15 June 2010

Randomisation done right

Probably the primary criticism of randomised control trials (RCTs) is that although they prove something very well in one context, the findings aren’t necessarily transferable to another context.

Another major criticism is that they tell you what happened but not necessarily how it happened.

To solve both of these problems what you need is theory. There is of course nothing intrinsic to doing an RCT which precludes also using this evidence to test or develop a theory.

Two new papers by leading researchers in this field do just this:

A BREAD Working Paper by Karlan, McConnell, Mullainathan, and Zinman explains why reminders to save are so effective, and a Working Paper by Duflo, Hanna and Ryan explains why financial incentives are effective at getting teachers to turn up.


Getting to the Top of Mind: How Reminders Increase Saving

We develop and test a simple model of limited attention in intertemporal choice … We find support for [the model’s] predictions in three field experiments that randomly assign reminders to new savings account holders.


Incentives Work- Getting Teachers to Come to School

We use a randomized experiment and a structural model to test whether monitoring and financial incentives can reduce teacher absence and increase learning in rural India.


Matt said...

"To solve both of these problems what you need is theory"

Really? Can't you just write the model to fit your results, then claim the model applies to all other situations? I see no way of getting around external validity problems without replication.

Lee said...

Yes, but doesn't the model make replication easier? Might it not reveal other unforeseen testable implications?

Post a Comment