Class 14: Ethics, Data Biases, and Correlation vs. Causation

What impact can data bias have?

Resumes and Advertisements

What is the problem with machine learning algorithms and data bias?

Machine Learning Algorithms learn from the data. If the data is biased, the algorithms will also be biased

What is McKinsey’s Solutions to AI?

1. Know where AI can help/hurt

2. Test and fix AI Bias

3. Talk about it

4. Work with AI

5. Invest in research

6. Diversify the field

What is the Casual Effect?

The difference between two potential outcomes

What is the fundamental problem of casual inference?

At most, we only observe one potential outcome

What do we need to do to estimate a casual effect?

We need to estimate the missing potential outcome

What is the goal standard of casual inference?

A randomized control trial

What is Self Selection?

Any situation in which individuals select themselves into a group

What may a firm’s decision to participate in self-selection be correlated with?

Firm characteristics that affect the outcome of interest

What can analyzing a sample of self selection lead to?

Misleading inferences