Thursday 24 November 2016

Economists are prone to fads, and the latest is machine learning

WHAT is the collective noun for a group of economists? Options include a gloom, a regression or even an assumption. In January, when PhD students jostle for jobs at the annual meeting of the American Economic Association, a “market” might seem the mot juste. Or perhaps, judging by the tendency of those writing economic papers to follow the latest fashion, a “herd” would be best. This year the hot technique is machine learning, using big data; Imran Rasul, an economics professor at University College, London, is expecting to read a pile of papers using this voguish technique.

Economists are prone to methodological crazes. Mr Rasul recalls past paper-piles using the regression-discontinuity technique, which compared similar people either side of a sharp cut-off to gauge a policy’s effect. An analysis by The Economist of the key words in working-paper abstracts published by the National Bureau of Economic Research, a think-tank (see chart), shows tides of enthusiasm for laboratory experiments, randomised control trials (RCTs) and the difference-in-differences approach (ie, comparing trends...Continue reading

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