Which term describes a situation where an external event or policy change creates variation that resembles a controlled experiment?

• A. Natural Experiment
• B. External Validity
• C. Hypothesis
• D. Research Question

Answer: (A)

The main idea here is natural experiments: when an outside event or policy change creates variation that works like a randomized or controlled setup. This external change affects some units and not others in a way that’s as if there were a treatment and a control group, which lets researchers compare outcomes across those groups to infer causal effects. The key is that the variation comes from real-world events and is as-if exogenous to the study, so you can estimate how the change influences the outcome without having to randomize participants yourself.

That’s why this term fits best: it explicitly describes using real-world variation to resemble a controlled experiment for causal inference. External validity, by contrast, is about how well findings generalize beyond the study context; a hypothesis is a testable statement about a relationship; a research question is the inquiry guiding the study. For example, a policy rollout in one region but not another creates the kind of exogenous variation natural experiments rely on to estimate effects.