Lecture 5.3: Empirical policy evaluation

Question 1

Problems with randomized trials

Answer 1

1. external validity
2. attrition
3. other implementation issues

Question 2

Identification problem

Answer 2

which series is causing another?
A <—> B (or maybe even C affecting both)

Question 3

Observational data

Answer 3

data generated by individual behaviour observed in the real world, not of deliberately designed experience

Question 4

Bias

Answer 4

Any source of difference between treatment and control group that is correlated but not due to the treatment

Question 5

Empirical public economics

Answer 5

Use of data and statistical methods to measure the impact of government policy on individuals, firms and markets

Question 6

Causality

Answer 6

Two economic variables where one moves because of the movement of the other

Question 7

Correlation

Answer 7

Two economic variables move together

Question 8

Quasi/natural experiments

Answer 8

Changes in economic environment that create similar treatment and testgroup for studying the effect of that climate change

Question 9

Randomized trial

Answer 9

The ideal type of research design to test causality: group of individuals to be studied is randomly divided into a treatment group and a control group

Question 10

Cross-sectional (regression) analysis

Answer 10

Statistical analysis of the relationship between two or more variables exhibited by many individuals at one point in time

Question 11

Time series analysis

Answer 11

Analysis of the co-movement of two variables over time