‘Metrics Monday: Lagged Explanatory Variables and the Estimation of Causal Effects

I have some good news to share. My paper with Tom Pepinsky and Taka Masaki titled “Lagged Explanatory Variables and the Estimation of Causal Effects” has been accepted for publication and is forthcoming in the Journal of Politics.

Because an image is worth a thousand words, here is one of the key figures in the paper, which illustrates in panel (a) what the problem is with using the lag of an explanatory variable to “exogenize” it, and in panel (b) the hard-to-swallow assumption the needs to be made in order for this trick to work:


Here is a link to the latest version of the paper, and here is the abstract:

Lagged explanatory variables are commonly used in political science in response to endogeneity concerns in observational data. There exist surprisingly few formal analyses or theoretical results, however, that establish whether lagged explanatory variables are effective in surmounting endogeneity concerns and, if so, under what conditions. We show that lagging explanatory variables as a response to endogeneity moves the channel through which endogeneity biases parameter estimates, supplementing a “selection on observables” assumption with an equally untestable “no dynamics among unobservables” assumption. We build our argument intuitively using directed acyclic graphs and then provide analytical results on the bias of lag identification in a simple linear regression framework. We then use Monte Carlo simulations to show how, even under favorable conditions, lag identification leads to incorrect inferences. We conclude by specifying the conditions under which lagged explanatory variables are appropriate responses to endogeneity concerns.

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A Conversation with Jeremy Cherfas on the Eat This Podcast

I spent part of last week in Rome at a conference organized by the Food and Agriculture Organization (FAO) of the United Nations. While there, I sat down with Jeremy Cherfas, who is based in Rome, from where he produces and hosts the Eat This podcast.

Over the course an hour, and my jet-lagged state notwithstanding, we chatted about a number of topics I have been working on these past few years: food prices spikes and food riots, commodity speculators and food crises, quinoa consumption in rich countries and rural livelihoods in the Andes, etc. More broadly, the conversation was about agricultural economics, and what agricultural economists do.

You can listen to (part of) our conversation here (the link opens an .mp3 file).

A Restaurant Tries Third-Degree Price Discrimination for the Common Good

From a story on NPR’s The Salt:

Here’s the concept behind the new chain: Customers walk in and grab a to-go container of pre-made, healthful meals prepared by chefs who’ve previously worked in some of the finest restaurants in LA and New York. [Consumers] can heat up the meals in microwaves at the restaurant, or take them home. And everything is priced affordably–though the price changes, depending on the neighborhood. The goal is to make nutritious food more available to everyone.

The first location opened this summer in South Los Angeles, a low-income area. The next one will soon open in a well-off neighborhood of downtown LA, and there are plans for outlets in other parts of the city. Each location will have the same exact menus and decor, but with different price plans.

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