economic beliefs and economic attitudes: results from principles of economics
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Economic Beliefs and Economic Attitudes: Results from Principles of Economics. Dan Settlage, Latisha Settlage, & Jim Wollscheid University of Arkansas – Fort Smith October 27, 2011. Presentation Outline. Motivation of Research Summary of Methods Used Knowledge Survey Attitude Survey - PowerPoint PPT PresentationTRANSCRIPT
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Economic Beliefs and Economic Attitudes: Results from Principles of Economics
Dan Settlage, Latisha Settlage, & Jim WollscheidUniversity of Arkansas – Fort SmithOctober 27, 2011
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Presentation Outline•Motivation of Research•Summary of Methods Used
▫Knowledge Survey▫Attitude Survey
•Discussion of Results▫Descriptive Statistics▫Evidence of Change
•Directions for Future Exploration
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Motivation of Research• Economics students often begin principles courses
with preconceived notions (often false) that shape their worldview and influence their learning environment.
• Selected Literature▫ Table 1 – Chapter 2; “Principles of Economics”
N. Gregory Mankiw▫ “The Myth of the Rational Voter”
Bryan Caplan▫ “Survey of Americans and Economists on the Economy”
The Washington Post/Harvard University▫ “Initial Misconceptions in a Macro Principles Class”
William Goffe
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Motivation (cont.)•We seek to answer the following
questions:▫How knowledgeable are principles students
about general economic conditions? Inflation, unemployment, economic growth
▫Is knowledge correlated with attitudes regarding basic economic principles?
▫Do we make a difference in the classroom?
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Summary of Methods Used•Two surveys were administered to
principles of economics students (start of spring 2011)▫Knowledge Survey▫Attitude Survey
•Surveys completed by both macro and micro students.▫278 observations (56% macro)
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Summary of Methods Used•Knowledge Survey
▫Descriptive statistics compiled and compared to correct answers.
•Attitude Survey▫Histograms of responses.▫Relationship between attitudes at the
beginning and end of the semester examined.
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Knowledge Survey – Historical Perspective•Considering period from 1950 to today,
students were asked to provide average annual percentages, max rate and min rate for:▫Unemployment▫Inflation
•Also asked to identify:▫Number of recessions since 1950
Average length in months Longest and shortest
▫Growth in real income
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Knowledge Survey – Current Perspective•Also asked to provide current percentages for:
▫Unemployment▫Inflation▫Workers employed at minimum wage jobs▫Proportion of federal income tax paid by top 20
percent of income earners▫Proportion of federal income tax paid by bottom
20 percent of income earners▫Prices controlled by government▫National debt relative to national income
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Economic Attitudes Survey•Students asked to rank their agreement
or disagreement with various economic statements.
•Likert scale:▫5 – strongly agree▫4 – agree▫3 – neither agree or disagree▫2 – disagree ▫1 – strongly disagree
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Economic Attitudes Survey• Example statements:
▫Trade/immigration is beneficial to U.S. economy.▫Govt should restrict companies from outsourcing
work.▫Taxes are too high for the poor/rich.▫Income has increased faster than the cost of living.▫The national debt is too big.▫Inflation/unemployment is a big problem in the U.S.▫Minimum wage is too low.▫Social security will be there for me when I retire.▫Government should control more prices.
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Results – Unemployment RatePre-SurveyMedians
Post-Survey
Medians
Actual Data
Average annual %(1950-today)
10 8 5.7
Highest annual %
16 12 9.7 (1982)
Lowest annual %
5 4 2.9 (1953)
Current 11 9 9.4 (Dec ‘10)
Future 10 8 N.A.
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Results – Inflation RatePre-Survey Medians
Post-Survey
Medians
Actual Data
Average annual %(1950-today)
16 10 3.7
Highest annual %
25 15 13.5 (1980)
Lowest annual %
5 5 -0.3 (2009)
Current 10 5 1.1 (Nov ‘10)
Future 10 5 N.A.
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Results – Misc. Econ. KnowledgePre-
Survey Medians
Post-Survey
Medians
Actual Data
Percentage growth in real income
20 21 226
Percent of workers earning min wage
40 30 1.3
% of fed inc tax paid by top 20% 33 40 69.3% of fed inc tax paid by lowest 20%
20 15 0.8
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Results – Misc. Econ. KnowledgePre-
Survey Medians
Post-Survey
Medians
Actual Data
Percent of prices controlled by govt
50 20 N/A
U.S. percent of world manufact.
22 30 20.2
China percent of world manufact.
45 30 13.9
Debt as % of national income 68 66 62
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Pre-Survey Average (Blue) 4.50Post-Survey Average (Red) 4.68Difference (Post-Pre) 0.18
1 2 3 4 50%
10%
20%
30%
40%
50%
60%
70%
80%
Trade Is beneficial to U.S.
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0%
200%
400%
600%
800%
1000%
1200%Immigration is beneficial to U.S.
Pre-Survey Average (Blue) 3.27Post-Survey Average (Red) 3.37Difference (Post-Pre) 0.09
1 2 3 4 50%
5%
10%
15%
20%
25%
30%
35%
40%
Immigration is beneficial to U.S.
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Pre-Survey Average (Blue) 3.01Post-Survey Average (Red) 3.52Difference (Post-Pre) -0.51
1 2 3 4 50%
5%
10%
15%
20%
25%
30%
35%
40%
The U.S. should restrict employers from outsourcing work to other countires
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Pre-Survey Average (Blue) 2.58Post-Survey Average (Red) 2.50Difference (Post-Pre) -0.08
1 2 3 4 50%
5%
10%
15%
20%
25%
30%
35%
40%
Taxes are too high for the poor
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Pre-Survey Average (Blue) 3.45Post-Survey Average (Red) 3.24Difference (Post-Pre) -0.21
1 2 3 4 50%
5%
10%
15%
20%
25%
30%
35%
Taxes are too high for the rich
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Pre-Survey Average (Blue) 2.58Post-Survey Average (Red) 2.80Difference (Post-Pre) 0.22
1 2 3 4 50%
5%
10%
15%
20%
25%
30%
Income has increased faster than the cost of living
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Pre-Test Average (Blue)4.60Post-Test Average (Red) 4.40Difference (Post-Pre) -0.20
1 2 3 4 50%
10%
20%
30%
40%
50%
60%
70%
80%
The national debt is too big
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Pre-Test Average (Blue)3.65Post-Test Average (Red) 3.32Difference (Post-Pre) -0.32
1 2 3 4 50%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
Inflation is a big problem in the U.S.
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Pre-Test Average (Blue)4.29Post-Test Average (Red) 3.98Difference (Post-Pre) -0.31
1 2 3 4 50%
10%
20%
30%
40%
50%
60%
Unemployment is a big problem in the U.S.
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Pre-Test Average (Blue)3.45Post-Test Average (Red) 3.23Difference (Post-Pre) -0.22
1 2 3 4 50%
5%
10%
15%
20%
25%
30%
35%
40%
Minimum wage is too low
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Pre-Test Average (Blue)2,43Post-Test Average (Red) 2.10Difference (Post-Pre) -0.33
1 2 3 4 50%
5%
10%
15%
20%
25%
30%
35%
40%
45%
Social Security will be there for me when I retire
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Pre-Test Average (Blue)2.64Post-Test Average (Red) 2.46Difference (Post-Pre) -0.18
1 2 3 4 50%
5%
10%
15%
20%
25%
30%
35%
The government should control more prices
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Directions for Future Exploration•Administer a demographic and
personality survey.▫Link perception and knowledge to
demographic variables as well as locus of control measures
•Capture student knowledge and perception beyond principles sequence (i.e., as an incoming freshman and senior).
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Thank you for your attention and participation!
Questions??
Dan Settlage, Latisha Settlage, Jim WollscheidUniversity of Arkansas – Fort Smith