Lesson Objectives

1 – To understand why we collect Positive and Normative

data Statements

2 – To understand the difficulties Keywords

Social Science
and problems in collecting
Normative statement
economic data Positive statement
Value judgement

3 – To be able to identify normative BLP

and positive statements Reasoning
Why do we collect data?
 Why do we collect data?

The scientific method! Provide support for policies!

Economics is a social When arguing for something
science. to happen or not you need
evidence to show if it is a
You need data to support good idea.
or refute a theory.
 Why is collecting data so hard?
Where?

Truth of sources?

Case Studies?

Misleading figures?

Variables?
 How would you?
Find out how much average earnings had increased?

Find out how high unemployment was?

Find out how much price changes impacted on miles

driven

Find out how many potential illegal immigrants are put

off by strict customs checks?
Positive and Normative statements
 Positive and Normative statements
POSITIVE STATEMENTS
Positive statements are objective statements dealing with matters of fact or
they question about how things actually are. Positive statements are made without
obvious value-judgements and emotions. They may suggest an economic
relationship that can be tested by recourse to the available evidence.

NORMATIVE STATEMENTS
Normative statements are subjective - based on opinion only - often without a
basis in fact or theory. They are value-laden, emotional statements that focus on
"what ought to be". These are often referred to as a Value judgement
Positive and Normative statements

Which is the positive and which is the

normative statement?
p/n Statement
A rise in interest rates will cause a rise in the exchange rate and an increase in the demand
for imported products

Lower taxes may stimulate an increase in the active labour supply

The UK economy now has lower unemployment than Germany

A national minimum wage is likely to cause a contraction in the demand for low-skilled
labour

Protectionism is the only proper way to improve the living standards of workers whose
jobs are threatened by cheap imports

The decision to grant independence for the Bank of England is unwise and should be
reversed

The national minimum wage should be increased to £10 as a method of reducing poverty

The American stock market has boomed in recent years

A national minimum wage is totally undesirable as it does not help the poor and causes
higher unemployment and inflation
MC
MC

I can check in my
textbook to see if this is
true

There is no way of ever

proving or disproving
this. It is an opinion and
a value judgement.
MC
MC
A positive statement can
be proven right or
wrong, so it must be
able to be tested.

That is a normative
statement

This isn’t always the

case as things can be
proven in other ways

Positive doesn’t mean it

is correct, just that it can
be proven or disproven
 Lesson Objectives
1 – To understand why we collect Positive and Normative
data Statements

2 – To understand the difficulties Keywords

Social Science
and problems in collecting
Normative statement
economic data Positive statement
Value judgement

3 – To be able to identify normative BLP

and positive statements Reasoning