Evaluating Studies

Below are a set of hypothetical studies. For each study:

  1. Define the outcome of interest

  2. Define the treatment of interest

  3. Give a reason that there may be baseline differences between groups

  4. Give an example of how you could evaluate that possibility

  5. Give a reason there may be differential treatment effects

  6. Give an example of how you could evaluate that possibility

Study 1: Gym Memberships

A health insurance company is thinking about paying for gym memberships for all their clients in the hopes that they will promote fitness and reduce healthcare costs (enough to offset the cost of the memberships).

To see if this would be worthwhile, they survey a random sample of their clients in the Durham, NC area about whether they currently have gym memberships.

They then correlate this data with the “fitness” of their members. (Let’s just talk about “fitness”, assuming they come up with some fancy index related to cholesterol, resting heart rate, and lots of other things that predict healthcare consumption and cost to the insurer).

They find that their clients with gym memberships are healthier than their clients without gym memberships.

Study 2: Car Insurance

A car rental company currently offers renters two insurance options: a high deductible (but lower fee) option, and a low deductible (but higher fee) option.

(A “high deductible” insurance policy means that in the event of an accident, the renter is responsible for more out-of-pocket costs before insurance kicks in).

The rental car company has found that the people with the higher deductible insurance are less likely to get into accidents. (even with the higher deductible, they lose money on accidents given the hassle of getting new cars in their fleet).

With that in mind, it’s thinking of having all rental agreements use the “high deductible” insurance.

Study 3: Billboard

You work for a Tesla dealership in Hillsboro (a town a little outside Durham, NC). You’ve heard that your colleagues who run a Tesla dealership near Duke Medical Center in central Durham have a billboard up. You also know that they sell substantially more Tesla’s than you.

So you’re thinking about also putting up a billboard near your store.