Research Methods in Economics

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Research Methods in Economics

• ECO 4451
• Introduction

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What Is Research?

• Stating a question seeking its answer
• Evaluating a question and answer previously
  considered by others
• Synthesizing existing knowledge to develop an
  answer (meta-study)
• Discovering new knowledge knowledge is the
  interpretation of facts (data)

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What Is Economics Research?

• Defined as much by the way of thinking as by the
  subject matter.
• Microeconomics
• Behavior of individual agents
• Interaction of agents in market and non-market
  settings
• Optimizing behavior (choices)
• and responses to incentives
• Equilibrium
• and changes in equilibrium in response to
  changing conditions

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What Is Economics Research?

• Macroeconomics
• Aggregate behavior of economy or large segments
  of it
• Based on microfoundation of behavior of
  individual agents their interactions

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Your Research Project

• Assignment is to conduct an independent analysis
  that seeks to answer a research question.
• What does this mean?

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Whats a Research Question?

• A good research question has several
  characteristics, but fundamentally it is
• A question, the answer to which is unknown or in
  doubt.

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Whats an Independent Analysis?

• You collect information or data needed to answer
  the research question.
• You apply a method of analysis that would
  reasonably be expected to generate an answer
  based on the information.
• You evaluate the information
• Weigh the evidence
• Consider the quality or uncertainty of the
  evidence
• You draw conclusions supported by this analysis

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Conducting an Independent Analysis

• The simplest way to conduct an independent
  analysis is to choose a research question that
  lends itself to a statistical test of a
  hypothesis.
• Less quantitative approaches make it harder to
• Credibly demonstrate independence of work
• Reach clear conclusions
• But non-quantitative approaches that seek to
  answer a research question or solve a research
  problem are acceptable, as long as the analysis
  is your own.

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Research Questions

• A good research question
• Is interesting and/or important from an economic
  perspective
• Is clearly stated
• Has a logical rationale is tied to economic
  theory
• Is doable but not trivial

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Research Answers

• Research answers should
• Be clearly stated
• Supported by the analysis conducted
• Be generalizable
• Be put in context
• Have implications or generate new questions

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From Questions to Answers The Research Process

• Good research
• Is incremental
• Is ethical
• Can be replicated
• Employs appropriate design analysis

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Where Do Research Questions Come From?

• Provided by a client, clear doable.
• Provided by client, but vague /or undoable.
• Generated by researcher.

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Finding a Research Question

• Start with a general area of interest refine to
  a research question.
• What interests you?
• Personal experience, topics from classes, current
  events
• Would this interest others?
• What have others done?
• Extend it, or do it in a different setting.

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Finding a Research Question

• Is it doable?
• Not too broad, not more work than you can do,
  data needed are available or can be acquired
• Get a few ideas critique them
• Your first idea may not be the best, may need to
  be refined significantly or even dropped

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Common Errors in Project Selection

• Its not a research question
• Its a research question, but the analysis is
  likely to degenerate into a report on rather
  than an independent investigation of
• Its not related to economics
• You care too much to be objective

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Common Errors in Project Selection (Cont)

• The problem is too hard
• Any answer obtained could not be generalized
• Evidence to answer the question cannot be
  obtained

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Economics and Your Research

• Make sure that your topic is economic.
• When the economic part of your problem is not
  obvious, be sure to clarify how the problem is
  economic in nature
• How it relates to the allocation of scarce
  resources among competing ends.

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