The winners and losers from the empirical shift in economics

Noahpinion proves why he is one of the best economics tweeters, with a riff on the winners and losers from the quasi-experimental shift in economics.

1/I just wanted to riff on this blog post about the shift toward quasi-empirical methods in econometrics.

2/Here’s who I see as the winners and losers from the shift (besides people who *do* quasi-experiments, obviously).

3/The biggest winner: The public and policymakers. The results of these experiments are often easy enough for them to understand.

4/When academic econ results are hard to understand, policymakers tend to ignore them and go with politically inspired simple stuff.

5/But quasi-experiments can often bring research insights to policymakers in a way they can understand and apply, to everyone’s benefit.

6/Another winner: Women in economics. When theory doesn’t rely on data for confirmation, it often becomes a bullying/shouting contest.

7/Women are disadvantaged in bullying contests. But with quasi-experiments, they can use reality to smack down bullies, as in the sciences.

8/A big loser from the shift: Free market purists. In fights between “Econ 101 theory” and quasi-experiments, the science tends to win out.

9/Theory lends itself to simplicity (for tractability reasons), and simple theories of markets tend not to have lots of market failures.

10/But reality is a thicket of market failures, and quasi-experiments let the results of that thicket be viewed in reduced form.

It continues. And the original blog post.

51 Responses

  1. Of course, the actual reasoning is much much older than the welcome shift in the reputation of empirical economics-

    1. Market failures

    2. ???

    Therefore, 3. Government intervention.

  2. Econ101,

    See points 3 and 4. Doing things like behavioural economic studies of economic policymaking is hardly going to win the hearts and minds of policymakers, is it?

    Let’s keep to the simplified textboom model of policymaking: what politicians do is pick the best out of a range of clear alternatives, and it’s economists’ job to set out those alternatives as best they can. It would be a tragedy if the empirical turn in economics disrupted this simple model.

  3. E Harding, I don’t think you’ve thought about this enough. Men are more into confrontation and debate. Men argue in part to show off how clever they are. Competition makes women less inclined to enter into a field, men are more likely to overestimate their ability to overcome said competition to rise to the top (although they also simply enjoy the process more). Because they are less inclined to hierarchy, female social struggle more often takes the form of exclusion, shaming & shunning. The economics profession is geared more toward competition.

  4. Will econ turn into social psychology where most experimental results appear to be wrong?

    Will empirical research focus as much on government failure as market failure?

  5. Women are bad at shouting and bullying matches? In what universe? They may be weaker in upper body strength, but not vocality.

  6. Nice catch. I’m particularly on board with no. 10. This should have been obvious a long time ago to anyone living in an urban environment. Even the south side of Chicago.