This note illustrates, using simple examples, how causal questions of non-trivial character can be represented, analyzed and solved using linear analysis and path diagrams. By producing closed form solutions, linear analysis allows for swift assessment of how various features of the model impact the questions under investigation. We discuss conditions for identifying total and direct effects, representation and identification of counterfactual expressions, robustness to model misspecification, and generalization across populations.
This paper reflects on a recent article by Heckman and Pinto (2013) in which they discuss a formal system, called do-calculus, that operationalizes Haavelmo’s conception of policy intervention. They replace the do-operator with an equivalent operator called “fix,” highlight the capabilities of “fix,” discover limitations in “do,” and inform readers that those limitations disappear in “the Haavelmo approach.” I examine the logic of HP’s paper, its factual basis, and its impact on econometric research and education.