The economic research race and Cyclone Sandy

In empirical economic research we live in the age of the randomistas where whole departments do nothing else but look for random events to give them some variation to identify a causal relation. Cyclone Sandy looks like providing a lot of random variation so you can bet your bottom dollar that right at this moment whole cohorts of PhDs and junior researchers in the US and beyond are thinking of how they can get a top paper out of Cyclone Sandy. The race is on. Let us reflect on the sorts of research we should expect to emerge.

The early birds in the race will have got going over a week ago when the storm was approaching. They will be looking for anticipation effects and trying to observe behaviour you would not normally see ‘in the wild’. Expect papers to come out on hoarding behaviour,on anticipating  investors betting on companies that would benefit or lose from a cyclone, on the speed with which different groups are warned of and react to official information, and on such things as the types of people who loot in such circumstances. Researchers on these types of topics will have their students and Research Assistants strategically placed, with our without cameras and sattelite images, to observe the goings on. The really smart ones will be measuring stuff in novel ways, such as via sets of webcams.

Another horde that is slightly less quick off the block and has to make do with data that can be collected afterwards will be planning papers on the effects of something on something. They will for instance look for variations in affected areas, comparing neighbourhoods that were damaged by the storm versus one that just escaped. They will compare how people subsequently become more or less risk-averse, how their future savings decisions are effected by the wealth shocks, how their parenting styles changes with the experience, etc.

Other random variation caused by Cyclone Sandy will similarly be milked for papers. The several days in which particular stock exchanges were off-line can be used to study shocks in shares since the several days mean there is a build-up of information as yet unpriced in the shares.

The shock to leisure will also be used for all kinds of studies. Undoubtedly someone will try to calculate how many more children were born because of the increase in leisure caused by the storm. The happiness within relations and of whole regions in response to the shock will turn up in some paper or another. And do not forget the random impacts on environments that come from the churning of the seas: some biologist is going to make a paper out of that.

The fact that the shock is in America and hits the rich East Coast where many of the major universities are guarantees lots of attention in the top journals. Hence it will be a veritable race to write up the results and beat the competition. I would be exceedingly surprised if we would not see a paper on some Sandy-related event within the next month. Anyone who waits longer than that to start is way behind the pack and within around 3 months all the easy pickings will be taken and only the more longitudinal or in-depth stuff will still be worth doing.

If you are a student looking for something to write on that has a shot at the top journals, the message is clear: get going on a project right now. Doesn’t really matter what on and whether it is really of economic interest or not. As long as you can argue you get a clean measure of the impact of X on Y, you are in with a chance.

Author: paulfrijters

Professor of Wellbeing and Economics at the London School of Economics, Centre for Economic Performance

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