This essay proves that Malaria is a disease that is highly prevalent.. It takes the form of a parasite that is carried by mosquitoes, and hence it is particularly severe in warm and wet climates where the insects thrive.

Malaria is a disease that is highly prevalent

Task description
Answer all questions with working and include all relevent econometric outputs from EVIEWS
NOMINAL LENGTH: 2000 WORDS EXCLUDING EQUATIONS/OUTPUTS

Q1 8 marks
Malaria is a disease that is highly prevalent through much of the developing world. It takes the form of a parasite that is carried by mosquitoes, and hence it is particularly severe in warm and wet climates where the insects thrive. Your task is to examine the effectiveness of a mosquito net program using data collected from villages in Senegal. In some villages the researchers distributed mosquito nets (the treatment group) while in others they did not (the control group).

The data obtains by recording details of each village twice, before and after the nets are hand out.

The data can find in the file malaria.wf1  where the variables  defines as follows: malaria gives the percent infection rate in the village, income gives the average income level (in USD), rain gives the annual rainfall, water is a dummy variable which is equal to one if there is a stagnant water source, and temperature is the average temperature in degrees Celsius. In addition there are two dummy variables.  MN denotes the villages that receives the nets with a value of 1.

To assess the effectiveness of the program a difference-in-differences estimator is in  use.

Briefly explain the concept of a “parallel trend” for this estimator and what this assumption implies for the mosquito net program.

Briefly explain
Calculate the difference-in-differences estimate of the effectiveness of the program (in terms of reduction in percent infections) base only upon average rates before and after the nets were in distribution.
Give the regression equation that would be in use to calculate the full difference-in-difference estimate employing the full set of control variables. Also estimate this equation and interpret the results. Why is this estimate preferable to the estimate given in part 3?
Briefly perform some diagnostics on your model.  Do the coefficients make sense? Are there any signs of misspecification? Are the residuals in line with your assumptions?