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How Much Can We Trust Causal Interpretations of Fixed-Effects Estimators in the Context of Criminality?

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  • Bjerk, David J.

    () (Claremont McKenna College)

Abstract

Researchers are often interested in estimating the causal effect of some treatment on individual criminality. For example, two recent relatively prominent papers have attempted to estimate the respective direct effects of marriage and gang participation on individual criminal activity. One difficulty to overcome is that the treatment is often largely the product of individual choice. This issue can cloud causal interpretations of correlations between the treatment and criminality since those choosing the treatment (e.g. marriage or gang membership) may have differed in their criminality from those who did not even in the absence of the treatment. To overcome this potential for selection bias researchers have often used various forms of individual fixed-effects estimators. While such fixed-effects estimators may be an improvement on basic cross-sectional methods, they are still quite limited when it comes to uncovering a true causal effect of the treatment on individual criminality because they may fail to account for the possibility of dynamic selection. Using data from the NSLY97, I show that such dynamic selection can potentially be quite large when it comes to criminality, and may even be exacerbated when using more advanced fixed-effects methods such as Inverse Probability of Treatment Weighting (IPTW). Therefore substantial care must be taken when it comes to interpreting the results arising from fixed-effects methods.

Suggested Citation

  • Bjerk, David J., 2009. "How Much Can We Trust Causal Interpretations of Fixed-Effects Estimators in the Context of Criminality?," IZA Discussion Papers 4387, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp4387
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    References listed on IDEAS

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    1. Ashenfelter, Orley C, 1978. "Estimating the Effect of Training Programs on Earnings," The Review of Economics and Statistics, MIT Press, vol. 60(1), pages 47-57, February.
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    Cited by:

    1. Christian Weisæth Monsbakken & Torbjørn Skardhamar & Torkild Hovde Lyngstad, 2012. "Crime and the transition to parenthood. The role of sex and relationship context," Discussion Papers 673, Statistics Norway, Research Department.
    2. Alvaro Morales & Prakarsh Singh, 2016. "“Face the bullet, spare the rod?” Evidence from the aftermath of the Shining Path Insurgency," HiCN Working Papers 191 updated, Households in Conflict Network.
    3. Prakarsh Singh & Alvaro Morales, 2015. "The Effect of Civil Conflict on Child Abuse: Evidence from Peru," NCID Working Papers 04/2015, Navarra Center for International Development, University of Navarra.
    4. McGarrell, Edmund F. & Corsaro, Nicholas & Melde, Chris & Hipple, Natalie K. & Bynum, Timothy & Cobbina, Jennifer, 2013. "Attempting to reduce firearms violence through a Comprehensive Anti-Gang Initiative (CAGI): An evaluation of process and impact," Journal of Criminal Justice, Elsevier, vol. 41(1), pages 33-43.
    5. Christian Weisæth Monsbakken & Torkild Hovde Lyngstad & Torbjørn Skardhamar, 2012. "Crime and the transition to marriage. The roles of gender and partner's criminal involvement," Discussion Papers 678, Statistics Norway, Research Department.

    More about this item

    Keywords

    marriage; crime; fixed-effects; gangs; smoking;

    JEL classification:

    • C12 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Hypothesis Testing: General
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law

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