Undercover Economist

Who shares wins

Armed with their theories and their statistical models, economists are increasingly marching off to occupy distant intellectual territory: marriage (Gary Becker), racial segregation (Thomas Schelling), obesity (David Cutler) and whether it matters whether your child goes to school with bright kids (Caroline Hoxby).

The practice – which has been around for a while – is often termed “economic imperialism”, perhaps because of the less-than-heartfelt welcome the natives usually extend to the economic explorers.

I am all in favour of economists venturing into new territory – and receiving incursions from outside – but the practice isn’t quite as productive as it should be.

Take the experience of Emily Oster, a young assistant professor of economics at Chicago with a big reputation. One of her celebrated articles is an analysis of the Aids epidemic in Africa: she offers her own epidemiological model and concludes that the virus is best fought by treating other sexually transmitted diseases. The research was published in the prestigious Quarterly Journal of Economics (QJE) in May 2005.

But Oster’s conclusion is probably wrong. Epidemiologists embraced the idea of treating other sexually transmitted diseases a long time ago, but it has been discredited (to their deep disappointment) by a series of rigorous clinical trials. Oster says that the most convincing evidence came out after her paper was written; still, she has repeated her recommendations more recently in Esquire magazine.

Oster also made a mistake in handling her data. The error – which she has acknowledged, and which makes a modest but noticeable difference to her calculations – was quickly spotted when I asked two epidemiologists to review her research. The QJE will be publishing a correction.

Oster quite reasonably says that her article has other merits. But it might have been much better if the epidemiologists had taken a look long before the FT got involved.

The problem is that the economists couldn’t get the epidemiologists to take the research seriously enough to comment. Oster tells me that she tried, but she couldn’t name an epidemiologist who was familiar with her QJE paper. And Larry Katz, the QJE editor who published Oster’s paper, acknowledges that the epidemiologists would not typically agree to review papers for the QJE.

Different academic disciplines should talk to each other more – but that is easy to say. “Every discipline develops a different set of things they care about,” says Michael Kremer, a Harvard economist.

Kremer has studied the impact of aid on the performance of schools, and that meant working with education experts. He focused on the statistical robustness of the research; they were worrying about whether the tests being given to students were valid. “Both are right, but the difference in areas of concern means that it takes a lot of work to communicate.”

It is not just the economists who struggle to collaborate. I recently read a book by the physicist Neil Johnson who believes physics is a better tool than economics for understanding financial markets. I was disappointed to find no evidence that Johnson cared what economics actually said about financial markets, which would have been helpful if he aimed to refute it.

Still, there are reasons for optimism. Princeton economist Alan Krueger is working with the psychologist (and winner of the Nobel prize in economics) Daniel Kahneman. The “neuroeconomists” talk to the neuroscientists, if only to beg the use of their brain-scanners. And Gary Becker, another Nobel laureate and the economic emperor himself, also holds a sociology professorship.

It is not so easy for younger economists to be taken seriously by others. Something tells me that is not going to curb their ambitions.