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Seaport
Seaport
08.02.2021 • 
Business

In 2001, the federal government enacted a law that forbade any student with a drug offense from receiving financial aid. Lovenheim and Owens (2014) study the effect of this law on college enrollment behavior by examining how enrollment among those with convictions changes relative to those without convictions in a difference-in-difference analysis. A difference-in-difference analysis takes two successive differences. The first difference is the difference between the pre and post-treatment values of a group that underwent treatment and the difference between the pre and post-treatment values of a group that did not undergo treatment. Once these two values are calculated, the difference between these differences is computed.a) Using the provided information, calculate the difference-in-difference estimateNo ConvictionConvictionPre-Change0.6230.358Post-Change0.6520.269b) Does the fact that college enrollment was rising throughout the United States for all students over the period cause a problem for their study?

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