I have received a lot of positive feedback on my first two posts of the year (see here on how development economics has seemingly become about anything and everything, and see here on whether agricultural economics departments should invest further in international development). People seem to be enjoying the longer-form thoughts I share here about the fields I have worked in and, in the process, about the economics profession more broadly.
My interest in writing these posts goes back to my first year of college, when I took two classes which have profoundly influenced my thinking—one on the philosophy of knowledge, one on the analysis of scientific discourse—when doing a minor in philosophy.
I spent part of last summer working on a forthcoming article with Dan Millimet on Yair Mundlak and the fixed effects estimator. While working on that article, I was reminded of how the Agricultural and Applied Economics Association (AAEA, my professional home) used to be known as the American Agricultural Economics Association (it was known by that name when I attende my first AAEA annual meeting in 2003) and how, before that, it had been known as the American Farm Economics Association.1
Note the change in focus: From farm economics to agricultural economics, and from agricultural economics to agricultural and applied economics.
This emphasis on “applied economics” and whether it remains relevant is the subject of this post.
First off, it is worth noting that the focus shifted from farm economics to agricultural economics when it became clear that agricultural economics as a discipline was about more than farm production and people recognized that the farm sector itself occupied a rapidly declining share of the economy.
Similarly, the focus shifted from agricultural economics to agricultural and applied economics when it became clear that agricultural economics (again, as a discipline) was about more than just agriculture and people recognized that agriculture was dependent on the environment, natural resources, international trade, and international development policy.
Perhaps more importantly, the focus shifted from agricultural economics to agricultural and applied economics for two additional reasons. From its very beginning, agricultural economics was an empirical discipline, data on the agricultural sector being the first data collected by most if not all governments for the purpose of levying taxes.
This was all the more so given that for the longest time, serious economists focused on theory instead of empirics. So when the association changed its name from American Agricultural Economics Association to Agricultural and Applied Economics Association, the shift in focus from “agricultural” to “agricultural and applied” economics made perfect sense. At that time, agricultural economists were still doing work of a relatively significantly more empirical nature than their counterparts in economics departments.
But then the Credibility Revolution happened, both as a result of increasingly cheaper and more plentiful data as well as of increasingly cheaper computational power, as Backhouse and Cherrier (2017a, b) have shown, but also because empirical economists decided to take causality seriously.2
But as happens way too often, many agricultural economists were not paying attention to what was going on in their parent discipline of economics, and they ignored the push for credibility in applied microeconomics, of which agricultural economics is a constituent field.3
To some extent, that situation persists to this day. If you think I am exaggerating, ask yourself why else would a group of agricultural economists feel the need to write a paper titled “Estimating Causal Effects with Observational Data: Guidelines for Agricultural and Applied Economists“—in the year of our Lord 2024!
Worse: Not only did many agricultural economists ignore the Credibility Revolution, many of those who did pay attention to it seem to have missed the fact that as time went by, agricultural economists clearly lost their former quasi monopoly on “applied” work.
Indeed, I am not an acquisitions editor, but I suspect the reason why I could publish Doing Economics with a top academic press instead of one of a number of significantly-less-picky-but-more-pricey publishers was because (i) the book’s only competitor, Thomson’s Guide for the Young Economist, was written more than 20 years earlier by a theorist and for theorists, and there was no comparable guide for empirical economics, and (ii) and there was a clear need for it in the economics profession, well beyond the confines of agricultural economics.
Which brings me to the my core point. Here is a list of all agricultural economics department maintained by the AAEA. I count 13 departments in there that have “applied economics” in their name.
But at this point in time, does it make much sense to emphasize “applied” in an agricultural economics department’s name? After all, universities as distant from agricultural economics as Johns Hopkins, Boston College, Georgetown, Michigan, Penn, and several others all offer master’s degrees in applied economics that run out of their economics department or business school. So what does it actually mean for an agricultural economics department to have “applied economics” in its name? Is it even good marketing at this point? Or does it only serve to further isolate agricultural economists from their life-science colleagues in colleges of agriculture?
Coming full circle with what I discussed in my last post: As of writing, the future of research funding (and of higher education, really) is highly uncertain in the United States for the next four years. Thus, wouldn’t it be preferable for agricultural economists to start focusing more explicitly on something we have both a comparative and an absolute advantage in (i.e., “agricultural economics,” or perhaps “agricultural and resource economics”) instead of trying to compete along a dimension (i.e., applied economics) in which we no longer have any particular claim to fame?
- Consistent with that, Mundlak’s seminal 1961 article featuring the first application of the fixed effects estimator was published in the Journal of Farm Economics, which later became the American Journal of Agricultural Economics. ↩︎
- Prior to that, the only work on causality in economics I know of had been about Granger causality (which, let’s be honest, is not ackchyually causality) and old work by Norwegian statistican Herman Wold in the 1950s, which was never particularly well known nor well cited. ↩︎
- I may dedicate a future post to this topic, viz. how many agricultural economists ignore what is going on in the broader economics profession at their own risk. ↩︎