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18 signs you
18 signs you’re reading bad criticism of economics
Every mainstream science which touches on political or religious ideology attracts more than its fair share of deniers: the anti-vaccine crowd v mainstream medicine, GMO fearmongers v geneticists, creationists v biologists, global warming deniers v climatologists. Economics is no different, but economics cranks differ in that they typically make false claims about the content of economics itself, as opposed, or Continue Reading
Behavioral hazard in health insurance
Behavioral hazard in health insurance
Suppose your health insurance becomes more generous, decreasing the proportion of the cost of care for which you are responsible. At the same time, your premium goes up to cover the extra costs faced by your insurer. In standard theory you are better off because you face less financial uncertainty, but you will also tend to consume too much health Continue Reading
The intuition of robust standard errors
The intuition of robust standard errors
Commonly econometricians conduct inference based on covariance matrix estimates which are consistent in the presence of arbitrary forms of heteroskedasticity; the associated standard errors are referred to as "robust" (also, confusingly, White, or Huber-White, or Eicker-Huber-White) standard errors. These are easily requested in Stata with the "robust" option, as in the ubiquitous reg y x, robust Everyone knows that the Continue Reading
What do we know about the effect of income inequality on health?
What do we know about the effect of income inequality on health?
This post briefly surveys some of the methods and results in the literature on health and income inequality, closing with some remarks on problems with the existing literature and where future research may take us. It is not intended as anything resembling a comprehensive survey; Lynch et al (2004) provides a useful review of the empirical literature up to that Continue Reading
Remarks on Chen and Pearl on causality in econometrics textbooks
[latexpage] Bryant Chen and Judea Pearl have published a interesting piece in which they critically examine the discussions (or lack thereof) of causal interpretations of regression models in six econometrics textbooks. In this post, I provide brief assessments of the discussion of causality in nine additional econometrics texts of various levels and vintages, and close with a few remarks about Continue Reading

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  • anon

    Colin Cameron is also a great teacher of economics.

  • anon

    errr, econometrics.

  • ezraabrams

    I admit, I don’t understand this
    but as a scientist who works with DNA, I can tell you what me and my colleagues would do: we would find an experiment to test casuality.
    In some cases – does a specific DNA sequence cause your hemoglobin, which carrys oxygen from the lungs to the tisues, to not work well (sickle celll, thallassemia)
    we can’t do this in humans, but we can do a direct exp in , say, mice.

    so, leaving aside the mumbo jumbo of Pearl, the problem is that statistical data can’t ever proove casaulity; you need a direct test, like the oregon medicare signup lottery.

    any effort devoted to fancy math is a waste of time; instead, stop doing math and lobby for funds to do experiments

    • Chris Auld

      Economists use controlled experiments when possible, but it’s often prohibitively expensive or ethically problematic to conduct experiments in social sciences, along with much of the natural and life sciences (e.g., astronomy, climatology, geology, epidemiology, public health). For that reason in these fields we try to make causal inferences from observational data which in some key ways mimic the data we could get from a controlled experiment. I assure you that this research is neither impossible nor mumbo jumbo, and it is not true that controlled experimentation is the only route to valid causal inference.

  • ezraabrams

    I would add, that the ability to show causality is the sign of a mature science; we can do a lot with DNA (except in humans, where ethics and morality forbid experiments)

    That you can’t do this in macro means you need to change how you do things

    As for the poor cosomologists and astrophysicisits, i guess the are SOL

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