Homework 3.1

Author
Affiliation

Alex Cardazzi

Old Dominion University

All materials can be found at alexcardazzi.github.io.

Completion Requirements: Complete the following questions in RStudio via the homework template. When you are ready, submit your rendered html to Canvas.

Grading Criteria: Full credit will be given to correct, well formatted, and detailed answers. Partial credit will be given if I can follow your work and/or see your thought process via code, comments, and text. Point totals are listed next to each question.

This homework focuses on a recent paper exploiting a long ago change (Copyrights and Creativity: Evidence from Italian Opera in the Napoleonic Age by Giorcelli and Moser, Journal of Political Economy, 2020). During the Napoleonic Wars in Italy, copyright laws applying to musical compositions changed in parts of Italy conquered by Napoleon. Copyright laws allow popular artists like song writers to monetize their work. Without them, other artists can perform their songs without compensating them. You should read through the paper before completing this Homework.1

Important Note: The data analyzed can be downloaded from the journal web site and come directly from this paper. However, the results you generate may not exactly match those reported in the paper.

Question 1

Summarize the main research question in the paper, the application analyzed, and why DiD is appropriate for this research question. (4 Points)

Question 2

Use the supplied data from Giorcelli and Moser (2020) to answer the following.

  1. Read in operas_1781_1820.csv and name it italy. (1 Point)

  2. Using the unique() function, print the state identifiers that are in the treatment group. (1 Point)

  3. Using table(), find the number of observations in each of the following groups: treatment group pre-treatment, treatment group post-treatment, control group pre-treatment, control group post-treatment. (1 Point)

  4. Using aggregate(), find the average number of new operas for each of the states. (1 Point)

Question 3

Describe the important components of DiD.

  1. Discuss the general assumptions underlying the causal inference method used in the empirical analysis. (4 Points)
  1. How do the authors address these assumptions in the paper (if at all)? Discuss the potential threats to a causal interpretation of the results in the paper. (4 Points)

Question 4

Do your best to replicate the content in Figure 2 using italy. Note: the lines in this graph might not replicate perfectly, but do what you can. (4 Points)

Question 5

Replicate the main result reported in the paper in the following:

  1. Estimate a 2x2 DiD model of the form (2 point):

\[Y_{st} = \beta_0 + \beta_1 \text{Treat}_s + \beta_2 \text{Post}_t + \delta (\text{Treat}_s \times \text{Post}_t) + \epsilon_{st}\]

  1. Replicate the results in Columns (1) and (2) on Table 3 in the paper. Do not worry about replicating the standard errors.2 (2 point)

  2. Create a table using modelsummary containing coefficients from the three models. (2 point)

Question 6

Discuss your results:

  1. What is the interpretation of the causal parameter of interest? Place the causal effect in the context of the setting. (2 Points)
  1. How large is the treatment effect as a percentage of the pre-treatment average of the treatment group? (4 Points)

Question 7

Replicate the Event Study in Figure 3 of the paper. (4 points)

Question 8

Do you believe the result to be credible in terms of causality and magnitude? Why or why not? (4 Points)

Footnotes

  1. The PDF will be made available on Canvas.↩︎

  2. You only need to replicate the first two columns.↩︎