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Quantitative skills: Reading graphical data


Randomised control trials

In this volume of Economic Review, Chris Jones explores ideas and concepts from development economics

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In the natural sciences, researchers can develop a better understanding of causeand-effect relationships by setting up controlled experiments in a lab, where all factors, except for the one being tested, are kept constant. However, in social sciences, like economics, this is very often infeasible or even unethical as the experiments involve human participation. For example, it is not possible for economic researchers to ask the Bank of England’s Monetary Policy Committee to alter interest rates for the sole purpose of observing the effects on the market for credit.

Nevertheless, recent methodological advances in econometrics — the application of statistical methods to analyse and quantify relationships between economic variables — have led to the widespread use and adoption of randomised control trials (RCT). These have become very popular in the field of development economics. RCTs refer to experimental studies that use random assignment of individuals, households or communities to different treatments or interventions. An example might be the introduction of insecticidetreated bed nets (ITNs) into communities aimed at reducing illness, severe disease and death due to malaria in endemic regions of the world. According to the Centers for Disease Control and Prevention — the national public health agency of the USA — ITNs were shown by RCTs to reduce the death of children under 5 years from all causes by about 20%.

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Quantitative skills: Reading graphical data

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