Romance Econometrics

I had a mentor at BYU, Prof. James McDonald, who tried to convince us that

  • Econometrics is Fun.
  • Econometrics is Easy.
  • Econometrics is Your Friend.

One of his classes made a bronze plaque out of it for him. He also tried to convince us that Economics is Romantic because this one guy took a girl to his class on a date and she married him anyway. Because he was one of the economists I’ve tried to model my life after, I’ve always been on the lookout for ways to convince people that econometrics is, in fact, fun, friendly, easy, and romantic.

A while back, Bill Easterly blogged about how marriage search is like development, and in the process talking about how unromantic economists can be:

I recently helped one of my single male graduate students in his search for a spouse.

First, I suggested he conduct a randomized controlled trial of potential mates to identify the one with the best benefit/cost ratio. Unfortunately, all the women randomly selected for the study refused assignment to either the treatment or control groups, using language that does not usually enter academic discourse.

With the “gold standard” methods unavailable, I next recommended an econometric regression approach. He looked for data on a large sample of married women on various inputs (intelligence, beauty, education, family background, did they take a bath every day), as well as on output: marital happiness. Then he ran an econometric regression of output on inputs. Finally, he gathered data on available single women on all the characteristics in the econometric study. He made an out-of-sample prediction of predicted marital happiness. He visited the lucky woman who had the best predicted value in the entire singles sample, explained to her how he calculated her nuptial fitness, and suggested they get married. She called the police.

He goes on from there to describe how he eventually did find a mate and makes a comparison with development and over-reliance on econometric methods. As popular as it is in Libertarian circles to bash on econometrics, I’d like to defend empirics by pointing out that his regression advice was not sound:

1 – The suitor’s regressions ignored the self-selection bias. Regressions only tell us what the ‘average’ effects are, that is the effect for the ‘average’ person. Making the average guy happy is only relevant if he is the average guy. Economists being the strange lot we are, it is likely that it takes a special kind of person to marry one of us. He ought to have found a bunch of guys very similar to himself and examine the qualities that made a difference from among (and this is key) the population of women willing to marry guys like him – the women who self-select themselves into our group. If he then approached a women who was not in that group, no wonder he was rejected! I knew I had my work cut out for me since I was in junior high: a Latter-day Saint economist-in-embryo who read Shakespeare “in the original Klingon”, and who carried a briefcase to school? Small sample sizes indeed!

2 – He ignored endogeneity. Instead of trying to convince her that research showed she would make him happy, he needed to present research that demonstrated he would make her happy, and that’s the other half of the regression: male qualities on marital happiness. No wonder she rejected him: his regressions didn’t answer her question!

Personally, I took more of a Bayesian approach. Bayesians believe that a lot of things in life (like regression coefficients) are random and over time we get better and better signals about where the truth is, but we only ever approach it by degrees. First, by trying to become a friend, I identified if a woman was in the group of people who might marry someone like me. Each interaction gave me more information about the error term and the regression coefficients about fostering a happy, loving friendship that could endure. After any failed relationship, I had a new variable or two to add to my equations and I understood the ‘relationships’ between relationship variables better. That might be about finding out different things I needed (hunh, so her political affiliation isn’t as important as I thought and her willingness to smile at me is vital) or about learning more and better policies over time that I could enact to make her happier (tips for being a better listener or learn to identify her love languages and feed them to her regularly).

One of the most important regression-related romance tips I learned was to control the variables I could control, and leave the residual in God’s hands. I recall a graduate labor economics research seminar where the presenter claimed that the marriage market always cleared. I complained that I was willing to supply a great deal more marriage than had ever been demanded at prevailing prices. I was reassured that the marriage market clears in equilibrium, and I might not have found my equilibrium yet. The presenter’s prediction was, thankfully, prescient: I found a buyer a year later, and last week we celebrated 5250 days of married bliss.

Nightcap

  1. Second World soft power Ken White, Asian Review of Books
  2. Alas my love, you do me wrong Roderick Long, Policy of Truth
  3. The great fear of 1776 Jeffrey Ostler, Age of Revolutions
  4. Will no one defend free trade? Shikha Dalmia, the Week

Nightcap

  1. To love is no easy task (America is just fine) Rachel Vorona Cote, New Republic
  2. Chronic vomiting (medical marijuana) Christopher Andrews, OUPblog
  3. The Neanderthal renaissance Rebecca Wragg Sykes, Aeon
  4. A mild defense of Andrew Johnson (the American president) RealClearHistory

Afternoon Tea: Death and Life (1916)

From my favorite artist, the Austrian Gustav Klimt:

nol art klimt death and life 1916
Click here to zoom

My son was born a few hours ago. If all went according to plan (I scheduled this post last weekend), I am in a state of pure love and joy as a another Christensen is added to the troop.

Nightcap

  1. Why the left needs “bottom” Chris Dillow, Stumbling & Mumbling
  2. How Adam Smith proposed to have his cake and eat it too Branko Milanovic, globalinequality
  3. Can relationship anarchy create a world without heartbreak? Sophie Hemery, Aeon
  4. The Lies We Were Told Simon Wren-Lewis, Mainly Macro

Is it always wrong to be angry?

Recently it was brought to my attention a text by a Brazilian journalist “chocked with the anger the Brazilian middle-class has for Lula,” evidenced in the celebrations over Lula’s imprisonment. Honestly, I couldn’t finish reading it because I have better things to do, but in the first lines, she questions how people can be so angry and at the same time rejoicing while Brazil goes through such a turbulent moment. In her understanding, Lula represented the aspirations of millions of Brazilians, and these aspirations are now failing.

Ironically, I believe I know where her frustration comes from. Marxism is nothing but a Christian heresy.  Marx belongs to the group of 19th-century intellectuals who declared that God is dead. However, Marx was not able to get rid of all the Christian ethos. He simply transformed the working class into the suffering Messiah, the socialist intellectuals (like himself) into prophets and the future communist society into Paradise. Classical liberalism has its roots in Christianism, and Marxism is one step further away from it.

One of the most basic Christian teachings (expressed by Jesus himself) is “love your enemies.” Maybe this doesn’t sound controversial today, but it certainly was in 1st century Palestine. My understanding is that, as a deformed form of Christianity, Marxism is questioning how people in Brazil are failing to love Lula, their enemy.

However, Jesus didn’t simply say “love your enemy.” He went on to explain what he meant by love. Love in a Christian sense is less a feeling (although it is also a feeling) and more an attitude. It is mostly to follow the 10 commandments in our relationship with God and with other people.

The love Marxists preach lacks definition and as so lacks meaning. Therefore it is open to abuse. The love Christians preach is deep and complex, and not always easy to understand or to put into practice. But it is certainly not shallow. It is possible, Biblically speaking, to love your enemy and at the same time rejoice with justice.

Some may argue that this is not necessarily due to Christianity. Some philosophical school that predates Christianism (such as stoicism) preached something similar. I’m not going to argue about that. I’m not doing the most scholarly argument here, so you can’t take it or leave it.

Some may argue that the journalist I’m referring to is not a Marxist. To those, I quote John Maynard Keynes (who was not always a very good economist, but sometimes was very accurate in his observations about life):

Practical men who believe themselves to be quite exempt from any intellectual influence, are usually the slaves of some defunct economist.

As a Christian, I don’t hate Lula and I don’t rejoice in his suffering. But I’m certainly rejoicing with justice. It may be hard to understand or to accept, but while I love my enemy I don’t necessarily approve his actions. And I certainly don’t consider my enemy my friend. It’s complex. As C.S. Lewis put it “people who have never been to Narnia find these things hard to understand.”