Economic Beliefs and Economic Attitudes: Results from Principles of Economics
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Transcript of Economic Beliefs and Economic Attitudes: Results from Principles of Economics
Economic Beliefs and Economic Attitudes: Results from Principles of Economics
Dan Settlage, Latisha Settlage, & Jim WollscheidUniversity of Arkansas – Fort SmithOctober 27, 2011
Presentation Outline•Motivation of Research•Summary of Methods Used
▫Knowledge Survey▫Attitude Survey
•Discussion of Results▫Descriptive Statistics▫Evidence of Change
•Directions for Future Exploration
Motivation of Research• Economics students often begin principles courses
with preconceived notions (often false) that shape their worldview and influence their learning environment.
• Selected Literature▫ Table 1 – Chapter 2; “Principles of Economics”
N. Gregory Mankiw▫ “The Myth of the Rational Voter”
Bryan Caplan▫ “Survey of Americans and Economists on the Economy”
The Washington Post/Harvard University▫ “Initial Misconceptions in a Macro Principles Class”
William Goffe
Motivation (cont.)•We seek to answer the following
questions:▫How knowledgeable are principles students
about general economic conditions? Inflation, unemployment, economic growth
▫Is knowledge correlated with attitudes regarding basic economic principles?
▫Do we make a difference in the classroom?
Summary of Methods Used•Two surveys were administered to
principles of economics students (start of spring 2011)▫Knowledge Survey▫Attitude Survey
•Surveys completed by both macro and micro students.▫278 observations (56% macro)
Summary of Methods Used•Knowledge Survey
▫Descriptive statistics compiled and compared to correct answers.
•Attitude Survey▫Histograms of responses.▫Relationship between attitudes at the
beginning and end of the semester examined.
Knowledge Survey – Historical Perspective•Considering period from 1950 to today,
students were asked to provide average annual percentages, max rate and min rate for:▫Unemployment▫Inflation
•Also asked to identify:▫Number of recessions since 1950
Average length in months Longest and shortest
▫Growth in real income
Knowledge Survey – Current Perspective•Also asked to provide current percentages for:
▫Unemployment▫Inflation▫Workers employed at minimum wage jobs▫Proportion of federal income tax paid by top 20
percent of income earners▫Proportion of federal income tax paid by bottom
20 percent of income earners▫Prices controlled by government▫National debt relative to national income
Economic Attitudes Survey•Students asked to rank their agreement
or disagreement with various economic statements.
•Likert scale:▫5 – strongly agree▫4 – agree▫3 – neither agree or disagree▫2 – disagree ▫1 – strongly disagree
Economic Attitudes Survey• Example statements:
▫Trade/immigration is beneficial to U.S. economy.▫Govt should restrict companies from outsourcing
work.▫Taxes are too high for the poor/rich.▫Income has increased faster than the cost of living.▫The national debt is too big.▫Inflation/unemployment is a big problem in the U.S.▫Minimum wage is too low.▫Social security will be there for me when I retire.▫Government should control more prices.
Results – Unemployment RatePre-SurveyMedians
Post-Survey
Medians
Actual Data
Average annual %(1950-today)
10 8 5.7
Highest annual %
16 12 9.7 (1982)
Lowest annual %
5 4 2.9 (1953)
Current 11 9 9.4 (Dec ‘10)
Future 10 8 N.A.
Results – Inflation RatePre-Survey Medians
Post-Survey
Medians
Actual Data
Average annual %(1950-today)
16 10 3.7
Highest annual %
25 15 13.5 (1980)
Lowest annual %
5 5 -0.3 (2009)
Current 10 5 1.1 (Nov ‘10)
Future 10 5 N.A.
Results – Misc. Econ. KnowledgePre-
Survey Medians
Post-Survey
Medians
Actual Data
Percentage growth in real income
20 21 226
Percent of workers earning min wage
40 30 1.3
% of fed inc tax paid by top 20% 33 40 69.3% of fed inc tax paid by lowest 20%
20 15 0.8
Results – Misc. Econ. KnowledgePre-
Survey Medians
Post-Survey
Medians
Actual Data
Percent of prices controlled by govt
50 20 N/A
U.S. percent of world manufact.
22 30 20.2
China percent of world manufact.
45 30 13.9
Debt as % of national income 68 66 62
Pre-Survey Average (Blue) 4.50Post-Survey Average (Red) 4.68Difference (Post-Pre) 0.18
1 2 3 4 50%
10%
20%
30%
40%
50%
60%
70%
80%
Trade Is beneficial to U.S.
0%
200%
400%
600%
800%
1000%
1200%Immigration is beneficial to U.S.
Pre-Survey Average (Blue) 3.27Post-Survey Average (Red) 3.37Difference (Post-Pre) 0.09
1 2 3 4 50%
5%
10%
15%
20%
25%
30%
35%
40%
Immigration is beneficial to U.S.
Pre-Survey Average (Blue) 3.01Post-Survey Average (Red) 3.52Difference (Post-Pre) -0.51
1 2 3 4 50%
5%
10%
15%
20%
25%
30%
35%
40%
The U.S. should restrict employers from outsourcing work to other countires
Pre-Survey Average (Blue) 2.58Post-Survey Average (Red) 2.50Difference (Post-Pre) -0.08
1 2 3 4 50%
5%
10%
15%
20%
25%
30%
35%
40%
Taxes are too high for the poor
Pre-Survey Average (Blue) 3.45Post-Survey Average (Red) 3.24Difference (Post-Pre) -0.21
1 2 3 4 50%
5%
10%
15%
20%
25%
30%
35%
Taxes are too high for the rich
Pre-Survey Average (Blue) 2.58Post-Survey Average (Red) 2.80Difference (Post-Pre) 0.22
1 2 3 4 50%
5%
10%
15%
20%
25%
30%
Income has increased faster than the cost of living
Pre-Test Average (Blue)4.60Post-Test Average (Red) 4.40Difference (Post-Pre) -0.20
1 2 3 4 50%
10%
20%
30%
40%
50%
60%
70%
80%
The national debt is too big
Pre-Test Average (Blue)3.65Post-Test Average (Red) 3.32Difference (Post-Pre) -0.32
1 2 3 4 50%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
Inflation is a big problem in the U.S.
Pre-Test Average (Blue)4.29Post-Test Average (Red) 3.98Difference (Post-Pre) -0.31
1 2 3 4 50%
10%
20%
30%
40%
50%
60%
Unemployment is a big problem in the U.S.
Pre-Test Average (Blue)3.45Post-Test Average (Red) 3.23Difference (Post-Pre) -0.22
1 2 3 4 50%
5%
10%
15%
20%
25%
30%
35%
40%
Minimum wage is too low
Pre-Test Average (Blue)2,43Post-Test Average (Red) 2.10Difference (Post-Pre) -0.33
1 2 3 4 50%
5%
10%
15%
20%
25%
30%
35%
40%
45%
Social Security will be there for me when I retire
Pre-Test Average (Blue)2.64Post-Test Average (Red) 2.46Difference (Post-Pre) -0.18
1 2 3 4 50%
5%
10%
15%
20%
25%
30%
35%
The government should control more prices
Directions for Future Exploration•Administer a demographic and
personality survey.▫Link perception and knowledge to
demographic variables as well as locus of control measures
•Capture student knowledge and perception beyond principles sequence (i.e., as an incoming freshman and senior).
Thank you for your attention and participation!
Questions??
Dan Settlage, Latisha Settlage, Jim WollscheidUniversity of Arkansas – Fort Smith