1. In many US states, high school students are offered scholarships are given to students to students who remain in-state for university or college. For example, Kansan high school students can receive scholarships for$12,500if they go to a university within Kansas. These types of policies are often thought to fight brain-drain from states that lack a high-skill workforce. Suppose that you are a policy analyst investigating the effect of scholarship provision on brain-drain. As a baseline model you estimateResidency i,t=β 0+β 1Scholarship i,t−1+ε iwhere Residency is a binary variable indicating whether or not Kansas high school studentiresided in Kansas in timetand Scholarship is a binary variable indicating whether or not Kansas high school studentireceived a scholarship to attend an in-state university in timet−1. Suppose the estimated model wasResidenc i,t= (0.0023)0.721− (0.00078)0.043Scholarship i,t−1a) Interpretβ^0andβ^1
