Title: The Centre for Microdata Methods and Practice
Funder: Economic and Social Research Council

Abstract: The Centre for Microdata Methods and Practice develops and applies tools to extract information about individual behaviour, and the influences on it, from 'microdata' - that is, data recording the actions of individuals and the outcomes they experience in their normal environment, not in a controlled laboratory situation. The 'individuals' the Centre studies can be, for example, people, households or enterprises. Almost all the quantitative individual data social scientists have to work with are of this non-experimental microdata type and availability of microdata is growing very fast, as is the computing technology required to process huge datasets. Many weighty policy decisions in the public sector, and pricing, investment and strategic decisions in the private sector, are based on the results of analysis of microdata. Microdata have the potential to be very informative but their analysis presents great challenges which the Centre will tackle. Some of these challenges arise because the processes in which individuals are engaged are complex, involving risk and uncertainty set in a dynamic context in which the outcomes of decisions occur long after decisions are made. Saving and pension planning behaviour is of this type and is critically important for government to understand. Further complication arises here because there is enormous heterogeneity, with people having very different attitudes to risk and estimates of their likely longevity. This may produce huge differences in savings outcomes and potentially great inequality in circumstances amongst the old. The research of the Centre aims to produce new models, methods and approaches for understanding behaviour of this sort, and it will apply them to develop answers to real policy questions using real microdata. A major issue arising with non-experimental microdata is the problem of distinguishing amongst competing observationally equivalent explanations for phenomena observed in microdata. For example, if able people tend to stay at school longer, how could one tell whether an observed correlation between wages and years of schooling is due to the high value placed by employers on the skills learned at school or the high value placed on ability? This is a simple example of the identification problem that lies at the heart of the Centre's research agenda. The Centre's research in this area is of crucial importance because it bears directly on the interpretation of the myriad statistics that policymakers and the public face. This work reveals the importance of assumptions in the interpretation of data analysis and the benefits from adopting alternative measurement schemes. The Centre aims to raise the quality of microdata-based analysis, and to spread good practice, so training, capacitybuilding and communication with users are key elements in its work. Through its programme of user engagement, it not only discovers challenging and important problems but also gains access to sources of microdata. The Centre mounts a programme of professional training courses and advanced masterclasses, trains doctoral students and boosts the careers of postdoctoral researchers. The Centre works with a network of Fellows who regularly visit, conduct research and lecture at the Centre and publish their works in the Centre's Working Paper series. The Fellowship counts in its membership many of the world's most creative researchers in microdata methods including the two Nobel Memorial Prize winners of 2000, the first to receive the prize for contributions to microeconometric analysis. The Centre builds on a firm foundation created with seed corn funding from the Leverhulme Trust and, since July 2007, core funding from ESRC. The Centre is the hub of a network of international research activity, a major world presence in microdata research and training and an invaluable asset to the UK social science professional and research community.


Research activity codes: 1.4 METHODOLOGIES AND MEASUREMENTS;1.5 RESOURCES AND INFRASTRUCTURE (UNDERPINNING)
Health categories: MENTAL HEALTH