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...

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...

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...