The THIRD Way in Empirical Economics Research

David Green

No 26152, RFBerlin Discussion Paper Series from ROCKWOOL Foundation Berlin (RFBerlin)

Abstract: There is a third way of doing empirical work in economics that combines the benefits of the two commonly described approaches (quasi-experimental (QE) and structural). It uses an economic model to provide interpretability and help in deciding on controls and the nature and solutions to endogeneity problems, but utilizes an approximation to get to an empirical specification that allows for QE-type assessments of identifying data variation. This approach is used in some of the most influential papers in applied economics. This paper makes the case for recognizing this as a specific approach to begin a discussion on improving implementation.

Keywords: applied; econometrics (search for similar items in EconPapers)
JEL-codes: C18 (search for similar items in EconPapers)
Date: 2026-05
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