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Estimator of What? A Note on Teaching Regressions in Introductory Econometrics

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  • Goel, Deepti

Abstract

The most widely used textbooks on Introductory Econometrics conflate three distinct population parameters: the population regression function (PRF), the conditional expectation function (CEF), and the causal effect. They also incorrectly suggest, and sometimes state, that the Conditional Mean Zero assumption implies causal interpretation of regression coefficients. I highlight these issues and show that by incorporating new notation these limitations can easily be overcome.

Suggested Citation

  • Goel, Deepti, 2025. "Estimator of What? A Note on Teaching Regressions in Introductory Econometrics," GLO Discussion Paper Series 1646, Global Labor Organization (GLO).
    • Handle: RePEc:zbw:glodps:1646
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    File URL: https://www.econstor.eu/bitstream/10419/323522/1/GLO-DP-1646.pdf
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    References listed on IDEAS

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    1. Joshua D. Angrist & Jörn-Steffen Pischke, 2010. "The Credibility Revolution in Empirical Economics: How Better Research Design Is Taking the Con out of Econometrics," Journal of Economic Perspectives, American Economic Association, vol. 24(2), pages 3-30, Spring.
    2. Joshua D. Angrist & Jörn-Steffen Pischke, 2017. "Undergraduate Econometrics Instruction: Through Our Classes, Darkly," Journal of Economic Perspectives, American Economic Association, vol. 31(2), pages 125-144, Spring.
    3. Ruud, Paul A., 2000. "An Introduction to Classical Econometric Theory," OUP Catalogue, Oxford University Press, number 9780195111644.
    4. Federico Crudu & Giovanni Mellace & Joeri Smits, 2022. "What does OLS identify under the zero conditional mean assumption?," Department of Economics University of Siena 872, Department of Economics, University of Siena.
    5. Joshua D. Angrist & Jörn-Steffen Pischke, 2009. "Mostly Harmless Econometrics: An Empiricist's Companion," Economics Books, Princeton University Press, edition 1, number 8769.
    6. Donald B. Rubin, 2005. "Causal Inference Using Potential Outcomes: Design, Modeling, Decisions," Journal of the American Statistical Association, American Statistical Association, vol. 100, pages 322-331, March.
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    Keywords

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    JEL classification:

    • A22 - General Economics and Teaching - - Economic Education and Teaching of Economics - - - Undergraduate
    • C18 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Methodolical Issues: General

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