UGBA 88 LECTURE 4: POTENTIAL
OUTCOMES FRAMEWORK
Causal inference compares WHAT? - correct answer Potential outcomes
Comparisons of observed differences between treated and control units are often contaminated by
_______ bias. - correct answer Selection
What ELIMINATES selection bias between treatment and control groups? - correct answer Random
assignment
What does Yi represent? Y1i? Y0i? - correct answer The observed OUTCOME of interest for unit i; Y1i=
potential outcome for unit i with treatment; Y0i = potential outcome for unit i WITHOUT treatment
What does Di represent? Di=1? Di=0? - correct answer The indicator of treatment for unit i; Di=1 means i
has the treatment; Di=0 means i does not have the treatment
At the most basic level, what is a TREATMENT EFFECT, and how is this represented in notation? - correct
answer The difference between 2 potential outcomes; Y1i - Y0i.
Y1i - Y0i also represents what? - correct answer The CAUSAL EFFECT OF TREATMENT on outcome Y for
unit i
What is the fundamental problem of causal inference? - correct answer Each individual unit i either takes
the treatment (and has the corresponding outcome) or they do not; WE CAN ONLY OBSERVE ONE
POTENTIAL OUTCOME, we cannot observe their counterfactual
What is the KEY TO CAUSAL INFERENCE? - correct answer A valid counterfactual; to answer a causal
question, you need to at least guess what the counterfactual is.
OUTCOMES FRAMEWORK
Causal inference compares WHAT? - correct answer Potential outcomes
Comparisons of observed differences between treated and control units are often contaminated by
_______ bias. - correct answer Selection
What ELIMINATES selection bias between treatment and control groups? - correct answer Random
assignment
What does Yi represent? Y1i? Y0i? - correct answer The observed OUTCOME of interest for unit i; Y1i=
potential outcome for unit i with treatment; Y0i = potential outcome for unit i WITHOUT treatment
What does Di represent? Di=1? Di=0? - correct answer The indicator of treatment for unit i; Di=1 means i
has the treatment; Di=0 means i does not have the treatment
At the most basic level, what is a TREATMENT EFFECT, and how is this represented in notation? - correct
answer The difference between 2 potential outcomes; Y1i - Y0i.
Y1i - Y0i also represents what? - correct answer The CAUSAL EFFECT OF TREATMENT on outcome Y for
unit i
What is the fundamental problem of causal inference? - correct answer Each individual unit i either takes
the treatment (and has the corresponding outcome) or they do not; WE CAN ONLY OBSERVE ONE
POTENTIAL OUTCOME, we cannot observe their counterfactual
What is the KEY TO CAUSAL INFERENCE? - correct answer A valid counterfactual; to answer a causal
question, you need to at least guess what the counterfactual is.
