Am I ruining economics or not?

I blogged a few weeks back about a piece in The New Republic last month that claimed I was ruining economics. At that time, there wasn’t a full version of the article online to link to, so there did not seem to be much point in saying much about the piece. Now, you can read the full article here.

If you’ve read the article, I’m curious as to how you would answer the following questions:

1) Where did the author of the story get his economics PhD?

2) How many years was he enrolled in the economics graduate program at Harvard?

3) How many times have he and I been in the same room in our lives?

It might surprise you to know that the answers to those questions are: he has no PhD, he never attended the economics graduate program at Harvard (the closest he ever got was dating someone in the program), and he and I have never been in the same room in our lives. If you read the article before trying to answer those questions, I am almost certain you will have gotten one or more of them wrong. In order to give himself some credibility (which he sorely lacks) on the issues in the article, he does everything short of outright lying about his connections to the profession.

It seems to me that Scheiber is tied up in knots to the point that he no longer knows what he believes. He seems to instinctively like clever research, but feels such guilt about it that he is compelled to denounce it. The incredibly important point that he misses is that often being clever is the way one cracks an important problem. He can denigrate the questions I have made progress on tackling, but it seems to me that understanding how crime responds to punishment, why crime fell in the 1990s, why Blacks are lagging Whites so badly educationally and economically, whether firms profit maximize, whether campaign spending affects election outcomes, and whether elected officials follow the will of the electorate are pretty reasonable topics for an economist to study. Sure, my approach to each of these was different than what everyone else was doing, but the questions I have asked have (usually) had both serious policy questions and economic issues at their heart, and I delivered some answers when others were not.

Similarly, he attacks Emily Oster completely unfairly and gets all the facts wrong. Maybe it would have helped him get things straight if he had the decency and journalistic rigor to actually talk to Emily about her research. A handful of years ago Scheiber wrote an equally misinformed piece in The New Republic (which I can’t find online to link to) which was titled or sub-titled something like “Why this recession will be so much worse.” Unfortunately for Scheiber, the recession being discussed was not only an unusually quick and painless one, but also, at the time he wrote the piece the recession had already officially ended according to the NBER panel in charge of demarcating such things!

And he is equally behind the times when branding me as a clever economist. While I am proud of my clever past, it is mighty hard to write clever papers. The way my life has evolved, my comparative advantage these days is getting my hands on data that no one else can get, and convincing the folks who make decisions to carry out interesting and informative field experiments. So while I wish I could promise a pipeline of really clever papers, I am afraid that is not likely to be my focus in the near future. Like Scheiber’s predictions about the recession, he’s already missed the boat.

Enough about what I think. What do other economists think? Greg Mankiw weighs in on the topic. Mankiw’s basic stance seems to be that I am trying to ruin economics, but other economists are too smart to let that happen. (One thing Mankiw and I definitely do agree on is that Scheiber is not good at accurately describing people’s physical characteristics. He said Mankiw had a big nose (when mine is much bigger), and said I had a concave chest — which is first of all not true, and second of all, since he has never seen me in person and certainly not with my shirt off, something he could not possibly be informed about. The Marginal Revolution guys are a little more charitable. A stong defender is Karl Smith.

But the single best comment I heard about The New Republic piece came from the spouse of an economist friend of mine who read the piece and whose only comment was “Steve Levitt seems to be the only one who is having any fun!”

Amen to that.


egretman

Yes, as a journalist, he reports...you decide. But Levitt has a right to respond, in kind, right back into the guy's face.

Don't fool yourself. Scheiber's was also a personal attack. "Levitt is ruining economics" How is that not personal?

If Levitt had not defended himself, he would have proved that he was a limp-wristed Harvard-educated girly-boy geek.

DeanS

Great post Steve, had no idea you were capable of such passion!

El Christador

Maybe economics needed a little ruining anyway...

Rick_Hunter

Angrist is also on your side:
http://www.marginalrevolution.com/marginalrevolution/2007/04/joshua_angrist_.html

east coast phil

The New Republic article was only available behind a firewall before.

Now the whole thing can be read online -- but only because it is on a blog that is violating the original writer's copyright by posting it in its entirety, presumably without permission.

Whatever the merits of the piece, linking to this version doesn't seem right. Plus the formatting makes it almost unreadable.

Kent

I liked the Scheiber article. And the ad hominem attacks against him in the post are rude.

Cyril Morong

I am stunned so many people take such a question seriously. It should not even be an issue.

jonathank

Is there something wrong with ruining economics? If the papers are good, that's all that matters.

If economics were all about huge ideas, we'd get a slew of papers about big ideas and many of them would be crap. Is there some other way it would work?

You know, in physics it's all about string theory. Guess what? Lots of papers about string theory. Not all of them are good. I saw the actual point of the article - which I saw as being that people looking for causes will find a bunch of iffy and even spurious corellations - as self-evident. The journalism is what it is.

Niall

Great response Steve. I agree that the attack on Emily Oster was not only unfair, but also entirely uninformed.

One issue that it would hear your point of view is is the supposed schism between the more "clever" economics that Scheiber refers to versus the Heckman/"Marie Curie" approach to economics. Cowen and Tabbarok said a bit about this, but I'd enjoy hearing your take on this issue.

While on the topic of Heckman. Do you think that 5 years from now Heckman, Urzua, & Vytlacil (2006) on IVs and heterogenity will be seen as a key driving force in a movement away from IV methods?

alec

The U of C news office is actually hosting a more visually appealing version of it (straight from the TNR website): http://www-news.uchicago.edu/citations/07/070329.heckman.levitt-tnr.html

I always find it funny when the news office posts very controversial articles like this.

majikthise

I'm not an economist, and I don't know anything about economics. But after reading the article it struck me that maybe there is a small kernal of useful truth there. We can distinguish between a discipline's tools and the questions it answers.

Perhaps the Freakonomics style uses the tools of economics but applies them to questions not traditionally considered within the domain of economics?

Then whether the resulting research counts as economics depends on the (perhaps arbitrary) answer to the taxonomy question: do we categorize research based on its tools or based on its questions?

And then a second question arises: what difference does it make how we classify?

A more interesting issue would be whether the research results are good or interesting. A (much) less interesting issue is whether to call it "economics" or something else.

There were a couple of other points where I felt the article was a bit sloppy. For example, presumably both Levitt and Heckman think that you should break up big questions into smaller, solvable chunks. It's just that perhaps H thinks the small chunks L focuses on are unrelated to any important big questions.

Also, the thing about needing a lot of time to solve big questions but not having a lot of time in a tenure-clock seems irrelevant to the debate between important vs. trivial questions, each of which needs to be broken up into smaller chunks.

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Craig

You sure are getting defensive about a piece written by someone who lacks "decency and journalistic rigor."

Just because he didn't attend Harvard or get his PhD doesn't mean he can't criticize you. Granted, it did sound like he was a Harvard PhD student, but he mentioned several times that he was only an econ "poseur."

I liked the article to some extent- his description of Freakonomics' unique "cleverness" is pretty accurate. I've had people in my econ classes complain and drop because they thought they would "be doing stuff like Freakonomics" only to be given a problem set on the Slutsky Equation or optimization or something. Not that Freakonomics isn't real economics or accurate or anything, it's just that it has a super clever, sexy approach that just isn't used in about 99% of economics problems.

Obviously, I'm a fan of this blog and of the book, but you can't expect every single person in the world to love the authors (or the book).

Plus his physical description of Levitt was pretty funny, too. I've only seen you on the Colbert Report and I still found myself laughing at his remarkably accurate description. Ha

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lermit

I'm sure you are getting too much attention as well.

.lermit

rubemode

Steve,

You are not ruining economics at all. I may not have the experience in the field or the knowledge of a PhD, but I will have my bachelors in Econ in 4 weeks and you sir are getting people excited about a field that many (who know nothing about it) find dreadful. As they say "No publicity is bad publicity."

Your work and methodology give me hope and excitement for my work in grad school. The potential implications of work like Oster's will be life changing for some of the beneficiaries.

So if my opinion matters, you now have it.

bolc

I completely agree with this statement:

Just because he didn't attend Harvard or get his PhD doesn't mean he can't criticize you. Granted, it did sound like he was a Harvard PhD student, but he mentioned several times that he was only an econ “poseur.”

pierremenard99

- I did not feel like Scheiber misrepresented his qualifications in the article.

- I feel like you did not adequately address his criticisms. Namely, what about fundamental questions of production, consumption, and exchange? Are these ever going to get solved?

almondwine

Steven-

I'm agnostic on your influence on economics, but you do remember from undergrad logic that appeals to authority are one of the, if not the (depending on the logician), weakest forms of argument, right?

Daniel

your t.a.

Scheiber seems to have two main critiques. The first is the notion that sometimes clean identification in the form of quasi-experiments means lots of internal validity but not so much external validity: you get your causal inference but how generalizable is your scenario (or as Scheiber says, no one cares about snow boots)? This internal/external validity trade-off is well-known to the Econ Tribe, and Scheiber is just describing internal arguments about (and taking a position on) the relative weights to place on internal vs. external validity. I'm not sure the internal/external validity problem is, as Scheiber claims, wholly attributable to Steve.

A second critique is whether economists, especially the young'uns, should really be allocating so much of their time and brainpower trying to dig up documentation of obscure natural disasters or arbitrary law changes to get their identification. Is this the kind of skill we want economists to cultivate? I think there is some merit in this critique, but only because some grad students have gotten the wrong message from Steve's work. They think that digging up cute natural experiments is the lesson to be learned from Steve's papers, but I would argue that the real lesson from his work is more general: don't just slavishly do what others have done before you, and go beyond the obvious in thinking about economic problems. The real message to take from Steve's work is that sometimes you can go further by taking a more indirect approach rather than a head-on approach. For that reason, maybe grad students should stop rummaging through the Green Book for the latest program rule changes and start finding their own ways of being creative, empirically or theoretically. Yeah, easier said than done, but it may more productive than taking sides.

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bunnyblaster

Nothing he said really should come as a surprise to you Levitt. Your research is interesting and stimulates more interest. I am sure since the publishing of your book, there was a surge in demand of the Chicago Economics department, especially being in the same lecture hall as you are.

However, the fundamental points the author addresses still remain. Should you care? I do not think so. Everyone professor should be allowed to pursue their own research. I suppose some are better than others in Applied Economics (your cup of tea). The ones who realize that they are not so great may eventually switch their interest out of economics or pursue the more typical macro/micro route.

Nothing about your book ruins the field. It just stimulated more attendence and attempts to try applied economics. I do not think you are detering those who care deeply about the other "so-called more important issues" from pursuing their line of work. You are merely opening the eyes of economists to applied economics. Perhaps a merger of the fields is what we need...who knows.

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erichb1

Why not answer the points he makes about you being wrong?

Why are you tying to cloud the issue that you are wrong a lot of the time by saying he is not a PhD from Harvard?

Seem like a pretty childish defense from someone supposedly as smart as you think you are.

More likely you are ruining economics, you know it, and you embarrassed that someone else has pointed it out in public.