Showing posts from March, 2015

The Limits of Econometrics, and Roots of Modern Applied Micro

I just stumbled upon this article by David Freedman, published post-mortem.  A lot of this looks familiar to me: you can find pieces of it in David Freedman's book, Statistical Models, Theory and Practice , which I highly recommend. Perhaps I've blogged about this before, but I rather suspect that David Freedman's critical writings on use and misuse of regression analysis formed the basis of so-called "applied micro," which grew out of Princeton University, and the work of Ashenfelter, Card, Krueger, Angrist and others.  An occasional citation will clue careful readers to this connection, particularly the teaching of natural experiments, and David Freedman's canonical example:   Snow on Cholera .  Some modern references to Snow refer to Freedman; many do not.  But I'm pretty sure it was in fact Freedman who  dug this seminal work out of the dustbin of history and used it to inspire invigorated new empiricism that searches for natural experiments and ri

Buying Conservation--For the Right Price

Erica Goode has an inspiring article about the benefits of conservation tillage, which has been gaining favor among farmers.  No-till farming can improve yields, lower costs, and improve the environment.  Just the kind of thing we all want to hear--everybody wins! One important thing Goode doesn't mention: USDA has been subsidizing conservation tillage, and these subsidies have probably played an important role in spreading adoption. Subsidizing conservation practices like no-till can be a little tricky.  After all, while this kind of thing has positive externalities, farmers presumably reap rewards too.  There are costs involved with undertaking something new. But once the practice is adopted and proven, there would seem to be little need for further subsidies.  The problem is that it can be difficult to take subsidies away once they've been established. In practice, the costs and benefits of no till and other conservation practices vary.  Some of this has to do with