Chapter 10 - Sample Selection Bias

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Lecture Slides:      Powerpoint     PDF

Learning Objectives

  • Articulate in words the implications of a nonrepresentative sample
  • Explain using mathematics the implications of a nonrepresentative sample
  • Apply a model of sample selection to correct sample selection bias
  • Describe the experiment you would like to run if you could


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What We Learned

  • Nonrepresentative samples cause estimates of population coefficients to be biased if you sample from a subpopulation that has nonzero correlation between the X variable and errors.
    • Examples include sampling on outcomes of the Y variable and (sometimes) selection on X variables not in the model.
  • If you can build a model of selection into the sample, you may be able to correct for selection bias.
  • Experiments can solve the sample selection problem in theory. Imagining the perfect experiment can help you design a defensible econometric modeling strategy.