Identification versus Importance
| Peter Klein |
At a recent workshop the subject of econometric identification came up. Identification is of course the major issue of our day among mainstream empirical economists. Some have described the dissertation process as the “search for a good instrument.” Instrumental-variables estimators have their critics, of course, but these critics are in the minority.
One of the workshop participants, a regular attendee at NBER events, summarized the consensus view among the elites of the profession with the following diagram:
A research problem can be important, and it can be well identified. The ideal problem is one in quadrant B, both important and identified. However, a problem in quadrant C is much more likely to be published in a top journal than a problem in quadrant A.
What does this say about the economics profession?