Research Methodology for Applied Economics

Lecture 1

Introduction to the Course

Syllabus (handout) Textbook
Ethridge, 2004, 2nd edition Research Methodology in Applied Economics

Grading
1 2 Suggested exercises (end of chapter) 2 exams (Nov 6 & 13)

Office hours
1 hour/day, 11:00am 12:00noon, place TBA
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Justification for the Study of Research Methodology

Need for formal, focused attention within the economics discipline on how to organize and conduct research in applied economics

Two central objectives: 1. Overview of the conceptual and philosophical basis of research methodology in economics 2. Procedural guidelines on planning, designing, and conducting research projects

Reasons to Study Methodology

Methodology is the manner in which we approach and execute functions or activities
Consists of approaches or guidelines, not specific details of how we do the task (they are methods)

Within a discipline, there are accepted rules of evidence and reasoning Research methodology provides the principles for organizing, planning, designing and conducting research. (It does not tell you how to do specific research).
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Reason for Studying Research Methodology

The central reason for studying research methodology is that it provides a time-tested, proven means of producing new, reliable knowledge. That accumulated, growing body of knowledge comprises a discipline, or perhaps a science (p 4)

We need to differentiate research methodology from research methods:

Methodology general approaches or guidelines
Methods specific details and/or procedures to accomplish a task

One course can not teach all methods in Agricultural Economics!

Examples of methods? (regression analysis, optimization models, surveys, econometrics .. )

Research Methodology in Economics

Study which integrates the various components of economics to accomplish a defined, goaldirected research To expand our knowledge and make that knowledge useful to the study of world problems To learn by doing under the supervision of an advisor (shown to be an effective model) Pull together various aspects of economic theories, methods, and analysis to present in a coherent, logical, reliable and useful manner.
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Recommendation from the Commission on Graduate Education for Economics in the US (1991)
1. More emphasis on real world problems and the application of economic research to them; 2. More emphasis on communication skills, especially writing, and the ability to relate economic knowledge to the public. FLAW WE TEACH STUDENTS TO KNOW ECONOMICS, BUT WE RARELY TEACH THEM TO DO ECONOMICS (p 6)
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Paradigm Shift for Success in Graduate School is Needed

Not determined solely by the understanding of theories or techniques What is needed is the understanding of economic issues, literature, research process and ability to conduct research and communicate results to the stakeholders.

Common flaws in Methodology

Failure to: Establish the reason for the research Provide clear & concise objectives Provide complete reference to prior research on the subject and methods Lack of understanding for the conceptual and theoretical basis of the research Selection of analytical structural model for mere empirical convenience (or familiarity) Presenting conclusions that are merely restatements of analytical findings (ie. results)
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Objectives and Focus of the Course

Increase proficiency and effectiveness in economic research efforts
Two primary objectives:
1. introduction to the conceptual and philosophical foundations of research methodology for applied economics research 2. procedural instruction on how to plan, design, and conduct research projects
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Creating good habits for graduate students

Doing research entails planning and designing the research, implementing and completing the analysis and disseminating the results. Conducting research that is defensible, useful and expands our knowledge base is not an accident.

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Examples of bad Methodology

Unclear about the research problem Unclear about the objectives Lack thorough awareness of previous work Incomplete conceptualization of the problem Confusing research means with ends
Good research is no accident. (p 7)
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What this course is not about

Philosophy of science Economic methodology (the approach to economic reasoning) Research methods (techniques)

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Ethridge addresses 2 divergent but related aspects of economic research methodology: Processes of discovery and confirmation
Discovery deals with formulating, finding, and creating new knowledge, information Confirmation deals with validity or reliability of information Discovery is a creative process (art) requiring questioning, probing, pursuing alternative avenues of exploration, etc.. Confirmation is more highly developed and this is the science part of the discipline
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Assumptions about the students

You will conduct or be required to do research You have basic knowledge of economic theories You know basic statistics and social sciences analytical techniques You are able to think abstractly You think critically (but not in extreme form cynicism, which is a barrier to understanding) You have the ability to synthesize from the facts and information in front of you Ability to discern privately held beliefs from concepts supported by evidence ie. need for objectivity You are currently initiating a research project
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Perspective and Views of the Author (Don Ethridge)

(I like the way he lays out his beliefs and biases this is rarely done)

Ethridge appreciates economic theory, but likes to focus on applied, problem solving issues. the beauty of economics rests in its theory, but the power of economics lies in its application to current problems. His beliefs are a mixture of positivism, normativism, & pragmatism, but mainly pragmatism. He sees economics as both an art and a science
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Organization of the Course

Definitional , conceptual and philosophical aspects of Research Methodology (Chap 2 4)
Define terms and concepts, examine the methodology of process, how research methodology is related to science, knowledge and objectivity, prediction, etc..

Procedural aspects (Chap 5 9)

planning and organizing research

Reporting of Research (Chap 10)

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