Monday, 12 May 2008

Bias and Orthodoxy

In shower today, I was wondering how prior beliefs of researchers could shape the development of a particular branch of economics literature. Potential bias not just of the empirical data-mining sort, but also in selective paper publications by major journals and the reluctance of younger academics in pursuing heterodox perspectives.


Then I found this good econoblog-post, on minimum wage:


Economic fundamentalism and the minimum wage
By Kathy G.


... Indeed, Krueger and Card have written a paper that provides strong evidence that “specification searching and publication bias” have led to an overrepresentation of studies that find that the minimum wage has a statistically significant disemployment effect. The ideological character of much of the economics profession in the United States suggests that there are rewards for producing scholarship that confirms the idea that the minimum wage causes unemployment, and punishment for scholarship that finds otherwise.


David Card, a highly regarded economist at Berkeley (among other honors, he won the John Bates Clark Prize, a prestigious award given every two years to the most outstanding economist under 40), has produced many of the best studies taking issue with the old conventional wisdom about the minimum wage. But he stopped studying this subject, to a large degree because the reception his research got was so hostile in some quarters of the economics profession. He said:


I’ve subsequently stayed away from the minimum wage literature for a number of reasons. First, it cost me a lot of friends. People that I had known for many years, for instance, some of the ones I met at my first job at the University of Chicago, became very angry or disappointed. They thought that in publishing our work we were being traitors to the cause of economics as a whole.


“Traitors to the cause of economics as a whole”! Those are strong words, especially coming from someone who seems, on the basis of interviews at least, to be a fairly mild-mannered, non-drama-queen kind of guy. And if someone who’s a tenured full professor and one of the leading lights in his field took so much heat that he abandoned this line of research, what do you think the chances are that aspiring Ph.D.s and ambitious young assistant professors are going to touch this issue with a ten-foot pole? ...


Now now, why did I choose a counter-orthodox dissertation topic again?

Elanor


P.S.:- No, my dissertation is not on minimum wage. And no, this is not a post in support of minimum wage in Malaysia. In fact, I am against it, at least in the guises proposed by some (e.g. RM1200 for a country with a per capita income of RM1800 is really not ‘minimum’). Especially since I believe the imposition of such policy would hurt rather than help the lower income group more.

2 comments:

nick said...

maybe u should consider maximum wage...

oyster cove said...

Our country could not strengthen the Ringgit because if it do so, Malaysia will not be able to compete with Thailand, Vietnam, China etc. This is because our economy still depending on cheap labour manufacturing industry. We are not producing high tech manufacturing like Singapore. Hence, Malaysians workers wages (not include top management positions) are kept at a low level on par with Thailand and slighly higher than Vietnam and China. In fact, workers here are paid undervalued.Thats why we import many foreign cheap labours from Bangladesh. The reasons of many Malaysians move to work in Singapore and Australia to earn money based on their true work value.

Could Ringgit be strengthen to help curb inflation?