Question

As a result of virus and its effect to various groups (high income vs low income population) in the context of food security, how would you conduct a survey to test the underlying idea of differential effects across income groups (high earners vs low earners). You can use the following terms to answer the question througugly. Data production, Causal effects, Statistical inference, Randomness Statistical data, The law of large values, Central limit theorem, Confidence interval, Hypothesis testing p-value.

Answer 1

Differential effects are evaluated on the basis of interaction terms. It assess whether the effects of one variable on another are moderated by a third variable. Emperical reserach using interactio terms often lag the theoretical development. So, traditional survey will fail to work. Here, it will be better, if we conduct cross sectional survey. But the problem will be that it will give less data compared with traditional survey. So after getting the data, Monte Carlo simulation can be used to take care the above mentioned issues. Generally, Regression or mixture of regression can be use to tackle the differential effects. Where all the concepts like confidence interval, hypothesis testing all carry usual meaning.