Research Methodology in Applied Economics
Research methodology outlines the principles for planning and conducting scientifically-based research. In applied economics, methodology involves reducing abstract theories and research methods to make them applicable to a range of issues in business, public policy and life.
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Identification
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The School of Economic, Political and Policy Sciences at the University of Texas at Dallas describes applied economics as applying economic theory and quantitative research techniques to real world problems. Research methodology in applied economics reduces the amount of abstraction in theory and analysis methods, applying them to everyday problems in labor, industrial production, health care, the environment and other issues.
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Applied economic methodology includes writing a research plan that articulates the research question or the problem being studied, then details a procedure for investigating the matter. This includes specifying the data to be collected and the methods used for analyzing them. The proposal also should describe previous research in the area being studied and explain how the proposed study will add to that body of knowledge.
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Analytical methods usually involve quantitative techniques, especially regression analysis and other economic statistical techniques. Other analytical methods in applied economics include input-output analysis and linear programming. Input-output analysis applies matrix algebra to study transactions among various sectors of the economy, while linear programming is a method for achieving the best outcome, such as highest profit levels or minimal costs, subject to a set of constraints, such as limited resources.
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