I agree with Friedman (1953) on the role of assumptions in formulating a hypothesis. The indispensable part that assumptions are sufficient to make theory or models understandable and investigable validates the role of assumptions (Friedman, 1953). Economics is a social science. Unlike the physical sciences, social sciences involve behavior among and between agents in the society. Human behavior per se is dynamic and very unpredictable. Any social (economic) phenomenon identified and put under investigation is determined or affected by a myriad of factors. For a social scientist to understand the aggregate behavior, he should try to explain, and perhaps measure, the magnitude, and the nature of the factors at play for every agent studied.
The challenge is that human behavior is unstable. What makes one person to act the way they act may actually make another person act in the opposite or remain indifferent. In testing a hypothesis, a theory must be stated or specified. In specifying theory to guide a given hypothesis acceptance or rejection, the variables chosen for a study are arrived at after elimination of other important variables. The only way to study the nature and the type of relationship between variables is to make assumptions of other significant variables. The assumptions make studying quantifiable relational dynamics easy. In other words, if there are ten factors that influence a phenomenon, only two may be picked and their influence measured. The remaining others are covered with an assumption as it may not be possible to study all of them at once (Hausman, 2008).Want an expert to write a paper for you Talk to an operator now
The cause of disagreement among scholars in economics is to whether assumptions abstract from reality the very issues that matter the most, and whether it is possible to explain the influence of each factor on a single phenomenon. More precisely, does theory differ from reality? If so, to what extent? If there are correct answers to these two questions, then can theory via hypothesis be used to exactly describe the reality? In his work, Friedman came out clean by arguing for the role of assumptions in investigations but was quick to label economics “unrealistic.” According to Friedman, assumptions are only necessary to make introspections easy. He feels that many assumptions merely move from simplifying reality to distorting it. He also points out that absolute realism is out of reach, and that there is no ‘enough’ acceptable realism (Friedman, 1953).
I already acknowledge that studying human behavior is difficult; a given hypothesis on human behavior cannot be tested by means of its assumptions. The only possible thing to do is properly detailing the provision to be at play so that a formulated hypothesis can exist. Investigators should be careful not to become obsessed with trying to match hypothesis with reality. Instead, they should find out the extrapolative capability of a hypothesis. Similarly, the assumptions underlying the hypothesis must be well defined for a hypothesis to qualify upon its predictability (Hausman, 2008).
Conclusively, economic theorists, econometricians and other people in social sciences must be able to determine (with the hypothesis and their assumptions) and explain the unknown. A theory or a hypothesis can only stand or becomes valid until after a better one comes through or convincingly say and prove the opposite to it. Therefore, I totally agree with Friedman to the point of existence of a total deposition of a hypothesis with unrealistic assumptions being replaced by a superior predicative one with much more realistic assumptions. However, I disagree that assumptions should be done away with; they are a realistic part of any meaningful study. Assumptions only need to be realistic for a hypothesis or theory to hold, and insistence should be on their capability to be utilized for prediction.