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Delve into the concepts of method and methodology in economics, exploring theory appraisal, purpose of economic inquiry, sources of knowledge, and structure of scientific theory.
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Topik 3PengertianMetodologiMatakuliahMetodologiPenelitian(ESL398) oleh: YusmanSyaukat DepartemenEkonomiSumberdaya & Lingkungan FakultasEkonomi & Manajemen IPB
Pengertian Method & Methodology Longman Dictionary of Contemporary English: • Method: (1) a planned way of doing something, especially one that a lot of people know about and use; (2) proper planning of the way that something is done • Methodology: the sets of methods and principles that are used when studying a particular subject or doing a particular kind of work
Pengertian Methodology dalamEkonomi • Daniel Hausman (1992): Methodology is concerned with whether the claims of economics area reliable and true and how can judge whether they are reliable and true; and it is concerned with whether the practices of economists lead to conclusions that one ought to rely on or to believe • Ilmu Ekonomi – interdisciplinary approach. Ia membutuhkan: • Pengertian mengenai struktur dan kandungan dari economic reasoning dan • Pemahaman tentang bagaimana filosofi ilmu pengetahuan (philosophy of science)
PenggunaanKata Methodology • Kata Methodology biasanya digunakan untuk dua hal: • Disalahgunakan untuk merefer pada pengertian method, procedure, technique atau approach; seperti CGE, Linear Programming, Regresi Berganda, atau lainnya • Diartikan sebagai study of the process of appraisal of theories that are purported to be scientific. Methodology is the theory of theories • Dalam pengertiannya yang kedua, metodologi memiliki kaitan yang erat dengan epistemology (epistemologi). • Epistemology is the study or the theory of the origins, the nature, the methods of authentication and the limits of knowledge
Theory Appraisal • Coherence: the logical integrity of the theory • Correspondence: the relationship between theory and the external world • Clarity and Simplicity: secondary virtues of a theory
Coherence • Delineation of the scope of application of the theory • To what phenomena does the theory relate? • Under what conditions is it intended to apply? • Identification of the elements or statements in the theory to which tests of correspondence are to be applied • Are all statements , including assumptions, predictions and hypotheses to be assessed or only some sub-set? • How is correspondence to be tested? • Are experiments necessary? • How are historical data to be interpreted? • Is introspection a legitimate source of knowledge?
Criteria for theory appraisal Coherence Phenomena Theory A Correspondence Simplicity Coherence Correspondence Theory B
Fundamental Methodological Questions • What is the purpose of economic inquiry? • What are the legitimate sources of knowledge about economic phenomena? • What is the scope of the subject matter of economics? What are the limits to the application of that knowledge? • What is the appropriate structure of economic theories or models?
What is the purpose of economic inquiry? • Theory appraisal is blind without an idea of what theorizing should accomplish • Successful economic inquiry makes it possible to understand social phenomena • Traditions in economic inquiry: • Prescriptive: qualitative rather than quantitative analysis and prediction • Instrumental purpose of economic analysis as explanation: rationality approach (eg utility maximization, profit maximization) • Emphasize on measurement, quantitative prediction and control of social phenomena
The purposes of economic inquiry (2) • Henderson and Quandt: explanation and predictions • Becker: provide a comprehensive framework for the study of human behavior • Machlup: explanation and the limits of economic explanation • Samuelson: to produce refutable hypothesis • Friedman: produce reliable prediction • Popper: understanding human social interaction
The purposes of economic inquiry (3) • In short, the purposes of economic inquiry are: • Understanding • Explanation • Prediction • Discovering laws • Description • Testing hypothesis • Good conversation • Way of thinking • Improved efficiency
What is the source of economic knowledge? • Revelation: extra human entities • Reason: self knowledge or introspection • Observation: observation to the external world • Tradition Observation Reason Tradition Revelation
What is the scope of economic analysis? • Application of the material and financial dimensions of human social interaction? • Becker: education and family economics • Robbins: resource allocation • Kirzner: entrepreneurship • In general: human behavior!
What is the appropriate structure of scientific theory? • Monism: the principles of theory appraisal are common to all scientific disciplines. Only subject matter differentiates branches of science • Dualist: disciplines which study human behavior need a fundamentally different logic of theory appraisal from those do not. • Rational action: constrained optimization – soc important • Role of mathematic: is mathematical expression necessary for the statement of knowledge claims in economics?
General Problems in the Philosophy of Science • Economists do not yet agree whether the purpose of their subject is understanding or explanation and prediction • Tension whether social sciences should proceed along holistic or individualistic lines • Individualism: either explanation or understanding of social phenomena can only be considered to be complete when it has been explicitly link to the purposes, perceptions and actions of the individuals • Holism views phenomena at a more aggregate level than individual choice • Tension between rationalism and empiricism: what is the basic source of knowledge observation or reason, logic, intuition and introspection? • Disagreement whether theories should be judged on the basis of their truthfulness or their usefulness: Instrumentalist: is it usefull or not? Truth is beyond the apprehension of mere mortals.
Characteristic Problems of Scientific Economics • Economic data are historical. They are created without controlled experiments difficulties in interpretation • Diversity of Human being. People have different goals, preferences, perceptions, expectation and abilities
Why Bother with Methodology? • Stigler: economists should be forbidden from studying or talking writing about methodology until they are at least 65 years of old • Buchanan: a knowledge of methodology is like a roadmap. The process of selection of problems for research can be better undertaken with a familiarity of the principles of the philosophy of science in general and of the methodology of economics in particular • Mises: economists need to master the methodology of their subject – to understand the basis and the limits of the knowledge claims • Diversity of Human being. People have different goals, preferences, perceptions, expectation and abilities
Reference Fox, Glenn. 1997. Reason and Reality in the Methodologies of Economics: An Introduction. Edward Elgar, Cheltenham, UK. (Chapter 3)