Wednesday, April 17, 2013

Star Wars

Today, Ryan MacDonald, a UVic Economics grad. who works with Statistics Canada, sent me an interesting paper by Abel Brodeur et al.: "Star Wars: The Empirics Strike Back". Who can resist a title like that!

The "stars" that are being referred to in the title are those single, double (triple!) asterisks that authors just love to put against the parameter estimates in their tables of results, to signal statistical significance at the 10%, 5% (1%!) levels. A table without stars is like champagne without bubbles!

Mark Thoma on Empirical Macro

Mark Thoma has a really nice post today on his blog, Economist's View. It's titled, "Empirical Methods and Progress in Macroeconomics".

Students of econometrics, and anyone doing empirical work in (macro)economics, would benefit from reading what Mark has to say about the use of historical data vs. experimental data.

I won't spoil the story by repeating it here, but his bottom line is:
"I used to think that the accumulation of data along with ever improving empirical techniques would eventually allow us to answer important theoretical and policy questions. I haven’t completely lost faith, but it’s hard to be satisfied with our progress to date. It’s even more disappointing to see researchers overlooking these well-known, obvious problems – for example the lack of precision and sensitivity to data errors that come with the reliance on just a few observations – to oversell their results".

© 2013, David E. Giles