Divided Germany: A Natural Experiment on Capitalism and Central Planning

Natural Experiments of History (Book)

Counterfactual

Analyzing a Causal Relationship in Housing

A city government unexpectedly decides to build a new subway line that serves only the western half of the city. An economist studies changes in housing prices and commute times in both the western (served by the new subway) and eastern (not served) halves of the city before and after the subway's construction. Which statement best explains why this scenario constitutes a natural experiment?

Analyzing a Minimum Wage Study

A researcher wants to study the effect of a new, optional online tutoring program on students' final exam scores. The researcher compares the scores of students who voluntarily signed up for the program with the scores of those who did not. Why does this research design fail to create a valid natural experiment for determining the causal impact of the tutoring program?

Evaluating a Proposed Natural Experiment on Disaster Impact

A study that compares the long-term health outcomes of individuals who voluntarily adopt a vegetarian diet (the treatment group) against those who do not (the control group) is a valid example of a natural experiment.

Evaluating a Premium Pricing Strategy

A researcher is studying the economic impact of a sudden, city-wide ban on single-use plastic bags. The ban was implemented in City A but not in the neighboring, demographically similar City B. The researcher compares grocery store profits in both cities before and after the ban. Match each term to its corresponding element in this study.

Critiquing a Productivity Study Design

An economist wants to use a sudden change in a state's school funding policy as a natural experiment to study its impact on student graduation rates. The policy increased funding only for schools in counties with populations below 50,000. Arrange the following steps in the logical order an economist would follow to conduct this study.