Monday, December 29, 2014

Econometrics and Causation

I listened to this interview on Econometrics and Causation
Roberts points to three controversial areas in microeconomic research- the effect of class size on student achievement, the employment effects of minimum wage, and the relationship between health insurance and health outcomes. What has econometrics been able to show about each of these, according to Angrist? Are these areas where knowledge has become more reliable and precise because of empirical study?
The guest made the point that there are a lot of studies in the social sciences that are effectively as good as the random clinical trials used for FDA drug approvals, because there is some dataset with randomness built in.

He says that Harvard grads do better than U.Mass. grads, but if you look at students who were admitted to Harvard and possibly went elsewhere, there is not much difference. He says that urban charter schools are effective, but small class sizes are not. He says that American health is worse than other developed countries, but that it cannot be improved by giving people health insurance.

If these studies are really as rock solid as he describes, then they should be central to public policy debates. They are not. I never heard of them. Is there really some body of econometric knowledge that is accurate but widely ignored? I guess I should read his book, but that may not tell me how political groups get away with ignoring the facts.

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