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Things Economists Agree and Disagree About:

Robert Whaples publishes the summary of the latest available (2007) survey of the views of the economics profession in the US, via a random sample of members of the American Economics Association. As ever, fascinating reading, particularly for its scope - questions deal with things from Walmart to trade to the size of Americans' houses. Professor Whaples's introduction and summary are very well written, and the whole report - it's not overwhelmingly long - is easily read and digested by students. There are a lot of things where economists largely agree, something that sometimes gets lost in translation in the wider culture; certainly many of my students seem to be under the impression that, particularly these days, economists disagree about everything and that there is no consensus, let alone a demonstrably 'correct', view on anything.

Commentor (mail):
I always have a hard time figuring out the difference between "agree" and "strongly agree." What if I really, really, really agree?
9.16.2009 3:31pm
Elmer:
Perugino's synthesis of Panglossian-necessitarianism and quantum mechanics reveals that fundamentally, all forms of agreement are one. Not even the harshest critics of Peruginan synthesis, including Goncharova(!), dispute this.
9.16.2009 3:42pm
ShelbyC:
According to Paul Krugman the extent to which they agree is inversely correlated with whether people actually care what they think.
9.16.2009 4:02pm
Malvolio:
Wow, I feel a lot better. A few days ago, I posted something to the effect that non-libertarians typically ignore economic consensus. Someone else responded with an article about several economists wanting to raise the minimum wage -- including Ken Arrow, who's a genius. I didn't get a chance to read the article, but still. (It actually relieved me that the guy who responded added something about how I must be a Christian to be so stupid: stupid or not, I'm a Jewish atheist.)

But the chart in this article shows the libertarian position typically generating 70+% support.

Of course, some questions are ambiguous:

The typical American saves

0% a. too much

69.5% b. too little

30.5% c. neither too much nor too little


"Too much" or "too little" for what? How is that question really answerable? (I was pleased though that the previous too much/too little questions were answered mostly (c), which I interpreted to mean, "It's none of my business -- each person does what he think best for his situation" and not "Exactly the optimal".)
9.16.2009 4:03pm
Tom952 (mail):
Interesting that they do not strongly agree on certain subjects that would seem to have a clear outcome, such as questions 12 (a tax on unhealthy foods), 17 (Wal Marts), and 18 (casinos).
9.16.2009 4:20pm
Tim Nuccio (mail) (www):
GREAT article. Thank you so much for sharing this with me.
9.16.2009 4:30pm
Alex Poterack (mail) (www):
So...economists are split 50/50 over whether Americans consume "too much" or "neither too much or too little", but agree 70-30 that Americans save "too little"? Am I missing something, or does that imply that some economists think Americans don't consume too much, but don't save enough?
9.16.2009 4:33pm
Dan Weber (www):
Where economists have an opinion, they think Americans consume too much and save too little. 0% had the contrary opinion to either of those.
9.16.2009 4:39pm
Off Kilter (mail):
Tyler Cowen's thoughts, from his Marginal Revolution blog:

"Health insurance receives preferential tax treatment. Should the U.S. change the income tax code so that health insurance benefits are taxed the same as income? Economists lean ever so slightly against this idea—44 percent oppose it, while 42 percent favor it. Should the U.S. amend the income tax code to eliminate the mortgage interest deduction? Again, economists are almost evenly split."

As Cowen notes, it is rather shocking that professional economists are so divided on these issues. My personal take: many economists cannot divorce the personal benefits they get from these subsidies from their professional stand on the baleful economic effects of subsidies.
9.16.2009 5:03pm
traveler496:
Alex-

Each of the 20% (or more) who answered "[saves] too little" AND "[consumes] neither too much nor too little" presumably
a) has no opinion on the consumption Q, or
b) thinks the typical American is too charitable, or
c) interprets the questions in absolute terms and thinks the typical American should earn more, or
d) is confused:-)
9.16.2009 8:46pm
Hamstonian:
That is a very interesting link. Most of the questions are "normative" rather than "positive." The economists would probably be more in a agreement on the effects of certain policy changes rather than their desirability. If asked what "effect" mortgage interest tax deduction has on housing prices, debt levels, etc., I bet there would be more consensus. That is not what was asked. I can imagine that some would have concluded correctly, that such a move in 2007 would implode our economy. It would be interesting to know if they agreed or disagreed with doing it in the first place - Was it a good idea to begin with? Different question.

The survey would be more complete and interesting with two sets of questions. The questions posed are biased towards personal preference. It would be similar to asking lawyers what the law should be rather than what it is.
9.16.2009 11:05pm
Josh K (mail):
This survey is almost useless, the response rate is way too low.
9.16.2009 11:17pm
cs3:
As an actual practicing economist, I wouldn't put any real stock in this survey, for the simple reason that the average economist actually researches and is an expert in maybe two to three of these subjects. In terms of this list, I would claim that economic theory and empirical work has shown almost conclusively the benefits to
-Eliminating barriers to international trade
-Reducing barriers to entry to the medical profession
-Payments to organ donors
-Inflation targeting on the range of 1-3%
and the other results just come out of policy preferences, economics as a discipline hasn't established anything one way or the other.

What would be significantly more interesting is a survey that asks labor economists about minimum wages and unions, trade economists about tariffs and outsourcing, financial economists about bubbles, education economists about school choice, etc. I would guess there is a much stronger consensus for specific within-field policy questions than we get here.
9.17.2009 2:27am
Ricardo (mail):
So...economists are split 50/50 over whether Americans consume "too much" or "neither too much or too little", but agree 70-30 that Americans save "too little"? Am I missing something, or does that imply that some economists think Americans don't consume too much, but don't save enough?

They might think taxes are too high and that with lower taxes (and consequent lower government spending) people would save more while keeping consumption about constant. More likely, they simply got duped by the way the questions were framed -- a popular topic in psychology and economics these days.

By the way, there is a somewhat objective answer to whether you save too much or too little. If growth(debt) > growth(income) + growth(assets) in the long-run, you have problems. You need to be very careful when choosing the assumed growth of your household's assets. Otherwise, this simple formula justifies huge amounts of leverage and we all know what tends to happen next.
9.17.2009 3:45am
Eli Rabett (www):
Something happened in 2008 which should have changed a few minds
9.17.2009 6:04pm

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