Позитивные изменения. Том 1, №1 (2021). Positive changes. Volume 1, Issue 1 (2021)

New ideas were not immediately recognized by the official science. In the early nineties, the work of David Card caused a lot of criticism from researchers, including Nobel laureates, as well as the approach of Imbens and Angrist to the analysis of cause-and-effect relationships. But over the years, these ideas have stood the test of time, and today it is difficult to imagine empirical work that does not rely to some extent on the research of Card, Imbens and Angrist. This approach to applied research has been called the “credibility revolution". “Thanks to them, the role of empirical research in economics has undergone revolutionary changes. Their work has radically changed the approach of scientists to finding answers to empirical questions based on data from natural and field experiments," the Nobel Committee stated.

Economic research over the past half century has shifted into the zone of empirical hypothesis testing. The very purpose of empirical research has also changed. There has been a shift in the attention of science from the description of variations of a particular value (income, unemployment, etc.) to the zone of identification of cause-and-effect relationships, from the description of attributes to the zone of experiments.

The global methodology for assessing Impact effects of socio-economic processes is moving from attributive approaches with the formulation of a controlled experiment towards natural experiments and counterfeit modeling. Here we can recall another Nobel laureate, Daniel Kahneman, who defined a new direction of research in economics — “behavioral economics". Kahneman proved by a simple experiment that a real person, and not some abstract economic person, is prone to irrational choice and that about 80–90 % of people do not follow rational choice.

It is worth noting that the rationality in economics differs from this concept in everyday life. It means a set of some axioms that indicate how to make a choice. We have all the alternatives; we can compare them taking into account all significant indicators and mathematically evaluate the benefits of each option. And as Kahneman's experiments have shown, real people evaluate the probabilities of certain alternatives differently. In the case of a win, for example, people tend to a guaranteed option more often than a risky one (less likely), even if a larger win is embedded in the risk. At the same time, with losses, these same people are more willing to take risks in choosing, expecting that there is a chance that there will be no losses. With his research, Kahneman seemed to combine mathematized approaches of economics with all strict rules and not always rational paradigms of social sciences. A new broad view of socio-economic processes was initiated.

In conclusion, it is worth noting that other scientists researched the idea of human irrationality — Adam Smith, John Maynard Keynes, Herbert Simon and Richard Thaler, as well as many others. “A person is not so irrational as to always act rationally" (as was noted by H.Simon, the author of the theory of limited rationality) — and this cannot be ignored in any way while modeling socio-economic processes.

Is it worth conducting rigorous experiments, using significant resources for this, in order to actually get figures that we ourselves are not inclined to rely on? There is no definite answer. Numbers are inexorable arguments in many cases, but if we decide to rely on them, we need to know exactly how these numbers have been received which part or slice of the multifaceted world they evaluate. Numbers are different from other numbers. And life gives us a proof that our conclusions and estimates cannot be based on numbers alone.

Science is giving us more and more interesting focuses and methods of exploring the world. Opportunities are opening up to try various new methods regarding our processes, to evaluate them according to a system we understand and to find what else can be positively changed in the life of society.

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The information about the 2021 Nobel Laureates in Economics and their contributions can be found at the following links:

https://www.nobelprize.org/prizes/economic-sciences/2021/summary/

https://www.nobelprize.org/prizes/economic-sciences/2021/popular-information/

https://davidcard.berkeley.edu/papers/njmin-aer.pdf

https://www.gov.uk/government/publications/impacts-of-minimum-wages-review-of-the-international-evidence

https://www.sciencedirect.com/science/article/abs/pii/0304407686900382

https://www.aeaweb.org/articles?id=10.1257/jep.24.2.3

Импакт-инвестирование как предмет исследования: 10 публикаций 2021 года

Елизавета Захарова