Questions tagged [causality]

The relationship between cause and effect.

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Identifying assumption meaning

I am hoping to get a good explanation regarding what is meant by an identifying assumption. In many articles, under empirical strategy, authors state that: we exploit firm level variation to identify ...
user508281's user avatar
7 votes
2 answers
330 views

When can economists claim to "understand" an event or phenomenon?

It's a common refrain that economists still don't have a solid grasp of the causes of business cycles (in particular, the Great Depression), despite decades of serious study. What would it take to say ...
sirallen's user avatar
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7 votes
1 answer
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How time zones affects causality?

Considering that markets open in different time zones, in general the opening and closing times are different. I suppose that a stock market opening later (in the same day) receive information on the ...
AbateFaria's user avatar
6 votes
5 answers
602 views

The relation between econometrics and machine learning

In my understanding the utility of econometrics versus machine learning is generally argued to be the research of causality. If I'm not wrong, when we put aside experimental economics, the golden ...
mobupu's user avatar
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3 votes
1 answer
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Does mathematical education imply a better salary?

In some sense this is a follow-up to Correlation between salary level and housing prices in a town There I was reminded to ask for causality, not correlation. I am interested in the causal effect of ...
Gergely's user avatar
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3 votes
1 answer
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Difference-in-differences with long time horizon and repeated treatments

I have a high-frequency panel dataset on the order of $i=150$ and $t=5000$. I am interested in studying the causal impact of a treatment with the following characteristics: The same unit can be ...
atkat12's user avatar
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3 votes
1 answer
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Looking for discussion on equilibrium vs dynamic models in econometrics

I'm a statistician/machine learning scientist more familiar with molecular bio than economics. Trying to find out if an issue I perceive in bio modeling also occurs in econometric modeling. A common ...
Count Zero's user avatar
3 votes
1 answer
192 views

How does counterfactual for continuous variables work?

It is clear to me what counterfactual is and how it works for binary variables. However, I'm confused about how it works for continuous variables. For example, we are trying to estimate the effect of ...
cc88's user avatar
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3 votes
1 answer
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I'm studying the effect of a law on a sector: how do I select the control group?

I'm planning on using a regression discontinuity design (RDD) to estimate the impact of a sector-specific law on the firms in that sector. I need to create a control group and I have read somewhere in ...
Fabio I.'s user avatar
3 votes
1 answer
132 views

SVAR causal interpretation: shock effects vs effects between variables

Consider a structural vector autoregressive (SVAR) model. One way to define a SVAR model is $$ \begin{aligned} B_0 y_t = B_1 y_{t-1} + \cdots + B_p y_{t-p} + \omega_t \quad (1) \ , \end{aligned} $$ ...
vvv's user avatar
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3 votes
0 answers
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Quantifying treatment effect in multivariate interrupted time series

I have a multivariate time series dataset, from which I am building an ITS (Interrupted Time Series) model by using facebook's Prophet to construct the counterfactual. Let's say I have a y variable ...
Arthur Langlois's user avatar
2 votes
2 answers
214 views

How to correct selection bias in an econometric analysis?

We know that selection bias occurs when the treatment and control groups are not comparable, leading to differences in the outcome that are not solely due to the treatment. How does one address the ...
funcard's user avatar
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2 votes
1 answer
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Articles on the definition of causality in Economics

I am looking for illustrative "soft" articles on the definition of causality of Economics. Something to assign as a reading in a causal inference course. Any ideas?
Papayapap's user avatar
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2 votes
1 answer
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Interacting covariates with the instrument in the first stage

If I want to run a 2 stage least squares (2SLS) regression with: Relationship of interest: $Y = \alpha + \beta X + \varepsilon $, where $X$ is the endogenous explanatory variable of interest. If I ...
ArOk's user avatar
  • 351
2 votes
1 answer
68 views

Group contamination in Regression Discontinuity

I'm an undergraduate student I have an empirical question regarding Regression Discontinuity and Diff-in-Diff methods. I'm currently evaluating the impact on fertility of a Conditional Cash Transfer ...
LuizHS's user avatar
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2 votes
0 answers
35 views

Staggered difference-in-difference for binary outcome and time-to-outcome

I am trying to find out the effect of a training program for employees by answering 2 questions: Does taking training increase the probability of an employee getting promoted? Does taking training ...
yunchan's user avatar
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0 answers
63 views

Trade-off between "extent of controls" and "quasi-experimental"

I apologize in advance for a long and possibly misworded question. I am trying to get to something but I am not exactly sure how to explain it. Hopefully, you can bear with me and provide me with some ...
FZS's user avatar
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2 votes
0 answers
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Professors Salary vs Alumni Earning: is the relation causal?

Elyase İskender posted in his blog an interesting plot correlating Professors Salary and Alumni Earnings Relation in US Universities. Is there a good way to establish causality here? Did the highest ...
emeryville's user avatar
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1 vote
1 answer
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Abadie's Kappa (2003) for continuous treatments / IVs

Does somebody know if there exist results and estimators to deal with controls in IV estimation under heterogeneous treatment effects, analogous to Abadie's Kappa (2003) for the binary case? Abadie, ...
Papayapap's user avatar
  • 1,833
1 vote
2 answers
193 views

Diff-in-diff with two control groups: compare parallel trends

Suppose in a diff-in-diff problem, I have two control groups, but just one can be used as comparison, so I want to check which of them provides a better comparison. My idea is to compare the parallel ...
Oalvinegro's user avatar
1 vote
1 answer
42 views

Where to find information to establish causation between economic policies and economic data?

I've merely taken a few economic courses in college -not an economics major-, so my knowledge regarding the field is limited. Lately I've been interested in learning about the economic impact of ...
Sam's user avatar
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1 vote
1 answer
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Justification for my Random Effects estimation

I need to defend my use of the Random Effects (RE) estimator in my economics project. I've been told in cross validated that the proper place for the question is here. The causal effect of the ...
Kelly's user avatar
  • 329
1 vote
1 answer
86 views

Granger-Sims causality and subtle differences

For a bivariate process $(\textbf{X},\textbf{Y})=( (X_t, Y_t)^\top, t\in\mathbb{Z})$, we say that the process $\textbf{X}$ Sims-causes the process $\textbf{Y}$ (notation $\textbf{X}\overset{Sims}{\to}...
Albert Paradek's user avatar
1 vote
2 answers
138 views

How to estimate loss of customers due to customer support inefficiency?

I have a data about customers and their activity on a website for a two-year period. Also, I have a customer support work evaluation data for a shorter period of that two-year period. The question is: ...
Sergey  Gulbin's user avatar
1 vote
0 answers
32 views

Heterogeneous treatment effects with two post-treatment time and without never-treated groups

I am trying to evaluate a policy with staggered policy time (the policy was implemented in two different years), and there are no never-treated groups. The data (four-time period, highly unbalanced - ...
Chang's user avatar
  • 11
1 vote
0 answers
13 views

Can I test Granger causality in cyclical components?

I want to test Granger causality test in cyclical components of GDP and private credit, obtained with Christiano-Fitzgerald filter in annual growth rates of quarterly data. The main purpose is to find ...
Miriam SQ's user avatar
1 vote
0 answers
49 views

What type of econometrics is practised most?

This might sound like a weird question, but what type of econometrics is most common in academia and / or the private sector? Here I am thinking about time series econometrics (Bayesian and ...
ArOk's user avatar
  • 351
1 vote
0 answers
19 views

One Treated Unit That Becomes Untreated

Suppose I have a set of units $n_i, i = 1,...,N$. One unit was receiving a treatment $n_j = 1$ at times $t=1$ to $t=\tau$. All other units never received the treatment so $\forall t, n_i=0,i\neq j$. ...
random's user avatar
  • 33
1 vote
0 answers
167 views

Difference in Regression Discontinuity Estimates

Suppose I run a regression discontinuity design (RDD) for two different samples - say, separately for regions A and B of the same country. I get RDD estimates that are statistically significant in ...
sgdomi's user avatar
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1 vote
0 answers
44 views

Partial least square structural equation modeling

The Partial least square structural equation modeling (PLS-PM, PLS-SEM) method to structural equation modeling allows estimating complex cause-effect relationship models with latent variables. This ...
emeryville's user avatar
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0 votes
3 answers
59 views

Causal link between business expansion and profit

I'm working on a conceptual model regarding a restaurant business looking to expand (by adding more restaurants). In that model, there are several variables which lead to lowering costs or increasing ...
Bachir Messaouri's user avatar
0 votes
1 answer
43 views

Simultaneous Causality and Variance within a supply and demand model

Given two single-variable regression equations, one for Demand and one for Supply, both with error terms and a constant. How does one solve for equilibrium quantity, price? Obviously you can set ...
baronwellingtoniii's user avatar
0 votes
2 answers
11k views

What are the difference between industry fixed effects and industry*year fixed effects?

In some papers, in column 4 Table 1, the author used firms fixed effects and industry*year fixed effect at the same time. I have two questions here: What does industry * year fixed effect mean? What ...
Phil Nguyen's user avatar
  • 1,110
0 votes
1 answer
57 views

Stock return predictability. Why do papers continue to use Granger Causality tests

There is a long literature on stock return predicabtility. When I read papers I see lots of authors still using granger causality tests. It is still prominently taught in undergrad and grad classess....
user22485's user avatar
  • 136
0 votes
1 answer
45 views

Estimating causal effect for educated people on wages

I have a problem regarding causation and effect. I have a linear model $ wage=\beta_0+\beta_1educ+\beta_2female+\beta_3hourseworked+errorterm$ When I need to estimate the causal effect for educated ...
aa_x's user avatar
  • 101
0 votes
2 answers
38 views

causal time series analysis economics

I want to analyse the relationship between the level of globalization,and the level of income inequality between two specific countries. however, I'm quite lost as to which method is good to use (in ...
user279711's user avatar
0 votes
0 answers
13 views

Regression and RDD give results in opposite directions but both statistically significant

I am conducting an RDD on an attitude and how it shifts over time due to a shock (sharp RD measured in days), I am using RDROBUST in STATA. I do not think I have coding errors but I need help ...
rdd_help's user avatar
0 votes
0 answers
15 views

Predicting the Impact of War?

How would an economist go about predicting the impact of a potential war on a certain country's economy? Say we are interested in assessing the impact of a possible war over Taiwan on the GDP of ...
kékszajkók's user avatar
0 votes
0 answers
13 views

Cross sectional survey - difference in difference campaign evaluation

I would like to use two cross sectional surveys to evaluate the impact of a media campaign on public opinions. The problem is how to identify the "untreated" at baseline? Technically ...
macster's user avatar
0 votes
0 answers
32 views

Behavioral responses of tax policy on labour supply ( first time doing Difference in Differences)

I am trying to estimate the causal effects of the The Working Income Tax Benefit (WITB) on the labour supply of married women in Canada. The WITB is essentially equivalent to the EITC. I am looking at ...
Friendlyperson2020's user avatar
0 votes
0 answers
53 views

How will Coronavirus affect Social Security solvency?

The Coronavirus (known by younger millennials as the "Boomer Plague") is estimated to have a cost of life between 100,000 - 240,000 Americans. According to the CDC approximately 80% of deaths ...
Evan Carroll's user avatar
0 votes
0 answers
117 views

Causal Interpretation of $\beta_1$ with a Dummy explanatory variable

Suppose you run a regression (over the entire sample) of hourly earnings $Y$ with an intercept and a binary variable $D$, where $D$ takes on a value of $1$ if the individual has a college degree and $...
CharlieCornell's user avatar
0 votes
0 answers
11 views

Where to find a list of U.S. policy changes for causal studies?

I'm currently trying to figure how the topic of my paper, which is supposed to be related to policy evaluation (causal inference). I thought it would be great if I could first obtain a list of recent ...
T. G.'s user avatar
  • 316