Omitted Variable Bias of Lasso-Based Inference Methods Under Limited Variability: A Finite Sample Analysis

2019 ◽  
Author(s):  
Kaspar Wuthrich ◽  
Ying Zhu
2021 ◽  
pp. 1-47
Author(s):  
Kaspar Wüthrich ◽  
Ying Zhu

Abstract We study the finite sample behavior of Lasso-based inference methods such as post double Lasso and debiased Lasso. We show that these methods can exhibit substantial omitted variable biases (OVBs) due to Lasso not selecting relevant controls. This phenomenon can occur even when the coeffcients are sparse and the sample size is large and larger than the number of controls. Therefore, relying on the existing asymptotic inference theory can be problematic in empirical applications. We compare the Lasso-based inference methods to modern highdimensional OLS-based methods and provide practical guidance.


2018 ◽  
Vol 30 (12) ◽  
pp. 3227-3258 ◽  
Author(s):  
Ian H. Stevenson

Generalized linear models (GLMs) have a wide range of applications in systems neuroscience describing the encoding of stimulus and behavioral variables, as well as the dynamics of single neurons. However, in any given experiment, many variables that have an impact on neural activity are not observed or not modeled. Here we demonstrate, in both theory and practice, how these omitted variables can result in biased parameter estimates for the effects that are included. In three case studies, we estimate tuning functions for common experiments in motor cortex, hippocampus, and visual cortex. We find that including traditionally omitted variables changes estimates of the original parameters and that modulation originally attributed to one variable is reduced after new variables are included. In GLMs describing single-neuron dynamics, we then demonstrate how postspike history effects can also be biased by omitted variables. Here we find that omitted variable bias can lead to mistaken conclusions about the stability of single-neuron firing. Omitted variable bias can appear in any model with confounders—where omitted variables modulate neural activity and the effects of the omitted variables covary with the included effects. Understanding how and to what extent omitted variable bias affects parameter estimates is likely to be important for interpreting the parameters and predictions of many neural encoding models.


2015 ◽  
Vol 18 (4) ◽  
pp. 376-387
Author(s):  
Trey Dronyk-Trosper ◽  
Brandli Stitzel

How important is recruiting to a football program’s success? While prior research has attempted to answer this question, we utilize an extensive panel set covering 13 years of games along with a two-stage least squares approach to investigate the effects of recruiting on team success. This article also includes new control variables to account for omitted variable bias that prior work may have missed. We also split our sample to investigate whether recruiting displays heterogeneous effects across schools. Additionally, we find evidence that the benefits of recruiting are driven by team-specific effects, indicating that team success may be more heavily derived from the ability of teams to harness and improve their recruits than their ability to utilize each athlete’s raw abilities. This leads to important revelations regarding future research into both the value of recruits and what drives a football team’s success.


2003 ◽  
Vol 184 ◽  
pp. 99-110 ◽  
Author(s):  
Thomas Zwick

This paper finds substantial effects of ICT investments on productivity for a large and representative German establishment panel data set. In contrast to the bulk of the literature also establishments without ICT capital are included and lagged effects of ICT investments are analysed. In addition, a broad range of establishment and employee characteristics are taken account of in order to avoid omitted variable bias. It is shown that taking into account unobserved heterogeneity of the establishments and endogeneity of ICT investments increases the estimated lagged productivity impact of ICT investments.


2020 ◽  
Vol 10 (23) ◽  
pp. 8747
Author(s):  
Wojciech Wieczorek ◽  
Olgierd Unold ◽  
Łukasz Strąk

Grammatical inference (GI), i.e., the task of finding a rule that lies behind given words, can be used in the analyses of amyloidogenic sequence fragments, which are essential in studies of neurodegenerative diseases. In this paper, we developed a new method that generates non-circular parsing expression grammars (PEGs) and compares it with other GI algorithms on the sequences from a real dataset. The main contribution of this paper is a genetic programming-based algorithm for the induction of parsing expression grammars from a finite sample. The induction method has been tested on a real bioinformatics dataset and its classification performance has been compared to the achievements of existing grammatical inference methods. The evaluation of the generated PEG on an amyloidogenic dataset revealed its accuracy when predicting amyloid segments. We show that the new grammatical inference algorithm achieves the best ACC (Accuracy), AUC (Area under ROC curve), and MCC (Mathew’s correlation coefficient) scores in comparison to five other automata or grammar learning methods.


2015 ◽  
Vol 61 (5) ◽  
pp. 935-963 ◽  
Author(s):  
Austin M. Strange ◽  
Axel Dreher ◽  
Andreas Fuchs ◽  
Bradley Parks ◽  
Michael J. Tierney

China’s provision of development finance to other countries is sizable but reliable information is scarce. We introduce a new open-source methodology for collecting project-level development finance information and create a database of Chinese official finance (OF) to Africa from 2000 to 2011. We find that China’s commitments amounted to approximately US$73 billion, of which US$15 billion are comparable to Official Development Assistance following Organization for Economic Cooperation and Development definitions. We provide details on 1,511 projects to fifty African countries. We use this database to extend previous research on aid and conflict, which suffers from omitted-variable bias due to the exclusion of Chinese development finance. Our results show that sudden withdrawals of “traditional” aid no longer induce conflict in the presence of sufficient alternative funding from China. Our findings highlight the importance of gathering more complete data on the development activities of “nontraditional donors” to better understand the link between aid and conflict.


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