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Question 3 (33 pts.) Michael is a health economics student interested in estimating the effect of health insurance coverage Di on the number of doctor visits Y, by estimating the population regression function (PRF) Y-B+ β2D, + ui by using the sample reported in Table 2, Enrollment in a health insurance plan is voluntary. Table 2 ups D Michael has heard that observational studies produce biased results, while randomized experiments deliver the causal effect if an exhaustive set of samples are produced. He conducts a set of experiments, which are accurately reported in Table 3. However, Michael's grasp of the analysis of randomized experiments is somewhat shaky and he needs assistance in answering a set of questions. Table 3 Treatment group1) Control group(T Sample 1 Sample 2 Sample 3 Sample 4 Sample 5 Sample 6 (2 pts.) Michael would like to use his experimental results in Table 3 to decompose the observed effect in Table 2 into the causal effect and the selection bias. List the individuals and the samples in Table 3 that must be used for the computation of the causal effect in Table 2. a)

Answer 1

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