Empirical Economics: Intuitive Does Not Equal Obvious

People often say that empirical economics papers are always obvious—either they engage in hindsight or their conclusions merely align with common sense. Only those papers that offer accurate predictions or counterintuitive insights are considered valuable.

Here, I’d like to counter this notion by arguing from several angles that a conclusion aligning with intuition is not necessarily self-evident.

Intuitive Conclusions Can Be Contradictory

• Some argue that social welfare policies encourage higher birth rates, which seems intuitive—after all, the cost of raising children is reduced.
• Others claim that social welfare discourages childbirth, which also seems intuitive—because children traditionally serve as a form of old-age security, and with welfare, the need for this security diminishes.

Therefore, the role of an empirical paper is to clarify the boundaries of intuitive conclusions. Which specific policy is causing the effect? What exactly is the effect? In what social context does it hold true?

Intuitive Conclusions Are Not Easily Conceptualized

With the hype surrounding Black Myth: Wukong, the domestic single-player game market size has become a frequent topic among netizens. Many directly use the sales of Palworld to estimate it. This is clearly flawed; at the very least, the structure should be as follows:

$$Black Myth Sales×Black Myth Price=PW Price×PW Sales=MARKET size$$

A more rigorous approach would consider economic consumption levels, population structure, game quality, marketing strategies, game genres… Let’s assume all these factors are equal, even that the utility derived from spending x yuan on a game is exactly x.

Now, consider this seemingly obvious conclusion—higher prices lead to lower demand, creating a fascinating dynamic. Even within the same single-player market, differing price points can lead to variations in the actual market size, despite the total being ostensibly the same.

The Counterintuitive Lies Behind Intuition

Let me illustrate this with an example from Richard Feynman.

You ask someone why they slipped on the ice. Why did they slip? Because they were on the ice. Why is ice slippery? Because ice melts into water under pressure. Why does ice melt under pressure? This is a physical reaction under force.

And so, we delve into mechanics, particles, and the realm of the counterintuitive.

A simple problem can also evolve into a broader perspective:

When agricultural taxes were in place, villagers cared about local infrastructure because it was their own money at stake. After the tax was abolished and the government took over, villagers no longer paid attention. Local officials, afraid of making mistakes, also became indifferent. As a result, nail houses emerged, and removing them required stronger local forces, leading to the rise of local power factions.

Thus, we find that the tax structure influenced the power structure, and agricultural taxes may have contributed to the emergence of local malevolent forces.

On Intuition

Many people like to use the term “research taste.” I dislike this tendency to mystify topic selection and research design. In truth, research isn’t mysterious, nor does it require genuine counterintuition.

Any research always builds on the work of predecessors. Don’t dismiss small, intuitive innovations as insignificant. What’s important is to summarize past experiences and distill fresh perspectives.