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“We have to unlock the economic discoveries otherwise we can’t change the world”

2024-04-16 17:24:00

John A. List is one of the world’s most influential economists, according to RePEc. He held a lecture in Budapest about how social scientists should alter their approach to research design and science communication to achieve real changes in the world. The professor presented three lessons from his career after receiving the John von Neumann Prize of 2022 from the Rajk College for Advanced Studies of Corvinus on April 8, 2024.
Budapesti Corvinus Egyetem

Surely, many of us wondered why social scientists could not always react effectively to the COVID pandemic and why they struggle to solve global issues like climate change or poverty. Much research is conducted and shared in scientific journals, and authors often support the relevance of their work by recommending it to policymakers and practitioners. How come they rarely pay attention, and the ideas of brilliant minds are only occasionally implemented in practice?  

John A. List is known for establishing field experiments as a tool in empirical economic analysis. His research covers a broad spectrum, from behavioral economics to charity and education. However, during the past two decades, he has also focused on how “the science of using science should be changed”. After receiving the award, he held a lecture in Budapest about the lessons he learned while researching this issue, being an advisor for President Bush, and working as a chief economist at Uber, Lyft, and, currently, Walmart. 

Lesson 1: “We really need policy-based evidence” 

While working at the University of Chicago, Professor List became aware of the surrounding societal problems. Chicago Heights is a neglected part of the metropolitan area where the lack of education causes inequalities. The researcher and his colleagues started exploring how to ensure each child has an opportunity to succeed and soon realized that this process should start as early as possible. They founded an early childhood center where they implemented a new educational program to help the local community.  

“I always wanted to use the world as a laboratory”, the professor explained about his approach. The center did not only provide opportunities for the people of Chicago Heights but also for researchers to explore the progress the children made and publish their findings. The results were promising. Therefore, Professor List approached politicians and decision-makers with the idea of scaling the educational program. When he got rejected multiple times, he realized that there may be an underlying problem.  

He started to explore the scaling practices used by economists in scientific papers. He found that the state of the literature was not very promising in this regard. Research designs often failed to consider how the findings could be extended. “There is rarely a question asked from the beginning whether the study is scalable”, he claimed in his lecture in Budapest.  

He recommended that the assignment mechanism in experiments should be controlled in order to model from the beginning what the scaling would look like. Researchers should take replications more seriously, just like in medical studies, and the critical, unscalable ingredients should be considered too. For example, highly qualified early childhood educators would have been needed to replicate the educational program in other towns and areas. This human factor means a limitation for scaling because the number of qualified educators should be considered. “We really need policy-based evidence. Researchers have to explain the real value and the limitations of their findings”, the professor emphasized.   

Lesson 2: “We have to unlock the economic discoveries” 

The scientific explanation of scaling and its economic theory was published by professor List, Susan Suskind and other colleagues in multiple reputable academic journals. However, each time when the professor was presenting these findings, almost anyone in the audience knew about them or had read these papers. “The problem in academia is that you’re lucky if three people read your paper: the journal editor and the reviewers. How can we change the world if we don’t reach the people?”  

These experiences motivated him to communicate his findings to a wider audience. Therefore, he wrote a book called The Voltage Effect. “You have to write it so that a trucker could read it”, he emphasized the importance of reformulating scientific findings and communicating them with the help of metaphors, everyday terms, and approachable stories. “We have to unlock the economic discoveries otherwise we can’t change the world.” 

Lesson 3: “We should value private partnerships” 

Scientific results in the field of economics can also be valuable to companies. According to professor List, private partnerships provide unique research opportunities. When he was working as the chief economist of Uber in 2017, the #DeleteUber story happened. The movement started on social media as a response to Uber’s actions during a protest at New York’s John F. Kennedy Airport against Trump’s travel ban. The team of Professor List was called to solve the problem of drivers swiftly leaving the company.  

They came up with the idea of introducing tipping in the Uber app to encourage and attract drivers. The team of economists was interested in how much service users would tip and how this would affect the income and the motivation of drivers, and finally solve the company’s crisis. “We suddenly had the chance to conduct a nationwide field experiment about generosity”, the researcher explained. Key to this project was that the researcher agreed with Uber on clear terms and conditions for publishing results of the field experiment. “Good agreements lead to a win-win situation. As researchers, we should value private partnerships”, the professor concluded his presentation. 

The whole presentation can be watched here. 

About the award: 

Since 1995, the John von Neumann Award has been awarded annually by the Rajk College for Advanced Studies at Corvinus to scientists who have made an outstanding contribution to the development of the exact social sciences and have thus had a significant impact on the professional development and thinking of the students. The John von Neumann Prize is the first and, to date, the only Hungarian prize that recognizes international achievements in economics. It is also unique because the members of the Rajk College, the students decide on the winner. 

Written by Tünde Taxner 

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GEN.:2024.06.17. - 07:54:56