- [Narrator] The path from cause to effect is dark and dangerous.
But the weapons of Econometrics are strong.
[Attack] with fierce and flexible instrumental variables
when nature blesses you with fortuitous random assignment.
[gong rings]
Randomized trials are the surest path to ceteris parabus comparisons.
Alas, this powerful tool is often unavailable.
But sometimes, randomization happens by accident.
That's when we turn to instrumental variables,
IV for short.
- [Voice whispers] Instrumental variables.
- [Narrator] Today's lesson is the first of two on IV.
Our first IV lesson begins with a story of schools.
- [Josh] Charter schools are public schools
freed from daily district oversight and teacher union contracts.
The question of whether charters boost achievement
is one of the most important
in the history of American education reform.