This note presents comments on a study by Director. In particular, it is shown that Equa
tion 2 of Director appears to be incorrect. The equation is rederived and contrasted with
Director's original result. The analysis shows that underadjustment bias will result when
the observed preprogram earnings of participants contain larger measurement errors than
those contained in the earnings of nonparticipants.
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References
1.
Ashenfelter, O. (1978) "Estimating the effect of training programs on earnings." Rev. of Econ. and Statistics60: 47-57.
2.
Barnow, B.S., G.G. Cain, and A.S. Goldberger (1980) "Issues in the analysis of selectivity bias," in E. Stromsdorfer and G. Farkas (eds.) Evaluation Studies Review Annual (Vol. 5). Beverly Hills, CA: Sage.
3.
Cooley, T.F., T.W. McGuire, and E.C. Prescott (1979) "Earnings and employment dynamics of manpower trainees: an exploratory econometric analysis," in F. Block (ed.) Evaluating Manpower Training Programs. Greenwich, CT: JAI Press.
4.
Director, S.M. (1979) "Underadjustment bias in the evaluation of manpower training." Evaluation Rev.3: 190-218.
5.
Johnston, J. (1972) Econometric Methods. New York : McGraw-Hill.
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Kmenta, J. (1971) Elements of Econometrics. New York: Macmillan.
