Causality and Econometrics / 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. w29787.

NBER working paper series no. w29787

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2022.

Summary:

This paper examines the econometric causal model for policy analysis developed by the seminal ideas of Ragnar Frisch and Trygve Haavelmo. We compare the econometric causal model with two popular causal frameworks: Neyman-Holland causal model and the do-calculus. The Neyman-Holland causal model is based on the language of potential outcomes and was largely developed by statisticians. The do-calculus, developed by Judea Pearl and co-authors, relies on Directed Acyclic Graphs (DAGs) and is a popular causal framework in computer science. We make the case that economists who uncritically use these approximating frameworks often discard the substantial benefits of the econometric causal model to the detriment of more informative economic policy analyses. We illustrate the versatility and capabilities of the econometric framework using causal models that are frequently studied by economists.

Notes:

Print version record

February 2022.