无代写-ECOS3002
时间:2022-09-18
ECOS3002 – Development Economics

Mid-Semester Exam
Semester 2 – 2021

Section 1. Draw, calculate, interpret
1. (15 points) Poverty analysis. Suppose a village has 5 households, with expenditure
levels 1, 3, 4, 7 and 10. Suppose the poverty line is 4.
a. (5 points) Draw the poverty profile for this village, including the poverty line.
b. (5 points) Calculate P0, P1, and P2 for this village.
c. (5 points) Suppose you have a budget of 3 to spend on reducing poverty in this
village. How you would allocate this budget if your objective was to most
reduce P0, P1, or P2, respectively?

Section 2. Interpret a quasi-experiment
2. (10 points) Interpret a regression discontinuity (RD) quasi-experiment. Suppose that
the government of Jakarta, Indonesia, wants to increase women’s workforce
participation. Prior research suggests that lack of access to affordable childcare is one
of main barriers to workforce participation of mothers, particularly for women from
lower-income households. Suppose that the government offers a 50% childcare subsidy
for approved childcare facilities, to households below a poverty threshold of 200,000
Rupiah per capita, per month. Two years after the subsidy is implemented, you are
asked to evaluate the subsidy program. Suppose that you decide to use an RD design,
collecting representative data from households just falling above and below the cutoff,
and decide to study the effect of the subsidy on hours worked per week.
a. (5 points) Interpret the results of the RD from the following figure, including
providing the RD estimate of the impact of the subsidy.


b. (5 points) Name one potential threat to the validity of this RD design, and what
you would do to test for it.

3. (5 points) Risk coping and risk management. Suppose that a household in a rural area
of inland Papua New Guinea has a hectare of land that it uses to grow cassava, and a
pond that it uses to produce fish as a source of protein and its main cash crop. It uses
this cash income to buy other necessities – food, clothing, mobile phone coverage, etc.
Suppose that there are many fish ponds in the area, and diseases can be transmitted
between the ponds by birds and rodents, which can occasionally kill all the fish. Name
one risk coping strategy and one risk management strategy the household might use to
address this risk.

4. (5 points) Evaluate a randomized control trial (RCT). The World Bank is working with
the International Rice Research Institute office in Cambodia to study the effectiveness
of the System of Rice Intensification (SRI), using an RCT. In 100 villages in the
northern part of the country, they will randomly sample 20 farm households in each
village, from a list of all households in the village. In each village, 10 of the 20
households will be randomly selected into the Treatment group, receiving SRI training
and a set of inputs (e.g., fertilizer, seeds, tools) at a heavily discounted price, and the
other 10 households will be the control. Comment on the internal validity and the
external validity of this RCT design.

5. (15 points) Short essay. Suppose you are talking with a government agricultural
extension worker who is working with maize farmers in a set of remote villages in
Ghana. The extension worker points out that the international price of maize has been
steadily rising over the last year, yet the farmers she works with have barely changed
their production choices over maize. Explain why this may not necessarily be
inconsistent with rational economic behavior, giving at least three reasons, making
precise use of concepts from ECOS3002 to illustrate your arguments.


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