What makes good support?

Support is the evidence that backs up your justification. Time and again, economics examiners are frustrated to see that students don’t seem to relate the models and theories that they have learned to the real world.

There are three main types of support: examples, summary statistics, and empirics.

a) Examples

Excellent for illustrating a simple point (that the model of perfect competition reasonably describes some industries for instance, even though no industry has ‘infinite’ firms and zero barriers to entry).

Examples are not so good for demonstrating a general relationship, as your example might not be representative (it could be an ‘outlier’). For instance, many people know at least one smoker who lived until they were 80 or 90 and died of non-smoking related illnesses. But it is wrong to assume that this one example contradicts the strong evidence that most people who smoke are much more likely to develop smoking-related illnesses.

b) Summary Statistics

Like examples, these are quick ways of illustrating a point. Summary statistics are typically averages, standard deviations, or ranges. e.g. people with a university degree typically earn £400,000 more over their lifetime than those without university degrees.

But one ‘summary’ figure can be misleading. In this case, it is possible that half the people going to university earn £800,000 more over their lifetimes, while half earn no more than someone without a degree (in fact this isn’t the case, but it illustrates the point well).

c) Econometric evidence

Examples and summary statistics are both descriptive in nature: they tell us something about the world as it is (and that picture might be quite misleading, as noted above). But they do not allow us to infer conclusions from them.

This is where econometrics comes in. Most undergraduates are introduced to econometrics in their second year. Econometrics tries to work out the underlying relationships at work by controlling for a variety of problems that can make normal correlations useless for drawing conclusions.

If you have studied econometrics, you should be able to discuss the results of different empirical papers. What’s more, you can discuss how reliable their assumptions, data and method are – and this will allow you to draw conclusions about which support is valid.

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