Causal Analysis after Haavelmo
Haavelmo's seminal 1943 paper is the first rigorous treatment of causality. In it, he distinguished the definition of causal parameters from their identification. He showed that causal parameters are defined using hypothetical models that assign variation to some of the inputs determining outcomes while holding all other inputs fixed. He thus formalized and made operational Marshall's (1890) ceteris paribus analysis. We embed Haavelmo's framework into the recursive framework of Directed Acyclic Graphs (DAG) used in one influential recent approach to causality (Pearl, 2000) and in the related literature on Bayesian nets (Lauritzen, 1996). We compare an approach based on Haavelmo's methodology with a standard approach in the causal literature of DAGs-- the "do-calculus" of Pearl (2009). We discuss the limitations of DAGs and in particular of the do-calculus of Pearl in securing identification of economic models. We extend our framework to consider models for simultaneous causality, a central contribution of Haavelmo (1944). In general cases, DAGs cannot be used to analyze models for simultaneous causality, but Haavelmo's approach naturally generalizes to cover it.
|Date of creation:||Sep 2013|
|Contact details of provider:|| Web page: http://www.hceconomics.org/|
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Mas-Colell, Andreu & Whinston, Michael D. & Green, Jerry R., 1995. "Microeconomic Theory," OUP Catalogue, Oxford University Press, number 9780195102680.
- James Heckman, 2008.
CeMMAP working papers
CWP01/08, Centre for Microdata Methods and Practice, Institute for Fiscal Studies.
- Heckman, James J., 2008. "Econometric Causality," IZA Discussion Papers 3425, Institute for the Study of Labor (IZA).
- James J. Heckman, 2008. "Econometric Causality," Working Papers 200826, Geary Institute, University College Dublin.
- James J. Heckman, 2008. "Econometric Causality," NBER Working Papers 13934, National Bureau of Economic Research, Inc.
- Lars Peter Hansen & Thomas J. Sargent, 1979.
"Formulating and estimating dynamic linear rational expectations models,"
127, Federal Reserve Bank of Minneapolis.
- Hansen, Lars Peter & Sargent, Thomas J., 1980. "Formulating and estimating dynamic linear rational expectations models," Journal of Economic Dynamics and Control, Elsevier, vol. 2(1), pages 7-46, May.
- Elie Tamer, 2003. "Incomplete Simultaneous Discrete Response Model with Multiple Equilibria," Review of Economic Studies, Oxford University Press, vol. 70(1), pages 147-165.
- James J. Heckman & Edward Vytlacil, 2005.
"Structural Equations, Treatment Effects and Econometric Policy Evaluation,"
NBER Technical Working Papers
0306, National Bureau of Economic Research, Inc.
- James J. Heckman & Edward Vytlacil, 2005. "Structural Equations, Treatment Effects, and Econometric Policy Evaluation," Econometrica, Econometric Society, vol. 73(3), pages 669-738, 05.
- James J. Heckman & Edward Vytlacil, 2005. "Structural Equations, Treatment Effects and Econometric Policy Evaluation," NBER Working Papers 11259, National Bureau of Economic Research, Inc.
- Whitney K. Newey & James L. Powell, 2003. "Instrumental Variable Estimation of Nonparametric Models," Econometrica, Econometric Society, vol. 71(5), pages 1565-1578, 09.
- Andrew Chesher & Adam Rosen, 2012. "Simultaneous equations for discrete outcomes: coherence, completeness, and identification," CeMMAP working papers CWP21/12, Centre for Microdata Methods and Practice, Institute for Fiscal Studies.
- James J. Heckman & Thomas E. MaCurdy, 1985. "A Simultaneous Equations Linear Probability Model," Canadian Journal of Economics, Canadian Economics Association, vol. 18(1), pages 28-37, February.
- Marshall, Alfred, 1890.
"The Principles of Economics,"
History of Economic Thought Books,
McMaster University Archive for the History of Economic Thought, number marshall1890.
- Steffen L. Lauritzen & Thomas S. Richardson, 2002. "Chain graph models and their causal interpretations," Journal of the Royal Statistical Society Series B, Royal Statistical Society, vol. 64(3), pages 321-348.
- James J. Heckman, 1976. "The Common Structure of Statistical Models of Truncation, Sample Selection and Limited Dependent Variables and a Simple Estimator for Such Models," NBER Chapters, in: Annals of Economic and Social Measurement, Volume 5, number 4, pages 475-492 National Bureau of Economic Research, Inc.
- Karim Chalak & Halbert White, 2008. "Causality, Conditional Independence, and Graphical Separation in Settable Systems," Boston College Working Papers in Economics 689, Boston College Department of Economics, revised 04 Jul 2010.
- James J. Heckman, 1977.
"Dummy Endogenous Variables in a Simultaneous Equation System,"
NBER Working Papers
0177, National Bureau of Economic Research, Inc.
- Heckman, James J, 1978. "Dummy Endogenous Variables in a Simultaneous Equation System," Econometrica, Econometric Society, vol. 46(4), pages 931-959, July.
- Edward Vytlacil, 2002. "Independence, Monotonicity, and Latent Index Models: An Equivalence Result," Econometrica, Econometric Society, vol. 70(1), pages 331-341, January.
When requesting a correction, please mention this item's handle: RePEc:hka:wpaper:2013-008. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Jennifer Pachon)
If references are entirely missing, you can add them using this form.