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Archive of posts filed under the Economics category.

Parliamentary Constituency Factsheet for Indicators of Nutrition, Health and Development in India

S. V. Subramanian writes: In India, data on key developmental indicators that formulate policies and interventions are routinely available for the administrative units of districts but not for the political units of Parliamentary Constituencies (PC). Members of Parliament (MPs) in the Lok Sabha, each representing 543 PCs as per the 2014 India map, are the […]

State-space models in Stan

Michael Ziedalski writes: For the past few months I have been delving into Bayesian statistics and have (without hyperbole) finally found statistics intuitive and exciting. Recently I have gone into Bayesian time series methods; however, I have found no libraries to use that can implement those models. Happily, I found Stan because it seemed among […]

All statistical conclusions require assumptions.

Mark Palko points us to this 2009 article by Itzhak Gilboa, Andrew Postlewaite, and David Schmeidler, which begins: This note argues that, under some circumstances, it is more rational not to behave in accordance with a Bayesian prior than to do so. The starting point is that in the absence of information, choosing a prior […]

“Heckman curve” update: The data don’t seem to support the claim that human capital investments are most effective when targeted at younger ages.

David Rea and Tony Burton write: The Heckman Curve describes the rate of return to public investments in human capital for the disadvantaged as rapidly diminishing with age. Investments early in the life course are characterised as providing significantly higher rates of return compared to investments targeted at young people and adults. This paper uses […]

“The Long-Run Effects of America’s First Paid Maternity Leave Policy”: I need that trail of breadcrumbs.

Tyler Cowen links to a research article by Brenden Timpe, “The Long-Run Effects of America’s First Paid Maternity Leave Policy,” that begins as follows: This paper provides the first evidence of the effect of a U.S. paid maternity leave policy on the long-run outcomes of children. I exploit variation in access to paid leave that […]

Most Americans like big businesses.

Tyler Cowen asks: Why is there so much suspicion of big business? Perhaps in part because we cannot do without business, so many people hate or resent business, and they love to criticize it, mock it, and lower its status. Business just bugs them. . . . The short answer is, No, I don’t think […]

Raghuram Rajan: “The Third Pillar: How Markets and the State Leave the Community Behind”

A few months ago I receive a copy of the book, “The Third Pillar: How Markets and the State Leave the Community Behind,” by economist Raghuram Rajan. The topic is important and the book is full of interesting thoughts. It’s hard for me to evaluate Rajan’s economics and policy advice, so I’ll leave that to […]

Moneyball for evaluating community colleges

From an interesting statistics-laden piece by “Dean Dad”: Far more community college students transfer prior to completing the Associate’s degree than actually complete first. According to a new report from the National Student Clearinghouse Research Center, about 350,000 transfer before completion, compared to about 60,000 who complete first. That matters in several ways. Most basically, […]

This is one offer I can refuse

OK, so this came in the email today: Dear Contributor, ADVANCES IN POLITICAL METHODOLOGY [978 1 78347 485 1] Regular price: $455.00 Special Contributor price: $113.75 (plus shipping) We are pleased to announce the publication of the above title. Due to the limited print run of this collection and the high number of contributing authors, […]

Zak David expresses critical views of some published research in empirical quantitative finance

In honor of Ebenezer Scrooge, what better time than Christmas Eve to discuss the topic of liquidity in capital markets . . . A journalist asked, “I just wanted to know how bad the problem of data mining is in capital markets compared to other fields, and whether the reasons for false postives in finance […]

“When Both Men and Women Drop Out of the Labor Force, Why Do Economists Only Ask About Men?”

Dean Baker points to this column, where Gregory Mankiw writes: With unemployment at 3.8 percent, its lowest level in many years, the labor market seems healthy. But that number hides a perplexing anomaly: The percentage of men who are neither working nor looking for work has risen substantially over the past several decades. . . […]

Oh, I hate it when work is criticized (or, in this case, fails in attempted replications) and then the original researchers don’t even consider the possibility that maybe in their original work they were inadvertently just finding patterns in noise.

I have a sad story for you today. Jason Collins tells it: In The (Honest) Truth About Dishonesty, Dan Ariely describes an experiment to determine how much people cheat . . . The question then becomes how to reduce cheating. Ariely describes one idea: We took a group of 450 participants and split them into […]

$ vs. votes

Carlos Cruz writes: Here’s an economics joke. Two economists are walking along when they happen to end up in front of a Tesla showroom. One economist points to a shiny new car and says, “I want that!” The other economist replies, “You’re lying.” The premise of this joke is that if the one economist had […]

“Economic predictions with big data” using partial pooling

Tom Daula points us to this post, “Economic Predictions with Big Data: The Illusion of Sparsity,” by Domenico Giannone, Michele Lenza, and Giorgio Primiceri, and writes: The paper wants to distinguish between variable selection (sparse models) and shrinkage/regularization (dense models) for forecasting with Big Data. “We then conduct Bayesian inference on these two crucial parameters—model […]

“She also observed that results from smaller studies conducted by NGOs – often pilot studies – would often look promising. But when governments tried to implement scaled-up versions of those programs, their performance would drop considerably.”

Robert Wiblin writes: If we have a study on the impact of a social program in a particular place and time, how confident can we be that we’ll get a similar result if we study the same program again somewhere else? Dr Eva Vivalt . . . compiled a huge database of impact evaluations in […]

“The hype economy”

Palko writes: I have no idea whether it is real or apocryphal, but there’s an often referred to study with primates where the they earned tokens that could be exchanged for food. According to the standard version, the subjects soon came to value those tokens more than the treats they could be exchanged for. The […]

Watch out for naively (because implicitly based on flat-prior) Bayesian statements based on classical confidence intervals! (Comptroller of the Currency edition)

Laurent Belsie writes: An economist formerly with the Consumer Financial Protection Bureau wrote a paper on whether a move away from forced arbitration would cost credit card companies money. He found that the results are statistically insignificant at the 95 percent (and 90 percent) confidence level. But the Office of the Comptroller of the Currency […]

“Statistical and Machine Learning forecasting methods: Concerns and ways forward”

Roy Mendelssohn points us to this paper by Spyros Makridakis, Evangelos Spiliotis, and Vassilios Assimakopoulos, which begins: Machine Learning (ML) methods have been proposed in the academic literature as alternatives to statistical ones for time series forecasting. Yet, scant evidence is available about their relative performance in terms of accuracy and computational requirements. The purpose […]

“2010: What happened?” in light of 2018

Back in November 2010 I wrote an article that I still like, attempting to answer the question: “How could the voters have swung so much in two years? And, why didn’t Obama give Americans a better sense of his long-term economic plan in 2009, back when he still had a political mandate?” My focus was […]

The Axios Turing test and the heat death of the journalistic universe

I was wasting some time on the internet and came across some Palko bait from the website Axios: “Elon Musk says Boring Company’s first tunnel to open in December,” with an awesome quote from this linked post: Tesla CEO Elon Musk has unveiled a video of his Boring Company’s underground tunnel that will soon offer […]