Groups A and B are where the action is in our example, since these groups include public and private school students who applied to and were admitted to the same set of schools. To generate a single estimate that uses all available data, we average the group-specific estimates. The average of − $5,000 for group A and $30, 000 for group B is $12, 500. This is a good estimate of the effect of private school attendance on average earnings, because, to a large degree, it controls for applicants’ choices and abilities.
