economics Paradigm Challenge

All those 'hidden biases' scientists spend years trying to fix? Turns out they aren't even there in most of the big, famous studies.

March 20, 2026

Original Paper

Investigating Instruments with Meta-Regressions

SSRN · 6442685

The Takeaway

By re-analyzing famous economics papers, researchers found that the massive differences in results were usually caused by simple data measurement errors, while the 'omitted variable bias' everyone worries about was actually negligible.

From the abstract

Instrumental variable (IV) estimates are typically much larger than their ordinary least squares (OLS) counterparts, often suggesting implausible values of the omitted variable bias. We derive a meta-regression of OLS on IV estimates that can resolve this puzzle by separately identifying omitted variable bias from measurement error in the endogenous regressor. We show that meta-regression estimates can also reveal when the underlying instruments are invalid. We apply the meta-regression to four