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Persuasion: Reflections on Economics, Data and the 'Homogeneity Assumption'

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  • Adam Fforde
Abstract
This paper discusses issues to do with the empirical basis of modern economics and points towards the need to look more closely at the ‘homogeneity assumption’ that underpins much economic theory. It argues that severe problems currently prevent economics from becoming more persuasive to both students of economics and those outside the discipline. The issue involves the management of disciplinary boundaries, and excessive use of the ‘homogeneity assumption.’ Three areas of concern are explored. First is the literature on causes of growth, and the role of policy. The paper documents reasons to doubt the existence of robust relationships between growth and policy variables. Second is the ‘homogeneity assumption’ that different countries are usefully viewed as members of a single population. Third is evidence suggesting that an assumption of ‘normal’ maximizing behaviour has to be justified, not just assumed, and that regular deviations from the usual maximizing assumptions occur with gender and culture. The paper argues that a central issue in economic methodology and pedagogy should be, as North implicitly argues, the negotiation of disciplinary boundaries: what economics can versus cannot explain. It suggests more explicitly basing the choice of explanatory models on empirics identifying where the model applies.

Suggested Citation

  • Adam Fforde, 2004. "Persuasion: Reflections on Economics, Data and the 'Homogeneity Assumption'," Department of Economics - Working Papers Series 919, The University of Melbourne.
    • Handle: RePEc:mlb:wpaper:919
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    Cited by:

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    2. Katsushi Imai & Raghav Gaiha & Woojin Kang, 2011. "Poverty, inequality and ethnic minorities in Vietnam," International Review of Applied Economics, Taylor & Francis Journals, vol. 25(3), pages 249-282.
    3. Adam Fforde, 2023. "Purposive Action Under Conditions of Unpredictability: Lessons from Development Practice and Some Suggestions," Progress in Development Studies, , vol. 23(3), pages 344-353, July.
    4. Michael Waibel, 2011. "Review: Adam Fforde: Coping with Facts: A Skeptic’s Guide to the Problem of Development," Journal of Current Southeast Asian Affairs, Institute of Asian Studies, GIGA German Institute of Global and Area Studies, Hamburg, vol. 30(1), pages 125-128.
    5. Adam Fforde, 2019. "Yes, but what about the authority of policy analysts? A commentary and discussion of Perl et al., ‘Policy-making and truthiness: Can existing models cope with politicized evidence and willful ignoranc," Policy Sciences, Springer;Society of Policy Sciences, vol. 52(1), pages 153-169, March.
    6. Adam Fforde, 2017. "Confirmation bias: methodological causes and a palliative response," Quality & Quantity: International Journal of Methodology, Springer, vol. 51(5), pages 2319-2335, September.
    7. Adam Fforde, 2021. "Engineering, economics, Heidegger … and Mariotti: a note," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 48(4), pages 589-600, December.

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