Tag Archives: Statistics & Econometrics

Collider bias (student stuff) .[embedded content]

How statistics can be misleading .[embedded content] From a theoretical perspective, Simpson’s paradox importantly shows that causality can never be reduced to a question of statistics or probabilities. To understand causality we always have to relate it to a specific causal structure. Statistical correlations are never enough. No structure, no causality. Simpson’s paradox is an interesting paradox in itself, but it can also highlight a deficiency in the...

Contaminated data — the case of racial discrimination .[embedded content]

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Econometrics — science built on untestable assumptions  Just what is the causal content attributed to structural models in econometrics? And what does this imply with respect to the interpretation of the error term? … Consider briefly the testability of the assumptions brought to light in this section. Given these assumptions directly involve the factors omitted in the error term, testing these empirically seems impossible without information about what is...

Why econometric models by necessity are endlessly misspecified The impossibility of proper specification is true generally in regression analyses across the social sciences, whether we are looking at the factors affecting occupational status, voting behavior, etc. The problem is that as implied by the three conditions for regression analyses to yield accurate, unbiased estimates, you need to investigate a phenomenon that has underlying mathematical...

Do any benefits of alcohol outweigh the risks? .[embedded content] Identifying the data generating process sure is important if we want to be able to understand data. Finding a correlation between drinking alcohol and mortality does not explain anything, and certainly does not mean that you have been able to identify a causal relation between variables. Regressing on covariates is not enough. There are tons of alternative explanations for the (alleged)...

Discovering causes from correlations .[embedded content]

The problems we face when using instrumental variables (student stuff) .[embedded content]

Användandet av instrumentalvariabler används numera flitigt bland ekonomer och andra samhällsforskare. Inte minst när man vill försöka gå bakom statistikens ‘korrelationer’ och också säga något om ‘kausalitet.’ Tyvärr brister det ofta rejält i tolkningen av de resultat man får med hjälp av den vanligaste metoden som används för detta syfte — statistisk regressionsanalys. Ett exempel från skolområdet belyser detta väl. Ibland hävdas det bland skoldebattörer och politiker att...