Applicability of Economics to QA

Years ago, I started listening to Russ Roberts' excellent podcast EconTalk (http://www.econtalk.org), and the more I've listened to it, the more I've come to understand that although the origins of economics and the study of quality may be different, the practice is very, very similar.


What do we measure?

We face a constant struggle trying to measure the right variables, and what is "right" changes over time. In economics, it seems like new indicators become popular all the time. After the Great Depression, the concept of a nation's Gross Domestic Product rose in popularity as economists worked on trying to explain how nations were affected by the depression, and how they might be able to avoid similar events in the future.

However, GDP did nothing to predict the "Great Recession" of 2007-2009, and in fact trailed the crisis by a considerable time.

We face similar issues with quality. Production or build test failure rates come to us pretty quickly. Customer satisfaction is much slower, but is clearly critically important. What about units sold? For any of these, do we want to measure the raw numbers, or is the rate of change more useful in some cases? Do we need to divide the numbers by units sold, or customer "impressions," or overall revenue or profit?

What are the incentives?

A second important similarity between economics and quality is: very often the problems both in a market and in building a good product is solved by understanding incentives. Are factory workers rewarded for shipping more units, regardless of the number of RMAs? Are employees threatened for trying to escalate quality problems? Are software developers rewarded for the number of bugs they fix? The lines of code they write? The late nights they work?

All of these things can lead to what Roberts refers to as "perverse incentives" where the incentives of the individual are not aligned with the good of the group.

The EconTalk podcast is a mind-opening resource that's great for people involved in quality issues!

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