Alex’s Adventures in Academia-land


While I usually use this blog to work on casual pet projects, I wanted to take an opportunity to use the medium to discuss academic research. Writing is an instinctive mechanism for me to process my thoughts on a topic, but it is one that I use sparingly to discuss the meta-narrative of my own decisions and behavior. The impetus for this self-reflection is the following exciting news: I’ll be pursuing my PhD in economics at Harvard starting this fall! The decision has naturally prompted me to think about my adventures thus far in the academic sphere and the scope of my ambitions and interests.

Think of this as a more organized and open outlet for many of the words (written, spoken, and silently thought) that have bounced around my head throughout the (now 100% finished!) applications process. This post contains a mixture of excerpts from academic personal statements from PhD applications as well as even undergraduate ones (turns out the overwhelming majority of my college application essays involved math in some way, shape, or form).[1] The purpose of this piece is multi-pronged: I’m hoping to (Part I) introduce my interest in economics research on a personal level, (Part II) clearly outline research questions and topics that I have worked on, and (Part III) describe potential eventual research ambitions.[2]

Part I: The number friends

A framed piece of legal paper hung in my parents’ room for nearly a dozen years. The numbers 0, 1, 2, 3, 4, 5, 6, 7, 8, and 9 were etched onto the page. Each held a shade or two of color, leaked from a gifted box of gel pens, within its skinny outline. A speech bubble burst from each number so it could introduce itself or articulate feelings that might be beyond its self-quantification. ‘9’ philosophizes that “it is hard to be odd,” while ‘1’ grumbles over lonesomeness. Atop this paper is the simply written title “The Number Friends.”[3]

Many of my childhood memories are inseparably intertwined with numbers. Learning the exponents of 2 while poking my head into the ice cream freezer at our local deli. Multiplying numbers by wicking my finger against moisture on my grandmother’s 1980 Volvo. Calculating and writing up the winning percentages of baseball teams on the white board in our living room. (It’s an understatement to say that the 2000 subway series was an exciting time in my early life.) To cut to the chase, I was always fond of numbers. My numbers—those I played with as though they were a set of stuffed animals in my living room—hardly resemble those many people groan about—their dusty gray, corporate counterparts.

Despite my interest in the numbers that were stacked on top of each other to fill the standings in the sports section, I grew up ignoring a word that often found itself on adjacent pages of the inky paper— “economics.” The word always seemed to be coming from the lips of men in suits who carried leather briefcases and drank dark, serious coffees. It was a word that I did not associate with anything but Mr. Monopoly—that is, until my senior year of high school when I took an economics class for the first time. Carrying the weightless tools of microeconomics outside of the classroom, I quickly found myself internally modeling the grumpiness of my classmates based on the outside temperature, the day’s schedule type, the quality of their chosen lunch, and the morning delays (or, hopefully, lack thereof) on their regular subway line; explaining my teenage decisions to my parents by implicitly highlighting our very different utility functions; and even debating how one could “optimally” match up students for prom.[4] Imagine my joy in 2012 when Alvin E. Roth won the Economics Nobel for work that redesigned the mechanism for students to select into my exam high school (Stuyvesant High School[5])! The eventual knowledge that groundbreaking work in game theory and market design had implicitly played a role in my presence at that school and, accordingly, in my first foray into economics was incredibly exciting and inspiring. My innate adoration of mathematics and logic combined with my attention to the dynamics of the human world around me molded me into a young economist.[6]

Part IIa: Early research exposure

In my undergraduate studies, I eagerly continued formulating arguments and theories using the building blocks of microeconomic theory and began to seek out academic opportunities to explore these interests. In particular, my fondness for behavioral economics was solidified when I earned a job as a Research Assistant to Professor Sarah Jacobsen my junior year and discovered how assumptions of rational choice do not necessarily hold in human decision-making.  In helping evaluate the results of experimental economic studies, I was intrigued by the gap between seemingly concrete theory and the realities of human behavior.[7] I dived deeper into economics research by working on campus at Williams that following summer as a 1957 Research Fellow for Professor Yung Suk Lee, focusing on a project about the expansion of exam schools and opportunities to attain academic achievement. In this role, I used knowledge of exam cutoffs for admission into specialized New York exam schools and compared academic outcomes for students that were at the margin (both above and below cutoffs) to investigate the much-debated impact of these schools on later academic success. As well as exposing me to statistical methodologies such as regression discontinuity design, the summer taught me how to work independently and probe assumptions and logical frameworks at the core of well-respected studies.

Part IIb: Wine economics as senior thesis

At the end of my junior year, I was lucky enough to be awarded the Carl Van Duyne Prize in Economics and received funding to pursue a senior honors thesis; this opportunity was the catalyst for the start of my self-directed economics research. My project focused on the intersection of applied econometrics and behavioral economics and examined the dynamic response of prices in the wine market to wine critic reviews. Since consumers have often not experienced a given wine ex ante when considering what to buy, reviews and ratings of quality play a consequential role in shaping consumer and market dynamics. My fascination with this subject was derived from the knowledge that, though ratings measure quality, they also influence consumers independent of their accuracy; for this reason, my curiosity about how researchers could disentangle the concepts of hype and quality grew.

While other economists have studied similar topics, no previous work had defined hype and quality as unobserved concepts. Given the fact that I defined these two dimensions of a product as unobserved, a naive cross-sectional regression would not have sufficed in comparing the respective roles. Therefore, I instead used a panel structural vector autoregression methodology to approach this topic from a new angle. (For more on this method, see Pedroni 2013.) I exploited knowledge of the dynamics of an online wine community (CellarTracker) as well as the behavior of the consumer rating mechanism in order to construct short-run restrictions to identify structural shocks. Therefore, by combining both substantive knowledge of wine and the wine drinking community with statistical techniques, I was able to work on a novel approach to a continuously intriguing problem.

I continue to work with my advisor Professor Peter Pedroni on translating the concepts beyond the scope of wine to broader research pertaining to high-end goods. In fact, I’m going to the American Association of Wine Economists Meeting in Bordeaux to present on this in June![8] In preparing a paper for conference submission, we treat information from expert reviews of high-end goods as a part of a broader signal extraction problem tackled by consumers of such goods. (More to come on this soon…) During June 2015, I presented this ongoing work at the interdisciplinary Connected Life Conference at Oxford University, which fostered collaboration with computer scientists, sociologists, and other researchers.[9]

Part IIc: Working at the intersection of law and economics @ Stanford

Since graduating from Williams, I have worked with Professor John Donohue at Stanford Law School as a Research Fellow.[10] In this pre-doctoral role, I work on projects at the intersection of law and economics, with a particular focus on the economics of crime and related econometric and statistical methodologies. For instance, I got to play a large role in developing and reviewing the paper “The Empirical Evaluation of Law: The Dream and the Nightmare” (published in the Journal of American Law and Economics Review).[11] This paper charts the enormous advances in estimating causal effects of laws and policies in the past few decades and points out the frequency of conflicting studies on identical questions. Given the conflicting nature of many studies, it can be hard to know what should be believed and the media, think tanks, and others often exploit this difficulty to promote certain studies for private political or social agendas. Accordingly, in discussing the methodological soundness of various approaches, this article seeks to begin a discussion about how we want to manage the translation between research and media coverage especially when it comes to politically contentious topics.

On a related note, I am currently working on a project that uses a statistical technique called synthetic controls (see Abadie & Gardeazabal 2003 and Abadie, Diamond, & Hainmueller 2009) to look at the impact of right-to-carry laws on crime in the United States. The impact of right-to-carry gun laws on crime has been debated within both the academic community and the public sphere for decades. To address some of the inherent weaknesses of panel data models, we are using the aforementioned synthetic controls methodology, a methodology that generates counterfactual units by creating a weighted combination of similar (in terms of the pre-treatment period) control units. Panel data studies are often extremely sensitive to minor changes in choices of explanatory variables. Therefore, by working on new approaches to these sorts of questions, we seek out methods that generate robust results that have the potential to help guide policy decisions in pivotal areas, where slicing and dicing numbers can be done to fit virtually any policy agenda. The broader impacts of creating robust decision-making processes for analyzing the impact of controversial policies is one of the aspects of economics about which I am most passionate.

Part IIIa: Potential research ambitions in economics

During PhD visits, it is common to pitch your interests to professors. At the macro level (and using some slick economics jargon), I am most interested in behavioral economics, and applied microeconomics. Applied microeconomics is a lovably large umbrella term that easily contains both urban economics, and law and economics, and, therefore, the previous sentence adequately articulates both my interest in the effects of psychological/social/cognitive/emotional factors on decision making as well as the application of microeconomic theory to the study of crime, cities, law, and education. (That undoubtedly leaves space for a lot of potential research topics!)

While I have a number of continuing interests, such as the reputational influence of experts in networks as investigated in the wine project (in the behavioral realm), or economics of crime topics at Stanford, I believe one of the ripest and most important areas for economic research is actually a union of behavioral economics with the economics of crime. That is, further investigating how people find themselves participating in crime.

I am often struck by how often individuals, myself included, buy into illusions of choice. It is tempting to view one’s accomplishments as essentially a function of personal social/academic merit. This is especially true among the more privileged among us—those of us who grew up benefitting from the financial success of family members, the color of our skin, and overall, positive reenforcement in most facets of our lives. I became aware of the influence of environmental behavioral factors while observing my own behaviors in a school context. In high school, I was lucky enough to be a beneficiary of overwhelmingly positive forces (driven/ambitious peers and thoughtful/encouraging teachers). The profound influence of positive classrooms like my own can be easily seen in a recent study by Card and Giuliano. The study found that participation by “non-gifted” students in a “gifted” classroom lead to significant achievement gains for the minority students (gains of 0.5 standard deviations in reading/math). Incredibly, the authors did not attribute the gains to teacher quality or peer effects, but to “the effects to a combination of factors like teacher expectations and negative peer pressure that lead high-ability minority students to under-perform in regular classes but are reduced in a GHA classroom environment“!

While education topics are increasingly receiving a behavioral treatment in the literature (due in part to the ability to fashion experiments in classrooms and, potentially, due to the less politically contentious nature of education), the current state of the economics of crime is still deeply entrenched in Beckerian ideas of deterrence–criminals make cost-benefit calculations in their minds and then use these to inform decisions. This type of reasoning (which is not incorrect, as much as it is lacking in dimensions of the human experience) over the past decades has lead to piles and piles of papers trying to separate out the impact of sentence enhancements (seen around the time of the 1990’s crime decline) into an incapacitation effect (people are off the street in prison and thus incapable of committing crimes) and a deterrence effect (people are scared off of committing crimes because of the greater cost). What with our improved notions of behavioral mechanisms and the current well-deserved focus on incarceration levels, policies from the 1990’s (specifically, the 1994 crime bill), and interactions between police and disadvantaged communities, there is no doubt that further studies of the social interactions in crime networks (see the classic Glaeser 1996 paper) as well as environmental factors (think Reyes’ work on lead exposure) are warranted to better inform policy as well as our core human understanding of how peoples’ lives diverge so starkly. Illusions of choice are powerful (as well as enticing to those at the helm of the ship) and are accordingly worth a hefty dose of skepticism from the community at large. (There are many more ideas to develop and papers to cite in these paragraphs, but I’ll let this marinate as it is for the moment.)

On herd behavior in particular: I have no qualms in asserting that I have benefited immensely from herding behaviors that harm others who simply gained consciousness in a different social/economic environment. The same strains of herd behavior, which pulses through networks (those of academics, and those of drug traffickers alike), lead to disparate outcomes based on the starting point and environment in which they occur. 

Beyond behavior and crime, some other developing research interests on my eventual topic wishlist include:

Part IIIb: Things are about to get meta

On a somewhat meta note, I feel strongly about making economics research and, more generally, research that is data-driven replicable and accessible to the public. I believe that open sourcing datasets and code for projects not only facilitates how different projects can build off of one another but also encourages a more diverse group of individuals to explore quantitative methods.[12] By making work publicly accessible, researchers can challenge themselves to defend their ideas and assertions to any interested individuals, rather than limiting themselves to discussion in academic bubbles. I strongly believe that this renders research dynamics fundamentally more efficient, as public-facing projects allow for a faster and smoother exchange of ideas, which can lead to superior projects in the long-run. This sort of openness on the part of researchers often allows for great collaborations—my wonderful friend/public speaking inspiration Sarah Michael Levine and I originally bonded via Twitter (!) and then ended up writing a paper together on the shortcomings of mainstream data science when applied to social good projects (which we got to present at the Bloomberg Data for Good Exchange 2015). In my personal experience, making work and ideas available to a larger audience has led to a number of incredible opportunities to work with talented people on a range of captivating questions that engage the public and illustrate the fundamental creativity that is inherent to but often ignored in quantitative work.


In reviewing this writing, I am acutely aware of the fact that I tend to over-narrativize my own experiences, injecting meaning into the twists and turns that may just be segments of a random walk. However, while there might not be some grand meaning in an individual’s path towards the degree that we call a PhD, I do strongly believe in the profound nature of social science research more generally—self-awareness is fundamentally human and our ability to study our own machinations is something that we find irresistible.[13] The letters we desire to have traipse behind our names are trivial in the long run, but the questions we ask in pursuit of them ultimately stem from the core of personhood—consciousness and the curiosity that comes with it.[14][15]


[1] Concretely describing motivations, processes, and goals for research is an element of communication in academia that I believe can be much improved by embracing non-traditional/technologically-driven mediums of discussion. So, why not take the time to try and practice communicating with the transparency and openness that I often crave from other researchers? (Warning: this is going to be long! I am working through caches of thoughts that have managed to build themselves into some pretty hefty structures over the years.)

[2] In thinking about that oft-cited 2 x 2 matrix that contains four quadrants dedicated to simple/complex ideas vs. simple/complex writing, the dream is to eventually make it into that slick complex ideas & simple writing quadrant.

[3] Oh, the trials and tribulations of being an only child… (“Some imaginary friends you never outgrow.”)

[4] Think utility maximization problems. If the application of mathematical concepts to questions of romance is interesting to you: check out the marriage problem.

[5] Go Vixens!/Go Phoenix!/Go Renegades! (The last one was a much needed improvement from the softball team’s previous mascot—the Chipmunks.)

[6] In this vein of personal narrative, see also Claudia Goldin’s “The Economist as Detective.”

[7] In technical terms, I ran paired t-test and signed-rank regressions in order to analyze a survey participant’s level of consistency in terms of his or her risk-taking decisions.

[8] Hopefully, I will soon have some slides that can help in communicating the relevant ideas.

[9] Check out the call for papers!

[10] I originally found out about Prof Donohue through reading Freakonomics (a commonly cited catalyst for people’s realization that economics can be clever and creative!) my sophomore year since the abortion and crime chapter is based on one of his articles “The Impact of Legalized Abortion on Crime” with Steven Levitt of UChicago.

[11] I saw the journal that contained this article (and my name typed within it) in the flesh a few weeks ago at Harvard before some meetings. That experience immediately quashed some hefty feelings of impostor syndrome.

[12] Papers, data, and methods should be available to the public rather than only available to those at institutions of higher education…or, even worse only available through asking nicely via email with shiny credentials. (Once, a professor I emailed once for data responded that he was retiring and moving across the country, so he had thrown out all his papers, and, thus, could not help me. I often feel more like an investigative reporter when tracking down data than an academic!)

[13] Research in this context should not be solely interpreted as academic research! In fact, I would argue that every individual conducts casual research in the day-to-day, while the PhD is an example of an institutionalized and formal medium for research.

[14] Listen to this recent episode of Radiolab for the following relevant quote and much more: “Consciousness—for some reason, for some reason one animal on the planet and only one that we can know seems to string into this very elaborate sense of self-awareness—we don’t know how it happened we don’t know why it happened it just did”

[15] Insightful discussions that stem from that very curiosity should not be limited to only those with a PhD. So, social network, let’s talk.

© Alexandra Albright and The Little Dataset That Could, 2016. Unauthorized use and/or duplication of this material without express and written permission from this blog’s author and/or owner is strictly prohibited. Excerpts, accompanying visuals, and links may be used, provided that full and clear credit is given to Alex Albright and The Little Dataset That Could with appropriate and specific direction to the original content.

How I Learned to Stop Worrying and Love Economics


Many months ago, in October, the Economics Nobel prize was awarded to Angus Deaton. Beyond experiencing sheer joy at having beaten my friend Mike at predicting the winner, I also was overwhelmed by the routine, yearly backlash against the discipline in the form of articles shared widely across any and all social networks. Of particular interest to me this year was the Guardian’s piece “Don’t let the Nobel prize fool you. Economics is not a science.” The dialogue surrounding this article made me incredibly curious to investigate my own thoughts on the discipline and its place in the realm of “the sciences.” In a frenzy of activity that can only be accurately explained as the result of a perfect storm of manic energy and genuine love for an academic topic, I wrote up a response not only to this article, but also to my own sense of insecurity in studying a discipline that is often cut down to size by the public and other academics.

In my aforementioned frenzy of activity, I found myself constantly talking with Mike (in spite of my status as the superior Nobel forecaster) about the definition of science, hierarchies of methodologies for causal inference, the role of mathematics in applied social science, and our own personal experiences with economics. Eventually, I linked the Guardian article to him in order to explain the source of my academic existential probing. As another economics researcher, Mike had a similarly strong reaction to reading the Guardian’s piece and ended up writing his own response as well.

So, I am now (albeit months after the original discussion) using this space to post both responses. I hope you’ll humor some thoughts and reactions from two aspiring economists.

Alex responds

I developed a few behavioral ticks in college when asked about my major.  First, I would blurt out “Math” and, after a brief pause of letting the unquestioned legitimacy of that discipline settle in, I would add “and Econ!”–an audible exclamation point in my voice. I had discovered through years of experience that the more enthusiastic you sounded, the less likely someone would take a dig at your field. However, nonetheless, I would always brace myself for cutting criticism as though the proofs I attempted to complete in Advanced Microeconomics were themselves the lynchpin of the financial crisis.

In the court of public opinion, economics is often misunderstood as the get-rich-quick major synonymous with Finance. The basic assumptions of self-interest and rationality that the discipline gives its theoretical actors are stamped onto its practitioners and relabeled as hubris and heartlessness. Very few students are seeking out dreamy economics majors to woo them with illustrations of utility functions in which time spent together is a variable accompanied by a large positive coefficient. (The part where you explain that there is also a squared term with a negative coefficient since the law of diminishing marginal utility still applies is not as adorable. Or so I’ve been told.)

It can be hard to take unadulterated pride in a subject that individuals on all sides of the techie/fuzzy or quant/qual spectrum feel confident to discredit so openly. Economics is an outsider to many different categories of academic study; it is notably more focused on quantitative techniques than are other social sciences but its applications are to human phenomena, which rightfully ousts it from the exclusive playground of the hard sciences. I admit I have often felt awkward or personally slighted when accosted by articles like Joris Luyendijk’s “Don’t let the Nobel prize fool you. Economics is not a science.” which readily demeans contributions to economics simply by both appealing to the unsexiness of technical jargon and by contrasting these with the literature and peace prizes:

Think of how frequently the Nobel prize for literature elevates little-known writers or poets to the global stage, or how the peace prize stirs up a vital global conversation: Naguib Mahfouz’s Nobel introduced Arab literature to a mass audience, while last year’s prize for Kailash Satyarthi and Malala Yousafzai put the right of all children to an education on the agenda. Nobel prizes in economics, meanwhile, go to “contributions to methods of analysing economic time series with time-varying volatility” (2003) or the “analysis of trade patterns and location of economic activity” (2008).

While comparing strides in economic methods to the contributions of peace prize recipients is akin to comparing apples to dragon fruit, Luyendijk does have a point that “[m]any economists seem to have come to think of their field in scientific terms: a body of incrementally growing objective knowledge.” When I first starting playing around with regressions in Stata as a sophomore in college, I was working under the implicit assumption that there was one model I was seeking out. My different attempted specifications were the statistical equivalent of an archeologist’s whisks of ancient dust off of some fascinating series of bones. I assumed the skeleton would eventually peek out from the ground, undisputedly there for all to see. I assumed this was just like how there was one theorem I was trying to prove in graph theory–sure, there were multiple modes of axiomatic transport available to end up there, but we were bound to end up in the same place (unless, of course, I fell asleep in snack bar before I could really get there). I quickly realized that directly transplanting mathematical and statistical notions into the realm of social science can lead to numbers and asterisks denoting statistical significance floating around in zero gravity with nothing to pin them down. Tying the 1’s, 3’s, and **’s  down requires theory and we, as economic actors ourselves who perpetually seek optimal solutions, often entertain the fantasy of a perfectly complex and complete model that could smoothly trace the outline and motions of our dynamic, imperfect society.

However, it is exactly Luyendijk’s point that “human knowledge about humans is fundamentally different from human knowledge about the natural world” that precludes this type of exact clean solution to fundamentally human questions in economics–a fact that has and continues to irk me, if not simply because of the limitations of computational social science, then because of the imperfection and incompleteness of human knowledge (even of our own societies, incentives, and desires) of which it reminds me. Yet, as I have spent more and more time steeped in the world of economics, I have come to confidently argue that the lack of one incredibly complex model that manages to encapsulate “timeless truth[s]” about human dynamics does not mean models or quantitative methods have no place in the social sciences. Professor Dani Rodek, in probably my favorite piece of writing on economics this past year, writes that,

Jorge Luis Borges, the Argentine writer, once wrote a short story – a single paragraph – that is perhaps the best guide to the scientific method. In it, he described a distant land where cartography – the science of making maps – was taken to ridiculous extremes. A map of a province was so detailed that it was the size of an entire city. The map of the empire occupied an entire province.

In time, the cartographers became even more ambitious: they drew a map that was an exact, one-to-one replica of the whole empire. As Borges wryly notes, subsequent generations could find no practical use for such an unwieldy map. So the map was left to rot in the desert, along with the science of geography that it represented.

Borges’s point still eludes many social scientists today: understanding requires simplification. The best way to respond to the complexity of social life is not to devise ever-more elaborate models, but to learn how different causal mechanisms work, one at a time, and then figure out which ones are most relevant in a particular setting.

In this sense, “focusing on complex statistical analyses and modeling” does not have to be to “the detriment of the observation of reality,” as Luyendijk states. Instead, emulating the words of Gary King, theoretical reasons for models can serve as guides to our specifications.

In my mind, economics requires not just the capability to understand economic theory and empirics, but also the humility to avoid mapping out the entire universe of possible economic interactions, floating coefficients, and greek numerals. Studying economics requires the humility to admit that economics itself is not an exact science, but also the understanding that this categorization does not lessen the impact of potential breakthroughs, just maybe the egos of researchers like myself.



Mike responds

Economics is an incredibly diverse field, studying topics ranging from how match-fixing works among elite sumo wrestlers to why the gap between developed and developing countries is as large as it is. When considering a topic as broad as whether the field of economics deserves to have a Nobel prize, then, it is important to consider the entire field before casting judgment.

Joris Luyendijk, in his article “Don’t let the Nobel prize fool you. Economics is not a science,” directs most of his criticisms of economics at financial economics specifically instead of addressing the field of economics as a whole. We can even use Mr. Luyendijk’s preferred frame of analysis, Nobel prizes awarded, to see the distinction between finance and economics. Out of the 47 times the economics Nobel has been awarded, it was only given in the field of Financial Economics three times.  And in his article, Mr. Luyendijk only addresses one of these three Nobels. I would argue that since financial economics is but a small part of the entire economics field, even intense criticism of financial economics should not bring the entire economics field down with it.

A closer look at the Nobels awarded in financial economics reveals that the award is not “fostering hubris and leading to disaster” as Mr. Luyendijk claims. The first Nobel awarded in financial economics was presented in 1990, for research on portfolio choice and corporate finance and the creation of the Capital Asset Pricing Model (CAPM). Far from causing financial contagion, to which Mr. Luyendijk hints the economics Nobel prize has contributed, optimal portfolio theory examines how to balance returns and risk, and CAPM provides a foundation for pricing in financial markets. More recently, the 2013 Nobel was again awarded in financial economics, for advances in understanding asset pricing in the short and long term, applications of which include the widely used Case-Shiller Home Price Index.

The second Nobel awarded for financial economics, to Merton and Scholes in 1997, does deserve some criticism, though. However, I would argue that the Black-Scholes asset pricing model gained traction long before the 1997 Nobel Prize, and continues to be used long after the collapse of the hedge fund Merton and Scholes were part of, because of its practical usefulness and not because of any legitimacy the Nobel prize might have endowed it with. The quantification of finance would have happened with or without the Nobel prize, and I find it hard to believe that the existence of the economics Nobel prize causes profit-driven financiers to blindly believe that the Black-Scholes formula is a “timeless truth.”

So if economics is not finance, then what is it? I would argue that an identifying feature of applied economics research is the search for causality. Specifically, much of economics is a search for causality in man-made phenomena. To model human behavior in a tractable way requires making assumptions and simplifications. I have to agree with Mr. Luyendijk that economics needs to be more forthright about those assumptions and limitations – economists may be too eager to take published findings as “timeless truths” without thinking about the inherent limitations of those findings.

Failing to realize the limitations of such findings can come back to bite. For example the Black-Scholes model assumes that securities prices follow a log-normal process, which underestimates the probability of extreme events, such as the ones that led to the collapse of Long-Term Capital Management. But the failure of some to pay attention to well-known limitations of important findings should not diminish economics as a whole.

Applied economics is also distinct from other social sciences in that it attempts to apply the tools of the hard sciences to human problems. I agree with Alex and Mr. Luyendijk that knowledge about the physical and human worlds is inherently different. The heterogeneity of human behavior creates messy models, and these models require the creation of new mathematical and statistical methods to understand them. This “mathematical sophistication” that Mr. Luyendijk bemoans is not just math for math’s sake, it is using tools from the hard sciences to explain real-world phenomena (and what’s wrong with pure math anyways?).

Despite the occasional messy solution, the ideal study in applied economics is still a controlled experiment, as it is in many hard sciences. In the human world, however, this experimental ideal is difficult to implement. Much of applied economics thus relies on quasi-experimental methods, trying to approximate experiments with observational data by finding natural experiments, for example, when controlled experiments are not feasible. Still other branches of economics use actual economic experiments, such as randomized control trials (RCTs). The idea behind economics RCTs is the same as that behind clinical drug trials, where people are randomly separated into treatment and control groups to test the effect of an intervention. RCTs have become increasingly popular, especially in development work, over the past decade or so. Given Mr. Luyendijk’s concern about how divorced from the real world economics has become, he would be impressed by the amount of practical, detailed planning required to successfully implement RCTs, and be taken aback by how different this fieldwork is from the academics spending all day thinking of complex and impractical models that he envisions.

A Nobel prize in economics will probably be awarded for advances in the methodology and applications of RCTs, the closest economics can come to the hard sciences that Mr. Luyendijk so reveres, sometime in the next decade. What will he say then?


Mike and I were Research Assistants at Williams College together during summer 2013. Mike is currently on a Fulbright in China working with Stanford’s Rural Education Action Program, which conducts RCTs in rural China. We are both happy to hear any feedback on the linked articles and our responses, as we are both genuinely interested in thinking through where economics (and computational social sciences on the whole) should belong in scientific dialogue.

© Alexandra Albright and The Little Dataset That Could, 2016. Unauthorized use and/or duplication of this material without express and written permission from this blog’s author and/or owner is strictly prohibited. Excerpts, accompanying visuals, and links may be used, provided that full and clear credit is given to Alex Albright and The Little Dataset That Could with appropriate and specific direction to the original content.