Mostly Harmless Econometrics? Statistical Paradigms in the ‘Top Five’ From 2000 to 2018

26 Pages Posted: 26 May 2022 Last revised: 27 Nov 2023

See all articles by John-Oliver Engler

John-Oliver Engler

University of Vechta

Julius Beeck

Leuphana University of Lueneburg - Department of Economics

Henrik von Wehrden

Leuphana University of Lueneburg

Date Written: November 20, 2023

Abstract

We explore the connection between four major inferential paradigms in statistical science and inferential practice in current econometrics. We develop the argument that econometrics is still largely characterized by John Stuart Mill’s conception of statistical inference from data, who saw a distinction between ‘theorists’ and ‘practical men’. We follow up with a review of all empirical papers published in the Top 5 economics journals in the period 2000-2018 (N = 2,258). In spite of Rodrik's (2015) much-debated notion of economics that sees issues of model selection at the core of the discipline, the ‘theory first’ / ‘pre-eminence of theory’ approach vastly dominates in the sample (94.0%). When model selection and model uncertainty is accounted for, this largely happens under the frequentist statistical paradigm. This finding may be explained by frequentism’s special role as an ‘orientational paradigm’ (Hoyningen-Huene & Kincaid, 2023) in economics.

Keywords: Bayesianism; econometrics; frequentism; likelihoodism; philosophy of science; paradigm

JEL Classification: A12; B16; B23 B41; C18

Suggested Citation

Engler, John-Oliver and Beeck, Julius and von Wehrden, Henrik, Mostly Harmless Econometrics? Statistical Paradigms in the ‘Top Five’ From 2000 to 2018 (November 20, 2023). Available at SSRN: https://ssrn.com/abstract=4112212 or http://dx.doi.org/10.2139/ssrn.4112212

John-Oliver Engler (Contact Author)

University of Vechta ( email )

Julius Beeck

Leuphana University of Lueneburg - Department of Economics

Germany

Henrik Von Wehrden

Leuphana University of Lueneburg ( email )

Scharnhorststraße 1
Lüneburg, 21335
Germany

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
80
Abstract Views
536
Rank
574,264
PlumX Metrics