Quantitative Methodologies
Matthew Schwarz and Valerie Dao
Fulbright Research Mentorship Program
Ho Chi Minh City, Vietnam
Introduction
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Quantitative research…
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Quantify variation
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Predict relationships
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What factors influence athletic ability?
When is it most likely to rain?
Describe characteristics
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What is the average height of an FRMP student?
Bridging the Gap
Qualitative: Understand a certain phenomenon
Is my understanding generalizable?
Qualitative: Determine whether your understanding can be generalized
Review
Review
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What is a variable?
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Independent variable?
Dependent variable?
How are independent and dependent variables related?
What does it mean to operationalize a variable?
Bonus Questions
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Can you have multiple independent variables?
Can you have multiple dependent variables?
What is the Operational Definition of Pho?
Steps
Define your research question
1.
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Define your variables
2.
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Independent variable: Location (HCMC or Hanoi)
Dependent variable: Factors influencing decision.
Operationalize your dependent variable
3.
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Labor supply
Business-friendly authorities
Others?
Collect data
4.
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5.
Why are there more foreign businesses in HCMC than Hanoi?
Survey
Databases
Analyze relationship using statistical methods
Correlation and Causation
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What is correlation?
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Correlation means that there is a
relationship between two variables.
What is causation?

Causation means that one variable
causes another variable to occur.
Correlation and Causation
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If there is correlation… isn’t there
automatically causation?
Let’s look at some examples and see if
we can answer this question.
Finance
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Research question
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Variables
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Independent: Price
Dependent (1): Earnings
Hypothesis
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What factors cause stock
prices to increase?
“When a company reports
strong earnings, it’s stock
price tends to increase.”
Correlation?
Causation?
Politics
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Research question
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Variables
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Independent: Vote for
Obama?
Dependent (1): Democrat
Dependent (2): Intelligent
Hypothesis
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What was the most important
reason why Barack Obama
won the 2008 election?
“The most important reason
why Barack Obama won the
2008 election was his status
as a Democrat.”
Correlation?
Causation?
Medicine
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Research question
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Variables
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Independent: Took pill?
Dependent (1): Health
Hypothesis

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Does this pill improve health?
“Taking this pill makes people
healthier.”
Correlation?
Causation?
“Correlation does not imply causation”
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By now, you should understand that
correlation does not imply causation.
There are two main reasons why we
cannot assume causation even when
we observe correlation:
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Coincidence
Intervening variables
Coincidence
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Even if we observe a strong correlation
between two variables, we cannot be
sure that it’s not a coincidence.
Always ask yourself this question:
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“Am I confident that the dependent
variable is changing because of
changes in the independent variable?”
Intervening Variables
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Intervening or confounding
variables prevent us from credibly
providing causality.
An intervening variable is a variable
that influences both the dependent and
independent variable.
Which one is the Intervening Variable?
Spurious Relationships
The intervening variables cause spurious relationships. Spurious
relationships are when are when two variables seem to have a
connection due to a third unknown or unseen (intervening) variable.
Spotting Intervening Variables
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Let’s revisit our examples to see if we
notice any intervening variables.
Finance
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In the Finance example, we saw a
correlation between a company’s
earnings and its stock price.
Are there any intervening variables?
Politics
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In the Politics example, we saw a
correlation between voting for Obama
and status as a Democrat.
Are there any intervening variables?
Medicine
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In the Medicine example, we saw a
correlation between taking the pill and
feeling healthier.
Are there any intervening variables?
Dealing with Intervening Variables
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The way to move from correlation to
causation is by controlling for
intervening variables.
This requires the researcher to modify
his/her statistical model.
Survey Design