Causal Effects That Depend on the Value of an Observable

question 7

Multiple Choice

Causal effects that depend on the value of an observable variable, say W_i,

• A)cannot be estimated.
• B)can be estimate by interacting the treatment variable with W_i.
• C)result in the OLS estimator being inefficient.
• D)requires use of homoskedasticity-only standard errors.

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Definitions:

Varies

Describes how something changes or differs across different situations, locations, or points in time.

Time

A continuum that lacks spatial dimensions and in which events occur in apparently irreversible succession from the past, through the present, into the future.

Circumstances

The conditions or facts affecting a particular event or situation, often influencing the outcome or actions of individuals.

Opportunity Cost

The cost of forgoing the next best alternative when making a decision, representing the benefits an individual, investor, or business misses out on.