Business, 10.05.2021 16:10 natishtaylor1p8dirz

A bank offers a week long management training programme to all its loan officers atthe end of the second year in their job. Participation in the programme is voluntary. The bank is interested in knowing whether participation in the programme makes itmore likely that a loan officer is promoted to branch manager. You have data on allthe bank’s loan officers, their participation in the programme, and whether they havebeen promoted between years three and five of being in their job. You run a regressionfor the promotion decision on a constant and a dummy for participation in the training programme. Required:
a. Suppose the bank encourages participation in the training programme by sending a personal letter from the CEO to selected employees who have been recommended by their supervisor as showing particular potential for a position in management. Would it be useful to use the CEO letter as an instrument for participation in the training programme? Explain why or why not.
b. Suppose the bank encourages participation in the training programme by sending a personal letter from the CEO to a randomly chosen set of employees. Would it be useful to use this CEO letter as an instrument for participation in the training programme? Explain why or why not.

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A bank offers a week long management training programme to all its loan officers atthe end of the se...