Economists, (Hard) Data, and (Soft) Data
| Nicolai Foss |
Economists have typically been suspicious of data generated by (mail, telephone) surveys and interviews, and have idolized register data. The former are soft and mushy data, the latter are hard and serious ones. I have always been a bit sceptical regarding whether the traditional economist’s suspicion of soft data is really that well-founded; after all, the statistical agencies of the world and other government institutions that are in the business of data collection are populated by fallible individuals and respondents are the same ones that respond to, say, a mail survey conducted by Prof. N. J. Foss, PhD. (Having recently conducted a major data collection effort with a public statistical agency, my skepticism has dramatically increased!)
The argument is sometimes made that there may be a legal duty to respond to the queries of a government agency and this means a high response rate and accurate reporting. However, it appears that we know rather little about the accuracy of data generated in this way, and it is quite conceivable that measurement error is high, exactly because the provision of data is “forced” (those anarcho-capitalist types out there may delight in providing errorneous data!). The serious content of the traditional economist’s prejudice is rather, I think, that surveys often have respondents reacting to subjective scales rather than providing absolute numbers. This is a warranted concern, but not a critique of surveys and interviews per se, because these methods do not imply commitment to subjective scales per se.
As a rule register data are not available that can be used to address numerous interesting issues in organizational economics, labor economics, productivity research and so on. Scholars working on these issues have to resort to those softy surveys and interviews that have been the workhorses of business school faculty for decades. This is a new recognition in economics. Case in point: A recent paper by Nicholas Bloom and John Van Reenen, “New approaches to surveying organizations.” There is absolutely nothing, I submit, in this short, well-written paper that would surprise virtually any empirically oriented business school professor (i.e., virtually all bschool professors) to whom this would not be anything “new” at all, but rather old hat.
This is not a critique of Profs. Bloom and Van Reenen at all (on the contrary, it is excellent that they educate their economist colleagues in this way). It is just striking and a little bit amusing, however, that we have had to wait until 2010 until empirical approaches that have been mainstream in management research for decades reach the pages of the American Economic Review.