Lars P. Syll

Natural experiments in the social sciences How, then, can social scientists best make inferences about causal effects? One option is true experimentation … Random assignment ensures that any differences in outcomes between the groups are due either to chance error or to the causal effect … If the experiment were to be repeated over and over, the groups would not differ, on average, in the values of potential confounders. Thus, the average of the average...

Causality and analysis of variation Modern econometrics is fundamentally based on assuming — usually without any explicit justification — that we can gain causal knowledge by considering independent variables that may have an impact on the variation of a dependent variable. This is however, far from self-evident. Often the fundamental causes are constant forces that are not amenable to the kind of analysis econometrics supplies us with. As Stanley Lieberson...

Kids knowing more about scientific methods than economists Limiting model assumptions in economic science always have to be closely examined since if we are going to be able to show that the mechanisms or causes that we isolate and handle in our models are stable in the sense that they do not change when we “export” them to our “target systems”, we have to be able to show that they do not only hold under ceteris paribus conditions and a fortiori only are...

Covariance algebra (student stuff) .                                                                                                                                                                                                 [embedded content]

The “prisoner’s dilemma” is a familiar concept to just about everyone who took Econ 101 … Yet no one’s ever actually run the experiment on real prisoners before, until two University of Hamburg economists tried it out in a recent study comparing the behavior of inmates and students. Surprisingly, for the classic version of the game, prisoners were far more cooperative than expected. Menusch Khadjavi and Andreas Lange put the famous game to the test for the first time ever,...

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Instrumental variables (student stuff) .                                                                                                                                 [embedded content]

Leontief and the sorry state of economics Page after page of professional economic journals are filled with mathematical formulas leading the reader from sets of more or less plausible but entirely arbitrary assumptions to precisely stated but irrelevant theoretical conclusions … Year after year economic theorists continue to produce scores of mathematical models and to explore in great detail their formal properties; and the econometricians fit algebraic...