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Atlanta Marriott Marquis, Marquis Ballroom A
American Economic Association
Applied Machine Learning
Friday, Jan. 4, 2019 2:30 PM - 4:30 PM
- Chair: Alberto Abadie, Massachusetts Institute of Technology
Pre-Analysis Plans in the Machine-Learning Era
AbstractConcerns about the dissemination of spurious results have led to calls for pre-analysis plans (PAPs), which force ex-ante specificity in order to avoid ex-post “p-hacking.” But in many cases the conceptual hypotheses being tested do not directly imply the level of specificity required for a PAP: estimating an average treatment effect requires the pre-specification of control variables and how they enter the regression; analysing heterogeneous treatment effects necessitates an explicit list of subgroups or interaction effects; testing for effects on many outcome variables or checking for balance relies on a predetermined way of combining evidence across many variables. At the same time, machine-learning (ML) techniques have been developed that engage in principled ex-post specification searches to select control variables, find subgroups with different treatment effects, or combine many variables into a single test. In this paper we suggest a framework for pre-analysis plans that capitalize on the availability of these new techniques, in which researchers combine specific aspects of the analysis that they care about or have strong priors over with ML for the flexible estimation of unspecific (or partially specific) remainders. When such machine-augmented pre-analysis plans spell out in detail how and what ML procedures will be used, they produce properly sized tests. A “cheap-lunch” theorem shows that the inclusion of ML in this way produces limited worst-case costs in power, while offering a substantial upside from systematic specification searches when the non-parametric remainder carries signal about the hypotheses of interest. These results suggest the careful integration of ML provides two gains over existing PAPs: it (i) limits the need of researchers to make arbitrary choices in their analysis that are not implied by the initial conceptual hypothesis being tested; and it (ii) integrates ex-post analysis without fear of p-hacking.
Causal Impact of Democracy on Growth: An Applied Econometrics Perspective
AbstractThe relationship between democracy and economic growth is of long standing interest in Economics. We revisit the empirical analysis of Acemoglu, Naidu, Restrepo and Robinson (forthcoming in the Journal of Political Economy) using state of the art econometric methods. We consider variations of the GMM Arellano-Bond and fixed effects estimators of a dynamic linear panel data model with country and time fixed effects. We find that both methods produce similar estimates of the short-run and long-run effects of democracy on growth once the GMM estimator is bias-corrected for the many instrument problem and the fixed effect estimator is bias-corrected for the incidental parameter problem. Our estimated effects show that the finding that democracy does cause growth is not sensitive to the econometric methodology.
- C2 - Single Equation Models; Single Variables