In-class exercise

Slides

• Introduction: Approaches in Applied Micro

• Introduction: A framework for causal analysis

Note

The tasks refer to “Econometric Evaluation of Social Programs, Part I: Causal Models, Structural Models and Econometric Policy Evaluation” (Heckman and Vytlacil, 2007).

Be prepared to present/discuss each of the following questions in class. You can designate group members to present specific questions, but everyone should be prepared for at least one question.

Task 1: Section 2.2

Skim through the beginning of Section 2.2 up to and including the second paragraph of page 4794. (this is pretty much what we talked about before).

We stick to the case of binary \(S\).

1. What do the authors mean when writing “This may be a nondegenerate random variable or a degenerate random variable.” (just below Equation (2.1))

2. What is the difference between \(Y(1; \omega) - Y(0; \omega)\) and \(R(1; \omega) - R(0; \omega)\)?

3. Explain, in your own words, the two aspects of a policy \(\tau\) in the definition of the second paragraph of page 4794.