Intro to Econometrics
In economics literature you would find two types of studies: - Observational. Data is collected in the way that do not intefere with the underlying social phenomena that we are researching. - Experimental studies (Randomized Controlled Trials i.e RCT) researchers randomly assign subjects into control and treatment groups. Treatment group will recieve intended program, while control group will not recive inteded program. RCT allows us easily draw causal relationships.
For example, if you want to research how sugary drink affect prevalence of diabetes in population, you can proceed in two ways:
- Sample group of people from population, subdivide sample into people who consume sugary drinks and who do not consume. Take the average diabetes prevelance for each group, and draw conclusions from there. This type of study would be observational study, since we do not in any way interfere in the way how much people drink sugary drinks. Or in other words, we do not change treatment.
- You can take group of people from the population and randomly assign one group of people to drink sugary drinks(treatment group) and assign second group of people not to drink any sugary drinks(control group). In the end you compare the average prevalence of diabetes for each group. This type of study would be called Experimental study, or Randomized Controlled Trials.
Randomized Controlled Trials
Watch the presentation to better understand what is RCT.