Let Y_1i Be the Output for Factory I When It

question 37

Multiple Choice

Let Y_1i be the output for factory i when it receives a new machine, and let Y_0i be the output for factory i when it does not receive a new machine. Also let Y_i be the realized output for factory i and let D_i be a binary variable that equals one if factory i actually received a new machine. If the company's headquarters randomly assigns new machines to a subset of the company's factories, this ensures:

• A) E(Y_i|D_i = 1) = E(Y_1i - Y_0i)
• B) E(Y_i|D_i = 1) - E(Y_i|D_i = 0) = E(Y_1i - Y_0i)
• C) E(Y_i|D_i = 0) - E(Y_i|D_i = 1) = E(Y_1i - Y_0i)
• D) E(Y_i|D_i = 1) = E(Y_i|D_i = 0)

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