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Title: 
[Events]
Format: Layer, Start, End, Style, Name, MarginL, MarginR, MarginV, Effect, Text
Dialogue: 0,0:00:00.00,0:00:02.55,Default,,0000,0000,0000,,♪ [music] ♪
Dialogue: 0,0:00:03.80,0:00:05.80,Default,,0000,0000,0000,,- [Narrator] Welcome \Nto Nobel Conversations.
Dialogue: 0,0:00:07.04,0:00:08.10,Default,,0000,0000,0000,,In this episode,
Dialogue: 0,0:00:08.10,0:00:11.57,Default,,0000,0000,0000,,Josh Angrist and Guido Imbens\Nsit down with Isaiah Andrews
Dialogue: 0,0:00:11.57,0:00:14.60,Default,,0000,0000,0000,,to discuss how the field \Nof econometrics is evolving.
Dialogue: 0,0:00:16.10,0:00:18.75,Default,,0000,0000,0000,,- [Isaiah] So, Guido and Josh, \Nyou're both pioneers
Dialogue: 0,0:00:18.75,0:00:21.50,Default,,0000,0000,0000,,in developing tools for\Nempirical research in economics.
Dialogue: 0,0:00:21.50,0:00:22.93,Default,,0000,0000,0000,,And so I'd like to explore
Dialogue: 0,0:00:22.93,0:00:25.30,Default,,0000,0000,0000,,where you feel like \Nthe field is heading --
Dialogue: 0,0:00:25.71,0:00:28.08,Default,,0000,0000,0000,,economics, econometrics,\Nthe whole thing.
Dialogue: 0,0:00:28.51,0:00:31.30,Default,,0000,0000,0000,,To start, I'd be interested to hear
Dialogue: 0,0:00:32.17,0:00:35.20,Default,,0000,0000,0000,,about whether you feel\Nthe way in which
Dialogue: 0,0:00:35.20,0:00:38.51,Default,,0000,0000,0000,,the local average treatment \Neffects framework took hold
Dialogue: 0,0:00:38.80,0:00:42.19,Default,,0000,0000,0000,,has any lessons for how \Nnew empirical methods in economics
Dialogue: 0,0:00:42.19,0:00:44.30,Default,,0000,0000,0000,,develop and spread\Nor how they should.
Dialogue: 0,0:00:44.56,0:00:45.96,Default,,0000,0000,0000,,- [Josh] That's a good question.
Dialogue: 0,0:00:46.61,0:00:47.79,Default,,0000,0000,0000,,You go first.
Dialogue: 0,0:00:47.79,0:00:49.46,Default,,0000,0000,0000,,[laughter]
Dialogue: 0,0:00:49.70,0:00:52.94,Default,,0000,0000,0000,,- [Guido] Yeah, so I think \Nthe important thing
Dialogue: 0,0:00:52.94,0:00:58.55,Default,,0000,0000,0000,,is to come up \Nwith good convincing cases
Dialogue: 0,0:00:58.55,0:01:02.21,Default,,0000,0000,0000,,where the questions are clear
Dialogue: 0,0:01:02.40,0:01:05.72,Default,,0000,0000,0000,,and where the methods\Napply in general.
Dialogue: 0,0:01:06.25,0:01:07.56,Default,,0000,0000,0000,,One thing I --
Dialogue: 0,0:01:08.19,0:01:12.00,Default,,0000,0000,0000,,looking back\Nat the subsequent literature.
Dialogue: 0,0:01:12.20,0:01:16.70,Default,,0000,0000,0000,,So I really like the regression\Ndiscontinuity literature
Dialogue: 0,0:01:16.70,0:01:19.67,Default,,0000,0000,0000,,where there were clearly a bunch\Nof really convincing examples
Dialogue: 0,0:01:19.67,0:01:23.38,Default,,0000,0000,0000,,and that allowed people\Nto think more clearly,
Dialogue: 0,0:01:23.38,0:01:27.20,Default,,0000,0000,0000,,look harder \Nat the methodological questions.
Dialogue: 0,0:01:27.40,0:01:28.80,Default,,0000,0000,0000,,Do clear applications
Dialogue: 0,0:01:28.80,0:01:30.60,Default,,0000,0000,0000,,that then allow you \Nto kind of think about,
Dialogue: 0,0:01:30.60,0:01:33.60,Default,,0000,0000,0000,,"Wow, does this type of assumption\Nseem reasonable here?
Dialogue: 0,0:01:33.60,0:01:38.00,Default,,0000,0000,0000,,What kind of things do we not like\Nin the early papers?
Dialogue: 0,0:01:38.50,0:01:39.80,Default,,0000,0000,0000,,How can we improve things?"
Dialogue: 0,0:01:39.80,0:01:44.21,Default,,0000,0000,0000,,So having clear applications \Nmotivating these literatures
Dialogue: 0,0:01:44.21,0:01:46.40,Default,,0000,0000,0000,,I think is very helpful.
Dialogue: 0,0:01:46.80,0:01:48.05,Default,,0000,0000,0000,,- I'm glad you mentioned
Dialogue: 0,0:01:48.05,0:01:49.38,Default,,0000,0000,0000,,the regression \Ndiscontinuity, Guido.
Dialogue: 0,0:01:49.38,0:01:53.30,Default,,0000,0000,0000,,I think there's a lot of \Ncomplementarity between IV and RD,
Dialogue: 0,0:01:54.70,0:01:57.06,Default,,0000,0000,0000,,Instrumental Variables\Nand Regression Discontinuity.
Dialogue: 0,0:02:00.51,0:02:03.26,Default,,0000,0000,0000,,A lot of the econometric\Napplications
Dialogue: 0,0:02:03.26,0:02:04.52,Default,,0000,0000,0000,,of regression discontinuity
Dialogue: 0,0:02:04.52,0:02:07.23,Default,,0000,0000,0000,,are what used to be called \N"fuzzy" RD,
Dialogue: 0,0:02:07.23,0:02:11.62,Default,,0000,0000,0000,,where, you know, it's not discrete \Nor deterministic at the cutoff,
Dialogue: 0,0:02:11.62,0:02:14.90,Default,,0000,0000,0000,,but just the change\Nin rates or intensity.
Dialogue: 0,0:02:14.90,0:02:18.74,Default,,0000,0000,0000,,And the late framework helps us\Nunderstand those applications
Dialogue: 0,0:02:18.74,0:02:21.14,Default,,0000,0000,0000,,and gives us a clear interpretation
Dialogue: 0,0:02:21.14,0:02:25.00,Default,,0000,0000,0000,,for say, something like, \Nin my paper with Victor Lavy,
Dialogue: 0,0:02:25.00,0:02:28.10,Default,,0000,0000,0000,,where we use Maimonides'\Nrule, the class size cutoffs.
Dialogue: 0,0:02:28.43,0:02:30.03,Default,,0000,0000,0000,,What are you getting there?
Dialogue: 0,0:02:30.29,0:02:31.82,Default,,0000,0000,0000,,Of course, you can\Nanswer that question
Dialogue: 0,0:02:31.82,0:02:33.90,Default,,0000,0000,0000,,with a linear \Nconstant effects model,
Dialogue: 0,0:02:34.20,0:02:36.31,Default,,0000,0000,0000,,but it turns out \Nwe're not limited to that,
Dialogue: 0,0:02:36.31,0:02:39.89,Default,,0000,0000,0000,,and RD is still very powerful \Nand illuminating,
Dialogue: 0,0:02:40.63,0:02:42.10,Default,,0000,0000,0000,,even when, you know,
Dialogue: 0,0:02:42.10,0:02:45.67,Default,,0000,0000,0000,,the correlation between the cutoff\Nand the variable of interest,
Dialogue: 0,0:02:45.67,0:02:48.98,Default,,0000,0000,0000,,in this case class size, \Nis partial,
Dialogue: 0,0:02:48.98,0:02:51.00,Default,,0000,0000,0000,,maybe even not that strong.
Dialogue: 0,0:02:52.00,0:02:54.100,Default,,0000,0000,0000,,So there was definitely a kind of,\Na parallel development.
Dialogue: 0,0:02:54.100,0:02:56.40,Default,,0000,0000,0000,,It's also interesting,
Dialogue: 0,0:02:56.60,0:02:59.78,Default,,0000,0000,0000,,you know, nobody talked about\Nregression discontinuity designs
Dialogue: 0,0:02:59.78,0:03:01.22,Default,,0000,0000,0000,,when we were in graduate school,
Dialogue: 0,0:03:01.22,0:03:05.30,Default,,0000,0000,0000,,it was something that other social\Nscientists were interested in,
Dialogue: 0,0:03:05.80,0:03:09.51,Default,,0000,0000,0000,,and that kind of grew up \Nalongside the LATE framework
Dialogue: 0,0:03:09.51,0:03:14.79,Default,,0000,0000,0000,,and we've both done work on \Nboth applications and methods there
Dialogue: 0,0:03:14.79,0:03:18.38,Default,,0000,0000,0000,,and it's been very exciting \Nto see that kind of develop
Dialogue: 0,0:03:18.38,0:03:19.80,Default,,0000,0000,0000,,and become so important.
Dialogue: 0,0:03:20.00,0:03:23.70,Default,,0000,0000,0000,,It's part of a general evolution,\NI think, towards, you know,
Dialogue: 0,0:03:24.00,0:03:27.70,Default,,0000,0000,0000,,credible identification strategies,\Ncausal effects...
Dialogue: 0,0:03:28.63,0:03:30.20,Default,,0000,0000,0000,,less, you know, making econometrics
Dialogue: 0,0:03:30.40,0:03:33.30,Default,,0000,0000,0000,,more about causal questions\Nthan about models.
Dialogue: 0,0:03:33.64,0:03:34.65,Default,,0000,0000,0000,,In terms of the future,
Dialogue: 0,0:03:34.65,0:03:37.86,Default,,0000,0000,0000,,I think one thing that LATE \Nhas helped facilitate
Dialogue: 0,0:03:37.86,0:03:42.70,Default,,0000,0000,0000,,is a move towards more creative,\Nrandomized trials, where,
Dialogue: 0,0:03:42.70,0:03:44.40,Default,,0000,0000,0000,,you know, there's\Nsomething of interest,
Dialogue: 0,0:03:45.50,0:03:48.46,Default,,0000,0000,0000,,it's not possible \Nor straightforward
Dialogue: 0,0:03:48.46,0:03:50.70,Default,,0000,0000,0000,,to simply turn it off or on,
Dialogue: 0,0:03:51.00,0:03:54.58,Default,,0000,0000,0000,,but you can encourage it \Nor discourage it.
Dialogue: 0,0:03:54.58,0:03:58.20,Default,,0000,0000,0000,,So you subsidize schooling \Nwith financial aid, for example.
Dialogue: 0,0:03:59.00,0:04:02.08,Default,,0000,0000,0000,,So now we have a whole \Nframework for interpreting that,
Dialogue: 0,0:04:03.60,0:04:06.90,Default,,0000,0000,0000,,and it kind of opens\Nthe doors to randomized trials
Dialogue: 0,0:04:06.90,0:04:10.30,Default,,0000,0000,0000,,of things that maybe would,\Nyou know,
Dialogue: 0,0:04:10.30,0:04:12.47,Default,,0000,0000,0000,,not have seem possible before.
Dialogue: 0,0:04:14.50,0:04:17.70,Default,,0000,0000,0000,,We've used that a lot in the work\Nwe do on schools in our --
Dialogue: 0,0:04:17.70,0:04:21.16,Default,,0000,0000,0000,,in the Blueprint Lab at MIT,
Dialogue: 0,0:04:22.36,0:04:26.60,Default,,0000,0000,0000,,we're exploiting random assignment\Nand in very creative ways, I think.
Dialogue: 0,0:04:28.10,0:04:31.51,Default,,0000,0000,0000,,- [Isaiah] Related to that, do you \Nsee sort of particular factors
Dialogue: 0,0:04:31.51,0:04:34.30,Default,,0000,0000,0000,,that make for useful research\Nin econometrics?
Dialogue: 0,0:04:34.40,0:04:38.29,Default,,0000,0000,0000,,You've alluded to\Nit having a clear connection
Dialogue: 0,0:04:38.29,0:04:40.30,Default,,0000,0000,0000,,to problems \Nthat are actually coming up
Dialogue: 0,0:04:40.30,0:04:42.65,Default,,0000,0000,0000,,and empirical practice \Nis often a good idea.
Dialogue: 0,0:04:43.29,0:04:45.00,Default,,0000,0000,0000,,- [Josh] Isn't it always \Na good idea?
Dialogue: 0,0:04:45.70,0:04:50.10,Default,,0000,0000,0000,,I often find myself sitting in an\Neconometrics theory seminar,
Dialogue: 0,0:04:50.70,0:04:52.50,Default,,0000,0000,0000,,say the Harvard MIT seminar,
Dialogue: 0,0:04:53.40,0:04:56.35,Default,,0000,0000,0000,,and I'm thinking, "What problem\Nis this guy solving?
Dialogue: 0,0:04:56.35,0:04:57.96,Default,,0000,0000,0000,,Who has this problem?"
Dialogue: 0,0:04:57.96,0:04:59.80,Default,,0000,0000,0000,,And, you know,
Dialogue: 0,0:05:01.60,0:05:04.70,Default,,0000,0000,0000,,sometimes there's an\Nembarrassing silence if I ask
Dialogue: 0,0:05:04.90,0:05:08.30,Default,,0000,0000,0000,,or there might be\Na fairly contrived scenario.
Dialogue: 0,0:05:08.80,0:05:11.60,Default,,0000,0000,0000,,I want to see \Nwhere the tool is useful.
Dialogue: 0,0:05:12.50,0:05:14.90,Default,,0000,0000,0000,,There are some \Npurely foundational tools,
Dialogue: 0,0:05:14.90,0:05:17.60,Default,,0000,0000,0000,,I do take the point, you know, \Nthere are people who are
Dialogue: 0,0:05:18.20,0:05:22.50,Default,,0000,0000,0000,,working on conceptual\Nfoundations of, you know,
Dialogue: 0,0:05:22.60,0:05:25.30,Default,,0000,0000,0000,,it's more -- becomes more like\Nmathematical statistics.
Dialogue: 0,0:05:25.80,0:05:28.20,Default,,0000,0000,0000,,I mean, I remember \Nan early example of that that I,
Dialogue: 0,0:05:28.20,0:05:29.92,Default,,0000,0000,0000,,you know, I struggled to understand
Dialogue: 0,0:05:29.92,0:05:32.50,Default,,0000,0000,0000,,was the idea\Nof stochastic equicontinuity,
Dialogue: 0,0:05:32.50,0:05:35.07,Default,,0000,0000,0000,,which one of my thesis advisors,\NWhitney Newey,
Dialogue: 0,0:05:35.07,0:05:36.90,Default,,0000,0000,0000,,was using to great effect
Dialogue: 0,0:05:37.50,0:05:39.90,Default,,0000,0000,0000,,and I was trying to understand that\Nand there isn't really --
Dialogue: 0,0:05:40.60,0:05:45.20,Default,,0000,0000,0000,,It's really foundational, it's not\Nan application that's driving that,
Dialogue: 0,0:05:45.89,0:05:47.30,Default,,0000,0000,0000,,at least not immediately.
Dialogue: 0,0:05:48.60,0:05:53.20,Default,,0000,0000,0000,,But most things are not like that\Nand so there should be a problem.
Dialogue: 0,0:05:53.80,0:05:59.10,Default,,0000,0000,0000,,And I think it's on the seller \Nof that sort of thing,
Dialogue: 0,0:06:00.10,0:06:02.25,Default,,0000,0000,0000,,you know, because there's \Nopportunity cost,
Dialogue: 0,0:06:02.25,0:06:05.17,Default,,0000,0000,0000,,the time and attention,\Nand effort to understand things
Dialogue: 0,0:06:05.17,0:06:07.20,Default,,0000,0000,0000,,to, you know, \Nit's on the seller to say,
Dialogue: 0,0:06:07.40,0:06:08.90,Default,,0000,0000,0000,,"Hey, I'm solving this problem
Dialogue: 0,0:06:09.40,0:06:12.90,Default,,0000,0000,0000,,and here's a set of results\Nthat show that it's useful,
Dialogue: 0,0:06:12.90,0:06:15.20,Default,,0000,0000,0000,,and here's some insight\Nthat I get."
Dialogue: 0,0:06:16.20,0:06:18.28,Default,,0000,0000,0000,,- [Isaiah] As you said, Josh, great,\Nsort of there's been a move
Dialogue: 0,0:06:18.28,0:06:20.70,Default,,0000,0000,0000,,in the direction of thinking \Nmore about causality
Dialogue: 0,0:06:20.70,0:06:22.80,Default,,0000,0000,0000,,in economics and empirical\Nwork in economics,
Dialogue: 0,0:06:22.90,0:06:24.80,Default,,0000,0000,0000,,any consequences of sort of the --
Dialogue: 0,0:06:24.80,0:06:26.57,Default,,0000,0000,0000,,the spread of that view \Nthat surprised you
Dialogue: 0,0:06:26.57,0:06:28.70,Default,,0000,0000,0000,,or anything that you view\Nas downsides
Dialogue: 0,0:06:28.70,0:06:31.40,Default,,0000,0000,0000,,of sort of the way \Nthat empirical economics has gone?
Dialogue: 0,0:06:31.50,0:06:34.19,Default,,0000,0000,0000,,- [Josh] Sometimes I see, \Nsomebody does IV
Dialogue: 0,0:06:34.19,0:06:38.30,Default,,0000,0000,0000,,and they get a result \Nwhich seems implausibly large.
Dialogue: 0,0:06:38.80,0:06:40.20,Default,,0000,0000,0000,,That's the usual case.
Dialogue: 0,0:06:42.50,0:06:45.22,Default,,0000,0000,0000,,So it might be, you know,\Nan extraordinarily large
Dialogue: 0,0:06:45.22,0:06:48.60,Default,,0000,0000,0000,,causal effect of some \Nrelatively minor intervention,
Dialogue: 0,0:06:49.10,0:06:52.26,Default,,0000,0000,0000,,which was randomized\Nor for which you could make a case
Dialogue: 0,0:06:52.26,0:06:54.49,Default,,0000,0000,0000,,that there's a good design.
Dialogue: 0,0:06:54.90,0:06:58.33,Default,,0000,0000,0000,,And then when I see that,\Nand, you know, I think
Dialogue: 0,0:06:58.90,0:07:00.46,Default,,0000,0000,0000,,it's very hard for me to believe
Dialogue: 0,0:07:00.46,0:07:02.03,Default,,0000,0000,0000,,that this relatively \Nminor intervention
Dialogue: 0,0:07:02.03,0:07:03.72,Default,,0000,0000,0000,,has such a large effect.
Dialogue: 0,0:07:04.10,0:07:06.11,Default,,0000,0000,0000,,The author will sometimes resort
Dialogue: 0,0:07:06.11,0:07:08.69,Default,,0000,0000,0000,,to the local average \Ntreatment effects theorem
Dialogue: 0,0:07:08.69,0:07:10.70,Default,,0000,0000,0000,,and say, "Well, these compliers,
Dialogue: 0,0:07:10.70,0:07:12.70,Default,,0000,0000,0000,,you know, they're\Nspecial in some way."
Dialogue: 0,0:07:13.30,0:07:15.80,Default,,0000,0000,0000,,And, you know, \Nthey just benefit extraordinarily
Dialogue: 0,0:07:15.80,0:07:17.60,Default,,0000,0000,0000,,from this intervention.
Dialogue: 0,0:07:18.10,0:07:20.90,Default,,0000,0000,0000,,And I'm reluctant \Nto take that at face value.
Dialogue: 0,0:07:20.90,0:07:23.75,Default,,0000,0000,0000,,I think, you know,\Noften when effects are too big,
Dialogue: 0,0:07:24.30,0:07:26.78,Default,,0000,0000,0000,,it's because the exclusion\Nrestriction is failing,
Dialogue: 0,0:07:26.78,0:07:29.24,Default,,0000,0000,0000,,so you don't really have the right\Nendogenous variable
Dialogue: 0,0:07:29.24,0:07:31.38,Default,,0000,0000,0000,,to scale that result.
Dialogue: 0,0:07:32.00,0:07:35.70,Default,,0000,0000,0000,,And so I'm not too happy to see
Dialogue: 0,0:07:35.70,0:07:38.80,Default,,0000,0000,0000,,you know, just sort of\Na generic heterogeneity
Dialogue: 0,0:07:38.90,0:07:41.61,Default,,0000,0000,0000,,argument being used \Nto excuse something
Dialogue: 0,0:07:41.61,0:07:43.80,Default,,0000,0000,0000,,that I think might be \Na deeper problem.
Dialogue: 0,0:07:45.19,0:07:47.36,Default,,0000,0000,0000,,- [Guido] I think it played \Nsomewhat of an unfortunate role
Dialogue: 0,0:07:47.36,0:07:49.98,Default,,0000,0000,0000,,when the discussions kind of \Nbetween reduced form
Dialogue: 0,0:07:49.98,0:07:51.70,Default,,0000,0000,0000,,and structural approaches,
Dialogue: 0,0:07:51.70,0:07:55.51,Default,,0000,0000,0000,,where I feel \Nthat wasn't quite right.
Dialogue: 0,0:07:56.09,0:07:58.81,Default,,0000,0000,0000,,The instrumental \Nvariables assumptions
Dialogue: 0,0:07:58.81,0:08:03.62,Default,,0000,0000,0000,,are at the core - structural \Nassumptions about behavior -
Dialogue: 0,0:08:03.62,0:08:05.20,Default,,0000,0000,0000,,they were coming from economic --
Dialogue: 0,0:08:07.10,0:08:09.90,Default,,0000,0000,0000,,thinking about the economic\Nbehavior of agents,
Dialogue: 0,0:08:10.30,0:08:15.00,Default,,0000,0000,0000,,and somehow it got\Npushed in a direction
Dialogue: 0,0:08:15.10,0:08:17.60,Default,,0000,0000,0000,,that I think wasn't \Nreally very helpful.
Dialogue: 0,0:08:18.80,0:08:21.70,Default,,0000,0000,0000,,The way I think, initially the --
Dialogue: 0,0:08:22.80,0:08:26.48,Default,,0000,0000,0000,,we wrote things up, it was \Ndescribing what was happening,
Dialogue: 0,0:08:26.48,0:08:29.49,Default,,0000,0000,0000,,there were a set of methods \Npeople were using,
Dialogue: 0,0:08:29.49,0:08:32.11,Default,,0000,0000,0000,,we clarified what \Nthose methods were doing
Dialogue: 0,0:08:32.81,0:08:38.36,Default,,0000,0000,0000,,and in a way that I think\Ncontain a fair amount of insight,
Dialogue: 0,0:08:39.10,0:08:42.05,Default,,0000,0000,0000,,but it somehow \Nit got pushed into a corner
Dialogue: 0,0:08:42.05,0:08:45.00,Default,,0000,0000,0000,,that I don't think \Nwas necessarily very helpful.
Dialogue: 0,0:08:45.10,0:08:46.85,Default,,0000,0000,0000,,- [Isaiah] I mean, \Njust the language
Dialogue: 0,0:08:46.85,0:08:48.60,Default,,0000,0000,0000,,of reduced form versus structural
Dialogue: 0,0:08:48.60,0:08:50.82,Default,,0000,0000,0000,,I find kind of funny \Nin the sense that,
Dialogue: 0,0:08:50.82,0:08:53.10,Default,,0000,0000,0000,,right, the local average treatment\Neffect model, right,
Dialogue: 0,0:08:53.10,0:08:56.11,Default,,0000,0000,0000,,the potential outcomes model is \Na nonparametric structural model,
Dialogue: 0,0:08:56.11,0:08:58.60,Default,,0000,0000,0000,,if you want to think about it, \Nas you sort of suggested, Guido.
Dialogue: 0,0:08:58.60,0:09:01.26,Default,,0000,0000,0000,,So there's something a little funny
Dialogue: 0,0:09:01.26,0:09:03.34,Default,,0000,0000,0000,,about putting these \Ntwo things in oposition when --
Dialogue: 0,0:09:03.34,0:09:04.69,Default,,0000,0000,0000,,- [Guido] Yes.\N- [Josh] Well, that language,
Dialogue: 0,0:09:04.69,0:09:08.16,Default,,0000,0000,0000,,of course, comes from \Nthe [inaudible] equations framework
Dialogue: 0,0:09:08.16,0:09:09.52,Default,,0000,0000,0000,,that we inherited.
Dialogue: 0,0:09:10.40,0:09:11.53,Default,,0000,0000,0000,,It has the advantage
Dialogue: 0,0:09:11.53,0:09:14.16,Default,,0000,0000,0000,,that people seem to know \Nwhat you mean when you use it,
Dialogue: 0,0:09:14.16,0:09:16.24,Default,,0000,0000,0000,,but might be that people \Nare hearing different,
Dialogue: 0,0:09:16.24,0:09:18.20,Default,,0000,0000,0000,,different people\Nare hearing different things.
Dialogue: 0,0:09:18.30,0:09:20.53,Default,,0000,0000,0000,,- [Guido] Yeah. I think [inaudible]\Nhas sort of become --
Dialogue: 0,0:09:20.53,0:09:22.56,Default,,0000,0000,0000,,used in a little bit \Nof the pejorative way, yeah?
Dialogue: 0,0:09:22.56,0:09:24.75,Default,,0000,0000,0000,,- [Josh] Sometimes.\N- [Guido] [The word].
Dialogue: 0,0:09:24.75,0:09:28.25,Default,,0000,0000,0000,,Which is not really quite what \Nit was originally intended for.
Dialogue: 0,0:09:30.10,0:09:33.09,Default,,0000,0000,0000,,- [Isaiah] I guess something else\Nthat strikes me in thinking about
Dialogue: 0,0:09:33.09,0:09:35.64,Default,,0000,0000,0000,,the effects of the local average\Ntreatment effect framework
Dialogue: 0,0:09:35.64,0:09:38.20,Default,,0000,0000,0000,,is that often folks will appeal to
Dialogue: 0,0:09:38.20,0:09:41.80,Default,,0000,0000,0000,,a local average treatment effects\Nintuition for settings well beyond
Dialogue: 0,0:09:42.00,0:09:43.70,Default,,0000,0000,0000,,ones where any sort \Nof formal result
Dialogue: 0,0:09:43.70,0:09:45.44,Default,,0000,0000,0000,,has actually been established.
Dialogue: 0,0:09:45.44,0:09:50.09,Default,,0000,0000,0000,,And I'm curious, given all the work\Nthat you guys did to, you know,
Dialogue: 0,0:09:50.09,0:09:52.39,Default,,0000,0000,0000,,establish late results \Nin different settings,
Dialogue: 0,0:09:52.39,0:09:54.42,Default,,0000,0000,0000,,I'm curious, any thoughts on that?
Dialogue: 0,0:09:55.36,0:09:57.42,Default,,0000,0000,0000,,- [Guido] I think there's\Ngoing to be a lot of cases
Dialogue: 0,0:09:57.42,0:10:02.20,Default,,0000,0000,0000,,where the intuition \Ndoes get you some distance,
Dialogue: 0,0:10:02.80,0:10:05.20,Default,,0000,0000,0000,,but it's going to be \Nsomewhat limited
Dialogue: 0,0:10:05.20,0:10:07.60,Default,,0000,0000,0000,,and establishing \Nformal results there
Dialogue: 0,0:10:08.40,0:10:09.49,Default,,0000,0000,0000,,may be a little tricky
Dialogue: 0,0:10:09.49,0:10:12.70,Default,,0000,0000,0000,,and then maybe only work \Nin special circumstances,
Dialogue: 0,0:10:14.60,0:10:16.54,Default,,0000,0000,0000,,and you end up\Nwith a lot of formality
Dialogue: 0,0:10:16.54,0:10:19.50,Default,,0000,0000,0000,,that may not quite \Ncapture the intuition.
Dialogue: 0,0:10:19.90,0:10:21.55,Default,,0000,0000,0000,,Sometimes I'm somewhat \Nuneasy with them
Dialogue: 0,0:10:21.55,0:10:24.44,Default,,0000,0000,0000,,and they are not necessarily\Nthe papers I would want to write,
Dialogue: 0,0:10:25.15,0:10:27.22,Default,,0000,0000,0000,,but I do think something --
Dialogue: 0,0:10:27.22,0:10:31.22,Default,,0000,0000,0000,,intuition often does capture \Npart of the problem.
Dialogue: 0,0:10:33.10,0:10:36.30,Default,,0000,0000,0000,,I think, in some sense we were\Nkind of very fortunate there
Dialogue: 0,0:10:36.90,0:10:39.25,Default,,0000,0000,0000,,in the way that the late paper \Ngot handled at the journal,
Dialogue: 0,0:10:39.25,0:10:41.77,Default,,0000,0000,0000,,is that, actually, the editor,\Nmade it much shorter
Dialogue: 0,0:10:42.10,0:10:46.30,Default,,0000,0000,0000,,and that then allowed us to kind of\Nfocus on very clear, crisp results.
Dialogue: 0,0:10:47.10,0:10:51.77,Default,,0000,0000,0000,,Where if you -- you know, this \Nsomewhat unfortunate tendency
Dialogue: 0,0:10:51.77,0:10:52.98,Default,,0000,0000,0000,,in the econometrics literature
Dialogue: 0,0:10:52.98,0:10:55.10,Default,,0000,0000,0000,,of having the papers \Nget longer and longer.
Dialogue: 0,0:10:55.10,0:10:56.69,Default,,0000,0000,0000,,- [Josh] Well, you should \Nbe able to fix that, man.
Dialogue: 0,0:10:56.69,0:10:58.80,Default,,0000,0000,0000,,- [Guido] I'm trying to fix that.
Dialogue: 0,0:10:59.40,0:11:01.62,Default,,0000,0000,0000,,But I think this is an example \Nwhere it's sort of very clear
Dialogue: 0,0:11:01.62,0:11:03.50,Default,,0000,0000,0000,,that having it be short\Nis actually --
Dialogue: 0,0:11:03.50,0:11:04.84,Default,,0000,0000,0000,,- [Josh] You should impose\Nthat no paper
Dialogue: 0,0:11:04.84,0:11:06.66,Default,,0000,0000,0000,,can be longer than the late paper.
Dialogue: 0,0:11:06.66,0:11:08.00,Default,,0000,0000,0000,,- [Guido] That, wow.
Dialogue: 0,0:11:08.00,0:11:09.62,Default,,0000,0000,0000,,That may be great.
Dialogue: 0,0:11:09.62,0:11:11.68,Default,,0000,0000,0000,,- [Josh] At least no theory, \Nno theory paper.
Dialogue: 0,0:11:11.89,0:11:14.30,Default,,0000,0000,0000,,- [Guido] Yeah, \Nand I think, I think...
Dialogue: 0,0:11:14.50,0:11:16.80,Default,,0000,0000,0000,,I'm trying very hard to get\Nthe papers to be shorter.
Dialogue: 0,0:11:16.80,0:11:18.70,Default,,0000,0000,0000,,And I think there's a lot of value
Dialogue: 0,0:11:19.20,0:11:21.48,Default,,0000,0000,0000,,today because it's often\Nthe second part of the paper
Dialogue: 0,0:11:21.48,0:11:26.40,Default,,0000,0000,0000,,that doesn't actually get you much\Nfurther in understanding things
Dialogue: 0,0:11:27.00,0:11:29.87,Default,,0000,0000,0000,,and it does make things \Nmuch harder to read
Dialogue: 0,0:11:30.63,0:11:33.20,Default,,0000,0000,0000,,and, you know, \Nit sort of goes back
Dialogue: 0,0:11:33.20,0:11:36.11,Default,,0000,0000,0000,,to how I think econometrics \Nshould be done,
Dialogue: 0,0:11:36.11,0:11:38.07,Default,,0000,0000,0000,,you should focus on --
Dialogue: 0,0:11:38.70,0:11:41.30,Default,,0000,0000,0000,,It should be reasonably\Nclose to empirical problems.
Dialogue: 0,0:11:41.50,0:11:43.90,Default,,0000,0000,0000,,They should be very clear problems.
Dialogue: 0,0:11:44.80,0:11:48.90,Default,,0000,0000,0000,,But then often the theory\Ndoesn't need to be quite so long.
Dialogue: 0,0:11:48.90,0:11:50.01,Default,,0000,0000,0000,,- [Josh] Yeah.
Dialogue: 0,0:11:51.10,0:11:54.67,Default,,0000,0000,0000,,- [Guido] I think things have gone\Na little off track.
Dialogue: 0,0:11:56.26,0:11:57.75,Default,,0000,0000,0000,,- [Isaiah] A new relatively \Nrecent change
Dialogue: 0,0:11:57.75,0:12:00.23,Default,,0000,0000,0000,,has been a seeming big \Nincrease in demand
Dialogue: 0,0:12:00.23,0:12:02.20,Default,,0000,0000,0000,,for people with sort of \Neconometrics,
Dialogue: 0,0:12:02.20,0:12:04.80,Default,,0000,0000,0000,,causal effect estimation skills\Nin the tech sector.
Dialogue: 0,0:12:05.00,0:12:07.48,Default,,0000,0000,0000,,I'm interested, \Ndo either of you have thoughts
Dialogue: 0,0:12:07.48,0:12:09.84,Default,,0000,0000,0000,,on sort of how \Nthat's going to interact
Dialogue: 0,0:12:09.84,0:12:11.60,Default,,0000,0000,0000,,with the development \Nof empirical methods,
Dialogue: 0,0:12:11.60,0:12:13.95,Default,,0000,0000,0000,,or empirical research\Nin economics going forward?
Dialogue: 0,0:12:14.60,0:12:16.77,Default,,0000,0000,0000,,- [Josh] Well, there's\Nsort of a meta point,
Dialogue: 0,0:12:16.77,0:12:21.00,Default,,0000,0000,0000,,which is, there's this new \Nkind of employer,
Dialogue: 0,0:12:21.80,0:12:27.53,Default,,0000,0000,0000,,the Amazons and the Uber,\Nand, you know, TripAdvisor world,
Dialogue: 0,0:12:28.00,0:12:29.30,Default,,0000,0000,0000,,and I think that's great.
Dialogue: 0,0:12:29.30,0:12:32.60,Default,,0000,0000,0000,,And I like to tell my students\Nabout that, you know, especially --
Dialogue: 0,0:12:32.60,0:12:35.50,Default,,0000,0000,0000,,at MIT we have a lot of \Ncomputer science majors.
Dialogue: 0,0:12:35.50,0:12:37.00,Default,,0000,0000,0000,,That's our biggest major.
Dialogue: 0,0:12:37.40,0:12:42.25,Default,,0000,0000,0000,,And I try to seduce some of those\Nfolks into economics by saying,
Dialogue: 0,0:12:42.25,0:12:45.70,Default,,0000,0000,0000,,you know, you can go \Nwork for these,
Dialogue: 0,0:12:45.80,0:12:49.25,Default,,0000,0000,0000,,you know, companies that people\Nare very keen to work for
Dialogue: 0,0:12:49.25,0:12:50.80,Default,,0000,0000,0000,,because the work seems exciting,
Dialogue: 0,0:12:52.00,0:12:54.25,Default,,0000,0000,0000,,you know, that the skills \Nthat you get in econometrics
Dialogue: 0,0:12:54.25,0:12:56.10,Default,,0000,0000,0000,,are as good or better
Dialogue: 0,0:12:56.10,0:12:59.74,Default,,0000,0000,0000,,than any competing \Ndiscipline has to offer.
Dialogue: 0,0:12:59.74,0:13:01.10,Default,,0000,0000,0000,,So you should at least
Dialogue: 0,0:13:01.40,0:13:04.20,Default,,0000,0000,0000,,take some econ, take some\Neconometrics, and some econ.
Dialogue: 0,0:13:04.80,0:13:07.00,Default,,0000,0000,0000,,I did a fun project with Uber
Dialogue: 0,0:13:07.60,0:13:09.77,Default,,0000,0000,0000,,on labor supply of Uber drivers
Dialogue: 0,0:13:09.92,0:13:12.80,Default,,0000,0000,0000,,and was very, very exciting\Nto be part of that.
Dialogue: 0,0:13:13.10,0:13:15.40,Default,,0000,0000,0000,,Plus I got to drive \Nfor Uber for a while
Dialogue: 0,0:13:15.90,0:13:17.73,Default,,0000,0000,0000,,and I thought that was fun too.
Dialogue: 0,0:13:17.73,0:13:20.70,Default,,0000,0000,0000,,I did not make enough\Nthat I was tempted to
Dialogue: 0,0:13:21.10,0:13:25.10,Default,,0000,0000,0000,,give up my MIT job, \Nbut I enjoyed the experience.
Dialogue: 0,0:13:25.23,0:13:30.90,Default,,0000,0000,0000,,I see a potential challenge to our\Nmodel of graduate education here,
Dialogue: 0,0:13:31.70,0:13:37.40,Default,,0000,0000,0000,,which is, if we're training people\Nto go work at Amazon, you know,
Dialogue: 0,0:13:37.90,0:13:41.19,Default,,0000,0000,0000,,it's not clear why, you know, \Nwe should be paying
Dialogue: 0,0:13:41.19,0:13:42.90,Default,,0000,0000,0000,,graduate stipends for that.
Dialogue: 0,0:13:43.20,0:13:47.28,Default,,0000,0000,0000,,Why should the taxpayer effectively\Nbe subsidizing that.
Dialogue: 0,0:13:47.28,0:13:51.40,Default,,0000,0000,0000,,Our graduate education\Nin the US Is generously subsidized,
Dialogue: 0,0:13:51.40,0:13:53.16,Default,,0000,0000,0000,,even in private universities,
Dialogue: 0,0:13:53.16,0:13:56.10,Default,,0000,0000,0000,,it's ultimately -- there's a lot of\Npublic money there,
Dialogue: 0,0:13:56.10,0:13:59.30,Default,,0000,0000,0000,,and I think the\Ntraditional rationale for that is,
Dialogue: 0,0:13:59.50,0:14:02.14,Default,,0000,0000,0000,,you know, we were training \Neducators and scholars,
Dialogue: 0,0:14:02.14,0:14:05.66,Default,,0000,0000,0000,,and there's a great externality\Nfrom the work that we do,
Dialogue: 0,0:14:05.66,0:14:07.61,Default,,0000,0000,0000,,it's either \Nthe research externality,
Dialogue: 0,0:14:07.61,0:14:09.56,Default,,0000,0000,0000,,or a teaching externality.
Dialogue: 0,0:14:10.10,0:14:12.35,Default,,0000,0000,0000,,But, you know, \Nif many of our students
Dialogue: 0,0:14:12.35,0:14:14.60,Default,,0000,0000,0000,,are going to work\Nin the private sector,
Dialogue: 0,0:14:16.30,0:14:21.70,Default,,0000,0000,0000,,that's fine, but maybe their \Nemployers should pay for that.
Dialogue: 0,0:14:22.12,0:14:23.37,Default,,0000,0000,0000,,- [Guido] But maybe\Nis not so different
Dialogue: 0,0:14:23.37,0:14:26.78,Default,,0000,0000,0000,,from people working \Nfor consulting firms.
Dialogue: 0,0:14:27.20,0:14:28.78,Default,,0000,0000,0000,,It's not clear to me
Dialogue: 0,0:14:28.78,0:14:32.84,Default,,0000,0000,0000,,that the number of jobs\Nin academics has changed.
Dialogue: 0,0:14:33.37,0:14:36.32,Default,,0000,0000,0000,,- [Josh] I feel like this \Nis a growing sector,
Dialogue: 0,0:14:36.32,0:14:39.29,Default,,0000,0000,0000,,whereas consulting -- \Nyou're right to raise that,
Dialogue: 0,0:14:39.29,0:14:42.10,Default,,0000,0000,0000,,it might be the same \Nfor consulting,
Dialogue: 0,0:14:43.30,0:14:44.85,Default,,0000,0000,0000,,but this, you know,
Dialogue: 0,0:14:44.85,0:14:47.50,Default,,0000,0000,0000,,I'm placing more and more \Nstudents in these businesses.
Dialogue: 0,0:14:47.50,0:14:50.40,Default,,0000,0000,0000,,So, it's on my mind \Nin a way that I've sort of,
Dialogue: 0,0:14:50.80,0:14:53.96,Default,,0000,0000,0000,,you know, not been attentive \Nto consulting jobs,
Dialogue: 0,0:14:53.96,0:14:56.92,Default,,0000,0000,0000,,you know, consulting \Nwas always important,
Dialogue: 0,0:14:56.92,0:14:58.95,Default,,0000,0000,0000,,and I think also \Nthere's some movement
Dialogue: 0,0:14:58.95,0:15:02.60,Default,,0000,0000,0000,,from consulting back into research,\Nit's a little more fluid.
Dialogue: 0,0:15:03.90,0:15:07.63,Default,,0000,0000,0000,,A lot of the work in both domains
Dialogue: 0,0:15:07.63,0:15:09.43,Default,,0000,0000,0000,,I have to say, \Nit's not really different
Dialogue: 0,0:15:09.43,0:15:12.73,Default,,0000,0000,0000,,but, you know, people who \Nare working in the tech sector
Dialogue: 0,0:15:12.73,0:15:15.48,Default,,0000,0000,0000,,are doing things that are \Npotentially of scientific interest,
Dialogue: 0,0:15:15.48,0:15:16.80,Default,,0000,0000,0000,,but mostly it's hidden.
Dialogue: 0,0:15:17.10,0:15:18.55,Default,,0000,0000,0000,,Then you really I have to say,
Dialogue: 0,0:15:18.55,0:15:20.90,Default,,0000,0000,0000,,you know, why is the government\Npaying for this?
Dialogue: 0,0:15:21.80,0:15:23.73,Default,,0000,0000,0000,,Yeah, although, yeah, \NI mean to Guidos point,
Dialogue: 0,0:15:23.73,0:15:26.10,Default,,0000,0000,0000,,I guess there's \Na data question here
Dialogue: 0,0:15:26.10,0:15:30.04,Default,,0000,0000,0000,,of it has the sort of \Ntotal [no-neck] sort of say
Dialogue: 0,0:15:31.30,0:15:34.87,Default,,0000,0000,0000,,for-profit sector employment \Nof econ Ph.D. program graduates
Dialogue: 0,0:15:34.87,0:15:38.29,Default,,0000,0000,0000,,increased or has it just been\Na substitution from finance
Dialogue: 0,0:15:38.29,0:15:40.20,Default,,0000,0000,0000,,and consulting towards tech.
Dialogue: 0,0:15:40.30,0:15:42.30,Default,,0000,0000,0000,,- [Josh] I may be reacting \Nto something
Dialogue: 0,0:15:42.30,0:15:44.30,Default,,0000,0000,0000,,that's not really happening.
Dialogue: 0,0:15:44.40,0:15:45.89,Default,,0000,0000,0000,,- [Guido] I've actually \Ndone some work
Dialogue: 0,0:15:45.89,0:15:48.20,Default,,0000,0000,0000,,with some of these tech companies.
Dialogue: 0,0:15:49.10,0:15:52.20,Default,,0000,0000,0000,,I don't disagree with Josh's point \Nthat we need to think
Dialogue: 0,0:15:52.20,0:15:53.83,Default,,0000,0000,0000,,a little bit about \Nthe funding model,
Dialogue: 0,0:15:53.83,0:15:56.39,Default,,0000,0000,0000,,who is it in the end paying \Nfor the graduate education.
Dialogue: 0,0:15:56.71,0:15:59.40,Default,,0000,0000,0000,,But from a scientific perspective,
Dialogue: 0,0:15:59.98,0:16:02.54,Default,,0000,0000,0000,,not only do these places\Nhave great data
Dialogue: 0,0:16:02.54,0:16:04.95,Default,,0000,0000,0000,,and nowadays they tend to be\Nvery careful with that
Dialogue: 0,0:16:04.95,0:16:07.10,Default,,0000,0000,0000,,for privacy reasons,
Dialogue: 0,0:16:07.38,0:16:08.90,Default,,0000,0000,0000,,but they also have great questions.
Dialogue: 0,0:16:10.20,0:16:13.21,Default,,0000,0000,0000,,I find it very inspiring \Nkind of to listen
Dialogue: 0,0:16:13.21,0:16:15.95,Default,,0000,0000,0000,,to the people there and kind of see\Nwhat kind of questions they have,
Dialogue: 0,0:16:15.95,0:16:17.33,Default,,0000,0000,0000,,and often they're questions
Dialogue: 0,0:16:18.20,0:16:21.51,Default,,0000,0000,0000,,that also come up outside \Nof these companies.
Dialogue: 0,0:16:21.51,0:16:27.43,Default,,0000,0000,0000,,I have a couple of papers \Nwith Raj Chetty and Susan Athey,
Dialogue: 0,0:16:27.43,0:16:31.60,Default,,0000,0000,0000,,where we look at ways \Nof combining experimental data
Dialogue: 0,0:16:31.60,0:16:34.00,Default,,0000,0000,0000,,and observational data,\Nand kind of their --
Dialogue: 0,0:16:35.50,0:16:38.60,Default,,0000,0000,0000,,Raj Chetty was interested\Nin what is the effect
Dialogue: 0,0:16:38.60,0:16:42.89,Default,,0000,0000,0000,,of early childhood programs \Non outcomes later in life,
Dialogue: 0,0:16:42.89,0:16:46.33,Default,,0000,0000,0000,,not just kind on test scores,\Nbut on earnings and stuff,
Dialogue: 0,0:16:46.33,0:16:48.30,Default,,0000,0000,0000,,and we kind of developed methods
Dialogue: 0,0:16:48.60,0:16:51.50,Default,,0000,0000,0000,,that would help you shed\Nlight on that, onto some --
Dialogue: 0,0:16:52.76,0:16:56.92,Default,,0000,0000,0000,,in some settings\Nand the same problems came up
Dialogue: 0,0:16:56.92,0:17:00.53,Default,,0000,0000,0000,,kind of in this \Ntech company settings.
Dialogue: 0,0:17:00.80,0:17:03.24,Default,,0000,0000,0000,,And so from my perspective,
Dialogue: 0,0:17:03.24,0:17:05.42,Default,,0000,0000,0000,,it's the same kind of --
Dialogue: 0,0:17:05.42,0:17:07.60,Default,,0000,0000,0000,,I was talking to people \Ndoing empirical work,
Dialogue: 0,0:17:07.60,0:17:09.70,Default,,0000,0000,0000,,I tried to kind of look at these\Nspecific problems
Dialogue: 0,0:17:09.70,0:17:13.37,Default,,0000,0000,0000,,and then try to come up\Nwith more general problems,
Dialogue: 0,0:17:15.11,0:17:18.23,Default,,0000,0000,0000,,we formulated the problems\Nat a higher level,
Dialogue: 0,0:17:18.50,0:17:22.90,Default,,0000,0000,0000,,so that I can think about solutions\Nthat work in a range of settings.
Dialogue: 0,0:17:23.40,0:17:24.84,Default,,0000,0000,0000,,And so from that perspective,
Dialogue: 0,0:17:24.84,0:17:27.57,Default,,0000,0000,0000,,the interactions \Nwith the tech companies
Dialogue: 0,0:17:27.57,0:17:30.30,Default,,0000,0000,0000,,are just very valuable\Nand very useful.
Dialogue: 0,0:17:31.70,0:17:35.03,Default,,0000,0000,0000,,We do have students now\Ndoing internships there
Dialogue: 0,0:17:35.03,0:17:38.39,Default,,0000,0000,0000,,and then coming back \Nand writing more interesting thesis
Dialogue: 0,0:17:38.39,0:17:43.40,Default,,0000,0000,0000,,as a result of their \Nexperiences there.
Dialogue: 0,0:17:44.60,0:17:47.02,Default,,0000,0000,0000,,- [Narrator] If you'd like to watch\Nmore Nobel Conversations,
Dialogue: 0,0:17:47.02,0:17:48.20,Default,,0000,0000,0000,,click here,
Dialogue: 0,0:17:48.20,0:17:50.50,Default,,0000,0000,0000,,or if you'd like to learn\Nmore about econometrics,
Dialogue: 0,0:17:50.50,0:17:53.10,Default,,0000,0000,0000,,check out Josh's \N"Mastering Econometrics" series.
Dialogue: 0,0:17:53.70,0:17:56.72,Default,,0000,0000,0000,,If you'd like to learn more \Nabout Guido, Josh and Isaiah
Dialogue: 0,0:17:56.72,0:17:58.30,Default,,0000,0000,0000,,check out the links \Nin the description.
Dialogue: 0,0:17:59.04,0:18:01.50,Default,,0000,0000,0000,,♪ [music] ♪