How the (Econometric) Sausage is Made

There was a fascinating story posted on Twitter this past week; original source is here . The story concerns a U.S. Air Force pilot, Lt. Gilbert S. Daniels, and how he single handedly saved the USAF in the 1950s. See, pilots were crashing. A lot. And no one knew why. One thought was that military planes and equipment were ill-sized for USAF pilots in the 1950s as they were built based on specifications of the average USAF pilot in the 1920s. What if the average pilot had changed over the past three decades? In the process of measuring the average specifications of USAF pilots in the 1950s, Daniels made a startling discovery. No pilot is average. In fact, Daniels found that no pilot was even close to being average. After collecting anthropometric measurements on over 4,000 pilots, he recorded whether each pilot was  within the middle 30% of the distribution for each of the ten most salient dimensions for pilots. How many pilots did he find that were close to average ...

Econometrics can be a wild ride. Trying to navigate the field as an applied researcher can be equally wild. But, sometimes it is exactly the wildness that makes the 'metrics work. I was inspired (tasked?) by my good friend whom I have never met,  Paul Hünermund , in a Twitter  thread  this week. He raised an old topic in econometrics that might be (vastly) underappreciated by applied researchers. The topic reminds me of a scene from the classic movie, Parenthood . All you struggling parents during the pandemic may be too young to have seen it. Now would be a good time to remedy that situation! Oh geez, I just looked and it is from 1989.  How old am I?    In the scene, Grandma relays the following bit of wisdom. Grandma :  You know, when I was nineteen, Grandpa took me on a roller coaster. Gil :  Oh? Grandma :  Up, down, up, down. Oh, what a ride! Gil :  What a great story. Grandma :...

COVID-19 got me thinking about my favorite band (no, I'm not hip), Imagine Dragons, and the song On Top of the World. "I've had the highest mountains I've had the deepest rivers ... Been dreaming of this since a child I'm on top of the world" And, of course, that led back to econometrics, where all good roads lead. What does COVID-19, highest mountains, deepest rivers, and being on top of the world have to do with econometrics? Good question. The answer is turning points. I'm beyond sure that we are all sick (no pun intended) of seeing graphs about "flattening the curve." The shapes of these curves are presumably fundamental to the question about when to "re-start" the economy. So, ideally we would like to use the current data to "fit" the curve and estimate when we can expect the number of new cases to begin to fall. This is a problem of estimating a turning point. Stated differently, the problem is t...