Money and Markets: Essays in Honor of Leland B. Yeager

76 Steven B. Caudillwould no doubt have insisted that Poisson regression either be used instead of OLSor in addition to OLS. This is an example of the water-down theory. The idea is nottoo important and the data are not of high quality, so the usual standard forempirical work does not apply. In the end, we have no structural model, a “proforma reduced form” model full of proxies, and no advanced econometric methodsused. In short, we have a bad regression. 10Reducing the number of bad regressionsThere is some hope for reducing the number of bad regressions in empiricalresearch. As many of the problems with public choice empirical research stem fromthe gap between theory and model, some effort to close the gap is helpful. Help forthe sociology of economics is another matter because these papers lack a theorysection. A change in culture among economists would help improve the quality ofempirical research. In our roles as teachers, referees, and editors, we can bettereducate young economists to consume, produce, and appreciate sound empiricalwork. As referees and editors we can stop publishing the stuff. I elaborate on thesesuggestions in the following paragraphs.I offer four suggestions that might help reduce the problem of bad regressions inthe PC area: (1) omit the empirical work from the paper; (2) require that data usedin the papers be made publicly available; (3) reward/publish work on proxyvariables; and (4) remind those in the profession in their roles as educators andreferees to demand improvements in the quality of empirical work. I discuss themerits of each of these suggestions in turn.1. Omit the empirical section. An obvious suggestion is to simply omit the regressionsfrom the paper entirely. The data problems make the interpretation of the empiricalresults impossible. The results do not serve the goals of measurement andestimation and should therefore be omitted. This would save author, editor, andreader time.The implications of this suggestion are very different for papers in the areas ofpublic choice and the sociology of economics. Papers in the area of public choicehave a theory section and an empirical section. If the empirical section containingthe bad regressions is eliminated, the paper could possibly survive. Consider thenew PhD student I mentioned in the Introduction. Little would have been lost if hispresentation had not made mention of the “altitude of a state.” Although theempirical section adds nothing, the presence of the theory section gives the papersome chance of survival.The consequences of omitting bad regressions from sociology of economicspapers are fatal. These papers are purely empirical and contain no theory section.Without the empirical section, the paper no longer exists. In light of this indictmentone might suppose that I argue that these papers should not be written. I do not. Myhope is that papers in the sociology of economics will no longer be published inmainstream economics journals.