“Picking a millionaire at random to participate in a training program for low skilled workers, or making an idiot into a PhD may be intriguing thought experiments but are usually neither policy relevant nor feasible” Heckman maintains …

Continue reading## Mediation Pitfall

One way to test various competing explanations for an identified causal effect of X on Y is to do a mediation analysis. In this paper, Hainmueller et al are trying to understand how ideology is related …

Continue reading## When Standard Errors Should(n’t) Be Zero

Why do we report statistical significance if we analyse the effect of X on Y across all states in US? In theory, one does not sample 50 states from the pool of states available. Rather, …

Continue reading## Why IIA?

Few pieces of work have managed to distract entire generations of social scientists. Ken Arrow’s work did just that. Initially published in 1953 and updated in 1963, Arrow’s impossibility theorem states that there is no …

Continue reading## On the Strength of May and Arrow’s Theorems

In a literature of impossibilities, intransitivities and cyclicalities May’s theorem provides a positive result. It says that social decisions between two options, simple majority rule uniquely satisfy four appealing conditions (unrestricted domain, anonimity, neutrality, positive …

Continue reading## Laspeyeres and Paasche as bounds of COLI

Tom Crossley taught a course on index number theory and got me fascinated with the subject. This post essentially summarizes how 2 price indices provide bounds to a cost of living index (COLI). Suppose you have …

Continue reading