Economists Do It With Models

Warning: “graphic” content…

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Causal Friday: Some Reading Material For The New Year…

January 16th, 2015 · No Comments
Causal Friday

One of my undergraduate professors has a new book. It looks like this:

And he looks like this:

I point this out mainly because yes, he also sounds just like Ben Stein. Anyway, the book is about the creative tactics that social scientists use to identify cause and effect. From the Technology Review:

If you want to produce good quantitative social-science research, remember two words: ceteris paribus.

That’s Latin for “all other things being equal.” And it’s a key research principle: if you take two groups of people that are different in one key feature but equal in other ways, you may be able to identify the effects of that difference.

“People are constantly looking at the world around them and trying to learn from it, and that’s natural,” says economics professor Joshua Angrist. “But it turns out to be very difficult, because the world’s a complicated place, and many things are going on.”

Fun fact: I’m still not sure what the proper way to pronounce ceteris paribus is, so that day of econ 101 is always pretty awkward. If this sort of things is up your alley, you should also check out Angrist and Pischke’s earlier, more technical book on a similar topic.

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Tales From The AEA Annual Meeting, Drunk Economics Edition…

January 15th, 2015 · No Comments
Economic History · Just For Fun

Yes, I realize that the title could refer to what transpired on any of the nights of the conference, but I’m talking about something a bit more structured:

Overall, I wish the video had come out a bit better, but I suppose it’s difficult to prepare a shot for a person sprawled on the stage floor in a bean bag chair. If you’ve been following along, you know that my choice of High West whiskey is not random, and, actually, neither are the Hard Rock Cafe shot glasses- I am not too proud to admit that I have a fairly expensive collection of HRC glassware (must have at one point contained a tequila shot), and I’ve actually met a few of my best econ friends because they were the ones who didn’t mind being dragged along for my cheesy alcohol-infused ritual. (Looking at you, James Tierney.) At least now you know what to look out for during the next economics conference.

In case you’re curious, most of the material was pulled from the following sources:

Hopefully the video makes this make a bit more sense:

I think the first YouTuber to comment gave a review that is on par with Siskel and Ebert’s best work: “It seems like the drunk chick at a party has managed to lure people into a lecture hall and everyone is a little confused about what’s happening.” And now I have a new life goal.

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More Tales From the AEA…

January 6th, 2015 · 4 Comments

Thanks to everyone who came to the humor session on Sunday night- it was a blast, and I hope to have video up soon to commemorate the event. Additional thanks to everyone who stopped by my exhibit booth to say hi- I particularly liked our discussions on how to be innovative (read, fun) in the world of online content.

Now, for some more FAQs:

Q: What was in the whiskey bottle?
A: A combination of whiskey and iced tea, the composition of which varied over the course of the evening.

Q: I saw a camera- will there be video of said event?
A: Yup, I will post it here once I’m done editing out awkward A/V moments.

Q: I tried to come say by at your booth Monday morning, but you weren’t there. What gives?
A: I think economists need to develop a theory of rational hangovers. (Or, in video form, here.) I would also like to give a particular thank you to Peter Griffin (awesome name) for leaving goldfish crackers and a nice note.

Q: Where can I find the lemonade video that you showed?
A: You can find that one and 19 or so more here or on Amazon Instant video, Netflix, YouTube, Vimeo, etc.

In related news, I came upon this when confirming that the series was in fact available on Netflix:

I guess when the Netflix recommendation engine fails, it fails big.

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Economic Humor, 2015 Edition…

January 1st, 2015 · No Comments

This weekend, for the purposes of the annual meeting of the American Economic Association at least, I am the new Yoram Bauman (some of you might know him better as The Stand-Up Economist), since I get to host the humor session on Sunday! So if you’re in Boston on Sunday, stop by the Sheraton by Hynes Convention Center to see this all-star nerd lineup:

The session is open to the public, so you don’t even need to register for the conference in order to attend, and I am working on making sure that there is a bar present. And I’m doing my background reading:

photo (11)

The session is even getting some press!

If you’re in Boston this weekend, skip the comedy clubs and swing by the funniest show in town: the Allied Social Science Association’s conference.

Well, okay, the whole conference won’t be a madcap romp (unless you’re really into macroprudential and exchange rate policies), but on Sunday night, they are holding the 7th Annual Economics Humor Session.

The shenanigans don’t end there; other presentations include “Homer-Economicus: The Simpsons and Economics” and “Rockonomix: Integrating Economics and Popular Music” — which features something called The Instrumental Variables (which we’re assuming/hoping is a face-melting rock band of economists).

Seriously, go. Then report back to us.

…though my friend did point out that perhaps this is the 47th thing that Vox got wrong in 2014- hmph. It’s gonna be great, though since we have lofty goals and good role models. =P

Update: I forgot to mention that I will be camped out in exhibit booth 111 in case you want to come say hi!

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The Economics Of Life, Dollar Auction Edition…

December 29th, 2014 · 1 Comment
Behavioral Econ · Just For Fun

Remind me to remind Zach that the dollar auction is supposed to be a lesson in choice bracketing

I don’t know about you, but I will be including something about broad choice bracketing and thinking ahead in my New Year’s resolutions.

Sidenote: If you like Zach’s stuff, you can come see him at the AEA Annual Meeting in Boston!

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Causal Friday: On The Limitations Of Experimental Research…

December 19th, 2014 · 2 Comments
Causal Friday · Just For Fun

Apparently Randall Munroe also has a thing for causal Friday:

On one hand, randomized experiments with a treatment and a control group are a very clean and effective way to determine the effects of a treatment. On the other hand, addressing the logistical caveats necessary in order to get a proper result is not always possible, as shown above. So let’s ruin the joke:

  • Blind trials- trials where the subjects don’t know whether they are receiving the treatment or a sugar pill- are important in order to control for the placebo effect- after all, you wouldn’t want to falsely attribute cardiovascular benefits to sex when they could actually be caused by the belief that you’re having sex!
  • Double-blind trials (now we’re getting fancy)- trials where neither the subjects nor those administering the experiments know whether a subject is receiving the treatment or a sugar pill- are important to control for the possibility that the experimenters inadvertently treat subjects differently based on whether they are receiving the treatment or the placebo. If a trial isn’t double-blind, researchers can’t rule out the possibility that the observed effect is due to the differential treatment on the part of the experiment administrators and not the treatment itself.

Technically, we don’t know whether the experiment in the cartoon is in fact double-blind, since, well, we don’t know whether the experimenters can tell who they are giving lot of sex to and who they are giving a placebo. (So many bad ways to envision this experiment…) There, joke ruined. But I’ll try to make it up to you…

Obviously, not very trial can be double-blind or even blind, but sometimes scientists can be super creepy in order to achieve scientific validity. For example, I bring you…wait for it…placebo surgeries!

A total of 180 patients who had osteoarthritis of the knee were randomly assigned (with their consent) to one of three groups. The first had a standard arthroscopic procedure, and the second had lavage. The third, however, had sham surgery. They had an incision, and a procedure was faked so that they didn’t know that they actually had nothing done. Then the incision was closed.

The results were stunning. Those who had the actual procedures did no better than those who had the sham surgery. They all improved the same amount. The results were all in people’s heads.

I guess I’m in favor of this, though I think that I’d be so pissed if I was in the placebo group…upon further reflection, however, I guess I wouldn’t really know so I wouldn’t have a reason to be mad, so now my brain hurts a little just thinking about it. (Perhaps it was the headache resulting from pondering the placebo surgery philosophy that distracted people from the knee pain!) That said, I definitely don’t want to think about how researchers could make this sort of experiment double-blind.

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