Mastering Metrics: The Path from Cause to Effect

"Written by true 'masters of 'metrics, ' this book is perfect for those who wish to study this important subject. Using real-world examples and only elementary statistics, Angrist and Pischke convey the central methods of causal inference with clarity and wit."--Hal Varian, chief economist at Google
"With humor and rigor, this book explores key approaches in applied econometrics. The authors present accessible, interesting examples--using data-heavy figures and graphic-style comics--to teach practitioners the intuition and statistical understanding they need to become masters of 'metrics. A must-read for anyone using data to investigate questions of causality!"--Melissa S. Kearney, University of Maryland and the Brookings Institution
"This valuable book connects the dots between mathematical formulas, statistical methods, and real-world policy analysis. Reading it is like overhearing a conversation between two grumpy old men who happen to be economists--and I mean this in the best way possible."--Andrew Gelman, Columbia University
"Modern econometrics is more than just a set of statistical tools--causal inference in the social sciences requires a careful, inquisitive mindset. Mastering 'Metrics is an engaging, fun, and highly accessible guide to the paradigm of causal inference."--David Deming, Harvard University
"Few fields of statistical inquiry have seen faster progress over the last several decades than causal inference. With an engaging, insightful style, Angrist and Pischke catch readers up on five powerful methods in this area. If you seek to make causal inferences, or understand those made by others, you will want to read this book as soon as possible."--Gary King, Harvard University
"Posing several well-chosen empirical questions in social science, Mastering 'Metrics develops methods to provide the answers and applies them to interesting datasets. This book will motivate beginning students to understand econometrics, with an appreciation of its strengths and limits."--Gary Chamberlain, Harvard University
"Focusing on five econometric tools, Mastering 'Metrics presents key econometric concepts. Any field that uses statistical techniques to conduct causal inference will find this book useful."--Melvyn Weeks, University of Cambridge

List of Figures vii List of Tables ix Introduction xi 1 Randomized Trials 1
1.1 In Sickness and in Health (Insurance) 1 1.2 The Oregon Trail 24 Masters of 'Metrics: From Daniel to R. A. Fisher 30 Appendix: Mastering Inference 33 2 Regression 47
2.1 A Tale of Two Colleges 47 2.2 Make Me a Match, Run Me a Regression 55 2.3 Ceteris Paribus? 68 Masters of 'Metrics: Galton and Yule 79 Appendix: Regression Theory 82 3 Instrumental Variables 98
3.1 The Charter Conundrum 99 3.2 Abuse Busters 115 3.3 The Population Bomb 123 Masters of 'Metrics: The Remarkable Wrights 139 Appendix: IV Theory 142 4 Regression Discontinuity Designs 147
4.1 Birthdays and Funerals 148 4.2 The Elite Illusion 164 Masters of 'Metrics: Donald Campbell 175 5 Differences-in-Differences 178
5.1 A Mississippi Experiment 178 5.2 Drink, Drank, ... 191 Masters of 'Metrics: John Snow 204 Appendix: Standard Errors for Regression DD 205 6 The Wages of Schooling 209
6.1 Schooling, Experience, and Earnings 209 6.2 Twins Double the Fun 217 6.3 Econometricians Are Known by Their ... Instruments 223 6.4 Rustling Sheepskin in the Lone Star State 235 Appendix: Bias from Measurement Error 240 Abbreviations and Acronyms 245 Empirical Notes 249 Acknowledgments 269 Index 271