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Empirical Evidence

Information obtained through observation and documentation of certain behavior and patterns or through an experiment

What is Empirical Evidence?

Empirical evidence is the information obtained through observation and documentation of certain behavior and patterns or through an experiment. Empirical evidence is a quintessential part of the scientific method of research that is applicable in many disciplines.

 

Empirical Evidence

 

In the scientific method, the pieces of empirical evidence are used to validate or disprove the stated hypothesis, statement, or claim. In the scientific world, a hypothesis can be accepted by the community only if sufficient (empirical) evidence that supports the hypothesis is provided.

 

Breaking Down Empirical Evidence

Empirical evidence is primarily obtained through observation or experimentation. The observations and experiments are known as primary sources. However, it can be also obtained through various secondary sources, including articles, reports, newspapers, etc. The process of finding empirical evidence is called empirical research.

The main concern with empirical research is the collection of unbiased evidence. In order to so, researchers must carefully design the research while minimizing exposure to potential errors. In the scientific world, it is common that several scientists or researchers gather evidence simultaneously through the replication of the same study. In addition, a peer review is a primary tool in science that is used to validate the evidence provided in a study or research.

 

Types of Empirical Evidence

The two primary types of empirical evidence are qualitative evidence and quantitative evidence.

 

1. Qualitative

Qualitative empirical evidence is the type of data that describes non-measurable information. Qualitative data is used in various disciplines, notably in social sciences, as well as in market research and finance. In such fields, the data generally investigate human behavior and its patterns. The non-measurable nature of qualitative data, as well as its subjective analysis, makes it prone to potential biases.

 

2. Quantitative

Quantitative empirical evidence refers to numerical data that can be further analyzed using mathematical and/or statistical methods. Quantitative data is used in almost every discipline or science.

Unlike qualitative data, the empirical evidence obtained using quantitative data is generally considered to be unbiased as the validity of the data can be easily verified using mathematical/statistical calculations or analysis.

 

Related Readings

CFI is the official provider of the Financial Modeling and Valuation Analyst (FMVA)™ certification program, designed to transform anyone into a world-class financial analyst.

To keep learning and developing your knowledge of financial analysis, we highly recommend the additional resources below:

  • Basic Statistics Concepts in Finance
  • Durability Bias
  • Monte Carlo Simulation
  • Survivorship Bias

Financial Analyst Certification

Become a certified Financial Modeling and Valuation Analyst (FMVA)® by completing CFI’s online financial modeling classes and training program!