The Corona Economy with John B. Taylor

Synthetic control methods hold the promise of identifying a credible counterfactual by closely reproducing pretreatment outcome paths. Their reliability, however, depends in part on how effectively they constrain researchers’ less-visible degrees of freedom. We explore these methods’ sensitivity by constructing 1440 plausibly defensible specifications to estimate the employment effect of California’s $20 fast-food minimum wage. While over 96 percent of the estimated employment effects are negative, the range is vast, illustrating that synthetic control methods are sensitive to specification choice.

Waste, fraud, and abuse of public funds are among the oldest and most persistent issues in American history.

“Personalized pricing” is in the news. Companies use big data to figure out what you’re willing to pay and charge accordingly. Politicians are already passing laws to ban it and the Federal Trade Commission is threatening action, as usual, before understanding the phenomenon. Economists call it “price discrimination.”