Discuss distinction between positive and normative analysis

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In Pennsylvania, wine and liquor can only be purchased from "state stores," which are stores that are owned and operated by the state government. According to an analysis by Katja Seim of the University of Pennsylvania and Joel Waldfogel of the University of Minnesota, if the state of Pennsylvania were to allow unlimited entry of private liquor stores, the number of stores would increase by 2.5 times and consumer surplus would increase by 9 percent. Are these results sufficient to decide whether the state of Pennsylvania should abolish the system of state stores and allow free entry of private stores? In your answer, discuss the distinction between positive and normative analysis.

Reference no: EM131021595

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