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The Paper of How: Estimating Treatment Effects Using the Front-Door Criterion

September 24, 2019

MC 4-301

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  • Modern empirical social science consists largely of attempts of answering questions of the form "What is the causal effect of X or Y?" As a result, social scientists rely on a number of empirical techniques aimed at disentangling causal relationships from mere correlations.

    One such technique is Judea Pearl's (1995, 2000) front- door criterion, which relies for identification on the presence of a single, strictly exogenous mechanism on the causal path between the treatment and outcome. Social scientists in general--and economists in particular--have been resistant to the idea of adding the front-door criterion to the standard empirical toolkit, largely due to the difficulty posed by finding the required mechanism. To help overcome that resistance, we first explain how to use the front-door criterion in a regression context.

    We then present three empirical illustrations of the front-door criterion. Finally, and most importantly, we look at what happens when some of the assumptions underpinning the front-door criterion are violated. 

     

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    MARC F. BELLEMARE

    Department of Applied Economics at the University of Minnesota

    Marc F. Bellemare is Northrop Professor in the Department of Applied Economics at the University of Minnesota, where he also directs the Center for International Food and Agricultural Policy. His research lies at the intersection of agricultural economics, food policy, and international development. A few specific areas in which he has been conducting research over the years include agricultural value chains, risk and uncertainty, and the consequences of high and volatile food prices. His work has so far been featured in media outlets such as The Economist, the New York Times, National Public Radio, and the Wall Street Journal. In January 2020, he will begin a four-year term as one of four co-editors of the American Journal of Agricultural Economics, after serving as one of two co-editors of Food Policy.

  • DIME is a World Bank-wide program to generate knowledge on the effectiveness of development policies. Working across 18 thematic areas, DIME collaborates with 300 agencies in 72 countries to improve the effectiveness of policies and programs and strengthen country capacity for real-time evidence-based policy-making. More »

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