Random Effects (The Effect, Videos on Causality, Ep 47)

Please visit www.theeffectbook.net to read The Effect online for free, or find links to purchase a physical copy or ebook.
The Effect is a book about research design and causal inference. How can we use data to learn about the world? How can we answer questions about whether X causes Y even if we can't run a randomized experiment? The book covers these things and plenty more. These videos are meant to accompany the book, although they can also be viewed on their own.
This video relates to material found in Chapter 16 of the book.
A version of this video without background music can be found here: • Random Effects (The Ef...
Fixed effects isn't the only way to control for some between variation without having to measure it all. Random effects is another way, and has some nice statistical properties... assuming the additional assumptions you need are valid!

[@GabrielleYadventuremore]

hi Professor! Thank you so much for the great video and book! This may be an obvious question, but i am really curious to know: can you add variable that explained the btw variation to make it still a fixed-effect model? The book & the video both say "fixed effect model" is the same as a regular linear regression model, and since linear regression model can be Y = a1x1 + a2x2 + .... anXn + b, will fixed effect model has any limitation on what fixed-effect variables it can take (i.e, categorical vs. continuous variable)? will you say a linear regression model with categorical variables can be seen as a fixed-effect model?

[@NickHuntingtonKlein]

Thanks! And yep, no reason you can't have categorical variables in a fixed-effect model. In fact, if you estimate fixed effects by including a set of binary indicators, the fixed effects themselves are in there as a categorical variable.

[@GabrielleYadventuremore]

Thanks for the quick response! that's what i was thinking too about the categorical variable. I assume it is also ok to include continuous variables, right? @@NickHuntingtonKlein

[@NickHuntingtonKlein]

@@GabrielleYadventuremore correct, yes