Tuesday, June 8, 2010

Does Studying Economics Make You More Republican?

Thus is titled Patrick McGeehan's New York Times Economix blog post on a new study about economics training and political leanings.  Oops. He apparently doesn't understand the difference between correlation and causation. In fact he starts his post with this paragraph:

Several academic studies have found that there is a link between education levels and civic behavior. But anew study from the Federal Reserve Bank of New York has concluded that how much economics people study can influence their political activity and how they spend their spare time.

Er...it does no such thing. It states very carefully that is is merely uncovering a correlation between political affiliation and economics education, nothing more, it makes no claim of causality. The correlation between republicanism and economics could be because economics teaching causes people to believe more strongly in ideas generally more associated with republicans or it could be that people who believe in ideas generally more associated with republicans are more drawn to economics classes.

Here is a line from the conclusion of the study:

Unfortunately, we cannot say if our results reflect what individuals have learned in these courses and majors, or if the relationships identified here are due to self-selection among college graduates into different college majors and economics course taking.

Now, I don't expect reporters or bloggers who cover economics to understand everything about the field, and I run into erroneous causal claims constantly from other sources, but I do expect economics reporters and bloggers to understand this one fundamental concept of empirical economics.  Come on everyone, it is not that hard, is it?  [This is an honest question, what seems obvious to me may be only because of years and years of careful training]

But, you are probably asking, do you think there is a causal link?  I do a but, but I think it is weak and is actually a non-linear linkage: I think a little economics education leaves you with the impression that the answer to all public policy questions is free markets. This is because in intro classes, we often only have enough time to study and understand markets and their wonderful aspects and about the distortions that taxes and price controls create, often leaving very little time to talk about market failures. This can be true of intermediate classes as well.  Later in economics classes, market failures come up all the time and you start to get an appreciation of the limits of markets.  But those that only take one or two economics classes will be inclined to believe that market failures are really not that big a deal, after all they were just a quick end note in the class...  But I also believe that students self-select into economics classes and that those with free market, anti-tax attitudes will find a lot to like in economics classes.  In general I think that professors have very little influence on the core beliefs of students and that mostly student gravitate to professors that teach things that resonate with those core beliefs.

Either way I welcome and value all points of view in my classes and I have found that I am very fortunate to generally have a broad spectrum of opinions in my class and what I try to do is to get all viewpoints to understand and respect the power of markets, understand carefully that nature of distortions and appreciate that rarely do markets function perfectly and so it behooves us to try and understand the failures of markets and whether they are significant.  In the vast majority of cases they are probably not.  I hope that I am producing students with a nuanced understanding of the field so that regardless of their philosophical beliefs they can use solid economic theory to back up their beliefs and that they can move beyond pure ideology.

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