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Question: long problems 1 you are conducting a study on the...

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Long Problems 1. You are conducting a study on the effects of chemotherapy on cancer survivability. You have determined that the years of survival are linearly related to how far one lives from a hospital (a proxy for healthcare accessibility) and whether or not one receives chemotherapy. You know that the true relationship is described by the model where yi years of survival after diagnosis for person i chemi 1 if person i receved chemotherapy, 0 otherwise dist distance to the nearest hospital for person i Ei person is baseline years of survival if dist, = chemi = 0 You also know for a fact that Edist 0. Unfortunately, your data only has information on whether or not each person received chemotherapy, so you are forced to estimate the regression using the model (a) Given the information above, do we know that E0? Explain

You also know for a fact that Eleichemi, dist 0. Unfortunately, your data only has information on whether or not each person received chemotherapy, so you are forced to estimate the regression using the model: 2 (a) Given the information above, do we know that E0 Explain (b) In terms of parameters from model (1), what will our estimate bi be on average if we exclude dist from the regression? Show your work. [Hint: v-Agdístit εί] (c) Suppose having good access to healthcare facilities (i.e. dist is low increases the chance that you get chemotherapy, and also helps you survive longer. Is the estimated bi biased? If so, is it overstated or understated? Assume chemotherapy has a positive effect on survival. (d) Intuitively, what goes wrong when you leave dist, out of the regression?

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