NATURE AND CHARATERISTICS OF SCIENTIFIC APPROACH TO THE STUDY OF ECONOMICS

MUSTAPHA MUKTAR, Ph.D

DEPARTMENT OF ECONOMICS

BAYERO UNIVERSITY KANO-NIGERIA

ABSTRACT

To Research is to search again, to take a more careful look, to find out more. Economics and other related social survey researches are scientific in nature bused on observation description, explanation and prediction of a given phenomenon with a view to testing it based on facts. Economic problems can be positive, normative or analytical, it can also be approached from inductive or deductive perspective. Other alternative methodology includes apriorism, falsificationism and conventionalism.

INTRODUCTION

Research methodology may be defined as a description of explanation and justification of various methods of conducting researchers. The method may either be general techniques such as experiments and surveys or logical procedures such as formulating research problems. The methodology that is employed in the study of economics and other related social sciences such as other related social sciences such as psychology and sociology is scientific in nature, it is scientific because they are sciences, but not physical sciences (which need laboratories for controlled experiments).

Sciences can be defined as a body of a systematized knowledge that involves observation, collection, densification and analysis of data with a view of matching evidence with theory. Science can also be seen as a strategy of explanation. Social scientists are explaining why events occur and why people behave as they do. In advancing explanations and description of events, scientists do three kinds of things they exercise imagination and creative insights, they perform logical analysis, and they make judgments that are based on  observation of events that they wish to explain Selltiz (1976).

Characteristics of scientific researches

The ultimate objective of science is to describe explain and predict, however all fields of science have in common the basic rules of evidence and logic. However the following are some of the characteristics of a scientific research.

Description- This attempt to answer the question of who, what, where, when or how much, it reports what happen, description is an indispensable part of science an usually precedes explanation and prediction.

Explanation: It attempts to answer why types of questions for example why is it that there exist high rate of crimes in urban areas than in rural areas? Providing answer to such kind of question needs scientific inquiry and methodology.

Prediction: This involves answering questions of what will occur in the future, so that forecast can be made in the above example a researcher may be interested in predicting the effect of high rate of crime on the welfare of the citizens as well as on the security of an area? Economist may also predict in circulation on the general prices of goods and services.

Observation: Observation makes description explanation, and forecasting possible. A phenomenon that is not observable is not amendable to scientific inquiry. An event have to be observed before the application of other scientific characteristics hence observation is the initial stage to any scientific research. Adam Smith observed than other countries of western Europe an that lead him to conduct a scientific research which was published as a book in 1776 titled “An inquiry into the nature and causes of wealth of natures.

Objectivity – This means that the claims of science can in principle be tested by any competent procedure, this means different competent people can test the scientific claims on neutral grounds. It should be noted that only claims open to repeatable  public tests qualify as scientific.

Logical: Scientific researches are guided by the accepted rules of reasoning, such as the rules of definition, inductive and deductive reasoning, probability theory and other scientific rules.   

Systematic: This means that scientific researches must be coherent and logically organized, such that they are open to modifications and falsification by new evidence. For example in the last 50 years block and white television set is a luxury but an inferior good hence its demand curve is different from the one when it was considered as a luxury.

Methodology in Economies

Economies have been defined as a study of human behaviours in relation to allocation of resources so that a balance can be achieved between scarce resources and unlimited wants, it is a social science and therefore apply scientific methodology in the analysis. Economic problems can either be positive, normative or analytical. The identification of a problem is to be one of them is dependent of the goal of the researcher as well as the type of problem he is working with.

Positive Economic – Some economic problems are positive in nature and they involve “what was” positive statements are testable statements and they are otherwise known as empherical  problems, they depends on the concept of emphericism (based on our senses of hearing, seeing, feeling and testing) they are the most reliable source of knowledge. Example the lower the price, the higher the quantity demanded statement can be tested by observing the behaviour of consumers under different prices of a given commodity. Another example of a positive statement is the lower the supplied to the market, all things being equal.

Normative statement on the other hand are statements which includes “what ought to be” they are not testable statements but depends on value judgment example between inflation and unemployment which one is a more serious social problems? Question of such nature depends on value judgment as different individuals may have a different perception on the problems are sometimes consistent with analytical problems.

Analytical problems are such problems that are guided by definitions; hence their judgment depends on the type of definition given example a researcher may categorize social problems as of two grades A and B and may rank A as most serious and dangerous while category B as less serious and dangerous. Now equipped with the above definition if for example unemployment falls in A while inflation in B (as defined by the researcher) than it is easy to judge which is more dangerous and exploitative. Economists also use the concept of dummy variables in quantitative analysis to categorize qualitative variables for judgement. For example a consumption function can be estimated in two periods of war and peace a dummy variable can be used and if it is a war period it takes a value of 0 and for peace period it is I hence the functions can be estimated below: -

C       =       b_o + b_iY  + b₂      = 0 during

War and  = 1 during peace

C = b_o + b_iY  + b₂  peace time

C = b_o + b_iY                  war time

Scientific Reasoning Employed by Economics

The study of economics and other related social science are also based on inductive or deductive reasoning. Deductive reasoning as the name implied is a process where by researches start their reasoning from a generated statements so that conclusion can be made, example a researcher can observe “the law of demand that is “ceteris paribus. The lower the price the higher will be the quantity demanded of a commodity” he then collects data and analyze it to see whether it is true or false from there he can also move ahead to see whether the law applies to all types/classes of commodities.

Inductive reasoning is the name implied start from observation of a given phenomenon and arriving at a generalized stament or theory. An individual may be interested in the persistence of object poverty among households headed by women, after collecting necessary data and testing it accordingly the findings can be generalized to form a theory, otherwise it is rejected and more observations will continue. Other aspect of scientific reasoning that are employed by economics includes reorganizing a problem, defining a problem, development of hypothesis around the problem that has been experienced, the development of techniques as well as instruments of measurement and lastly drawing conclusions. It should be noted that where a hypothesis is tested and accepted then it becomes a theory otherwise. It is not and need to be re-formulated.

Latsis (1976) identified three alternative methodologies of economics as Apriorism, falsificationism and conventionalism. Aprriorism claims that the assumption of rationality is an absolute pre-requisite for describing and explaining human actions, and in particular economic actions. According to this approach the fundamental prepositions of economic science are “time” or “hold” independently of the vagaries of experience. The fundamental apriori category is that of purposeful action. Every attempt to prove them (the prori categories) must presuppose their validity. It is impossible to explain them to a being who does not possess them on his own account. Latsis (1976).

Falsification is quite the opposite of apriorism. Its purpose is to expose maximally theories is logical possibility of empheircal counter-example. The criterion of goodness of a theory is a function of its falsification together with its success in withstanding attempts to falsify it. If, other things being equal, theory A is more falsifiable than theory B and have survived non trivial efforts to falsify it, then theory A better than theory B. Latsis (1976). The justification of this approach is due to the fact that knowledge is dynamic hence what is regarded as truth at one point in time may often be rejected at another point in time by new evidence or interpretation.

Conventionalism this was introduced to economics by Vilfredo Pareto in his (1909) book, he wrote: “The same facts may be explained by an infinity of theories equally true because they all reproduce facts to be explained…” More recently conventionalist methodologies of economics were put forward in 1940s and 50s by Machlup and Friedman. An example is that there exist various theories to welfare maximization ranging from the increase in GNP criterion, the Pareto second best criterion, the Jeremy Bethany’s criterion up to the compensation criterion each aimed at maximizing the total social welfare of a given society and each with its unique assumptions and approach.

Conclusion: The study of economics and other related social sciences such as psychology employed a scientific method of reasoning, which is systematic and based on facts. Scientific method is however subject to test before confirmation. The ability of a statement to resist forces of falsification makes it a theory, otherwise it is rejected.

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