2024 Clark Medalist: Philipp Strack

Congratulations to Philipp Strack who has won the 2024 John Bates Clark Medal. The John Bates Clark Medal is awarded annually each April to that American economist under the age of forty who is judged to have made the most significant contribution to economic thought and knowledge. The American Economic Association webpage has a nice…

RIP: Daniel Kahneman

Nobel prize winner Daniel Kahneman passed away today. His work incorporating psychology into economics through Prospect Theory has been a major advance. From the N.Y. Times obituary: Professor Kahneman delighted in pointing out and explaining what he called universal brain “kinks.” The most important of these, the behaviorists hold, is loss-aversion: Why, for example, does…

ISPOR’s Top 10 HEOR Trends

These trends are summarized on their webpage and in a larger report. Here they are with some key excerpts from their report: Real world Evidence. “As RWE continues to gain significant traction in healthcare, agencies including the United States Food and Drug Administration (FDA), the European Medicines Agency (EMA), The National Institute for Health and…

The Carer QALY Trap

The term “Carer QALY” was coined in a paper by Mott et al. (2023) and is identified as the case where “it is possible for an effective treatment that provides survival gains (with relatively little or no QOL gain) to appear less effective than the comparators when carer QOL is considered.” While the term “Carer…

Interest rates are falling

…well, real interest at least. While in the years since the COVID-19 pandemic have seen nominal interest rates rising, in the long run real (i.e., inflation adjusted) interest rates are falling. A NBER working paper by Obstfeld (2023) provides compelling evidence of this trend. Current real interest rates are likely somewhere in the 1%-2% range.…

How are the stock market and quantum mechanics related?

From a Lex Fridman interview with theoretical physicist Lisa Randall. “Stocks may not achieve a precise value until they’re traded, but that doesn’t mean we can’t approximate their worth until they change hands. Similarly, electrons might not have definite properties, but they do exist. It’s true that the electron doesn’t exist as a classical object…

Teamwork makes the dream work

An interesting paper by Cooper and Kegel (2023) in AEJ: Microeconomics finds that using teams (rather then individuals) in the prisoner’s dilemma game is more likely to result in choosing to cooperate than would be the case if individuals playing each other. We compare behavior of two person teams with individuals in indefinitely repeated prisoner…

Copulas explained

Let’s say you want to measure the relationship between multiple variables. One of the easiest ways to do this is with a linear regression (e.g., ordinary least squares). However, this methodology assumes that the relationship between all variables is linear. One could also use generalized linear models (GLM) in which variables are transformed, but again…