Consider the quasi-experiment described in Section 13.4
Question and Solution
Consider the quasi-experiment described in Section 13.4 involving the draft lottery, military service, and civilian earn
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Consider the quasi-experiment described in Section 13.4 involving the draft lottery, military service, and civilian earnings. Explain why there might be heterogeneous effects of military service on civilian earnings; that is, explain why b1i in Equation (13.9) depends on i. Explain why there might be heterogeneous effects of the lottery outcome on the probability of military service; that is, explain why p1i in Equation (13.11) depends on i. If there are heterogeneous responses of the sort you described, what behavioral parameter is being estimated by the TSLS estimator?
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