Method myopia

Abstract

Method myopia is defined as theoretical rhetoric absent empirical discernment regarding flavor-of-the-day econometric methodologies. This Fellows Address discusses why method myopia is pervasive, what factors contribute to the pervasiveness, why is likely it to increase, and finally, a possible remedy. To that end, incentive structures facing researchers, reviewers, and editors are considered within the life-cycle of a typical econometric methodology. Considering our discipline is empirically driven, there are potentially large costs by using flavor-of-the-day methodologies when an alternative -- possibly leading to different economic results and policy responses -- is the appropriate method. Furthermore, method myopia can notably restrict the set of research problems examined thereby creating additional, potentially large, opportunity costs. Finally, over-selling the superiority/completeness/correctness of results from such flavor-of-the-day methodologies to policy makers can not only be costly in the particular case, but can undermine the long-term credibility of our disciplinary advice to policy makers.