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.