Understanding and Misunderstanding Randomized Controlled Trials

71 Pages Posted: 7 Sep 2016

See all articles by Angus Deaton

Angus Deaton

Princeton University; National Bureau of Economic Research (NBER)

Nancy Cartwright

Durham University

Date Written: September 2016

Abstract

RCTs would be more useful if there were more realistic expectations of them and if their pitfalls were better recognized. For example, and contrary to many claims in the applied literature, randomization does not equalize everything but the treatment across treatments and controls, it does not automatically deliver a precise estimate of the average treatment effect (ATE), and it does not relieve us of the need to think about (observed or unobserved) confounders. Estimates apply to the trial sample only, sometimes a convenience sample, and usually selected; justification is required to extend them to other groups, including any population to which the trial sample belongs. Demanding “external validity” is unhelpful because it expects too much of an RCT while undervaluing its contribution. Statistical inference on ATEs involves hazards that are not always recognized. RCTs do indeed require minimal assumptions and can operate with little prior knowledge. This is an advantage when persuading distrustful audiences, but it is a disadvantage for cumulative scientific progress, where prior knowledge should be built upon and not discarded. RCTs can play a role in building scientific knowledge and useful predictions but they can only do so as part of a cumulative program, combining with other methods, including conceptual and theoretical development, to discover not “what works,” but “why things work”.

Suggested Citation

Deaton, Angus S. and Cartwright, Nancy, Understanding and Misunderstanding Randomized Controlled Trials (September 2016). NBER Working Paper No. w22595, Available at SSRN: https://ssrn.com/abstract=2835853

Angus S. Deaton (Contact Author)

Princeton University ( email )

Woodrow Wilson School
Princeton, NJ 08544
United States
609-258-5967 (Phone)
609-258-5974 (Fax)

HOME PAGE: http://www.wws.princeton.edu/~deaton

National Bureau of Economic Research (NBER)

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Cambridge, MA 02138
United States

Nancy Cartwright

Durham University

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