Do Economists Recognize an Opportunity Cost When They See One? A Dismal Performance from the Dismal Science
AbstractOne expects people with graduate training in economics to have a deeper understanding of economic processes and reasoning than people without such training. However, as others have noted over the past 25 years, modern graduate education may emphasize mathematics and technique to the detriment of economic reasoning. One of the most important contributions economics has to offer as a discipline is the understanding of opportunity cost and how to apply this concept to all forms of decision making. We examine how PhD economists answer an introductory economics textbook question that requires identifying the relevant opportunity cost of an action. The results are not consistent with our expectation that graduate training leads to a deeper understanding of the concept. We explore the implications of our results for the relevance of economists in policy, research, and teaching.
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Bibliographic InfoArticle provided by De Gruyter in its journal The B.E. Journal of Economic Analysis & Policy.
Volume (Year): 4 (2005)
Issue (Month): 1 (September)
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Web page: http://www.degruyter.com
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- Lee C. Spector & Courtenay C. Stone, 2010. "Unlikely Estimates of the Ex Ante Real Interest Rate: Another Dismal Performance from the Dismal Science1," Working Papers 201010, Ball State University, Department of Economics, revised Jan 2011.
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- Daniel Arce & Sherry Li, 2011. "Profits, Layoffs, and Priorities," Journal of Business Ethics, Springer, vol. 101(1), pages 49-60, June.
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