Explaining Positive and Normative Statements | tutor2u Economics
Study notes

Explaining Positive and Normative Statements

  • Levels: GCSE, AS, A Level, IB
  • Exam boards: AQA, Edexcel, OCR, IB, Eduqas, WJEC

Whenever you are reading articles on current affairs it is important to be able to distinguish between objective and subjective statements

What are positive statements?

Positive statements are objective statements that can be tested, amended or rejected by referring to the available evidence. Positive economics deals with objective explanation and the testing and rejection of theories. For example:

  • A fall in incomes will lead to a rise in demand for own-label supermarket foods
  • If the government raises the tax on beer, this will lead to a fall in profits of the brewers.
  • The rising price of crude oil on world markets will lead to an increase in cycling to work
  • A reduction in income tax will improve the incentives of the unemployed to find work.
  • A rise in average temperatures will increase the demand for sun screen products.
  • Higher interest rates will reduce house prices
  • Cut-price alcohol has increased the demand for alcohol among teenagers
  • A car scrappage scheme will lead to fall in the price of second hand cars

What are Normative Statements?

A value judgement is a subjective statement of opinion rather than a fact that can be tested by looking at the available evidence

Normative statements are subjective statements – i.e. they carry value judgments. For example:

  • Pollution is the most serious economic problem
  • Unemployment is more harmful than inflation
  • The congestion charge for drivers of petrol-guzzling cars should increase to £25
  • The government should increase the minimum wage to £7 per hour to reduce poverty.
  • The government is right to introduce a ban on smoking in public places.
  • The retirement age should be raised to 70 to combat the effects of our ageing population.
  • Resources are best allocated by allowing the market mechanism to work freely
  • The government should enforce minimum prices for beers and lagers sold in supermarkets and off-licences in a bid to control alcohol consumption

Focusing on the evidence is called adopting an empirical approach – evidence-based work is becoming more and more important in shaping different government policies and how much funding to give to each.

Key point:

Most economic decisions and policy are influenced by value judgements, which vary from person to person, resulting in fierce debate between competing political parties.

Positive and normative statements

Subscribe to email updates from tutor2u Economics

Join 1000s of fellow Economics teachers and students all getting the tutor2u Economics team's latest resources and support delivered fresh in their inbox every morning.

You can also follow @tutor2uEconomics on Twitter, subscribe to our YouTube channel, or join our popular Facebook Groups.

Related Collections

Teaching Vacancies

Recruitment

Advertise your vacancies with tutor2u

Much cheaper & more effective than TES or the Guardian. Reach the audience you really want to apply for your teaching vacancy by posting directly to our website and related social media audiences.

Find our more ›

Advertise your teaching jobs with tutor2u

A New Home for tutor2u Resources

We've just flicked the switch on moving all our digital resources to instant digital download - via our new subject stores.

For every subject you can now access each digital resource as soon as it is ordered. This will always be the latest edition of each resource too (and we'll update you automatically if there is an upgraded version to use).

Simply add the required resources to your cart, checkout using the usual options and your resources will be available to access immediately via your mytutor2u account.