Economics and Ecology: A Comparison of Experimental Methodologies and Philosophies

Jason F. Shogren, Clifford Nowell
November 1990  [90-WP 62] (Revised)

Views of the proper role of experiments in (environmental) economics and ecology have developed quite differently. Economics has devoted the majority of effort to abstract theory, with experimentation coming in a distant second. Kagel quotes a colleague who illustrates a common perception among economists: "I am a 'true believer' in microeconomic theory, and as a result I am perfectly willing to accept mathematical proofs without experimental evidence.

In contrast, ecology has focused on observation-based experiments as the primary mechanism of research, almost separate from the development of abstract theoretical ecology. Kareiva notes that "sad truth is that ecological theory exists largely in a world of its own, unnoticed by mainstream ecology." We explore why this divergence has developed and persisted. The main reason is economists and ecologists differ in their assumptions regarding the objective function of a model. Economists generally assume the objective function is well-defined; ecologists view the function as unknown. We highlight recent research in environmental economics to illustrate the economist's approach to experimentation.