---
title: "Inference and Simulation"
subtitle: "EC 425/525, Set 4"
author: "Edward Rubin"
date: "`r format(Sys.time(), '%d %B %Y')`"
output:
  xaringan::moon_reader:
    css: ['default', 'metropolis', 'metropolis-fonts', 'my-css.css']
    # self_contained: true
    nature:
      highlightStyle: github
      highlightLines: true
      countIncrementalSlides: false
---
class: inverse, middle

```{R, setup, include = F}
# devtools::install_github("dill/emoGG")
library(pacman)
p_load(
  broom, tidyverse,
  ggplot2, ggthemes, ggforce, ggridges,
  latex2exp, viridis, extrafont, gridExtra,
  kableExtra, snakecase, janitor,
  data.table, dplyr,
  lubridate, knitr,
  estimatr, here, magrittr
)
# Define pink color
red_pink <- "#e64173"
turquoise <- "#20B2AA"
orange <- "#FFA500"
red <- "#fb6107"
blue <- "#3b3b9a"
green <- "#8bb174"
grey_light <- "grey70"
grey_mid <- "grey50"
grey_dark <- "grey20"
purple <- "#6A5ACD"
slate <- "#314f4f"
# Dark slate grey: #314f4f
# Knitr options
opts_chunk$set(
  comment = "#>",
  fig.align = "center",
  fig.height = 7,
  fig.width = 10.5,
  warning = F,
  message = F
)
opts_chunk$set(dev = "svg")
options(device = function(file, width, height) {
  svg(tempfile(), width = width, height = height)
})
options(crayon.enabled = F)
options(knitr.table.format = "html")
# A blank theme for ggplot
theme_empty <- theme_bw() + theme(
  line = element_blank(),
  rect = element_blank(),
  strip.text = element_blank(),
  axis.text = element_blank(),
  plot.title = element_blank(),
  axis.title = element_blank(),
  plot.margin = structure(c(0, 0, -0.5, -1), unit = "lines", valid.unit = 3L, class = "unit"),
  legend.position = "none"
)
theme_simple <- theme_bw() + theme(
  line = element_blank(),
  panel.grid = element_blank(),
  rect = element_blank(),
  strip.text = element_blank(),
  axis.text.x = element_text(size = 18, family = "STIXGeneral"),
  axis.text.y = element_blank(),
  axis.ticks = element_blank(),
  plot.title = element_blank(),
  axis.title = element_blank(),
  # plot.margin = structure(c(0, 0, -1, -1), unit = "lines", valid.unit = 3L, class = "unit"),
  legend.position = "none"
)
theme_axes_math <- theme_void() + theme(
  text = element_text(family = "MathJax_Math"),
  axis.title = element_text(size = 22),
  axis.title.x = element_text(hjust = .95, margin = margin(0.15, 0, 0, 0, unit = "lines")),
  axis.title.y = element_text(vjust = .95, margin = margin(0, 0.15, 0, 0, unit = "lines")),
  axis.line = element_line(
    color = "grey70",
    size = 0.25,
    arrow = arrow(angle = 30, length = unit(0.15, "inches")
  )),
  plot.margin = structure(c(1, 0, 1, 0), unit = "lines", valid.unit = 3L, class = "unit"),
  legend.position = "none"
)
theme_axes_serif <- theme_void() + theme(
  text = element_text(family = "MathJax_Main"),
  axis.title = element_text(size = 22),
  axis.title.x = element_text(hjust = .95, margin = margin(0.15, 0, 0, 0, unit = "lines")),
  axis.title.y = element_text(vjust = .95, margin = margin(0, 0.15, 0, 0, unit = "lines")),
  axis.line = element_line(
    color = "grey70",
    size = 0.25,
    arrow = arrow(angle = 30, length = unit(0.15, "inches")
  )),
  plot.margin = structure(c(1, 0, 1, 0), unit = "lines", valid.unit = 3L, class = "unit"),
  legend.position = "none"
)
theme_axes <- theme_void() + theme(
  text = element_text(family = "Fira Sans Book"),
  axis.title = element_text(size = 18),
  axis.title.x = element_text(hjust = .95, margin = margin(0.15, 0, 0, 0, unit = "lines")),
  axis.title.y = element_text(vjust = .95, margin = margin(0, 0.15, 0, 0, unit = "lines")),
  axis.line = element_line(
    color = grey_light,
    size = 0.25,
    arrow = arrow(angle = 30, length = unit(0.15, "inches")
  )),
  plot.margin = structure(c(1, 0, 1, 0), unit = "lines", valid.unit = 3L, class = "unit"),
  legend.position = "none"
)
theme_set(theme_gray(base_size = 20))
# Column names for regression results
reg_columns <- c("Term", "Est.", "S.E.", "t stat.", "p-Value")
# Function for formatting p values
format_pvi <- function(pv) {
  return(ifelse(
    pv < 0.0001,
    "<0.0001",
    round(pv, 4) %>% format(scientific = F)
  ))
}
format_pv <- function(pvs) lapply(X = pvs, FUN = format_pvi) %>% unlist()
# Tidy regression results table
tidy_table <- function(x, terms, highlight_row = 1, highlight_color = "black", highlight_bold = T, digits = c(NA, 3, 3, 2, 5), title = NULL) {
  x %>%
    tidy() %>%
    select(1:5) %>%
    mutate(
      term = terms,
      p.value = p.value %>% format_pv()
    ) %>%
    kable(
      col.names = reg_columns,
      escape = F,
      digits = digits,
      caption = title
    ) %>%
    kable_styling(font_size = 20) %>%
    row_spec(1:nrow(tidy(x)), background = "white") %>%
    row_spec(highlight_row, bold = highlight_bold, color = highlight_color)
}
```

# Prologue

---
name: schedule

# Schedule

### Last time

The *CEF* and least-squares regression

### Today

Inference
<br>.note[Read] *MHE* 3.1

### Upcoming

Lab (as usual) on Friday. (Meet Jenni!)

No class on Monday.
---
name: advice
layout: false
class: clear, middle

.attn[Advice] Don't ride elevators (especially in PLC).

---
layout: true

# Inference
---
class: inverse, middle
---
name: why

## Why?

.qa[Q] What's the big deal with inference?

--

.qa[A] We rarely know the CEF or the population (and its regression vector).

We *can* draw statistical inferences about the population using samples.

--

.attn[Important] The issue/topic of *statistical inference* is separate from *causality*.

Separate questions

1. How do we interpret the estimated coefficient $\hat{\beta}$?
2. What is the sampling distribution of $\hat{\beta}$?

---
name: ols

## Moving from population to sample

.attn[Recall] The population-regression function gives us the best linear approximation to the CEF.

--

We're interested in the (unknown) population-regression vector
$$
\begin{align}
  \beta = \mathop{E}\nolimits\left[ \text{X}_{i} \text{X}_{i}' \right]^{-1} \mathop{E}\left[ \text{X}_{i} \text{Y}_{i} \right]
\end{align}
$$
--
which we estimate via the ordinary least squares (OLS) estimator.super[.pink[†]]
$$
\begin{align}
  \hat{\beta} = \left( \sum_i \text{X}_{i}\text{X}_{i}' \right)^{-1} \left( \sum_i \text{X}_{i} \text{Y}_{i} \right)
\end{align}
$$

.footnote[.pink[†]
*MHE* presents a method-of-moments motivation for this derivation, where $\dfrac{1}{n}\sum_i \text{X}_{i} \text{X}_{i}'$ is our sample-based estimated for $\mathop{E}\left[ \text{X}_{i}\text{X}_{i}' \right]$. You've also seen others, _e.g._, minimizing MSE of $\text{Y}_{i}$ given $\text{X}_{i}$.
]

---

## A classic

However you write it, this OLS estimator
$$
\begin{align}
  \hat{\beta}
  &= \left( \text{X}^\prime \text{X} \right)^{-1} \text{X}^\prime \text{y} \\
  &= \left( \sum_i \text{X}_{i}\text{X}_{i}' \right)^{-1} \left( \sum_i \text{X}_{i} \text{Y}_{i} \right) \\
  &= \beta + \left[ \sum_i \text{X}_{i}\text{X}_{i}' \right]^{-1} \sum_i \text{X}_{i}e_i
\end{align}
$$
is the same estimator you've been using since undergrad.

--

.note[Note] I'm following *MHE* in defining $e_i = \text{Y}_{i} - \text{X}_{i}'\beta$.

---

## A classic

As you've learned, the OLS estimator
$$
\begin{align}
  \hat{\beta} = \left( \sum_i \text{X}_{i}\text{X}_{i}' \right)^{-1} \left( \sum_i \text{X}_{i} \text{Y}_{i} \right) = \beta + \left[ \sum_i \text{X}_{i}\text{X}_{i}' \right]^{-1} \sum_i \text{X}_{i}e_i
\end{align}
$$
has asymptotic covariance
$$
\begin{align}
  \mathop{E}\left[ \text{X}_{i}\text{X}_{i}' \right]^{-1} \mathop{E}\left[ \text{X}_{i}\text{X}_{i}' e_i^2 \right] \mathop{E}\left[ \text{X}_{i}\text{X}_{i}' \right]^{-1}
\end{align}
$$
--
which we estimate by (**1**) replacing $e_i$ with $\hat{e}_i = \text{Y}_{i} - \text{X}_{i}'\hat{\beta}$ and (**2**) replacing expectations with sample means, _e.g._, $\mathop{E}\left[ \text{X}_{i}\text{X}_{i}'e_i^2 \right]$ becomes $\dfrac{1}{n}\sum \left[ \text{X}_{i}\text{X}_{i}'\hat{e}_i^2 \right]$.

--

Standard errors of this flavor are known as heteroskedasticity-consistent (or -robust) standard errors (or Eicker-Huber-White).

---
name: het

## Defaults

Statistical packages default to assuming homoskedasticity, _i.e._, $\mathop{E}\left[ e_i^2 \mid \text{X}_{i} \right] = \sigma^2$ for all $i$.
--
 With homoskedasticity,
$$
\begin{align}
  \mathop{E}\left[ \text{X}_{i}\text{X}_{i}'e_i^2 \right] = \mathop{E}\left[ \mathop{E}\left[ \text{X}_{i}\text{X}_{i}'e_i^2 \mid \text{X}_{i} \right] \right] = \mathop{E}\left[ \text{X}_{i}\text{X}_{i}' \mathop{E}\left[ e_i^2 \mid \text{X}_{i} \right] \right] = \sigma^2 \mathop{E}\left[ \text{X}_{i}\text{X}_{i}' \right]
\end{align}
$$

--

Now, returning to to the asym. covariance matrix of $\hat{\beta}$,
$$
\begin{align}
  \mathop{E}\left[ \text{X}_{i}\text{X}_{i}' \right]^{-1} \mathop{E}\left[ \text{X}_{i} \text{X}_{i}' e_i^2 \right] \mathop{E}\left[ \text{X}_{i}\text{X}_{i}' \right]^{-1}
  &= \mathop{E}\left[ \text{X}_{i}\text{X}_{i}' \right]^{-1} \sigma^2 \mathop{E}\left[ \text{X}_{i} \text{X}_{i}' \right] \mathop{E}\left[ \text{X}_{i}\text{X}_{i}' \right]^{-1} \\
  &= \sigma^2 \mathop{E}\left[ \text{X}_{i}\text{X}_{i}' \right]^{-1}
\end{align}
$$

---

## Defaults

Angrist and Pischke argue we should probably change our default to heteroskedasticity.

If the CEF is nonlinear, then our linear approximation (linear regression) generates heteroskedasticity.

--

$\mathop{E}\left[ \left( \text{Y}_{i} - \text{X}_{i}'\beta \right)^2 \mid \text{X}_{i} \right]$
--
<br>  $= \mathop{E} \left[ \bigg( \big\{ \text{Y}_{i} - \mathop{E}\left[ \text{Y}_{i} \mid \text{X}_{i} \right] \big\} + \big\{ \mathop{E}\left[ \text{Y}_{i} \mid \text{X}_{i} \right] - \text{X}_{i}'\beta \big\} \bigg)^2 \Bigg| \text{X}_{i} \right]$
--
<br>  $= \mathop{\text{Var}} \left( \text{Y}_{i} \mid \text{X}_{i} \right) + \left( \mathop{E}\left[ \text{Y}_{i} \mid \text{X}_{i} \right] - \text{X}_{i}'\beta \right)^2$

--

Thus, even if $\text{Y}_{i}\mid \text{X}_{i}$ has contant variance, $e_i \mid \text{X}_{i}$ is heteroskedastic.

---

## Two notes

1. Heteroskedasticity is .hi[not our biggest concern] in inference.
> ...as an empirical matter, heteroskedasticity may matter very little... If heteroskedasticity matters a lot, say, more than a 30 percent increase or any marked decrease in standard errors, you should worry about possible programming errors or other problems. (*MHE*, p.47)

2. Notice that we've .hi[avoided "standard" stronger assumptions], _e.g._, normality, fixed regressors, linear CEF, homoskedasticity.

--

Following (2): We only have large-sample, asymptotic results (consistency) rather than finite-sample results (unbiasedness).

---
name: warning

## Warning

Because many of properties we care about for the inference are .hi-pink[large-sample] properties, they may not always apply to .hi-purple[small samples].

--

One practical way we can study the behavior of an estimator: .b[simulation].

--

.note[Note] You need to make sure your simulation can actually test/respond to the question you are asking (_e.g._, bias *vs.* consistency).
---
name: sim

## Simulation

Let's compare false- and true-positive rates.super[.pink[†]] for

.footnote[.pink[†] The false-positive rate goes by many names; another common name: *type-I error rate*.]

1. .hi-purple[Homoskedasticity-assuming standard errors] $\color{#6A5ACD}{\left( \mathop{\text{Var}} \left[ e_i | \text{X}_{i} \right] = \sigma^2\right)}$
1. .hi-pink[Heteroskedasticity-robust standard errors]

--

.b[Simulation outline]

.pseudocode-small[
1. Define data-generating process (DGP).
1. Choose sample size n.
1. Set seed.
1. Run 10,000 iterations of
<br>  a. Draw sample of size n from DGP.
<br>  b. Conduction inference.
<br>  c. Record inferences' outcomes.
]
---
layout: true
# Simulation

---
class: inverse, middle
---
name: dgp
## Data-generating process

First, we'll define our DGP.

--

We've been talking a lot about nonlinear CEFs, so let's use one.

Let's keep the disturbances well behaved.

--

$$
\begin{align}
  \text{Y}_{i} = 1 + e^{0.5 \text{X}_{i}} + \varepsilon_i
\end{align}
$$
where $\text{X}_{i}\sim\mathop{\text{Uniform}}(0, 10)$ and $\varepsilon_i\sim\mathop{N}(0,1)$.

---
## Data-generating process

$$
\begin{align}
  \text{Y}_{i} = 1 + e^{0.5 \text{X}_{i}} + \varepsilon_i
\end{align}
$$
where $\text{X}_{i}\sim\mathop{\text{Uniform}}(0, 10)$ and $\varepsilon_i\sim\mathop{N}(0,15^2)$.

--

```{R, sim_seed, include = F}
set.seed(12345)
```

.pull-left[
```{R, sim_dgp}
library(pacman)
p_load(dplyr)
# Choose a size
n <- 1000
# Generate data
dgp_df <- tibble(
  ε = rnorm(n, sd = 15),
  x = runif(n, min = 0, max = 10),
  y = 1 + exp(0.5 * x) + ε
)
```
]
--
.pull-right[
```{R, sim_dply, printed, echo = F}
dgp_df
```
]
---
layout: false
class: clear, middle

.orange[Our CEF]
```{R, sim_pop_plot1, echo = F}
ggplot(data = dgp_df, aes(x = x, y = y)) +
  stat_function(fun = function(x) 1 + exp(0.5 * x), color = orange, size = 1.5) +
  geom_point(alpha = 0) +
  theme_pander(base_size = 18, base_family = "MathSansBook") +
  theme(axis.title.y = element_text(angle = 0, vjust = 0.5))
```
---
count: false
class: clear, middle

Our population
```{R, sim_pop_plot2, echo = F}
ggplot(data = dgp_df, aes(x = x, y = y)) +
  stat_function(fun = function(x) 1 + exp(0.5 * x), alpha = 0.9, color = orange, size = 1.5) +
  geom_point(alpha = 0.7, size = 1.8) +
  theme_pander(base_size = 18, base_family = "MathSansBook") +
  theme(axis.title.y = element_text(angle = 0, vjust = 0.5))
```
---
count: false
class: clear, middle

.purple[The population least-squares regression line]
```{R, sim_pop_plot3, echo = F}
ggplot(data = dgp_df, aes(x = x, y = y)) +
  stat_function(fun = function(x) 1 + exp(0.5 * x), alpha = 0.9, color = orange, size = 1.5) +
  geom_point(alpha = 0.2, size = 2) +
  stat_smooth(method = lm, se = F, color = purple, size = 2) +
  theme_pander(base_size = 18, base_family = "MathSansBook") +
  theme(axis.title.y = element_text(angle = 0, vjust = 0.5))
```
---
layout: true
# Simulation

---
name: iter
## Iterating

To make iterating easier, let's wrap our DGP in a function.

```{R, sim_fun}
fun_iter <- function(iter, n = 30) {
  # Generate data
  iter_df <- tibble(
    ε = rnorm(n, sd = 15),
    x = runif(n, min = 0, max = 10),
    y = 1 + exp(0.5 * x) + ε
  )
}
```
We still need to run a regression and draw some inferences.

.note[Note] We're defaulting to size-30 samples.
---

We will use `lm_robust()` from the `estimatr` package for OLS and inference..super[.pink[†]]

.footnote[.pink[†] `lm()` works for "spherical" standard errors but cannot calculate het.-robust standard errors.]

- `se_type = "classical"` provides homoskedasticity-assuming SEs
- `se_type = "HC2"` provides heteroskedasticity-robust SEs

```{R, ex_lm_robust}
lm_robust(y ~ x, data = dgp_df, se_type = "classical") %>% tidy() %>% select(1:5)
lm_robust(y ~ x, data = dgp_df, se_type = "HC2") %>% tidy() %>% select(1:5)
```
---
## Inference

Now add these estimators to our iteration function...
```{R, sim_fun2}
fun_iter <- function(iter, n = 30) {
  # Generate data
  iter_df <- tibble(
    ε = rnorm(n, sd = 15),
    x = runif(n, min = 0, max = 10),
    y = 1 + exp(0.5 * x) + ε
  )
  # Estimate models
  lm1 <- lm_robust(y ~ x, data = iter_df, se_type = "classical")
  lm2 <- lm_robust(y ~ x, data = iter_df, se_type = "HC2")
  # Stack and return results
  bind_rows(tidy(lm1), tidy(lm2)) %>%
    select(1:5) %>% filter(term == "x") %>%
    mutate(se_type = c("classical", "HC2"), i = iter)
}
```
---
## Run it

Now we need to actually run our `iter_df()` function 10,000 times.

--

There are a lot of ways to run a single function over a list/vector of values.

- `lapply()`, _e.g._, `lapply(X = 1:3, FUN = sqrt)`
- `for()`, _e.g._, `for (x in 1:3) sqrt(x)`
- `map()` from `purrr`, _e.g._, `map(1:3, sqrt)`

--

We're going to go with `map()` from the `purrr` package because it easily parallelizes across platforms using the `furrr` package.
---
name: parallel

## Run it!

.pull-left[
Run our function 10,000 times
```{R, ex_sim, eval = F}
# Packages
p_load(purrr)
# Set seed
set.seed(12345)
# Run 10,000 iterations
sim_list <- map(1:1e4, fun_iter)
```
]
--
.pull-right[
Parallelized 10,000 iterations
```{R, ex_sim2, eval = T, cache = T}
# Packages
p_load(purrr, furrr)
# Set options
set.seed(123)
# Tell R to parallelize
plan(multiprocess)
# Run 10,000 iterations
sim_list <- future_map(
  1:1e4, fun_iter,
  .options = future_options(seed = T)
)
```
]

--

The `furrr` package (`future` + `purrr`) makes parallelization .hi-pink[easy] .hi-orange[and] .hi-turquoise[fun].hi-purlple[!]😸
---
## Run it!!

Our `fun_iter()` function returns a `data.frame`, and `future_map()` returns a `list` (of the returned objects).

So `sim_list` is going to be a `list` of `data.frame` objects. We can bind them into one `data.frame` with `bind_rows()`.

```{R, sim_bind}
# Bind list together
sim_df <- bind_rows(sim_list)
```

--

So what are the results?

---
name: results
layout: false
class: clear, middle

Comparing the distributions of standard errors for the coefficient on $x$
```{R, sim_plot1, echo = F}
ggplot(data = sim_df, aes(x = std.error, fill = se_type)) +
  geom_density(color = NA) +
  geom_hline(yintercept = 0) +
  xlab("Standard error") +
  ylab("Density") +
  scale_fill_viridis(
    "", labels = c("Classical", "Het. Robust"), discrete = T,
    option = "B", begin = 0.25, end = 0.85, alpha = 0.9
  ) +
  theme_pander(base_size = 20, base_family = "Fira Sans Book")
```
---
class: clear, middle

Comparing the distributions of $t$ statistics for the coefficient on $x$
```{R, sim_plot2, echo = F}
ggplot(data = sim_df, aes(x = statistic, fill = se_type)) +
  geom_density(color = NA) +
  geom_hline(yintercept = 0) +
  geom_vline(xintercept = qt(0.975, df = 28), linetype = "longdash", color = red_pink) +
  xlab("t statistic") +
  ylab("Density") +
  scale_fill_viridis(
    "", labels = c("Classical", "Het. Robust"), discrete = T,
    option = "B", begin = 0.25, end = 0.85, alpha = 0.9
  ) +
  theme_pander(base_size = 20, base_family = "Fira Sans Book")
```
---
class: clear, middle

.qa[Q] All of these test are for a false H.sub[0]. How would the simulation change to enforce a *true* null hypothesis?
---
layout: true
# Simulation

---
name: null
## Updating to enforce the null

Let's update our simulation function to take arguments `γ` and `δ` such that
$$
\begin{align}
  \text{Y}_{i} = 1 + e^{\gamma \text{X}_{i}} + \varepsilon_i
\end{align}
$$
where $\varepsilon_i\sim\mathop{\text{N}}(0,\sigma^2\text{X}_{i}^\delta)$.

--

In other words,
- $\gamma = 0$ implies no relationship between $\text{Y}_{i}$ and $\text{X}_{i}$.
- $\delta = 0$ implies homoskedasticity.
---
## Updating to enforce the null

Updating the function...

```{R, sim_null}
flex_iter <- function(iter, γ = 0, δ = 1, n = 30) {
  # Generate data
  iter_df <- tibble(
    x = runif(n, min = 0, max = 10),
    ε = rnorm(n, sd = 15 * x^δ),
    y = 1 + exp(γ * x) + ε
  )
  # Estimate models
  lm1 <- lm_robust(y ~ x, data = iter_df, se_type = "classical")
  lm2 <- lm_robust(y ~ x, data = iter_df, se_type = "HC2")
  # Stack and return results
  bind_rows(tidy(lm1), tidy(lm2)) %>%
    select(1:5) %>% filter(term == "x") %>%
    mutate(se_type = c("classical", "HC2"), i = iter)
}
```
---
## Run again!

Now we run our new function `flex_iter()` 10,000 times

```{R, ex_sim3, eval = T, cache = T}
# Packages
p_load(purrr, furrr)
# Set options
set.seed(123)
# Tell R to parallelize
plan(multiprocess)
# Run 10,000 iterations
null_df <- future_map(
  1:1e4, flex_iter,
  # Enforce the null hypothesis
  γ = 0,
  # Specify heteroskedasticity
  δ = 1,
  .options = future_options(seed = T)
) %>% bind_rows()
```
---
layout: false
class: clear, middle

Comparing the distributions of standard errors for the coefficient on $x$
```{R, sim_plot3, echo = F}
ggplot(data = null_df, aes(x = std.error, fill = se_type)) +
  geom_density(color = NA) +
  geom_hline(yintercept = 0) +
  xlab("Standard error") +
  ylab("Density") +
  scale_fill_viridis(
    "", labels = c("Classical", "Het. Robust"), discrete = T,
    option = "B", begin = 0.25, end = 0.85, alpha = 0.9
  ) +
  theme_pander(base_size = 20, base_family = "Fira Sans Book")
```
---
class: clear, middle

Comparing the distributions of $t$ statistics for the coefficient on $x$
```{R, null_plot4, echo = F}
ggplot(data = null_df, aes(x = statistic, fill = se_type)) +
  geom_density(color = NA) +
  geom_hline(yintercept = 0) +
  geom_vline(xintercept = qt(0.975, df = 28), linetype = "longdash", color = red_pink) +
  xlab("t statistic") +
  ylab("Density") +
  scale_fill_viridis(
    "", labels = c("Classical", "Het. Robust"), discrete = T,
    option = "B", begin = 0.25, end = 0.85, alpha = 0.9
  ) +
  theme_pander(base_size = 20, base_family = "Fira Sans Book")
```
---
class: clear, middle

Distributions of *p*-values: both methods slightly over-reject the (true) null
```{R, null_plot5, echo = F}
ggplot(data = null_df, aes(x = p.value, fill = se_type)) +
  geom_density(color = NA) +
  geom_hline(yintercept = 0) +
  geom_vline(xintercept = 0.05, linetype = "longdash", color = red_pink) +
  xlab("t statistic") +
  ylab("Density") +
  scale_fill_viridis(
    "", labels = c("Classical", "Het. Robust"), discrete = T,
    option = "B", begin = 0.25, end = 0.85, alpha = 0.9
  ) +
  theme_pander(base_size = 20, base_family = "Fira Sans Book")
```

---
layout: false
# Table of contents

.pull-left[
### Admin
.smaller[

1. [Schedule](#schedule)
1. [Advice](#advice)
]

]

.pull-right[
### Inference
.smaller[

1. [Why?](#why)
1. [OLS](#ols)
1. [Heteroskedasticity](#het)
1. [Small-sample warning](#warning)
1. [Simulation](#sim)
  - [Outline](#sim)
  - [DGP](#dgp)
  - [Iterating](#iter)
  - [Parallelization](#parallel)
  - [Results](#results)
  - [Under the null](#null)
]
]
---
exclude: true

```{R, generate pdfs, include = F, eval = T}
source("../../ScriptsR/unpause.R")
unpause("04Inference.Rmd", ".", T, T)
```