Towards a “Text as Data” Approach in the History of Economics: An Application to Adam Smith’s Classics

Abstract

Quantitative techniques have received increasing attention in the history and methodology of economics. Nonetheless, a “text as data” approach has mostly been overlooked and its applicability to the history of economics remains to be examined. To understand what we gain from such quantitative techniques in relation to existing historical analyses, we apply some “text as data” techniques to Adam Smith’s The Theory of Moral Sentiments and The Wealth of Nations. We explore the books’ topics, styles, and sentiments. We show how word frequency analysis can be used to examine the differences between the books, shed light on conceptual discussions and reveal an important stylistic aspect, specifically Smith’s use of personal pronouns. Style analysis shows the similarities and differences in terms of lexical richness and readability between the two books. Finally, we show the limitations of a third technique, sentiment analysis, when applied to historical economic texts.

Keywords: Adam Smith; Lexical diversity; Readability; Sentiment analysis; Text as data; Text mining

JEL Classification: B12; B41