Rice Economics Fall 2019 Newsletter - Page 3

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