Question

In: Economics

Explain why Maimonides’ rule is a good instrumental variable for class size. Without such an instrumental...

Explain why Maimonides’ rule is a good instrumental variable for class size. Without such an instrumental variable, if we regress pupil performance on class size with ordinary least squares, give one reason why the effect of class size may be underestimated and one reason why it may be overestimated. Can you think of another good instrumental variable for class size?

Solutions

Expert Solution

Maimonides' rule identifies a correlation between class size and students' achievements. It states that a class size may rise to an upper limit of 40 students. Once this quota is reached the class is cut in half, so instead of one class with forty-one students there are now two classes: one with twenty students and one with twenty-one students.

Maimonides’ rule is a good instrument for the discontinuity sample. Maimonides’ rule is extremely effective with schools with a high PD index. The rule can be used as an identification method as it “induces a discontinuity in the relationship between enrolment and class size at enrolment multiples of 40” (pp. 540). It means that class size varies “abruptly and predictably” or is variable, every time enrolment exceeds a multiple of 40, when a new class needs to be formed. Put another way, at the points of discontinuity the school average class size drops from 40 (when grade enrolment is 40, 80, 120 etc) to 20.5 (when the 41st, 81st, 121st etc student is enrolled), reflecting an exogenous variation created by the institutional rule.

The econometric identification of class-size effects is difficult, because class-size is a highly endogenous variable. Naive, ordinary least squares estimations of the impact of class-size on test scores usually yield positive coefficients: it seems that increasing class 2 size helps students.

Least squares estimates with no control variables show a strong positive correlation between class size and achievement.The positive correlation between achievement and class size is clearly an artifact of the association between smaller classes and the proportion of pupils from disadvantaged backgrounds. Instrumental variables estimates constructed by using functions of Maimonides’ rule as instruments for class size while controlling for enrollment and pupil background consistently show a negative association between larger classes and student achievement.

A substantial amount of unobserved remedial education by means of smaller classes takes place and ordinary least squares estimates of class-size coefficients are biased upwards.


Related Solutions

Explain why you think the variable is a good way to explain the differences you see...
Explain why you think the variable is a good way to explain the differences you see in the dependent variable. Then, use the independent sample t-test to analyze whether the variable of interest exhibit a statistical significant difference between the two groups. t-Test: Two-Sample Assuming Unequal Variances Variable 1 Variable 2 Mean 83264.18182 108197.8929 Variance 548267073.5 7402724432 Observations 22 28 Hypothesized Mean Difference 0 df 32 t Stat -1.465917462 P(T<=t) one-tail 0.076214534 t Critical one-tail 1.693888748 P(T<=t) two-tail 0.152429067 t...
Explain the purpose of the good faith exception of the exclusionary rule.
Explain the purpose of the good faith exception of the exclusionary rule.
What is an instrumental good? Something that is valuable in and of itself, regardless of the...
What is an instrumental good? Something that is valuable in and of itself, regardless of the consequences. Something that is good only for what you can get out of it, only for what it can be used for Something that generates happiness and pleasure in life Something that generates profit and financial security It is a kind of pleasurable sensation obtained by certain stimuli Philosophy Category!
Explain why the squatters at the same time were instrumental for early prosperity in Australia but...
Explain why the squatters at the same time were instrumental for early prosperity in Australia but later on became a danger.
Do you think the Miranda rule is necessary and is a good rule, and is required...
Do you think the Miranda rule is necessary and is a good rule, and is required by the Constitution? How else can the right to prevent self incrimination be protected?
Consider the market for cars which we will assume to be a normal good. Explain, without...
Consider the market for cars which we will assume to be a normal good. Explain, without using graphs, what would happen to the supply or demand curve, and to equilibrium price and quantity of cars in each of the following situations: 1. A technological advance in the methods of producing cars. Due to a recession, households experience a decrease in income. 2. incomes decline 3. There is a technological advance and a decrease in income at the same time
We know how difficult it is to find a convincing instrumental variable Zi to overcome the...
We know how difficult it is to find a convincing instrumental variable Zi to overcome the “unobserved ability” problem in a wage regression to measure the returns to education. Critically discuss whether Zi =”distance in miles of high school location of workeri to closest four year college”satisfies the two properties of a valid instrument.
Explain the concept of time consistency. Is the Taylor rule time consistent? Why or why not?
Explain the concept of time consistency. Is the Taylor rule time consistent? Why or why not?
a) Why does the shear strength of beams without stirrups increase when the aggregate size increases?...
a) Why does the shear strength of beams without stirrups increase when the aggregate size increases? b) Describe a bond-splitting failure. Why do stirrups tend to prevent bond-splitting failures? c) Why is the “side cover” and “back cover” important when designing hooks for rebars? d) What is the kern of a footing?
1.Why is the equilibrium cluster size not same as the efficient cluster size? Explain with a...
1.Why is the equilibrium cluster size not same as the efficient cluster size? Explain with a graph. 2.The production of wooden ships is a weight-losing activity (as shown by the large piles of sawdust and wood-scraps) and yet most of the shipyards are located far from a forest. Shipyards locate far from a forest because...Illustrate.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT