The case for mixed methods research: Embracing qualitative research to understand the (informal) economy

Abstract Economics has long shunned qualitative research methods, such as interviews, focus groups and observational studies, in preference for quantitative methods, such as empirical analysis of secondary data and field experiments. Moreover, recent years, with advances in econometric theory, have seen a notable increase in the size and quality of data sets that are needed to publish quantitative research in leading journals. This has the effect of significantly increasing the ‘entry costs’ for researchers interested in studying economic development. Crucially, it also limits the topics that can be studied. In particular, it focuses attention on issues and countries where large data sets exist or can be collected. In this paper, we argue that by putting too much weight on internal validity, economics has adopted a too narrow definition of ‘rigour’ and would benefit from embracing qualitative and mixed methods research. To illustrate our point, we pay particular attention to the informal economy. The informal economy is understudied by economists because of the lack of available quantitative data. We show that this fundamentally impacts our understanding of the wider economy. Qualitative research can enrich our understanding by providing a more complete and nuanced view of the economy.