Deductive method

economic-dictionary

The deductive method consists of drawing a conclusion based on a premise or a series of propositions that are assumed to be true.

The above means that logic is being used to obtain a result, only based on a set of statements that are taken for granted.

Through this method, one goes from the general (such as laws or principles) to the particular (the reality of a specific case).

It should be noted that the veracity of the conclusion obtained will depend on the validity of the premises taken as a basis or reference.

Types of deductive method

The deductive method can be applied in two ways:

  • Direct: Be part of a single premise.
  • Indirect: Two or more premises are used that are contrasted. Usually one contains a universal statement and the other a particular fact. For example: dogs bark (i) and I have a pet that is a dog (ii). Therefore, my pet barks.

Difference between deductive and inductive method

The deductive method, as we mentioned previously, goes from the general to the particular. Instead, the inductive method proposes to do the reverse path. That is, go from the specific facts to draw a general conclusion.

An example of an inductive method would be the following.

Let's imagine that a person moving into a new house observes that the garbage truck passes by his street every day at 11 pm. So, you come to the conclusion that the garbage truck always passes your street at that time.

Deductive method in economics

In economics, the Austrian school has been characterized by making deductions from self-evident axioms or irrefutable facts. This method, developed by Ludwig von Mises, is called praxeology.

An example of its application, Austrian economists affirm that the value of a good depends on the satisfaction it provides to each individual (base premise). Therefore, value is not objective, as claimed by other theories such as that of labor-value, but has a subjective nature.

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