Systematically Biased Beliefs about Economics: Robust Evidence of Judgemental Anomalies from the Survey of Americans and Economists on the Economy

Abstract

Differences between the general public's positive economic views and economists' resemble other judgemental anomalies: Laypeople and experts systematically disagree. I analyse this puzzle using data from the Survey of Americans and Economists on the Economy. The paper first tests and decisively rejects the hypothesis that the differences solely reflect economists' self-serving bias. Then it examines whether economists' political ideology and party loyalties explain the disagreement; if anything, this slightly increases their magnitude. The effect of economic training clearly falls but remains large after adding education to the set of control variables. Apparent biases' robustness suggests that the anomaly is real.