Lesson 11
Ceteris paribus
Big question
What does it mean to compare while holding other factors fixed?
Lesson progress
Complete checkpoints as you learn
Learning objectives
- Explain ceteris paribus in plain language.
- Use ceteris paribus correctly in an interpretation.
- Connect the lesson idea to a formula, graph, Python result, or real example.
Simple explanation
Ceteris paribus means all else equal. In econometrics, we often want to compare people or firms that differ in one key variable while accounting for other important variables.
Key terms
- Ceteris paribus
- A phrase meaning all else equal or holding other factors fixed.
- Control variable
- A variable added to account for another relevant factor.
- Partial effect
- The relationship with one variable while holding others fixed.
- Comparison
- Looking at differences in outcomes across different values of an explanatory variable.
Holding experience fixed
Example
To compare wages by education, we might also account for experience so we are not simply comparing new workers to experienced workers.
Checkpoint activity
Pause and explain this lesson's main idea in your own words before moving forward.
Try it yourself
Write one plain-English sentence explaining the main idea from this lesson.
Common mistakes
Check these before you move on.
A regression coefficient describes a pattern unless the assumptions or research design support a causal interpretation.
Quick quiz
What does ceteris paribus mean?
Key takeaway
Ceteris paribus thinking is central to careful econometric interpretation.