Friday, August 27, 2010

A Funny Endogeneity Problem

One big question is whether variables like the deficit or Fed Funds rate causes GDP, or GDP causes the deficit, or both are caused by something else. Sometimes, these relationships change in various situations, as for example usually your temperature merely reflects an illness, but extreme exposure to cool water can lead to a low body temperature that directly causes death. It's a big problem in economics, where sadly we often don't have enough data.

However, common sense is very helpful in these environments. Over at Bloggingheads, this woman argues that obese, poor Americans are really hungry--a novel hunger problem--which is caused by their poverty.
"One of the biggest risk factors for somebody being both hungry and obese is living in poverty"

No comments:

Post a Comment