Alwyn Young - Research
I use the bootstrap to study a comprehensive sample of 1400 instrumental variables regressions in 32 papers published in the journals of the American Economic Association. IV estimates are falsely significant between ⅓ and ½ of the time, include the OLS point estimate in their 99 percent confidence interval from 92 to 94 percent of the time, allow the rejection of the null that OLS estimates are unbiased at the .01 level only 8 to 14 percent of the time, and have a ln mean squared error around the 2SLS population moment that is on average 1.52 greater than that of OLS estimates around the same value. In finite samples IV methods provide information that is credibly more accurate and substantively different than OLS in only about one in every twenty coefficients. In addition, I find instrument strength is much weaker than believed, while established weak instrument pre-tests are largely uninformative and weak instrument robust methods generally perform no better or substantially worse than 2SLS.
I propose bias and effective degrees of freedom corrections, based upon mimicking the first two moment properties of a chi-squared variable, to statistical inference using robust and clustered covariance matrices. Simulation, using 1378 practical regression examples found in 44 experimental papers, shows that these corrections render the test statistics nearly exact in the face of ideal iid normal errors and provide large improvements in the accuracy of statistical inference in the presence of distinctly non-iid non-normal errors.
Stata code (updated 10/2016): edfreg.ado file and edfreg.sthlp, code that allows users to call for effective degrees of freedom corrections in their robust and clustered regressions. The updated version runs faster and allows for absorbed fixed effects, weights and noconstant.
I follow R.A. Fishers The Design of Experiments, using randomization statistical inference to test the null hypothesis of no treatment effect in a comprehensive sample of 2003 regressions in 53 experimental papers drawn from the journals of the American Economic Association. Randomization tests reduce the number of regression specifications with statistically significant treatment effects by 30 to 40 percent. An omnibus randomization test of overall experimental significance that incorporates all of the regressions in each paper finds that only 25 to 50 percent of experimental papers, depending upon the significance level and test, are able to reject the null of no treatment effect whatsoever. Bootstrap methods support and confirm these results.
Published Papers by Topic
Macroeconomic Implications of Worker Self Selection
"Structural Transformation, the Mismeasurement of Productivity Growth, and the Cost Disease of Services." American Economic Review 104 (November 2014): 3635-67.
The Aids Epidemic and African Growth
"In Sorrow to Bring Forth Children: Fertility amidst the Plague of HIV." Journal of Economic Growth 12 (December 2007): 283-327.
The Gift of the Dying: The Tragedy of AIDS and the Welfare of Future African Generations. Quarterly Journal of Economics 120 (May 2005): 423-466.
Growth and Reform in the People's Republic of China
Gold into Base Metals: Productivity Growth in the Peoples Republic of China during the Reform Period. Journal of Political Economy 111 (December 2003): 1220-1261.
The Razors Edge: Distortions and Incremental Reform in the Peoples Republic of China. Quarterly Journal of Economics 115 (November 2000): 1091-1135.
East Asian Productivity Growth
The Tyranny of Numbers: Confronting the Statistical Realities of the East Asian Growth Experience. Quarterly Journal of Economics 110 (August 1995): 641-680.
Lessons from the East Asian NICs: A Contrarian View. European Economic Review 38 (1994): 964-973.
A Tale of Two Cities: Factor Accumulation and Technical Change in Hong Kong and Singapore. In NBER, Macroeconomics Annual 1992. Cambridge, MA: MIT Press, 1992.
Models of Endogenous Growth
Growth without Scale Effects. Journal of Political Economy 106 (February 1998): 41-63.
Substitution and Complementarity in Endogenous Innovation. Quarterly Journal of Economics 108 (August 1993): 775-807.
Invention and Bounded Learning by Doing. Journal of Political Economy 101 (June 1993): 443-472.
Learning by Doing and the Dynamic Effects of International Trade. Quarterly Journal of Economics 106 (May 1991): 369-405.
Ballistic Missile Defense
Ballistic Missile Defense: Capabilities and Constraints. The Fletcher Forum 8 (Winter 1984).
Reprinted in Department of Defense, Current News, Special Edition, No. 1142, 25 April 1984 and Air War College, Strategic Nuclear Force Posture, Vol. II, Chap. 5, December 1984.
"The Gini Coefficient for a Mixture of Ln-Normal Populations." December 2011. (Data and programmes).