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ECON 3210

BIG DATA ECONOMETRICS

FINAL EXAMINATION

TERM 2, 2021

Question

Read and provide a report evaluating Andiniet al. (2018). Your evaluation and discussion of the paper should be guided by the following broad categories:

.    What is the main objective the research? Describe the context and motivation.

.    What is the research strategy and main assumptions? Describe the form of the data and sample and identify the strengths and weaknesses of the overall approach.

.    What are the key results? What are the significance and implications of the results?

.    What is your overall evaluation of the paper in terms of addressing the main objective and in terms of the clarity of the presentation?

Your report should provide a coherent summary and evaluation of the paper and not stand- alone answers to these categories of questions. You undertook a similar exercise in the week 7 tutorial. Here though the length of your report is allowed to be longer reflecting the length of the allocated paper and the opportunity for you togo into more detail.

As part of your report, you should also address the following questions. Please note that

again you should work your responses into your summary rather than provide stand-alone answers.

1.    What is the purpose of including Fig. 1?

2.    Why is Fig. 3 useful in providing motivation for the research strategy?

3.    ML methods such as random forests typically outperform decision (regression) trees, as they do here. Why are the latter preferred in this study?

4.    Why does a comparison of results in Panel A of Table 3 with those in Table 5, provide added confidence in the proposed ML targeting strategy?

5.    Explain the measure of spending inefficiency derived on p. 96.

6.    What is the omitted payoffs problem and how is it relevant in this study?

For each of the above questions that is not adequately addressed, 2 marks will be deducted from your overall grade on the exam.

Report details:

The report should be no longer than 1500 words. It should be typed and saved to a document using your SID in the name, e.g. z1234567.doc.  Upload the document via the Turnitin submission link on the Moodle website.

Article to review:

Andini, M., Ciani, E. de Blasio, G. D’Ignazio, A. and Salvestrini, V. (2018), “Targeting with machine learning: An application to the tax rebate program in Italy”, Journal of

Economic Behavior and Organization, 156, 82- 102.

The article is included in the course Leganto reading list. It is also available under the “Final Exam" tab on the course Moodle page. The article refers to supplementary materials, but these are not required for the exam.