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Economic theories useful to understand data about human behaviour – Prof Rulof Burger
Author: Corporate Communication and Marketing/Korporatiewe Kommunikasie en Bemarking
Published: 08/05/2024

​​Prof Rulof Burger from the Department of Economics in the Faculty of Economics and Management Sciences delivered his inaugural lecture on Tuesday, 7 May 2024. The title of his lecture was “From data to discovery: the role of economists in the era of machine learning".

Burger spoke to the Corporate Communication and Marketing Division about how he combines microeconomic theories and econometric methods (using mathematical and statistical methods to analyse economic data) to make sense of data about human behaviour and to assess the impact of specific policy interventions.

Tell us more about your research and why you became interested in this specific field.

My research combines microeconomic theories and econometric methods to try understand, predict and find ways to influence the decisions individuals make. I've focused mainly on behaviour in the domains of labour, education and health, and usually within the context of developing countries. I have always been interested in behaviour and briefly considered studying psychology before starting my studies in economics and statistics. As a happy coincidence, economics recently started incorporating more insights from psychology into our models in the emerging field of behavioural economics, which is one of the modules I lecture. As a student, I was immediately drawn to the way in which economists blend mathematics and domain expertise to formulate theories of human behaviour and then used data to test these theories. I was also very fortunate to have lecturers who were excited about their work.

How would you describe the relevance of your work as it relates to labour, education and health?

Most of my research has a strong policy focus. Earlier in my career, I mainly used publicly available data to study things like the causes of unemployment, wage inequality, discrimination and the extent of economic mobility. More recently, I also started conducting field experiments by gathering new experimental data to assess the impact of specific interventions using randomised controlled trials (experiments where participants are randomly assigned to receive or not receive an intervention). I find that these are a useful way to ensure that we focus on relevant and scalable policy interventions. For instance, a collaboration with the Department of Labour tested low-cost employment strategies, like providing reference letter templates and job search aids to young job seekers, which proved effective and have been implemented in various labour centres and by NGOs focused on youth employment.

How do the tools and theories developed in economics help us make sense of data about human behaviour?

Economic theories traditionally assume that humans are rational – that they act in their own best interests – which can successfully explain much observed behaviour. However, there is also persuasive evidence that people sometimes behave in ways that systematically deviate from what this assumption would predict. Over the last two decades, economists have paid more attention to research in psychology and neuroscience, which has led to more realistic models that expand the range of motivations that drive behaviour. These models have also suggested ways to nudge the behaviour of individuals to be more closely aligned with their long-run interests.  

Economists have also developed several econometric tools that can deal with the problematic real-world data that we use to test our theories. Issues like measurement error, sample selection bias, reverse causality and omitted variable bias are very common in data produced by human behaviour and require appropriate tools to avoid drawing misleading conclusions from data. Combining economic theories and econometric techniques has produced and validated models that can successfully explain a broad spectrum of behaviour, including the existence of financial bubbles, bargaining power between a husband and wife, the factors that make countries vulnerable to civil wars, and why so many of us buy gym memberships and then end up not using them.

You have spent many years in the challenging environment of higher education. What keeps you motivated when things get tough?

The opportunity to pose and solve intriguing questions keeps me motivated. Witnessing my research being implemented or influence policy debates is rewarding. The responsibilities of teaching, mentoring and supervising the next wave of economists also provide significant motivation.

What aspects of your work do you enjoy the most?

I enjoy most aspects of my job. I cherish the opportunity to immerse myself in research projects, but also enjoy the interaction with the exceptionally talented students who attend our University.

Tell us something exciting about yourself that people would not expect.

I suspect this is more surprising than exciting, but my employment history includes short spells as a bouncer at a bar in the Neelsie and as a slack-rope walker in the circus.

How do you spend your free time?

I enjoy mountain biking, watching movies with my children, listening to music and socialising with friends over dinner and wine.  

  • Photo by Ignus Dreyer (The Stellenbosch Centre for Photographic Services).                         ​