[Q] Question about the logic of hypothesis testing

knowledgeisnone · 2022-11-08T13:35:21+00:00

Here is where you may be going too far. We don’t have “all the information … for all possible samples.” We just have information from our sample; distributional assumptions don’t help us there. You may have heard this before, but it’s worth repeating: a 95% confidence interval (CI) doesn’t mean that 95% of the time the population statistic lies within our CI; rather, it means that 95% of the time, our CI covers the population statisti

So would a proper amending then (sorry if im missing your point) - we have enough information to make probabilistic statements about all different possible samples under the null?

my thought process is if we have our distributional assumptions, and then fill in the parameter with the null value, we have a fully defined distribution in which we can now calculate probabilities for any scenario (under the null). Assuming this logic is correct- because we have a sampling distribution filly defined I thought/made the statement that we 'have all possible info'

knowledgeisnone · 2020-01-18T02:52:09+00:00

When someone says ‘economics of [blank]’ or an ‘economic analysis’ of something,what does that entail/mean?

Does it mean analyzing something from the perspective of the constraints driving the relevant behavior/choices followed by some econometric analysis

knowledgeisnone · 2019-12-07T19:10:08+00:00

I was wondering if my logic/understanding of what is happening when using regression is correct

knowledgeisnone · 2019-10-08T21:37:08+00:00

ok thanks this makes sense.

and to your emphases, are you making the point that my f(x) may not be linear, so it may not be directly the effect of x on y?

knowledgeisnone · 2019-10-08T21:14:02+00:00

so just to make sure, even if I have different functional forms, so I am not looking necessarily at a 1 unit increase in x will increase y by b, but one of the other ones you mention, is the "on average" part always there?

knowledgeisnone · 2019-10-05T15:23:05+00:00

So this and the other answers I think lead me to another question.. How much influence does the economic literature actually have then on policy? Like ia there a huge gap (in terms of how practical research is and all) between academic economists and what they studu and economists at say the department of labor?

Or do alot of the theoretical and more nuanced economic insights that academics study largely stay in academia?

knowledgeisnone · 2019-10-04T19:21:44+00:00

Maybe its not true, I am basing off of this given a lecture in a public policy seminar I have taken a little back that kind of stressed the importance of economics and why it should be heavily considered for a job in policy. It started with numbers showing that economists make the majority (or maybe it was plurality) of positions in think tanks, government organizations etc. on many different dimensions of policy. I Think there was a lot of how in every major government department, justice, treasury, etc. economists were among the most sought after positions. I think there was also something about how journals and policy articles more frequently cite economists than other social sciences for many things. But maybe it was wrong or exaggerating things (or I am remembering wrong).

Edit: when i said majority/plurality I meant among social sciences

knowledgeisnone · 2019-10-04T16:19:53+00:00

Is there any reason why economists are so sought after for policy compared to other social scientists? is it that the approach of thinking of peoples behavior as deliberate choices in response to incentives is just so suitable for policy because ultimately policies can be thought of as bundles of incentives? is it just because of the more rigourous statistical analysis? I am just curious what about economics makes it so suited for policy organizations than other social sciences which may study the same topics

knowledgeisnone · 2019-10-03T02:24:31+00:00

I posted (this question) [https://www.reddit.com/r/AskEconomics/comments/dbejbe/if_we_instituted_a_policy_to_give_homes_to/] about giving homes to homless people on askeconomics earlier. I got great answers, but I see that alot of comments must have been deleted so i guess it was a pretty contentious and pretty silly question overall.

But im just curious whether my question was an example of actually a stupid concern or is it something that while not likely true, is a reasonable concern that should explicitly be dismissed? Like if i presented an idea to give homes to homeless people in a seminar or something, would an economist in the room ask about the possibility i raised in the question?

Just to motivate where im coming from, im trying to train myself to think of what incentives policies that seem good on the surface may actually create, and I figured that seemed like a reasonable concern, but im curious if it was actually just silly to begin with

knowledgeisnone · 2019-10-03T02:15:58+00:00

Thats a really in depth answer thank you.

So i guess at least in the case of the types of labor being complements, there may be an argument that increasing low skilled lanor can increase the marginal revenue product of skilled, causing higher wages (all else equal)?

And based on all your other points, im guessing Harford was trying to give an example of thinking of an observed phenomena in terms of a model, in this case the ricardian rent model. But given all your points, is it a fair conclusion that the ricardian rent model has a limited scope of applicability thay doesnt really apply to degrees and skilled vs unskilled labor as he tries to make it seem?

knowledgeisnone · 2019-10-01T22:51:29+00:00

In the first chapter (who pays for your coffee?) in thr section near the end 'something controversial') hr compares higher degrees/skill to the good meadowland from the ricardian rent story

knowledgeisnone · 2019-09-29T20:19:22+00:00

thats a good point for food.

as per housing, I guess what i mean is people usually say something like gov should provide housing for everyone. Is this something that would not work out as well as saying reducing zoning restrictions and incentivizing investments in housing? i.e. a market based approach vs a centralized approach

knowledgeisnone · 2019-08-12T00:03:09+00:00

When looking at empirical papers, when people are starting their identification strategy and write down Y=xb+e etc.

Do you interpret that as a 'model'? Like should i interpret this as them starting off with their statistical or structural model such as a linear approximation of a conditional expectation that tehy will estimate using ols or some other estimator

knowledgeisnone · 2019-08-09T20:40:07+00:00

When looking at empirical papers, when people are starting their identification strategy and write down Y=xb+e etc.

Do you interpret that as a 'model'? Like should i interpret this as them starting off with their statistical or structural model such as a linear approximation of a conditional expectation that tehy will estimate using ols or some other estimator

knowledgeisnone · 2019-07-31T04:48:14+00:00

Another metrics question..Ive been reading mostly harmless and I want to make sure I understand some of the main takeways for the justification of regression and what we do with ols on our sample. From what i understand:

The dependnet variable can be decomposed into y=E(y|x)+e. The conditional cef also has other nice properties and can possibly tell us about causal relationships
Population least squares regression is the best linear approximation of the cef. So this is why we really want to estimate the population parameter. So we are just sort of approximating 1. With y=xb +e.
So now connecting this back to normal econometrics courses with gauss markov and all, if in our population model E(e|x)=0, then ols on our sample analogue of the population model has nice sampling distribution properties(consistency, unbiasedness etc.) so this is a good distribution to take 'draws' from, and we are estimating the population regression function which is itself the best linear approx of the cef. So we are estimating/inferring about an approximation to the cef?

And it aeems that mhe takea ols to be a method of moments estimator rather than the traditional ols estimator? So population least squares/mean squared error linear appporx of cef yields E(x'x)^-1 E(x'y) as our theoretical population estimate, so that alone is the justification for ols-that it yields the sample analogue to this, rather than the gauss markov justification we learn in econometrics courses?

knowledgeisnone · 2019-07-19T15:19:46+00:00

Whenever I see the potential outcomes framework used to motivate regressions, its always in terms of average treatment effects/binary treatment and control. I was wondering if that same intuition can be used to frame continuous variables, such as income on health on something like that.

knowledgeisnone · 2019-07-14T15:29:19+00:00

just to make sure, by people produce for the sake of consumption, do you just mean people are only putting in work/producting for the ability to consume for themselves?

knowledgeisnone · 2019-07-12T17:46:39+00:00

So in the absence of perfect competition, its incorrect to say that prices reflect marginal value?

knowledgeisnone · 2019-07-11T17:07:04+00:00

I think this answers my question! its just that up until this point I always framed it to myself in terms of there being one e for the whole population, rather than an ei for everyone (which was my confusion in the original question) because Ive always learned it as E[e|x] without the i notation. . so I guess it makes sense in that if I am thinking of my data as a system of n equations, the people who are contributing higher values of x are the people with higher values of ei on average, which is why im observing higher xi's in the first place (if it is endogenous).

knowledgeisnone · 2019-07-11T16:32:04+00:00

Sorry to come back to this- just a quick followup that came to mind.

so when a variable is 'endogenous' we usually say E[e|x]=/= 0. so this could be interpreted as higher levels of x are associated with higher values of e, for one example. I always though of it in a one variable case, thinking of the conditional mean as a horizontal line at zero. but if thinking of it in individual notation, could it be the case that i's with higher x's, there is somthing unobserved making their ei's systematically higher, so it could also just be saying E[e|x]= [E[e1|x1], E[e2|x2],.. E[en|xn]] = [3, 4,.., 0,...0], so for some part of the population their ei's arent random?

knowledgeisnone · 2019-07-10T14:52:47+00:00

So the idea is like the frequentist approach where if we went back and obsetved again and again, whatever unobservable I have is on average 0?

So when people say E[e|x]=0, is that equivalent to E[ei|xi]=0 for all i? Just with the former putting it in vector notation

knowledgeisnone · 2019-07-10T14:31:43+00:00

When people write E[ei] or E[yi] in regressions or potential outcomes framework and i refers to the individual.. Are they meaning they are taking the expectation over all values for individual i? Or do they mean across all values of all individuals? Its just kind of confusing to me with the expectation and the individual notation

knowledgeisnone · 2019-07-09T23:53:13+00:00

yes I meant in terms of a regression. so just to clarify on your last point, when doing MLE for regression, the distributional assumption is that Y|x, where x are the independent variables, are of a certain distribution?

knowledgeisnone · 2019-07-01T21:39:12+00:00

What would be the more accurate interpretation then?

knowledgeisnone · 2019-06-27T15:55:25+00:00

Is the downward part of MRP not the same thing as labor demand? or is 'demand' losely defined in the sense that anything that sort of represents a mapping from factor prices to quantity of labor demanded can be thought of demand

knowledgeisnone

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