# Separating the roles of theory and direct empirical evidence in belief formation: the examples of minimum wage and anthropogenic global warming

I recently asked two questions on Quora with similar question structures, and the similarities and differences between the responses were interesting.

**Question #1: Anthropogenic global warming, the greenhouse effect, and the historical weather record**

I asked the question [here](http://www.quora.com/If-you-believe-in-Anthropogenic-Global-Warming-AGW-to-what-extent-is-your-belief-informed-by-the-theory-of-the-greenhouse-effect-and-to-what-extent-is-it-informed-by-the-historical-temperature-record?share=1). Question statement:

> If you believe in Anthropogenic Global Warming (AGW), to what extent is your belief informed by the theory of the greenhouse effect, and to what extent is it informed by the historical temperature record?

In response to some comments, I added the following question details:

> Due to length limitations, the main question is a bit simplistically framed. But what I'm really asking for is the relative importance of _theoretical mechanisms_ and _direct empirical evidence_. Theoretical mechanisms are of course also empirically validated, but the empirical validation could occur in different settings.  
>   
> For instance, the greenhouse effect is a mechanism, and one may get estimates of the strength of the greenhouse effect based on an understanding of the underlying physics or by doing laboratory experiments or simulations.  
>   
> Direct empirical evidence is evidence that is as close to the situation we are trying to predict as possible. In this case, it would involve looking at the historical records of temperature and carbon dioxide concentrations, and perhaps some other confounding variables whose role needs to be controlled for (such as solar activity).  
>   
> Saying that your belief is largely grounded in direct empirical evidence is basically saying that just looking at the time series of temperature, carbon dioxide concentrations and the other variables can allow one to say with fairly high confidence (starting from very weak priors) that increased carbon dioxide concentrations, due to human activity, are responsible for temperature increases. In other words, if you ran a regression and tried to do the usual tricks to infer causality, carbon dioxide would come out as the culprit.  
>   
> Saying that your belief is largely grounded in theory is basically saying that the science of the greenhouse effect is sufficiently convincing that the historical temperature and weather record isn't an important factor in influencing your belief: if it had come out differently, you'd probably just have thought the data was noisy or wrong and wouldn't update away from believing in the AGW thesis.

I also posted to Facebook [here](https://www.facebook.com/vipulnaik.r/posts/10203391692928956) asking my friends about the pushback to my use of the term "belief" in my question.

**Question #2: Effect of increase in the minimum wage on unemployment**

I asked the question [here](http://www.quora.com/If-you-believe-that-raising-the-minimum-wage-is-likely-to-increase-unemployment-to-what-extent-is-your-belief-informed-by-the-theory-of-supply-and-demand-and-to-what-extent-is-it-informed-by-direct-empirical-evidence?share=1). Question statement:

> If you believe that raising the minimum wage is likely to increase unemployment, to what extent is your belief informed by the theory of supply and demand and to what extent is it informed by direct empirical evidence?

I added the following question details:

> By "direct empirical evidence" I am referring to empirical evidence that  directly pertains to the relation between minimum wage raises and  employment level changes, not empirical evidence that supports the  theory of supply and demand in general (because transferring that to the  minimum wage context would require one to believe the transferability  of the theory).  
>   
> Also, when I say "believe that raising the minimum wage is likely to increase unemployment" I am talking about minimum wage increases of the sort often considered in legislative measures, and by "likely" I just mean that it's something that should always be seriously considered whenever a proposal to raise the minimum wage is made. The belief would be consistent with believing that in some cases minimum wage raises have no employment effects.

I also posted the question to Facebook [here](https://www.facebook.com/vipulnaik.r/posts/10203393417012057).

**Similarities between the questions**

The questions are structurally similar, and belong to a general question type of considerable interest to the LessWrong audience. The common features to the questions:

*   In both cases, there is a theory (the greenhouse effect for Question #1, and supply and demand for Question #2) that is foundational to the domain and is supported through a wide range of lines of evidence.
*   In both cases, the quantitative specifics of the extent to which the theory applies in the particular context are not clear. There are _prima facie_ plausible arguments that other factors may cancel out the effect and there are arguments for many different effect sizes.
*   In both cases, people who study the broad subject (climate scientists for Question #1, economists for Question #2) are more favorably disposed to the belief than people who do not study the broad subject.
*   In both cases, a significant part of the strength of belief of subject matter experts seems to be their belief in the _theory_. The data, while consistent with the theory, does not seem to paint a strong picture in isolation. For the minimum wage, consider the Card and Krueger study. Bryan Caplan [discusses how Bayesian reasoning with strong theoretical priors](http://econlog.econlib.org/archives/2013/03/the_vice_of_sel.html) can lead one to continue believing that minimum wage increases cause unemployment to rise, without addressing Card and Krueger at the object level. For the case of anthropogenic global warming, consider the [draft by Kesten C. Green](http://www.kestencgreen.com/gas-improvements.pdf) (addressing whether a warming-based forecast has higher forecast accuracy than a no-change forecast) or the paper [AGW doesn't cointegrate](http://landshape.org/enm/agw-doesnt-cointegrate-beenstocks-challenging-analysis-published/) by Beenstock, Reingewertz, and Paldor (addressing whether, looking at the data alone, we can get good evidence that carbon dioxide concentration increases are linked with temperature increases).
*   In both cases, outsiders to the domain, who nonetheless have expertise in other areas that one might expect gives them insight into the question, are often more skeptical of the belief. A number of weather forecasters, physicists, and forecasting experts are skeptical of long-range climate forecasting or confident assertions about anthropogenic global warming. A number of sociologists, lawyers, and politicians often are disparaging of the belief that minimum wage increases cause unemployment levels to rise. The criticism is similar: namely, that a basically correct theory is being overstretched or incorrectly applied to a situation that is too complex, is similar.
*   In both cases, the debate is somewhat politically charged, largely because one's beliefs here affect one's views of proposed legislation (climate change mitigation legislation and minimum wage increase legislation). The anthropogenic global warming belief is more commonly associated with environmentalists, social democrats, and progressives, and (in the United States) with Democrats, whereas opposition to it is more common among conservatives and libertarians. The minimum wage belief is more commonly associated with free market views and (in the United States) with conservatives and Republicans, and opposition to it is more common among progressives and social democrats.

**Looking for help**

I'm interested in thoughts from the people here on these questions:

*   Thoughts on the specifics of Question #1 and Question #2.
*   Other possible questions in the same reference class (where a belief arises from a mix of theory and data, and the theory plays a fairly big role in driving the belief, while the data on its own is very ambiguous).
*   Other similarities between Question #1 and Question #2.
*   Ways that Question #1 and Question #2 are disanalogous.
*   General thoughts on how this relates to Bayesian reasoning and other modes of belief formation based on a combination of theory and data.