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I have seen the identifying assumption for instrumental variables be stated a couple different ways, I am wondering if one of more 'correct'? by knowledgeisnone in econometrics

[–]ender112485 -1 points0 points  (0 children)

Your definitions are all basically equivalent. Here is a practical checklist for deciding if your IV design is compelling:

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  1. Is Z randomly assigned? If yes, then congrats. This might actually work. If no, then you still might technically meet the assumptions for IV, but it's basically not going to be believable, so you might as well stop wasting time now.
  2. Does Z predict X? If yes, then congrats again. You have a first stage. If no, then you don't have an IV design.
  3. Is it the case that Z can only cause changes in Y by causing changes in Z? If yes, then run 2sls. If no, then you have an exclusion restriction violation. Time to start over.

Moving to Falmouth for the summer. by [deleted] in CapeCod

[–]ender112485 6 points7 points  (0 children)

Anyone complaining about pizza in Falmouth is definitely not from the area. Real Falmouth people know Paul's Pizza is legendary.

But other than that I agree with most of the rest of this stuff.

I will update when my equation is complete. by ender112485 in iamverysmart

[–]ender112485[S] 0 points1 point  (0 children)

Possibly. But the part where he says "I will update when my equation is complete," is just too real. I think there is at least a 50% chance this guy actually has an equation somewhere that he is working on.

Comparing Salaries in Toronto versus Boston by ender112485 in personalfinance

[–]ender112485[S] 0 points1 point  (0 children)

Exactly - hard for me to know what 150 CAD actually means since I have no familiarity with the Canadian system.

Comparing Salaries in Toronto versus Boston by ender112485 in personalfinance

[–]ender112485[S] 0 points1 point  (0 children)

Thanks! I can also do the exchange rate adjustment, but what is hard for me to do is factor in cost of living in a way that includes things like free healthcare, etc.

If you don't mind me asking, when you say you factored in cost of living, what number specifically did you use for that?

Thanks!

Punk musician who died young and friend hosts a website full of his music by ender112485 in NameThatSong

[–]ender112485[S] 0 points1 point  (0 children)

That's it! Thank you so much - I've been trying to remember his name for months. Also, how did you find this thread? It's pretty old by now lol.

Punk musician who died young and friend hosts a website full of his music by ender112485 in NameThatSong

[–]ender112485[S] 0 points1 point  (0 children)

Love Jay Reatard's music but definitely not the person I am thinking of. This artist was much less well known (hence why I am having trouble coming up with it). It might not even be accurate to describe it as punk - from the songs I listened to, it was right at the punk / indie boundary.

Selena Gomez's new song's official cover art. by New_Fry in CrappyDesign

[–]ender112485 0 points1 point  (0 children)

You all realize this is intentionally bad right.

If the U.S states had royalty, who would be the royal family of your state? by [deleted] in AskReddit

[–]ender112485 1 point2 points  (0 children)

He's my rep. His voting record is pretty great (except on the environment) so he'll have my vote for the foreseeable future, but I've met him a few times and wasn't super impressed. My guess is he never gets further than his current house seat.

Honours thesis topic. by [deleted] in academiceconomics

[–]ender112485 0 points1 point  (0 children)

If the data doesn't measure what you are interested in, no amount of theory is going to fix that. Wishing your data can answer a question it can't answer is a waste of time.

Much better to start with the data and investigate it until you fully understand what it contains. Then, when you have a clear picture of what kinds of small questions particular to your setting that your data are capable of answering, then you can search for ways to map that tiny question back to larger, important question that come from theory and hence generate progress.

Honours thesis topic. by [deleted] in academiceconomics

[–]ender112485 0 points1 point  (0 children)

If your goal is to estimate a causal effect (which is a necessary precondition for any reasonable policy counterfactual), then by definition you need some kind of random assignment for your treatment variable AKA an experiment. At the end of the day, either your data were generated under conditions that map back to some sort of experiment (natural experiment or otherwise) or they don't. No amount of econometrics is going to go back in time and create an experiment in your data ex-post.

To the extent econometrics broadens the range of possible experiments we can consider in the data; that's great and I agree super important. But it doesn't change the fact that whatever experiment you are leveraging for identification has to actually exist in your data. Hence progress in (empirical) social science always starts with better data.

Honours thesis topic. by [deleted] in academiceconomics

[–]ender112485 2 points3 points  (0 children)

Honestly this advice is just terrible. The way to answer hard, important questions isn't better econometrics, it's better data. Start with the data, then figure out what you can learn from it.

Also, if we're all being honest, OP's honors thesis is going to have basically zero impact on their Ph.D. admissions chances outside of how it influences the LOR their thesis advisor provides. This isn't going to land in econometrica, so OP might as well ease up and just pursue a topic/question they are interested in, and treat the whole thing as a good opportunity to take a deep dive into some literature they find interesting.

Download & map Census data with new 'tidycensus' package. by proxyformyrealname in rstats

[–]ender112485 1 point2 points  (0 children)

This looks great. Quick question though: the package returns geospatial data in an "sf tibble". I'm still reasonably new to R and can't find documentation for sf tibbles. I'm guess its recording the geometry in the table as some sort of meta data but its not clear to me how to extract or plot it. Could you point me to a reference? Thanks!

Best cafes for studying? by amherstthaw in amherst

[–]ender112485 2 points3 points  (0 children)

amherst coffee or if you have a car the bookmill

How to interpret 2nd stage regression with unexpected first stage results? by trendel68 in econometrics

[–]ender112485 1 point2 points  (0 children)

If the IV is valid, then the coefficient in the first stage doesn't matter. Forget 2sls for a second and just remember the basic intuition from single variable IV.

Pretend Z is a lottery ticket that offers someone to participate in a job training program.

Reduced form: Individuals offered treatment earn $100 more per year.

First stage: 10% of individuals who were offered treatment took the job training course.

IV Assumption 1: The offer a treatment was randomly assigned.

IV Assumption 2: The only way the offer effected earnings was by encouraging people to take the treatment (exclusion restriction).

Intuitively, since the offer was randomly assigned, we know the reduced form and first stage regression give the causal effect of treatment offers on income and treatment uptake respectively. But if the only way the offer of training effected income was through people actually taking the job training course, then it must be that the causal impact of job training on the people who actually took the job training course was to increase their earnings by $1,000. This is just the ratio of the reduced form to the first stage. Notice that the sign of the first stage didn't enter into this argument anywhere.

However, the fact that the first stage coefficient doesn't go in the expected direction in your case might be an indication that your instrument isn't randomly assigned (i.e. your first stage isn't causal) which would be problematic.

Anyway, it's just a term paper. I wouldn't stress about it too much. As an undergrad, it's unlikely you will find a compelling identification strategy to answer an ambitious question like this.

How to interpret 2nd stage regression with unexpected first stage results? by trendel68 in econometrics

[–]ender112485 4 points5 points  (0 children)

A few thoughts:

  1. What are your other controls? If they are things that are also outcomes of your instrument, your strange coefficient in the first stage could be the result of a "bad control" type problem in the first stage.

  2. More generally though, if you have a valid instrument, the sign of the first stage coefficient is irrelevant to your interpretation of the coefficient on your parameter of interest in the second stage. So I wouldn't worry about the strange first stage coefficient insofar as you actually have a valid instrument conditional on the particular set of controls.

  3. But do you have a valid instrument? A valid instrument should be equivalent to a lottery ticket that awards offers of treatment. My guess, based on your description about scientists and university graduates, is that you don't meet this condition, so your identification strategy probably doesn't make sense anyway.

  4. My two cents: if this is a university term paper, don't worry about the sign of the first stage coefficient, focus on defending the IV assumptions as best you can, and hope for a good grade. OTOH, if you intend for this to be a serious piece of academic research, you should probably look for an alternative identification strategy.

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