Outcome (game theory)

Quantum mechanics

Algorithm

Engineering

Philosophy

Economics

Computer science

Mechanical engineering

Physics

Relevance (law)

Political science

Work (physics)

Epistemology

Artificial intelligence

Mathematical economics

Positive economics

Perspective (graphical)

Causality (physics)

Directed acyclic graph

Journal of Economic Literature

In this essay I discuss potential outcome and graphical approaches to causality, and their relevance for empirical work in economics. I review some of the work on directed acyclic graphs, including the recent The Book of Why (Pearl and Mackenzie 2018). I also discuss the potential outcome framework developed by Rubin and coauthors (e.g., Rubin 2006), building on work by Neyman (1990 [1923]). I then discuss the relative merits of these approaches for empirical work in economics, focusing on the questions each framework answers well, and why much of the the work in economics is closer in spirit to the potential outcome perspective. (JEL C31, C36, I26)

Potential Outcome and Directed Acyclic Graph Approaches to Causality: Relevance for Empirical Practice in Economics