H/T to Physics of Finance Blog for pointing up this paper and providing some commentary.

Ole Rogeberg, Hans Olav Melberg

Abstract

Do economists accept absurd and unsupported claims about reality, and if so, why? We define four types of claims commonly made in economics that require different types of evidence, and show examples of each from the rational addiction literature. Claims about real world causal mechanisms and welfare effects seem poorly supported. A survey mailed to all researchers with peer-reviewed work on rational addiction theory provides some evidence that criteria for evaluating claims of pure theory and statistical prediction are better understood than those needed for claims of causality or welfare analysis. We suggest that unsupported claims about real world causality or welfare may be accepted in parts of economics provided they derive from a formally correct model consistent with certain types of (often aggregate) data. The rational addiction literature illustrates that this can lead to absurd and unjustified claims being made and accepted in even highly-ranked journals.