question archive Econometric Theory Tasks You want to study whether employers discriminate against minorities in their hiring decisions
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Econometric Theory Tasks
You want to study whether employers discriminate against minorities in their hiring decisions. You have a
data set of people who sent job applications to firms. The dataset contains information on the following:
• interview: whether a person was invited for an interview (i.e. a binary indicator that equals one if a
person applied and was invited for an interview and zero otherwise)
• minority: a person's minority status: a binary indicator that equals one if the person is from an ethnic
minority and zero otherwise
• yrs_educ: a person's years of education (a continuous variable)
• female: whether a person is female or not (also a binary indicator)
question:
3. All you know about the data is that is was collected from a job board (i.e. a website where jobs are
advertised). Discuss the random sampling assumption and the conditional independence assumption (in
the lecture it was E(u|X) = 0). Are these assumptions fulfilled in this case (explain why or why not)?
Explain intuitively the likely consequences of these assumptions (not) being fulfilled for estimating the
effect of interest.