BS3397 Microeconometrics Fixed Window Assessment | Aston University

BS3397 Fixed Window Assessment

Please consider this as an Open Book Assessment, you are not expected to spend the entirety of the allotted time on your assessment.

File/Format Requirements

1. Please complete this Fixed Window assessment on a MS Word document.
2. Include your candidate number (6 digit) and Module Code and Name
3. Formatting should be Arial font, Size: 12 point and 1.5 spacing.
4. You must combine all answers, figures, tables, and calculations into one document. (any hand-written calculations or answers, should be scanned or photographed, and inserted into the word file). Your answer MUST include a statement (under 200 words) clearly detailing any use of AI (even if none).
5. Save your FILE (MS Word or PDF) as “Module Code – Candidate Number”. E.g.BS3397 -123456

Instructions to candidates

1. Submit to the BS3397 Turnitin link by 16:00 (4pm) on the date of assessment.
2. Please note this is a fixed time assessment and the 5 working day lateness window will not apply. You will not be able to submit after the deadline.
3. Answer ALL
4. The data keys are available at the end of the exam paper
5. Question weightings and associated word limits are shown in parentheses. Word limits are strict (you may not exceed the specified limit).
6. You must submit your answers as a single Word file, saved as a PDF, which should consist of three parts:
   • The main written report which should feature all relevant written work, results, and visualisations.
   • Your clean R code, copied and pasted into an appendix. This is not a dump of your code, but it is a tidy, complete, list of all the commands you used to elicit your answer.
   • A 200-word (or less) statement which clearly outlines any use of AI, even if this is none. Work without an AI statement will be penalised.
7. This exam assesses all learning outcomes for the module:
   Upon successful completion of the module, the typical student should be able to:
   o Manage and describe economic data and datasets from a range of sources
   o Demonstrate and communicate a conceptual understanding of a range of econometric issues and approaches relevant to microeconomic data
   o Demonstrate the ability to appropriately select, and use computer software to implement, a range of econometric approaches dependent on context and suitability
   o Critically interpret microeconometric results, demonstrate the ability to understand their implications, and to relate them to broader real-world settings

Candidates are strongly recommended to consult the marking criteria for the module (available on Blackboard)

Additional Instructions

1. Citations and References: Any sources you use should be properly cited and include a properly formatted reference list (in APA or Harvard, you may include this at the end or by question). If you are in doubt about how to reference properly, there are numerous websites which can help.
2. Diagrams, Figures or Tables:
   • If you are including any diagrams, figures or tables in your answer which have not been created by you, you must reference the source and use reputable sources such as academic journals, periodicals and consultancy sources such as Hootsuite, Hubspot, McKinsey and similar. Please avoid using material from obscure websites and essay sites.
   • If producing your own graphs and tables—these should be produced using computer software and should not be included as screengrabs of unadulterated R output. Diagrams which are produced using R can be copied as images for inclusion in your work. Hand-drawn diagrams are not to be included.
   • You are also strongly encouraged to and create your own original figures/diagrams, i.e. drawn using a suitable editor and inserted by you into the answer in your Word document.

Figures should be cited in the main text and appropriately explained.

3. You MUST NOT contact the module leader, teaching team or BSS College Office (Exams & Assessment or Student Support) through email during the 7-hr period, when the assessment is taking place, with any queries related to the assessment questions to ensure fairness to all students. Please answer the questions to the best of your abilities and your own understanding.

Declaration:

I declare that I have personally prepared this assignment.  The work is my own, carried out personally by me unless otherwise stated and has not been generated using Artificial Intelligence tools unless specified as a clearly stated approved component of the assessment brief.  All sources of information, including quotations, are acknowledged by means of the appropriate citations and references.  I declare that this work has not gained credit previously for another module at this or another University.

I understand that plagiarism, collusion, copying another student and commissioning (which for the avoidance of doubt includes the use of essay mills and other paid for assessment writing services, as well as unattributed use of work generated by

Artificial Intelligence tools) are regarded as offences against the University’s Assessment Regulations and may result in formal disciplinary proceedings.

I understand that by submitting this assessment, I declare myself fit to be able to undertake the assessment and accept the outcome of the assessment as valid.

Hire a Professional Essay & Assignment Writer for completing your Academic Assessments

Flexible Rates Compatible With Everyone’s Budget

Order Now

SECTION A  

Answer ALL questions in this section

This section counts for 40% of the marks for this exam

The UK winter fuel allowance is a means-tested cash benefit paid to older people to assist them with the additional costs of heating the home during the winter. It has very particular eligibility criteria and is available only to those pensioners who both a) have low household incomes, and b) have applied successfully for the UK pension credit, another means-tested income support benefit for individuals claiming the state pension.

A1) Assuming the role of a government analyst, how would you go about measuring the impact of the policy, focussing on units of domestic gas consumed (domestic gas is measured in terms of kilowatt hours (kWh)) as the outcome variable of interest?

(30 marks, 300 words max)

Your answer should cover:

a) The main challenges in estimating the effect of the policy?

b) The approach you would use for estimation, and why

Work on the simplified assumption that the level of analysis is at the household level, and that each household that receives the payment receives the same amount.  Work under the assumption that you have access to any reasonable covariates (e.g. age, income) and that gathering an appropriately sized sample is not a problem. Feel free to use any diagrams, equations, or any other approaches to help explain your answer

Marks will be awarded on recognition of the challenges of estimation in the example and, crucially, clarity of expression. Submissions which are vague or non-specific will be penalised.

A2) The policy was recently changed from an automatic age-based eligibility to the present means testing. Assuming that, under the previous regime, cash payments were made automatically to all eligible individuals (without the need for recipients to apply), how would this change your analysis in question A1?

(10 marks, 150 words max)

The assessment continues onto the next page

SECTION B  

Answer ALL questions in this section

This section counts for 60% of the marks for the exam

Marks for each question and individual word limits are shown in parentheses

In all cases you should make use of any relevant formulae, tables, or diagrams to assist you in your answer. The best answers will demonstrate evidence of broader engagement, efforts to explain in your own words, well-chosen examples, and will not excessively repeat or rely on repeated content from the lectures.

You are reminded that effective use of formulae, tables, or diagrams can assist in overcoming tight word limits.

Hints and tips for section B:

• Think carefully about the variables you include in your models—econometrics is not just about grinding through data, it is about using judgement and understanding to properly specify models.
• Think about which variables are key to your narrative, and which are only in there as ‘control variables’—those which we know are likely to have an impact, but are not central to our key story.
• Don’t be afraid to respecify/change your model if you’re unhappy with it—explore your data and experiment with different specifications.
• When reporting results, always include a results table and think about what is most important/interesting in your results table and focus on that (are all the results in the table equally relevant to the core question you’re trying to answer?)
• Remember the presentation requirements: R code or console output is not a substitute for a properly written answer and should not be used in place of properly formatted results or descriptive statistics tables. Your R code should be copied and pasted as text into an appendix, and make sure it is tidy.
• To avoid identification, make sure that you remove any reference to your identity from your R code (e.g. remove your name in a setwd() command)

Microfinance can play a crucial role in economic development by providing financial services to low-income individuals and small businesses that lack access to traditional banking. These services often include small loans, savings accounts, insurance, and other financial products designed to promote entrepreneurship in marginalised communities and help the poor manage their finances, invest in their businesses, and improve their livelihoods.

In development projects, microfinance has often been used as a strategy to empower women, support rural development, and foster economic growth. For instance, microfinance institutions (MFIs) partner with international and domestic financial organizations to ensure that funds are available for low-income borrowers— especially women, where formal and informal barriers may restrict their access to conventional banking and financial services.

You have been provided with two datasets which features details of 1129 households in India, spread across 104 villages. Most (but not all) of the villages were chosen to be part of a trial whereby microfinance was offered to women in poorer households (those who own less than 50 hectares of land) for the purposes of developing business or investing in other forms of human capital. If a household was interested, they needed to notify the funder to request the funds (it was not paid automatically to qualifying households).

The Stata dataset ‘microfinance1.dta’ concerns the characteristics of households; you will need this for question B1

The Stata dataset ‘microfinance2.dta’ tells you which villages participated in the study; you will need both datasets for question B3

The data keys are available at the end of the exam paper

B1) Estimate an OLS regression model which seeks to explain total household expenditure as a function of other variables, and interpret the results.

In answering the question you must:

1. Demonstrate that you have checked the distribution of variables and, if necessary, corrected for this
2. Neatly specify the model you intend to estimate (the PRF), paying particular attention to any subscripts or superscripts which are required.
3. Briefly comment on the expected signs of key variables
4. Present your results in a neatly formatted table
5. Conduct standard tests of robustness of your results (e.g. check for heteroskedasticity and multicollinearity)
6. Interpret your results, with particular focus on key results (I’ll let you decide what is a key result)

(30 marks, 300 words max)

B2) A colleague suggests that OLS may not be the best approach in this instance due to self-selection amongst households which accepted microfinance support. Briefly explain their reasoning and how it might have affected your answer in question B1.

(10 marks, 100 words max)

B3) Someone suggests that eligibility for microfinance could be used as an exogenous instrument for whether a household accepted:

1. Use the data available to you to generate a binary eligibility variable (hint: households need to be both land-poor and in a participating village—you will need to merge the two datasets)
2. Re-estimate your model from B1 as an instrumental variable estimation, using your eligibility variable as the primary instrument, and neatly present your results
3. Briefly comment on your results and whether your colleague in B2 had a point
4. Use a Hausman test to test for endogeneity in your original regression, explain your approach, and comment briefly on the results

(20 marks, 250 words max)

Remember that econometrics does not always deliver lovely clean results. Focus on your process, and make sure you are doing everything right, and the results will be what they will be — focus on correctly interpreting the results you have in front of you.

Data Keys

microfinance1.dta Household Characteristics  n = 1299

             Variable Name                     Variable Label

nh                                      HH ID

year      Year of observation       village_id         Village ID         agehead             Age of HH head: years  sexhead            Gender of HH head: 1=M, 0=F  educhead             Education of HH head: years

famsize            HH size            hhland HH land: decimals        hhasset HH total asset: Tk.        expfd   HH per capita food expenditure (Tk/yr):       expnfd HH per capita nonfood expenditure: Tk/year       exptot   HH per capita total expenditure: Tk/year            dmmfd HH has male microcredit participant: 1=Y, 0=N

HH has female microcredit participant: 1=Y,

dfmfd                               0=N

Village is accessible by road all year: 1=Y,

vaccess                            0=N

pcirr     Proportion of village land irrigated         rice       Village price of rice: Tk./kg       wheat             Village price of wheat: Tk./kg    milk     Village price of milk: Tk./litre    potato   Village price of potato: Tk./kg  egg       Village price of egg: Tk./4 counts           oil        Village price of edible oil: Tk./kg

Hire a writer to get plagiarism free assignment answers of this question

Flexible Rates Compatible With Everyone’s Budget

Order Now