# Observational equivalence

**Observational equivalence** is the property of two or more underlying entities being indistinguishable on the basis of their observable implications. Thus, for example, two scientific theories are observationally equivalent if all of their empirically testable predictions are identical, in which case empirical evidence cannot be used to distinguish which is closer to being correct; indeed, it may be that they are actually two different perspectives on one underlying theory.

In econometrics, two parameter values (or two *structures,* from among a class of statistical models) are considered observationally equivalent if they both result in the same probability distribution of observable data.^{[1]}^{[2]}^{[3]} This term often arises in relation to the identification problem.

In the formal semantics of programming languages, two terms *M* and *N* are observationally equivalent if and only if, in all contexts *C*[...] where *C*[*M*] is a valid term, it is the case that *C*[*N*] is also a valid term with the same value. Thus it is not possible, within the system, to distinguish between the two terms. This definition can be made precise only with respect to a particular calculus, one that comes with its own specific definitions of *term*, *context*, and the *value of a term*.

## See alsoEdit

## ReferencesEdit

**^**Dufour, Jean-Marie; Hsiao, Cheng (2008). "Identification". In Durlauf, Steven N.; Blume, Lawrence E. (eds.).*The New Palgrave Dictionary of Economics*(Second ed.).**^**Stock, James H. (July 14, 2008). "Weak Instruments, Weak Identification, and Many Instruments, Part I" (PDF). National Bureau of Economic Research.**^**Koopmans, Tjalling C. (1949). "Identification problems in economic model construction".*Econometrica*.**17**(2): 125–144. doi:10.2307/1905689. JSTOR 1905689.

This article is based on material taken from the *Free On-line Dictionary of Computing* prior to 1 November 2008 and incorporated under the "relicensing" terms of the GFDL, version 1.3 or later.

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