The Best Skill in Research

Market Power Changes

If someone asked me at the end of my undergraduate career what I thought was the most important research skill for an economist to acquire, I would have said something about finding good identification strategies.

I don’t think that anymore.

But let me review that one first. An identification strategy is a combination of data and setting that provides the conditions to empirically estimate a causal effect. The best research often does this in a clever way. Sometimes you get to create the conditions, such as in a paper released last week where economists randomly gave villages in Bangladesh masks to see it reduced the transmission of COVID (it did, by 10%!).

But most of the time, you have to be clever. I can claim a victory here. While in graduate school, I was interested in how smartphones affect child injuries. I had read an article claiming that smartphones distracted parents from caring for their children, and as a result the kids were getting hurt. I had a clever way to look at that! I collected data on when cities got 3G, the key network enabling the smartphone’s distractions. I wrote a paper showing that when cities got 3G, injuries to children under 5 increased by 10%. (A long time ago I made a video about the research.)

Finding good identification strategies is still an important skill. But lately I think the most important skill is discernment. Discernment is that ability to judge the value of projects and ideas. There are two ways discernment plays an important role.

First, you need to discern the low-value projects from the high-value projects. Researchers have limited time and resources. If you have the potential to create high-value research, you can’t waste your time on the low-value projects. This principle was summarized by Richard Hamming, the great mathematician. In his book The Art of Doing Science and Engineering he recounts his interactions with colleagues. He was surprised by how many of the top scientists did not have a good answer for what the most important questions in their field were. He then asked, “If what you are working on is not important and not likely to lead to important things, then why are you working on it?” If you want to be a good researcher, you need to separate good ideas from great ideas.

Second, discernment helps you turn great ideas into the best ideas. Think of this like the Elon Musk effect. Musk recognized that electric cars and space were important business frontiers. But so did many others. Yet Musk has this skill of discernment where he can turn these great ideas into the best ones. The same goes for great researchers. Sometimes it is a really little tweak to the paper, like how they write the introduction, but that turns the paper from a forgettable project into a brilliant masterpiece.

How do we cultivate discernment? The current practice is to read the best research. The belief is that exposing yourself to the best research will help you gain a taste for the best ideas. It works, but only to an extent. Just because I know that Shang-Chi was a great Marvel movie doesn’t mean I know why it was great or how to create something similar.

A helpful step is to add contrast. Why was this research good and other projects not as good? Continuing with Marvel movies, we can look at DC movies and notice differences in what makes Marvel movies great and DC movies suck. But in research contrast is hard. Only sometimes do you have a good comparison that will help you see these key differences.

So how do we cultivate discernment? I honestly do not know. If I did, I would be doing it! But I’m putting it out there because I think it’s a crucial skill to success that I rarely here discussed.

Market Power changes

My semester started this last week, and with the increased demand on my time I decided to change some things with Market Power. The change you’ll notice the most is that there is no video today. Sorry!

The main change is that I’m reducing the frequency of videos. Weekly videos are incredibly demanding and they make it hard for me to deliver the best possible videos. My biggest concern is making well-researched videos that will get people interested in economics. Publishing weekly makes it hard for me to dive into the research and create better videos. I decided to take extra time last week to read more about my next video’s topic (gangs!) and I’m grateful for the additional insights that came as a result. I’m trying to trade quantity for quality.

Another change is that I’ll be focusing more on topics at the intersection of political economy and development. This is not a huge change, since I have already been making these types of videos. But I wanted to have a more recognizable theme behind the videos.

I’m hoping these changes will really help the Market Power community grow!

China, redux

Last week I wrote about China’s invisible influence on America’s culture. If you want a sliver of that influence, you can go watch Shang-Chi. The movie illustrates more of the direct influence that I attributed to Japan. Just like anime is a Japanese cultural export, martial arts movies are a Chinese cultural export. So on the surface, Shang-Chi looks like that direct influence.

But behind the scenes, the indirect influence is more important. The project was designed to be a movie that would go big in China. The cast is entirely Asian (with the exception of one character, who has something like two lines). It starts in San Francisco (the most Asian American city) and quickly moves to recognizable Chinese locations. The backstory of Shang-Chi was scrubbed to remove offensive Asian imagery. Marvel poised this movie to be a huge hit for the Chinese market.

And yet, it may not even get released in China. It’s the first Marvel movie to not immediately receive approval for distribution in the Chinese market. We don’t know why, but it does make you wonder how that affects the next Shang-Chi film.

By the way, the movie was fantastic! One of Marvel’s best individual stories. And if you time your showing properly, you can see it at low COVID risk. I was in a theater with only two other people.