You might find some normative statements in online articles. Some of them come from expert views on the economy and may, contrary to your beliefs. In other places, you find an expert who is good at delivering economic data. He explained in detail the causes of current economic conditions.
Definition of normative statements
Normative statements are statements based on opinions about what should happen. They are subjective rather than objective because they involve value judgment about what is right and what is wrong.
Unlike positive statements, which depend on objective data analysis, normative statements are more concerned with “what should be” rather than facts or causal relationships. Normative economics expresses ideological judgments and ideal states related to a condition, event, action, or behavior.
Normative statements usually present an opinion-based analysis in terms of what is considered desirable. For example, you stated that Indonesia’s economic growth should increase to 6%. It is normative because it is based on your subjective opinion.
In the following, I summarize the characteristics of the normative statement:
- Based on opinions, so it is subjective
- Often include words like “ought to” or “should.”
- Involves judging values or norms about what is good and what is bad
- We cannot prove or test it
- It cannot be right or wrong because it is relative, depending on the beliefs or views of each individual.
Why you should know
Although subjective, it doesn’t mean unuseful.
- It might be useful in developing and generating new ideas from different perspectives. But, because it does not take an objective point of view, it can’t be the sole basis for making decisions on critical economic issues.
- It usually aims to determine the solution. This is different from a positive statement that describes the situation and conditions as they are.
- Usually used to determine and recommend ways to change a condition, for example, related to economic policy. This can also be used to influence economic decisions.
The difference to positive statements
Normative statements and positive statements often appear in economic textbooks or in the media. The two statements are contradictory.
Normative statements are more subjective, whereas positive statements are objective. The latter usually depends on theory, data, and cause-effect relationships to explain certain conditions.
You can test or verify the truth of a positive statement from data. Hence, economists and analysts often like it. It becomes a measurable perspective, helping policymakers and governments and other business authorities make credible decisions.
Examples of normative statements
- The Indonesian government should do anything to help promote the tourism industry in Bali.
- Increasing taxes on cars should reduce traffic congestion
- A reduction in the supply of gasoline should benefit the environment.
- Workers should receive a more significant share of company profits than management.
- The government should prioritize unemployment over economic growth.