Unbiased Analysis of Today's Healthcare Issues
When beginning your research, here are the questions you need to ask yourself [from Mostly Harmless Econometrics]: What is the causal relationship of interest? What specific mechanism will cause a change in the dependent variable of interest? Often one uses economic theory to predict these causal relationships. What experiment could be used to capture the causal effect of…
If we start with 1000 people and 10% of the population dies each year, how many people will be left in 10 years? One could figure this out using manually. However, for more complicated models, involving covariate predictors of survival, using survival analysis is helpful. Survival analysis starts with a hazard function, λ(t), which gives the…
Let us assume that our null hypothesis is that when someone is sick, it is not swine flu. A type I error is a false positive. That is, we claim that the person has the swine flu, when actually then do not. A type II error is a false negative. This means that the person…
Regression Discontinuity is an econometric method that has become popular in recent years. Let me give you an example where regression discontinuity would be valid. Let us say that all students who score 1000 or more on their SATs matriculate at Ivy U and all students who score below 1000 attend college at State…
Most people know that under the central limit theory claims, the distribution of the mean of a distribution will be normally distributed as the number of observations gets large. The question is, if we have a series of discrete events that we want to approximate the distribution of the mean with a continuous distribution, should we estimate…
How do you estimate the specific risk a smoking has on the probability of being hospitalized. If smokers on average have lower income and less educational achievement, is smoking truly causing the increase in hospitalization or could the covariates fully or partially explain the increased hospitalization rates? A paper by Kleinman and Norton suggests using…
Let us say you have 10 observations of 2 different variables. How do you determine which of the observations to use? Should you throw out the outliers? Should you only include the most similar values? Does more observations increase or decrease the amount of measurement error? These problems can be answered by the discipline of Statistics.…
Let us say that you are a hospital administrator. You are very clever and have come up with a system to score the quality of the work done by the physicians at your hospital. To simplify things, lets assume that you only have 3 physicians who work at your hospital. The physician’s scores are as…
Nobel laureate James Heckman has a nice summary of how applied econometricians and policy researchers should define causality. Some of the more interesting points I have excerpted below. On the source of randomness in a sample “One reason why many statistical models are incomplete is that they do not specify the sources of randomness generating…
Much of health care data is characterized by a large cluster of data at 0, and a right skewed distribution of the remaining outcomes. For instance, people who do not get sick generally use $0 of medical care. Those who do get sick, use a varying amount of medical care dollars, but there are a…