WSJ on how not to do project evaluation

This WSJ piece purports to offer very high return "investments" that consist of minor changes in household behavior.

See if you can find the missing cost in each one of them that should exclude it from the list. Hint: value of time is a good place to start, but it is not the only thing missing.

I am surprised that this made it past the WSJ editors. They should send the author to a remedial economics course.

Hat tip: yahoo.com

Hearts, minds and ... other bits

Apparently the US is using free gifts of Viagra to powerful figures in Afghanistan as a way to lure them onto our side.

The link is here and it is not work friendly due to the ads that surround the blog post but I could not find another more work friendly discussion that I liked as well (or that had as many clever puns).

It always struck me during the end of the cold war that we were wrong to be in such fear of communism. The fact is, communism is not any fun and no one likes it much, other than the party bosses, once they have experienced it. I think the same is true of radical Islam, which is one reason that I am more optimistic about the future of Iran than about the future of some other middle eastern countries as the Iranians have experienced a heavy dose of it and so have a keen sense, by this point, of what they do not want. I think the way we can help these things along is by exporting the fun bits of our culture, whether it be sports, jazz, or viagra.

Mom, I want to be an evaluator

I like this post from Chris Blattman a lot!

Here are some thoughts:

First, it provides good advice on what human capital you should accumulate if you want to be an evaluator. I would just add a bit more refinement to Chris' recommendations. If you want to do evaluation in development, find a place that is strong in micro-development and in labor. Princeton and Michigan are examples here. If you want to do domestic educational evaluation, find a place that is good in labor and/or education and, ideally, where the economists talk to the ed school people and the ed school people are worth talking to. Harvard and Michigan come to mind here. I would second his recommendation regarding obtaining some work experience in the real world of evaluation but would broaden it to include working at an evaluation consulting firm like Mathematica, Abt or RTI.

Second, it really is true that getting a reliable impact analysis is just the first step. There is always interest in improving even the most effective programs (where effective programs are a rather modest subset of all existing programs) by tweaking the design. There are also important issues of portability. For example, just because Progresa "works" in Mexico does not mean that a Nicarguan or Brazilian version will obtain the same results. Knowing how and why a program produces the impacts it produces makes addressing these questions of program modification and program replication in other contexts a much surer business. Of course, as a byproduct learning about how and why programs work adds to our general stock of social science knowledge in a way that isolated black-box impacts estimates do not. This point is emphasized in, e.g. the Heckman and Smith (1995) piece in the Journal of Economic Perspectives.

Third, I would note that economists sometimes forget that there is more to evaluation itself than obtaining credible impact estimates, difficult though that often is even within the context of an RCT. If you pick up one of the standard non-economics texts on evaluation, such as the nice book by Shadish, Cook and Campbell, you will find that surprisingly little space (probably too little, but that is a different post) is spent on impact evaluation. What you find are are sections on topics such as implementation fidelity (does the program as implemented match the program as designed) and process evaluation (how does the program operate in practice) that economists tend not to talk too much about.

Finally, cost-benefit analysis, which in economics traditionally falls under the heading of public finance, is also an important part of a serious evaluation. Very few evaluations do a very good job with this; a useful exception in the labor economics world is Mathematica's experimental evaluation of the Job Corps program. Even if your career focuses on impact evaluation, having a solid foundation in the other facets of evaluation will allow you to do your job better. You will be able to interact more effectively with people from other backgrounds and you will find that, for example, the output produced under the heading of a process analysis is very valuable in the course of an impact analysis. An excellent examples of a (relatively quantitative) process analyses in the labor economics context is the Kemple, Doolittle and Wallace (1993) report produced as part of the National Job Training Partnership Act (JTPA) study.

Hat tip: marginal revolution

Doing fieldwork in prostitution law at UM

A Michigan law student took a "hands on" approach to studying the law and economics of prostitution, according to this article in the Ann Arbor News. In the process, she corrupted one of my distinguished colleagues in the Department of Near Eastern Studies.

Methinks that the Ann Arbor police department is a ripe target for budget cuts as the city tries to balance its budget if this is the best way they can come up with to spend their time and my tax dollars.

Methinks too that students exchanging for grades is a much more serious issue than students exchanging favors for cash.

UW hires Nick Holt from USC as defensive coordinator

Here is the Seattle Times piece on the hiring. I am amazed that UW was able to hire both coordinators from USC, one as head coach and one in a lateral move as a coordinator. The article, of course, lets on that $$$ played a big role. Holt will make more as a coordinator than the WSU head coach makes.

I am actually a bit excited about next year now.

Year in Review

This is a pretty clever video summary of the year's news.

Hat tip: Jackie Smith

The Economist picks future economics stars

TheEconomist makes its once-a-decade predictions of future big stars in economics. I had heard of all of them - you can't imagine how much I hear about Marc Melitz here at Michigan, where he got his Ph.D. - except for Xavier Gabaix. I agree with those who thought Ester Duflo already too famous to deserve note in such a column. There is no uncertainty in that "prediction".

The list includes only one macroeconomist and no labor economists (and no micro theorists either). I am not sure who I would pick as a future star in labor; the field seems to be in a stretch of high quality, within-paradigm research of an incrementalist sort. This kind of research gets done by good but not star quality researchers.

The Economist does an excellent job of analogizing the link between structural economics and the raw reduced form results produced by experiments and other reduced form analyses:

The randomistas, as Ms Duflo and her comrades are called, liken their studies to the clinical trials that prove the efficacy of new drugs. But the ultimate ambition of economics is for something more akin to anatomy. Researchers hope to dissect the underlying physiology of an economic problem, revealing how the leg bone is connected to the thigh bone. With a full anatomy of behaviour—what economists call a structural model—they can determine if a policy or project will work even before it has been attempted.

I read that as a gentle poke at the randomistas and a nod to the view, implicit in my papers with Shannon Seitz and Jeremy Lise on the Canadian SSP program and in the excellent paper (since published in the AER) on the Mexican PROGRESA program by Petra Todd and Ken Wolpin, that experiments and structural models are complements, not substitutes.

I also like the Economist's (likely controversial) definition of what constitutes economics:

What, then, unites these eight young stars and the discipline they may come to dominate? Economists still share a taste for the Greek alphabet: they like to provide formal, algebraic accounts of the behaviour they explain. And they pride themselves on the sophistication of their investigative methods. They are usually better at teasing confessions out of data than their rivals in other social sciences. What defines economics? Economics is what economists do—the best of them, anyway.

I think this bit indirectly highlights the fact that recent economic imperialism, unlike the efforts led by Becker and others, rides on the superior applied econometric skills of economists rather than on their theory. This is particularly true for the large inroads that economists have made into education research.