Bryan Caplan  

Me on Economists' Ideological Divide

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My "What Makes People Think Like Economists?" (Journal of Law and Economics 2001) also analyzes why economists disagree with each other.  Key results (footnotes omitted):
Overall, the SAEE evidence suggests that disagreements among economists are surprisingly random. There are 10 questions for which nothing in Table 7 matters. Income remains a poor predictor of economists' beliefs. At most, those with higher income are slightly more prone to think that supply and demand explain the gas price rise, that trade agreements cost jobs, and that real wages and incomes rose over the last 20 years. Most of the strongest pattern in the public's beliefs fade in the economist-only subsample: gender, recent income growth, and job security rarely matter for economists.
The leading correlates of economists' disagreement are political-ideology and, to a lesser extent, party affiliation. Liberal Democratic and conservative Republican economists disagree in expected ways about taxes, regulation, excessive profits and executive pay, and some employment-related issues. Conservative economists are also markedly more optimistic about the country's economic future. Note, however, that there is little evidence of an ideological divide over the economy's past or present performance. Economists
across the political spectrum can largely agree about the path of inequality, real income, and real wages over the past two decades. Compared to the results for the whole sample, the statistical significance of the ideology coefficients falls (unsurprising given the reduced number of observations), but their absolute magnitude tends to rise. As John Zaller documents, this is a common pattern: highly educated respondents match ideological stereotypes much more closely than less-educated respondents who use the same ideological label. Needless to say, the connection between economists' beliefs and their ideology could easily reflect reverse causation. Economists might choose ideologies because they fit well with their understanding of how the economy works.
Who's closer to the truth about economists' ideological divide: Dahl and Gordon, or Wolfers?  My answer: it heavily depends on whether or not your sample includes the broader public.  Compared to non-economists, economists enjoy an amazing consensus.  But if you only compare us to one another, we're a contentious tribe.

By analogy, if you asked me how much my identical twins sons agree, my answer would heavily depend on whether they are any additional children in the room.  Compared to virtually all other kids, my twins are as alike as peas in a pod.  Yet when they're the only kids in the room, their numerous disagreements come into focus.

Comments and Sharing

COMMENTS (7 to date)
eric writes:

So you think that if we asked economists whether they want higher taxes, more government spending, single payer health care, more gun control, etc., there would be less disagreement than the population as a whole? That's not obvious. Sure, if you frame the questions correctly, they will agree ('do you want more rational gun regulation?'), but at the high level federal legislation is proposed and enacted I don't think that matters.

Glen Smith writes:

The government assistance I get is not welfare but the government assistance you get is welfare.

John V writes:

Your analogy holds up very well for libertarians as well in my experience. :-)

Krishnan writes:

It appears to be a signal-to-noise problem - it may be that it is far easy to pick out the signal (or noise) when the sample is "homogeneous" (i.e. say all economists than when examining a larger set (that includes non economists).

Put a number of "conservatives" and "liberals" in a room together and you will conclude (albeit with some caveats) that there are two groups - "conservatives" and "liberals" - but if you examine any one group where the people self describe themselves to be "conservatives" or "liberals" - we will begin to see differences that were either buried - OR that show up in such homogeneous groups.

Steve Sailer writes:

"Compared to virtually all other kids, my twins are as alike as peas in a pod. Yet when they're the only kids in the room, their numerous disagreements come into focus."

The Relativism of Relatives.

Dante writes:

Wolfers chose one of the biggest straw men in the book: "tax cuts pay for themselves" in his little article. He pointed out that virtually no one in the IGM Forum thought that in five years tax revenue would increase if we cut marginal tax rates. He conveniently left out that the results of that same survey found that economists generally agreed that a marginal tax cut would lead to higher GDP.
If you read the comments, even those who are "uncertain" seem to think that given the nature of the tax cut it certainly is likely in lead to higher GDP growth. On the revenue question, even economists who would likely support a tax cut (like Lazear or Zingales) also disagreed. Why? because no one believes a tax cut always leads to more revenue. Wolfers is just using the same old straw man we heard before and disgracefully trying to communicate to the public that "smart people all support Democrats." This just proves Thomas Sowell is right in his recent book Trickle Down Theory and Tax Cuts for the Rich."

Dante writes:

I am referring to his Bloomberg article on the topic in the example I gave. I think he used the same question as an example in a Freakonomics blog post.

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