The Importance of Econometric Artillery

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The effect of the minimum wage on employment, the effect of class size on educational attainment are three incredibly contentious policy issues in microeconomics. At the macro level, at the macrolevel, I'll pick the stimulus package of 2009. So here are four issues that we as economists are expected to talk about. And so we roll out tremendous econometric artillery along the lines that you've mentioned. But they take a lot of time and effort to do correctly with the data.

Joshua Angrist of the Massachusetts Institute of Technology talks to EconTalk host Russ Roberts about the craft of econometrics--how to use economic thinking and statistical methods to make sense of data and uncover causation. Angrist argues that improvements in research design along with various econometric techniques have improved the credibility of measurement in a complex world. Roberts pushes back and the conversation concludes with a discussion of how to assess the reliability of findings in controversial public policy areas.