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Are economists born or made?


Stephen King

By

February 27th, 2014


Is the economist’s astute (and sometimes uncharitable) nature born or bred? Professor Stephen King explains.


As we enter a new university year, it is worth considering a simple question.

Who studies economics?

Needless to say, (academic) economists have studied this important question. But the answers don’t look very good—for the economists.

Experiments in Canada and the US involving university students show that economics students are more ‘self centred’ and less open to cooperative behaviour than other students. For example, in one experiment, undergraduate students could contribute towards a ‘public good’. All players could gain by increasing contributions to a common pool of funds. But given other players’ contributions, each player would be individually better off by letting others contribute while not contributing themselves. And the economics students did just that: they ‘free rode’ significantly more than the other undergraduates.

Similarly a recent experimental study from the US concluded that undergraduate economists are significantly less trustworthy than other students. And it doesn’t stop with the students. Results from a US survey of university professors suggest that economists are among the least generous in terms of charitable donations.

This behaviour could be explained in three ways. First, the experiments and surveys all appear to be from North America. So it could be that North American economists are a nasty self-centred lot, unlike the warm-hearted generous brand of economists we get in Australia.

Alternatively, it could be that students self-select into economics. Economics, as a discipline, attracts flint-hearted students who look askance at their fuzzy-thinking, well-meaning colleagues in the Arts and Science faculties. Ebenezer Scrooge would major in economics were Charles Dickens to write A Christmas Carol today. In other words, economists are ‘born’.

Third, it might be that learning economics trains students to think through issues of public goods, externalities and free-riding. Economists study game theory and strategic situations, so economics undergraduates are better able to think through these situations. The experiments simply reflect that economics undergraduates better understand the game. On this explanation, economists are ‘made’.

If we dismiss North American exceptionalism, we are left with a simple question. Are economists born or made?

In my own case I fell into economics by accident. I was enrolled in a B.Sc. (Forestry) and had one option in my first year. I could choose physics (I hated high school physics!), or geology (yeah, right, rocks!) or economics. I had no idea what economics was about. But I knew it wasn’t physics or geology and that it didn’t have a ‘prac period’ so enrolling in economics meant three hours less class time per week.

So I enrolled in economics.

And it was eye opening. Here was an area of study where people were thinking about real, practical, important problems. Should the Australian government use tax revenue to support the car industry? Can a carbon tax help to deal with global warming and if so, how should it be designed? Why is unemployment going up and what can (and should) the government do about it?

Forestry paled by comparison. Being able to identify 1000 or so different types of eucalyptus trees from samples of wood (I am serious—that was one of the subjects in forestry) somehow didn’t seem quite so exciting as understanding international trade. Determining the structure of a soil sample (another semester-long subject) seemed rather dull compared to dealing with the problems of Indian and Chinese development.

So halfway through my second year of university I switched to an economics degree.

As an economist, was I born or made?

I think the answer is a bit of both. I was ‘born’ to find the problems tackled by economics to be fascinating. This is what university was meant to be about—asking the hard questions and debating the answers. But I was also ‘made’ through the rigorous, logical and challenging approach that economics provided.

I don’t think that I am that unusual among economics students. A friend who is now an economics professor at another Australian university only went to the economics classes to keep his girlfriend company. He was enrolled in Science/Law. But he was hooked! (His girlfriend—now wife—switched to Arts).

Another friend studied economics because she wanted to solve world poverty. A bit ambitious perhaps, but she is now working at the World Bank and making a difference.

And I think this is the key to understanding economics undergraduates. They are people who want to tackle the hard problems that face the world and they want to make a difference. So they are ‘born’ to be economists. But they are also people who are drawn to the rigorous approach adopted by economists. The answers provided by economics do not always fit our preconceptions and they sometimes put economists at odds with ‘popular sentiment’. So economists are also ‘made’ through their university training that provides them with the analytical tools needed to tackle the world’s problems.

 

For further reading on the experiments referred to in this article, see:

U. Dasgupta and A. Menon (2011) “Trust and trustworthiness among economics majors”, Economics Bulletin, 31(4), 2799-2815 (available online through SSRN.com)

R. Frank, T. Gilovich, & D. Regan, (1993), “Does Studying Economics Inhibit Cooperation?” Journal of Economic Perspectives, 7(2), 159-71.

For other articles by Stephen (and other economists) see the CoRE Economics Blog at www.economics.com.au and Stephen’s column at the Conversation, https://theconversation.com/profiles/stephen-king-1374/articles

The views expressed within this article are those of the author and do not represent the views of the ESSA Committee or the Society's sponsors. Use of any content from this article should clearly attribute the work to the author and not to ESSA or its sponsors.

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