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Progressives Fail Basic Economics

17 June 2010 14 Comments

A very fascinating poll released where 5,000 Americans were asked a series of basic economic questions.  The participants were also asked to self-identify their political leanings by selecting one of the following:

  1. Very Conservative
  2. Libertarian
  3. Conservative
  4. Moderate
  5. Liberal
  6. Progressive / Very Liberal

The eight questions were as follows:

  1. Mandatory licensing of professional services increases the prices of those services.
  2. Overall, the standard of living is higher today than it was 30 years ago
  3. Rent control leads to housing shortages.
  4. A company with the largest market share is a monopoly.
  5. Third World workers working for American companies overseas are being exploited.
  6. Free trade leads to unemployment.
  7. Minimum wage laws raise unemployment.
  8. Restrictions on housing development make housing less affordable

The participants were told to either strongly agree, somewhat agree, strongly disagree, or somewhat disagree (or select “not sure”) to the above statements.

Here’s the interesting thing about this study. The researchers only looked at the incorrect answers. If, for instance, the economic proposition was correct, “Somewhat” and “strongly” disagree would be counted as wrong answers. “Not sure” was never counted as an incorrect answer. Makes sense, because it’s not much of an answer at all.

So, how did the various groups do according to political affiliation?  The following shows the group and the average number of incorrect answers for that group:

  • Very Conservative – Average of 1.30 incorrect answers (out of 8 questions)
  • Libertarian – Average of 1.38 incorrect answers (out of 8 questions)
  • Conservative – Average of 1.67 incorrect answers (out of 8 questions)
  • Moderate  – Average of 3.67 incorrect answers (out of 8 questions)
  • Liberal – Average of 4.69 incorrect answers (out of 8 questions)
  • Progressive/Very Liberal – Average of 5.26 incorrect answers (out of 8 questions)

Amazing the jump from conservative to moderate.  Thanks to Boortz.com for bringing this to my attention.

What do you think about this?

14 Comments »

  • Tom said:

    I think question five is a matter of debate and it really biases the result. For instance if I said that the answer were true and we fairly assume that the conservatives would now answer wrongly and the liberals correctly the results would look like this:

    * Very Conservative – Average of 2.30 incorrect answers (out of 8 questions)
    * Libertarian – Average of 2.38 incorrect answers (out of 8 questions)
    * Conservative – Average of 2.67 incorrect answers (out of 8 questions)
    * Moderate – Average of 2.67 incorrect answers (out of 8 questions)
    * Liberal – Average of 3.69 incorrect answers (out of 8 questions)
    * Progressive/Very Liberal – Average of 4.26 incorrect answers (out of 8 questions)

    Conservatives now score the same as moderates and the overall spread has been reduced significantly.

    Furthermore, in trying to keep the question simple they actually made them untrue.

    E.g., Rent control leads to housing shortages.

    This is strictly not true even in a basic economic sense. This would only be true if the rent controlled price is actually below the market equilibrium price (otherwise it would have no effect). So if I was an economic professor taking this quiz I might be tempted to answer somewhat disagree to this question and then I would be classified as being wrong (or you may answer unsure as there is not enough information and then you would be discounted).

  • 20smoney said:

    Don't you think by definition "rent controlled" housing is below what the market would pay? If not, why do you need it?

  • Tom said:

    Say in a recession (like the one we just had) cost of housing fell then rent control would have no effect. Rent control only has an effect in the long run and in a market where property values are increasing. Again, information we were not given.

    Also, I noticed you didn't respond to the first part of my post. From the actual study:

    "Of the 16 questions in that uniform format, this paper deals with only eight.
    We have omitted 8 of the economic questions in that format because they are not
    as useful in gauging economic enlightenment, either because the question is too
    vague or too narrowly factual, or because the enlightened answer is too uncertain or
    arguable."

    Removed because they were "not as useful in gauging economic enlightenment." So basically they removed the data that didn't agree with what they wanted to find. This is terrible procedure.

    I think the only thing this survey shows is that there are politically polarizing questions you can ask people (duh) and by selecting the data you want you can make unrelated claims about certain groups. I think these people need to take a course in basic survey design and analysis.

  • 20smoney said:

    Tom, I disagree with you on rent controls… again, if they have no effect, why do you need them.

    On the other points, you make good points and I appreciate your input in the discussion.

  • 20smoney said:

    Just to shed some more light on this survey, here's more comments about it from the WSJ source article which is at http://online.wsj.com/article/SB10001424052748703

    "To be sure, none of the eight questions specifically challenge the political sensibilities of conservatives and libertarians. Still, not all of the eight questions are tied directly to left-wing concerns about inequality and redistribution. In particular, the questions about mandatory licensing, the standard of living, the definition of monopoly, and free trade do not specifically challenge leftist sensibilities.

    Yet on every question the left did much worse. On the monopoly question, the portion of progressive/very liberals answering incorrectly (31%) was more than twice that of conservatives (13%) and more than four times that of libertarians (7%). On the question about living standards, the portion of progressive/very liberals answering incorrectly (61%) was more than four times that of conservatives (13%) and almost three times that of libertarians (21%)."

  • Tom said:

    That's a bit more interesting of a result. I'd like to see how many people classified themselves as each group. My guess is that most people fell towards the more liberal side, in which case the Law of Large Numbers applies. But still a more meaningful result.

  • Snarf said:

    Very interesting…I just happened upon this post some 18 months later.

    And actually I didn’t think the jump from conservative to “moderate” was amazing at all. This proves what many of us already knew: that most self-reported moderates, are no such thing.

    Remember, many of Obummer’s minions consider HIM a moderate…so there you go.