---
title: "Applied economics"
chunk: 2/3
source: "https://en.wikipedia.org/wiki/Applied_economics"
category: "reference"
tags: "science, encyclopedia"
date_saved: "2026-05-05T03:55:10.777450+00:00"
instance: "kb-cron"
---

relabeling variables as more specific, concrete concepts;
providing some structure to allow the drawing of more detailed conclusions;
producing numerical estimates for some of the parameters;
using the analysis to interpret the real world phenomena which are interpreted as examples of some more general class of events that the core theory might be used to examine.

=== Economics as a science ===
Pesaran and Harcourt (2000) describe Stone's attempt to face the challenge of making economics into a science by combining theory and measurement within a cohesive framework. They report Stone's proposal for the establishment of the now famous Department of Applied Economics at Cambridge. Stone argued that:

"The ultimate aim of applied economics is to increase human welfare by the investigation and analysis of economic problems of the real world. It is the view of the Department that this can best be achieved by the synthesis of three types of study which now tend to be pursued in isolation. The Department will concentrate simultaneously on the work of observations, i.e. the discovery and preparation of data; the theoretical appraisal of problems, i.e. the framing of hypotheses in a form suitable for quantitative testing; and the development of statistical methods appropriate to the special problems of economic information. The special character of the Department's approach to problems of the real world will lie in this attempt at systematic synthesis." (Stone in Pesaran and Harcourt (2000) pp. 149–150)

=== Other views ===
The basis for rival approaches tends to be the denial that sound theory can be made without some concrete linking with its area of application. Both the 19th century Historical School and the 20th Century Institutionalists argue in this way. Mitchell (1936) noted that those working in "specialized fields" had little use for kind of qualitative theory postulated by Marshall and Jevons. Mitchell suggested that knowledge of "real markets," would cause the complexion and content of economic theory (Mitchell 1937, 26–28). Friedman shared this view that theoretical concepts might or rather should arise out of the analysis of real world data. For both Mitchell and Friedman economics should involve an interaction between examining data and formulating hypotheses.
Another issue which is related to the McCloskey critique. This is economists do not necessarily practice what they preach. In this context that is the claim to be an "applied economist," is just shorthand for saying they are looking at the real economy. What is being applied need not be "economic theory", as conventionally defined rather something more basic. Eli Devons made a distinction between three different kinds of "things", any of which might be being applied:

theoretical models;
commonsense axioms, and
theoretical concepts.

=== Journals ===

==== The Journal of Applied Economics ====
The Journal of Applied Economics publishes original contributions on applied issues in micro and macroeconomics. The primary criteria for selecting papers are quality and importance for the field. Papers based on a well motivated research problem that make a concrete contribution to empirical economics or applied theory are especially encouraged.

==== Applied Economics ====
Applied Economics is a journal that interprets its subject area as "the application of economic analysis to specific problems in both the public and private sectors" and seeks to publish "quantitative studies, the results of which are of use in the practical field" and thus may help "bring economic theory nearer to reality"; Applied Economics is a leading peer-reviewed journal in economics and its practical applications.

==== American Economic Journal: Applied Economics ====
This quarterly journal which began publication in 2009 is from the American Economic Association. It publishes papers on a range of topics in applied economics, particularly empirical microeconomic issues, such as in labor economics, development microeconomics, health,  education, demography, empirical corporate finance, empirical studies of trade, and empirical behavioral economics.

==== American Journal of Agricultural Economics ====
These journals are published by the Agricultural & Applied Economics Association.  The American Journal of Agricultural Economics has been produced since 1919, and publishes research in the "economics of agriculture and food, natural resources and the environment, and rural and community development throughout the world".

==== Applied Economics Perspectives and Policy ====
Applied Economic Perspectives and Policy (AEPP) is the leading  peer-reviewed journal of applied economics and policy. Published four times per year by Oxford University Press, it is the one of two journals published by the Agricultural & Applied Economics Association (AAEA), along with the American Journal of Agricultural Economics (AJAE). Today is the leading journal in 'applied economics' with a 2011 impact factor of 1.552. The purpose of AEPP is to analyze areas of current applied economic research in an effort to inform the policy-makers and decision makers; and to generate connections between sub-fields of agricultural and applied economics in order to focus future research and increase knowledge of those in the field about the impact of public policy.

== Critique ==
Backhouse and Biddle argue that the mainstream view, that there is an accepted "theoretical core" and that this can be applied in a range of areas, relies on this core having specific characteristics – namely, that it has a wide scope and can be developed independently of individual applications. But they note that as with the definition of applied economics itself, there are within the economics profession differing views as to what belongs in the core – where one draws the line between research that is contributing to the core and research that is applying the core, and the relative importance or significance of research on topics in the core versus applied economics research.
Some examples of the problems of applied economics from various fields and issues: