He defends Levitt's work, his own work, and the use of instrumental variables in economics...
In "Freaks and Geeks" (April 2, 2007) Noam Scheiber praises my work with Alan Krueger on the economic effects of compulsory schooling but argues that economics Ph.D. students today are obsessed with headline-grabbing trivia of little substantive importance. The root cause is said to be excessive attention to a good or clever research design at the expense of the relevance of the underlying question. Scheiber’s story is engaging and he lands a few punches, but his account is misleading in two important ways. For one thing, he exaggerates the problem of small-bore studies. America’s half-dozen top Ph.D. programs produce scores of Ph.D. students every year. Most of this work is still on traditional topics. At MIT (where Levitt studied), we continue to supervise empirical theses on, among other things, health insurance, immigration, unions, and human capital. High-quality research on these traditional topics gets students high-quality jobs. I’ll plead guilty, however, to being especially pleased when students manage to come up with clean identification–that is, they have a convincing strategy for uncovering causal effects. Clean identification is not a fetish; without it, little of value is learned. On this score, our students typically do better than the empiricists of H.G. Lewis’s generation. In two of the most dynamic empirical microeconomics subfields, the economics of education and economic development, there has been a virtual credibility revolution, with the increase of randomized field trials as well as compelling natural-experiments research designs (see, e.g., the work done at MIT’s Poverty Action Lab).
Second, in his rush to tar some up-and-comers with the "cute-o-nomics" brush, Scheiber misses a central feature of the clean-identification research agenda, best explained by example. One of the enduring scientific and policy questions in Labor economics is the sensitivity of hours worked to changes in pay (this matters for tax policy, for example). The best evidence labor economists have on the relation between wages and hours worked comes from a small experiment (by Ernst Fehr and Lorenz Goette) involving the wages of bicycle messengers in Switzerland. The second best comes from a study of stadium vendors by Gerald Oettinger. Who cares about the riders of Veloblitz or snack sellers at Camden Yards? We care because economics is predicated on the notion that a few simple principles explain behavior in many settings. These studies produce results that are convincing and may well be general, though, as always in science, it will take replication to know for sure. Some of the studies Scheiber dismisses can be understood in this spirit. Finally, as to the merits of Freakonomics the book: My 17-year old daughter picked it up on her own last year. She never knew economics could be so cool. Even better, she now asks me what I’m up to. So I tip my cap to Dubner and Levitt–I hope to see many of their readers in an economics classroom some day.
JOSHUA ANGRIST is a professor of economics at Massachusetts Institute
That is from TNR on-line. Here is Alex’s earlier post on the Scheiber piece.