Abstract

Reichenbach’s ‘principle of the common cause’ is a foundational assumption of some important recent contributions to quantitative social science methodology but no similar principle appears in econometrics. Angrist et al. has argued that the principle is necessary for instrumental variables methods in econometrics, and Angrist Krueger builds a framework using it that he proposes as a means of resolving an important methodological dispute among econometricians. Through analysis of instrumental variables methods and the issue of multicollinearity, we aim to show that the relationship of the principle to econometric methods is more nuanced than implied by previous work but nevertheless may make a valuable contribution to the coherence and validity of existing methods.