Sanford V. Berg

English

Research Papers in Economics

This PDF is a selection from an out-of-print volume from the National Bureau of Economic Research
Volume Title: Annals of Economic and Social Measurement, Volume 1, number 1
Volume Author/Editor: NBER
Volume Publisher: NBER
Volume URL: http://www.nber.org/books/aesm72-1
Publication Date: 1972
Chapter Title: Computers, Information Retrieval and Research Methodology
Chapter Author: Sanford V. Berg
Chapter URL: http://www.nber.org/chapters/c9179
Chapter pages in book: (p. 1 - 5)A
COMPUTERS. INFORMATION RETRIEVAL AND RESEARCH
METHODOLOGY
inSANFORD V. BERG
Computers hate contributed to making economics a mathematical science, and are changing thu ierv
character q[quantirative research. The old division of labor among researchers did not adequately promote
the exchange of information about at;ailahle data, software, and new research techniques. Because 0/ this
situation, the NBER has begun sereral projects, including the publication of a new journal, to reduce
commupticotions lags and extend recent advances.
The purpose of theAnnalsofEconomic and Social Measurementis to serve as an
interface between economics arid statistics, management science, and information
science. The modern computer has created a large constituency with common
problems, requiring a new division of labor which permits more eflicient specializa-
tion. Such specialization cuts across fields and reflects an increasing awareness of
the problems and potential associated with large-scale research effortsexchange
of data, distribution of software, and dissemination of new methodologies for
quantitative research. Although initial developments in research methodology
need not necessarily involve the computer in a vital way, further improvements
in measurement and estimation will probably have roots in computer technology.
TuINVISIBLE ScIENTIFIc REVOLUTION
During the last decade, the computer has contributed to the emergence of
economics as a mathematical science.' Although the way research is conducted
has been altered, models have been refined rather than abandoned.2 This con-
ceptual continuity has been attributed to imprecise theories and unmet data
needs; the models are less susceptible to empirical testing.3 However, the storage
and manipulative capacity of computers is being combined more effectively wiih
advanced techniques, so mathematical models are becoming more powerful tools.
The computerized information retrieval systems appearing in universities
and government statistical otfices promise to further alter the research patterns
ofeconomists,just as the telescope and microscope changed the research methodol-
ogy of astronomers and biologists. The change cannot help but have an impact
on our socio-economic models, given the possibilities inherent in the new tech-
nology. The Behavioral and Social Sciences Survey for Economics,4 assembled
by a distinguished panel of economists, placed great emphasis on changes being
For a description of the non-computer aspects of the process. see Karl Fox. "The Invisible
Revolution in Economics: Emergence of a Mathematical Science," inEconomic Models, Estimation
and Risk Programming.Springer-Verlag. 1969.
2George Stigier, "Does Economics Have a Useful Past,"HistoryofPolitical Economy. Vol. 1.
No. 2, 1969.
A. W. Coats, "Is There a 'Structure of Scientific Revolutions' in Economics," Kykios. Vol. XXII,
1969, Fase. 2.
Nancy Ruggles. ed..Economics(Prentice 1-lall, Inc., Englewood Cliffs, New Jersey, 1970).I
wrought by the computer. i'hc panel niade six rcconimend;itions involving coin-
puters. information retrieval,and changes in research fllCthOdOiOCy
I ) the sievelopment ol a national data system for economic and s(,)cjal
recearch
the establishment of large scale social science research centers to function
as laboratories For the social scientist
the pro vision of computer facilities for research, and the design of com-
puter networks which can provide linkages between research centers and
data bases
the organization of long-term economic research ellorts to reduce Start-up
costs, build trained staffs. and choose more ellicient research methods:
5) the reorientation of graduate training toward providing more competence
in research methods and more research experience, with particulat
emphasis placed on the acquisition of niatheniatical, statistical, andpro-
raniming skills: and
(6) the improvenient of communication channels within the profession arid
the sponsorship of workshops and conferences in specialized fields.
The entire Report. from which the above recommendations are distilled,stresses
the changes in the character of research brought about by the availability ofnew
technologies, like the computer and telecommunications, and newresearch
methodologies, such ass imulation,large-scale econometric modeling, and
sophisticated estimation techniques. The potential for evenmore dramatic change
is at hand.
('oxtI'UmRsAND R1suAic1wks
After a period of intensive experimentation withcomputer technology and
its application to a wide range of research activities, scientistsare in a position
to consolidate and extend recent advances. Consolidation isnecessary because
the fast pace of technological change has resulted inthe rapid turnover of com-
puter hardware and the duplication of programming efforts.The National Bureau
has responded to the current situation by creatinga ('ant i'rence on (lie ('o?npuu'r
in Economic and Social Research.The series of workshops held under the auspices
of the Conference promotes the exchangeof information and experience among
scholars from universities, researchinstitutes, government agencies and other
groups concerned with large-scalecomputer research on economic and social
questions The Annals will publishpapers on datahanks, inicrodata sets. research
methodology, and information retrievalwhich are presented at workshops.
Further extension of advancesin computer technology is made possible
through a second NL3ERproject, a('omputer Research ('enter /r bo,iwni(s iiid
Managenie,:t Science. Through theCenter, researchers will interact witha skilled
staff of programmers andsystems analysts : the operating system will facilitate
the creation, testing, andmodification of new computational !.:hniques. These
endeavors should result innew software for a broad class of users. Programs will
he disseminated througheducational activities (suchas workshops) and main-
tenance procedures with thejl,tnals serving as a clearinghouse for the Center.
One NBER sofisarc packagedeveloped prior to the establishmentol the ('enier is described Y. J-Iaitossk> and S. Jacobs."REGEN.('omputcr Program io Gencraic Multivariate Ohseraiions br Linear Regression Equations,"this issue
*I
Computer technology can he expected to further change our concepts of
economic and social measurenient. Within a decade, many economists will spend
as much time working at interactive terminals as their predecessors did at their
desks, with pencil and paper. The shift to the use of new research techniques is
likely to be quite discontinuous and involve high adjustment costs. During the
transition, wide dissemination of information about available programs or new
data manipulation systems can reduce the communications gaps resulting from
overspecialization and isolation.
The computer is already aiding scientists in both microecononlic and macro-
economic research: many instances will be reported in the 4mw/s. The develop-
ment of testable hypotheses has plagued researchers in microeconomics, but
simulation models of consumers and producers offer promise for the l'uture.' The
estimation and simulation of large-scale macroeconomic models is also made
possible by the computer.7 in both cases. the econometrician is able to specifv
much more complex relationships than were previously feasible, with simulations
and sensitivity tests becoming regular aspects of his research. Researchers are
beginning to formulate models with suflIcient complexity, that models more
adequately reflect realitysoftware which handles complicated lag structures
and nonlinearit.es has facilitated these efforts, However, the models often lack
enough simplicity to be understood, or do not have unambiguous interpretations
of casual relationships. Furthermore, the quality of basic data may not permit
one to discriminate from among alternative hypotheses embedded within these
sophisticated models.8 Problems of research ntethodologv, estimation techniques.
and data needs are not likely to diminish when the fourth generation of computers
become widely available.
INFORMATION RETRIEVAl.
Data accessibility must be insured in order for the computer to serve as an
efficient tool. Problems of data documentation, storage, and retrieval will be a
major focus of .4,m,wls articles. A forthcoming article on standards for data inter-
change is partially a result of a datahank workshop sponsored by the inter-
institutional Conference on the Computer. The standards developed by George
Sadowsky and others provide for human readability: header systems that can he
interrogated by standardized progranis could provide labels, definitions, and
source-notes for researchers. Hopefully the system will prevent much needless
duplication of effort and ensure ease of access to data.
A second example of developments in information retrieval is the NBER
datahank of' over 2,500 time series. This centralized repository of economic data
Martin Shubik believes that new developments in computation and simulation will result in
the joining together of microeconomic institutional studies, advanced mathematical-economic theory
and political economy. With compiner technology, complex institutional elements can re-enter our
market models: for example. game-theoretic considerations can be taken into account through the
introduction of conjectural variations. Martin Shuhik. "A Curmudgeon's Guide to Microeconontics,"
Journal oJ Econmnie Literature,June1970.
'SeeEconometric Models of Cyclical Beharior.Bert Hickman. ed,. forthcoming. NBER.
One aspect ofdetermining causation is the identification ofendogenous variables. See Christopher
Sims. "Are There Exogenous Variables in ShortProduction Relations?" this issue.
3S
was created and is being maintained for internal researchpurposes arid forOutsjdc users who subscribe to the information service. The JdttbhC has becomepart of an on-going effort to trace the changingrequfrenlents br datarocessi,1fr economics, to establish efficient methods for gatheringand ha,dh,,CCOflO1 data, and to collect information about the technoIog''of dataretrievil Rea(krs of the Annals will be kept informed ofdevelopments in theNBFR° andother databanks.
As a supplement for book reviews,we hope to have reviewsof major n1acIijti_ readable data sets. For example,a forthcoming Conferenceon the Current Population Survey will generatepapers by researchers withinthe CensusDepart. ment and by outside users of CPS data. Paperson the Objectives of('PS aridcon- ceptual problems with the data will bepublished in the Au,ra/s
The computer can be expectedto affect our capabilitiesto store andretrieve not only data, but also informationabout research.Inforn,tion that hastradi- tionally been disseminated throughpublished media willbegin to hecoiiieaail- able on-line. For example, theJournal ?I EconomicLiierat ore isexperinlent ing with rnachine-reathible input.Another NBER workshophas examinedthe role of the computer in theevolution of communicationnetworks with somepapers to receive wider disseminationthrough the Annals. 10As moreapplications Occur, we can expect to find an increasingdependence on thecomputer for infortttion retrieval.
RESEARCH METuor)oLoc'
The analytic techniquesmade possible bynew technology alter theproduction possibilities foreconomic knowledge.Assuming that thepast mix of activities adequately reflectedrelative prices andpayoffs, a reallocationof resources devoted to research isnecessary for efficiency. TomJuster, in hispaper in this issue, argues in favor of devotingmore resources to thecollection of data forthe testing of hypotheses.'' A shiftof resourcesto research centers whichare capable of recruit- ing, training, andsupporting iarge-scjlequantitative research isanother change brought about bynew technologies. Thereis also need for collaborationamong a number ofresearchers trained indifferent fields,as was pointed out by theHASS Report discussionsof surveyresearch and simulationmodels. 12 The meth- odological advancesresulting from suchcross-fertilization wilt find theAnnals a particularlyappropriatecommunications channel. In a way, thejournal systemoperates as a kind of"invisible hand," aiding in thecoordination of activitiesof diversespecialists Journals alertScientists to new researchpossibilities andreward (indirectly) thosewho publish research resultsSuch indirectcoordination may breakdown in periods ofrapid change.Methodologicaladvances tend tohe linked tosubstantive research, so disciplinaryboundaries canimpede widespremdapplicatioji of the advances. Futurepapers will iltustritehow theSolution to particulardata problems can
Charlotte Boschan,'The NatjonajBureau T!rne-Seriesflatahank.ln,iijIofL4OIIOO1jC(Old
Soci0! Measurt,,,e#,,
forthcon1 ing. '°See thenote by NevitfeBeharie for anoverviev of the workshop ' SeeF Thomas Juster
"MIcrodat, Require,nenm5and PublicPolicyi)ecisions." this issue
12
Nancy Ruggles,op. ciz. -
4I
help scientists in other disciplines.'3 Researchers in health, education, and other
fields are combining data sets from dil1reiit sources with various degrees of
success. Experimentation with alternatic match merge procedurescan heexpected
in the coining years as mote attempts are made to grait additional variables onto
empirical models. Such ellorts are in many ways more difficult than arm-chair
theor 1/111g. hut are potentially more productive.
NEW DIRECTIoNs IN RESEARCH ANI) THE Nmw JOURNAL.
Quantitative research has received a giant boost from the computer. This
change is desirable, i[we consider the possible development of economics without
an infusion of new analytic techniques
.there is grave danger that the subject will develop along the line of least resist-
ance. that the stream so far from its source will separate into a multitudeof in-
significant branches. and that the discipline will become a disorganized mass of
details and complexities. In other words, at a great distance from its empirical
source, or after much abstract inbreeding, a mathematical subject is in dangerof
degeneration. At the inception the style is usually classical when it shows signs
of becoming baroque, then the danger signal is up ....
Is the danger signal up in Economics? In his Presidential address to the American
Economic Association. Wassily Leontief spoke disparagingly of the "state of
splendidisolation'' in which Economics finds itself and called for a shift to
"systematic large-scale factual analysis."If Economics is slipping into a phase
in which research is superficially impressive but lacking itt substantive content,
then developments in computers. data bases. and research methodology can serve
as a powerful counterforce. We hope that theNational Bureau, through the
,4nnals and other projects, can focus attention on the role of the computer in
large-scale factual analysis.
It is the hope of the board of editors that the articles published in the new
journal will inform, instruct, and motivate researchers in economics, statistics,
and management science. Thus, the Annals is intended to be more than a research
archive fr retrospective searching: the articles will also serve to increase awareness
of current developments through the publication of timely articles and announce-
nients. We will give visibility to researchers whose work has a highsocial marginal
product, but who often do not receive the recognition warranted bytheir work.
We feel that the articles carried in the journal will help express the sensethat
intellectual and technological breakthroughs in economic and social measurement
offer exciting possibilities for future research.
thin cr50V 0/Horula, i!i(!
National Bureau of Economic Research
'3 Ben Okner. "Constructing a New Data Base From Ex,st,ng Microdata Sets -1966 Merge File."
fort ii c,sniin.
'JvonNeumann. "The Mathematician," inR. B. Fieyssuod (cdi, T!it' liorks 0/ lilt'.\Iud
(Chicago: UniversityofChicago Press.1947). p. 196.
Wassily Leontief, "Theoretical Assumptions and Nonobserved Facts.".4,;iercw, Econoniu
Rt'rieiv.March1971, p. 5.

Annals of Economic and Social Measurement, Volume 1, number 1

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