Chapter 5, exercise 5.8 p.77

[williamlai2]

Hi. this might be an error, though also might not. It is in the exercises for Chapter 5 (p.77)

In the first bit, we are working with standard error, but in (a) it is standard deviation.

5.8 Coverage of confidence intervals: On page 15 there is a discussion of an experimental study of an education-related intervention in Jamaica, in which the point estimate of the treatment effect, on the log scale, was 0.35 with a standard error of 0.17. Suppose the true effect is 0.10—this seems more realistic than the point estimate of 0.35—so that the treatment on average would increase earnings by 0.10 on the log scale. Use simulation to study the statistical properties of this experiment, assuming the standard error is 0.17. (a) Simulate 1000 independent replications of the experiment assuming that the point estimate is normally distributed with mean 0.10 and standard deviation 0.17.