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Systematically Biased Beliefs About Economics: Robust Evidence of Judgemental Anomalies from the Survey of Americans and Economists on the Economy

Author Info

Listed author(s):
  • Bryan Caplan

    (George Mason University)

Abstract

Differences between the general public"s "positive" economic views and economists" resemble other judgemental anomalies: Laypeople and experts "systematically" disagree. I analyse this puzzle using data from the Survey of Americans and Economists on the Economy. The paper first tests and decisively rejects the hypothesis that the differences solely reflect economists" self-serving bias. Then it examines whether economists" political ideology and party loyalties explain the disagreement; if anything, this slightly increases their magnitude. The effect of economic training clearly falls but remains large after adding education to the set of control variables. Apparent biases" robustness suggests that the anomaly is real. Copyright 2002 Royal Economic Society

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Article provided by Royal Economic Society in its journal The Economic Journal.

Volume (Year): 112 (2002)
Issue (Month): 479 (April)
Pages: 433-458

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Handle: RePEc:ecj:econjl:v:112:y:2002:i:479:p:433-458
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  1. Christina D. Romer & David H. Romer, 1997. "Reducing Inflation: Motivation and Strategy," NBER Books, National Bureau of Economic Research, Inc, number rome97-1, June.
  2. Linda Babcock & George Loewenstein, 1997. "Explaining Bargaining Impasse: The Role of Self-Serving Biases," Journal of Economic Perspectives, American Economic Association, vol. 11(1), pages 109-126, Winter.
  3. Robert J. Shiller, 1997. "Why Do People Dislike Inflation?," NBER Chapters,in: Reducing Inflation: Motivation and Strategy, pages 13-70 National Bureau of Economic Research, Inc.
  4. Shiller, Robert J & Boycko, Maxim & Korobov, Vladimir, 1991. "Popular Attitudes toward Free Markets: The Soviet Union and the United States Compared," American Economic Review, American Economic Association, vol. 81(3), pages 385-400, June.
  5. Eichenberger, Reiner & Serna, Angel, 1996. "Random Errors, Dirty Information, and Politics," Public Choice, Springer, vol. 86(1-2), pages 137-156, January.
  6. Sheffrin,Steven M., 1996. "Rational Expectations," Cambridge Books, Cambridge University Press, number 9780521474009, February.
  7. Linda Babcock & Xianghong Wang & George Loewenstein, 1996. "Choosing the Wrong Pond: Social Comparisons in Negotiations That Reflect a Self-Serving Bias," The Quarterly Journal of Economics, Oxford University Press, vol. 111(1), pages 1-19.
  8. Frey, Bruno S & Eichenberger, Reiner, 1992. "Economics and Economists: A European Perspective," American Economic Review, American Economic Association, vol. 82(2), pages 216-220, May.
  9. Matthew Rabin., 1995. "Moral Preferences, Moral Constraints, and Self-Serving Biases," Economics Working Papers 95-241, University of California at Berkeley.
  10. Fremling, Gertrud M & Lott, John R, Jr, 1996. "The Bias towards Zero in Aggregate Perceptions: An Explanation Based on Rationally Calculating Individuals," Economic Inquiry, Western Economic Association International, vol. 34(2), pages 276-295, April.
  11. Matthew Rabin, 1998. "Psychology and Economics," Journal of Economic Literature, American Economic Association, vol. 36(1), pages 11-46, March.
  12. George A. Akerlof, 1970. "The Market for "Lemons": Quality Uncertainty and the Market Mechanism," The Quarterly Journal of Economics, Oxford University Press, vol. 84(3), pages 488-500.
  13. Caplan, Bryan, 2001. "Rational Ignorance versus Rational Irrationality," Kyklos, Wiley Blackwell, vol. 54(1), pages 3-26.
  14. Caplan, Bryan, 2001. "Rational Irrationality and the Microfoundations of Political Failure," Public Choice, Springer, vol. 107(3-4), pages 311-331, June.
  15. Wittman, Donald, 1989. "Why Democracies Produce Efficient Results," Journal of Political Economy, University of Chicago Press, vol. 97(6), pages 1395-1424, December.
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  1. Ekonomisti nemaju privilegiranu govornicu
    by cronomy in Cronomy on 2012-12-19 00:22:22
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