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"Although it might sometimes be useful to ask people why they make particular decisions, it is not clear to me how much value or understanding one gets from that."
While I don't do economics research, I do a lot of research around buying and selling of innovative or novel products in various categories for my businesses and investments. For me, the value of collecting why someone believes they made a decision is that it provides a collection of hypotheses. The buyer believes they made a decision for reason X, what happens next time they are presented with X? Do they make the same decision or a different decision?
For innovative products, there is no history to analyze, no data to reference. The buyers' provided reason is the best proxy we have for what might be the truth, and then we can test it.
"For example, firms experiencing an increase in the demand for their product might blame rising costs for their decision to increase their price without realizing that the rising costs are the result of greater competition for inputs caused by the increase in demand for the output good. "
This is an interesting pointing as it touches upon the value of survey data. I think there is value, and the type of questions that need to be asked, should be informed by the model we are using. We could still get good information from firms about what the underlying problem is. For example, firms often track competitor performance closely or participate in industry panels and might now if the reason they getting fewer inputs is because they're being priced (due to higher input demand) or that the supplier is providing much less (due to COVID closing the factory). We could also aggregate the data.
Given the bigger and bigger issues we have with survey data, it is more important than ever to design them intelligently. Reminds me of the survey and auction experiments regarding the value of gift giving (how surveys showed one result, while auctions another).
Professor, I wander if this can fit into of what is known as policy humility. I was just struck with that word, reading the last paragraph, where the prediction vanishes into thin air. :)
"Although it might sometimes be useful to ask people why they make particular decisions, it is not clear to me how much value or understanding one gets from that."
While I don't do economics research, I do a lot of research around buying and selling of innovative or novel products in various categories for my businesses and investments. For me, the value of collecting why someone believes they made a decision is that it provides a collection of hypotheses. The buyer believes they made a decision for reason X, what happens next time they are presented with X? Do they make the same decision or a different decision?
For innovative products, there is no history to analyze, no data to reference. The buyers' provided reason is the best proxy we have for what might be the truth, and then we can test it.
This is a pretty weak post.
"For example, firms experiencing an increase in the demand for their product might blame rising costs for their decision to increase their price without realizing that the rising costs are the result of greater competition for inputs caused by the increase in demand for the output good. "
This is an interesting pointing as it touches upon the value of survey data. I think there is value, and the type of questions that need to be asked, should be informed by the model we are using. We could still get good information from firms about what the underlying problem is. For example, firms often track competitor performance closely or participate in industry panels and might now if the reason they getting fewer inputs is because they're being priced (due to higher input demand) or that the supplier is providing much less (due to COVID closing the factory). We could also aggregate the data.
Given the bigger and bigger issues we have with survey data, it is more important than ever to design them intelligently. Reminds me of the survey and auction experiments regarding the value of gift giving (how surveys showed one result, while auctions another).
Professor, I wander if this can fit into of what is known as policy humility. I was just struck with that word, reading the last paragraph, where the prediction vanishes into thin air. :)