Learning Objectives
Students will understand:
- The distinction between positive and normative economic statements.
- The role of value judgements in influencing economic decision making and policy
Content
Positive Economic Statements
Positive Economic Statements: A factual/objective statement which can be proved true or false (‘What is’).
Examples:
- ‘Fire is hot’.
- ‘If nurses’ salaries were raised, the greater rewards would encourage more people to go into nursing and therefore solve the NHS’s staff shortage problem’.
- ‘The sky is green’.
Role: Positive economics deals with objective explanation and the testing and rejection of theories, i.e. provable causal relationships.
Positive statements identify relationships between economic variables, which can be verified by referring to data (you can be positive about a positive statement).
Normative Economic Statements
Normative Economic Statements: Value judgements which cannot be proved true or false (‘What ought to be’).
Value judgement: an assessment of something in terms of one’s standards or priorities. It is subjective.
An Important distinction: Opinions are not the same as value judgements.
Opinions can be tested through the scientific method. E.g. I think boiling point of water is 10 C.
Value judgements cannot be tested by the scientific method. E.g. Economic freedom is more important than ensuring an equality of living standards.
Examples:
- ‘The government ought to give free school meals to all students’.
- ‘Nurses’ salaries should be raised immediately as they do such a good job for the NHS and deserve greater rewards’.
- ‘Tottenham Hotspur play the most attractive football in the premier league’.
Role: Often concerned with ethical issues such as ‘fairness’.
Normative statements are indicated by words such as ‘should’, ‘ought to’, etc. They are often used when considering policy options.
Presentation
Workbook
N.B. There is one workbook for the Economics as a ‘Social Science’ and ‘Positive & Normative Statements’ topics.
