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Volume 7 - Number 2 | July 2023

A partial solution for the replication crisis in economics

William M. Briggs

12/07/2023 109 137 0
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Bayes factors Hypothesis testing Predictive modeling Replication crisis.

Abstract:

Purpose
Important research once thought unassailable has failed to replicate. Not just in economics, but in all science. The problem is therefore not in dispute nor are some of the causes, like low power, selective reporting, the file drawer effect, publicly unavailable data and so forth. Some partially worthy solutions have already been offered, like pre-registering hypotheses and data analysis plans.

Design/methodology/approach
This is a review paper on the replication crisis, which is by now very well known.

Findings
This study offers another partial solution, which is to remind researchers that correlation does not logically imply causation. The effect of this reminder is to eschew “significance” testing, whether in frequentist or Bayesian form (like Bayes factors) and to report models in predictive form, so that anybody can check the veracity of any model. In effect, all papers could undergo replication testing.

Originality/value
The author argues that this, or any solution, will never eliminate all errors.

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