[Script Info]
Title: 
[Events]
Format: Layer, Start, End, Style, Name, MarginL, MarginR, MarginV, Effect, Text
Dialogue: 0,9:59:59.99,9:59:59.99,Default,,0000,0000,0000,,- [Instructor] The path from cause \Nto effect is dark and dangerous.
Dialogue: 0,9:59:59.99,9:59:59.99,Default,,0000,0000,0000,,But the weapons \Nof Econometrics are strong.
Dialogue: 0,9:59:59.99,9:59:59.99,Default,,0000,0000,0000,,[Attack] with fierce \Nand flexible instrumental variables
Dialogue: 0,9:59:59.99,9:59:59.99,Default,,0000,0000,0000,,when nature blesses you \Nwith fortuitous random assignment.
Dialogue: 0,9:59:59.99,9:59:59.99,Default,,0000,0000,0000,,[gong rings]
Dialogue: 0,9:59:59.99,9:59:59.99,Default,,0000,0000,0000,,Randomized trials are the surest \Npath to ceteris parabus comparisons.
Dialogue: 0,9:59:59.99,9:59:59.99,Default,,0000,0000,0000,,Alas, this powerful tool \Nis often unavailable.
Dialogue: 0,9:59:59.99,9:59:59.99,Default,,0000,0000,0000,,But sometimes, randomization \Nhappens by accident.
Dialogue: 0,9:59:59.99,9:59:59.99,Default,,0000,0000,0000,,That's when we turn \Nto instrumental variables,
Dialogue: 0,9:59:59.99,9:59:59.99,Default,,0000,0000,0000,,IV for short.
Dialogue: 0,9:59:59.99,9:59:59.99,Default,,0000,0000,0000,,- [Voice whispers] Instrumental \Nvariables.
Dialogue: 0,9:59:59.99,9:59:59.99,Default,,0000,0000,0000,,- [Instructor] Today's lesson \Nis the first of two on IV.
Dialogue: 0,9:59:59.99,9:59:59.99,Default,,0000,0000,0000,,Our first IV lesson begins \Nwith a story of schools.
Dialogue: 0,9:59:59.99,9:59:59.99,Default,,0000,0000,0000,,- [Josh] Charter schools \Nare public schools
Dialogue: 0,9:59:59.99,9:59:59.99,Default,,0000,0000,0000,,freed from daily district oversight\Nand teacher union contracts.
Dialogue: 0,9:59:59.99,9:59:59.99,Default,,0000,0000,0000,,The question of whether charters \Nboost achievement
Dialogue: 0,9:59:59.99,9:59:59.99,Default,,0000,0000,0000,,is one of the most important
Dialogue: 0,9:59:59.99,9:59:59.99,Default,,0000,0000,0000,,in the history \Nof American education reform.
Dialogue: 0,9:59:59.99,9:59:59.99,Default,,0000,0000,0000,,- The most popular charter schools\Nhave more applicants
Dialogue: 0,9:59:59.99,9:59:59.99,Default,,0000,0000,0000,,so the luck of the lottery draw \Ndecides who's offered a seat.
Dialogue: 0,9:59:59.99,9:59:59.99,Default,,0000,0000,0000,,A lot is at stake for the students \Nvying for their chance.
Dialogue: 0,9:59:59.99,9:59:59.99,Default,,0000,0000,0000,,Waiting for the lottery results \Nbrings up lots of emotions
Dialogue: 0,9:59:59.99,9:59:59.99,Default,,0000,0000,0000,,as was captured \Nin the award-winning documentary
Dialogue: 0,9:59:59.99,9:59:59.99,Default,,0000,0000,0000,,"Waiting For Superman."
Dialogue: 0,9:59:59.99,9:59:59.99,Default,,0000,0000,0000,,- [Mother] Don't cry.\NYou're gonna make Mommy cry.
Dialogue: 0,9:59:59.99,9:59:59.99,Default,,0000,0000,0000,,Okay?
Dialogue: 0,9:59:59.99,9:59:59.99,Default,,0000,0000,0000,,- Do charters really provide\Na better education?
Dialogue: 0,9:59:59.99,9:59:59.99,Default,,0000,0000,0000,,Critics most definitely say no,
Dialogue: 0,9:59:59.99,9:59:59.99,Default,,0000,0000,0000,,arguing that charters enroll \Nbetter students to begin with,
Dialogue: 0,9:59:59.99,9:59:59.99,Default,,0000,0000,0000,,smarter or more motivated\Nso differences in later outcomes
Dialogue: 0,9:59:59.99,9:59:59.99,Default,,0000,0000,0000,,reflects selection bias.
Dialogue: 0,9:59:59.99,9:59:59.99,Default,,0000,0000,0000,,- [Kamal] Wait, this one seems easy.
Dialogue: 0,9:59:59.99,9:59:59.99,Default,,0000,0000,0000,,In a lottery, winners \Nare chosen randomly,
Dialogue: 0,9:59:59.99,9:59:59.99,Default,,0000,0000,0000,,so just compare winners and losers.
Dialogue: 0,9:59:59.99,9:59:59.99,Default,,0000,0000,0000,,- [Student] Obviously.
Dialogue: 0,9:59:59.99,9:59:59.99,Default,,0000,0000,0000,,- On the right track, Kamal,
Dialogue: 0,9:59:59.99,9:59:59.99,Default,,0000,0000,0000,,but charter lotteries \Ndon't force kids into
Dialogue: 0,9:59:59.99,9:59:59.99,Default,,0000,0000,0000,,or out of a particular school.
Dialogue: 0,9:59:59.99,9:59:59.99,Default,,0000,0000,0000,,They randomize offers \Nof a charter seat.
Dialogue: 0,9:59:59.99,9:59:59.99,Default,,0000,0000,0000,,Some kids get lucky.
Dialogue: 0,9:59:59.99,9:59:59.99,Default,,0000,0000,0000,,Some kids don't.
Dialogue: 0,9:59:59.99,9:59:59.99,Default,,0000,0000,0000,,If we just wanted to know \Nthe effect of charter school offers,
Dialogue: 0,9:59:59.99,9:59:59.99,Default,,0000,0000,0000,,we could treat this \Nas a randomized trial.
Dialogue: 0,9:59:59.99,9:59:59.99,Default,,0000,0000,0000,,But we we're interested \Nin the effects
Dialogue: 0,9:59:59.99,9:59:59.99,Default,,0000,0000,0000,,of charter school attendance,\Nnot offers.
Dialogue: 0,9:59:59.99,9:59:59.99,Default,,0000,0000,0000,,And not everyone \Nwho is offered, accepts.
Dialogue: 0,9:59:59.99,9:59:59.99,Default,,0000,0000,0000,,IV turns the effect of being offered\Na charter seat into the effect
Dialogue: 0,9:59:59.99,9:59:59.99,Default,,0000,0000,0000,,of actually attending \Na charter school.
Dialogue: 0,9:59:59.99,9:59:59.99,Default,,0000,0000,0000,,- [Student] Cool.
Dialogue: 0,9:59:59.99,9:59:59.99,Default,,0000,0000,0000,,- Oh nice.
Dialogue: 0,9:59:59.99,9:59:59.99,Default,,0000,0000,0000,,- Let's look at an example, \Na charter school from
Dialogue: 0,9:59:59.99,9:59:59.99,Default,,0000,0000,0000,,the Knowledge Is Power \NProgram, or KIPP for short.
Dialogue: 0,9:59:59.99,9:59:59.99,Default,,0000,0000,0000,,This KIPP school is in Lynn,
Dialogue: 0,9:59:59.99,9:59:59.99,Default,,0000,0000,0000,,a faded industrial town \Non the coast of Massachusetts.
Dialogue: 0,9:59:59.99,9:59:59.99,Default,,0000,0000,0000,,The school has \Nmore applicants than seats
Dialogue: 0,9:59:59.99,9:59:59.99,Default,,0000,0000,0000,,and therefore picks its students\Nusing a lottery.
Dialogue: 0,9:59:59.99,9:59:59.99,Default,,0000,0000,0000,,From 2005 to 2008,\N371 fourth and fifth graders
Dialogue: 0,9:59:59.99,9:59:59.99,Default,,0000,0000,0000,,put their names \Nin the KIPP/Lynn lottery,
Dialogue: 0,9:59:59.99,9:59:59.99,Default,,0000,0000,0000,,253 students won a seat at KIPP,
Dialogue: 0,9:59:59.99,9:59:59.99,Default,,0000,0000,0000,,118 students lost.
Dialogue: 0,9:59:59.99,9:59:59.99,Default,,0000,0000,0000,,A year later, lottery winners had \Nmuch higher match scores
Dialogue: 0,9:59:59.99,9:59:59.99,Default,,0000,0000,0000,,than lottery losers.
Dialogue: 0,9:59:59.99,9:59:59.99,Default,,0000,0000,0000,,But remember, \Nwe're not trying to figure out
Dialogue: 0,9:59:59.99,9:59:59.99,Default,,0000,0000,0000,,whether winning a lottery \Nmakes you better at math.
Dialogue: 0,9:59:59.99,9:59:59.99,Default,,0000,0000,0000,,We want to know if attending KIPP\Nmakes you better at math.
Dialogue: 0,9:59:59.99,9:59:59.99,Default,,0000,0000,0000,,Of the 253 lottery winners,\Nonly 199 actually went to KIPP.
Dialogue: 0,9:59:59.99,9:59:59.99,Default,,0000,0000,0000,,The others chose \Na traditional public school.
Dialogue: 0,9:59:59.99,9:59:59.99,Default,,0000,0000,0000,,Similarly of the 118 lottery losers,\Na few actually ended up at KIPP.
Dialogue: 0,9:59:59.99,9:59:59.99,Default,,0000,0000,0000,,They got an offer later.
Dialogue: 0,9:59:59.99,9:59:59.99,Default,,0000,0000,0000,,So what was the effect of test scores\Nof actually attending KIPP?
Dialogue: 0,9:59:59.99,9:59:59.99,Default,,0000,0000,0000,,- [Student] Why can't we just \Nmeasure their math scores?
Dialogue: 0,9:59:59.99,9:59:59.99,Default,,0000,0000,0000,,- [Instructor] Great question.
Dialogue: 0,9:59:59.99,9:59:59.99,Default,,0000,0000,0000,,Who would you compare them to?
Dialogue: 0,9:59:59.99,9:59:59.99,Default,,0000,0000,0000,,- [Student] Those who didn't attend.
Dialogue: 0,9:59:59.99,9:59:59.99,Default,,0000,0000,0000,,- [Instructor] Is attendance random?
Dialogue: 0,9:59:59.99,9:59:59.99,Default,,0000,0000,0000,,- [Camilla] No.
Dialogue: 0,9:59:59.99,9:59:59.99,Default,,0000,0000,0000,,- Selection bias.
Dialogue: 0,9:59:59.99,9:59:59.99,Default,,0000,0000,0000,,- [Instructor] Correct.
Dialogue: 0,9:59:59.99,9:59:59.99,Default,,0000,0000,0000,,- [Otto] What?
Dialogue: 0,9:59:59.99,9:59:59.99,Default,,0000,0000,0000,,- [Instructor] The KIPP offers \Nare random so we can be confident
Dialogue: 0,9:59:59.99,9:59:59.99,Default,,0000,0000,0000,,of ceteris parabus,\Nbut attendance is not random.
Dialogue: 0,9:59:59.99,9:59:59.99,Default,,0000,0000,0000,,The choice to accept the offer \Nmight be due to characteristics
Dialogue: 0,9:59:59.99,9:59:59.99,Default,,0000,0000,0000,,that are related \Nto math performance.
Dialogue: 0,9:59:59.99,9:59:59.99,Default,,0000,0000,0000,,Say, for example, \Nthat dedicated parents
Dialogue: 0,9:59:59.99,9:59:59.99,Default,,0000,0000,0000,,are more likely \Nto accept the offer.
Dialogue: 0,9:59:59.99,9:59:59.99,Default,,0000,0000,0000,,Their kids are also more likely \Nto do better in math,
Dialogue: 0,9:59:59.99,9:59:59.99,Default,,0000,0000,0000,,regardless of school.
Dialogue: 0,9:59:59.99,9:59:59.99,Default,,0000,0000,0000,,- [Student] Right.
Dialogue: 0,9:59:59.99,9:59:59.99,Default,,0000,0000,0000,,- [Instructor] IV converts \Nthe offer effect
Dialogue: 0,9:59:59.99,9:59:59.99,Default,,0000,0000,0000,,into the effect of KIPP attendance,
Dialogue: 0,9:59:59.99,9:59:59.99,Default,,0000,0000,0000,,adjusting for the fact \Nthat some winners go elsewhere
Dialogue: 0,9:59:59.99,9:59:59.99,Default,,0000,0000,0000,,and some losers manage \Nto attend KIPP anyway.
Dialogue: 0,9:59:59.99,9:59:59.99,Default,,0000,0000,0000,,Essentially, IV takes \Nan incomplete randomization
Dialogue: 0,9:59:59.99,9:59:59.99,Default,,0000,0000,0000,,and makes the appropriate \Nadjustments.
Dialogue: 0,9:59:59.99,9:59:59.99,Default,,0000,0000,0000,,How? IV describes a chain reaction.
Dialogue: 0,9:59:59.99,9:59:59.99,Default,,0000,0000,0000,,Why do offers affect achievement?
Dialogue: 0,9:59:59.99,9:59:59.99,Default,,0000,0000,0000,,Probably because they affect \Ncharter attendance
Dialogue: 0,9:59:59.99,9:59:59.99,Default,,0000,0000,0000,,and charter attendance \Nimproves math scores,
Dialogue: 0,9:59:59.99,9:59:59.99,Default,,0000,0000,0000,,the first link in the chain\Ncalled the first stage
Dialogue: 0,9:59:59.99,9:59:59.99,Default,,0000,0000,0000,,is the effect of the lottery \Non charter attendance.
Dialogue: 0,9:59:59.99,9:59:59.99,Default,,0000,0000,0000,,The second stage is the length \Nbetween attending a charter
Dialogue: 0,9:59:59.99,9:59:59.99,Default,,0000,0000,0000,,and an outcome variable,
Dialogue: 0,9:59:59.99,9:59:59.99,Default,,0000,0000,0000,,in this case, math scores.
Dialogue: 0,9:59:59.99,9:59:59.99,Default,,0000,0000,0000,,The instrumental variable \Nor instrument for short
Dialogue: 0,9:59:59.99,9:59:59.99,Default,,0000,0000,0000,,is the variable \Nthat initiates the chain reaction.
Dialogue: 0,9:59:59.99,9:59:59.99,Default,,0000,0000,0000,,The effect of the instrument \Non the outcome is called
Dialogue: 0,9:59:59.99,9:59:59.99,Default,,0000,0000,0000,,the reduced form.
Dialogue: 0,9:59:59.99,9:59:59.99,Default,,0000,0000,0000,,This chain reaction can be \Nrepresented mathematically.
Dialogue: 0,9:59:59.99,9:59:59.99,Default,,0000,0000,0000,,We multiply the first stage,\Nthe effect of winning
Dialogue: 0,9:59:59.99,9:59:59.99,Default,,0000,0000,0000,,on attendance, by the second stage,
Dialogue: 0,9:59:59.99,9:59:59.99,Default,,0000,0000,0000,,the affect of attendance on scores.
Dialogue: 0,9:59:59.99,9:59:59.99,Default,,0000,0000,0000,,And we get the reduced form,
Dialogue: 0,9:59:59.99,9:59:59.99,Default,,0000,0000,0000,,the effect of winning \Nthe lottery on scores.
Dialogue: 0,9:59:59.99,9:59:59.99,Default,,0000,0000,0000,,Reduced form and first stage \Nare observable and easy to compute.
Dialogue: 0,9:59:59.99,9:59:59.99,Default,,0000,0000,0000,,However, the effect of attendance\Non achievement
Dialogue: 0,9:59:59.99,9:59:59.99,Default,,0000,0000,0000,,is not directly observed.
Dialogue: 0,9:59:59.99,9:59:59.99,Default,,0000,0000,0000,,This is the causal effect\Nwe're trying to determine.
Dialogue: 0,9:59:59.99,9:59:59.99,Default,,0000,0000,0000,,Given some important assumptions \Nwe'll discuss shortly,
Dialogue: 0,9:59:59.99,9:59:59.99,Default,,0000,0000,0000,,we can find the effect \Nof KIPP attendance
Dialogue: 0,9:59:59.99,9:59:59.99,Default,,0000,0000,0000,,by dividing the reduced form\Nby the first stage.
Dialogue: 0,9:59:59.99,9:59:59.99,Default,,0000,0000,0000,,This will become more clear \Nas we work through an example.
Dialogue: 0,9:59:59.99,9:59:59.99,Default,,0000,0000,0000,,- [Student] Let's do this.
Dialogue: 0,9:59:59.99,9:59:59.99,Default,,0000,0000,0000,,- A quick note on measurement.
Dialogue: 0,9:59:59.99,9:59:59.99,Default,,0000,0000,0000,,We measure achievement\Nusing standard deviations,
Dialogue: 0,9:59:59.99,9:59:59.99,Default,,0000,0000,0000,,often denoted \Nby the Greek letter sigma (σ).
Dialogue: 0,9:59:59.99,9:59:59.99,Default,,0000,0000,0000,,One σ is a huge move\Nfrom around the bottom 15%
Dialogue: 0,9:59:59.99,9:59:59.99,Default,,0000,0000,0000,,to the middle of most\Nachievement distributions.
Dialogue: 0,9:59:59.99,9:59:59.99,Default,,0000,0000,0000,,Even a 1/4 or 1/2 σ \Ndifference is big.
Dialogue: 0,9:59:59.99,9:59:59.99,Default,,0000,0000,0000,,- [Instructor] Now we're ready \Nto plug some numbers
Dialogue: 0,9:59:59.99,9:59:59.99,Default,,0000,0000,0000,,into the equation \Nwe introduced earlier.
Dialogue: 0,9:59:59.99,9:59:59.99,Default,,0000,0000,0000,,First up, what's the effect
Dialogue: 0,9:59:59.99,9:59:59.99,Default,,0000,0000,0000,,of winning the lottery \Non math scores?