A0200
Title: Can two variables have the same values but different impacts: Revisiting Card \& Krueger and Lord's paradox
Authors: Yongnam Kim - Seoul National University (Korea, South) [presenting]
Soo Jung La - Seoul National University (Korea, South)
Abstract: Card and Krueger investigated the impact of the minimum wage on employment by comparing New Jersey (treatment group) and Pennsylvania (control group). The focus is on which variable serves as their treatment in the analysis: Minimum wage (increase or not) or State (New Jersey or Pennsylvania)? Despite the perfect correlation, the two treatment effects differ conceptually. Drawing a causal graph, it demonstrated how to derive the effect of Minimum wage on employment by examining the effect of the State on the employment change. Further, extending to Lord's paradox, it is shown how to infer the effect of diet despite its perfect collinearity with students' sex status. This approach offers a novel perspective on Lord's paradox, avoiding substantial distortion of the original scenario.
