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Experiential knowledge was succinctly defined in 1994 as “information and wisdom gained from lived experience” by Marsha A. Schubert and Thomasina J. Borkman. It signifies a way of knowing about and understanding things and events through direct engagement. Lived experience incorporates the actual experience itself along with the meanings attributed to the experience by the person experiencing it. One form of experiential knowledge, termed Indigenous or local environmental knowledge, refers to information and meanings gleaned through active participation in an activity that is shared by or distributed among members of a group or community. This can include groups of people who form a community (e.g., people who are part of the same village or ethnic group), people who are linked in other ways (e.g., people engaged in similar activities such as fishermen in a particular geographic region or factory workers), or people who are a group only in the sense that they share a particular experience (e.g., people with a chronic medical condition).

A second thread in the discussion of experiential knowledge focuses on how researchers' own lived experiences frame their decisions regarding research questions, understanding, and interpretations. Arguing that research decisions are selective and that understanding is informed by perspective, postmodernists, feminists, qualitative researchers, and critical race theorists challenge exclusion and marginalization of the experiences of subgroups by mainstream researchers. They argue that the researcher's lens, shaped by identity, gender, race, ethnicity, class, sexual orientation, education, and position, influences how questions are selected and framed as well as how data are collected and interpreted. Experiential knowledge of the researcher is always present in research, and some propose that research benefits when this is made explicit. Beyond mere acknowledgment, the researcher embraces the importance of experiential knowledge constantly exploring the interaction among experience, data, and understanding through an iterative process of inquiry and reflection. For some researchers, this also includes an action phase whereby findings are tested and the results are fed back into the process.

Another aspect of experiential knowledge entails understanding how it is directly embedded in the inquiry process itself and how the researcher taps into the knowledge of the “other.” Anthropologists and other social scientists who conduct research in naturalistic settings engage in a process by which knowledge is gleaned through empathic participation in everyday events and in-depth reflection on the experience. The researcher uses all of his or her senses in seeing, hearing, feeling, and understanding. The researcher's toolkit, including participant and unobtrusive observation and listening, questioning, informal conversation, various forms of interviewing, mapping, elicitation, photography, and survey taking, supports this way of knowing. What is unique is that the researcher uses these tools, particularly observation, listening, questioning, and reflecting, to experience the phenomenon under study, albeit only partially. Experiential knowledge takes many forms, including cultural, social, political, environmental, historical, and organizational knowledge. Through participatory and collaborative research, the researcher joins himself or herself, as well as his or her knowledge, with the wisdom of those engaged in the domain or issue under study in a discovery process that is cooperative and negotiated.

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