4. Workers at Yosemite National Park started giving out free binoculars to visit

Question

4. Workers at Yosemite National Park started giving out free binoculars to visitors in July so that people could more easily see the beauty of the park. Here are visitors to the park in July and the preceding months: Yosemite visitors Month April May June Jul 400,000 450,000 500,000 One interpretation of these data is that the free binoculars increased visitors by 100,000 since visitors increased from 500,000 to 600,000 from June to Juljy a) What was happening to the number of visitors in the months before the free binoculars? What is the estimate of the impact of the free binocular in July after removing the trend in visitors? b) Now ignore trend and consider instead information from another national park. Suppose that you find information below on the number of visitors at Redwood National Park, which did not give out free binoculars. What is the difference in difference estimate of the effect of the free binoculars on visitors at Yosemite? April May une Jul Year Redwood National Parlk 300,000 320,000 340,000 360,000

Explanation / Answer

Ans. 4

(a) If we look at the table and analyze that the number of visitors were increasing by 50,000 every month before the park announced to give free binoculars from the month of July.

But, when the park announced that it will give free binoculars from july to every visitor, this increased the number of visitors by 100,000 in the month of July.

If this increase will remain in subsequent months and park gives everyone free binoculars, then the cost of binoculars will increase and at one moment, the number of visitors in the park would be so much, that it would be too costly to provide everyone free binoculars.

However, the park can do one thing, they can give every visitor binocular and when they exit the park, the park officials can collect the same binoculars from the visitors. In this way, the cost of bincoulars can be reduced and the number of visitors remain unaffected.

(b) Now in this information, the visitor in each month is increasing by a constant difference of 20,000 even though the park is not giving them free binoculars. This increase in visitors could be because of better quality of the park, or more species of the bird in the park. However, if the park authorities start some other programs like the one introduced by Yosemite, then they would also experience a rapid increase in their number of visitors.

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