Week 1 - Causality, Correlation & Data

Question 1

Correlation

Answer 1

• Two variables co-vary
• Does not imply causality

Question 2

Causality

Answer 2

• Cause and effect
• Does treatment have an effect on outcome
• Direction. Explanatory variable causes change in dependent variable. (treatment has causal effect on outcome)

Question 3

Causality requirements

Answer 3

• Counterfactual Analysis
• Counterfactual never observable
• Therefore causal analysis requires that contruct believable counterfactual analysis

Question 4

Cross - Sectional Data

Answer 4

• Obsevations of large number
• Collected at given time or short period
• Variation in causal factors is a function of differences in individuals observed

Question 5

Panel Data

Answer 5

• Collection of Cross sectional data at different points in time
• Same individuals observed as in cross sectional , but over several years.
• Variation in causal factors is a functin of differences in individuals, and difference in years that they were observed.

Question 6

Time Series Data

Answer 6

• Observation of single indivual over time
• Difference in causal factor, is a function of difference in individual over time.