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Über dieses Buch

This textbook articulates the elements of good craftsmanship in applied microeconomic research and demonstrates its effectiveness with multiple examples from economic literature. Empirical economic research is a combination of several elements: theory, econometric modelling, institutional analysis, data handling, estimation, inference, and interpretation. A large body of work demonstrates how to do many of these things correctly, but to date, there is no central resource available which articulates the essential principles involved and ties them together. In showing how these research elements can be best blended to maximize the credibility and impact of the findings that result, this book presents a basic framework for thinking about craftsmanship. This framework lays out the proper context within which the researcher should view the analysis, involving institutional factors, complementary policy instruments, and competing hypotheses that can influence or explain the phenomena being studied. It also emphasizes the interconnectedness of theory, econometric modeling, data, estimation, inference, and interpretation, arguing that good craftsmanship requires strong links between each. Once the framework has been set, the book devotes a chapter to each element of the analysis, providing robust instruction for each case. Assuming a working knowledge of econometrics, this text is aimed at graduate students and early-career academic researchers as well as empirical economists looking to improve their technique.

Inhaltsverzeichnis

Frontmatter

Chapter 1. Craftsmanship and Credibility in Economic Research

Abstract
This introductory chapter argues that applied microeconomic research should be considered a craft, because it cannot be reduced to a fixed set of procedures that guarantee the “right answer” if performed competently. It then takes stock of the various elements, or inputs, that go into economic research, each of which is explored over the course of this book.
Darren Grant

Ways of Thinking

Frontmatter

Chapter 2. Systems

Abstract
This chapter provides a general definition of a system in economics, and shows how to go about defining such a system in practice. It argues that the ideal scope of an economic analysis is the system, and explains the types of problems that can occur by ignoring the system and focusing narrowly on the relationship of interest. These problems are illustrated in applications to labor supply in Europe, worker motivation in the American steel and aircraft industries, and children’s rights in Nigeria.
Darren Grant

Chapter 3. Scale

Abstract
This chapter introduces the concept of scale as it is used in other disciplines, as an indicator of magnitude. It shows how economists can utilize this concept to add clarity, simplicity, and insight to their research. Applications to the incidental parameters problem, the Slutsky Equation, Mincer’s wage equation, mortality dynamics, and more elucidate the power of scale analysis, both theoretically and empirically.
Darren Grant

Ways of Seeing

Frontmatter

Chapter 4. Vernacular Knowledge

Abstract
This chapter argues that an empirical analysis of an economic phenomenon should be rooted in a thorough understanding of that phenomenon’s social, institutional, and technical context. It discusses what it means for a study to be so rooted, and how to go about acquiring the appropriate level of knowledge required. These ideas come to life in applications to whaling, sports betting, participation in union certification elections, and more.
Darren Grant

Chapter 5. Data

Abstract
This chapter portrays the economic analysis of data as a sophisticated way of “seeing like a state,” a perspective which highlights the inherent limitations of most economic data. It articulates the data qualities the researcher should be familiar with, and the econometric consequences of failing to understand these qualities. These ideas come to life in applications to patents, informal markets in Peru, school accountability ratings, drug dealing, medical coding, and the employment effects of the minimum wage.
Darren Grant

Ways of Doing

Frontmatter

Chapter 6. Theory and Models

Abstract
This chapter distinguishes a theory from a model and lays out the threefold objectives of economic models. It demonstrates how to negotiate the tradeoffs involved in meeting these objectives, and specifies three instruments that can be used for this purpose. These ideas come to life in applications to attorney compensation, insurance pricing and valuation, the behavior of government bureaucracies, the size of cities, and more.
Darren Grant

Chapter 7. Description

Abstract
This chapter portrays data description as an integral prelude to economic modeling, a key aspect of shaping a model. It lays out three principles that exemplify effective description and presents three techniques for creating graphs and tables that adhere to these principles. These ideas come to life in applications to ultramarathoning, beer prices, and the incentive effects of letter grades.
Darren Grant

Chapter 8. Econometric Modeling

Abstract
This chapter treats an econometric model as an experiment, or set of experiments, that are embedded within an economic model. It shows how to unpack the “experimental content” of an econometric analysis, and demonstrates how this concept and the modeling principles from the preceding chapters contribute to the development of econometric models. These ideas come to life in applications to orchestra auditions, aluminum recycling, the returns to schooling, economic development in The Gambia, fracking, and more.
Darren Grant

Ways of Knowing

Frontmatter

Chapter 9. Testing

Abstract
This chapter treats hypothesis testing as an opportunity for the researcher to distinguish between three possible explanations for a set of empirical findings: random chance, the scientific hypothesis of primary interest, and alternative scientific hypotheses. The methods it offers to advance this goal involve refining the null hypothesis, while increasing the scrutiny of the primary scientific hypothesis of interest and the number of alternative scientific hypotheses that it must compete with. These methods are brought to life in applications to home sales in New England, multiproduct pricing in Major League Baseball, turnout in Congressional elections, and the link between abortion and crime.
Darren Grant

Chapter 10. The Ends of Your Means

Abstract
This chapter lays out the first steps to bringing closure to an empirical study. Above all, this involves pursuing “coherence,” in which the study’s findings, economic theory, and vernacular knowledge about the phenomenon of interest coalesce into a logically consistent, unified whole. The pursuit of coherence is multifaceted, and extends to the larger literature to which the study belongs. These ideas inform studies of the demand for cigarettes, zero tolerance drunk driving laws, The Great Moderation, and more.
Darren Grant

Chapter 11. The Narrative in the Numbers

Abstract
This chapter describes how to finish bringing closure to an empirical study, in a way that both structures and enhances the narrative used to report that study’s methods, results, and conclusions. It emphasizes the importance of relating the study’s findings back to the essential facts of the phenomenon of interest, and argues that the study’s ultimate objective should be to understand that phenomenon on its own terms, not the terms prescribed by the researcher. In the process of doing this, the researcher will often unearth an “organizing principle” that grounds the behavior of the major actors involved in this phenomenon, and which also can ground the study’s narrative. These ideas spring to life in applications to the housing crash, the behavior of carnival workers, development in the tropics, teenage fatherhood, and more.
Darren Grant

Backmatter

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