Martha A. Starr

QUALITATIVE AND MIXED‐METHODS RESEARCH IN ECONOMICS: SURPRISING GROWTH, PROMISING FUTURE

Qualitative research in economics has traditionally been unimportant compared to quantitative work. Yet there has been a small explosion in use of quantitative approaches in the past 10–15 years, including ‘mixed-methods’ projects which use qualitative and quantitative methods in combination. This paper surveys the growing use of qualitative methods in economics and closely related fields, aiming to provide economists with a useful roadmap through major sets of qualitative methods and how and why they are used. We review the growing body of economic research using qualitative approaches, emphasizing the gains from using qualitative- or mixed-methods over traditional ‘closed-ended’ approaches. It is argued that, although qualitative methods are often portrayed as less reliable, less accurate, less powerful and/or less credible than quantitative methods, in fact, the two sets of methods have their own strengths, and how much can be learned from one type of method or the other depends on specific issues that arise in studying the topic of interest. The central message of the paper is that well-done qualitative work can provide scientifically valuable and intellectually helpful ways of adding to the stock of economic knowledge, especially when applied to research questions for which they are well suited.

Socially responsible investment and pro-social change

Abstract: Socially responsible investment (SRI) refers to investing in companies based on financial and social performance, where the latter includes such concerns as the environment, sweatshop labor, and animal testing. This paper argues that SRI strongly resembles pro-social behaviors and social dynamics found in experimental settings. The role of fairness-related sanctioning is emphasized, wherein companies that treat their various stakeholders “fairly” are screened into SRI portfolios, while those treating them poorly are screened out. It is argued that because SRI creates opportunities for businesses to thrive relative to their competitors by improving social performance, it creates some scope for pro-social change. Still, the magnitude of changes that can be expected from voluntary changes in business behavior remains to be determined.

Consumption, Sentiment, and Economic News

This paper investigates the influence of economic news on consumer sentiment, and examines whether ‘news shocks’ –- changes in coverage that would not be expected from incoming data on economic fundamentals -– have aggregate effects. Using monthly U.S. data and a structural vector-autoregression, I find that (1) sentiment is affected by news shocks, (2) after filtering out effects of news shocks, shocks to sentiment still have positive effects on consumer spending, and (3) news shocks influence both spending and unemployment in significant, though transitory ways. These results are consistent with other evidence of a role of non-fundamental factors in aggregate fluctuations.

Saving, Spending, and Self-Control: Cognition versus Consumer Culture

Recent economic literature puts forth “behavioral” perspectives on self-control as a means of understanding oddities of consumer behavior: spending too much, saving too little, borrowing too much on costly credit cards. This article argues that the behavioral emphasis on cognition overlooks the extent to which issues of self-control are framed, elaborated, and sustained as problematics of contemporary consumer culture. As such, they are rooted as much in the social, cultural, and economic dynamics of capitalism as they are in the human mind.

Consumption, Identity, and the Sociocultural Constitution of "Preferences": Reading Women's Magazines

This paper shows how the concept of identity may figure importantly into shifts in preferences and patterns of consumption. We explore the 1970s emergence of the “working woman” – a woman who worked outside the home and regarded work as central to her identity. Womens magazines were especially involved in working out the “working woman” image, stressing how products could be used to attain her readily-identifiable appearance and efficient, pleasant home life. As such, they played into a shift in social valuation of female identities – away from those centered on traditional feminine pursuits, towards those centered on intensified labor-force involvement, consumerism, and commodified private life.

Technology, Capital Spending, and Capacity Utilization

This paper examines the relationships between technology, capital spending, and capacity utilization. Recent technological changes have increased the flexibility of relationships between inputs and outputs in manufacturing, which may have eroded the predictive value of the utilization rate. This paper considers how technology might be expected to affect utilization. We show that recent changes could either lower average utilization by making it cheaper to hold excess capacity, or raise utilization by making further changes in capacity less costly and time-consuming. We then examine the effects of technology on utilization, using data on 111 manufacturing industries from 1974 to 2000. The results suggest that, for the average industry, the technological change of that period had a modest but appreciable effect, shaving between 0.2 percentage point and 2.3 percentage points off the utilization rate.

Decomposing Growth In Spending Finds Annual Cost Of Treatment Contributed Most To Spending Growth, 1980–2006

Researchers have disagreed about factors driving up health care spending since the 1980s. One camp, led by Kenneth Thorpe, identifies rising numbers of people being treated for chronic diseases as a major factor. Charles Roehrig and David Rousseau reach the opposite conclusion: that three-quarters of growth in average spending reflects the rising costs of treating given diseases. We reexamined sources of spending growth using data from four nationally representative surveys. We found that rising costs of treatment accounted for 70 percent of growth in real average health care spending from 1980 to 2006. The contribution of shares of the population treated for given diseases increased in 1997-2006, but even then it accounted for only one-third of spending growth. We highlight the fact that Thorpes inclusion of population growth as part of disease prevalence explains the appreciable difference in results. An important policy implication is that programs to better manage chronic diseases may only modestly reduce average spending growth.

Fiscal policy and growth in Saudi Arabia

Whether government spending can boost the pace of economic growth is widely debated. In the neoclassical growth model, it is supplies of productive resources and productivity that determine growth in the long-run. In endogenous growth models, an increase in government spending may raise the steady-state rate of growth due to positive spillover effects on investment in physical and/or human capital. This paper examines the relationship between government spending and non-oil GDP in the case of Saudi Arabia. Using time-series methods and data for 1969-2005, we find that increases in government spending have a positive and significant long-run effect on the rate of growth. Estimated effects of current expenditure on growth turn out to exceed those of capital expenditure—suggesting that government investment in infrastructure and productive capacity has been less growth-enhancing in Saudi Arabia than programs to improve administration and operation of government entities and support purchasing power. We discuss possible reasons for this finding in the Saudi case and draw some policy implications.

Households' Deposit Insurance Coverage: Evidence and Analysis of Potential Reforms

It is often suggested that reducing deposit insurance would reduce problems of moral hazard in the banking industry. However, little is known about likely effects of proposed reforms on household depositors. This study uses data from the Survey of Consumer Finances to examine the characteristics of household depositors, particularly those with uninsured funds. The authors find that large depositors tend to have substantial shares of their assets in insured depositories, yet often fail to keep their holdings within insurance limits. Various explanations for these factors are considered. The authors also simulate the effects of proposed reforms on the pool of uninsured depositors. Copyright 1996 by Ohio State University Press.

Reading The Economist on Globalisation: Knowledge, Identity, and Power

The UK-based magazine The Economist portrays globalisation as a positive extension of liberal capitalism. While consistent with the magazines pro-market bent, the rationale for the coverage is complex, since many readers presumably share the magazines dominant code and do not need persuasion. This paper first explores tactics used to limit discourse on globalisation to realms of economic knowledge, while devaluing knowledge from other domains. Then, using cultural theories of how people read, I argue that coverage provokes reader anxieties about a changing world--while allaying them through tales of a future in which growth continues, the lot of the poor improves, and power remains vested in the institutions, knowledge, and people that have it currently. As such, The Economist provides a utopian vision of the future and tools for shaping identity to fractions of dominant groups seeking to define their strategies in a changing world.