The value of economic analysis in development of policies to address social issues is also much broader than generally perceived.
Economists have played a critical role in the development of policies aimed at protecting endangered species and addressing global warming and climate change.
Traditional economic analysis has been used to explain why people who are overweight tend to have lower incomes than those who are thin as well as why some nations grow faster than others.
Economists have explored why people gamble even though they are likely to lose money as well as why stock markets respond in predictable or unpredictable ways to external events.
Once the theory or model is developed, empirical evidence is explored, usually using statistical and econometric tools, to evaluate the ability of the model to predict outcomes.
If the data lend support to the model, the model can then be used to predict outcomes.For example, an economist researching the decisions of owners of professional baseball teams may find that traditional models of profit maximization provide a good base but that they have to be modified to take into account motives that include status or pleasure in addition to profit.Whether existing or modified models are used, the economist’s objective is to ask whether the theory or model can take into account the unique considerations critical to the topic.Participants may be consumers, producers, resource owners, agents of government bodies, or third parties who are affected by but not in control of the decisions made by other participants.The theoretical base is then applied to the decisions and behavior of participants relevant to the topic being explored.Following the section on policy implications, most research papers discuss future directions—what are the new but related questions that are likely to be explored by economists; what new methods are being developed to analyze data on the topic; what insights from other disciplines are likely to be applied to this topic; what policies are likely to be developed related to the topic?Research papers collected here generally reflect this approach and the resulting format, but given the wide range of topics addressed, the format is not appropriate in every research paper.Economics is generally described as the study of resource allocation; or of production, distribution, and consumption of wealth; or of decision making—descriptions that sacrifice much for the sake of brevity.Within these relatively vague definitions lie fascinating questions and critical policy implications.They develop models to analyze how tax policies affect philanthropy and how managers of baseball teams can determine which players are worth their salary demands.The range of research paper topics that falls within the domain of economic analysis is much broader (and more interesting) than those suggested by the traditional definition of the discipline.