Psychics, data, theory, and economics

When Dr Bem’s study on psi was released, I chose to focus my discussion on how the study – if perfect and accepted – would give us a test of determinism vs free will.  When I initially saw the study, two things entered my head – and were filled up during a coffee meeting with a political scientist friend of mine:

  1. This acts as a test of determinism vs free will,
  2. It is MORE likely to lead to a realisation, and decision around, the weakness of statistical methods then to achieve any sort of belief about psi.  This is a good thing, as it is important to understand causal mechanisms when using data.

I was surprised, pleasantly, at the pace that psychologists actually moved onto that second point – see here (ht Marginal Revolution).

Now this is also a major point for economics, as has been pointed out by Chris Blattman and Alex Tabarrok (ht Offsetting Behaviour).  As discussed in this comment on the post on neo-classical economics, economists do recognise many of these limitations – which is why we often seem “pigheadedly” obsessed with theory.

There are ebbs and flows of course, when Chris states:

I don’t know if I believe a single cross-national result any longer.

I have to agree.

However, the fact that economists don’t feel like they can interpret the data cleanly enough, combined with the fact that the economic method is so broad that we can often explain the same set of data with entirely different models, with entirely different policy conclusions, is what makes it interesting 😉

  • Falafulu Fisi

    Psi is bullsh*t. It doesn’t exist. For it to exist, it means that all known laws of physics must be contradicted. If laws of physics are being contradicted, then it means that everything we (conscious observer on this universe) encounter is just illusion. But we know that we really exist (ie, no illusion). I don’t know why psychologists are wasting time & money doing research in bullsh*t.

  • Falafulu Fisi

    Matt said…
    the fact that the economic method is so broad that we can often explain the same set of data with entirely different models

    Matt, can you give some examples please? There is a huge difference between descriptive statistical analysis and modeling.

  • Jim Rose

    Falafulu Fisi,

    for examples, compare the 9 schools of marcoeconomic thought on inflation, unemployment and the business cycle.

    another example is the clashing views of economists on the successes of privatisation or deregulation using the same data.