positive versus normative economics

Consider two sentences about a tax: 'This tax will raise petrol prices by about 5 percent' and 'This tax is unfair to poor families'. The first can in principle be checked against evidence — it is either roughly right or wrong. The second expresses a value, a judgement about what ought to be, which data alone can never prove. Economics carefully separates these two kinds of statements, calling the first positive and the second normative.

Positive economics is about what is — descriptive, factual claims about how the economy actually works, which can be tested against data and found true or false (for example, 'raising the minimum wage by 10 percent reduces teen employment by X percent'). Normative economics is about what ought to be — prescriptions and value judgements that rest on ethics and priorities, not just facts (for example, 'the government should raise the minimum wage'). The clue is often the word should or ought: it signals you have crossed from fact into value.

The distinction matters because honest debate requires knowing whether you are arguing about facts or about values. Two people can fully agree on the positive economics — say, that a policy will boost growth but widen inequality — and still disagree on the normative question of whether that trade is worth making. Economists are supposed to be experts on the positive part and ordinary citizens on the normative part, though in practice their values often colour which questions they ask and which evidence they trust. Keeping is and ought apart is a discipline, not a guarantee.