Heckman Selection Model: Correcting Sample Selection Bias
The Heckman selection model corrects for sample selection bias in wage equations and any setting where the outcome is observed...
Author: Majid Ali Sanghro
Hausman Test: Choosing Between Fixed and Random Effects
The Hausman test compares fixed effects and random effects estimators in panel data, deciding which set of assumptions about unobserved...
Public Goods vs Private Goods: Rivalry, Excludability, Free-Rider Problem
Rivalry and excludability separate public goods vs private goods, and the free-rider problem explains why markets undersupply non-excludable goods that...
Elasticity of Substitution: Measuring Input Flexibility
The elasticity of substitution measures how readily a firm swaps one input for another when relative prices change, governing factor...
Cross-Price Elasticity of Demand: Substitutes, Complements, and Strategic Pricing
Cross-price elasticity of demand measures how one good's quantity responds when another's price changes. The sign identifies substitutes and complements;...
Income Elasticity of Demand: Necessities, Luxuries, and Inferior Goods
The income elasticity of demand measures how consumer spending responds to changes in income, sorting goods into necessities, luxuries, and...
Elasticity in Economics: The Four Measures and How to Use Them
Elasticity in economics measures how strongly markets respond to changes in price, income, or related prices. Explains all five elasticities,...
Repo Market Standing Repo Facility: September 2019 Spike
The September 2019 SOFR spike revealed how brittle US money market plumbing had become. The Standing Repo Facility, launched in...
Dot Plot FOMC: Decoding the Summary of Economic Projections
The FOMC dot plot is the most-cited chart in monetary policy. Reading it well requires looking past the median to...
Forward Guidance Frameworks: From Open-Mouth Operations to Date-Based Pledges
Forward guidance is how central banks move long-term interest rates by managing expectations. From qualitative language to date-based pledges, the...