Journal of Economic Perspectives: Vol. 2 No. 1 (Winter 1988)


Quick Tools:

Print Article Summary
Export Citation
Sign up for Email Alerts Follow us on Twitter


JEP - All Issues

Frequentist and Subjectivist Perspectives on the Problems of Model Building in Economics

Article Citation

Poirier, Dale J. 1988. "Frequentist and Subjectivist Perspectives on the Problems of Model Building in Economics." Journal of Economic Perspectives, 2(1): 121-144.

DOI: 10.1257/jep.2.1.121


I plan to discuss, in as simple and nontechnical a fashion as possible, the subjectivist-Bayesian attitude toward model building in econometrics and to contrast it with the standard frequentist attitude. To convey what I believe is the principle distinguishing attitude between Bayesians and non-Bayesians, I refer to their respective positions as "subjectivist" and "frequentist." The basic differences between these positions arise from different interpretations of "probability." Frequentists interpret probability as a property of the external world, i.e., the limiting relative frequency of the occurrence of an event as the number of suitably defined trials goes to infinity. For a subjectivist, probability is interpreted as a degree of belief fundamentally internal to the individual as opposed to some characteristic of the external world. Subjective probability measures a relationship between the observer and events (not necessarily "repetitive") of the outside world, expressing the observer's personal uncertainty about those events. The subjectivist paradigm is designed to produce "coherent" revisions in beliefs about future observables in light of observed data. Most of the issues I raise are familiar to statisticians but not to economists. Rather than give the suspicious reader a menu of Bayesian techniques, I hope to create an interest in acquiring a taste for the Bayesian cuisine by recommending five pragmatic principles.

Article Full-Text Access

Full-text Article (Complimentary)


Poirier, Dale J. (Unlisted)

JEL Classifications

212: Construction, Analysis, and Use of Econometric Models
211: Bayesian Statistics and Bayesian Econometrics


View Comments on This Article (0) | Login to post a comment

Journal of Economic Perspectives

Quick Tools:

Sign up for Email Alerts

Follow us on Twitter

Subscription Information
(Institutional Administrator Access)


JEP - All Issues

Virtual Field Journals

AEA Member Login:

AEAweb | AEA Journals | Contact Us