Category THE PATH FROM CAUSE TO EFFECT

Alas, there’s more to earnings than sex, schools, and SAT scores. Since college attendance decisions aren’t randomly assigned, we must control for all factors that determine both attendance decisions and later earnings. These factors include student characteristics, like writing ability, diligence, family connections, and more. Control for such a wide range of factors seems daunting: the possibilities are virtually infinite, and many characteristics are hard to quantify. But Stacy Berg Dale and Alan Krueger came up with a clever and compelling shortcut.- Instead of identifying everything that might matter for college choice and earnings, they work with a key summary measure: the characteristics of colleges to which students applied and were admitted.

Consider again the tale of Uma and ...

British physician John Snow was one of the fathers of modern epidemiology, the study of how illness moves through a population. Studying an outbreak of cholera in London in 1849, Snow challenged the conventional wisdom that the disease is caused by bad air. He thought cholera might be caused by bad water instead, an idea he first laid out in his 1849 essay On the Mode of Communication of Cholera.

A further cholera outbreak in 1853 and 1854 claimed many lives in the London neighborhood of Soho. Snow attributed the Soho epidemic to water from a pump on Broad Street. Not afraid to give a natural experiment a helping hand, he convinced the local parish council to remove the handle of the Broad Street pump...

Our regression discussion has largely ignored the fact that our data come from samples. As we noted in the appendix to the first chapter, sample regression estimates, like sample means, are subject to sampling variance. Although we imagine the underlying relationship quantified by a regression to be fixed and nonrandom, we expect estimates of this relationship to change when computed in a new sample drawn from the same population. Suppose we’re after the relationship between the earnings of college graduates and the types of colleges they’ve attended. We’re unlikely to have data on the entire population of graduates. In practice, therefore, we work with samples drawn from the population of interest...

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Abbreviations and acronyms are introduced on the page indicated in parentheses.

2SLS two-stage least squares, an instrumental variables estimator that replaces the regressor being instrumented with fitted values from the first stage (p. 132)

ALS a study by Joshua D. Angrist, Victor Lavy, and Analia Schlosser on the causal link between quantity and quality of children in Israeli families (p. 127)

BLS Boston Latin School, the top school in the Boston exam school hierarchy (p. 164)

C&B College and Beyond, a data set (p. 52)

CEF conditional expectation function, the population average of Y. with X. held fixed (p. 82)

CLT Central Limit Theorem, a theorem which says that almost any sample average is approximately normally distributed, with the accuracy of the approximation increasing...

blind master PO: Close your eyes. What do you hear? young kwai chang caine: I hear the water, I hear the birds. master PO: Do you hear your own heartbeat?

KWAI CHANG CAINE: No.

master PO: Do you hear the grasshopper that is at your feet? kwai chang caine: Old man, how is it that you hear these things?

master PO: Young man, how is it that you do not?

Kung Fu, Pilot

Economists’ reputation for dismality is a bad rap. Economics is as exciting as any science can be: the world is our lab, and the many diverse people in it are our subjects.

The excitement in our work comes from the opportunity to learn about cause and effect in human affairs...

katy: Is this really what you’re gonna do for the rest of your life? boon: What do you mean?

katy: I mean hanging around with a bunch of animals getting drunk every weekend.

boon: No! After I graduate, I’m gonna get drunk every night.

Animal House, 1978 … of course

Your twenty-first birthday is an important milestone. American over-2 Is can drink legally, “at last,” some would say. Of course, those under age drink as well. As we learn from the exploits of Boon and his fraternity brothers, not all underage drinking is in moderation. In an effort to address the social and public health problems associated with underage drinking, a group of American college presidents have lobbied states to return the minimum legal drinking age (MLDA) to the Vietnamera threshold of 18...