How the (Econometric) Sausage is Made

#EconTwitter once again showed this week why it is not a giant waste of time. In a Twitter discussion  started by the wonderful author of The MixTape himself (available here for the low, low price of $35.00), I became aware of a purported phenomenon discovered in psychology over 20 years ago: the Dunning-Kruger Effect. And, given how long 2020 has lasted, it's really about 100 years old. The Dunning-Kruger Effect was the subject of an article and another blog post this week and that sparked Scott's attention. This, in turn, led Grant McDermott , to suggest I enter the fray. See, the aforementioned blog post made its point using R and, since Grant and I are statistical software nemeses, he asked for my Stata take. Of course, I was easily intrigued because it turns out at the heart of the alleged Dunning-Kruger Effect lies measurement error. Nonclassical measurement error to boot! So, I threw all my other work to side and dove right in. I am a sucker for a good measurement err...

As the year 2020 finally -- FINALLY! -- nears an end, hope looms on the horizon. That person currently residing in the White House is about to be evicted and a vaccine is currently en route . Some day soon, we may actually get to see one another in person. I apologize to all those in hearing distance (which, thanks to social distancing, is not many), but I feel like singing! Singing  a cappella  style. Why a cappella ? I am glad you asked. A cappella music is music to the ears of empirical researchers.   Because no instruments  are required! I know, I know, but hear me out. I was thinking about a lack of instruments this week because I stumbled across a few new papers by Jan Kiviet (some with co-authors) that address the issue of endogeneity. And, these papers do not require, you guessed it, an instrument.  Kiviet (2020a,b) and Kiviet and Kripfganz (2020) develop and apply the estimation approach. Kripfganz and Kiviet (2020) outline a new Stata command, ki...

Wow, did that semester last a long time! For today, I am back to one of the activities I love, but for which I have had no time or mental energy: talking with all of you. I hope everyone has survived. I won't ask if anyone thrived. That is not the proper metric. Survival is more than sufficient.  It reminds me of a conversation I have repeatedly with a friend of mine. He has a son the same as age as mine (both sophomores at our local high school). He and I co-coached our boys' soccer and baseball teams when they were little. His son is now trying to be the kicker/punter on our high school football team. My son is trying to be a pitcher. Our high school is ridiculously competitive when it comes to sports (and academics).  As kids drop off the sports landscape, either through burn-out or being cut, he and I just hope that our kids stick around to have a chance. It's our mantra: just stick around . So, be kind to yourself and just stick around .  That said, let's move on ...

This is a week filled with great angst. And, while I don't think a good electoral outcome "saves the republic," it does help stem the tide. And avert more unnecessary deaths. At least for a while. So, here's hoping the will of the people leads to a flip flop in our government.  Our government needs a flip; not necessarily from one party to the other. It needs a flip from those in leadership positions that lack the ability or desire to lead to those that do. If politicians who are willing to and able to lead are concentrated in one party, so be it. If individuals on both sides of the aisle can stand up and lead, so be it. We need leaders in charge, not cowards. Or morons. Alas, this is an econometrics blog, not a political one. So, I was thinking about flip flops for another reason. No, not because I have only failed to wear flip flops on only about six occasions since the pandemic began. No, not because I am typing this in my office at SMU in bare feet. In hopes of di...