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Econometrica Vol. 92 No. 4 2024

Presidential Address: Economics and Measurement: New Measures to Model Decision Making

Ingvild Almås1,2; Orazio Attanasio3,4,5; Pamela Jervis6,7,8,9

1 Institute for International Economics, Stockholm University · 2 Norwegian School of Economics · 3 Department of Economics, Yale University. · 4 FAIR at Norwegian School of Economics · 5 NBER · 6 Department of Industrial Engineering, Universidad de Chile · 7 Institute for Research in Market Imperfections and Public Policy · 8 Institute for Fiscal Studies · 9 Center for Research in Inclusive Education

Abstract

Most empirical work in economics has considered only a narrow set of measures as meaningful and useful to characterize individual behavior, a restriction justified by the difficulties in collecting a wider set. However, this approach often forces the use of strong assumptions to estimate the parameters that inform individual behavior and identify causal links. In this paper, we argue that a more flexible and broader approach to measurement could be extremely useful and allow the estimation of richer and more realistic models that rest on weaker identifying assumptions. We argue that the design of measurement tools should interact with, and depend on, the models economists use. Measurement is not a substitute for rigorous theory, it is an important complement to it, and should be developed in parallel to it. We illustrate these arguments with a model of parental behavior estimated on pilot data that combines conventional measures with novel ones.

DOI
10.3982/ecta21528
Volume
92
Issue
4
Pages
947-978
Language
en
Sources
openalex crossref

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