1. Consider the paper by Banerjee and Duo, The Economics Lives of the Poor.” To answer
the following questions, look at the tables presented there and keep in mind that by poor”
I mean living below 1.08 dollars per day.”
(a) Of the countries surveyed by the two researchers, which one has thehighestnumber
of poor people? (Enter name of country in question 1) Which one has thelowest?
(Enter name of country in question 2)
(b) Compare the rural and urban poor in Pakistan in regards to:
_use of toilet and electricity
Given that both groups have similar earnings levels, why do you think they are different along those lines (i.e., food expenditures, asset ownership, toilet and electricity)?
(Under question 3, check all answers that apply.)
(c) Which country would you judge to have theworstbasic infrastructure for its urban
poor? (Enter name of country under question 4) Thebest? (Enter name under
(d) In general, do you think that the urban poor are more or less likely to have multiple
jobs than the rural poor? (Enter answer in question 6)
(e) In most countries, the percentage of poor children in school declines for those aged
13-18, relative to those aged 7-12.
i. Why do you think that is the case? Enter all answers that are true under question
ii. What are the exceptions you can find that do not meet this pattern? Enter the
name of one country for girls under question 8 and for boys under question 9.
2. We now are going to get some practice with regression analysis. Olken (2009) has studied
the economics of bribe-giving among indonesian truck drivers going through a specific
route, by having enumerators collecting information on those bribes over a number of trips.
Specifically, enumerators recorded how much money the truck driver gave to a police every
time that there was a police checkpoint along the road to Meulaboh in northern Sumatra.
Note that in the road under consideration, there are many checkpoints, and each is manned
by police units that are independent from one another.
(a) Consider table 2.
_Under question 10, _ll the blanks to give the true meaning of the coefficients
in column 1, panel A. (Note: both dependent and independent variables are
measured in logs; the coefficient, then, should be interpreted as an elasticity).
_Under question 11, fill the blanks to give the true meaning of the coefficients in
column 1, panel B.
_Could you think of an intuitive explanation for this result? Briefly enter your
explanation under question 12.
(b) Consider next table 4. log payment” means the log of the bribe given; negotiate
dummy” is equal to 1 if the police at the check point tries to negotiate a higher bribe
than the one being offered; gun visible” is a dummy equal to 1 if the police has a
visible machine gun.
_Explain the coefficients in column 1 by filling the blanks in question 13.
_What does this regression tells us about bargaining over bribes? Enter a brief
explanation under question 14.
(c) Consider column 2 and 4: why do you think the author included as control Gun visible at subsequent checkpoints” and Number of officers visible at subsequent check-
points?”. Enter your explanation under question 15.
(d) The figure below shows the amount of bribe paid as the truck moves from origin to
_What kind of trend is evident? Fill the blanks in question 16.
_Can you think of a reason for this pattern? Enter a brief explanation under