Project description
A better measure of economic activity
Measuring economic activity is a fundamental challenge. For instance, consider production problems such as how a firm produces goods from intermediate goods or how income of an individual is produced from the individual's cognitive and non-cognitive skills. Such inputs (intermediate goods or skills) are inherently difficult to measure and researchers often wonder whether their data actually measure what they are supposed to measure. The EU-funded MEImpact project will develop a new methodology for formally assessing the potential impact of measurement error (ME), which is the difference between a measured quantity and its true value. The project aims to change how empirical researchers approach measurement issues and prevent misleading conclusions and policy decisions.
Objective
Measuring economic activity is a fundamental challenge for empirical work in economics. Most empirical projects raise concerns about whether the data do in fact measure what they purport to measure. Mismeasurement may lead to severe model misspecification, biased estimates, and misled conclusions and policy decisions. Unfortunately, formally accounting for the possibility of mismeasurement in the econometric model is complicated and possible only under strong assumptions that limit the credibility of resulting conclusions. Therefore, the most common approaches to measurement issues are to ignore them, to informally argue why they may not be of first-order importance, to abandon the project, or to search for better data.
The objective of the research described in this proposal is to develop new methodologies for formally assessing the potential impact of measurement error (ME) on all aspects of an empirical project: on model-building, on estimation and inference, and on decision-making. For instance, the new inference procedures allow the researcher to test whether ME is a statistically significant feature that should be modeled, whether ME distorts objects of interest (e.g. a production or utility function), whether ME distorts conclusions from hypothesis tests, and whether ME affects subsequent decision-making.
I show that answering such questions is possible under much weaker assumptions than identification and estimation of a ME model and thus leads to more credible and robust conclusions. In addition, the implementation of the new procedures can be based on standard nonparametric estimation techniques that are part of many applied researchers’ toolkits.
In consequence, the research has the potential to fundamentally transform the way empirical researchers approach measurement issues, to significantly impact empirical practice, and ultimately to avoid misled conclusions and policy decisions.
Fields of science (EuroSciVoc)
CORDIS classifies projects with EuroSciVoc, a multilingual taxonomy of fields of science, through a semi-automatic process based on NLP techniques. See: The European Science Vocabulary.
CORDIS classifies projects with EuroSciVoc, a multilingual taxonomy of fields of science, through a semi-automatic process based on NLP techniques. See: The European Science Vocabulary.
You need to log in or register to use this function
We are sorry... an unexpected error occurred during execution.
You need to be authenticated. Your session might have expired.
Thank you for your feedback. You will soon receive an email to confirm the submission. If you have selected to be notified about the reporting status, you will also be contacted when the reporting status will change.
Keywords
Project’s keywords as indicated by the project coordinator. Not to be confused with the EuroSciVoc taxonomy (Fields of science)
Project’s keywords as indicated by the project coordinator. Not to be confused with the EuroSciVoc taxonomy (Fields of science)
Programme(s)
Multi-annual funding programmes that define the EU’s priorities for research and innovation.
Multi-annual funding programmes that define the EU’s priorities for research and innovation.
-
H2020-EU.1.1. - EXCELLENT SCIENCE - European Research Council (ERC)
MAIN PROGRAMME
See all projects funded under this programme
Topic(s)
Calls for proposals are divided into topics. A topic defines a specific subject or area for which applicants can submit proposals. The description of a topic comprises its specific scope and the expected impact of the funded project.
Calls for proposals are divided into topics. A topic defines a specific subject or area for which applicants can submit proposals. The description of a topic comprises its specific scope and the expected impact of the funded project.
Funding Scheme
Funding scheme (or “Type of Action”) inside a programme with common features. It specifies: the scope of what is funded; the reimbursement rate; specific evaluation criteria to qualify for funding; and the use of simplified forms of costs like lump sums.
Funding scheme (or “Type of Action”) inside a programme with common features. It specifies: the scope of what is funded; the reimbursement rate; specific evaluation criteria to qualify for funding; and the use of simplified forms of costs like lump sums.
ERC-STG - Starting Grant
See all projects funded under this funding scheme
Call for proposal
Procedure for inviting applicants to submit project proposals, with the aim of receiving EU funding.
Procedure for inviting applicants to submit project proposals, with the aim of receiving EU funding.
(opens in new window) ERC-2019-STG
See all projects funded under this callHost institution
Net EU financial contribution. The sum of money that the participant receives, deducted by the EU contribution to its linked third party. It considers the distribution of the EU financial contribution between direct beneficiaries of the project and other types of participants, like third-party participants.
80539 MUNCHEN
Germany
The total costs incurred by this organisation to participate in the project, including direct and indirect costs. This amount is a subset of the overall project budget.