Secret Art of Econometrics

Analysing the need to make numerous undocumented subjective choices when estimating econometric models, this book collates these choices, revealing the normative nature of econometric research.Don Webber and Wayne Thomas examine a range of issues impacting econometric analysis, including the importance of specification, (re)framing research problems to fit convention, rhetoric and persuasion, and the pressing need to present statistically significant results. They also explore multiple sources of errors, implicit biases and the lack of critical reflection regarding the strength of results for real-world policymaking. The book concludes that, if done correctly, econometrics can make key contributions to evidence-based policymaking, but that it requires much greater transparency about subjective choices than is currently the case.Scholars of economic methodologies and social science will benefit from the book's insights into the difficulties of formulating econometric models and the data processing choices. The book is especially vital for economic practitioners and policymakers, as it challenges the belief that econometrics provides the strongest possible support for evidence-based policymaking.