Comparison between Deductive and Inductive Method

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Introduction to Induction and Deduction

There are two methods of reasoning the deductive method and the inductive method. Both the methods are forms of logic that help to establish the truth. It means generalization can be drawn by using these two methods. During scientific reasoning, true logic can be stressed through deduction as well as induction. This article tries to present the comparison between the deductive and the inductive method.

Deductive reasoning is a fundamental structure of valid reasoning. Deductive reasoning, or deduction, initiates with a general statement, or hypothesis, and examines the possibilities to reach a specific, logical conclusion. Scientific researchers use the deductive method to test theories and hypotheses.

Inductive reasoning on the other hand is contrary to deductive reasoning. Inductive reasoning seeks lane generalizations from specific observations. In essence, there is data, and then conclusions are drawn from the data. In the process of inference from induction, we go from a particular to a general. The researchers have to make many observations, determine a pattern, generalize, and figure out an explanation of a theory.  This sort of reasoning is also known as a derivation of generalization based on experience and observations.

The comparison between deductive and inductive methods includes the discussion covering similarities and differences among both the methods of logic or reasoning. Both are related to each other while performing research.

Differences between deductive and inductive methods/comparison between the deductive and the inductive method

The major differences noticed between deductive and inductive methods/comparison between the deductive and the inductive method can be listed below;

BasisDeductive MethodInductive Method
OriginThe deductive method was used by economists belonging to the classical school.The inductive method was strongly advocated and used by economists belonging to the German Historical School.
TechniqueThis method may be described as the technique of an abstract approach to problem-solving.This method may be described as the technique of a practical approach to the problems of economic science.
Also known asThis method is also called analytical, abstract, and a priori methods.This method is also called the historical, empirical, and posterior methods.
ProcedureIn deduction, the researcher starts from a few indisputable facts about human nature and deduces or draws inferences from them about concrete individual cases. It follows the top-down approach of the study.In induction, two forms of experimentation and a statistical approach are considered to test the validity of laws or generalizations arrived as a result of deductive reasoning by resorting to the study of facts. It follows the bottom-up approach of the study.
Advantages and costsThrough deduction, from a few basic facts of human nature, we can derive a large number of inferences in a short time. And it is an exceedingly simple affair.This method is something complicated, time-consuming, and expensive way of lawmaking. It could be statistical induction or experimental induction. Economic laws arrived at by the process of induction from a set of carefully collected facts lead to precise, measurable, and exact conclusions. Highly skilled experts are needed here for induction
ScopeAs economics is social science so there is only a limited place for experimentation as compared with other sciences. So deduction may be the best alternative in economic research. It requires experimentation and statistical application in a wider scope. So it may not be the best method in economic research. However, even in economics some very important theorems and laws have been discovered from an empirical study of facts.
Associated risksThe deductive method and generalization of its conclusions are highly dependent on the assumptions. The assumption of Ceteris Paribus is applied throughout the study.The serious risk associated with induction is that the conclusions drawn from an inadequate number of facts may lack sufficient background of judgment.
ApplicabilityLaws or generalizations made by the deductive method have universal applications.The laws or generalizations drawn by inductive may not apply and be adopted universally. It means they may be fitted for a particular place and situation.
Usability in economic researchThe deductive approach is more applied in economics as in economics experimentation is limited or controlled study is impossible in social sciences like economics.Experimental induction is relatively less used in economics but statistical induction has been getting a vital place in economic research.
ResultThe ending result of the deductive method is confirmation of the hypothesis. It means acceptance and rejection of the hypothesis is the final result. Thus it is used to verify the existing well-established theory.Building a theory is the ending result of induction. It starts from observation and such a series will produce the generalization. Thus it is used to build a new theory.
Nature of structureThe deductive methodology is a highly structured method. The researcher has to follow it.Induction is less structured and the researcher can make it flexible as per the interest.
comparison between the deductive and the inductive method


In economics, the issue of whether a deduction is to be used in preference to induction and vice versa has been the subject matter of a raging and tearing controversy in the past.  The controversy has not been finally settled although it does not burn as brightly as it did a generation or two back. In the latter half of the 19th century, there was a bitter controversy between the Classical School of Britain and The Historical School of Germany. The Classical School stood solidly for deduction while the Historical School represented a reaction against the Classical School, and stood in favor of induction. This could be observed from the given comparison between the deductive and the inductive method as well.

The modern viewpoint in this regard is that both are needed for the proper development of scientific economic theories. These two methods are complementary rather than competitive. Modern economists first derive hypotheses through the process of logical deduction and then empirically test them through statistical or econometric models. According to Marshall, induction and deduction are both needed for scientific thought as the right and left foot are both needed for walking. Therefore, induction and deduction both are used in the studies of economic phenomena in various fields for arriving at generalizations from observed facts for the indirect verification of the hypothesis. Conclusions drawn from deduction are confirmed by induction.  


Ahuja, H.L. (2017). Advanced Economic Theory. New Delhi: S Chand And Company Limited.

Jhingan, M.L (2012). Advanced Economic Theory. New Delhi: Vrinda Publications (P) LTD.

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