How Sample Data Can Support / Inform Economic Decision Making

How can sample data support or inform economic decision making within an organization? Can the sample data have errors or be problematic when making decisions? Provide an example.

Sample data helps in supporting or informing economic decision making, by testing for the significance of economic policies and decisions with respect to the population.The use of research in managementand making of decisions is a necessary skill to address problems we might encounter in our daily lives either personal or professional. An element of decision-making involved in working towards deciding upon a solution. The process includes evaluation against some criteria.Generally the decision making process was broken down into three skills: Identifying the problem; suggesting a solution; and deciding on appropriate action.

Research results do not at all times feed right into the decision-making for guiding principle and practices. However, research tends to influence the decision-making process and the actions of those charged with governance even when not used directly.

There are four main types of research applicationthat are well-knowninclude: Instrumental use whereby the research findings feed the decision-making process directly; Conceptual use whereby research findings altersthe understanding of those charged with governance by providing them with new perspectives; Mobilization of support  whereby the research acts as an tool of persuasion; and Wider influence whereby research findings may be employed through the decision makers’ and researchers’networksand change policy standards or thecommunity beliefs. Various econometric and statistical measures like regression, forecasting can be used to predict the past as well as future trends and formulate policies accordingly.

Yes, sample data can have errors to be problematic, like autocorrelation, biasedness, missing out of important variables etc., which can pose a serious problem to the credibility of the results obtained. For example, while calculating a sample to check for health conditions in a rural village, the sample might miss out on collecting data on past health record.

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