Language economics: Overview, applications and recent methodological developments

Abstract

The expression "language economics" appears for the first time in 1965 in an article by Jakob Marschak, in which the author discusses the economic nature of language optimization and the various processes that characterize it. In short, Marschak argues that the functioning of languages is the result of the continuous search for a compromise between "clarity" and "brevity" of the message. In other words, languages (or, more precisely, the way they work) are the result of an optimization problem in which the speaker tries to maximize the amount of information she can convey, while at the same time keeping the effort to a minimum. To understand why this problem can be considered "economic" it is necessary to go beyond the common but partial idea that the economy is only interested in money and markets. Economics is a very broad disciplinary field and is mainly concerned, as a social science, with the behavior of decision-making units when they have to allocate scarce resources (including money, but also time or various symbolic goods) having alternative uses. In light of this, it is evident that oral and written expression, a problem that involves the use of time and cognitive resources, can be studied from a purely economic point of view. Since the 1960s, research in the field of language economics has constantly extended its field of application. Researchers have begun to study the relationship between language and economy from a variety of perspectives. Topics of interest to scholars of linguistic economy include, among others: 1) the impact of individual language skills (understood both as an ethnic attribute and as a form of human capital) on remuneration; 2) the causes and consequences of language dynamics (such as language evolution, the decline and protecion of languages, etc.); 3) personnel hiring strategies according to the language needs of companies and public institutions. The results of language economics studies are often used to inform language policy decisions, as they help to explain the processes behind these phenomena. Research in linguistic economics has often relied on conventional methods of economic research, such as mathematical models and statistical tests, with all the resulting hypotheses and simplifications. However, recent research work in the field of language policy deals with the complexity of language issues from an alternative point of view. Starting from the observation that these issues involve many agents and variables, and that the causal links between these variables are often non-linear, an increasing number of researchers move from purely analytical (i.e. mathematical) approaches, which often try to find a so-called "closed form solution" to a problem, to computation-based approaches, which use algorithms and simulations. In this chapter we briefly introduce the field of linguistic economics, we discuss some of the current challenges and we present some recent methodological developments.

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