Once people have made their mind up about something, they are generally unwilling to change their minds easily. We can link this to the idea of loss aversion from behavioural economics - we feel greater pain from losing something than we receive from gaining that same thing, and that applies to opinions just as much as it does to physical objects.
That unwillingness to change their minds leads people to hold a number of economic misconceptions - beliefs that are contradicted not only by economic theory, but are at odds with the beliefs of the vast majority of economists. Two examples of misconceptions are that trade is zero-sum (i.e. that there are not gains from trade for both parties), and that rent controls have generally beneficial (rather than negative) outcomes. [*] We might hope that economists could counter these misconceptions, either by teaching people some economics (but that doesn't appear to work) or by writing books (such as Economic Facts and Fallacies, which I reviewed earlier this week). However, misconceptions appear to be stubbornly persistent.
The futility of trying to address economic misconceptions is neatly on display in this new article by Jordi Brandts (Instituto de Análisis Económico), Isabel Busom (Universitat Autonoma de Barcelona), Cristina Lopez-Mayan (Universitat de Barcelona), and Judith Panadés (Universitat Autonoma de Barcelona), forthcoming in the Journal of Economic Psychology (ungated earlier version here). Busom, Lopez-Mayan and Panadés were all co-authors on earlier research on whether economics teaching could reduce misconceptions (which I discussed here), and this appears to be a follow-up to that earlier work.
In this article, Brandts et al. report on two studies that attempt to reduce misconceptions about the negative effects of rent controls. Both studies make use of a technique called a 'refutation text' (RT), which Brandts et al. explain as:
...a communication tool designed to help people revise their false beliefs through slow, analytical processing of information... Essentially, the RT must first explicitly state the belief and assert it is a misconception. It then should emphasize the negative consequences of the belief and refute it explaining the arguments and evidence obtained through scientific research. In this way the RT intends to connect this new information to the incorrect information pre-existing in a person’s memory. In addition, the RT should acknowledge the motivation for the misconceived belief.
The first study that they report on was a laboratory experiment, where research participants were allocated to one of three conditions: (1) RT; (2) non-refutational text (NRT); or (3) control. Each participant, either individually or as part of a team, answered some questions (which included their views on rent controls), then read the RT (or NRT, or neither, depending on which condition they were assigned to), and then were asked the rent control questions (along with a bunch of other questions) again, both immediately after the experiment, and several weeks later.
The second study was conducted in an economics class, across three cohorts (2015, 2017, and 2019), where:
The first cohort is exposed to a standard lecture on price controls and to a standard practice session where problems about supply, demand and price controls are solved; the second cohort is exposed to the standard lecture and to a practice session with the RT; and the third cohort is exposed to the standard lecture and to a practice session with the NRT.
The students completed questionnaires at the start and the end of their semester, which include questions about their views on rent controls.
Brandts et al. extract the effect of the RT on misconceptions by comparing the change in views between research participants (or students) in the RT group with those in the control group. They also compare RT with NRT, and NRT with control, as well as comparing those who completed individual tasks with those completing group tasks, as well as some other comparisons.
Brandts et al. present and discuss their results, but the results and their interpretations are not always in unison, and the results are not concordant across the two studies. I think they best summarise their results in their conclusion to the article:
What we learn is, first, that providing scientific information, be it through the RT or the NRT, about a salient issue such as the case of rent controls does change participants’ opinions in the direction of scientific consensus. Second, we learn that the way that the information is presented (RT vs NRT) does not make a difference... Third, a large proportion of participants still sticks to the misconception.
There is some weak evidence in the paper that the RT might have a small effect, when more reflective people discuss it in teams rather than individually. The main problem with this study was the small sample size, which did not have sufficient statistical power to detect small effects. Study 1 had 180 participants only, and while Study 2 had over 1200 students, it is based on cohort differences and there were differences in rates of attrition between the three cohorts, which may have contributed to the lack of statistical significance of the results.
The key takeaway is that this is the sort of research that is begging for additional replication studies, not just in economics but across many fields. Understanding how we can best counter misconceptions is important not just for economists, but also for public health researchers (to take a very salient current example), scientists, and researchers more generally.
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[*] Note that this doesn't apply to cases where there is still reasonable debate among economists, such as the disemployment effects of the minimum wage (although, see my most recent post on that topic). It also doesn't apply to misconceptions driven by underlying behavioural biases and heuristics, such as the sunk cost fallacy, or where the economic theory is more difficult to understand.
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