The standardized regression coefficient has been a common tool for assessing the effect, predictive power or explanative power of an independent variable (IV).
So we have one independent variable – receiving the voucher or not – and a bunch of possible dependent variables, like earnings, education, and health outcomes.
In this case, geographic location is what we call the independent variable; it’s the variable that we think is affecting the change in how people describe themselves.
The division of the determinants of the economic system into the two groups of given factors and independent variables is, of course, quite arbitrary from any absolute standpoint.
Thus the traditional analysis is faulty because it has failed to isolate correctly the independent variables of the system. Saving and investment are the determinates of the system, not the determinants.
To begin with, it may be useful to make clear which elements in the economic system we usually take as given, which are the independent variables of our system and which are the dependent variables.
Our independent variables are, in the first instance, the propensity to consume, the schedule of the marginal efficiency of capital and the rate of interest, though, as we have already seen, these are capable of further analysis.