Friday, June 30, 2006

Econometrics and knowledge

Latest Mises.org blog post
http://blog.mises.org/archives/005249.asp


The National Bureau of Economic Research has just published a study that purports to answers one of the questions that has stumped men for ages, "Why do high earners work long hours?" Will the next study answer another unsolved mystery, "Why do those who work long hours tend to be high earners?"

There are a number of ways used by men in attempt to discover truth, one way is to employ empirical methods and gather data and generate correlation statistics, while another way is to utilize a priori logic and reason. The first method ends up with "knowledge" that is tempered by the term, suggest, since these studies can prove nothing. The data may suggest this, or it may suggest that. The findings and suggestions depend on the assumptions, equations, models, etc., and are always open to questions and challenges.

On the other hand, a priori knowledge is exact. The only problem with a priori logic is that it does not require a cadre of econometricians and statisticians, and what in the world would the feds do with all those unemployed researchers?

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