Addressing Alternative Explanations: Multiple Regression 17.871.

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Presentation transcript:

Addressing Alternative Explanations: Multiple Regression

Did Clinton hurt Gore example Did Clinton hurt Gore in the 2000 election?  Treatment is not liking Bill Clinton How would you test this?

Bivariate regression of Gore thermometer on Clinton thermometer Clinton thermometer

Did Clinton hurt Gore example What alternative explanations would you need to address? Nonrandom selection into the treatment group (disliking Clinton) from many sources Let’s address one source: party identification How could we do this?  Matching: compare Democrats who like or don’t like Clinton; do the same for Republicans and independents  Multivariate regression: control for partisanship statistically Also called multiple regression, Ordinary Least Squares (OLS) Presentation below is intuitive

Democratic picture

Independent picture

Republican picture

Combined data picture

Combined data picture with regression: bias! Clinton thermometer

Tempting yet wrong normalizations Subtract the Gore therm. from the avg. Gore therm. score Subtract the Clinton therm. from the avg. Clinton therm. score

Combined data picture with “true” regression lines overlaid Clinton thermometer

The Linear Relationship between Three Variables Clinton thermometer Gore thermometer Party ID STATA: reg y x1 x2 reg gore clinton party3

Party ID Gore thermometer Clinton thermometer Y X1X1 X2X2 Clinton Gore Party ID Clinton Gore

Multivariate slope coefficients Clinton effect (on Gore) in bivariate (B) regression Clinton effect (on Gore) in multivariate (M) regression Are Gore and Party ID related? Bivariate estimate: Multivariate estimate: Are Clinton and Party ID related? Clinton Gore Party ID

Gore thermometer Clinton thermometer Y X1X1 X2X2 Clinton Gore Party ID

Gore thermometer Clinton thermometer Y X1X1 X2X2 When does Obviously, when

Genetic predisposition Lung cancer Smoking Y X1X1 X2X2

The Slope Coefficients X 1 is Clinton thermometer, X 2 is PID, and Y is Gore thermometer

The Slope Coefficients More Simply X 1 is Clinton thermometer, X 2 is PID, and Y is Gore thermometer

The Matrix form y1y1 y2y2 … ynyn 1x 1,1 x 2,1 …x k,1 1x 1,2 x 2,2 …x k,2 1………… 1x 1,n x 2,n …x k,n

The Output. reg gore clinton party3 Source | SS df MS Number of obs = F( 2, 1742) = Model | Prob > F = Residual | R-squared = Adj R-squared = Total | Root MSE = gore | Coef. Std. Err. t P>|t| [95% Conf. Interval] clinton | party3 | _cons | Interpretation of clinton effect: Holding constant party identification, a one- point increase in the Clinton feeling thermometer is associated with a.51 increase in the Gore thermometer.

Separate regressions Each column shows the coefficients for a separate regression DV: Gore thermometer (1)(2)(3) Intercept Clinton Party N 1745

Is the Clinton effect causal? That is, should we be convinced that negative feelings about Clinton really hurt Gore? No!  The regression analysis has only ruled out linear nonrandom selection on party ID.  Nonrandom selection into the treatment could occur from Variables other than party ID, or Reverse causation, that is, feelings about Gore influencing feelings about Clinton.  Additionally, the regression analysis may not have entirely ruled out nonrandom selection even on party ID because it may have assumed the wrong functional form. E.g., what if nonrandom selection on strong Republican/strong Democrat, but not on weak partisans

Other approaches to addressing confounding effects? Experiments Matching Difference-in-differences designs Others?

Summary: Why we control Address alternative explanations by removing confounding effects Improve efficiency

Why did the Clinton Coefficient change from 0.62 to corr gore clinton party, cov (obs=1745) | gore clinton party gore | clinton | party3 |

The Calculations. corr gore clinton party,cov (obs=1745) | gore clinton party gore | clinton | party3 |

Drinking and Greek Life Example Why is there a correlation between living in a fraternity/sorority house and drinking?  Greek organizations often emphasize social gatherings that have alcohol. The effect is being in the Greek organization itself, not the house.  There’s something about the House environment itself. Example of indicator or dummy variables

Dependent variable: Times Drinking in Past 30 Days

. infix age residence 16 greek 24 screen 102 timespast howmuchpast gpa studying 281 timeshs 325 howmuchhs 326 socializing 283 stwgt_ weight using da3818.dat,clear (14138 observations read). recode timespast30 timeshs (1=0) (2=1.5) (3=4) (4=7.5) (5=14.5) (6=29.5) (7=45) (timespast30: 6571 changes made) (timeshs: changes made). replace timespast30=0 if screen<=3 (4631 real changes made)

. tab timespast30 timespast30 | Freq. Percent Cum | 4, | 2, | 2, | 1, | 1, | | Total | 13,

Key explanatory variables (indicator variables or dummy variables) Live in fraternity/sorority house  Indicator variable (dummy variable)  Coded 1 if live in, 0 otherwise Member of fraternity/sorority  Indicator variable (dummy variable)  Coded 1 if member, 0 otherwise

Three Regressions Dependent variable: number of times drinking in past 30 days Live in frat/sor house (indicator variable) 4.44 (0.35) (0.38) Member of frat/sor (indicator variable) (0.16) 2.44 (0.18) Intercept4.54 (0.56) 4.27 (0.059) 4.27 (0.059) R N13,876 Note: Standard errors in parentheses. Corr. Between living in frat/sor house and being a member of a Greek organization is.42

Interpreting indicator variables Dependent variable: number of times drinking in past 30 days Live in frat/sor house (indicator variable) 4.44 (0.35) (0.38) Member of frat/sor (indicator variable) (0.16) 2.44 (0.18) Intercept4.54 (0.56) 4.27 (0.059) 4.27 (0.059) R N13,876 Col 1 Live in frat/sor house increases number of times drinking in past 30 days by 4.4 Compare to constant: Live in frat/sor house increases number of times drinking from 4.54 to ( =) 8.98 Col 3 Holding constant membership, live in frat/sor house increases number of times drinking by 2.26

Accounting for the total effect Total effect = Direct effect + indirect effect

Accounting for the effects of frat house living and Greek membership on drinking EffectTotalDirectIndirect Member of Greek org (85%) 0.44 (15%) Live in frat/ sor. house (51%) 2.18 (49%)