novelty of Heckman’s insight is a measure of how far econometrics has drifted from its causal roots towards statistics. Although not an econometrician, in Caus- ality

research in this area is only just beginning. Identifying the impact of money on happiness is hard. There are serious problems of endogeneity. Happy people may do better because others want to work with them. Testing for comparison effects is also hard. Identifying reference groups is non-trivial. They may even change over time. The book subsequently… CONTINUE READING