Weekly links April 23: RCT pointillism, the evaluation winners curse, subsidizing farmers to use machines, phone surveys and income expectations, and more…
· Federal Reserve of Minneapolis interview with Esther Duflo: she offers her thoughts on the growth and inequality relationship and why there isn’t a trade-off, on whether there will be sovereign defaults after COVID-19, and why doing RCTs is like a Seurat painting.
· The 2021 Clark Medal was awarded to Isaiah Andrews. A Fine Theorem does its usual excellent job in summarizing some of Isaiah’s research contributions and putting them in a broader context of applied econometric work. The Economist also covers the award, noting as one example a piece of his recent work that is likely to be of particular interest to our readers - the winners curse that arises when choosing the policy that performs best in a horse race of different treatments in an impact evaluation - estimation error leads us to over-predict the benefits of our chosen policy and to misstate our uncertainty about its effectiveness. : “Mr Andrews, with others, also explored what is called the winner’s curse when it comes to choosing between policies: the policy that performs best in a trial may owe its top rank to chance, and will later be doomed to disappoint. To illustrate this the researchers turn to a trial that assesses the most effective ways of encouraging people to donate to charity, by combining requests for specific donations with promises to match the initial contribution. The researchers find that if the charity chooses the method that does best in a trial, it will always overestimate its donations. They suggest ways to make a more realistic estimate that takes account of the role of chance.”