Statistical models of unobserved heterogeneity are typically formalised as mixtures of simple parametric models and interest naturally focuses on testing for homogeneity versus general mixture alternatives. Many tests of this type can be interpreted as C (a) tests, as in Neyman (1959), and shown...

The instrumental variable (IV) estimator in a cross-sectional or panel regression model is often taken to provide valid causal inference from contemporaneous correlations. In this exercise we point out that the IV estimator, like the OLS estimator, cannot be used effectively for causal inference...

Most commonly used measures of housing affordability are essentially short-run indicators that compare current income with house prices or housing costs. Despite the emphasis in the literature on the importance of long-term affordability, researchers have not developed measures of lifetime...

The link between mental stress and cancer is still a belief, not a well established scientific fact. Scientists have relied largely on opinions of cancer stricken patients to establish a link between stress and cancer. Such opinion surveys tend to produce contradictory statistical inferences....

The existing measures of housing affordability are essentially short-run indicators that compare current income with property prices. Taking into consideration that a housing purchase is a long-horizon decision and the property price reflects the discounted present value of future mortgage...

Policy makers often impose some cooling measures on the housing market when housing prices rise fast. Such policies yield limited success if housing prices are driven up by fundamentals. A fundamental price trend may not necessarily be an affordable one. Unaffordable housing price trends...