Adjusted Values

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• Grid for responses is coarse
  • 5%, 10%, ..., 200%

• Measured r2 value is a lower bound on the r2 value that might be obtained with a finer grid

• To find an upper bound
  • adjust the wealth in each state towards the regression line
  • maximum adjustment = 2.5%

• Fit a new regression line and measure r2
  • provides an upper bound