prior probability

This was my first visit to New Haven since March of 1998, when I attended a conference at Yale (see here), and my first with my wife Sydjia and our daughter Adys. Shout out to Avelo Airlines for their non-stop flights from Florida!

Visiting my alma mater this weekend brought back memories of this hit song by Juan Luis Guerra, which was super popular in Latin America and on Spanish radio stations in the US while I was attending law school.

Note: I will be blogging less frequently during the next few days as my schedule will be full, for I will be attending my tricennial law school reunion (Class of 1993) this weekend in the Elm City (good ol’ New Haven, Connecticut).

Fun fact: This year’s alumni weekend at my alma mater coincides with the decennial reunion of my fellow Yale Law School graduates Vivek Ramaswamy and J.D. Vance (Class of 2013) as well as with the semi-centennial reunion of Bill & Hillary Clinton (Class of 1973). I just hope I get to meet Vivek!

Personally, I prefer roundabouts over stop signs or traffic lights, but my few attempts to navigate them in my neck of the woods (such as this infamous one in Clearwater Beach) have always been frustrating at best, which begs the question, why do so many of my fellow Floridians become paralyzed with fear and indecision whenever they approach a traffic circle? Is it their novelty? That can’t be right: the Clearwater Beach roundabout has been around (pun intended!) for decades. Or is there some inherent flaw in their design? Again, that can’t be right either, since roundabouts work perfectly fine in every other country outside the USA.

As a follow-up to one of my previous posts (see here), below is my contribution to the most recent episode of the ten-part “Books that Shaped America” series that aired on C-SPAN earlier this week. In brief, I explain why Oliver Wendell Holmes’s 1881 lectures on the common law are still worth reading. (This week’s episode, which is also available in full here, was devoted to Holmes’s classic work The Common Law.)

My previous post highlighted this 2023 paper by my colleague and new friend Ian D. Gow, who conjectures that much of the published research in his field (academic accounting) is the product of p-hacking or data dredging. Professor Gow’s recent paper caught my attention because I suspect that these data manipulation practices are not only common in many other fields beyond academic accounting; they may also be symptoms of deeper problems in scientific research more generally. So, what is to be done? Here, as a public service, I will survey three possible solutions and explain why #3 is my preferred option for now:

1. Prohibition, i.e. banish p-values altogether. Perhaps the time has come for accounting journals to follow the lead of the editors of Basic and Applied Social Psychology, which took this drastic step in 2015 in response to the replication crisis in their field. After all, if the practice of p-hacking is really as rampant as Professor Gow says it is, then his proposed solutions, e.g. paltry reforms like “more descriptive research” and improved research training (see Gow 2023, pp. 8-12), are mere band-aids that are unlikely to address the perverse “publish or perish” incentive structure among academic accountants.
2. Pre-registration, i.e. reduce researcher degrees of freedom. If prohibition of null hypothesis significance testing is too radical a solution, perhaps accounting journals should require all author teams to submit detailed research plans (e.g. hypotheses, design, and analysis) before they begin collecting any data. On page 3 of his paper, for example, Professor Gow compares and contrasts “traditional editorial processes” or TEP, where researchers have so many degrees of freedom that research misconduct is all but inevitable, with “registration-based editorial processes” or REP, which has been tested by some accounting journals, but for some reason Gow himself does not pursue this solution to its logical conclusion. (PS: To learn more about the costs and benefits of TEP versus REP, check out this 2018 paper by Bloomfeld et al.)
3. The invisible hand, i.e. journals should do nothing. What if Professor Gow is wrong? What if accounting research isn’t so bad, after all? For my part, given my Burkean priors, this is my preferred solution, at least until Professor Gow’s claims themselves have been replicated. I would therefore recommend “do nothing” for now, but in the meantime I would like to see Gow’s claims tested by other accounting researchers.