Economics

What is Economics Studying?

Having spent all five of my years as a graduate student trying to get psychologists and economists to agree on basic ideas about decision-making, I think the following two pieces complement one another perfectly: Cosma Shalizi’s comments on rereading Blanchard and Fischer’s “Lectures on Macroeconomics”: Blanchard and Fischer is about “modern” macro, models based on […]

Criticism 5 of NHST: p-Values Measure Effort, Not Truth

Criticism 5 of NHST: p-Values Measure Effort, Not Truth

Introduction In the third installment of my series of criticisms of NHST, I focused on the notion that a p-value is nothing more than a one-dimensional representation of a two-dimensional space in which (1) the measured size of an effect and (2) the precision of this measurement have been combined in such a way that […]

Criticism 4 of NHST: No Mechanism for Producing Substantive Cumulative Knowledge

[Note to the Reader: This is a much rougher piece than the previous pieces because the argument is more complex. I ask that you please point out places where things are unclear and where claims are not rigorous.] In this fourth part of my series of criticisms of NHST, I’m going to focus on broad […]

Criticism 3 of NHST: Essential Information is Lost When Transforming 2D Data into a 1D Measure

Criticism 3 of NHST: Essential Information is Lost When Transforming 2D Data into a 1D Measure

Introduction Continuing on with my series on the weaknesses of NHST, I’d like to focus on an issue that’s not specific to NHST, but rather one that’s relevant to all quantitative analysis: the destruction caused by an inappropriate reduction of dimensionality. In our case, we’ll be concerned with the loss of essential information caused by […]

Criticism 2 of NHST: NHST Conflates Rare Events with Evidence Against the Null Hypothesis

Introduction This is my second post in a series describing the weaknesses of the NHST paradigm. In the first post, I argued that NHST is a dangerous tool for a community of researchers because p-values cannot be interpreted properly without perfect knowledge of the research practices of other scientists — knowledge that we cannot hope […]

Criticism 1 of NHST: Good Tools for Individual Researchers are not Good Tools for Research Communities

Introduction Over my years as a graduate student, I have built up a long list of complaints about the use of Null Hypothesis Significance Testing (NHST) in the empirical sciences. In the next few weeks, I’m planning to publish a series of blog posts, each of which will articulate one specific weakness of NHST. The […]

Speeding Up MLE Code in R

Recently, I’ve been fitting some models from the behavioral economics literature to choice data. Most of these models amount to non-linear variants of logistic regression in which I want to infer the parameters of a utility function. Because several of these models aren’t widely used, I’ve had to write my own maximum likelihood code to […]

The Post-Lehman Era

The existence of recessions no more invalidates economic theory than the existence of AIDS invalidates molecular biology.

Inconsistencies in Bayesian Models of Decision-Making

But modeling devices that make sense for an unbiased decisionmaker may not make sense for a biased one. For example, why would individuals have priors and posteriors if they are destined to apply Bayes’ law incorrectly?1 A question I often ask myself. Wolfgang Pesendorfer : Behavioral Economics Comes of Age: A Review Essay on Advances […]

Academic Jargon: Field-Specific Insults

Every academic field seems to develop a set of generic insults based on their intellectual toolkit. Here are two examples I hear often: Probabilists and Statisticians: “I think that’s an interesting case, but it’s in a set with measure zero.” Economists: “X group’s behavior is clearly rent-seeking.” Do any readers have good examples from other […]