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The process designed to generate knowledge through the collection and analysis of experimental data is known as the:


A) scientific method.
B) survey-based research.
C) business analytics paradigm.
D) "big data" revolution.

E) A) and C)
F) B) and C)

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In trying to measure the "treatment effect" of getting an MBA on career earnings, the observation that individuals with an MBA have higher salaries than individuals without them is likely to suffer from which of the following?


A) ETT < ATE
B) Selection Bias > 0
C) ETT > ATE
D) ETT = ATE

E) All of the above
F) B) and C)

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When running an experiment, suppose we assume the participants in the experiment are a random sample of the population. Let Yi be the outcome for individual i and let Di equal one if individual i receives the treatment and zero otherwise. What does the assumption of a random treatment imply?


A) Yi∣Di=1‾ \overline {Y _ { i } \mid D _ { i } = 1} - Yi∣Di=0‾ \overline {Y _ { i } \mid D _ { i } = 0} approximates E(Yi)
B) Yi‾\underline { Y _ { i }} approximates E(Yi|Di = 1) - E(Yi|Di = 0)
C) Yi∣Di=1‾ \overline {Y _ { i } \mid D _ { i } = 1} - Yi∣Di=0‾ \overline {Y _ { i } \mid D _ { i } = 0} = 0
D) Selection Bias = 0

E) None of the above
F) A) and B)

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In nonexperimental data the nonrandom assignment of treatment leads to what?


A) Selection Bias ≠ 0
B) Non-normal underlying population distribution
C) Mismeasured standard deviations
D) Loss of degrees of freedom

E) None of the above
F) B) and D)

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If you have a sufficiently large random sample from the population, but do not know how treatment was assigned, what object will a confidence interval centered on the difference in average outcomes for the treated and control groups be describing?


A) ATE
B) ETT
C) Selection Bias
D) ETT + Selection Bias

E) B) and C)
F) A) and D)

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In building a confidence interval for the ATE of an experiment, all the following objects will influence the spread of the confidence interval except what?


A) Confidence level
B) Number of subjects in the treated group
C) Number of subjects in the control group
D) Sample average outcome for the control group

E) A) and C)
F) All of the above

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While there are a few instances in the business world where one will observe experimental data, understanding the scientific method is critical because:


A) it's the benchmark for analysis in the "hard" sciences.
B) it's the gold standard for establishing causality.
C) it leads to larger treatment effects.
D) it is often cheaper to implement than observational studies.

E) A) and C)
F) A) and D)

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In evaluating the hypothesis test on experimental data, all the following will change the resulting p-value except for what?


A) Number of subjects receiving the treatment
B) Number of subjects receiving the control
C) Hypothesized value in the null hypothesis
D) Confidence level

E) A) and D)
F) A) and C)

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Given the average outcomes for the treated and control groups, and their respective sample standard deviations, how does the number of observations impact the spread of a confidence interval?


A) Only increasing the number of treated will decrease the spread of the confidence interval
B) Only increasing the number of control groups will decrease the spread of the confidence interval
C) Only increasing the number of treated will increase the spread of the confidence interval
D) None of the answers is correct.

E) A) and D)
F) None of the above

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D

Given that nonexperimental datasets are likely to have treatments that have not been randomly assigned, what is likely to contribute to difference in average outcomes between groups with different treatment levels?


A) Some of those differences are driven by a selection bias
B) Non-normality of the underlying population distribution
C) Skewed perceptions of quality
D) Heteroskedasticity

E) B) and C)
F) All of the above

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Given the average outcomes for the treated and control groups, and their respective sample standard deviations how does the number of observations impact the p-value of a hypothesis test?


A) Only increasing the number of treated will lower the p-value.
B) Only increasing the number of control groups will lower the p-value.
C) Only increasing the number of treated will raise the p-value.
D) None of the answers is correct.

E) All of the above
F) B) and D)

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Regardless of how treatment was assigned, what can be assumed about what the difference in the average outcomes of the treated and untreated groups is equal to?


A) Effect of the treatment on the treated + Selection Bias
B) Effect of the treatment on the treated
C) Average treatment effect (ATE)
D) (ETT)

E) None of the above
F) A) and D)

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How can applying the insights from the experiment ideal and the scientific method approach facilitate better analysis with nonexperimental data?


A) Sharpen attention towards the variation in treatment that is most appropriate for measuring treatment effects
B) Illustrates the role of measurement error
C) Illustrates the role of sample size in appealing to the use of the normal distribution for probability assessments
D) None of the answers is correct.

E) All of the above
F) None of the above

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Among the six steps of the scientific method, the first step involves:


A) writing a grant proposal.
B) asking a question.
C) gathering market data.
D) writing up the results.

E) B) and D)
F) A) and B)

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Which of the following is not an assumption required to build a confidence level for an ATE in an experimental design?


A) You have a random sample from the population.
B) You randomly assigned treatment.
C) The outcomes for the treated group and control group are the same.
D) Your sample is large enough.

E) B) and C)
F) A) and D)

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C

In building a confidence interval for the ATE of an experiment, what object will determine the spread of the confidence interval?


A) Null hypothesis value
B) Average outcome for the treated group
C) Average outcome for the control group
D) Sample standard deviation for the treated group

E) A) and B)
F) A) and C)

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D

In the scientific method, why is it crucial to start with a question before conducting the empirical analysis?


A) It makes writing the results easier.
B) It facilitates survey responses from subjects.
C) It motivates the specific variation in the treatment required to test the hypothesis.
D) Questions are easier to communicate than propositions.

E) None of the above
F) B) and C)

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In running an experiment, it is crucial that there exists both subjects who receive the treatment, but also subjects who do not because:


A) without variation in the treatment, testing the hypothesis would not be feasible.
B) the treatment will be well calibrated.
C) this allows you to run regressions in the analysis step.
D) None of the answers is correct.

E) All of the above
F) A) and B)

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Suppose Apple is considering increasing its advertising expenditures to promote the most recent iPhone. To try to assess the effect of such a move, it looks at sales in several small markets. In some of these markets Apple increased advertising expenditures by 30% and in others there was no change. When conducting this "experiment," what is the treatment?


A) iPhone sales in the small markets that were studied
B) The number of small markets that received an increase in advertising expenditures
C) The increase in advertising expenditures
D) The increase in iPhone sales in markets experiencing the increase in advertising expenditures

E) A) and B)
F) B) and D)

Correct Answer

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In building a confidence interval for the ATE of an experiment, what object will determine the center of the confidence interval?


A) The average outcome for the treated group
B) The average outcome for the control group
C) The average outcome for the treated group minus the average outcome for the control group
D) None of the answers is correct.

E) A) and B)
F) All of the above

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