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7. Suppose you are interested in estimating the causal effects of community serviceon earnings. You want to estimate the following regression: \ln (e a m i n g s)_{1}=\beta_{0}+\beta_{1} \text { CommSerı }+u_{1} where CommSer; is an indicator variable that takes the value 1 if the individual doescommunity service and 0 otherwise. [5 marks] a) Consider each of the five threats to internal validity listed in section 9.2 of the textbook. Critically discuss each of those five threats in this context. [2.5 marks] b) Suppose there is a lottery where the numbers 1 through 100 are randomly drawn for each individual in the population. Individuals with low numbers are told they will have to do community service unless they either make a charitable donation or pursue a graduate degree while individuals with high numbers are told they will not have to do community service. Is this randomly assigned lottery number a valid instrument for CommSer? [2.5 marks]

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