Dr. Stat

Dr. Stat is a Statistics Professor. This blog is his opportunity to share ideas and opinions about education (especially math education), politics, and whatever else comes up.

Monday, May 23, 2005

Economic Analysis

The business/management analogy I discussed previously could be considered a sort of economic analysis. Economics doesn't just mean money. The idea is that people engage in goal-directed activities in order to realize a gain (profit) of some kind. Even altruistic activities can be seen this way, if intrinsic rewards are also considered profitable.

Really, this is nothing more than a way of analyzing goals and the processes required to achieve them.

Many of our institutions are structured so that the activities carried out in them are expected to result in a profit. This is even true of non-profit organizations, because the term "non-profit" really means that the profit isn't in the form of money, but some other desired outcome, such as alleviated suffering, happier communities, etc. Government institutions are structured to profit society as a whole in various ways. Schools are no different.

We would like to improve our schools. We want to make instruction better and more efficient. By defining the activity in economic or business terms, we can have some hope of achieving these goals. It is not that business terminology is necessary to do this. But the quality control literature has provided a framework for improvement that has had phenomenal success in the last forty years or so. Some people would object that reducing an activity as personal as education to the cold, dry terms of economics is unreasonable or even immoral. The idea that economic analysis is cold and dry, though, is not necessarily accurate. Nor does such analysis, properly done, eliminate the human element of the process.

Let's look at another trend in education. The use of "research" and "statistical analysis" has become predominant in the education literature in any discussion of improving education. Yet, in the past, people objected that such scientific analyses were inappropriate for education. This kind of research is limited in its effectiveness because of the large number of confounding variables present in any study. It is also rare that randomized experiments can be carried out in education, therefore results can be biased and statistical methods appropriate only to randomized experiments are often used inappropriately in the analysis.

Scientific research and economic analysis are by no means mutually exclusive. They are complementary. Economic analysis provides a conceptual framework in which to implement and interpret research.