In economics, there are many laws and theories. Have you ever wondered how an economist concluded how a consumer’s behaviour changes with the price of a commodity or how a producer produces more or less with varying the price? Laws and theories which are built on empirical pieces of evidence need economic data for verification. Without data, the rules and ideas of economics and the problems of an economy can not be solved. Therefore we need economic data for economic research. Now talking about data sources, we have primary data and secondary data. Let’s dig deeper into the primary sources of data.

What is Primary Data?

When the information collected by an investigator is first-hand, meaning that certain information is being collected for the first time by the investigator, it is called primary data. They are original and more reliable because they are more accurate. Some of the primary sources of data are surveys, experiments, questionnaires, interviews, observations, etc.

While collecting primary data, the investigator directly collects it from the source of the data without going through any existing data sources. It is organised to address problems related to economy and economic research. But one thing to keep in mind is that for collecting primary data, a lot of time and resources like money are required, and researchers tend to avoid this kind of data collection until necessary.

Some primary data examples are the data collected by the government for the census every ten years, data collected by firms for market research, product research, and competitive analysis. You know how long the census collection process is, and it requires a lot of resources, too, as the data is being collected from the source.

Advantages of Primary Data

Here are some of the advantages of primary data collection for economic research:

• While collecting primary data, the researcher or investigator controls the data they particularly need. These data are specific to the researcher’s needs, which they get by collecting data from the source.
• In comparison to secondary data, they are more accurate. The authenticity of this data can be trusted as it is not subjected to personal bias.
• The ownership of this kind of data is solely in the hands of the researcher or investigator. Their call is to make this collected data public or patent it or even sell it.
• The data collected from the primary sources is collected in real-time, they are up to date as they are not collected from old or existing data like in the secondary data.
• The investigator has complete control over the information they have collected from the primary sources of data. It is up to them how they want to utilise this data. In what way to design it, which method to use, data analysis techniques, etc., all are decided by them.
• While collecting primary data, there is no need to take extra precautions like in secondary data.

Disadvantages of Primary Data

Here are some of the disadvantages of primary data collection for economic research:

• As the data is collected from the original point of data generation, this data is very expensive to collect in comparison with secondary data. Therefore, the process of collection of primary data can be quite difficult.
• The process of the collection of primary data is very time-consuming. Primary data examples like census collection every 10 years prove this point.
• The collection of primary data is a complex process and requires a lot of commitment to finish. Therefore, sometimes it is not feasible to collect data from primary sources.

Methods of collecting primary data

For the collection of primary data, the investigator or researcher uses some methods; let us have a quick look at the names of the methods used for collecting data from primary sources:

• Direct personal investigation
• Indirect oral investigation
• Information through correspondents
• Telephonic interview
• Mailed questionnaire
• The questionnaire filled by enumerators

Conclusion 

The study of data collection is very important in studying economics. There are two ways to collect data- primary data collection and secondary data collection. Today we have solely focused on collecting primary data as it is important to understand how economics researchers solve economic problems. Data collection from the primary sources of data generation is time-consuming and expensive. Still, the investigator gets first-hand, real-time, accurate, reliable, and original data over which the investigator has complete control. Collecting data from primary sources has advantages and disadvantages, but they are important for economic theory.