Communication in

Clients, output, and ethics

Models, assumptions, and their roles

The output required in policy and consulting work will not always be about "creating knowledge" or to "inform decision making" alone - but also may include marketing for a firm or output required for lobbying.

A model is an idealized system that we use to represent some element of the real world.

• A model is built up by a set of assumptions
• What assumptions are appropriate depends on the type of question we are asking about the real, or idealised, world.

The seeming "precision" of economic results can be favoured for this type of work, and is one of the areas where economists are accused of rent seeking.

Communication in

Economics

However, the line between these types of outputs is fuzzy - making an "ethical" choice often unclear. Combined with our responsibility to provide a product to the client (who is paying us) this question is difficult.

Questions on: Description, explanation, understanding, prescription, prediction

Key point is that we are an information discipline focused on trade-offs (part of our limited role). Clients can use your work out of context (it is their property), but in your reports and when you are asked about it your ethical responsibility is to clearly articulate the assumptions and trade-offs involved.

Assumptions take a number of forms - but fall into two general camps: Core and peripheral.

• A core assumption is necessary to answer the question
• A peripheral assumption is unnecessary, but fills another role (eg clarity, simplicity, tractability)

Questions to ask yourself

The Folk Economist

Communicating with assumptions

What is my core story/model?

Folk economist: An individual without economics training who is unable to differentiate between core and peripheral assumptions.

What do I need to add to this story to communicate it?

When asking about communication, we will assume you have a modeling framework that allows you to answer your question already. As a result, we are interested in how we can modify this to communicate the result to different audiences.

Most communication is with 'folk economists' - general public will have an economic model they refer to. They will just not have had the time or opportunity to develop it as far as economists have been able to.

• Are these additions misleading?
• Would these additions be out of place for a related question?
• If I am asked a question, how easy is it to "peel back" these additions to get to my core story?

In communication with folk economists the role of peripheral assumptions is central.

Can my communicated story be used "out of context". This may be unavoidable, if yes:

• To other economists it may be fine to merely discuss core assumptions.
• But the less exposure your audience has had to economics language and debate, the more peripheral assumptions are necessary to explain results.

• In your write-up have you appropriately conditioned your results.
• Where a possible misinterpretation is very likely, have you pointed this out in the presentation/report.

Although this is a common way of communicating, there is a public good problem.

• Peripheral assumptions that seem innocuous in one setting may be very inappropriate in another setting - can accidentally mislead general public.

Key use of peripheral assumptions in this context are to simplify a logical argument or to clarify a result.

In fairness, this is the very best you can do!

Avoid overconfidence!

Limits of the Economist's role

Normative - positive distinction (Humean is-ought).

After working on an issue for some time it can be tempting to start believing certain things:

A model cannot give a policy conclusion without a value judgement - therefore purpose of normative-positive distinction is not to treat conclusions as a black-box, but to be honest about ethical assumptions involved in any policy advice.

• My model of this issue is the right one.
• Oversimplified core assumptions don't matter.
• Conditional results will hold more generally.
• The clients belief on the issue is true.

Even a description is likely to have ethical content, or rely on assumptions about unobservables. This is a limitation regarding our ability to tie model "worlds" to the real world.

We trade in knowledge and logical frameworks. As a result, overconfidence is typical - in fact it is often rewarded.

However, even when using a number of economic models that utilize our whole body of knowledge, results are highly conditional.

Appropriate value judgements/assumptions require input from other disciplines/stakeholders.

• Blurry line between giving client their "result" and doing "objective" analysis - an ideal does not exist.

Overconfidence with simplifying assumptions is dangerous for policy.