Introduction to Econometrics 3rd Edition by James Stock, James Stock

Exercise 12

A prospective employer receives two resumes: a resume from a white job applicant and a similar resume from an African American applicant. Is the employer more likely to call back the white applicant to arrange an nterview Marianne Bertrand and Sendhil Mullainathan carried out a randomized controlled experiment to answer this question. Because race is not typically included on a resume, they differentiated resumes on the basis of "white-sounding names" (such as Emily Walsh or Gregory Baker) and "African American-sounding names" (such as Lakisha Washington or Jamal Jones). A large collection of fictitious resumes was created, and the presupposed "race" (based on the "sound" of the name) was randomly assigned to each resume. These resumes were sent to prospective employers to see which resumes generated a phone call (a "call back") from the prospective employer. Data from the experiment and a detailed data description are on the textbook Web site http://www.pearsonhighered.com/stock_watson/ in the files Names and Names_Description.
a. Define the "call-back rate" as the fraction of resumes that generate a phone call from the prospective employer. What was the call-back rate for whites For African Americans Construct a 95% confidence interval for the difference in the call-back rates. Is the difference statistically significant Is it large in a real-world sense
b. Is the African American/white call-back rate differential different for men than for women
c. What is the difference in call-back rates for high-quality versus lowquality resumes What is the high-quality/low-quality difference for white applicants For African American applicants Is there a significant difference in this high-quality/low-quality difference for whites versus African Americans
d. The authors of the study claim that race was assigned randomly to the resumes. Is there any evidence of nonrandom assignment