Asked by Zheng Shouyi on Jun 13, 2024
Verified
You want to run a difference-in-difference experiment with a price increase for your lawn chairs in Miami,FL.If you are worried about "leakage" with your control group,a poor comparison city would be
A) Boston,MA
B) San Francisco,CA
C) St.Paul,MN
D) Tampa Bay,FL
Control Group
In scientific research, a group of subjects or entities kept under standard conditions to serve as a comparison against a group where experimental variables are altered.
Leakage
In economic terms, refers to the loss of funds through non-productive means, such as untaxed income or unrecorded sales.
- Pinpoint the considerations of representativeness and leakage in experimental setups and their repercussions.
Verified Answer
AT
Ahsan TariqJun 15, 2024
Final Answer :
D
Explanation :
Tampa Bay, FL, is geographically close to Miami, FL, increasing the likelihood of "leakage" where customers or influences from the treatment group (Miami) could affect the control group (Tampa Bay) due to their proximity. This could include customers traveling between the cities for purchases or shared media markets.
Learning Objectives
- Pinpoint the considerations of representativeness and leakage in experimental setups and their repercussions.
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