Methodological Concepts and Perspectives

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Methodological Concepts and Perspectives

• Lecture 3

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Organization of this lecture

• Concepts Perspective in Methodology
• Defining science
• Considering knowledge
• Classification of types of knowledge
• Role of personal objectivity
• Role of facts, theory and hypothesis

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Science

• Science is the organized accumulation of
  systematic reliable knowledge for the purpose
  of intelligent explanation/prediction (Williams,
  1984)

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• Science is systematic inquiry -- it is not a
  static or unchanging entity.
• Its intended purpose is explanation / prediction
  science is especially concerned with
  conditional prediction
• ie. if X, Y, and Z occur, W will follow
• Research and Science are mutually interdependent
• Science is accumulated, reliable knowledge
• Research is a process through which science is
  expanded and tested for validity

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• Science does not consist of factual truth,
  devoid of human values or personal views.
• Science is inherently a social enterprise and
  scientific knowledge is shaped by human values,
  limitations, and social contexts
• Personal beliefs can affect scientific judgment
  and people are fallible.
• Scientists should not blindly accept (or reject)
  ideas, observations or concepts

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Economics as Art and Science(Is Economics a
Science?)

• Economics is a science because it accumulates
  (reliable?) knowledge through systematic inquiry
• It is also is an art which applies knowledge to
  current issues and problems.
• Good economic research requires intuition,
  creativity, and worldly experience

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Physical vs Social Science

• Social science places heavy emphasis on
  development and use of theories
• Physical sciences generate data under controlled
  conditions to test their theories postulated
  relationships between physical forces , verified
  through experimental design and data generation.
• Theories in social science tend to address more
  complex phenomenon of individual and group
  motivation and behavior, and effects on societal
  institutions. (Often cant be directly observed
  or quantified under controlled conditions.)

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Knowledge(How do we know what we know?)

• Postivistic vs. Normativistic Knowledge (Johnson,
  1986)
• Private vs. Public Knowledge (Larrabee, 1964)

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Positivistic vs. Normativistic Knowledge

• Positivisitic knowledge of conditions, or
  things that are directly observable or measurable
• Normativistic knowledge about values
• prescriptive knowledge what ought or ought not
  to be done to solve a problem. Inherently
  embodies judgement
• knowledge of values the goodness and badness of
  conditions and situations (not observable)

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Private vs. Public Knowledge(another way to
classify knowledge)

• Public knowledge can be demonstrated to others
  through logic and/or evidence. It is reliable
  knowledge and is shared publically.
• Private knowledge is that which we know ourselves
  but cannot be demonstrated to others. eg.
  religious beliefs, faith
• Private knowledge can lead to public knowledge if
  we set to demonstrate its reliability
• Only public knowledge can be reliable in a
  scientific sense, but what is accepted as public
  knowledge can be culturally and time dependent

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Ways We Obtain Knowledge

• Six primary means
• the senses, experience, intuition, revelation,
  measurement, and reasoning
• All ways of knowing can be placed in one of
  these categories, or some combination.

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The Senses

• Knowledge through sight, sound, touch, taste and
  smell
• These are generally privately perceived and help
  in forming the basis for each of the other
  avenues to knowledge, except reasoning

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Experience

• The accumulated total of ones exposure to and
  interaction with people, places, things,
  circumstances, ideas, senses etc..
• Experience knowledge is a disorderly and
  unorganized means of learning, however, it is an
  essential component of making sense of knowledge
  we possess.
• We use our experience to evaluate new knowledge
  in its relation to prior knowledge

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Intuition

• Sensing or feeling of something being accurate or
  not
• Inherently private knowledge
• However, this might lead to an orderly
  exploration and logical development which can
  lead to public knowledge
• Intuition can be important for the creative
  research process, but cant be accepted as
  reliable on its own.

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Revelation

• The reception of knowledge from an undefined or
  unknown source
• Not confined to divine revelation something can
  just occur to us out of the blue
• Not a reliable source of knowledge, unless it is
  tested for reliability

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Measurement

• Knowledge gained through measurement
  (quantification) such as data.
• Its connection to senses and experience is
  obvious
• It is generally considered factual knowledge and
  reliable, with understanding of sampling or
  measurement error
• Economic research involves a lot of statistical
  sampling and data gathering

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Reasoning

• The final means of gaining knowledge -- also
  thought of as interpretation. Integrates the
  other ways
• Knowledge gained through reasoning is the only
  way to derive reliable knowledge of relationships
  and patterns ,through which we develop
  explanatory or predictive capability
• Reasoning is the main avenue to useful
  disciplinary, subject-matter, and problem-solving
  knowledge
• Reasoning can be deductive, inductive, or both.

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Reliability of (Public) Knowledge

• Two criteria for establishing reliability of
  knowledge
• Supported by evidence (quantitative data or
  complex logical constructions). This should be
  measureable
• The way the evidence is obtained or generated can
  be demonstrated or reproduced
• The reliability of things that cannot be directly
  observed, is through reasoning and logic.

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Two Types of Logic (Deductive and Inductive)

• Deductive logic
• The process of reasoning from general premises
  (e.g. assumptions) to specific results or
  conclusions. Economic theory is largely based on
  deductive logic.
• We establish a series of assumptions about
  conditions, motivations and behaviors, and
  logically work through to variables and
  parameters we wish to explain or predict.

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Inductive Logic

• Is reasoning from the specific circumstances or
  outcomes to a conclusion about general
  circumstances or outcomes
• It is an empirical process of reaching a
  conclusion or arriving at new principles from
  known data and experience by observing objective
  realities.
• The most applicable explanation of induction from
  economics is statistical inference
• Collect data from a sample using established
  standards and criteria to infer characteristics
  and behavior of the entire population

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Logical Fallacies

• Errors in reasoning, which can lead to errors in
  conclusions or unreliable information
• List of logical fallacies
• Special pleading (selective use of information)
• Affirming the consequent (validity of premises??)
• Attacking the person (person representing issue)
• Appeal to the people (majority rules)
• Appeal to authority (X says its so)
• False cause (attributing wrong cause to an
  effect)
• Argument by analogy (analogous cases act the
  same)
• Composition and division (true for part, true for
  whole, and vice versa)

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Tests for Reliability

• Besides avoiding logical fallacies, more
  comprehensive guidelines are needed
• Four tests are recognized
• logical coherence,
• correspondence
• clarity (comprehensiveness)
• the pragmatic test of workability

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Test of Logical Coherence

• Examining an outcome or proposition to see if it
  is free of logical contradiction (errors and
  fallacies)
• Meeting the test of logical coherence does not
  ensure the reliability of the outcome but its
  reliability fails if the test is not met
• When applied to theory, it is a test of whether
  the conclusions follow logically from the
  assumptions.

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Test of Correspondence

• Comparing an outcome or statement to what is
  already known to see if it is consistent with
  prior knowledge.
• When applied to theory, it examines whether
  conclusions are supported by empirical evidence.

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Test of Clarity

• Examines the outcome or proposition for lack of
  ambiguity or vagueness.
• If more than one meaning, it fails the test
• Use of a concept in which terms used are not well
  defined so the meanings are vague

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Test of Workability (Pragmatism)

• The results have to solve the problem or issue
  addressed.
• The results must work, be relevant, and be
  reliable
• Example
• Physician giving a child a smallpox vaccination.
• Correspondence yes it has worked before, but
  for child no (lack prior knowledge)
• Coherence yes for doctor but not for child
• Clarity yes for doctor and not for child
• Workability did it work for the child?
• If these tests are met, the knowledge can be
  considered tentatively reliable, subject to
  further tests.
• We must consider all of the relevant evidence
  when evaluating reliability of knowledge

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Role of Personal Objectivity

• Fundamental to reliable knowledge
• Avoid trying to impose our private values and
  beliefs on others
• Subjectivity is associated with beliefs, values
  and opinion. Reliable public knowledge cannot be
  derived from personal subjective positions.
• Objectivity relies on what is demonstrable by
  observation, measurement, and logic.

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• Objectivity is the cornerstone of science and
  reliable knowledge.
• However, no scientist is completely objective.
  All introduce some subjectivity in our work, even
  by deciding what issues to study.
• Strive for scientific neutrality, by avoiding
  personal values influencing research. Be open to
  any research outcome.

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Scientific Prediction

• Scientific prediction involves theory used in
  conjunction with empirical (experimental)
  knowledge and experience.
• It involves the interaction of the following
  terms
• Fact a verifiable observation
• Theory logical relationships among facts
• Hypothesis a testable proposition

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Facts

• Observations that we establish through sense or
  measurement
• Facts are positive (directly observable or
  measureable) and independent of personal judgment
• Facts are not necessarily permanent
• They are not by themselves used for prediction
• Facts and values need to be differentiated, but
  there can be facts about values

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Theory

• Theories establish relationships, using
  deductive logic and facts as building blocks
• A theory is not unfounded speculation, as in the
  popular phrase that may be true in theory, but
  This is wrong!
• Theories are used for predictive and explanatory
  purposes
• Theories are tested by their internal logic
• Theories are abstractions, simplifications,
  and/or generalizations

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Functions of Theory in Economic Research

• Orientation framework to establish a problem or
  queston
• Classification defined meanings that facilitate
  understanding of complex concepts
• Conceptualization visualizing how something
  works or suggesting causes and effects
• Summarization
• Empirical generalization
• Generalized relationships

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Functions of Theory cont.

• Provision of precision help to relate facts and
  concepts
• Prediction of facts or identification of
  hypotheses
• Identification of gaps in our knowledge

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Hypothesis

• A result or outcome that is not yet evaluated or
  tested
• It is a tentative assertion of a relationship
  between factors or events that is subject to
  verification
• eg. Statistical hypothesis testing in
  econometrics
• significance of individual parameters
• statistical fit of the entire model

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Hypothesis cont.

• Three categories of hypotheses
• Maintained hypotheses things assumed true for
  the purposes of a study
• Diagnostic hypotheses propositions about the
  cause of a problem
• Remedial hypotheses proposed solutions to
  problems