“And almost invariably, I see the same colleague in our communal kitchen, who asks with delight, “Joe, what are you having for lunch today?” The types of bean and cheese rotate, as does the fruit—which depends on the season—but I do not inform my co-worker of these variations when I laugh off her very clever and funny question.” In an article about the comforts of routine and habit when it comes to food, I found this excerpt to be pleasingly meta. You know who should especially read this article? Statisticians – especially aspiring statisticians.
“Take his celebrated work with David Card on the minimum wage. They looked at how relative hiring patterns changed when one state raised its minimum wage and one right on its border did not. Not much except the minimum wage differed between the two situations, so it was about as close to a controlled experiment as economists will ever get. Alan was a pioneer in the exploitation of such natural experiments. After Alan showed what kind of evidence can be marshaled to study a labor-market intervention, economists have raised their standard of what constitutes convincing evidence. What followed has been called a “credibility revolution” in empirical economics.”
Unless you are a student of economics, it is unlikely that you will have heard of Alan Krueger. More’s the pity – for as the title of this article will tell you, his work likely has already affected you, no matter where in the world you are reading this.
“The issue, Statistical Inference in the 21st Century: A World Beyond P<0.05, calls for an end to the practice of using a probability value (p-value) of less than 0.05 as strong evidence against a null hypothesis or a value greater than 0.05 as strong evidence favoring a null hypothesis. Instead, p-values should be reported as continuous quantities and described in language stating what the value means in the scientific context.”
Statistics is harder, and more confusing than you think. Yet another example is this article – each of the quotes in the article make for thoughtful reading.
“…Section 230 has proved an “awesome benefit” for the tech platforms. It has encouraged astonishing innovation and accelerated the growth of some of the richest companies on the planet. But it has also allowed billions of people to post anything they like online with almost no constraint. Some of that content is inspirational, much of it trivial, and a small sliver grotesque and harmful. Social networks do not discriminate.”
The FT on whether Facebook and its ilk are publishers or postmen. The import of section 230 is quite staggering, and I’d like to read the book mentioned in the article for that reason.
“We ran similar regressions controlling for industry and found that — even after controlling for industry — elite MBAs did not produce positive statistically significant alpha. Elite MBAs did perform relatively well as CEOs in healthcare and consumer staples, but relatively poorly in energy and materials businesses, though those results were not statistically significant. Our study is not the only one to come to this conclusion. A study by economists at the University of Hawaii asked similar questions and found that firm performance is not predicted by the educational background of the CEOs.” A regression based exercise (which of course comes with its own set of problems) on whether education (type and quality) and experience matters for CEO performance. Short answer: it doesn’t. I was tempted to excerpt the concluding paragraph, but I’ll leave it to the reader to discover.
“It is an example of the paradox of India’s state capacity that it can execute well-defined tasks like elections, census, disaster relief etc with unparalleled proficiency and do the simplest things like running mid-day meal kitchens in the most appalling manner.”
The always excellent Gulzar Natarajan on the paradox that is Indian bureaucracy. Given the remarkable efficiency with which we run our elections – and read the article to find out just how efficient it really is – why not other stuff in India? I do not have a clue. Will headline converge to core, or will core converge to headline?
“While a Chinese depreciation would be a negative to shock to the world, China’s apparent willingness to use fiscal tools to restart its economy should be helpful to the world, at least directionally.*”
The asterisk is at least as important as the excerpt, because the nature of the fiscal stimulus will matter more than the extent of it in the long run – but an update on what is fast becoming a mini-series – the state of China’s economy.
“A key problem is that there are no interpretations of these concepts that are at once simple, intuitive, correct, and foolproof. Instead, correct use and interpretation of these statistics requires an attention to detail which seems to tax the patience of working scientists. This high cognitive demand has led to an epidemic of shortcut deﬁnitions and interpretations that are simply wrong, sometimes disastrously so – and yet these misinterpretations dominate much of the scientiﬁc literature.”
I don’t know if I’ve fully understood p-values, and I don’t know if I do a good job of teaching them – to the extent that I understand them myself. And occasionally reading, and re-reading this blog post is therefore a useful thing to do. Assuming it is correct in the first place!
“…boosting an intermediate range of labor-intensive, low-skilled economic activities. Tourism and non-traditional agriculture are the prime examples of such labor-absorbing sectors. Public employment (in construction and service delivery), long scorned by development experts, is another area that may require attention. But government efforts can go much further.”
Buried in this article are a whole range of papers waiting to be written – but that’s for academicians to salivate over. The article is a wonderful summary of what good jobs are, why they are difficult to come by today, and what can be done to make sure that they do come by.
“I suppose it’s worth trying to measure economic growth, but don’t take the findings too seriously.” Words to live by, and I mean that. Trying to measure economic growth is, ultimately, an un-solvable problem. Conversely, any estimate that we have is always going to be off the mark. Think through the implications (and the implications of the implications!)