Indeed, we did take the average of the logs instead of the log of the averages. This doesn’t change the end and start point, so it wouldn’t change the overall decay rate we estimate. We could do more complex modelling where effects between KLPS2 and KLPS3 see small growth and KLPS3 and KLPS4 see large decay. I think this shows that the overall results are sensitive to how we model effect across time.
See Figure 4 of the appendix, which shows, whether in earnings or in consumption, that the relative gains, as shown by the log difference, decrease over time.
We used the pooled data because it is what GiveWell does. In the appendix we note that the consumption and earnings data look different. So, perhaps a more principle way would be to look at the decay within earnings and within consumption. The decay within earnings (84%) and the decay within consumption (81%) are both stronger (i.e., would lead to smaller effects) than the 88% pooled decay.
Thank you for your comment!
Indeed, we did take the average of the logs instead of the log of the averages. This doesn’t change the end and start point, so it wouldn’t change the overall decay rate we estimate. We could do more complex modelling where effects between KLPS2 and KLPS3 see small growth and KLPS3 and KLPS4 see large decay. I think this shows that the overall results are sensitive to how we model effect across time.
See Figure 4 of the appendix, which shows, whether in earnings or in consumption, that the relative gains, as shown by the log difference, decrease over time.
We used the pooled data because it is what GiveWell does. In the appendix we note that the consumption and earnings data look different. So, perhaps a more principle way would be to look at the decay within earnings and within consumption. The decay within earnings (84%) and the decay within consumption (81%) are both stronger (i.e., would lead to smaller effects) than the 88% pooled decay.
Thanks for the response Samuel, would be interesting to hear GiveWell’s rationale on using the log of average(earnings+consumption).