Causal Analysis after Haavelmo / James J. Heckman, Rodrigo Pinto.

Format:

Book

Author/Creator:

Heckman, James J.

Contributor:

National Bureau of Economic Research.

Pinto, Rodrigo.

Series:

Working Paper Series (National Bureau of Economic Research) no. w19453.

NBER working paper series no. w19453

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2013.

Summary:

Haavelmo's seminal 1943 paper is the first rigorous treatment of causality. In it, he distinguished the definition of causal parameters from their identification. He showed that causal parameters are defined using hypothetical models that assign variation to some of the inputs determining outcomes while holding all other inputs fixed. He thus formalized and made operational Marshall's (1890) ceteris paribus analysis. We embed Haavelmo's framework into the recursive framework of Directed Acyclic Graphs (DAG) used in one influential recent approach to causality (Pearl, 2000) and in the related literature on Bayesian nets (Lauritzen, 1996). We compare an approach based on Haavelmo's methodology with a standard approach in the causal literature of DAGs- the "do-calculus" of Pearl (2009). We discuss the limitations of DAGs and in particular of the do-calculus of Pearl in securing identification of economic models. We extend our framework to consider models for simultaneous causality, a central contribution of Haavelmo (1944). In general cases, DAGs cannot be used to analyze models for simultaneous causality, but Haavelmo's approach naturally generalizes to cover it.

Notes:

Print version record

September 2013.