Abstract

https://ssrn.com/abstract=2803263
 


 



Identification with Models and Exogenous Data Variation


R. Jay Kahn


University of Michigan, Stephen M. Ross School of Business, Students

Toni M. Whited


University of Michigan, Stephen M. Ross School of Business; National Bureau of Economic Research

July 1, 2016

Forthcoming, Foundations and Trends in Accounting
Ross School of Business Paper No. 1323

Abstract:     
We distinguish between identification and establishing causality. Identification means forming a unique mapping from features of data to quantities that are of interest to economists. Establishing causality is synonymous with finding sources of exogenous variation. These two issues are often confused. However, exogenous variation is only sometimes necessary and never sufficient to identify economically interesting parameters. Instead, even for causal questions identification must rest on an underlying economic model. We illustrate these points by examining identification in two recent papers: one causal study relying on an entirely verbal model and one non-causal study relying on a formal mathematical model.

Number of Pages in PDF File: 12

Keywords: Identification, Causality, Natural Experiments, Structural Estimation

JEL Classification: G30,C10,M40


Open PDF in Browser Download This Paper

Date posted: July 2, 2016 ; Last revised: October 11, 2016

Suggested Citation

Kahn, R. Jay and Whited, Toni M., Identification with Models and Exogenous Data Variation (July 1, 2016). Forthcoming, Foundations and Trends in Accounting; Ross School of Business Paper No. 1323. Available at SSRN: https://ssrn.com/abstract=2803263 or http://dx.doi.org/10.2139/ssrn.2803263

Contact Information

R. Jay Kahn
University of Michigan, Stephen M. Ross School of Business, Students ( email )
Ann Arbor, MI
United States
Toni M. Whited (Contact Author)
University of Michigan, Stephen M. Ross School of Business ( email )
701 Tappan Street
Ann Arbor, MI MI 48109
United States

National Bureau of Economic Research ( email )
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
Feedback to SSRN


Paper statistics
Abstract Views: 791
Downloads: 348
Download Rank: 66,641