Normative Economics
Categories: Econ
If you say you’re in the second tax bracket, that’s a positive economic statement, i.e. positively true.
If your friend Sam says in response that taxes are high, that’s a normative economic statement. It's subjective.
Normative economics is opinion economics, reflecting people’s ideologies and judgements about what they think should be done. Positive economics is all the facts and tools we can use to do things (if we raise taxes, we can expect x, y, and z effects), but normative economics is how we decide what to do with those tools and facts.
Take “fairness,” for example. A libertarian might say that the “fair” distribution of income is the market distribution of income. A neoliberal might say that a “fair” distribution of income is market distribution of income plus universal basic income. A socialist might say that a “fair” distribution of income can only be achieved if the workers are also owners, controlling the means of production. All of these ideologies are normative economics: ideas about how and why things should be done in the socioeconomic world.