Mechanism Testing OLS

[chelle anny]

Hi there! I am new to Stata and trying to learn more about the relationship between risk and weather. I am trying to run a mechanism test but I am not so sure as to how I could run it/ what the general command is for this. Would really appreciate your advice!

[Carlo Lazzaro]

Chelle:
what is a mechanism test?

[chelle anny]

Hi Carlo,
I am not sure if this is the right term but essentially, I want to explore using my data how weather could affect risk. For example, I want to check if weather affects risk through the variable "optimism"- I'd like to understand how low or high optimism caused by weather could affect risk. Would this be possible?

[Felix Bittmann]

I think mechanism is just another term for mediation. And sure, Stata can do that easily. Actually, the topic is rather complex and various options, also depending on the scale of your variables, exist. I suggest starting with a general introduction to the topic and then start looking at Stata details. For some starters see:
https://www.stata.com/meeting/italy1...t13_grotta.pdf
https://stats.idre.ucla.edu/stata/fa...e-sem-command/
https://journals.sagepub.com/doi/pdf...867X1201100407

However, the most simple option is usually a nested regression design.

reg DEPVAR INDEPVAR
reg DEPVAR INDEPVAR MEDIATOR

The change of the coefficient of the indepvar ("treatment") then quantifies your mediation.

[Carlo Lazzaro]

Thanks, Felix.

[chelle anny]

Thank you Felix! Means a lot.