Suppose You Observe That Several Different Communities in a Large

question 22

Essay

Suppose you observe that several different communities in a large metropolitan area raised their sales tax by one percentage point in 2012 while several others did not.In an effort to determine how the increase affected car sales in the affected communities you estimate a difference-in-difference estimator for 2011 and 2013 car sales and get $$\begin{array} { l } \text { Car Sales }_{i}=&987.25+&17.082013_{i}+&1.47 \text { Treatment }_{i}-&8.32(2013 * \text { Treatment })_{i}\\&(311.24) &(5.33)&(0.56)&(2.46) \\\end{array}$$
a)Why would you want to estimate a difference in difference model?
b)Draw a graph with the 4 means on it and explain where the difference in difference estimator is on the graph.

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Definitions:

Ideally Attractive

Attributes or qualities perceived as most desirable or appealing to the majority within a cultural context.

Weigh

To assess or consider the importance, effect, or value of something.

Evolutionary Analysis

The study of how evolutionary theory can explain and predict patterns of behavior, traits, and other biological changes over time.

Mate Selection

The process by which individuals choose partners based on a variety of factors, including personal preferences, social standards, and evolutionary influences.