Someone sent me an email: I thought you will get a kick out of these figures from a new paper [appearing in a top economics journal]. I replied: Wow—this is like a parody of econ. But, then again, econ is a parody of econ, isn’t it? [To clarify here, by “econ,” I don’t mean the […]
Archive of posts filed under the Economics category.
Postmodernism for zillionaires
“Postmodernism” in academia is the approach of saying nonsense using a bunch of technical-sounding jargon. At least, I think that’s what postmodernism is . . . Hmm, let’s check wikipedia: Postmodernism is a broad movement that developed in the mid- to late 20th century across philosophy, the arts, architecture, and criticism, marking a departure from […]
In making minimal corrections and not acknowledging that he made these errors, Rajan is dealing with the symptoms but not the underlying problem, which is that he’s processing recent history via conventional wisdom.
Raghuram Rajan is an academic and policy star, University of Chicago professor, former chief economist for the International Monetary Fund, and former chief economic advisor to the government of India, and featured many times in NPR and other prestige media. He also appears to be in the habit of telling purportedly data-backed stories that aren’t […]
Lawrence H. Summers, meet Albert O. Hirschman
Zach Carter quotes former U.S. Treasury Secretary Lawrence Summers as saying “$2,000 checks would be a pretty serious mistake” because larger stimulus checks to Americans could risk overheating the economy. Carter replies, “he’s right about there being conceptually better uses for the money, but the idea that we risk ‘a temporary overheat’ of the economy […]
“Prediction Markets in a Polarized Society”
Rajiv Sethi writes about some weird things in election prediction markets, such as Donald Trump being given a one-in-eight chance of being the election winner . . . weeks after he’d lost the election. Sethi writes: There’s a position size limit of $850 dollars per contract in this market, which also happens to have hit […]
Still more on the Heckman Curve!
Carlos Parada writes: Saw your blog post on the Heckman Curve. I went through Heckman’s response that you linked, and it seems to be logically sound but terribly explained, so I feel like I need to explain why Rea+Burton is great empirical work, but it doesn’t actually measure the Heckman curve. The Heckman curve just […]
Call for a moratorium on the use of the term “prisoner’s dilemma”
Palko writes: I’m not sure what the best way to get the ball rolling here would be (perhaps a kickstarter?) but we need to have a strictly enforced rule that no journalist or pundit is allowed to mention the prisoner’s dilemma for the next five or ten years, however long it takes to learn to […]
More on that credulity thing
I see five problems here that together form a feedback loop with bad consequences. Here are the problems: 1. Irrelevant or misunderstood statistical or econometric theory 2. Poorly-executed research 3. Other people in the field being loath to criticize, taking published or even preprinted claims as correct until proved otherwise 4. Journalists taking published or […]
What happened with HMOs?
Back in the 1970s, I remember occasionally reading a newspaper or magazine article about this mysterious thing called an HMO—a “health maintenance organization.” The idea was that the medical system as we knew it (you go to the doctor when you’re sick and pay some money, or you go to the hospital if you’re in […]
Many years ago, when he was a baby economist . . .
Jonathan Falk writes: Many years ago, when I was a baby economist, a fight broke out in my firm between two economists. There was a question as to whether a particular change in the telecommunications laws had spurred productivity improvements or not. There a trend of x% per year in productivity improvements that had gone […]
“Accounting Theory as a Bayesian Discipline”
David Johnstone writes: The Bayesian logic of probability, evidence and decision is the presumed rule of reasoning in analytical models of accounting disclosure. Any rational explication of the decades-old accounting notions of “information content”, “value relevance”, “decision useful”, and possibly conservatism, is inevitably Bayesian. By raising some of the probability principles, paradoxes and surprises in […]
Estimating the college wealth premium: Not so easy
Dale Lehman writes: Emmons_Kent_Ricketts_College_Still_Worth_ItHere’s the article referenced on Marginal Revolution today. I thought it might be of interest and worth blogging about. It is quite thorough and fairly complex. The results are quite striking – and important. My big concern relates to a critical variable – financial literacy. On page 14 they claim that it […]
Here is how you should title the next book you write.
I was talking with someone about book titles. I thought Red State Blue State Rich State Poor State was a good title, but the book did not sell as well as I hoped (not that I thought it would sell enough to make me lots of money; I’m just using sales here as a proxy […]
“Sponsored products related to this item”
I happened to look up the classic programming book Code Complete (fully, “Code Complete: A Practical Handbook of Software Construction, Second Edition,” by Steve McConnell) and I learned two amusing things when scrolling down the page: 1. It says, “You last purchased this item on September 9, 2004.” Wow! I bought it, probably on Bob […]
This one pushes all my buttons
August Wartin writes: Just wanted to make you aware of this ongoing discussion about an article in JPE: It’s the same professor Lidbom that was involved in this discussion a few years ago (I believe you mentioned something about it on your blog). Indeed, we blogged it here. Here’s the abstract of Lidbom’s more recent […]
Meta-meta-science studies
August Wartin asks: Are you are familiar with any (economic) literature that attempts to model academia or the labor market for researchers (or similar), incorporating stuff like e.g. publication bias, researcher degrees of freedom, the garden of forking paths etcetera (and that perhaps also discusses possible proposals/mechanisms to mitigate these problems)? And perhaps you might […]
What about that new paper estimating the effects of lockdowns etc?
A couple people pointed me to this article, “Assessing Mandatory Stay‐at‐Home and Business Closure Effects on the Spread of COVID‐19,” which reports: The most restrictive non‐pharmaceutical interventions (NPIs) for controlling the spread of COVID‐19 are mandatory stay‐at‐home and business closures. . . . We evaluate the effects on epidemic case growth of more restrictive NPIs […]
Megan Higgs (statistician) and Anna Dreber (economist) on how to judge the success of a replication
The discussion started with this comment from Megan Higgs regarding a recent science replication initiative: I [Higgs] was immediately curious about their criteria for declaring a study replicated. In a quick skim of the info in the google form, here it is: In the survey of beliefs, you will be asked for (a) the probability […]
Does regression discontinuity (or, more generally, causal identification + statistical significance) make you gullible?
Yes basically. This one’s pretty much a perfect example of overfitting, finding a discontinuity out of noise, in that if you just draw a smooth line through each graph, it actually looks better than the discontinuous version. We see this a lot: There’s no discontinuity in the data, but it’s possible to make a discontinuity […]
No, this senatorial stock-picking study does not address concerns about insider trading:
Jonathan Falk writes: As you have tirelessly promoted, a huge problem with NHST is that “insignificant” effects on average can mask, via attenuation bias, important changes in subgroups. Further, as you have somewhat less tirelessly pointed out, you need much bigger samples to reliably see anything in subgroups, particularly when (ok.. you’re back to your […]