Evaluation in Economics

Eval­u­a­tion is a very impor­tant con­cept in eco­nom­ics. It is what you to when you have fin­ished ana­lyz­ing. By ana­lyz­ing we mean giv­ing your Defi­ni­tions, Expla­na­tions, Exam­ples and Diagrams (DEED). Show how the the­o­ries relate to the ques­tion and explain the the­o­ries. Basi­cally ana­lyz­ing is draw­ing out the the­ory and then eval­u­a­tion is draw­ing your con­clu­sions and also chal­leng­ing the analysis.

The hard part about all of this is mak­ing sure that you say enough in your analy­sis and in your eval­u­a­tion. So you don’t for­get, remem­ber to “Do the DEED” when you ana­lyze and then “CLASPP it all together” when you’re evaluating.

On your essay ques­tions and data response ques­tions (on your exams) you’ll need to eval­u­ate. But you don’t need to eval­u­ate in your short-answer questions.

CLASPP

(d.) — A clasp is some­thing that holds things together. But (spelled with 2 P’s) it’s also an acronym for the 6 types of eval­u­a­tion in IB Economics.

Try to do all 6 parts.

Con­clu­sions

• What can we con­clude from the the­ory (that you’ve explained in your analysis)?

Long-term and short-term effects

• Is the change good in the short-term, but over in a few years it will have unde­sir­able consequences?
• Will the pol­icy be really hard on peo­ple in the short-run, but it fixes the long-term problem?
• Will this pol­icy fix one prob­lem, but cre­ate another?

Assump­tions

• Are there some assump­tions being made, that the the­ory depends on that may not hold true? This is the same as “ceteris paribus” –the assump­tion that all other things are being held equal, when in fact they might not stay con­stant. Explain what might change and how that would effect your analysis.
• Tell us the weak­nesses in the theory?
• What is unre­al­is­tic about the theory?

Stake­hold­ers

• What effects would this pol­icy (i.e. an indi­rect tax) have on the gov­ern­ment, con­sumers, pro­duc­ers and the rest of society?
• Poli­cies (i.e. price ceil­ings) are often made with par­tic­u­lar stake­hold­ers in mind, so are there unde­sir­able effects on other par­ties (i.e. price increases for consumers)?
• Is the pol­icy great for some groups, but bad for others?

Pri­or­i­ties

• Dis­cussing the pri­or­i­ties of a soci­ety, or the gov­ern­ment is also a good way to keep things in per­spec­tive. A pol­icy like sub­si­diz­ing schools is good for fam­i­lies, good for the long-term macro econ­omy, but bad for tax pay­ers who don’t have chil­dren, what are the pri­or­i­ties as a society?
• Is there an impor­tant nor­ma­tive (i.e. val­ues aspect) that the the­ory doesn’t consider?

Pros and Cons

• What are the advan­tages and dis­ad­van­tages of this policy?
• What are the costs and the ben­e­fits of this policy?
• What are the argu­ments for and the argu­ments against this policy?
• This one is to double-check that you haven’t left any­thing out in the pre­ced­ing ones.