
This year’s Nobel prizes prompt soul-searching among economists - pseudolus
https://www.economist.com/finance-and-economics/2019/11/23/this-years-nobel-prizes-prompt-soul-searching-among-economists
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notafraudster
Esther Duflo is the most obviously deserving Nobel Prize in Economics pick in
decades. Major substantive contributions to development economics coupled with
being absolutely the vanguard of the credibility revolution.

The article seems to motivate criticism of RCTs in only the barest manner:
"what of external validity?" No shit, Sherlock, which is why the credibility
revolution also argues for frequent and cross-contextual replications. "RCTs
present ethical quandaries in re denying the control group the benefits of a
presumed good intervention". Again, duh. The problem is these presumed good
interventions often aren't which is why the most resounding impact of RCTs is
not proving treatments successful beyond our wildest dreams, but rather
finding a series of disappointing and in some cases devastating null effects.
Bringing up deworming is especially rich in light of the serious concerns
raised by deworming RCTs about the value and effect.

It is also weird to talk about the credibility term solely or entirely in
terms of RCTs. As economists often say RCTs are the gold standard, but there
exist many silver standards and causal inference writ large and a broader
concern with well identified pseudo-experimental or observational work has
also developed thanks to the same forces and same people credited here.

Thank god for Esther Duflo. Oh, and her husband is a half decent economist
too, I guess.

~~~
billfruit
I am in general skeptical that statistical experiments will give use much
insight into complex behavior. I think building theoritical models is the
better approach to study complex systems, since then we will can explain why a
certain behaviour shall manifest.

Do astrophysicists use controlled trials to study the universe?

~~~
samvher
Those models aren't worth much if you don't test them, so these efforts will
have to go hand in hand. The way it tends to go now is RCT -> try to explain
findings by hypothesizing about mechanisms -> think about an RCT that can test
this hypothesis -> repeat. It's a slow and expensive process and not always
successful, but I would say that it's progress.

~~~
billfruit
I would say testing is a small part of building models: building models should
essentially be driven by theory, not by experiments.

~~~
SiempreViernes
Stare upon the FRBTheory wiki in delight then, here are ~50 different theories
describing the same thing:
[https://frbtheorycat.org/index.php/Main_Page](https://frbtheorycat.org/index.php/Main_Page)

As a generous guess at most 40 of these models are _wrong_ , since they all
describe basically the same few events with vastly different mechanisms. I
guess that majority of interesting but wrong models is what you are after?

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jerf
These critics should spend some time speaking to the medical research
community. These aren't new questions.

It kinda reveals the deep underlying assumptions; "of course we can know the
results of these interventions in advance, so we must base our ethics on
that"... ok, but if you _already_ know the effects, why are you testing them?
You're testing them because you _don 't_ know. Unfortunately, there's no royal
road to science knowledge, and, yeah, that means that some people are going to
fail to get positive interventions, and some people are going to get negative
interventions. Either that, or nobody gets anything and we just keep
blundering on in ignorance. There is no answer where nobody takes any risks
and everybody gets the good stuff guaranteed.

~~~
billfruit
I am somewhat bothered about the reverse scenario. For example e-cigarettes,
some people are eager to quote statistical data on it, but I feel we should be
able to state if e-cigarettes are harmful or not from a purely theoritical
standpoint, an explanation on how it interacts with the chemistry of the human
body and say it is harmful or not.

We didn't send the man to the Moon on the basis of statistical experiments, we
knew it was possible even before the first screw was put in on the rocket.

I am fearful that depending on experiments would lead to the same dire
credibility issues that plague experimental psychology.

~~~
grandmczeb
The human body (and biology more generally) is fractal-like in its complexity.
One day we may be able to model things accurately enough to not require
experimental work, but probably not in our lifetime.

~~~
cannonedhamster
Modelling the basics of a human lung isn't all that difficult. You can see the
effects of vaping on an enclosed space just by having the smoke pulled into an
enclosed space like they used to do for cigarettes. That would give you
substances created though the vaping process and likely to stick in the lungs.
Longer term effects are drastically harder obviously as it doesn't take into
account the cleaning mechanisms in the lungs but for basic verification that
something is toxic that's not a difficult bridge to cross.

Now when you get into whole body or things with mutations such as cancer I
agree with you while heartedly. While we can understand in a petri dish how to
kill something in a human you've got to worry about things like delivery,
hidden single cells, toxicity, and drug proliferation all of which can be
different in every single person with a cancer. In biotech we're still just
barely out of the dark ages.

To bring this to the original topic, we're still in the dark ages with fields
like economics. While we understand many of levers that exist we have little
idea of how and when to effectively pull them.

~~~
grandmczeb
Models are useful tools, but at the end of the day you’re not going to get a
conclusive answer to a question like “what are the impacts of vaping on human
health?” without looking at a real life human. At least at current levels of
scientific understanding, being able to plug a chemical into an equation and
pop out a complete description of the effects (my interpretation of what the
gp is asking for) is a bit of a pipe dream.

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thegranderson
Though I know the Nobel is focused on theoretical contribution, I found this
discussion interesting: [https://andrewbatson.com/2019/10/25/who-deserves-the-
nobel-f...](https://andrewbatson.com/2019/10/25/who-deserves-the-nobel-for-
chinas-economic-development/)

The editorial Batson is reacting to (by Yao Yang) makes the point that the
largest economic development project that lifted the vast majority of people
out of poverty over the past 20 years was orchestrated by China, and the
RCTs/small scale interventions that Duflo et. al. won the Nobel for had no
role or relevance there. He focuses more on the policies guided by the
"classic" development economists like Solow which emphasize domestic savings
and investment.

Batson's post delves into who in China actually was responsible for the
economic policy changes that created that development.

Personally, I welcome the the addition of RCTs to the economic research
toolkit. For too long, economics has wrapped itself up in a mathematically
complex knot that bears no resemblance to the real world. Behavioral economics
has started to crack that by applying common sense, though too often they have
dramatically overextrapolated their hard-to-replicate results.

Hopefully economists can see RCT as a tool which can be used where
appropriate, rather than an entirely new paradigm that much be applied to
everything (as they did with highly mathematical economics).

~~~
markdown
RCT? Perhaps it would be helpful to explain what that is.

~~~
mohaba
It's in the second paragraph of the article

> The prize, awarded in early October, recognised the laureates’ efforts to
> use randomised controlled trials (RCTs) to answer social-science questions.

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Gimpei
RCTs aren't perfect. There's a bunch of problems with them, generalizability
being just one. But you know what's even worse? Everything else.

Big questions are great and I'd be all for focusing on them if we were capable
of coming up with reasonable answers. But all we've managed are DSGE models
and they're about as useful as reading the lines in goat livers.

I'll take the RCTs thank you and with a side natural experiments. Duflo is the
most significant economist of my lifetime. Thanks to her economics has some
basis for calling itself a science.

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neonate
[https://outline.com/6wLpv3](https://outline.com/6wLpv3)

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ralph84
Worth noting that The Sveriges Riksbank Prize in Economic Sciences in Memory
of Alfred Nobel is not an actual Nobel Prize. It was established by a central
bank so they could award people who justify the existence of central banks.

~~~
jtms
Yes, it is technically separate from the other Nobel prizes, but no one treats
it any differently than the rest of them.

~~~
cf141q5325
I mean quite a few people treat it differently, you just have to look as far
as some of Nobels decedents. Wyattpeak linked the article a bit below.

>It is a deceptive utilisation of the institution of the Nobel Prize and what
it represents.

[https://rwer.wordpress.com/2010/10/22/the-nobel-family-
disso...](https://rwer.wordpress.com/2010/10/22/the-nobel-family-dissociates-
itself-from-the-economics-prize/)

Not to mention one of its awardees, Hayek.

[https://www.nobelprize.org/prizes/economic-
sciences/1974/hay...](https://www.nobelprize.org/prizes/economic-
sciences/1974/hayek/speech/)

------
Gatsky
Economics continues to try and reinvent itself. I’m curious how the example of
an RCT in deworming schedules for children counts as Economics. This seems
like a field in its death throes. Nobels for ‘credibility research’?

~~~
IAmEveryone
The effect size of an intervention (deworming) on a measured outcome (test
scores) is, almost by definition, its efficiency. And that's within economic's
wheelhouse if you're studying paper clip manufacturing or schools.

But, ultimately, I think the researchers would probably answer with something
closer to "I don't care if it's economics. I consider it both interesting and
relevant", and so would the Nobel judges.

~~~
Gatsky
Yeah, it doesn’t matter in the end, we have learned something important. But
there is some context to all this - (macro)economics has had a huge influence
on the world through monetary policy. This influence is waning due to
financial crises and the apparent failure of neoliberalism among other things.

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_0ffh
Yearly reminder that there is no Nobel Prize in Economics. It is the "Nobel
Memorial Prize in Economic Sciences", established in 1968, to coattail on the
prestige of the original.

Edit: Your DVs don't change the facts.

~~~
sedeki
They should have just named someone else. Now we have to qualify any sentence
referencing the Economics price each time we say it.

~~~
cyborgx7
>Now we have to qualify any sentence referencing the Economics price each time
we say it.

They should have to do that, but they don't. Which is precisely the point, and
why they didn't name it something else.

~~~
sedeki
I think you are overestimating the intellect of Sweden’s central bankers.

~~~
cyborgx7
I don't know. "If our discipline had a Nobel Prize, people would consider it
most legitimate" isn't really a genius level plan.

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curiousgal
Surprised the article didn't even mention the word _econometrics_. It being
the topic and all.

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Iv
I don't get it...

Isn't RCT what the medical world, psychologists and sociologists have been
doing for decades?

~~~
sedeki
I am curious about this too.

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ptah
it looks like economics is moving from the alchemy to the chemistry stage in
its evolution

------
cyborgx7
Note: This article lazily does not make the distinction, but the "economics
nobel prize" is not a real Nobel prize.

It was added years later, sponsored by a bank, and is officially called "The
Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel". It
exists purely to legitimize a neoliberal financial ideology and has nothing to
do with scientific rigor.

~~~
cik
Outside of the financial press this doesn't get nearly the amount of attention
it deserves.

Part of the (harsh) reality in the dislike of economics recently has been that
the Behavioural Economics folks (yay Ariely!) have made it a point to start
introducing experiment-based rigour and protocols. That part I find
fascinating at least.

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manquer
What about informed consent ? People participating in experimental drug trials
with control groups give informed consent that they may not get the medicine ,
did these RCT participants do the same ?

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mikorym
I'm sorry, but is this really news or what is it? Criticism against RCTs are
in biological sciences too. I don't see how criticism against RCTs is news. Is
it that the prize winners are just being more scientific about RCT and getting
headwind? Is it that mentioning the Nobel is always news?

In the Ebola vaccine trial, they did away with the control groups the moment
they realised that the vaccine was effective, sacrificing their nice full
statistical analysis for (in this case sensible) common sense. So there are
always exceptions to RCTs and there are always cases where they are not the
suitable method from the outset.

Is the point of the article that economists are not rigorous enough and that
Banerjee, Duflo and Kremer try to be more rigorous, bringing RCTs into
economics where they are traditionally more in the biological sciences?

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ptah
> not all economic questions can be suitably framed

maybe don't thumb suck answers for those questions then as is currently the
norm

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bitxbit
There’s overemphasis on macro and finance.

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xyzzy2020
Totally bonkers: economists using science to approach "social science" issues.
Social sciences should be ashamed that this is not the norm, we should all be
startled and surprised that this is a new thing and evidently people have just
been using a system of high-fives and good wishes to solve the world's social
problems.

~~~
hangonhn
Before we pile on the social sciences, maybe someone familiar with them can
tell us why RCTs are so hard to do. There are likely other issues involved
that make RCTs very difficult -- I'm guessing some ethical issues at least. I
doubt social scientists and economists are just a bunch of idiots or
charlatans. Likewise, the recent breakthrough wouldn't be such a breakthrough
if it had been easier. I don't have an Economist account so I can't read the
rest of the article. Perhaps that was illuminated in the article. Anyways,
before we criticize another field, we should at least have a good
understanding of it.

~~~
jfengel
You are exactly correct. RCTs are hard, not just for ethical reasons but also
logistical ones. It's hard to get the money and authority to conduct an
experiment in the first place, and it's often impossible to create a true
control group.

"Hard" scientists like to pat themselves on the back for rigor, but they get
that because they're studying comparatively simple things. Studying the lives
of people is hard, but it's also important. It affects public policy, which in
turn affects people's actual lives. That public policy gets created whether
it's being studied or not -- the studies are hard, but they're better than
guessing, and slowly they can build up a picture that makes them better. It's
a bit like medicine: we're not going to stop treating people just because we
don't understand the mechanism of action and can't guarantee that it will
work.

This breakthrough is about finding ways to use the many villages found in poor
countries to even attempt to do an RCT, and to come up with mathematical ways
to account for the fact that the trials aren't really randomized. Aid had
previously been given based on people's best guesses about what would work,
which would maximize the value of the aid given if the guesses were correct,
but it's hard to measure if it weren't. Aid has been beset by misguided
theories and lack of measurement -- good intentions, but often ineffective.

~~~
kortilla
> It's a bit like medicine: we're not going to stop treating people just
> because we don't understand the mechanism of action and can't guarantee that
> it will work.

Yet medicine actually focuses on scientific measurement of effects. They don’t
just throw their hands up and go, “experiments that affect people’s lives are
too hard.”

~~~
throwaway2048
Except there is a direct, causal link between treatment and life and death, or
at least quality of life.

Economic or social studies are a lot more nebulous.

~~~
SiempreViernes
Seems weird to accept that "quality of life" is a straightforward measure, but
insists nothing of the like can be created for social studies.

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AcerbicZero
There is no Nobel prize for economists, specifically anyway. There is a Nobel
Memorial Prize in Economic Sciences, but that was created in 1968 by Sweden's
central bank, and has nothing to do with Alfred Nobel other than being from
Sweden and "borrowing" his name. I believe the Nobel foundation now manages
that award, but there are still only 5 "real" Noble prizes.

~~~
idoh
More accurate to say that there are five "original" ones and then one added in
later. It seems that at this point it has equal standing, in that the Nobel
foundation admins it, and it is presented in the same ceremony.

~~~
ralph84
_The Wealth of Nations_ was published in 1776, 57 years before Alfred Nobel
was born. He was aware of the field of economics and didn't think it was
worthy of a prize.

Fields such as mathematics and philosophy were also around in Nobel's time and
he didn't think they were worthy of a prize either. The difference is those
fields aren't associated with an organization that literally prints money to
buy their way in.

~~~
bdhess
> He was aware of the field of economics and didn't think it was worthy of a
> prize.

I doubt you have evidence of this, beyond the simple fact that he didn't
personally establish a sixth prize. If such evidence existed, I think it's
unlikely that the Nobel Foundation would've agreed to administer the prize in
the first place.

That said, at this point, I'm not sure what the difference would be anyway.
The Nobel prizes (including the memorial one) have become a globally admired
celebration of human achievement, the personal beliefs and shortcomings of the
19th century arms dealer who established the prizes notwithstanding.

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edoo
They shouldn't worry too much. The economy Nobel was a fake political after
addition to the real set of scientific prizes, along with peace prize.

~~~
cyborgx7
Completely different cases. The peace prize existed since the beginning. The
economic "Nobel prize" though was added after the fact by a Bank and should
not be considered legitimate.

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cyborgx7
> Nobel Prize in Economics

No such thing exists.

