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February 4, 2013

Latest Posts from Economist's View

Latest Posts from Economist's View

Posted: 12 Jan 2013 12:06 AM PST
Posted: 11 Jan 2013 03:04 PM PST

Posted: 11 Jan 2013 01:06 PM PST
As I struggle to beat the deadline for having next year's full class schedule ready, another quickie:
The Natural Experimenter, by Peter Dizikes: Josh Angrist is an acclaimed experimentalist who does not work in a lab. ... Angrist has built a kind of virtual laboratory of economics, where he generates precise answers to difficult social questions. As much as any scholar, he has helped popularize the idea that microeconomic research can, and should, imitate the conditions of lab experiments. Many other microeconomists base their work on models that make large assumptions about human behavior. But Angrist uses only empirical data that illuminate causal relationships in society.
Consider an issue Angrist has been pondering a lot lately: the effectiveness of high schools. To evaluate schools, you might compare test scores, graduation rates, or college acceptance data. Yet it could just be that the top-rated school districts attract a greater proportion of families with well-prepared students. 
Scholars can't answer questions like this by randomly assigning students to schools themselves and studying the results. So to gain traction on such slippery problems, Angrist relies on natural experiments—cases in which two otherwise similar groups of people have been distinguished by one particular circumstance. If, say, a school district line is redrawn, instantly transferring one group of students to a new school, it might create what economists call a "clean identification" of cause and effect that isolates the schools' own impact.
Over two decades, Angrist's natural experiments have made him a prominent figure within economics. As of August, he was one of the 100 most-cited economists in the world... Among his best-known papers are studies on the relationship between length of schooling and income; the effect military service has on earnings; and the link between class size and student achievement.
Angrist did not invent his quasi-­experimental methods; they were largely popularized from the 1980s onward by a group of prominent economists including Alan Krueger (currently chair of the White House's Council of Economic Advisers), with whom Angrist has co-authored multiple papers; Lawrence Katz of Harvard University; David Card, now of the University of California, Berkeley, who was one of Angrist's graduate-school advisors; and Angrist's principal mentor, Orley Ashenfelter of Princeton University. But no one has been a more staunch advocate of lab-like economics.
"He's had tremendous influence," says Whitney Newey, PhD '83, chair of MIT's Department of Economics, who was one of Angrist's graduate-school advisors. ......
Much, much more here, for example:
Angrist, for his part, says he is not opposed to model-based work for the purposes of, say, forecasting the effects of a policy change. But he maintains an "experimentalist mind-set" and believes that any such models should be based on significant amounts of empirical data.
To be sure, many economists, as Card puts it, still view their discipline as "a kind of mathematical philosophy" based on ideas about rationality and predictable responses to incentives. These scholars find pure empiricism "very alienating." And some younger economists working in the mode of Angrist, Card, and Krueger have drawn criticism; they are sometimes depicted as opportunists looking for any topic that can yield a clear conclusion, even about something as seemingly inconsequential as the use of gym memberships. A 2007 article in the New Republic decried the "academic parlor game" played by new scholars using natural experiments.
"There has been some pushback in the last 10 years, that guys like me, or my students, or my school of thought—that we're all about the tools and not about the questions," Angrist says. "But I don't think that's fair." ... In general, he says, "it's the combination of a cool tool applied to a central question that leads to good research." ...

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