Tag Archives: Statistics & Econometrics

Regression analysis — a constructive critique As a descriptive exercise, all is well. One can compare the average salary of men and women, holding constant potential confounders. The result is a summary of how salaries differ on the average by gender, conditional on the values of one or more covariates. Why the salaries may on the average differ is not represented explicitly in the regression model … Moving to causal inference is an enormous step that needs...

How to control confounding (wonkish)  [embedded content] Advertisements

The debate about RCTs is over. The randomistas lost. We won.  [embedded content] Advertisements

In the ongoing discussion on the ’empirical revolution’ in economics, some econometricians criticise — rightfully — the view that quasi-experiments and RCTs are the (only) true solutions to finding causal parameters. But — the alternative they put forward, structural models, have their own monumental problems. Structural econometrics — essentially going back to the Cowles programme — more or less takes for granted the possibility of a priori postulating relations that describe...

Estadística y econometría no son muy útiles para entender la economía La mayor parte del trabajo en econometría y estadística se realiza suponiendo que el investigador tiene un modelo teórico que es “verdadero”. Sin embargo, “pensar que podemos construir un modelo donde todas las variables relevantes están incluidas, y que las relaciones funcionales que hay entre ellas están correctamente especificadas, no es solamente una creencia sin sustento, sino que es...

The range of men and women I happen to be reading The Puppet Masters, a Heinlein novel from the 1950s … and came across this line: “Listen, son—most women are damn fools and children. But they’ve got more range than we’ve got. The brave ones are braver, the good ones are better—and the vile ones are viler. . . .” What struck me about the above quote is how it goes in the opposite of current received wisdom about men and women, the view, associated with...

Causal interaction and external validity As yours truly has repeatedly argued on this blog, randomized control trials (RCTs) usually do not provide evidence that their results are exportable to other target systems. The almost religious belief with which its propagators portray it, cannot hide the fact that RCTs cannot be taken for granted to give generalizable results. Randomized evaluations have become widespread in development economics in recent...

The Gambler’s Ruin (wonkish)  [embedded content] [In case you’re curious what happens if you start out with $25 but we change the probabilities — from 0.50, 0.50 into e. g. 0.49, 0.51 — you can check this out easily with e.g. Gretl:matrix B = {1,0,0,0; 0.51,0,0.49,0;0,0.51,0,0.49;0,0,0,1} matrix v25 = {0,1,0,0} matrix X = v25*B^50 X which gives X = 0.68 0.00 0.00 0.32] Advertisements

Wenn Wissenschaftler etwas herausgefunden haben – wann kann man sich auch tatsächlich darauf verlassen? Eine Antwort lautet: Wenn Fachkollegen die Studie überprüft haben. Eine andere: Wenn sie in einer renommierten Fachzeitschrift veröffentlicht wurde. Doch manchmal reicht auch beides zusammen nicht aus, wie Forscher jetzt gezeigt haben. Und zwar auf die beste und aufwendigste Art: Sie haben die zugrundeliegenden Experimente wiederholt. Und geschaut, ob noch einmal dasselbe...

Some common misunderstandings about randomization Randomization is an alternative when we do not know enough to control, but is generally inferior to good control when we do. We suspect that at least some of the popular and professional enthusiasm for RCTs, as well as the belief that they are precise by construction, comes from misunderstandings about … random or realized confounding on the one hand and confounding in expectation on the other … The RCT...