Re:This year’s Nobel prizes prompt soul-searching among econ...
by duxut_staglatz on Thursday November 21, 2019 @04:22PM
(#21599780)
For essentially three reasons:
- ethics. Example: is democracy good for economic growth? Of course one could randomly engineer coups in some countries but that's probably not appropriate.
- cost. Example: how much do people change their labor force participation when taxes change by 1%? where a RCT would be "let's give a _lot_ of money to people" and see what happens.
- situation where it is not appropriate. Example: why did Europe rise to prominence (aka the great divergence)? There is not much to randomize here.
Note that RCTs have shortcomings anyway (see for instance [0]).
- ethics. Example: is democracy good for economic growth? Of course one could randomly engineer coups in some countries but that's probably not appropriate.
- cost. Example: how much do people change their labor force participation when taxes change by 1%? where a RCT would be "let's give a _lot_ of money to people" and see what happens.
- situation where it is not appropriate. Example: why did Europe rise to prominence (aka the great divergence)? There is not much to randomize here.
Note that RCTs have shortcomings anyway (see for instance [0]).
[0] https://www.nber.org/papers/w22595