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Is there a systematic way to assess regression studies? (SW Chapter 9) . A Framework for Assessing Statistical Studies: Internal and External Validity. Threats to External Validity. Threats to Internal Validity. 1. Wrong functional form . 2. Omitted variable bias . - PowerPoint PPT Presentation
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Is there a systematic way to assess regression studies? (SW Chapter 9)
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A Framework for Assessing Statistical Studies: Internal and External Validity
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Threats to External Validity
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Threats to Internal Validity
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1. Wrong functional form
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2. Omitted variable bias
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3. Errors-in-variables bias
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Errors-in-variables bias
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Errors-in-variables bias
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Potential solutions to errors-in-variables bias
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4. Sample selection bias
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Example #1: Mutual funds
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Example #2: Returns to education
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Potential solutions to sample selection bias
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5. Simultaneous causality bias
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Simultaneous causality bias
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Potential solutions to simultaneous causality bias
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Internal and External Validity When the Regression is Used for Forecasting
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Applying External and Internal Validity: Test Scores and Class Size
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The Massachusetts data: summary statistics
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Predicted effects for a class size reduction of 2
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Summary of Findings for Massachusetts
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Comparison of estimated class size effects: CA vs. MA
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Summary: Comparison of California and Massachusetts Regression Analyses
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Remaining threats to internal validity in the test score/class size example?
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Spot the Endogeneity?
• Effect of police on crime …
• Estimating the effect of police on crime …
• Source: Levitt (American Economic Review, 1997)
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Spot the Endogeneity?• Estimating the effect of police on crime …
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Spot the Endogeneity?• Estimating the effect of guns on crime …
• Source: Ayres and Donohue (Stanford Law Review, 2003)
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Spot the Endogeneity?• Estimating the effect of studying on GPA …
• Source: Stinebricker and Stinebricker (BE Journal of Analysis & Policy, 2008)
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Spot the Endogeneity?• Estimating the effect of school start time on academic
performance …
• Source: Carrell, Maghakian, and West (American Economic Journal: Economic Policy, 2011)
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Spot the Endogeneity?• Estimating the effect of national income on democracy
…
• Source: Acemoglu, Johnson, Robinson, and Yared (American Economic Review, 2008)
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Spot the Endogeneity?• Estimating the effect of competition on student
achievement …
• Source: Hoxby (American Economic Review, 2000)
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Spot the Endogeneity?• Estimating the effect of teen drinking on HS
completion/attending college …
• Source: Dee & Evans (Journal of Labor Economics, 2003)