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A Random Shock Is Not Random Assignment

Author

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  • Christoph Engel

    (Max Planck Institute for Research on Collective Goods)

Abstract

A random shock excludes reverse causality and reduces omitted variable bias. Yet a natural experiment does not identify random exposure to treatment, but the reaction to a random change from baseline to treatment. A lab experiment comparing higher certainty with higher severity of punishment for stealing (holding the expected value of the intervention constant) shows that the difference between the effects of a random shock and random assignment can be pronounced.

Suggested Citation

  • Christoph Engel, 2016. "A Random Shock Is Not Random Assignment," Discussion Paper Series of the Max Planck Institute for Behavioral Economics 2016_09, Max Planck Institute for Behavioral Economics.
    • Handle: RePEc:mpg:wpaper:2016_09
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    File URL: http://www.coll.mpg.de/pdf_dat/2016_09online.pdf
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    Cited by:

    1. Christoph Engel & Keren Weinshall, 2020. "Manna from Heaven for Judges: Judges’ Reaction to a Quasi‐Random Reduction in Caseload," Journal of Empirical Legal Studies, John Wiley & Sons, vol. 17(4), pages 722-751, December.
    2. Natalie Nitsche & Ansgar Hudde, 2022. "Countries embracing maternal employment opened schools sooner after Covid-19 lockdowns," MPIDR Working Papers WP-2022-008, Max Planck Institute for Demographic Research, Rostock, Germany.
    3. Barati, Mehdi & Adams, Scott, 2019. "Enhanced penalties for carrying firearms illegally and their effects on crime," Economic Analysis and Policy, Elsevier, vol. 63(C), pages 207-219.
    4. Christoph Engel, 2018. "Empirical Methods for the Law," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 174(1), pages 5-23, March.

    More about this item

    Keywords

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    JEL classification:

    • C01 - Mathematical and Quantitative Methods - - General - - - Econometrics
    • C12 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Hypothesis Testing: General
    • C90 - Mathematical and Quantitative Methods - - Design of Experiments - - - General
    • K14 - Law and Economics - - Basic Areas of Law - - - Criminal Law

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