The Unreasonable Effectiveness of Algorithms
Jens Ludwig, Sendhil Mullainathan, Ashesh Rambachan · National Bureau of Economic Research · 2024
We calculate the social return on algorithmic interventions (specifically their Marginal Value of Public Funds) across multiple domains of interest to economists-regulation, criminal justice, medicine, and education.Though these algorithms are different, the results are similar and striking.Each one has an MVPF of infinity: not only does it produce large benefits, it provides a "free lunch."We do not take these numbers to mean these interventions ought to be necessarily scaled, but rather that much more R&D should be devoted to developing and carefully evaluating algorithmic solutions to policy problems.