Quantitative Methods in Social Sciences

Quantitative research is a process that uses empirical investigation of the evidence involved. When it comes to economics, this can include social sciences to gather information about what people are thinking or feeling in a given situation. This information can be collected through market observation, polling, and some other methods.

Gathering this information and analyzing it allows investors to make decisions based on the facts that are compiled together. If a significant percentage of a population is having negative thoughts on the state of a company, it may be an indication that the stock prices could go down in the near future. While this is a simple example, it is easy to see how pure numbers gathered can help people to better predict future performance of individual companies, sectors, or even the market as a whole.

This section covers a variety of data focused topics, including:

Econometrics

This is when people apply math and statistics to economic data. This can be done using computer models, or just observing the data and making a more informed financial decision.

Econometric Theory

The theory behind econometrics, which helps economists and others predict future performances of different segments of the market. By focusing on pure numbers and statistics, it is much easier to make the right decisions successfully.

Analysis of the Numbers

Using quantitative methods in social sciences is an excellent way to predict the behavior of larger groups of people. This is sometimes misunderstood or underappreciated due to the fact that the data gathered is hard to apply to any person because there are so many factors involved. When applied to larger groups, however, the results quickly become much more accurate. Fortunately, being able to foresee how large groups (markets) will react to different things is what most investors are primarily concerned with in this area.

Gathering Accurate Data

When engaging in quantitative methods in social sciences, it is important to collect accurate data. The method of data collection can be questionnaires, polls, surveys, or other interaction with people. When performing these things, however, it is important to put a priority on wording the questions and comments in such a way, as they won’t influence the answers of the people participating. This can be difficult to do, and when done poorly, can affect the accuracy of the data collected. This is why many investment companies employ professional polling companies to gather the best data possible.

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