Imagine you have access to data on two colleges -- College A and College B. You know College A pays instructors more than College B. You also know College A's graduation rate is higher than College B's graduation rate. Does paying instructors more cause graduation rates to go up? Mark all that apply!

Question

Imagine you have access to data on two colleges -- College A and College B. You know College A pays instructors more than College B. You also know College A's graduation rate is higher than College B's graduation rate. Does paying instructors more cause graduation rates to go up? Mark all that apply!

BlackTom AI · Accepted Answer

Begin by identifying the core idea: the question asks whether paying instructors more causes higher graduation rates, and asks you to mark all that apply.
Option 1: 'No, the student quality may vary across the colleges.' This is a valid caveat. If College A attracts or retains students with different abilities, backgrounds, or study habits than College B, the observed higher graduation rate could be due to student mix rather than pay per se. It highlights potential selection effects or differences in student quality as confounding factors.
Option 2: 'No, the standards for graduation may vary across the schools. College A may be less strict in terms of grades.' This is another important consideration. If College A has looser graduation requirements or grading practices, its higher graduation rate might reflect institutional standards rather than the effect of paying instructors more. This points to measurement and policy differences as alternative explanations.
Option 3: 'Yes, college A pays instructors more and has higher graduation rates. Therefore, higher pay increases graduation rates.' This statement infers causation from correlation and neglects confounding variables. It assumes no other differences exist between the colleges, which is typically implausible in real-world data where multiple factors co-vary with pay.
Option 4: 'Yes, but only if we assume the instructor quality is the same in the two colleges.' This option tries to set a condition, but it still relies on a questionable premise: if instructor quality is known to be the same, other factors could still differ (student quality, resources, policies). Even with equal instructor quality, you cannot conclude pay causes higher graduation without ruling out all other confounders; and in practice, assuming equal instructor quality across colleges is rarely justified without evidence.
Option 5: 'No, the student quality may vary across the colleges' (note: this is a duplicate reflection of Option 1). Reiterating the same concern about differences in student populations reinforces the reasoning that pay alone does not prove causation.
Option 6: 'No, the standards for graduation may vary across the schools. College A may be less strict in terms of grades.' (note: this repeats the concern from Option 2). Emphasizing varying graduation standards again underscores that differences in outcomes could stem from policy or grading practices rather than pay practices.
In summary, the two statements beginning with 'No' correctly identify viable alternative explanations—differences in student quality and differences in graduation standards—that can account for higher graduation rates without attributing the effect to higher pay. The remaining options incorrectly assume causation or rely on unverified conditions, which does not establish a causal link between instructor pay and graduation rates.

ECON5_WI25_A00 Week 1 Quiz

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