Your Textbook Mentions Use of a Quasi-Experiment to Study the Effects

question 7

Essay

Your textbook mentions use of a quasi-experiment to study the effects of minimum wages on employment using data from fast food restaurants. In 1992, there was an increase in the (state) minimum wage in one U.S. state (New Jersey) but not in neighboring location (Eastern Pennsylvania). To calculate the $\widehat { \beta } _ { 1 } ^ { \text {diffs-in-diffs } }$ you need the change in the treatment group and the change in the control group. To do this, the study provides you with the following information

$\begin{array}{|l|c|c|} \hline& \text { PA } & \text { NJ } \\ \hline \begin{array}{l}\text { FTE Employment } \\\text { before }\end{array} & 23.33 & 20.44 \\\hline \begin{array}{l}\text { FTE Employment } \\\text { after }\end{array} & 21.17 & 21.03 \\\hline\end{array}$

Where $F T E$ is "full time equivalent" and the numbers are average employment per restaurant. W
(a) Calculate the change in the treatment group, the change in the control group, and finally $\widehat { \beta } _ { 1 } ^ { d i f f - i n - d i f f s }$ . Since minimum wages represent a price floor, did you expect $\widehat { \beta } _ { 1 } ^ { d i f f s - i n - d i f f s }$ to be positive or negative?

Assess the impact of dividend policy on a firm’s capital structure.

Recognize factors influencing dividend policy preferences among investors.

Analyze the effects of taxation on dividend preferences and policies.

Understand the information content effect of dividends and its impact on stock prices.

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Definitions:

Implicit Attitudes

Unconscious beliefs or feelings towards objects, people, or situations which can influence behavior and perceptions.

Attitude Accessibility

The ease with which an attitude can be retrieved from memory.

Insufficient Justification Effect

A phenomenon where individuals experiencing insufficient external reasons for their actions undergo attitude change to reduce dissonance.

Part-time Tutors

Individuals who provide educational assistance and instruction on certain subjects or skills but do not work full-time hours.