ECON 570 The University of Manchester Lalonde NSW Data Project

1 Lalonde NSW Data

A. Load the Lalonde experimental dataset with the lalonde_data method from the mod

ule causalinference.utils. The outcome variable is earnings in 1978, and the co

variates are, in order:

Black Indicator variable; 1 if Black, 0 otherwise.

Hispanic Indicator variable; 1 if Hispanic, 0 otherwise.

Age Age in years.

Married Marital status; 1 if married, 0 otherwise.

Nodegree Indicator variable; 1 if no degree, 0 otherwise.

Education Years of education.

E74 Earnings in 1974.

U74 Unemployment status in 1974; 1 if unemployed, 0 otherwise.

E75 Earnings in 1975.

U75 Unemployment status in 1975; 1 if unemployed, 0 otherwise.

Using CausalModel from the module causalinference, provide summary statistics

for the outcome variable and the covariates. Which covariate has the largest normal

ized difference?

B. Estimate the propensity score using the selection algorithm est_propensity_s. In

selecting the basic covariates set, specify E74, U74, E75, and U75. What are the addi

tional linear terms and second

–

order terms that were selected by the algorithm?

C. Trim the sample using trim_s to get rid of observations with extreme propensity score

values. What is the cut

–

off that is selected? How many observations are dropped as a

result?

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