Problem
Medical marijuana laws have received increasing attention in recent years, and was a particularly prominent and contentious issue in many states in the most recent election. As economists, we may be particularly interested in how expanding access to marijuana via medical marijuana laws affects labor supply outcomes, like the propensity to work and the amount of hours worked.
Let's pick a hypothetical pattern to observe in our data according to your own prior. Pretend we observe data that shows increased medical marijuana use is associated with an (increase/decrease) in the number of hours worked [pick one to use for this question. Either would be fine]. Now, answer these following questions:
1. What is the difference between a correlation and a causal claim using the above hypothetical data as an example?
2. Given the direction of the correlation you've chosen, provide two reasons why we should be hesitant in drawing causal conclusions from this data (You can make these up, just make sure they're logically consistent. No need to go find real data).
3. Now, as an economist, you want to actually estimate a causal effect of increase medical d marijuana use on labor supply outcomes in a way that tries to get around these biases. What approach might you take in doing so s there a particular term for the method you would use? What assumptions would you need for your strategy to work?
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.