Should We Care About Replication?

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Over the last week, there has been a lot of chatter on social media about replication (or lack thereof) of empirical studies in economics. This springs up from time to time where people note that this or that study is hard to replicate. Other times, people point out that there is simply an absence of replication studies that are done each year. The discourse around this is that the failure to have a branch of the literature dedicated to replication is a failure of the profession. Some even go so far to say that this just demonstrates that the entire field of economics is nonsense.I think that it is worth having a conversation about these issues, but that the discourse largely misses the point. Sometimes missing the point is deliberate because people are acting in bad faith.Thus, in today’s newsletter, I would like to think through some of these issues in a much more serious way. First, I would like to talk about why replication matters. Then, I would like to address some problems with the criticism. For example, by appealing to certain statistics, it is easy to weave a narrative. However, it is important to recognize that these statistics reflect equilibrium outcomes. In addition, it is important to understand what replication failures do and do not mean for the usefulness of economics. Finally, I would like to conclude by discussing the importance of price theory (of course).Setting the StageLet me begin by saying that I think replication is important. In part, it is important because it helps us to root out fraud in the profession. If people are making up data or manipula…