Estimation of Treatment Effects with Simulated Data - Engineering Assignment Help

Assignment Task

Estimation of treatment effects with simulated data 
 

1. With the software you prefer, generate data for the following model': 
= p(0) + Ai/7i + Ui(0) (1) D:=a+fiZi+Vi (2) D. 1 if D: 0} (3) 0 if D: < 0 
= p(1) — p(0) + U;(1) — Ui(0) = E{A,} + Ui(1) — WO) 
 

E{l/i(1)} = E{U;(0)} = E{Vi} = 0 (5) and where correlation between 1/, and V, is possible. Calibrate your data generating process to mimic the "real setting" you prefer.

2. Once you have generated the data, assume that you do not know the data generating process and estimate the model with as many as possible of the methods studied during the course and applicable to this problem. 
 

3. Discuss the result you obtain in the light of what you know about the data generating process.

4. Keeping fixed the idiosyncratic treatment effects Ai, change the assumptions concern-ing the selection into treatment. Then show how the choice of identifying assumption and estimation method should change according to what you know about the selection into treatment and the average population parameter in which you are interested

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