The Role of Theory in Field Experiments

W hen it comes to the role of theory in their research, empirical microeconomists are torn. On the one hand, we devote a large fraction of our graduate instruction to models of consumer behavior and fi rm decision making, and to the interactions that determine market equilibrium. On the other hand, it is not always obvious how these theories are relevant to empirical research. Outside the academy, policymakers and business leaders often demand “basic facts” and simplifi ed policy guidance with little or no concern for theoretical nuances. How then do empirical economists negotiate between theory and “facts”? In this paper, we focus on the role of theory in the rapidly growing area of fi eld experiments. We take an empirical approach and quantify the role of theoretical modeling in all published fi eld experiments in fi ve top economics journals from 1975 to 2010. We propose a new classifi cation of experimental studies that captures the extent to which the experimental design and analysis is linked to economic theory. Specifi cally, we distinguish between four classes of studies: Descriptive studies that lack any explicit model; Single Model studies that test a single model-based hypothesis; Competing Models studies that test competing model-based hypotheses; and Parameter Estimation studies that estimate structural parameters in a completely specifi ed model. Applying the same classifi cation to laboratory experiments published over the same period we conclude that theory has played a more central role in the The Role of Theory in Field Experiments