Spotlight on our Faculty
Dr. Xun Tang, Henry S. Fox Sr. Chair of Economics
Research Interests: Econometric Theory and Empirical Microeconomics
Xun Tang joined the economics faculty at Rice University in July 2014 after having
previously served as faculty at the University of Pennsylvania. He received a Ph.D.
from Northwestern University, in addition to a Master of Public Policy degree from
the University of Chicago. His research focuses on the robust econometric analysis
of economic models about agents’ behavior in environments with or without strategic
interactions.
tell me more about the award and the
research involved?
Tell me your economics origin story.
What got you interested in the field?
My first job before grad school was with
a newspaper, and that got me interested in
analyzing public policy questions. Later
I studied for a master’s degree in public
policy, but felt that was insufficient to
satisfy my research interest. I am interested
in applying more logic and quantitative
thinking to address policy questions. After
talking to my master advisors and fellow
graduate students from an economics Ph.D.
program, I decided to pursue a doctoral
degree in economics.
What are your research interests, and
why do you find your area of research
fascinating? Is there anything new and
exciting happening in your subfield?
I am fascinated by econometric theory and
empirical microeconomics because they
allow us to adopt a scientific approach to
infer the incentives of economic agents
from their reported decisions and use them
to answer meaningful business or welfare
questions (such as how individuals and
firms interact in hypothetical scenarios
featured in policy discussions). These fields
are dynamic and ever-growing, with lots
of unanswered research questions. The
new topics that I find exciting include:
estimating individual preferences or
information sets in bargaining episodes
under different protocols, inferring peer
effects in social networks when the data
is subject to measurement error, and
estimating bidders’ valuations in various
auctions with non-standard formats such as
scoring or multi-attribute auctions.
I heard that you recently received a
joint National Science Foundation (NSF)
grant with Arthur Lewbel, an economics
professor at Boston College. Can you
The award is based on our proposal to
analyze peer and contextual effects in
social networks when the data available
to researchers do not measure the links
between individuals perfectly. For
instance, students’ test performance may
be influenced by many factors beyond
their own characteristics (a.k.a. direct
effects), such as the social environment
in the classroom (a.k.a. peer effects). The
goal of empirical research is to infer the
magnitude of these different sources of
effects and use them for policy designs. For
instance, if the goal is to improve average
performance and the estimates suggest
that the peer effect is large and positive,
then you’d want to encourage student
friendships (or work groups) instead of
only counting on admitting good students
in the class. In reality, the estimation of
such effects always requires some measure
of the links (e.g. self-reported friendships)
but such measures are subject to error.
The goal of our award is to propose new
ways to incorporate and account for such
measurement errors while estimating the
effects.
MTEC undergraduates choose between
ECON 496 (Capstone in Economic
Theory) and ECON 497 (Capstone in
Econometrics) to complete their degree.
Why would someone choose your
Econometrics course over the Econ
Theory course?
other goal of ECON 497 is to help students
appreciate how economic models can be
elegantly integrated with econometric
methods in modern empirical research.
One of the main themes for this part of
the course is that valid identification
and inference are always specific to and
constrained by the data-generating process
(e.g., statistical assumptions about the
relation between observed and unobserved
variables). As a responsible researcher, one
always needs to be aware of the conditions
that underlie their conclusions and ideally
should try to test those conditions if
possible.
What’s the optimal time for students to
take your course?
I highly recommend students take ECON
497 in their junior year if they can. This
probably means a student needs to commit
to and focus on an Econ major path as early
as possible. Parts of the course material
in ECON 497 can be a bit dense, and
therefore require lots of attention and time
commitment. Based on responses from
past students, I believe seniors juggling
interviews and their job search would be at
a bit of disadvantage due to multitasking.
More importantly, understanding and
mastering the course materials would
actually help you improve job prospects in
the long run. You want to learn these tools
earlier and be able to implement them in
later research/intern work, which will, in
turn, help you improve your resume by the
time you go on the job market.
ECON 497 and ECON 496 are courses
with different goals, tailored for students
with different interests and strengths. As
far as ECON 497 is concerned, I have
two primary goals. The first is to provide
students with an in-depth review of some
of the classical tools in econometrics.
I want to make sure that students fully
understand why these methods work (e.g.
what assumptions are needed for valid
inference), as opposed to just memorizing
the “recipes” or Stata commands. The
3