Lacking direct measures of the theoretical variable of interest, some scholars rely on â€˜proxy variablesâ€™. For instance, some have used years of education as a proxy for cognitive ability. However, using â€˜proxy variablesâ€™ can be problematic for the following reasons â€“ (1) proxy variables may not track the theoretical variable of interest very well, (2) they may track other confounding variables, outside the theoretical variable of interest. For instance, in the case of years of education as a proxy for cognitive ability, the concerns manifest themselves as follows â€“
1) Cognitive ability causes, and is a consequence of, what courses you take, and what school you go to, in addition to of course, years of education. GSS for instance contains more granular measures of education – for instance did the respondent take science course in college. And nearly always the variable proves significant when predicting knowledge, etc. This all is somewhat surmountable as it can be seen as measurement error.
2) More problematically, years of education may tally other confounding variables â€“diligence, education of parents, economic strata, etc. And then education endows people with more than cognitive ability; it also causes potentially confounding variables such as civic engagement, knowledge, etc.
Conservatively we can only attribute the effect of the variable to the variable itself. That is â€“ we only have variables we enter. If one does rely on â€˜proxy variablesâ€™ then one may want to address the two points mentioned above.