When do economists matter?

by on August 21, 2014 at 2:05 am in Economics, Political Science | Permalink

Christopher D. Johnston and Andrew Ballard have a new paper on this neglected topic, the abstract is this:

Given an increasing presence in the public sphere, what role do economic experts play in shaping public opinion on economic issues? In this paper, we examine the responsiveness of American public opinion on five economic policy issues to real information regarding the distribution of opinion on these issues among economists. We also examine the extent and role of trust in economists within the public. On average, we find meaningful changes in public opinion in the direction of expert consensus when citizens are given explicit information about expert opinion. However, we also find heterogeneity in citizen responsiveness across issues, such that aggregate opinion change is smaller on symbolic policy issues relative to technical ones. Further, on symbolic (but not technical) issues we find that citizens use judgments of the trustworthiness of economic experts in a motivated fashion, as a means of reinforcing prior opinions.

That is a little bloodless and the paper is also poorly written and organized but nonetheless it is important work.  Here is one very interesting bit:

…strongly left-leaning citizens are about 12 percentage points more trusting of economists than strongly right-leaning citizens.

This part of (sort of) encouraging:

…all three groups of respondents show greater trust than predicted after exposure to consensus information.  This pattern is consistent with the notion that exposure to highly technical, means-oriented issues makes one’s lack of knowledge salient, and perhaps engenders greater respect for experts…

The full paper is here, I would say start reading on p.16 and return to the beginning later on if you wish.

prior_approval August 21, 2014 at 2:41 am

‘That is a little bloodless and the paper is also poorly written and organized but nonetheless it is important work.’

Whereas this sentence is a model of incisive insight.

Alexei Sadeski August 21, 2014 at 2:52 am

Zing!

andrew' August 21, 2014 at 3:27 am

By “this sentence” you mean your sentence.

andrew' August 21, 2014 at 3:30 am

Does Scott Sumner (or Dean Baker or Robert Schiller or…) “trust” economists?

Ray Lopez August 21, 2014 at 3:42 am

Also does it mean the Federal Reserve does or does not listen to Scott Sumner when they implemented QE that supposedly targets NGDP?

As for the left trusting economists more than the right, it’s because most economists believe in Keynesianism, which puts great responsibility on government.

Andrew' August 21, 2014 at 3:49 am

More generally, they just (speculative) tend to trust experts because they believe in a tidy progressive explanation of the world.

Brian Donohue August 21, 2014 at 1:17 pm

Yeah, sometimes I envy them for their tidy worldview. Like religious people.

Then I get over it.

Oakchair August 21, 2014 at 12:28 pm

Though your right about Keynesianism; there is a general trend of the right not trusting experts ranging from scientists to data nerds like Nate Silver. This is due to the right basing their opinions less so on facts and reality and more so on what they feel and tribal identities.

stan August 21, 2014 at 4:20 pm

No. This is based on overwhelming evidence that the vast majority of published academic studies are wrong.

dearieme August 21, 2014 at 4:53 am

If the public were familiar with the distinction between microeconomics and macroeconomics, it might well trust “economists” (= macroeconomists?) a good deal less.

sym August 21, 2014 at 5:55 am

…strongly left-leaning citizens are about 12 percentage points more trusting of economists than strongly right-leaning citizens

That’s like saying “people who believe in unicorns also believe in magical creatures”. Of course that strongly left-leaning citizens, who, by definition, believe in collectivism and thus its prophets: politicians & social issues “experts” (which includes economists), will trust economists.

Oakchair August 21, 2014 at 12:30 pm

Its really weird how the right can turn trusting people who have more knowledge on a subject as a bad thing; its mostly likely because facts have a liberal bias.

Brian Donohue August 21, 2014 at 1:21 pm

Just adorable! I suspect you would have been perfectly content parroting the wisdom of the clergy a couple hundred years ago.

Z.G. August 21, 2014 at 6:17 am
S August 21, 2014 at 6:20 am

Where economists can make correct predictions they are useful, where they cant they are not. I dont care about consensus.

S August 21, 2014 at 6:27 am

I should say, to avoid sounding excessively cynical, it does not have to be a specific number with zero residual. Sometimes the best you can do is get the sign right.

stan August 21, 2014 at 4:24 pm

Experts are no more accurate in their predictions than a dart-throwing chimp. — Philip Tetlock

Michael Cain August 21, 2014 at 6:52 pm

And yet buildings and bridges stand, and cars run, and processors get the right answer the vast majority of the time. Guess it depends on the field of expertise.

The Devil's Dictionary August 21, 2014 at 6:28 am

“…strongly left-leaning citizens are about 12 percentage points more trusting of economists than strongly right-leaning citizens.”

I tend not to believe economic experts too much, because I am believed to be one.

A August 21, 2014 at 2:44 pm

No one thinks you are an economic expert.

Rich Berger August 21, 2014 at 7:12 am

The fourth issue tested is
“A cut in federal income tax rates in the US right now would raise taxable income enough so that the annual total tax revenue would be higher within five years than without the tax cut.” Economists disagree with this statement. I consulted the US budget statistics and found that tax receipts were higher in 1991, five years after the Tax Reform Act of 1986 sharply reduced rates. I also found that tax revenues were higher in 2008 five years after the Bush tax cuts reduced rates in 2003. That held for off-budget and on-budget revenues. Note that the statement did not indicate that receipts should be measured in constant dollars or compared to where they would have been had no cuts in rates been made. Of course, it says “now”, but why ignore past experience in making predictions?

I think they should have included a statement about the efficacy of stimulus – than we could talk about the major fail of the White House economists who predicted how low the unemployment rate would go after the stimulus.

What this paper gives us is bogus meta-analysis to prove that economists are ignored because people are stupid (and the right wingers more so). Just another version of the science is settled argument – they gave a quick nod to climate debate in their paper. In fact, thinking like a macroeconomist is useful in analyzing everyday phenomenona. Macroeconomics, in the service of government power is about as useful as astrology.

This study is crap.

Rich Berger August 21, 2014 at 7:14 am

Thinking like a microeconomist – hoist by autocorrect. I guess that isn’t considered science!

andrew' August 21, 2014 at 7:52 am

I hate how (Ezra Klein does this a lot just as an aside) how they confidently stride right over such issues. The ladder curve is a mathematical identity. Bush and his well-deserved bashing did not repeal math.

Spencer August 21, 2014 at 11:06 am

is there any time since WWII when tax receipts were not higher five years later?

Spencer August 21, 2014 at 11:13 am

I just checked — 2011 and 2012 were the only time federal receipts were below there level 5 years ago

msgkings August 21, 2014 at 1:50 pm

BOOM goes the dynamite.

Oakchair August 21, 2014 at 12:44 pm

The tax reform act of 1986 raised taxes. In 1990 there were more tax increases. So where did you get this alternative reality from because clearly you’re getting information from not completely uncredible places.
“A cut in federal income tax rates in the US right now would raise taxable income enough so that the annual total tax revenue would be higher within five years than without the tax cut.”
Are you illiterate or did you not actually read the bolded part?

Oakchair August 21, 2014 at 12:55 pm

When you look at the data and compare to similar periods in the business cycle tax revenue grew more when taxes where not cut/increased (IE the 90’s then the 00’s, and the late 80’s vrs the early 80’s.
http://useconomy.about.com/od/fiscalpolicy/p/Budget_Income.htm

Brian Donohue August 21, 2014 at 1:24 pm

TRA 86 cut marginal rates. I didn’t take you for a Laffer acolyte.

msgkings August 21, 2014 at 1:54 pm

Yeah but it closed enough loopholes to raise revenue…it was Simpson-Bowles, 1980s style.

andrew' August 21, 2014 at 7:52 am

Laffer curve, obviously.

The Cranky Professor August 21, 2014 at 8:39 am

One reason I don’t “trust” economists is that I know a whole department full of them and their self-interests fairly well. Mainly nice people – but I don’t start out by trusting their statements in committee or on the floor of the faculty meeting.

Oh – but I’m certainly not left-leaning.

The Engineer August 21, 2014 at 8:56 am

What if the “study” replaced “economist” with “climate scientist”.

NathanP August 21, 2014 at 9:09 am

I’d argue they are most useful in the behavioral economics realm.

Brian Donohue August 21, 2014 at 9:26 am

Finally, a blog title question with a non-obvious answer!

Yancey Ward August 21, 2014 at 11:14 am

They matter a lot more than their actual ability warrants. That is the problem.

Brian Donohue August 21, 2014 at 11:18 am

They provide answers to pressing questions. No matter that the answers are dubious. The questions are pressing. The demand is there, so the supply rises to meet it.

Econ 101.

T. Shaw August 21, 2014 at 12:45 pm

When do eco nomists matter?

When a lawyer joke just won’t do.

TMC August 21, 2014 at 12:59 pm

Conservatives are more likely to be (non academic) scientists, or engineers, and not only know the science, but the limitations of current knowledge. Many/most studies prove more than the data suggests they should.

Nathan W August 21, 2014 at 2:31 pm

I don’t think you necessarily need to hear it, but I propose that a GENERAL distrust of experts on the part of any leadership figure, should generally be a cause for great alarm. And moreover, that distrust of expert opinion in any given circumstance should also be cause for concern in the absence of extremely well-defended reasoning.

I’m referring to perspectives promoted by political leaders, not banter on the forum of a blog.

In my experience, economic analyses which ultimately condone “leftist” policies are full of caveats which point to areas for methodological improvements, and provide contact information and other means fo providing constructive feedback, whereas, for example in Canada, the CD Howe Institute and the Fraser Institute routinely produce linear models of the world and then claim that minimum wages will cost some hundreds of thousands of jobs or that helping people will hurt them … always based on linear models without openly questioning what the results may have been if the world were not linear (it is not).

But I think the general public is probably not so aware of how difficult it is to defend some specific non-linear way of modelling the world. Anyways, the right (most certainly and very much openly in Canada) has been demonizing “experts” for some years now, probably to help evade inconvenient truths (e.g., cutting consumption taxes is not the best tax cut if the goal is to promote economic growth), and imo opinion that is the number one and primary factor explaining why people on the left are somewhat more trusting of “expert” opinion in economics.

Jeff Lonsdale August 21, 2014 at 3:51 pm

So with ALS in the news – what technical solutions to the orphan drug problem should economists be advocating? (Assuming that widespread reform of the FDA in a way that changes its role is too symbolic for many citizens to take seriously)

Jacob Lee August 22, 2014 at 7:33 am

We can’t fix today’s problems unless we change yesterday’s rules. But economists — and the models they rely on — are bounded by yesterday’s rules. For most economists, the economy can only be organized and managed in a very specific set of ways — by orthodox institutions: evil corporations, pump-and-dump brokers, profit-seeking investors, you know the score. Yet it is exactly that set of institutions that got us into this mess.

Greg Ransom August 22, 2014 at 5:10 pm

The more a person knows about economics the more they confidently know that most economists can’t be trusted as competent scientists or ‘experts’ — they simply have failed to produce a non-pathological science and they routinelymand demonstrably mistake their pseudo-science for reality. A great illustration of this was Paul Samuelson decade after decade on the economics of the Soviet Union. Or macroeconomists on the economy in 2006 and 2007.

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