Marc F. Bellemare Posts

In economics and related disciplines, discussions about whether one should be using Microsoft Word* or LaTeX to write one’s papers are roughly like discussions about the gender of angels in theology–everyone has an opinion, and few are willing to change their mind in response to other people’s reasons for preferring one or the other.

One of the arguments that I have often heard for preferring LaTeX is that even though it takes more time to format a document in LaTeX, it looks more professional, which in turn might even signal (however subliminally) technical competence to journal editors and reviewers, and so it remains optimal to use LaTeX even though one can only do so at relatively higher fixed (and often variable) cost.**

But it looks like it is possible to have your cake and eat it too. I was at the University of Illinois to give a talk a few weeks ago, where my colleague Scott Irwin gave me a copy of a new paper of his titled “The Case for Writing Papers in Economics Using Fake LaTeX.”

Here is the abstract:

I unfortunately have too little time for a proper post this week, but I wanted to make time for a quick post. A grad-school friend and colleague sent a link to an interesting new(-ish) paper by Kahn and Whited (2017) that has been making the rounds in finance, and which is forthcoming in the Review of Corporate Finance Studies.

The title of the article is “Identification Is Not Causality, and Vice Versa.” Here is the abstract:

I was in Helsinki last week for the UNU-WIDER workshop on the Vietnam Access to Resources Household Survey (VARHS) data, presenting work that my coauthors and I have been doing using these data.

One thing that I saw a few instances of during the workshop was the following. A researcher wants to a variable x in a regression, but that variables needs to be logged. Because there are many zero-valued observations of x, and because log(0) is undefined, the author simply uses log(x +1), or log(x + 0.001), or log(x + 0.00001), and so on.

This post is about what to do in such cases. There are many instances in development where you’d like to include a financial variable–say, the value of chemical fertilizer used on a given plot, for example–where many observations will have a zero-valued observation–in the chemical fertilizer example, not everyone in the data will use chemical instead of organic fertilizer, and so they will report a zero when you ask them what was the value of chemical fertilizer used on any of their plots.

When you want to log a variable x but that x has many zero-valued observations, there are three things you can do in principle: