21 December 2015 11:47AM
In the last half-century, economists increasingly have turned to empirical methods in their research, and empirical studies now represent the majority of published work in the top economic journals. However, what some economists may not realize is that the shift toward empirical economics indicates that the discipline could be in the midst of a fundamental change.
Duke Economics Ph.D. students Matt Panhans and John Singleton sought to understand this transition by examining the rise of quasi-experimental methods in a working paper they first released on the Social Sciences Research Network (SSRN) in May. Within two weeks of its posting, the paper made the network’s Weekly Top 5 Papers list and lit up the economics blogosphere.
Panhans and Singleton already have presented their work to historically minded audiences over the last year. But the next stage they take will be the biggest one yet: the 2016 Annual Meeting of the American Economic Association in San Francisco, Calif. On Jan. 3 the duo will present their research at the History of Economics Society-sponsored session on the transformation of economics since the 1970s.
“The Empirical Economist’s Toolkit: From Models to Methods” looks particularly closely at applied microeconomics, a field in which quasi-experimental research designs have grown tremendously. Using bibliometrics to identify trends in economic research, the co-authors were able to detect a “sharp upward climb” in the use of quasi-experimental terms in published economics articles starting in 1990.
“Two things we try to bring to the fore are how economic theory used in applied work has changed and how the standards for ‘credible’ empirical results have developed since around 1970,” Singleton said.
Panhans and Singleton assert that the growth of quasi-experimental work has displaced structural approaches in a number of fields, perhaps foremost in labor and education, while in others they have “expanded the boundaries of economic science to areas detached from choice and optimizing frameworks.”
According to Singleton, “One implication of those changes is economists using quasi-experimental tools to provide causal evidence on questions that are non-economic.” What this means is that the paradigm shift has transformed the way in which economics influences and engages with neighboring disciplines.
“Scholars in fields like sociology and political science who either used, or were critical of, what they took to be economics (that is, a rational choice approach to questions posed in their own disciplines) have also taken notice of the paper, as it signals the need to reassess the relationship between their fields and economics,” said Professor Bruce Caldwell, director of the Duke University Center for the History of Political Economy.
Caldwell spoke highly of Panhans and Singleton, stating that they represent the future of the history of economics as it is developing at Duke. Their work, he said, could lead to “fruitful lines of research going forward for historians of economics.”
Panhans is a fourth year whose primary research focus is applied microeconomics, particularly healthcare. Singleton, a fifth year, also works in applied microeconomics with a focus on education. The idea for their paper was initially stimulated by the conversations they had while developing research in their respective fields.
“In that process, you ask yourself things like: What makes for a well-motivated research question in economics? What sort of data — or features of the data — would I need to answer the question? What kinds of tools or techniques would I apply to the data?” Singleton explained. “I think for both of us the answers to those questions necessarily embedded historical ones, too: How would an economics graduate student in 1970 or 1980 have answered those questions? What has changed about the economic practice since then, and why? We saw the then-upcoming History of Political Economy conference on applied economics as an opportunity to explore those historical lines of inquiry.”
Both co-authors have a strong interest in the history of economics, and they cited the HOPE Center and the HOPE-Rubenstein Library Economists’ Papers Project as the reasons why they chose to pursue their graduate studies at Duke.