Economic Imperialism

28 February 2007 at 5:43 pm 2 comments

| Peter Klein |

This item in Tuesday’s W$J, “Is an Economist Qualified To Solve Puzzle of Autism?”, is required reading for those interested in the scope and methods of modern empirical economics. The piece focuses on Michael Waldman’s paper (with Sean Nicholson Nodir Adilov) linking autism to television, a link vehemently denied by other autism researchers and advocacy groups. More generally,

Prof. Waldman’s willingness to hazard an opinion on a delicate matter of science reflects the growing ambition of economists — and also their growing hubris, in the view of critics. Academic economists are increasingly venturing beyond their traditional stomping ground, a wanderlust that has produced some powerful results but also has raised concerns about whether they’re sometimes going too far.

Ami Klin, director of the autism program at the Yale Child Study Center, says Prof. Waldman needlessly wounded families by advertising an unpublished paper that lacks support from clinical studies of actual children. “Whenever there is a fad in autism, what people unfortunately fail to see is how parents suffer,” says Dr. Klin. “The moment you start to use economics to study the cause of autism, I think you’ve crossed a boundary.”

Moreover — how unusual is this for a newspaper story — there’s also an extended discussion of instrumental-variables estimation.

Waldman’s paper uses precipitation levels as an instrument for time watching TV to address the potential for reverse causality. Rainfall is exogenous, so while kids genetically predisposed toward autistic behavior may tend to watch more TV, they aren’t more likely to live in Seattle or Portland. If there is more autism in rainy places than dry places, it is likely that the additional time spent indoors — presumably in front of the tube — is at least one of the causes. Notes the WSJ reporter:

Such debates are likely to grow as economists delve into issues in education, politics, history and even epidemiology. Prof. Waldman’s use of precipitation illustrates one of the tools that has emboldened them: the instrumental variable, a statistical method that, by introducing some random or natural influence, helps economists sort out questions of cause and effect. Using the technique, they can create “natural experiments” that seek to approximate the rigor of randomized trials — the traditional gold standard of medical research.

Instrumental variables have helped prominent researchers shed light on sensitive topics. Joshua Angrist of the Massachusetts Institute of Technology has studied the cost of war, the University of Chicago’s Steven Levitt has examined the effect of adding police on crime, and Harvard’s Caroline Hoxby has studied school performance. Their work has played an important role in public-policy debates.

The article concludes with a detailed discussion of some of these studies, along with a helpful summary table which I’ve reproduced below.

It’s all very interesting. But what would Steve Sailer say?

Examples of instrumental-variables research in economics:

Author(s) Year* Instrument How it worked Conclusion Link
Joshua Angrist 1990 Vietnam draft lottery Randomly made some people more likely to serve in the military than others Being drafted into the Vietnam-era military reduced future earnings for white males N.A.
Joshua Angrist and Alan Krueger 1991 Season of a student’s birth Compulsory education laws forced people with later birthdates to stay in high school longer Extra time in high school positively affected future earnings N.A.
Steven Levitt 1997 Election cycles Politicians tend to hire more police before election day Additional police reduce violent crime Read the paper8
Caroline Hoxby 2000 Number of streams in metropolitan areas Led some metropolitan areas to have more school districts than others Greater competition among school disctricts leads to better academic results Read the paper9
Lakshmi Iyer 2004 Deaths of heirless rulers of Indian regions Made region more likely to fall under British rule Colonial administrators did a poorer job of providing public goods, such as schools and medical care, than did local rulers Read the paper10
James Feyrer and Bruce Sacerdote 2006 Wind patterns Blew European colonizers’ ships to some islands earlier than to others Earlier colonization had a positive effect on islands’ future wealth Read the paper11
Emily Oster 2006 Distance from the origin of the HIV virus in Africa Caused some Africans to confront the HIV virus earlier than others Wealthier Africans, and in general those who have reason to expect long lives, have cut back on risky sex in response to HIV Read the paper12
Morten Bennedsen, Kasper Meisner Nielsen, Francisco Pérez-González and Daniel Wolfenzon 2006 Gender of CEO’s first-born child, among Danish firms The presence of a first-born son makes the management of a family firm more likely to stay within the family Nepotism harms firms’ profitability Read the paper13
Ben Olken 2006 Signal strength in Indonesia People with better reception watch more TV and listen to more radio TV and radio have had a negative effect on social capital in Indonesia Read the paper14

*Initial publication or working paper

Entry filed under: - Klein -, Methods/Methodology/Theory of Science. Tags: .

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2 Comments Add your own

  • 1. bee  |  28 February 2007 at 10:45 pm

    I think that Michael Waldman is not only entitled to offer a point of view, it is good for science and humanity that he does so. As for the allegations of harm, I think that Ami Klin owes Michael and the rest of us an apology. He is hurt that others may intelligently opine in his area and in a manner that challenges the PhD silo rules. I say to Michael Bravo! We will not spur advancement in the sciences without crossing borders of sceintic thought.

  • 2. N. Emrah Aydinonat  |  2 March 2007 at 12:05 pm

    I think it is better to use the term “economics imperialism” instead of “economic imperialism”. Lazear (2000) prefers “economic imperialism”, yet Fine (2000) and Mäki (2002) prefer to use “economics imperialism”.

    Here is what Ben Fine says: “I prefer the term economics imperialism, as well as colonisation of the other social sciences, but not economic imperialism – favoured by the mainstream despite total neglect of the latter’s incidence in reality […]. Note that Olson and Kähkönen (2000) reject the term imperialism on the grounds that no force is used in the cross-disciplinary expansion by economics. They prefer the equally revealing metaphor of economics as the metropolis, extending its influence to the suburban social sciences.”

    Fine, Ben (2000) “Economics Imperialism”, History of Economics Review, Vol. 32, pp. 10 -35 Online: http://hetsa.fec.anu.edu.au/review/ejournal/pdf/32-A-2.pdf (see the first endnote)

    Lazear E. (2000) ‘Economic imperialism’, Quarterly Journal of Economics, 115 (1), pp.99-146.

    Mäki, Uskali (2002), Explanatory ecumenism and economics imperialism, Economics and Philosophy, 18(2), 235-257.

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