Back in Waseda University, I was wondering what a theoretical research in economics is and how different it is from an empirical one. Most students from Cambodia, at least, choose empirical research for both undergraduate and graduate studies. I do not like empirical research because I would have to look at computer screen with millions of data there. It took me quite a long time to see the difference and finally I chose empirical research. Here I hope to help you see the difference in a short period of time.
Theory, as it sounds, is about explaining how things work. For instance, you may say consumer behavior of spending this month is dependent on their income this month. If you think this is correct, you will find proof to prove that your income this month affects your spending this month. Thus, your research here is empirical. If you think that your behavior of spending this month is dependent on your income this month, next month and several months ahead, you will do a theoretical research because you are modifying the previous theory.
Is theoretical research about description? If you are a genius, it is true! your description of the theory is more than sufficient. For instance, F.A. Hayek's The Use of Knowledge in the Society is a theoretical paper which uses only words to describe his theory. You may find plethora of such paper as well. However, as a student, even in a Ph.D program, theory research tends to mean utilization of mathematics. You will have to use mathematics to prove your theory. Milton Friedman's Permanent Income Hypothesis, for instance, utilizes the simple concept of marginal utility of consumption.
Mathematics is not about calculation only. Its underlying concept is the most important part in theoretical research. For instance, Y= X and X=Y are different, with the latter meaning that Y causes X; X happens as a result of Y. If you like this kind of concept in mathematics, you will find theoretical paper interesting.
Empirical research is about proving or disproving an existing theory. The theory may not be a perfect one for you to prove or disprove. Using the above example, you may think incomes for two months determine your behavior of spending this month. In that case, you have to modify the theory first; that means somehow you will include the theoretical part in addition to the main part of your empirical research. Still, your research is an empirical one. Nonetheless, it is not important to classify if your paper an empirical or theoretical one. You definitely can do both in a paper.
See my Master's Thesis as an example of theoretical research in economics.
