What “treatments” change behavior? Will higher taxes lead golf’s Phil Mickelson to play fewer rounds? He said so but since we will never observe his 2013 golf schedule had the Bush Tax Cuts lived on, we don’t know. In the case of energy efficiency, which investments are cost-effective? In this Opinion Piece, Catherine Wolfram makes the case for implementing more field experiments so that there is a kosher treatment group whose behavior can be compared to a control group. Macro policy makers can’t run credible field experiments since there is no contemporaneous control group. If Congress could randomly raise taxes for half of the population, the CBO could measure whether this treatment group works less. In this case, we would learn something about how the rest of the population would be affected by increasing taxes on them. When you can’t randomize incentives, how do we establish cause and effect? Many economists continue to grapple with this tough issue.
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