MEPX
Chapter 7 of 10All chapters

Chapter 7 of 10

Causal inference

When you cannot randomise.

Confounding

Observational comparisons mix the effect of the treatment with the reasons people received it. Adjustment helps and never fully substitutes for randomisation.

  • Adjusting for a variable on the causal path removes part of the real effect.
  • Draw the assumed causal diagram before choosing what to control for.

Quasi-experiments

Difference in differences, regression discontinuity and instrumental variables exploit near-random variation. Each rests on assumptions that should be stated and tested.