The Role of Statistics in Economics

Economics Economics Questions
1

I’m trying to state explicitly the Austrian view of statistics, or empirical data analysis in general.

I understand that praxeology is a deductive approach, using a priori reasoning, and so has no use for empirical data sets in deriving its results

At the same time, the analysis of empirical data sets is a very important part of economic calculation for most acting agents (e.g. many businesses make heavy use of statistical tools).

And Austrian economists, when they interpret economic history and make forecasts, must engage in some form of empirical data analysis.

I think the issue is possibly confused because many people consider the statistical analysis of economic data sets to be economics, whereas people like myself prefer to think of economics primarily as the discovery of results about theoretical action, with statistics being more of an interpretative tool.

Anyway, am I correct in saying that Austrians view statistics as necessary for their empirical analysis, and potentially useful for economic calculation, though it is not to be used in economic theory?

2

Yeah, you’re more or less correct. When Austrians say their theories are a priori, what they mean is that they do not need empirical testing (not that they’re infallible), precisely because action is too multifaceted and complex (as opposed to the entities studied by the natural sciences), and so a theory is necessary to even identify these facts and analyze them - one cannot, as the positivists wants to, simply analyze brute facts, expecting them to interpret themselves. The precise details of the methodology differ according to whether one is a Kantian or Aristotelian. Anyway, this means that economic theory is purely axiomatic-deductive - econometric (and other studies), whilst useful, are not economics per se, although they might qualify as economic history. The axiomatic-deductive methodology pertains strictly to the pure theory of the science.

3

Cool, it makes sense to me.