Department of Economics and Business Economics

Simulating an empirical paper by the rational economist

Research output: Contribution to journal/Conference contribution in journal/Contribution to newspaperJournal articleResearchpeer-review

Standard

Simulating an empirical paper by the rational economist. / Paldam, Martin.

In: Empirical Economics, Vol. 50, No. 4, 02.05.2016, p. 1383-1407.

Research output: Contribution to journal/Conference contribution in journal/Contribution to newspaperJournal articleResearchpeer-review

Harvard

APA

CBE

MLA

Vancouver

Author

Paldam, Martin. / Simulating an empirical paper by the rational economist. In: Empirical Economics. 2016 ; Vol. 50, No. 4. pp. 1383-1407.

Bibtex

@article{02e6aacda8ca4521b2a2bbae631bcbc7,
title = "Simulating an empirical paper by the rational economist",
abstract = "Papers in economics often try to find the {\textquoteleft}best{\textquoteright} estimate of a parameter. If researchers behave as predicted by economic theory, the research process can be modeled and simulated. The {\textquoteleft}best{\textquoteright} estimate is selected from J regression experiments by a selection rule, SR, which gives the researcher{\textquoteright}s preferences for the fit (significance) and size of the estimated parameter. Eight Js and five SRs are considered. To find a stable pattern for all 40 cases, 70 million regressions are simulated. The key results are: (1) All rational SRs cause the selected estimate to be substantially biased in the direction of the priors of the researcher. (2) All such rules give almost the same bias. It can be assessed from a set of estimates, and (3) the standard PET estimate of the meta-average reduces the bias by more than 90%.",
keywords = "Publication bias, Meta-analysis, Selection of regressions",
author = "Martin Paldam",
year = "2016",
month = may,
day = "2",
doi = "10.1007/s00181-015-0971-6",
language = "English",
volume = "50",
pages = "1383--1407",
journal = "Empirical Economics",
issn = "0377-7332",
publisher = "Springer",
number = "4",

}

RIS

TY - JOUR

T1 - Simulating an empirical paper by the rational economist

AU - Paldam, Martin

PY - 2016/5/2

Y1 - 2016/5/2

N2 - Papers in economics often try to find the ‘best’ estimate of a parameter. If researchers behave as predicted by economic theory, the research process can be modeled and simulated. The ‘best’ estimate is selected from J regression experiments by a selection rule, SR, which gives the researcher’s preferences for the fit (significance) and size of the estimated parameter. Eight Js and five SRs are considered. To find a stable pattern for all 40 cases, 70 million regressions are simulated. The key results are: (1) All rational SRs cause the selected estimate to be substantially biased in the direction of the priors of the researcher. (2) All such rules give almost the same bias. It can be assessed from a set of estimates, and (3) the standard PET estimate of the meta-average reduces the bias by more than 90%.

AB - Papers in economics often try to find the ‘best’ estimate of a parameter. If researchers behave as predicted by economic theory, the research process can be modeled and simulated. The ‘best’ estimate is selected from J regression experiments by a selection rule, SR, which gives the researcher’s preferences for the fit (significance) and size of the estimated parameter. Eight Js and five SRs are considered. To find a stable pattern for all 40 cases, 70 million regressions are simulated. The key results are: (1) All rational SRs cause the selected estimate to be substantially biased in the direction of the priors of the researcher. (2) All such rules give almost the same bias. It can be assessed from a set of estimates, and (3) the standard PET estimate of the meta-average reduces the bias by more than 90%.

KW - Publication bias

KW - Meta-analysis

KW - Selection of regressions

U2 - 10.1007/s00181-015-0971-6

DO - 10.1007/s00181-015-0971-6

M3 - Journal article

VL - 50

SP - 1383

EP - 1407

JO - Empirical Economics

JF - Empirical Economics

SN - 0377-7332

IS - 4

ER -