Dispelling Misconceptions in Economics

Abstract

Some popular views about the workings of the economy are completely at odds with solid empirical evidence and congruent theoretical explanations and therefore can be qualified as misconceptions. Such beliefs lead to support for harmful policies. Cognitive biases may contribute to explaining why misconceptions persist even when scientific information is provided to people. We conduct two types of experiments to investigate, for the first time in economics, whether presenting information in a refutational way affects people’s beliefs about an important socio-economic issue on which expert consensus is very strong: the harmful effects of rent controls. In the laboratory both our refutational and non-refutational messages induce a belief change in the direction of expert knowledge. The refutational message, however, does not improve significantly on the non-refutational one. In the field, where participants are college students receiving economic training, the refutational text improves on standard teaching. Overall, the refutational message has a moderate success since most participants stick to the misconception.