On making causal claims: A review and recommendations

Social scientists often estimate models from correlational data, where the independent variable has not been exogenously manipulated; they also make implicit or explicit causal claims based on these models. When can these claims be made? We answer this question by first discussing design and estimation conditions under which model estimates can be interpreted, using the randomized experiment as the gold standard. We show how endogeneity--which includes omitted variables, omitted selection, simultaneity, common methods bias, and measurement error--renders estimates causally uninterpretable. Second, we present methods that allow researchers to test causal claims in situations where randomization is not possible or when causal interpretation is confounded, including fixed-effects panel, sample selection, instrumental variable, regression discontinuity, and difference-in-differences models. Third, we take stock of the methodological rigor with which causal claims are being made in a social sciences discipline by reviewing a representative sample of 110 articles on leadership published in the previous 10 years in top-tier journals. Our key finding is that researchers fail to address at least 66 % and up to 90 % of design and estimation conditions that make causal claims invalid. We conclude by offering 10 suggestions on how to improve non-experimental research.

On making causal claims: A review and recommendations

Social scientists often estimate models from correlational data, where the independent variable has not been exogenously manipulated; they also make implicit or explicit causal claims based on these models. When can these claims be made? We answer this question by first discussing design and estimation conditions under which model estimates can be interpreted, using the randomized experiment as the gold standard. We show how endogeneity--which includes omitted variables, omitted selection, simultaneity, common methods bias, and measurement error--renders estimates causally uninterpretable. Second, we present methods that allow researchers to test causal claims in situations where randomization is not possible or when causal interpretation is confounded, including fixed-effects panel, sample selection, instrumental variable, regression discontinuity, and difference-in-differences models. Third, we take stock of the methodological rigor with which causal claims are being made in a social sciences discipline by reviewing a representative sample of 110 articles on leadership published in the previous 10 years in top-tier journals. Our key finding is that researchers fail to address at least 66 % and up to 90 % of design and estimation conditions that make causal claims invalid. We conclude by offering 10 suggestions on how to improve non-experimental research.

Sympatric speciation in palms on an oceanic island.

The origin of species diversity has challenged biologists for over two centuries. Allopatric speciation, the divergence of species resulting from geographical isolation, is well documented. However, sympatric speciation, divergence without geographical isolation, is highly controversial. Claims of sympatric speciation must demonstrate species sympatry, sister relationships, reproductive isolation, and that an earlier allopatric phase is highly unlikely. Here we provide clear support for sympatric speciation in a case study of two species of palm (Arecaceae) on an oceanic island. A large dated phylogenetic tree shows that the two species of Howea, endemic to the remote Lord Howe Island, are sister taxa and diverged from each other well after the island was formed 6.9 million years ago. During fieldwork, we found a substantial disjunction in flowering time that is correlated with soil preference. In addition, a genome scan indicates that few genetic loci are more divergent between the two species than expected under neutrality, a finding consistent with models of sympatric speciation involving disruptive/divergent selection. This case study of sympatric speciation in plants provides an opportunity for refining theoretical models on the origin of species, and new impetus for exploring putative plant and animal examples on oceanic islands.

Niche conservatism in non-native birds in Europe: niche unfilling rather than niche expansion

Aim Niche conservatism, or the extent to which niches are conserved across space and time, is of special concern for the study of non-native species as it underlies predictions of invasion risk. Based on the occurrence of 28 non-native birds in Europe, we assess to what extent Grinnellian realized niches are conserved during invasion, formulate hypotheses to explain the variation in observed niche changes and test how well species distribution models can predict non-native bird occurrence in Europe. Location Europe. Methods To quantify niche changes, a recent method that applies kernel smoothers to densities of species occurrence in a gridded environmental space was used. This corrects for differences in the availability of environments between study areas and allows discrimination between 'niche expansion' into environments new to the species and 'niche unfilling', whereby the species only partially fills its niche in the invaded range. Predictions of non-native bird distribution in Europe were generated using several distribution modelling techniques. Results Niche overlap between native and non-native bird populations is low, but niche changes are smaller for species having a higher propagule pressure and that were introduced longer ago. Non-native birds in Europe occupy a subset of the environments they inhabit in their native ranges. Niche expansion into novel environments is rare for most species, allowing species distribution models to accurately predict invasion risk. Main conclusions Because of the recent nature of most bird introductions, species occupy only part of the suitable environments available in the invaded range. This signals that apart from purely ecological factors, patterns of niche conservatism may also be contingent on population-specific historical factors. These results also suggest that many claims of niche differences may be due to a partial filling of the native niche in the invaded range and thus do not represent true niche changes.

Determinants of generic drug substitution in Switzerland.

Background: Since generic drugs have the same therapeutic effect as the original formulation but at generally lower costs, their use should be more heavily promoted. However, a considerable number of barriers to their wider use have been observed in many countries. The present study examines the influence of patients, physicians and certain characteristics of the generics' market on generic substitution in Switzerland.Methods: We used reimbursement claims' data submitted to a large health insurer by insured individuals living in one of Switzerland's three linguistic regions during 2003. All dispensed drugs studied here were substitutable. The outcome (use of a generic or not) was modelled by logistic regression, adjusted for patients' characteristics (gender, age, treatment complexity, substitution groups) and with several variables describing reimbursement incentives (deductible, co-payments) and the generics' market (prices, packaging, co-branded original, number of available generics, etc.).Results: The overall generics' substitution rate for 173,212 dispensed prescriptions was 31%, though this varied considerably across cantons. Poor health status (older patients, complex treatments) was associated with lower generic use. Higher rates were associated with higher out-of-pocket costs, greater price differences between the original and the generic, and with the number of generics on the market, while reformulation and repackaging were associated with lower rates. The substitution rate was 13% lower among hospital physicians. The adoption of the prescribing practices of the canton with the highest substitution rate would increase substitution in other cantons to as much as 26%.Conclusions: Patient health status explained a part of the reluctance to substitute an original formulation by a generic. Economic incentives were efficient, but with a moderate global effect. The huge interregional differences indicated that prescribing behaviours and beliefs are probably the main determinant of generic substitution.

Altruism across disciplines: one word, multiple meanings

Altruism is a deep and complex phenomenon that is analysed by scholars of various disciplines, including psychology, philosophy, biology, evolutionary anthropology and experimental economics. Much confusion arises in current literature because the term altruism covers variable concepts and processes across disciplines. Here we investigate the sense given to altruism when used in different fields and argumentative contexts. We argue that four distinct but related concepts need to be distinguished: (a) psychological altruism, the genuine motivation to improve others' interests and welfare; (b) reproductive altruism, which involves increasing others' chances of survival and reproduction at the actor's expense; (c) behavioural altruism, which involves bearing some cost in the interest of others; and (d) preference altruism, which is a preference for others' interests. We show how this conceptual clarification permits the identification of overstated claims that stem from an imprecise use of terminology. Distinguishing these four types of altruism will help to solve rhetorical conflicts that currently undermine the interdisciplinary debate about human altruism.

Essays in equilibrium asset pricing

This thesis consists of four essays in equilibrium asset pricing. The main topic is investors' heterogeneity: I investigates the equilibrium implications for the financial markets when investors have different attitudes toward risk. The first chapter studies why expected risk and remuneration on the aggregate market are negatively related, even if intuition and standard theory suggest a positive relation. I show that the negative trade-off can obtain in equilibrium if investors' beliefs about economic fundamentals are procyclically biased and the market Sharpe ratio is countercyclical. I verify that such conditions hold in the real markets and I find empirical support for the risk-return dynamics predicted by the model. The second chapter consists of two essays. The first essay studies how het¬erogeneity in risk preferences interacts with other sources of heterogeneity and how this affects asset prices in equilibrium. Using perceived macroeconomic un¬certainty as source of heterogeneity, the model helps to explain some patterns of financial returns, even if heterogeneity is small as suggested by survey data. The second essay determines conditions such that equilibrium prices have analytical solutions when investors have heterogeneous risk attitudes and macroeconomic fundamentals feature latent uncertainty. This approach provides additional in-sights to the previous literature where models require numerical solutions. The third chapter studies why equity claims (i.e. assets paying a single future dividend) feature premia and risk decreasing with the horizon, even if standard models imply the opposite shape. I show that labor relations helps to explain the puzzle. When workers have bargaining power to exploit partial income insurance within the firm, wages are smoother and dividends are riskier than in a standard economy. Distributional risk among workers and shareholders provides a rationale to the equity short-term risk, which leads to downward sloping term structures of premia and risk for equity claim. Résumé Cette thèse se compose de quatre essais dans l'évaluation des actifs d'équilibre. Le sujet principal est l'hétérogénéité des investisseurs: J'étudie les implications d'équilibre pour les marchés financiers où les investisseurs ont des attitudes différentes face au risque. Le première chapitre étudie pourquoi attendus risque et la rémunération sur le marché global sont liées négativement, même si l'intuition et la théorie standard suggèrent une relation positive. Je montre que le compromis négatif peut obtenir en équilibre si les croyances des investisseurs sur les fondamentaux économiques sont procyclique biaisées et le ratio de Sharpe du marché est anticyclique. Je vérifier que ces conditions sont réalisées dans les marchés réels et je trouve un appui empirique à la dynamique risque-rendement prédites par le modèle. Le deuxième chapitre se compose de deux essais. Le première essai étudie com¬ment hétérogénéité dans les préférences de risque inter agit avec d'autres sources d'hétérogénéité et comment cela affecte les prix des actifs en équilibre. Utili¬sation de l'incertitude macroéconomique perù comme source d'hétérogénéité, le modèle permet d'expliquer certaines tendances de rendements financiers, même si l'hétérogénéité est faible comme suggéré par les données d'enquête. Le deuxième essai détermine des conditions telles que les prix d'équilibre disposer de solutions analytiques lorsque les investisseurs ont des attitudes des risques hétérogènes et les fondamentaux macroéconomiques disposent d'incertitude latente. Cette approche fournit un éclairage supplémentaire à la littérature antérieure où les modèles nécessitent des solutions numériques. Le troisième chapitre étudie pourquoi les equity-claims (actifs que paient un seul dividende futur) ont les primes et le risque décroissante avec l'horizon, mme si les modèles standards impliquent la forme opposée. Je montre que les relations de travail contribue à expliquer l'énigme. Lorsque les travailleurs ont le pouvoir de négociation d'exploiter assurance revenu partiel dans l'entreprise, les salaires sont plus lisses et les dividendes sont plus risqués que dans une économie standard. Risque de répartition entre les travailleurs et les actionnaires fournit une justification à le risque à court terme, ce qui conduit à des term-structures en pente descendante des primes et des risques pour les equity-claims.