UA 323 Development Economics Problem Set 2 Due: February 20 • Remember to include your name on your independently written-up solutions. • You should feel free to work with classmates (and use readings/slides/etc. for help), just please write the names of who you worked with • Submit your solutions to the Brightspace before class starts. No need to bring a hard copy. • Show your work. Include brief and precise explanations of intuition and derivations as appropriate. You do not need to include your code (unless the question explicitly asks for you for the code). But you should save your script. The first two questions on this problem set are from last year’s midterm. 1. Not all capital is identical. Most statistical agencies distinguish between Land (which we’ll call T for Terrain) and other fixed assets (mostly Plants and Machinery, we’ll call all of it P). This more nuanced view of the constant returns to scale GDP production function is Y = A(hL)α P β T 1−α−β . Derive ŷ No economics in this question, just math. 2. Consider your answer from the previous question. Do you know anything about what the contributions of P and T might be for growth? Does one have a bigger magnitude than the other? The rest of the homework walks you through an exercise based on ”Missing Women and the Price of Tea in China: The Effect of Sex-Specific Earnings on Sex Imbalance” (Qian, 2008). You will need to download the tea data.csv from Brightspace Nacy Qian proposes a test for whether households behave like an unitary model or a non-unitary model. She studies the impact of post-Mao reform in 1979 that increased income from cash crops including tea and orchard. 3. Explain in a paragraph or two why this reform is useful for her research question (the plan is to cover the paper in class well before the problem set is due, but you should be able to read the paper before that if you wish) 4. Write out equation (2) of the paper. Writing equations is a good skill (plus this is me pushing you to write your problem sets in overleaf since it’s much easier in latex than in word or google docs). Here is a short equation just to give you a sense of what the commands are (for those of you looking at the template) sexic = (treati × postc )β ChatGPT and similar programs are really good at latex 5. Now we’re going to load the dataset. First, you want to use setwd to whatever the directory the dataset is in. Then you want to use a command like teaData