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Normative Economics

Normative economics is different from positive economics. This is because normative economics is based on the opinion of the individuals involved, and it relies on the values. On the other hand, positive economics is based on facts; it is objective, and the facts do not really have to correct, but they are usually verified through testing for them to be proved and not to be approved.


  • Normative economics is based on the opinion of individuals on the matter however it is usually hard to verify the validity or truth behind the view because they cannot be subjected to testing and are a personal opinion while Positive economics is based facts that can be verified and tested once they are communicated. They are also facts on the economic state of the society or the world as a whole that is usually evidence based.
  • Normative economics has the development of individual or producers at heart. This is because here taxes can be reduced to boost the development of individuals with low income while positive economics will focus on why should the taxation be lowered at the expense of economic growth and development. It, therefore, has its focus on the societal development at large and will only pay attention to the aspect of tax reduction upon submission of adequate facts and evidence.
  • Normative economics can advocate for increased income for the members as a result of the varied economic situation. This is usually a move to allow individuals to cope with the daily demands. While Positive economics will not consider that approach directly, it will focus on the personal input in their line of duty and how much profit can be achieved from his or her efforts at the end of the day. This is used as a gauge to warrant a salary rise, and if there is no positive impact, then there will be no pay increase.