Yeah that’s fair enough re that part of the comment.
Yeah I suppose I would disagree with how a lot of researchers view the strength of evidence provided by cross-sectional studies. I think a lot of researchers seem to endorse the proposition ‘if this could be confounded, it provides no evidence of causation’, which I don’t think is right. It depends on one’s prior on how plausible the confounder is. I think this is why a lot of economics has stopped trying to focus on some of the more important macro questions, and I think this is a mistake.
eg consider the potential effects of climate change on economic performance. I do think cross-sectional evidence is highly relevant and should update one’s view. If economic performance were very strongly climatically determined, I would expect this to show up strongly in the cross-section. I wouldn’t expect to see California being way richer than Baja California. I wouldn’t expect gross state product for US states to look like this as a function of state average temperature:
I would expect growth rates to be uniformly low in climatically exposed places like Vietnam, Bangladesh, Indonesia, India etc, which is not what we see. So, I do think this sort of evidence should update one’s view, even though there are obviously loads of potential confounders.
In climate economics, people don’t like this, so they have started using panel data approaches which aim to test the exogenous effects of weather changes on economic performance in particular periods of time. This supposedly provides better evidence of causation, but I think should be completely ignored because of huge researcher degrees of freedom, reporting bias and political bias. I think they leave the door open for econometric skullduggery to provide inflated estimates. In part because the cross-sectional evidence is more transparent, I think it is more reliable.
Yeah that’s fair enough re that part of the comment.
Yeah I suppose I would disagree with how a lot of researchers view the strength of evidence provided by cross-sectional studies. I think a lot of researchers seem to endorse the proposition ‘if this could be confounded, it provides no evidence of causation’, which I don’t think is right. It depends on one’s prior on how plausible the confounder is. I think this is why a lot of economics has stopped trying to focus on some of the more important macro questions, and I think this is a mistake.
eg consider the potential effects of climate change on economic performance. I do think cross-sectional evidence is highly relevant and should update one’s view. If economic performance were very strongly climatically determined, I would expect this to show up strongly in the cross-section. I wouldn’t expect to see California being way richer than Baja California. I wouldn’t expect gross state product for US states to look like this as a function of state average temperature:
I would expect growth rates to be uniformly low in climatically exposed places like Vietnam, Bangladesh, Indonesia, India etc, which is not what we see. So, I do think this sort of evidence should update one’s view, even though there are obviously loads of potential confounders.
In climate economics, people don’t like this, so they have started using panel data approaches which aim to test the exogenous effects of weather changes on economic performance in particular periods of time. This supposedly provides better evidence of causation, but I think should be completely ignored because of huge researcher degrees of freedom, reporting bias and political bias. I think they leave the door open for econometric skullduggery to provide inflated estimates. In part because the cross-sectional evidence is more transparent, I think it is more reliable.