Dispelling Misconceptions about Economics

That’s the title of a recent paper in the Journal of Economic Psychology.

Here’s the abstract:

Some popular views about the workings of the economy are completely at odds with solid empirical evidence and congruent theoretical explanations and therefore can be qualified as misconceptions. Such beliefs lead to support for harmful policies. Cognitive biases may contribute to explaining why misconceptions persist even when scientific information is provided to people. We conduct two experimental studies to investigate, for the first time in economics, whether presenting information in a refutational way affects people’s beliefs about an important socio-economic issue on which expert consensus is very strong: the harmful effects of rent controls. In the laboratory (Study 1) both our refutational and non-refutational messages induce a belief change in the direction of expert knowledge. The refutational message, however, does not improve significantly on the non-refutational one. In the field (Study 2), where participants are college students receiving economic training, the refutational text improves, subject to some caveats, on standard instruction but not on the non-refutational message. The main overall implications of our results are that providing information moderately reduces the misconception, but does not eliminate it, and that the refutational approach does not work better than providing the same information in a non-refutational manner.

The paper’s results don’t bode well for my book’s prospects of winning friends and influencing people.

Incidentally, the paper zeroes in on rent control for the same reason I chose it for my book: Economists agree it’s destructive.

I’m reminded of a comment Bryan Caplan made in PhD micro during grad school. Something like: “All the studies show it’s near-impossible to teach the economic way of thinking. We’re going to try anyway. None of the studies were on me.”

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