Beliefs about the Economic Impact of Immigration

The public's beliefs about the economic impact of immigration on host nations' economies is significantly more negative than both the beliefs of economists, and what much of the empirical evidence would suggest. In an attempt to explain this disparity, and the wide range of beliefs about what should largely be a matter of fact, I develop a simple model of belief formation based on the concept of motivated reasoning: when coming to a conclusion people are influenced by the desire to come to a particular conclusion (a directional goal) and by the desire for their conclusion to be justified by evidence (an accuracy goal). This gives agents an incentive to manipulate their beliefs. The model yields several testable hypotheses: positive beliefs about the economic impact of immigrants should be negatively associated with a preference for living in an ethnically homogeneous society; the effect of education depends crucially on the aforementioned preference; finally, beliefs should reflect the probability of receiving supporting evidence. An empirical analysis using the European Social Survey 2002/2003 data finds support for all three hypotheses.