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Archive of posts filed under the Economics category.

Causal inference using data from a non-representative sample

Dan Gibbons writes: I have been looking at using synthetic control estimates for estimating the effects of healthcare policies, particularly because for say county-level data the nontreated comparison units one would use in say a difference-in-differences estimator or quantile DID estimator (if one didn’t want to use the mean) are not especially clear. However, given […]

Looking for the bottom line

I recommend this discussion of how to summarize posterior distributions. I don’t recommend summarizing by the posterior probability that the new treatment is better than the old treatment, as that is not a bottom-line statement!

Rosenbaum (1999): Choice as an Alternative to Control in Observational Studies

Winston Lin wrote in a blog comment earlier this year: Paul Rosenbaum’s 1999 paper “Choice as an Alternative to Control in Observational Studies” is really thoughtful and well-written. The comments and rejoinder include an interesting exchange between Manski and Rosenbaum on external validity and the role of theories. And here it is. Rosenbaum begins: In […]

Causal identification + observational study + multilevel model

Sam Portnow writes: I am attempting to model the impact of tax benefits on children’s school readiness skills. Obviously, benefits themselves are biased, so I am trying to use the doubling of the maximum allowable additional child tax credit in 2003 to get an unbiased estimate of benefits. I was initially planning to attack this […]

“Mainstream medicine has its own share of unnecessary and unhelpful treatments”

I have a story and then a question. The story Susan Perry (link sent by Paul Alper) writes: Earlier this week, I [Perry] highlighted two articles that exposed the dubious history, medical ineffectiveness and potential health dangers of popular alternative “therapies.” Well, the same can be said of many mainstream conventional medical practices, as investigative […]

He wants some readings on the replication crisis that are accessible to college freshmen in economics

Harvey Rosen writes: My query is similar to the one from André Ariew that you posted on August 7, in which he asked if you could suggest readings for his graduate course in philosophy. I occasionally teach an undergraduate course on introductory microeconomics. I like to devote some time to discussing challenges to economists’ conventional […]

Also holding back progress are those who make mistakes and then label correct arguments as “nonsensical.”

Here’s James Heckman in 2013: Also holding back progress are those who claim that Perry and ABC are experiments with samples too small to accurately predict widespread impact and return on investment. This is a nonsensical argument. Their relatively small sample sizes actually speak for — not against — the strength of their findings. Dramatic […]

The Pandora Principle in statistics — and its malign converse, the ostrich

The Pandora Principle is that once you’ve considered a possible interaction or bias or confounder, you can’t un-think it. The malign converse is when people realize this and then design their studies to avoid putting themselves in a position where they have to consider some potentially important factor. For example, suppose you’re considering some policy […]

Delegate at Large

Asher Meir points to this delightful garden of forking paths, which begins: • Politicians on the right look more beautiful in Europe, the U.S. and Australia. • As beautiful people earn more, they are more likely to oppose redistribution. • Voters use beauty as a cue for conservatism in low-information elections. • Politicians on the […]

Died in the Wool

Garrett M. writes: I’m an analyst at an investment management firm. I read your blog daily to improve my understanding of statistics, as it’s central to the work I do. I had two (hopefully straightforward) questions related to time series analysis that I was hoping I could get your thoughts on: First, much of the […]

How does a Nobel-prize-winning economist become a victim of bog-standard selection bias?

Someone who wishes to remain anonymous writes in with a story: Linking to a new paper by Jorge Luis García, James J. Heckman, and Anna L. Ziff, an economist Sue Dynarski makes this “joke” on facebook—or maybe it’s not a joke: How does one adjust standard errors to account for the fact that N of […]

Hey—here are some tools in R and Stan to designing more effective clinical trials! How cool is that?

In statistical work, design and data analysis are often considered separately. Sometimes we do all sorts of modeling and planning in the design stage, only to analyze data using simple comparisons. Other times, we design our studies casually, even thoughtlessly, and then try to salvage what we can using elaborate data analyses. It would be […]

Why they aren’t behavioral economists: Three sociologists give their take on “mental accounting”

Nina Bandelj, Fred Wherry, and Viviana Zelizer write: Rather than retreat to disciplinary corners, let us begin by affirming our respect for the generative work undertaken across a variety of disciplines. We’re all talking money, so it is helpful to specify what’s similar and what’s different when we do. . . . In this post, […]

Statisticians and economists agree: We should learn from data by “generating and revising models, hypotheses, and data analyzed in response to surprising findings.” (That’s what Bayesian data analysis is all about.)

Kevin Lewis points us to this article by economist James Heckman and statistician Burton Singer, who write: All analysts approach data with preconceptions. The data never speak for themselves. Sometimes preconceptions are encoded in precise models. Sometimes they are just intuitions that analysts seek to confirm and solidify. A central question is how to revise […]

Turks need money after expensive weddings

Josh Miller points to this: “We offered mTurk workers $0.50–$0.75 to complete the survey.” Why would someone who spent $20k+ on their wedding be filling out a survey on mTurk? Maybe things didn’t turn out so well? Josh continues: I didn’t read the paper or the empirical section, just the abstract and I quickly looked […]

Capitalist science: The solution to the replication crisis?

Bruce Knuteson pointed me to this article, which begins: The solution to science’s replication crisis is a new ecosystem in which scientists sell what they learn from their research. In each pairwise transaction, the information seller makes (loses) money if he turns out to be correct (incorrect). Responsibility for the determination of correctness is delegated, […]

Incentives Matter (Congress and Wall Street edition)

[cat picture] Thomas Ferguson sends along this paper. From the summary: Social scientists have traditionally struggled to identify clear links between political spending and congressional voting, and many journalists have embraced their skepticism. A giant stumbling block has been the challenge of measuring the labyrinthine ways money flows from investors, firms, and industries to particular […]

“Developers Who Use Spaces Make More Money Than Those Who Use Tabs”

Rudy Malka writes: I think you’ll enjoy this nice piece of pop regression by David Robinson: developers who use spaces make more money than those who use tabs. I’d like to know your opinion about it. At the above link, Robinson discusses a survey that allows him to compare salaries of software developers who use […]

Where’d the $2500 come from?

Brad Buchsbaum writes: Sometimes I read the New York Times “Well” articles on science and health. It’s a mixed bag, sometimes it’s quite good and sometimes not. I came across this yesterday: What’s the Value of Exercise? $2,500 For people still struggling to make time for exercise, a new study offers a strong incentive: You’ll […]

Financial anomalies are contingent on being unknown

Jonathan Falk points us to this article by Kewei Hou, Chen Xue, and Lu Zhang, who write: In retrospect, the anomalies literature is a prime target for p-hacking. First, for decades, the literature is purely empirical in nature, with little theoretical guidance. Second, with trillions of dollars invested in anomalies-based strategies in the U.S.market alone, […]