Elite Folly and Selection Bias
I’ve been arguing for several years that more educated people have more sensible views about economics than less educated people. (No need to wait for my book; see here and here). Arnold is not the first to demur. Many economists, especially libertarian economists, are incredulous:
“Look at the universities, Bryan. The professors are a bunch of Marxists!”
Yes, I’ve noticed. The problem with this objection is that it suffers from severe selection bias. In the data, highly educated people are not especially leftist. What happens, rather, is that highly educated leftists stick around campus, and the rest move on to “the real world.” My claim isn’t that all Ph.D.s have sensible views, but that, averaging over the whole population, Ph.D.s have more sensible views.
“But Bryan, I know lots of highly educated people in ‘the real world’ with idiotic beliefs about economics.”
Reply: I know lots too. Nevertheless, the data shows that the economic beliefs of less educated people are, on average, even worse. Once again, there’s selection bias: If you talk about economics almost exclusively with highly educated people, most of the economically illiterate statements you hear will be uttered by highly educated people.