Page 60 -

Review the Concepts 59

Key Terms

randomized controlled experiment observational data (54)
(52) cross-sectional data (54)
observation number (55)
control group (52) time series data (55)
treatment group (52) panel data (57)
causal effect (52) longitudinal data (57)
experimental data (53)

MyEconLab Can Help You Get a Better Grade

MyEconLab If your exam were tomorrow, would you be ready? For each chapter,

MyEconLab Practice Tests and Study Plan help you prepare for your exams.
You can also find similar Exercises and Review the Concepts Questions now in MyEconLab.
To see how it works, turn to the MyEconLab spread on pages 2 and 3 of this book and then go to
www.myeconlab.com.

For additional Empirical Exercises and Data Sets, log on to the Companion Website at
www.pearsonglobaleditions.com/Stock_Watson.

Review the Concepts

1.1 Design a hypothetical ideal randomized controlled experiment to study
the effect of reading on the improvement of a person’s vocabulary. Suggest
some impediments to implementing this experiment in practice.

1.2 Design a hypothetical ideal randomized controlled experiment to study the
effect of the consumption of alcohol on long-term memory loss. Suggest
some impediments to implementing this experiment in practice.

1.3 You are asked to study the causal effect of hours spent in remedial classes
at schools by students who are struggling in mathematics on their final test
scores and performance in the subject. Describe:

a. an ideal randomized controlled experiment to measure this causal
effect;

b. an observational cross-sectional data set with which you could study
this effect;

c. an observational time series data set for studying this effect; and
d. an observational panel data set for studying this effect.