2. Controlled and natural experiments
Consider the following conversation between Kate, a teaching assistant, and Hubert and Eric, students in her Economics class.
KATE: Could someone identify the characteristics of a natural experiment in economics?
Check all that apply.
Results from natural experiments are only relevant for the specific natural experiment that is conducted.
Groups are self-selected.
The selection of groups is randomized.
The difference between the groups is introduced by the researchers.
ERIC: Kate, could you please explain the difference between controlled experiments and natural experiments in economics?
KATE: Economists cannot perform controlled experiments in the way medical researchers can. However, economists are looking for cases that mimic controlled experiments as closely as possible. In such cases, nature presents circumstances when an exogenous change in a key variable gives researchers a control group and a treatment group. Based on your textbook chapter, could someone give me an example of a natural experiment in economics?