A natural or Quasi-experiment is a naturally occurring instance of observable phenomena which approximate or duplicate the properties of a controlled experiment. In contrast to laboratory experiments, these events aren't created by scientists, but yield data which nonetheless can be used (commonly through the use of instrumental variables) to make causal inferences. Natural experiments are a common research tool in fields where artificial experimentation is difficult, such as economics, cosmology, epidemiology, and sociology.

An example of a natural experiment occurred in Helena, Montana during the period from June 2002 to December 2002 when a smoking ban was in effect in all public spaces in Helena including bars and restaurants. Helena is geographically isolated and served by only one hospital. It was observed that the rate of heart attacks dropped by 60% while the smoking ban was in effect. ^[1]

A second example is discussed in Angrist and Evans (1988).^[2] The authors wish to estimate the effect of family size on the labor market outcomes of the mother. The correlations between family size and various outcomes do not tell us how family size causally affects labor market outcomes because both labor market outcomes and family size may be affected by unobserved variables such as preferences and because labor market outcomes may "reverse" cause family size (for example, a woman may defer having a child if she gets a raise at work). The study notes that two-children families with either two boys or two girls are substantially more likely to have a third child than two-children families with one boy and one girl. The sex of the first two children, then, forms a natural experiment: it is as if an experimenter has randomly assigned some families to have two children and others to have three or more. The authors are then able to credibly estimate the causal effect of having a third child on labor market outcomes.

References

1. ↑ Sargent RP, Shepard RM, Glantz SA, Reduced incidence of admissions for myocardial infarction associated with public smoking ban: before and after study., British Medical Journal, volume 328 pp. 977-980, 2004
2. ↑ Angrist, J. & W. Evans (1998) Children and their parents' labor supply: Evidence from exogenous variation in family size," American Economic Review, 88(3), 450-77.