In his own words, “fruitful application does not demand extraordinary mathematical sophistication” but simply firm evidence-based foundations. On the merit of how much does the book intend to give the reader the details on these things is another issue. this is an excellent book as an introduction to econometrics, focusing on the conceptual stuff and giving specific and appealing examples. Mastering ’Metrics: The Path from Cause to Effect is a short book that helps bridge the gap between classroom recipes and reality. There are a couple of vague references to statistical software (Stata) but the idea that a student would read this and then go off to perform DiD is laughable.

The promise of our approach to instruction is evident in the popularity of the Freakonomics franchise and in the sparkling new intro-to-economics principles book by Acemoglu, Laibson, and List (2015): their take on economics puts questions and evidence ahead of abstract models. Modern econometrics is more than just a set of statistical tools–causal inference in the social sciences requires a careful, inquisitive mindset. This valuable book connects the dots between mathematical formulas, statistical methods, and real-world policy analysis. Wielding econometric tools with skill and confidence, Mastering 'Metrics uses data and statistics to illuminate the path from cause to effect. Our regression application — estimating the effects of private college attendance on later earnings — shows the power of regression to turn night into day when it comes to causal conclusions.I did not expect the details of an econometrics course; but I thought as the book started out, it would have a funny take and make things interesting for the reader.

In the fourth section, the authors cover how breaks and discontinuities offer opportunities for uncovering useful information. This leads easily to a discussion of two-stage least squares as a powerful method harnessing variation in instruments originating from a wide variety of sources. The people they asked to provide blurbs for the back include Hal Varian (of Google), and Andrew Gelman (of Bayesian and Stan fame). Metrics, that is, the field of applied econometrics, encompasses the statistical methods economists use to untangle cause and effect in human affairs. In my view, the emphasis on thinking about parameters of interest and identification before discussing technical matters is a huge improvement on traditional teaching approaches.Yet they get no attention in Studenmund (2011) or Gujarati and Porter (2010), while Hill, Griffiths, and Lim (2011) and Wooldridge (2012) briefly attend to differences-in-differences only. While it adequately covers core econometric concepts, I'm not convinced it effectively balances a textbook approach vs that of a "how-to" guide: it likely would have been better suited leaning a bit more in one direction or another.

Measuring these before-and-after effects is the foundation of any event study but, again, requires careful structure and control for other factors. Posing several well-chosen empirical questions in social science, "Mastering 'Metrics" develops methods to provide the answers and applies them to interesting datasets. Gary Chamberlain, Harvard University "Modern econometrics is more than just a set of statistical tools--causal inference in the social sciences requires a careful, inquisitive mindset.It follows and complements a recent Journal of Econometrics special issue also in honor of William A. The more gnarly statistical proofs seem to be left to their other more advanced book Mostly Harmless Econometrics. The purpose of regression is not merely to fit a line but, rather, to examine a number of independent variables that can explain or control the behavior of the dependent variable and arrive at an understanding of the core relationships.

Jörn-Steffen Pischke is professor of economics at the London School of Economics and Political Science. It is found that students receive 9% higher earnings from going to a private university based on a simple regression methodology. Such questions are easily understood, and the answers to them have real consequences for real people, including, in many cases, for our students.Written by true 'masters of 'metrics, ' this book is perfect for those who wish to study this important subject. Readers who seek core insights into finance will be disappointed, but what the book lacks in financial specifics, it makes up for with clear thinking. This showed that people receiving more healthcare were not significantly more healthy - which seemed a disappointing result. The unapologetic focus on causal relationships that’s emblematic of modern applied econometrics emerged gradually in the 1980s and has since accelerated.