Thinking Like an Economist

Previous research indicates that the more years of education a person has, the more he thinks like an economist. A new paper (summarized by the BPS Research Digest) by Bryan Caplan and Stephen C. Miller, however, attempts to separate the role of intelligence and education in “thinking like an economist.” Caplan and Miller found that “the estimated effect of education sharply falls after controlling for intelligence. In fact, education is driven down to second place, and intelligence replaces it at the top of the list of variables that make people ‘think like economists.’ Thus, to a fair degree education is proxy for intelligence, though there are some areas – international economics in particular -where education still dominates.” [%comments]


Drill-Baby-Drill Drill Team

When time or money is not an unlimited resource, Economics is the Science of saying NO.

We realize our limitations of resources as we gain maturity and responsibility. Everything else is magical thinking.

Eric M. Jones

I could be wrong...but it looks like a couple of conservative quasi-eggheads trying to show that politically conservative people can be intelligent without being educated.

Another nail in the American coffin.

Carrie H.

As if economists needed any more proof that they are the smartest people in the world.

Joe

Do intelligent people think like economists, or are economists trained to think like intelligent people?

Ian Kemmish

Well, both smart people and economists say "but on the other hand" more often than the hoi polloi.

But only one of them means it!

Brian Potter

I read the abstract and the introduction to the paper, which explain the basic premise: the public and economists have different beliefs about economics in terms of how it works and the likely economic future. I notice that nowhere in either the abstract or introduction does it allow the possibility that the general public perception is correct. It immediately assumes the economists are right.
"Absent an empirically sound explanation for expert bias on the part of economists, the belief gap appears to be the result of the public's systematic bias." Where is the possibility that the gap is a result of economists' systematic bias?
"The importance is difficult to overstate; if the public has systematically biased beliefs about economics, sound economic policy will frequently lack popular support." If economists have systematically biased beliefs about economics (or the public!), sound economic policy is an oxymoron. Is there proof that economists do not have systematically biased beliefs about the value of economics?

Read more...

Lord

Ah, but isn't the question whether they think like intelligent economists or like shallow ones? Isn't the difference between penetrating astute observation reflection and thought and reflexive non thinking answers bent to promote a political agenda?

frasier crane

apologies for sounding snarky and not to denigrate the study, but you can replace "economics" with any academic discipline.

make a hypothesis, look at the facts. re-examine/adjust hypothesis. repeat.

this is the foundation for the advancement of human knowledge but seems to be incredibly lacking in today's America.

Max Rockbin

This isn't too surprising since Economists tend to consider virtually any rational decision making "thinking like an economist"

To really see if someone is "thinking like an economist" you'd have to look at those areas where simple rational analysis and economic analysis do not overlap.

For example, completely ignoring actual experience in the face of a simple model that seems to contradict it. Only economists and politicians tend to do that.

Mark Brucker

Sounds like these people are thinking a lot like the economists who believed markets couldn't have bubbles, couldn't crash, always get prices right, didn't need regulation to avoid meltdowns. Oh, maybe the same economists who believe that people are always rational in decisions, have unlimited willpower, never help others and should believe in the tooth fairy!

joselito

Easy bet for Ig-Nobel of Economics 2011.

Beatrice

Caplan and Miller are themselves economists, right? Because I imagine that a group of sociologists, for example, would have arrived at quite a different conclusion.

Next month, an anthropological case study will reveal that generous, kind individuals think like anthropologists. Political scientists will retort that their faculty Christmas parties are objectively the funnest of all... and so forth.

Practical_Econ

What was in third and fourth place?

Joseph K

I wonder if in the past smarter people tended to think differently. Like say, maybe in the past the smartest people tended the think like a philosopher, or maybe after the scientific revolution the smartest people tended the think like scientists.

Nowadays, economics is a rather selective field that attracts bright minds (I'm stuck with being a philosopher). Thus, economists as a group, are just a whole bunch of smart people. So, maybe the study is just showing that smart people tend to think like other smart people.

James

Re #2: "...trying to show that politically conservative people can be intelligent without being educated."

Well, that puts them one up on the politically liberal, who all too often manage neither :-)

Mark W

This week in Australia a new TV show started; RAKE. The first show featured Cleaver Greene (a Barrister) defending a world renowned economist, Graham Murray, on a charge of cannabalism.

Murray, utters the classic line when in the witness box,

"I'm not a murderer, I'm an economist!"

Stephen Miller

Brian Potter seems to have missed a few key lines early in the paper:

"Critics of the economics profession have blamed these differences on economists' self-serving bias (economists are rich and have high job security) and ideological bias (economists are conservative ideologues). *However, these explanations fail empirically*: large belief differences between economists and the public persist even after controlling for income, job security, political party identification, ideology, and more (Caplan, 2001, 2002a)."

As an aside, the ideology-based explanation for economist bias is simply wrong: the median economist is a moderate democrat politically, and ideologically slightly left-of-center. Those are the typical reasons we hear for economist bias, and fortunately the SAEE makes those claims testable. Are there any other reasons to think economists are the ones who are biased, rather than the public? We certainly considered the possibility of economist bias. There just isn't an explanation of *why* economists are biased (and the public isn't) that holds up when tested.

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Scott

"...the more years of education a person has, the more he thinks like an economist"

So the more educated a person is, the better he is at explaining tomorrow why he was wrong today?

That sounds about right.

Ryan P

@Brian Potter,
If you read the paper and its predecessors, you'll find the authors consider this possibility, and consider a number of possible sources of bias on the part of economists. (For instance, maybe you think it's because economists have an ideological conservative bias, or that economists have a higher income, etc, and one of these is biasing the results.) The authors then control for these possibilities explicitly. (Incidentally, it turns out ideology explains less than zero of the gap, since the average economist is more left-wing than the average American.)

So the question is, what sort of evidence would you require to be even slightly more convinced that if the average person and someone who studies a field for a living disagree about matters of fact in that field, maybe the average person is wrong?

John Dyer

One way to think smarter than an economist- take energy and natural resources into account for an economy. No economist every seems to realize that resources and energy are finite. They tend to believe that the economy can grow forever. On a finite planet, this path can only lead to collapse.