Dr. Max Funn: Questionable Proxy Variables

Hedonism is the ethical theory that people should maximize their own pleasure in life. One hedonist in particular, Dr. Max Funn, wondered if religious attendance leads to happiness, and decides to conduct an experiment to answer this question. Since Mr. Funn was also trained as an economist, instead of directly measuring the effect of religious attendance on his sample's subjective happiness, he decides instead to study the effect of religious attendance on a proxy variable for happiness---income---which is known to be correlated with and causal of happiness.

Dr. Funn randomly divides a large sample of non-religious people into two groups, and has one group attend church weekly, and the other not attend church at all. After a year, the economist asks his sample to report their incomes and finds a statistically significant average treatment effect of religious attendance on happiness (measured as income). This result increases Dr. Funn's own happiness.

Which of the following hypothetical scenarios, if true, would make us question whether income is a good proxy variable for happiness in this experiment?

Possible answers

If religious attendance were found to have a positive effect on happiness.

If, across the population, income were not associated with church attendance.

If religious attendance made people sad, and employers were more likely to give raises to employees who seem sad.

Exercise

Dr. Max Funn: Questionable Proxy Variables

Instructions

Possible answers