Lubbock (USA)
Big day plays important role in making interventions
and policy decisions.
On Monday (October 11), the Royal Swedish Academy of
Sciences while announcing the Economic Prize in Memory of Alfred Nobel
recognized the power of real-world data.
Professors David Card, Joshua Angrist and Guido Imbens
were awarded the economics prize for their work related to natural experiments
involving empirical data in analyzing markets such as labor.
Natural experiments are those that happen due to
policy interventions such as those by imposing minimum wage, tariffs, etc. and
can serve as useful alternatives to randomized trials to analyze cause and
effects such as the growth of industrial sectors. This field came to prominence
in the early 1990s due to the efforts of economists Alan Krueger and David
Card.
Sectors like textiles, agriculture, food service,
domestic service, which are labor intensive can benefit from empirical and
behavioral economics. Analyzing empirical data rather than theoretical modeling
will be more ideal in suggesting changes to grow the sectors, as was the case
of the Nobel winning work of this year’s laureates.
Textile sector is dependent on the discretionary
spending power, socio-economic conditions and cultural preferences. Therefore,
analysis of big data on the spending pattern will help the industry to plan its
growth. Particularly now when raw material prices are high and the growing
power crisis in China and India, which are major textile manufacturing hubs,
planning based on big data will be helpful.
In recent years, the use of data and empirical
modeling have been helpful in predicting the growth of the Indian technical
textiles sector. In 2008, I predicted the growth of this industry to be in
double digits based on GDF growth rate and per capita income in India comparing
with the United States. The work resulted in the report, “India Rising: Opportunities in Nonwovens and Technical
Textilesâ€Â. The empirical
modeling as advocated by this year’s Nobel work showcased the growth pattern of
India’s technical textiles sector, which was later validated by actual data for
the following years.
Interestingly, this year’s Nobel prizes in Medicine,
Physics and Economics provide ample clues for the textile and allied sectors in
terms of planning and developing new products such as sustainable and green
textiles.
Textiles sector will benefit from the gathering of
reliable data and undertaking credible analysis such as price, consumer trends,
manufacturing costs with and without policy interventions to chart its next
course.
Nobel in economics underscores the necessity of
empirical and behavioral analysis.
About the Author:
Dr Seshadri Ramkumar is the Professor, Nonwovens &
Advanced Materials Laboratory, at Texas Tech University, Texas, USA. He can be
reached on email: s.ramkumar@ttu.edu