Mastering `metrics: the path from cause to effect

Table of content

List of Figures
List of Tables
Introduction
1 Randomized Trials
1.1 In Sickness and in Health (Insurance)
1.2 The Oregon Trail
Masters of ’Metrics: From Daniel to R. A. Fisher
Appendix: Mastering Inference
2 Regression
2.1 A Tale of Two Colleges
2.2 Make Me a Match, Run Me a Regression
2.3 Ceteris Paribus?
Masters of ’Metrics: Galton and Yule
Appendix: Regression Theory
3 Instrumental Variables
3.1 The Charter Conundrum
3.2 Abuse Busters
3.3 The Population Bomb
Masters of ’Metrics: The Remarkable Wrights
Appendix: IV Theory
4 Regression Discontinuity Designs
4.1 Birthdays and Funerals
4.2 The Elite Illusion
Masters of ’Metrics: Donald Campbell
5 Differences-in-Differences
5.1 A Mississippi Experiment
5.2 Drink, Drank, …
Masters of ’Metrics: John Snow
Appendix: Standard Errors for Regression DD
6 The Wages of Schooling
6.1 Schooling, Experience, and Earnings
6.2 Twins Double the Fun
6.3 Econometricians Are Known by Their … Instruments
6.4 Rustling Sheepskin in the Lone Star State
Appendix: Bias from Measurement Error
Abbreviations and Acronyms
Empirical Notes
Acknowledgements
Index

Applied econometrics, known to aficionados as ‘metrics, is the original data science. ‘Metrics encompasses the statistical methods economists use to untangle cause and effect in human affairs. Through accessible discussion and with a dose of kung fu–themed humor, Mastering ‘Metrics presents the essential tools of econometric research and demonstrates why econometrics is exciting and useful.

The five most valuable econometric methods, or what the authors call the Furious Five — random assignment, regression, instrumental variables, regression discontinuity designs, and differences in differences — are illustrated through well-crafted real-world examples (vetted for awesomeness by Kung Fu Panda’s Jade Palace). Does health insurance make you healthier? Randomized experiments provide answers. Are expensive private colleges and selective public high schools better than more pedestrian institutions? Regression analysis and a regression discontinuity design reveal the surprising truth. When private banks teeter, and depositors take their money and run, should central banks step in to save them? Differences-in-differences analysis of a Depression-era banking crisis offers a response. Could arresting O. J. Simpson have saved his ex-wife’s life? Instrumental variables methods instruct law enforcement authorities in how best to respond to domestic abuse.

Wielding econometric tools with skill and confidence, Mastering ‘Metrics uses data and statistics to illuminate the path from cause to effect.

Shows why econometrics is important
Explains econometric research through humorous and accessible discussion
Outlines empirical methods central to modern econometric practice
Works through interesting and relevant real-world examples