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Economic Literacy and Public Policy Views

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Title: Economic Literacy and Public Policy Views
Language: English
Authors: Jared Barton (ORCID 0000-0001-9327-6492), Cortney Rodet
Source: Journal of Economic Education. 2025 56(4):290-305.
Availability: Routledge. Available from: Taylor & Francis, Ltd. 530 Walnut Street Suite 850, Philadelphia, PA 19106. Tel: 800-354-1420; Tel: 215-625-8900; Fax: 215-207-0050; Web site: http://www.tandf.co.uk/journals
Peer Reviewed: Y
Page Count: 16
Publication Date: 2025
Document Type: Journal Articles
Reports - Evaluative
Descriptors: Economics, Public Policy, Attitudes, Gender Differences, Racial Differences, Educational Attainment, Political Affiliation, Expertise, Lay People
Geographic Terms: United States
Assessment and Survey Identifiers: Test of Economic Literacy
DOI: 10.1080/00220485.2025.2518155
ISSN: 0022-0485
2152-4068
Abstract: The authors measure economic literacy among a representative sample of U.S. residents, explore demographic correlates with the measure, and examine how respondents' policy views correlate with it. They then analyze policy view differences among Republicans and Democrats and among economists and non-economists. They find significant differences in economic literacy by sex, race/ethnicity, and education, but little evidence that respondents' policy views relate to their level of economic literacy. Examining heterogeneity by political party, they find that estimated fully economically literate policy views (i.e., predicted views as if respondents scored perfectly on the authors' economic literacy assessment) for Democrats and Republicans are farther apart than respondents' original views. Greater economic literacy among general survey respondents also does not result in thinking like an economist on policy.
Abstractor: As Provided
Entry Date: 2025
Accession Number: EJ1488580
Database: ERIC
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  Value: <anid>AN0188100604;jmd01oct.25;2025Sep23.08:05;v2.2.500</anid> <title id="AN0188100604-1">Economic literacy and public policy views </title> <p>The authors measure economic literacy among a representative sample of U.S. residents, explore demographic correlates with the measure, and examine how respondents' policy views correlate with it. They then analyze policy view differences among Republicans and Democrats and among economists and non-economists. They find significant differences in economic literacy by sex, race/ethnicity, and education, but little evidence that respondents' policy views relate to their level of economic literacy. Examining heterogeneity by political party, they find that estimated fully economically literate policy views (i.e., predicted views as if respondents scored perfectly on the authors' economic literacy assessment) for Democrats and Republicans are farther apart than respondents' original views. Greater economic literacy among general survey respondents also does not result in thinking like an economist on policy.</p> <p>Keywords: Economic literacy; public opinion; role of government</p> <p> <emph>"'Poets are the unacknowledged legislators of the World.' It was a poet who said that, exercising occupational license. Some sage, it may have been I, declared in a similar vein:</emph> <bold> <emph>'I don't care who writes a nation's laws—or crafts its advanced treaties—if I can write its economics textbooks.</emph> </bold>'"—Paul Samuelson ([<reflink idref="bib22" id="ref1">22</reflink>])</p> <p>Economists produce research to understand and explain human behavior, but also to influence public policy. While some economists work directly with policymakers, many more exert their influence through teaching future citizens. Samuelson's ([<reflink idref="bib22" id="ref2">22</reflink>]) famous statement on laws and textbooks suggests economists believe that economic literacy leads people to hold different—indeed, <emph>more informed—</emph>public policy views, and that is why we teach it. A key element of this belief, however, is that the economically literate hold different views from those ignorant of economics.</p> <p>We examine how economic literacy correlates with individuals' policy views. Employing a pre--registered survey using questions drawn from a nationally normed test of economic literacy (Walstad, Rebeck, and Butters [<reflink idref="bib30" id="ref3">30</reflink>]), a battery of policy questions from the International Social Survey Programme's Role of Government module (Edlund and Lindh [<reflink idref="bib10" id="ref4">10</reflink>]), and questions of our own design on contemporary policy issues, we measure economic literacy and policy views among a representative sample of United States residents.[<reflink idref="bib1" id="ref5">1</reflink>]</p> <p>We also survey American Economic Association (AEA) members on their views of the same policy questions (but not their economic literacy). We examine the demographic and socioeconomic correlates of this measure of economic literacy among respondents, then estimate the relationship between respondents' economic literacy and policy views. Furthermore, we calculate counterfactual mass policy views, assuming in the data that all respondents were fully economically literate (FEL) in order to compare the relative policy views of the estimated FEL to the original survey responses, controlling for several covariates.</p> <p>We also analyze relative policy views between two sets of distinct groups: (<reflink idref="bib1" id="ref6">1</reflink>) self-reported Republicans and Democrats, and (<reflink idref="bib2" id="ref7">2</reflink>) economists (i.e., members of the AEA) and non-economists. For each set of distinct groups, we compare estimated FEL policy views with respondents' original views to assess whether greater similarity in economic literacy across groups reconciles differences in their policy views. Such an approach offers a novel way to uncover what potentially influences policy views beyond economic literacy.</p> <p>We find that men, older Americans, Americans without children, Republicans, and the more educated have higher economic literacy. Family income is unrelated to economic literacy, although Black and Hispanic Americans have lower economic literacy (including conditional on education and income). Regarding economic literacy and policy views, we find that economic literacy had little to do with respondents' views. We regressed respondents' economic literacy on their original policy views for the 26 questions on the roles and responsibilities of government and current public policy debates, and found that the coefficient on economic literacy was statistically significant in only four cases after controlling for covariates and correcting for multiple comparisons. Specifically, economic literacy is negatively correlated with support for more military spending and more spending on the arts. It is also negatively correlated with the view that it is the government's responsibility to control prices and to reduce income inequality.</p> <p>As few of the respondents' policy views are correlated with economic literacy, there are generally few differences between "raw" original policy preference views and our estimated fully literate ones (FEL estimates). If we examine "net favorability" (the percentage of respondents supporting/in favor of a policy less the percentage of those not in favor/opposing it), the average absolute <emph>change</emph> in net favorability (i.e., support for the policy less opposition to that policy) between our FEL estimates and the original survey responses was 7.9 percentage points. In only one case did net favorability change sign: raw original preferences support for military spending exhibited 12.5 percent net favorability, while estimated fully literate preferences, the FEL estimate, exhibited −8.7 percent net support favorability (i.e., 8.7% more opposition than support).</p> <p>When we look at FEL estimated policy views of Democrats and Republicans, we find that they differ <emph>more</emph> in their policy views than respondents do in their respective original policy views, which suggests there are other factors shaping economic policy views beyond literacy. The average divide between partisans in net favorability across our 26 questions is 45 percentage points in the raw data but grows to 85 percentage points in the FEL estimates of net favorability. Estimated FEL views of both parties are (a) strongly in support or opposition to each policy, spending item, or potential responsibility of government, and (b) decisively at odds with one another on nearly every question. Indeed, on eight questions, unadjusted partisan support is on the same side of an issue (i.e., having the same sign net favorability), while FEL estimated views are on opposite sides (opposite-signed net favorabilities).</p> <p>Finally, we find that economic literacy is mostly uncorrelated with the level of disagreement between the public and professional economists. Where the estimated correlation is statistically significant (6 out of 26 questions), in all but one case, greater economic literacy is associated with greater <emph>disagreement</emph> among economists and non-economists. Greater economic literacy is not associated with thinking like an economist in our sample.</p> <hd id="AN0188100604-2">Existing literature</hd> <p>Our findings add to an interdisciplinary literature on how literacy shapes public policy views. Political scientists have examined levels of political literacy among U.S. residents, estimated how policy views and political activities differ between politically literate and politically illiterate citizens, and inferred what the views of a "fully politically literate" electorate would look like. Althaus ([<reflink idref="bib2" id="ref8">2</reflink>]) first estimates the relationship between public policy views and political knowledge, and then uses his estimated relationships to predict what public opinion on the same questions would be if everyone were fully knowledgeable.[<reflink idref="bib2" id="ref9">2</reflink>] He finds that fully literate public opinion would result in a different preference ordering (i.e., changing the majority/plurality on a particular policy question) in only 20 percent of the questions he examined. In contrast, Bartels ([<reflink idref="bib4" id="ref10">4</reflink>]) employs a similar approach to Althaus, using stated political party vote choice in presidential elections, and finds that a fully literate electorate would increase the vote share of challengers and the Republican candidate generally. Delli Carpini and Keeter ([<reflink idref="bib9" id="ref11">9</reflink>]) find that more politically literate respondents hold different views than less literate respondents and that political views, in several cases, varied significantly with political literacy when tied to other attributes that would reasonably inform policy views.[<reflink idref="bib3" id="ref12">3</reflink>] That said, Levendusky ([<reflink idref="bib17" id="ref13">17</reflink>]) argues that the estimated correlations between literacy and both political views and behavior obtained in cross-sectional data (specifically noting the papers cited here, but also applicable to our data) are biased upward in magnitude, and correcting for this bias significantly reduces estimates. Our results are closer to Althaus's findings than to those of either Bartels or Delli Carpini and Keeter.</p> <p>Caplan ([<reflink idref="bib7" id="ref14">7</reflink>], [<reflink idref="bib8" id="ref15">8</reflink>]) uses survey data on views of economic policies and events from both laypeople and economists to examine which characteristics lead laypeople's views on economic issues to align with professional economists and to demonstrate that laypeople systematically disagree with economists in ways that cannot be explained by the self-interest or political views of economists. The survey data he uses, however, do not measure laypeople's economic literacy, while the policy questions measure how economists and laypeople evaluate the relative <emph>importance</emph> of challenges facing the economy at that time, rather than specific policy views on government action or responsibilities. Like Caplan, Sapienza and Zingales ([<reflink idref="bib23" id="ref16">23</reflink>]) find a substantial divergence between the average views of the public and a panel of 41 economic experts on several policy questions. Unlike our results, they find that no other layperson characteristic, except economics training, explains the divergence in viewpoints, although they argue this has to do with how professional economists and laypeople interpret the questions. And Allgood et al. ([<reflink idref="bib1" id="ref17">1</reflink>]), using data from graduates of four large public universities in the United States, find that those graduates who completed more economics courses hold policy attitudes closer to those of professional economists.</p> <p>Finally, we add to an ongoing literature on economic literacy itself (see Wobker et al. [[<reflink idref="bib32" id="ref18">32</reflink>]] for a summary). Walstad and Soper ([<reflink idref="bib31" id="ref19">31</reflink>]) introduce the first edition of the <emph>Test of Economic Literacy</emph>. Walstad and Larsen ([<reflink idref="bib28" id="ref20">28</reflink>]) conduct the first national survey of economic literacy in the United States and, consistent with our results, find lower literacy levels among high school graduates than college graduates. Walstad ([<reflink idref="bib26" id="ref21">26</reflink>]) and Walstad and Rebeck ([<reflink idref="bib29" id="ref22">29</reflink>]) are closely related to our article. Using data collected from 1992 to 1999 on economic literacy and five economic policy questions, both papers examine how economic policy views vary with economic literacy. Unlike our results, they find large differences in opinions on each policy between high- and low-literacy respondents, consistent with the conjecture that the literate think more like economists. Neither paper, however, estimates a counterfactual "fully informed" opinion. More recently, Girardi et al. ([<reflink idref="bib13" id="ref23">13</reflink>]) perform a difference-in-difference analysis on enrollment in a college economics class and find little evidence of any effect of studying economics on students' other-regarding behavior or public policy views. Our correlational results are consistent with theirs. In contrast to these results and our own, Magistro ([<reflink idref="bib19" id="ref24">19</reflink>]) uses a six-question measure of financial literacy and policy-specific economic literacy among a representative sample of Italians and finds that the financially and economically literate favor a more open economy and the recent Italian pension reform when compared to the financially and economically illiterate.</p> <hd id="AN0188100604-3">Survey instrument and implementation</hd> <p></p> <hd id="AN0188100604-4">Instrument</hd> <p>We chose 15 questions from the <emph>Test of Economic Literacy</emph> (TEL), a high-school-level assessment of economic literacy developed by the Council for Economic Education (Walstad et al. [<reflink idref="bib30" id="ref25">30</reflink>]). As only 35 percent of U.S. adults hold a postsecondary education or higher (U.S. Census Bureau [<reflink idref="bib25" id="ref26">25</reflink>]), the TEL represents a reasonable benchmark for Americans' economic literacy. We have chosen questions across the key concepts highlighted by the test authors, with a focus away from definitions (e.g., what is gross domestic product?) and toward economic intuition or tradeoffs (e.g., it is efficient to reduce pollution to the point where the marginal benefit of doing so equals the marginal cost?). The survey instrument is available upon request.</p> <p>For policy views, we ask respondents three sets of questions from the International Social Survey Programme's Role of Government module (Edlund and Lindh [<reflink idref="bib10" id="ref27">10</reflink>]). The first set of questions asks respondents' views of policies on economic intervention in the economy (e.g., "less government regulation of business"). The second asks respondents whether they prefer more or less government spending on seven policy areas (e.g., "health"), while the third set asks whether it should be the government's responsibility to address ten separate issues in society (e.g., "keep prices under control"). In addition to these questions, we crafted a short block of questions on support for currently discussed policy proposals (e.g., "restricting the sale of firearms").</p> <p>The survey also includes a short battery of socioeconomic and demographic questions, placed at the beginning to reduce item nonresponse (Teclaw, Price, and Osatuke [<reflink idref="bib24" id="ref28">24</reflink>]), and one question to ensure respondents are paying attention to the survey. We pre-registered our survey and analysis plan with the Evidence in Governance and Politics registry.</p> <hd id="AN0188100604-5">Survey implementation</hd> <p>We distributed the survey to U.S. residents from August 16–28, 2021, through the survey research firm Centiment (<ulink href="http://www.centiment.co">http://www.centiment.co</ulink>).[<reflink idref="bib4" id="ref29">4</reflink>] Of the 1,605 respondents who began the survey, 441 (27.5%) failed the attention check. We first check that these respondents are likely inattentive and drop them from subsequent analyses.[<reflink idref="bib5" id="ref30">5</reflink>] Retaining those respondents who responded to all demographic questions leaves 1,157 respondents.[<reflink idref="bib6" id="ref31">6</reflink>]Table 1 shows our respondents' demographic characteristics. Our sample is like the U.S. adult population but skews white, younger, male, and lower-income, which is consistent with previous research using online survey platforms (Boas, Christenson, and Glick [<reflink idref="bib6" id="ref32">6</reflink>]). Respondents are less likely to be married and more likely to be divorced, separated, widowed, or never married than the overall population. Our respondents are about as educated as the overall population, but are less likely to be employed and more likely to be retired or out of the labor force. Finally, while we have the correct proportion of Democrats, we have too few Republicans.</p> <p>Table 1. Sample characteristics compared to U.S. population averages.</p> <p> <ephtml> <table><thead><tr><td>Characteristic</td><td>U.S. Adult Population</td><td>Total</td></tr></thead><tbody valign="top"><tr><td>Observations</td><td /><td char=".">1,157</td></tr><tr><td> Female</td><td char=".">0.514</td><td char=".">0.475</td></tr><tr><td>Age (years)</td><td char=".">47</td><td char=".">47.9</td></tr><tr><td> Family income (0,000)</td><td char=".">108.56</td><td char=".">59.50</td></tr><tr><td><italic>Marital status</italic></td><td /><td /></tr><tr><td> Married</td><td char=".">0.476</td><td char=".">0.396</td></tr><tr><td> Widowed</td><td char=".">0.057</td><td char=".">0.067</td></tr><tr><td> Divorced</td><td char=".">0.109</td><td char=".">0.154</td></tr><tr><td> Separated</td><td char=".">0.018</td><td char=".">0.030</td></tr><tr><td> Never married</td><td char=".">0.339</td><td char=".">0.354</td></tr><tr><td><italic>Race & ethnicity</italic></td><td /><td /></tr><tr><td> White</td><td char=".">0.641</td><td char=".">0.773</td></tr><tr><td> Black</td><td char=".">0.120</td><td char=".">0.122</td></tr><tr><td> Asian</td><td char=".">0.061</td><td char=".">0.035</td></tr><tr><td> Native/Pacific Islander/Other</td><td char=".">0.178</td><td char=".">0.070</td></tr><tr><td> Hispanic</td><td char=".">0.168</td><td char=".">0.100</td></tr><tr><td><italic>Education</italic><xref ref-type="table-fn" rid="tfn2">a</xref></td><td /><td /></tr><tr><td> Less than high school</td><td char=".">0.114</td><td char=".">0.046</td></tr><tr><td> High school</td><td char=".">0.269</td><td char=".">0.268</td></tr><tr><td> Some college, no degree</td><td char=".">0.200</td><td char=".">0.201</td></tr><tr><td> Associate's degree</td><td char=".">0.086</td><td char=".">0.166</td></tr><tr><td> College graduate</td><td char=".">0.203</td><td char=".">0.194</td></tr><tr><td> Postgraduate degree</td><td char=".">0.128</td><td char=".">0.122</td></tr><tr><td><italic>Employment</italic></td><td /><td /></tr><tr><td> Full time<xref ref-type="table-fn" rid="tfn3">b</xref></td><td char=".">0.490</td><td char=".">0.358</td></tr><tr><td> Part time<xref ref-type="table-fn" rid="tfn4">c</xref></td><td char=".">0.095</td><td char=".">0.139</td></tr><tr><td> Unemployed</td><td char=".">0.032</td><td char=".">0.121</td></tr><tr><td> Not in labor force<xref ref-type="table-fn" rid="tfn5">d</xref></td><td char=".">0.214</td><td char=".">0.113</td></tr><tr><td> Retired<xref ref-type="table-fn" rid="tfn5">d</xref></td><td char=".">0.169</td><td char=".">0.269</td></tr><tr><td><italic>Political party</italic></td><td /><td /></tr><tr><td> Republican</td><td char=".">0.43</td><td char=".">0.33</td></tr><tr><td> Democrat</td><td char=".">0.46</td><td char=".">0.47</td></tr></tbody></table> </ephtml> </p> <p>1 <emph>Sources:</emph> American Community Survey (ACS) 2019 1-year estimates: Percentage female over age 18, age, (median) family income, marital status, and educational attainment (for population 25 years and over); 2020 U.S. Census Redistricting Data Summary File: Race & ethnicity; Bureau of Labor Statistics' August 2021 Employment Situation News Release: Employment status; August 2–17, 2021, wave of the Gallup survey (party affiliation plus leaners): Political views.</p> <ulist> <item>2 We include respondents with technical or vocational training with associate's degree holders and sum master's and professional/PhD degrees to match the ACS categories.</item> <item>3 Full-time is the employed percentage less the part-time percentage.</item> <item>4 The part-time employment percentage (0.095) is calculated based on seasonally adjusted persons in August 2021 who worked as part-time for economic or noneconomic reasons.</item> <item>5 We divide "not in labor force" from the Bureau of Labor Statistics between "not in labor force" and "retired," based on the proportion of "not in labor force" that was retired in Hipple ([<reflink idref="bib15" id="ref33">15</reflink>]).</item> </ulist> <p>The characteristics we have underrepresented in our data—nonwhite, married, employed, higher-income, and Republican—are not all positively correlated, although one can see married, working, higher-income Republicans as being a subset of the population that our sample lacks. While it is not clear how that would bias either our economic literacy measures or the relationship between economic literacy and policy views, it certainly seems reasonable to expect that such respondents indeed hold different levels of economic literacy and different policy views than those already in the sample (although how that list interacts with our other "missing" characteristic—nonwhite respondents—is also unclear).</p> <hd id="AN0188100604-6">Economic literacy in the United States</hd> <p>Per our pre-registered analysis plan, we begin with examining U.S. residents' level of economic literacy. The average (median) economic literacy score is 7.06 (<reflink idref="bib7" id="ref34">7</reflink>) questions correct out of 15. Only 16 percent of respondents did worse than random guessing (3.75 questions correct).[<reflink idref="bib7" id="ref35">7</reflink>]Table 2 presents respondents' average literacy by various demographic characteristics.</p> <p>Table 2. Economic literacy (average score) by respondent characteristics.</p> <p> <ephtml> <table><thead><tr><td /><td>Economic Literacy</td><td /><td /></tr></thead><tbody valign="top"><tr><td>Characteristic</td><td>Mean</td><td>SD</td><td>95 percent C.I.<xref ref-type="table-fn" rid="tfn6">a</xref></td><td>N</td></tr><tr><td><italic>Sex</italic></td><td /><td /><td /><td /></tr><tr><td> Male</td><td char=".">7.32</td><td>(3.45)</td><td char=".">[7.04–7.60]</td><td char=".">607</td></tr><tr><td> Female</td><td char=".">6.77</td><td>(3.12)</td><td char=".">[6.51–7.03]</td><td char=".">550</td></tr><tr><td><italic>Age</italic></td><td /><td /><td /><td /></tr><tr><td char="."> 18–33</td><td char=".">5.57</td><td>(2.76)</td><td char=".">[5.25–5.89]</td><td char=".">293</td></tr><tr><td char="."> 34–47</td><td char=".">6.27</td><td>(3.25)</td><td char=".">[5.90–6.64]</td><td char=".">296</td></tr><tr><td char="."> 48–63</td><td char=".">7.63</td><td>(3.28)</td><td char=".">[7.24–8.02]</td><td char=".">281</td></tr><tr><td> 64+</td><td char=".">8.82</td><td>(2.96)</td><td char=".">[8.48–9.16]</td><td char=".">287</td></tr><tr><td><italic>Family income</italic></td><td /><td /><td /><td /></tr><tr><td> ≤$46,000</td><td char=".">6.69</td><td>(3.10)</td><td char=".">[6.44–6.94]</td><td char=".">581</td></tr><tr><td> >$46,000</td><td char=".">7.43</td><td>(3.47)</td><td char=".">[7.15–7.71]</td><td char=".">576</td></tr><tr><td><italic>Marital status</italic></td><td /><td /><td /><td /></tr><tr><td> Married</td><td char=".">7.50</td><td>(3.49)</td><td char=".">[7.18–7.82]</td><td char=".">458</td></tr><tr><td> Widowed</td><td char=".">7.49</td><td>(3.18)</td><td char=".">[6.77–8.21]</td><td char=".">77</td></tr><tr><td> Divorced</td><td char=".">7.33</td><td>(3.08)</td><td char=".">[6.87–7.79]</td><td char=".">178</td></tr><tr><td> Separated</td><td char=".">7.34</td><td>(3.38)</td><td char=".">[6.18–8.50]</td><td char=".">35</td></tr><tr><td> Never married</td><td char=".">6.34</td><td>(3.11)</td><td char=".">[6.04–6.64]</td><td char=".">409</td></tr><tr><td><italic>Parental status</italic></td><td /><td /><td /><td /></tr><tr><td> No children under 18</td><td char=".">7.47</td><td>(3.30)</td><td char=".">[7.24–7.70]</td><td char=".">823</td></tr><tr><td> Yes, living with respondent</td><td char=".">6.12</td><td>(3.18)</td><td char=".">[5.75–6.49]</td><td char=".">288</td></tr><tr><td> Yes, not living w/respondent</td><td char=".">5.65</td><td>(2.79)</td><td char=".">[4.82–6.48]</td><td char=".">46</td></tr><tr><td><italic>Race & ethnicity</italic></td><td /><td /><td /><td /></tr><tr><td> White</td><td char=".">7.62</td><td>(3.31)</td><td char=".">[7.39–7.85]</td><td char=".">832</td></tr><tr><td> Black</td><td char=".">5.13</td><td>(2.65)</td><td char=".">[4.66–5.60]</td><td char=".">126</td></tr><tr><td> Asian</td><td char=".">7.19</td><td>(3.73)</td><td char=".">[5.95–8.43]</td><td char=".">37</td></tr><tr><td> Native/Pacific Islander/Other</td><td char=".">6.77</td><td>(2.88)</td><td char=".">[5.88–7.66]</td><td char=".">43</td></tr><tr><td> Hispanic</td><td char=".">5.24</td><td>(2.46)</td><td char=".">[4.79–5.69]</td><td char=".">116</td></tr><tr><td><italic>Education</italic></td><td /><td /><td /><td /></tr><tr><td> Less than high school</td><td char=".">4.83</td><td>(2.38)</td><td char=".">[4.18–5.49]</td><td char=".">53</td></tr><tr><td> High school</td><td char=".">5.85</td><td>(2.56)</td><td char=".">[5.57–6.14]</td><td char=".">310</td></tr><tr><td> Some college, no degree</td><td char=".">7.38</td><td>(3.13)</td><td char=".">[6.98–7.79]</td><td char=".">233</td></tr><tr><td> Trade/technical/vocational</td><td char=".">7.38</td><td>(3.85)</td><td char=".">[6.43–8.34]</td><td char=".">65</td></tr><tr><td> Associate's degree</td><td char=".">7.00</td><td>(3.31)</td><td char=".">[6.43–7.57]</td><td char=".">131</td></tr><tr><td> College graduate</td><td char=".">8.23</td><td>(3.55)</td><td char=".">[7.76–8.70]</td><td char=".">224</td></tr><tr><td> Master's degree</td><td char=".">8.02</td><td>(3.48)</td><td char=".">[7.36–8.68]</td><td char=".">110</td></tr><tr><td> PhD or professional degree</td><td char=".">8.19</td><td>(3.60)</td><td char=".">[6.87–9.52]</td><td char=".">31</td></tr><tr><td><italic>Employment</italic></td><td /><td /><td /><td /></tr><tr><td> Full time</td><td char=".">6.59</td><td>(3.26)</td><td char=".">[6.28–6.90]</td><td char=".">414</td></tr><tr><td> Part time</td><td char=".">6.81</td><td>(3.22)</td><td char=".">[6.31–7.31]</td><td char=".">160</td></tr><tr><td> Unemployed</td><td char=".">5.94</td><td>(3.10)</td><td char=".">[5.42–6.46]</td><td char=".">140</td></tr><tr><td> Not in labor force</td><td char=".">6.89</td><td>(3.09)</td><td char=".">[6.35–7.43]</td><td char=".">130</td></tr><tr><td> Retired</td><td char=".">8.38</td><td>(3.23)</td><td char=".">[8.02–8.74]</td><td char=".">311</td></tr><tr><td><italic>Political party</italic></td><td /><td /><td /><td /></tr><tr><td> Republican</td><td char=".">7.83</td><td>(3.30)</td><td char=".">[7.50–8.16]</td><td char=".">383</td></tr><tr><td> Independent</td><td char=".">6.34</td><td>(3.34)</td><td char=".">[5.91–6.77]</td><td char=".">235</td></tr><tr><td> Democrat</td><td char=".">6.83</td><td>(3.20)</td><td char=".">[6.56–7.10]</td><td char=".">539</td></tr></tbody></table> </ephtml> </p> <p>6 95 percent confidence interval around the mean.</p> <p>We regress economic literacy (both the number of questions correct out of 15 and the <emph>z</emph>-score transformation of this sum for a sense of the magnitude of differences) as a function of respondents' characteristics in table 3. We find statistically significant differences in economic literacy by sex, race, parental status, and employment status. Men have higher economic literacy than women. Economic literacy is greater with both age and more formal schooling. Black and Hispanic respondents have lower economic literacy than other racial/ethnic groups, parents with children under age 18 have lower economic literacy than respondents without young children, and Republicans have higher economic literacy than do political independents. In many cases, these differences are quite large (e.g., all groups with more than a high school education have more than a half-standard-deviation higher economic literacy score than high school dropouts).[<reflink idref="bib8" id="ref36">8</reflink>] These patterns in the covariates associated with economic literacy echo Delli Carpini and Keeter's ([<reflink idref="bib9" id="ref37">9</reflink>]) findings on Americans' political knowledge as well as Walstad and Rebeck's ([<reflink idref="bib29" id="ref38">29</reflink>]) and Walstad and Allgood's ([<reflink idref="bib27" id="ref39">27</reflink>]) previous findings on economic literacy: women and nonwhite Americans had lower political and economic literacy than did men and whites, and Americans with more schooling had considerably higher political knowledge than those with less. Unlike past analyses, we find less of an income gradient in economic literacy than Walstad and Rebeck ([<reflink idref="bib29" id="ref40">29</reflink>]) do, and a different rank-ordering of economic literacy by political party (in their data, both Republicans and independents had higher economic literacy than Democrats). That said, what Americans know about economics is less important than whether economic literacy is related to their policy views. We turn to this question below.</p> <p>Table 3. Regressing economic literacy on respondent characteristics.</p> <p> <ephtml> <table><thead><tr><td /><td>(1)</td><td>(2)</td><td /><td>(1, cont.)</td><td>(2, cont.)</td></tr></thead><tbody valign="top"><tr><td /><td><italic>Economic Literacy</italic></td><td /><td><italic>Economic Literacy</italic></td></tr><tr><td /><td>Total Correct</td><td><italic>z</italic>-score</td><td /><td>Total Correct</td><td><italic>z</italic>-score</td></tr><tr><td>Female</td><td char=".">−0.553***</td><td char=".">−0.150***</td><td><italic>Education</italic></td><td /><td /></tr><tr><td>(0.18)</td><td>(0.05)</td><td> High school</td><td char=".">0.667*</td><td char=".">0.181*</td></tr><tr><td>Age (years)</td><td char=".">0.052***</td><td char=".">0.014***</td><td /><td>(0.36)</td><td>(0.10)</td></tr><tr><td>Family income (0,000)</td><td>(0.01)</td><td>(0.00)</td><td> Some college, no degree</td><td char=".">2.225***</td><td char=".">0.605***</td></tr><tr><td char=".">−0.000</td><td char=".">−0.000</td><td /><td>(0.38)</td><td>(0.10)</td></tr><tr><td>(0.00)</td><td>(0.00)</td><td> Trade/vocational</td><td char=".">1.900***</td><td char=".">0.517***</td></tr><tr><td><italic>Political party</italic></td><td /><td /><td /><td>(0.57)</td><td>(0.15)</td></tr><tr><td> Democrat</td><td char=".">0.218</td><td char=".">0.059</td><td> Associate's degree</td><td char=".">1.949***</td><td char=".">0.530***</td></tr><tr><td>(0.24)</td><td>(0.06)</td><td /><td>(0.43)</td><td>(0.12)</td></tr><tr><td> Republican</td><td char=".">0.615**</td><td char=".">0.167**</td><td> College graduate</td><td char=".">2.943***</td><td char=".">0.801***</td></tr><tr><td>(0.25)</td><td>(0.07)</td><td /><td>(0.43)</td><td>(0.12)</td></tr><tr><td><italic>Marital status</italic></td><td /><td /><td> Master's degree</td><td char=".">2.765***</td><td char=".">0.752***</td></tr><tr><td> Married</td><td char=".">−0.269</td><td char=".">−0.073</td><td /><td>(0.47)</td><td>(0.13)</td></tr><tr><td>(0.24)</td><td>(0.06)</td><td> Postgraduate degree</td><td char=".">2.860***</td><td char=".">0.778***</td></tr><tr><td> Divorced</td><td char=".">−0.494</td><td char=".">−0.134</td><td /><td>(0.61)</td><td>(0.17)</td></tr><tr><td>(0.30)</td><td>(0.08)</td><td><italic>Employment</italic></td><td /><td /></tr><tr><td> Separated</td><td char=".">0.524</td><td char=".">0.143</td><td> Full-time</td><td char=".">−0.882***</td><td char=".">−0.240***</td></tr><tr><td>(0.58)</td><td>(0.16)</td><td /><td>(0.31)</td><td>(0.08)</td></tr><tr><td> Widowed</td><td char=".">−0.566</td><td char=".">−0.154</td><td> Part-time</td><td char=".">−0.654*</td><td char=".">−0.178*</td></tr><tr><td>(0.40)</td><td>(0.11)</td><td /><td>(0.35)</td><td>(0.09)</td></tr><tr><td><italic>Parental status</italic></td><td /><td /><td> Unemployed</td><td char=".">−0.586*</td><td char=".">−0.159*</td></tr><tr><td> Yes, w/respondent</td><td char=".">−0.750***</td><td char=".">−0.204***</td><td /><td>(0.34)</td><td>(0.09)</td></tr><tr><td>(0.23)</td><td>(0.06)</td><td> Retired</td><td char=".">−0.729**</td><td char=".">−0.198**</td></tr><tr><td> Yes, not w/respondent</td><td char=".">−1.549***</td><td char=".">−0.421***</td><td /><td>(0.33)</td><td>(0.09)</td></tr><tr><td>(0.42)</td><td>(0.11)</td><td /><td /><td /></tr><tr><td><italic>Race & ethnicity</italic></td><td /><td /><td>Constant</td><td char=".">3.303***</td><td char=".">−0.718***</td></tr><tr><td> Black</td><td char=".">−1.645***</td><td char=".">−0.448***</td><td /><td>(0.97)</td><td>(0.26)</td></tr><tr><td>(0.28)</td><td>(0.08)</td><td /><td /><td /></tr><tr><td> Asian</td><td char=".">0.092</td><td char=".">0.025</td><td /><td /><td /></tr><tr><td>(0.60)</td><td>(0.16)</td><td /><td /><td /></tr><tr><td> Native/Pacific Islander/Other</td><td char=".">−0.279</td><td char=".">−0.076</td><td /><td /><td /></tr><tr><td>(0.42)</td><td>(0.11)</td><td /><td /><td /></tr><tr><td> Hispanic</td><td char=".">−1.418***</td><td char=".">−0.386***</td><td>Observations</td><td char=".">1,157</td><td char=".">1,157</td></tr><tr><td>(0.29)</td><td>(0.08)</td><td><italic>R</italic>-squared</td><td char=".">0.315</td><td char=".">0.315</td></tr></tbody></table> </ephtml> </p> <ulist> <item>7 <emph>Notes:</emph> The omitted group in both regressions is a white, never-married male who does not identify with either U.S. political party, does not have children, has not completed high school, and is out of the labor force. Both regressions include state fixed effects. Robust standard errors in parentheses.</item> <item>8 ***<emph>p</emph> < 0.01; **<emph>p</emph> < 0.05; *<emph>p</emph> < 0.1</item> </ulist> <hd id="AN0188100604-7">Are policy views related to economic literacy?</hd> <p>In this section, we examine the extent to which views on the government's role in the economy, government spending priorities, the government's responsibilities broadly, and five contemporary policy questions are correlated with economic literacy. Each of these questions was presented as a five-point Likert scale, and for each one, we have set the dependent variable (<emph>Policy</emph>) equal to its highest value (<reflink idref="bib5" id="ref41">5</reflink>) for strongly favoring a role, spending priority, responsibility, or policy, and its lowest value (<reflink idref="bib1" id="ref42">1</reflink>) for strongly opposing it.</p> <p>As in Althaus ([<reflink idref="bib2" id="ref43">2</reflink>]), for each policy question,[<reflink idref="bib9" id="ref44">9</reflink>] we estimate:</p> <p>Graph</p> <p> <ephtml> <math display="block" xmlns="http://www.w3.org/1998/Math/MathML"><msub><mrow><mtext mathvariant="italic">Policy</mtext></mrow><mrow><mi>i</mi></mrow></msub><mo>=</mo><mi>α</mi><mo>+</mo><msub><mrow><mi>β</mi></mrow><mrow><mn>0</mn></mrow></msub><msub><mrow><mtext mathvariant="italic">EL</mtext></mrow><mrow><mi>i</mi></mrow></msub><mo>+</mo><mi>γ</mi><msub><mrow><mtext mathvariant="italic">Female</mtext></mrow><mrow><mi>i</mi></mrow></msub><mo>+</mo><msub><mrow><mi>β</mi></mrow><mrow><mn>1</mn></mrow></msub><msub><mrow><mtext mathvariant="italic">Female</mtext></mrow><mrow><mi>i</mi></mrow></msub><mi mathvariant="normal">∗</mi><msub><mrow><mtext mathvariant="italic">EL</mtext></mrow><mrow><mi>i</mi></mrow></msub><mo>+</mo><mi>δ</mi><msub><mrow><mtext mathvariant="italic">Age</mtext></mrow><mrow><mi>i</mi></mrow></msub><mo>+</mo><msub><mrow><mi>β</mi></mrow><mrow><mn>2</mn></mrow></msub><msub><mrow><mtext mathvariant="italic">Age</mtext></mrow><mrow><mi>i</mi></mrow></msub><mi mathvariant="normal">∗</mi><msub><mrow><mtext mathvariant="italic">EL</mtext></mrow><mrow><mi>i</mi></mrow></msub><mo>+</mo><mi>ζ</mi><msub><mrow><mtext mathvariant="italic">Income</mtext></mrow><mrow><mi>i</mi></mrow></msub><mo>+</mo><msub><mrow><mi>β</mi></mrow><mrow><mn>3</mn></mrow></msub><msub><mrow><mtext mathvariant="italic">Income</mtext></mrow><mrow><mi>i</mi></mrow></msub><mi mathvariant="normal">∗</mi><msub><mrow><mtext mathvariant="italic">EL</mtext></mrow><mrow><mi>i</mi></mrow></msub><mo>+</mo><mrow><munderover><mo stretchy="false">∑</mo><mrow><mi>j</mi><mo>=</mo><mn>1</mn></mrow><mrow><mn>5</mn></mrow></munderover><mrow><msub><mrow><mi>η</mi></mrow><mrow><mi>j</mi></mrow></msub><msub><mrow><mtext mathvariant="italic">Marital</mtext></mrow><mrow><mtext mathvariant="italic">ij</mtext></mrow></msub></mrow></mrow><mo>+</mo><mrow><munderover><mo stretchy="false">∑</mo><mrow><mi>j</mi><mo>=</mo><mn>1</mn></mrow><mrow><mn>5</mn></mrow></munderover><mrow><msub><mrow><mi>β</mi></mrow><mrow><mn>4</mn><mi>j</mi></mrow></msub><msub><mrow><mtext mathvariant="italic">Marital</mtext></mrow><mrow><mtext mathvariant="italic">ij</mtext></mrow></msub><mi mathvariant="normal">∗</mi><msub><mrow><mtext mathvariant="italic">EL</mtext></mrow><mrow><mi>i</mi></mrow></msub></mrow></mrow><mo>+</mo><mrow><munderover><mo stretchy="false">∑</mo><mrow><mi>k</mi><mo>=</mo><mn>1</mn></mrow><mrow><mn>5</mn></mrow></munderover><mrow><msub><mrow><mi>θ</mi></mrow><mrow><mi>k</mi></mrow></msub><msub><mrow><mtext mathvariant="italic">Race</mtext></mrow><mrow><mtext mathvariant="italic">ik</mtext></mrow></msub></mrow></mrow><mo>+</mo><mrow><munderover><mo stretchy="false">∑</mo><mrow><mi>k</mi><mo>=</mo><mn>1</mn></mrow><mrow><mn>5</mn></mrow></munderover><mrow><msub><mrow><mi>β</mi></mrow><mrow><mn>5</mn><mi>k</mi></mrow></msub><msub><mrow><mtext mathvariant="italic">Race</mtext></mrow><mrow><mtext mathvariant="italic">ik</mtext></mrow></msub><mi mathvariant="normal">∗</mi><msub><mrow><mtext mathvariant="italic">EL</mtext></mrow><mrow><mi>i</mi></mrow></msub></mrow></mrow><mo>+</mo><mrow><munderover><mo stretchy="false">∑</mo><mrow><mi>l</mi><mo>=</mo><mn>1</mn></mrow><mrow><mn>6</mn></mrow></munderover><mrow><msub><mrow><mi>κ</mi></mrow><mrow><mi>l</mi></mrow></msub><msub><mrow><mtext mathvariant="italic">Educ</mtext></mrow><mrow><mtext mathvariant="italic">il</mtext></mrow></msub></mrow></mrow><mo>+</mo><mrow><munderover><mo stretchy="false">∑</mo><mrow><mi>l</mi><mo>=</mo><mn>1</mn></mrow><mrow><mn>6</mn></mrow></munderover><mrow><msub><mrow><mi>β</mi></mrow><mrow><mn>6</mn><mi>l</mi></mrow></msub><msub><mrow><mtext mathvariant="italic">Educ</mtext></mrow><mrow><mtext mathvariant="italic">il</mtext></mrow></msub><mi mathvariant="normal">∗</mi><msub><mrow><mtext mathvariant="italic">EL</mtext></mrow><mrow><mi>i</mi></mrow></msub></mrow></mrow><mo>+</mo><mrow><munderover><mo stretchy="false">∑</mo><mrow><mi>m</mi><mo>=</mo><mn>1</mn></mrow><mrow><mn>5</mn></mrow></munderover><mrow><msub><mrow><mi>λ</mi></mrow><mrow><mi>l</mi></mrow></msub><msub><mrow><mtext mathvariant="italic">Employ</mtext></mrow><mrow><mtext mathvariant="italic">im</mtext></mrow></msub></mrow></mrow><mo>+</mo><mrow><munderover><mo stretchy="false">∑</mo><mrow><mi>m</mi><mo>=</mo><mn>1</mn></mrow><mrow><mn>5</mn></mrow></munderover><mrow><msub><mrow><mi>β</mi></mrow><mrow><mn>7</mn><mi>m</mi></mrow></msub><msub><mrow><mtext mathvariant="italic">Employ</mtext></mrow><mrow><mtext mathvariant="italic">im</mtext></mrow></msub><mi mathvariant="normal">∗</mi><msub><mrow><mtext mathvariant="italic">EL</mtext></mrow><mrow><mi>i</mi></mrow></msub></mrow></mrow><mo>+</mo><mrow><munderover><mo stretchy="false">∑</mo><mrow><mi>n</mi><mo>=</mo><mn>1</mn></mrow><mrow><mn>2</mn></mrow></munderover><mrow><msub><mrow><mi>ν</mi></mrow><mrow><mi>n</mi></mrow></msub><msub><mrow><mtext mathvariant="italic">Party</mtext></mrow><mrow><mtext mathvariant="italic">in</mtext></mrow></msub></mrow></mrow><mo>+</mo><mrow><munderover><mo stretchy="false">∑</mo><mrow><mi>n</mi><mo>=</mo><mn>1</mn></mrow><mrow><mn>2</mn></mrow></munderover><mrow><msub><mrow><mi>β</mi></mrow><mrow><mn>8</mn><mi>n</mi></mrow></msub><msub><mrow><mtext mathvariant="italic">Party</mtext></mrow><mrow><mtext mathvariant="italic">in</mtext></mrow></msub><mi mathvariant="normal">∗</mi><msub><mrow><mtext mathvariant="italic">EL</mtext></mrow><mrow><mi>i</mi></mrow></msub></mrow></mrow><mo>+</mo><msub><mrow><mi>s</mi></mrow><mrow><mi>i</mi></mrow></msub><mo>+</mo><msub><mrow><mi>ε</mi></mrow><mrow><mi>i</mi></mrow></msub></math> </ephtml> </p> <p>That is, we first estimate an ordered probit[<reflink idref="bib10" id="ref45">10</reflink>] of each policy question on respondents' economic literacy, their demographic and socioeconomic characteristics, and the interaction of economic literacy and these characteristics. We then replace the respondent's actual literacy score with a perfect score, interact this again with their characteristics, and use the estimated coefficients to predict each respondent's probability distribution over the possible answers. Finally, we sum the predicted probabilities for each response along the Likert scale across respondents to arrive at our FEL estimates. This allows us to estimate by how much the public's view on these issues would change if all residents were fully economically literate by our measure.</p> <p>Table 4 reports the results of this simulation. The first five columns report the original distribution of responses for each question as well as the average of the respondents' predicted probability distributions over the answers as if they were fully economically literate. The next column reports the "net favorability" of each policy, or the positive responses (favor/spend more/support) less the negative responses (oppose, spend less), for both the original and predicted distribution of answers. The last two columns provide two ways of summarizing the difference between respondents' original policy views and FEL estimates: the raw difference in net favorability and whether net favorability changes sign under the FEL estimates.</p> <p>Table 4. Estimating "fully economically literate" policy views.</p> <p> <ephtml> <table><thead><tr><td>A. Here are some things that the government might do for the economy. Please indicate which actions you are in favor of and which you are against:</td></tr><tr><td /><td /><td>Strongly favor</td><td>Favor</td><td>Neither</td><td>Oppose</td><td>Strongly oppose</td><td>Net favorability</td><td>Change Net Fav.</td><td>Plurality change</td></tr></thead><tbody valign="top"><tr><td>Government financing of projects to create jobs</td><td>Original</td><td char=".">24.8</td><td char=".">35.6</td><td char=".">26.9</td><td char=".">8.4</td><td char=".">4.3</td><td char=".">47.7</td><td char=".">1.4</td><td>No</td></tr><tr><td>Fully literate</td><td char=".">35.4</td><td char=".">28.4</td><td char=".">21.5</td><td char=".">8.5</td><td char=".">6.2</td><td char=".">49.1</td></tr><tr><td>Less government regulation of business</td><td>Original</td><td char=".">17.8</td><td char=".">25.6</td><td char=".">33.2</td><td char=".">16.6</td><td char=".">6.8</td><td char=".">19.9</td><td char=".">−1.2</td><td>No</td></tr><tr><td>Fully literate</td><td char=".">26.1</td><td char=".">20.9</td><td char=".">24.7</td><td char=".">16.1</td><td char=".">12.2</td><td char=".">18.7</td></tr><tr><td>Financial aid (tax cuts or subsidies) for industry to develop new products and technology</td><td>Original</td><td char=".">14.9</td><td char=".">35.4</td><td char=".">33.1</td><td char=".">11.6</td><td char=".">5.0</td><td char=".">33.7</td><td char=".">7.5</td><td>No</td></tr><tr><td>Fully literate</td><td char=".">22.1</td><td char=".">34.0</td><td char=".">28.9</td><td char=".">10.2</td><td char=".">4.8</td><td char=".">41.1</td></tr><tr><td>Financial aid (tax cuts or subsidies) or other support (for example, import restrictions) for declining industries to protect jobs</td><td>Original</td><td char=".">14.6</td><td char=".">30.7</td><td char=".">37.3</td><td char=".">12.4</td><td char=".">5.0</td><td char=".">27.9</td><td char=".">−5.6</td><td>No</td></tr><tr><td>Fully literate</td><td char=".">14.8</td><td char=".">28.3</td><td char=".">36.0</td><td char=".">13.9</td><td char=".">7.0</td><td char=".">22.3</td></tr></tbody></table> </ephtml> </p> <p></p> <p> <ephtml> <table><thead><tr><td>B. Please indicate whether you would like to see more or less government spending in each area. Remember that if you say "more" or "much more," it might require a tax increase or cuts to other spending to pay for it.</td></tr><tr><td /><td /><td>Much more</td><td>More</td><td>About right</td><td>Less</td><td>Much less</td><td>Net favorability</td><td>Change Net Fav.</td><td>Plurality change</td></tr></thead><tbody valign="top"><tr><td>The environment</td><td>Original</td><td char=".">21.6</td><td char=".">27.6</td><td char=".">33.9</td><td char=".">11.8</td><td char=".">5.1</td><td char=".">32.4</td><td char=".">1.3</td><td>No</td></tr><tr><td>Fully literate</td><td char=".">35.6</td><td char=".">19.6</td><td char=".">23.3</td><td char=".">11.9</td><td char=".">9.6</td><td char=".">33.7</td></tr><tr><td>Health</td><td>Original</td><td char=".">22.2</td><td char=".">33.8</td><td char=".">32.0</td><td char=".">8.9</td><td char=".">3.2</td><td char=".">43.8</td><td char=".">7.3</td><td>No</td></tr><tr><td>Fully literate</td><td char=".">38.0</td><td char=".">25.8</td><td char=".">23.4</td><td char=".">8.4</td><td char=".">4.4</td><td char=".">51.1</td></tr><tr><td>Police and law enforcement</td><td>Original</td><td char=".">15.6</td><td char=".">28.7</td><td char=".">36.0</td><td char=".">12.8</td><td char=".">6.9</td><td char=".">24.5</td><td char=".">−16.4</td><td>No</td></tr><tr><td>Fully literate</td><td char=".">16.0</td><td char=".">22.4</td><td char=".">31.3</td><td char=".">15.0</td><td char=".">15.3</td><td char=".">8.1</td></tr><tr><td>Education</td><td>Original</td><td char=".">19.5</td><td char=".">33.6</td><td char=".">36.3</td><td char=".">7.5</td><td char=".">3.1</td><td char=".">42.4</td><td char=".">3.0</td><td>No</td></tr><tr><td>Fully literate</td><td char=".">30.6</td><td char=".">27.6</td><td char=".">29.0</td><td char=".">8.0</td><td char=".">4.8</td><td char=".">45.3</td></tr><tr><td>The military and defense</td><td>Original</td><td char=".">13.6</td><td char=".">23.3</td><td char=".">38.8</td><td char=".">14.9</td><td char=".">9.5</td><td char=".">12.5</td><td char=".">−21.2</td><td>Yes</td></tr><tr><td>Fully literate</td><td char=".">13.0</td><td char=".">17.0</td><td char=".">31.4</td><td char=".">17.1</td><td char=".">21.6</td><td char=".">−8.7</td></tr><tr><td>Old age pensions</td><td>Original</td><td char=".">17.4</td><td char=".">31.4</td><td char=".">40.6</td><td char=".">8.3</td><td char=".">2.3</td><td char=".">38.2</td><td char=".">7.1</td><td>No</td></tr><tr><td>Fully literate</td><td char=".">25.5</td><td char=".">30.0</td><td char=".">34.3</td><td char=".">7.5</td><td char=".">2.7</td><td char=".">45.3</td></tr><tr><td>Culture and the arts</td><td>Original</td><td char=".">6.9</td><td char=".">17.3</td><td char=".">41.4</td><td char=".">23.8</td><td char=".">10.6</td><td char=".">−10.2</td><td char=".">−15.7</td><td>No</td></tr><tr><td>Fully literate</td><td char=".">6.5</td><td char=".">13.8</td><td char=".">33.4</td><td char=".">24.7</td><td char=".">21.6</td><td char=".">−25.9</td></tr></tbody></table> </ephtml> </p> <p></p> <p> <ephtml> <table><thead><tr><td>C. On the whole, do you think it should or should not be the government's responsibility to...</td></tr><tr><td /><td /><td>Definitely should</td><td>Probably should</td><td>Unsure</td><td>Probably should not</td><td>Definitely should not</td><td>Net favorability</td><td>Change Net Fav.</td><td>Plurality change</td></tr></thead><tbody valign="top"><tr><td>Keep prices under control</td><td>Original</td><td char=".">29.0</td><td char=".">32.2</td><td char=".">22.5</td><td char=".">11.2</td><td char=".">5.1</td><td char=".">44.9</td><td char=".">−15.0</td><td>No</td></tr><tr><td>Fully literate</td><td char=".">28.3</td><td char=".">26.0</td><td char=".">21.3</td><td char=".">14.1</td><td char=".">10.3</td><td char=".">29.9</td></tr><tr><td>Provide health care for the sick</td><td>Original</td><td char=".">40.3</td><td char=".">30.4</td><td char=".">17.5</td><td char=".">7.4</td><td char=".">4.4</td><td char=".">58.9</td><td char=".">−1.7</td><td>No</td></tr><tr><td>Fully literate</td><td char=".">50.4</td><td char=".">21.3</td><td char=".">13.9</td><td char=".">7.4</td><td char=".">7.1</td><td char=".">57.2</td></tr><tr><td>Provide a decent standard of living for the old</td><td>Original</td><td char=".">37.6</td><td char=".">36.1</td><td char=".">17.2</td><td char=".">5.6</td><td char=".">3.6</td><td char=".">64.4</td><td char=".">10.3</td><td>No</td></tr><tr><td>Fully literate</td><td char=".">54.0</td><td char=".">27.7</td><td char=".">11.5</td><td char=".">3.9</td><td char=".">3.0</td><td char=".">74.8</td></tr><tr><td>Provide industry with the help it needs to grow</td><td>Original</td><td char=".">19.4</td><td char=".">29.9</td><td char=".">30.1</td><td char=".">15.9</td><td char=".">4.8</td><td char=".">28.6</td><td char=".">−14.7</td><td>No</td></tr><tr><td>Fully literate</td><td char=".">17.4</td><td char=".">25.0</td><td char=".">29.0</td><td char=".">19.9</td><td char=".">8.7</td><td char=".">13.8</td></tr><tr><td>Reduce income differences between the rich and the poor</td><td>Original</td><td char=".">28.1</td><td char=".">21.8</td><td char=".">23.1</td><td char=".">14.5</td><td char=".">12.7</td><td char=".">22.7</td><td char=".">−14.3</td><td>No</td></tr><tr><td>Fully literate</td><td char=".">30.6</td><td char=".">15.3</td><td char=".">16.8</td><td char=".">13.7</td><td char=".">23.7</td><td char=".">8.5</td></tr><tr><td>Give financial help to university students from low-income families</td><td>Original</td><td char=".">29.1</td><td char=".">31.4</td><td char=".">22.2</td><td char=".">10.8</td><td char=".">6.5</td><td char=".">43.3</td><td char=".">−3.6</td><td>No</td></tr><tr><td>Fully literate</td><td char=".">33.8</td><td char=".">26.4</td><td char=".">19.3</td><td char=".">11.1</td><td char=".">9.4</td><td char=".">39.7</td></tr><tr><td>Provide decent housing for those who can't afford it</td><td>Original</td><td char=".">30.7</td><td char=".">30.6</td><td char=".">21.6</td><td char=".">10.7</td><td char=".">6.5</td><td char=".">44.0</td><td char=".">−10.5</td><td>No</td></tr><tr><td>Fully literate</td><td char=".">32.8</td><td char=".">24.3</td><td char=".">19.3</td><td char=".">12.3</td><td char=".">11.3</td><td char=".">33.5</td></tr><tr><td>Impose strict laws to make industry do less damage to the environment</td><td>Original</td><td char=".">36.8</td><td char=".">31.6</td><td char=".">19.2</td><td char=".">7.9</td><td char=".">4.5</td><td char=".">56.0</td><td char=".">5.2</td><td>No</td></tr><tr><td>Fully literate</td><td char=".">50.3</td><td char=".">23.0</td><td char=".">14.6</td><td char=".">7.0</td><td char=".">5.1</td><td char=".">61.2</td></tr><tr><td>Promote equality between men and women</td><td>Original</td><td char=".">33.8</td><td char=".">27.7</td><td char=".">19.8</td><td char=".">10.7</td><td char=".">8.0</td><td char=".">42.8</td><td char=".">−1.6</td><td>No</td></tr><tr><td>Fully literate</td><td char=".">40.8</td><td char=".">21.9</td><td char=".">15.8</td><td char=".">10.3</td><td char=".">11.2</td><td char=".">41.2</td></tr><tr><td>Promote equality between different racial groups in America</td><td>Original</td><td char=".">34.0</td><td char=".">23.63</td><td char=".">21.2</td><td char=".">11.9</td><td char=".">9.2</td><td char=".">36.5</td><td char=".">−3.8</td><td>No</td></tr><tr><td>Fully literate</td><td char=".">41.8</td><td char=".">16.7</td><td char=".">15.6</td><td char=".">11.3</td><td char=".">14.6</td><td char=".">32.7</td></tr></tbody></table> </ephtml> </p> <p></p> <p> <ephtml> <table><thead><tr><td>D. For each policy proposal, please indicate whether you support or oppose that policy being enacted into law at the national level.</td></tr><tr><td /><td /><td>Strongly favor</td><td>Favor</td><td>Neither</td><td>Oppose</td><td>Strongly oppose</td><td>Net favorability</td><td>Change Net Fav.</td><td>Plurality change</td></tr></thead><tbody valign="top"><tr><td>Abolishing the death penalty</td><td>Original</td><td char=".">17.2</td><td char=".">16.5</td><td char=".">30.1</td><td char=".">17.4</td><td char=".">18.9</td><td char=".">−2.7</td><td char=".">−10.4</td><td>No</td></tr><tr><td>Fully literate</td><td char=".">18.1</td><td char=".">13.3</td><td char=".">24.1</td><td char=".">16.4</td><td char=".">28.1</td><td char=".">−13.1</td></tr><tr><td>Restricting the sale of firearms</td><td>Original</td><td char=".">29.2</td><td char=".">18.2</td><td char=".">21.1</td><td char=".">12.1</td><td char=".">19.4</td><td char=".">15.9</td><td char=".">−12.4</td><td>No</td></tr><tr><td>Fully literate</td><td char=".">30.9</td><td char=".">13.2</td><td char=".">15.3</td><td char=".">10.2</td><td char=".">30.3</td><td char=".">3.5</td></tr><tr><td>Legalizing the possession and use of marijuana</td><td>Original</td><td char=".">38.3</td><td char=".">19.2</td><td char=".">21.3</td><td char=".">8.8</td><td char=".">12.4</td><td char=".">36.3</td><td char=".">4.0</td><td>No</td></tr><tr><td>Fully literate</td><td char=".">47.1</td><td char=".">14.8</td><td char=".">16.5</td><td char=".">7.5</td><td char=".">14.1</td><td char=".">40.3</td></tr><tr><td>Taxing carbon-based fuels to reduce carbon emissions</td><td>Original</td><td char=".">25.5</td><td char=".">26.4</td><td char=".">27.4</td><td char=".">10.4</td><td char=".">10.3</td><td char=".">31.2</td><td char=".">−10.8</td><td>No</td></tr><tr><td>Fully literate</td><td char=".">32.5</td><td char=".">17.6</td><td char=".">20.2</td><td char=".">11.0</td><td char=".">18.7</td><td char=".">20.4</td></tr><tr><td>Creating a pathway to citizenship for illegal immigrants to the U.S.</td><td>Original</td><td char=".">22.9</td><td char=".">21.8</td><td char=".">25.5</td><td char=".">12.7</td><td char=".">17.2</td><td char=".">14.8</td><td char=".">0.6</td><td>No</td></tr><tr><td>Fully literate</td><td char=".">32.6</td><td char=".">16.3</td><td char=".">17.7</td><td char=".">10.5</td><td char=".">23.0</td><td char=".">15.4</td></tr></tbody></table> </ephtml> </p> <p>FEL estimates are not much different than respondents' original views. On average across the 26 questions, the absolute value of net favorability changes about 7.9 percentage points; for comparison, the average of the absolute value of net favorability of respondents' original views is about 34 percentage points. On one question—support for spending on "the military and defense"—opinion differs in plurality support between the original and FEL estimates. Respondents' original views favor more spending (37% more/much more vs 24% less/much less), while FEL estimates suggest favoring less (30% more/much more vs 38.7% less/much less). This is also the largest change in net favorability between original responses and the FEL estimates. On all other issues, while there was occasionally sizeable movement in net favorability, the plurality views remained unmoved (i.e., the sign of net favorability remained the same).</p> <hd id="AN0188100604-8">Economic literacy and political party</hd> <p>Overall, our estimates in table 4 indicate that economic literacy relates little to Americans' public policy views. That conclusion, however, may mask heterogeneity in estimated fully economically literate policy views.[<reflink idref="bib11" id="ref46">11</reflink>] For instance, uncovering differences in policy views associated with different party affiliations could shed light on any role that greater economic literacy plays in forming policy views. Given the notable perception of political polarization in American politics, our analysis offers a unique testbed for the conjecture that those who are more literate think differently than the illiterate, even when other differences persist. Figure 1 plots the net favorability among both Democrats and Republicans for both their original views and the FEL estimates for each policy question. The shapes indicate an original (circle) or FEL (asterisk) data point, and the colors indicate a Democrat (dark gray) or a Republican (light gray) data point. The policy questions are abbreviated and indicated along the left-hand side of each subfigure.</p> <p>Graph: Figure 1. Economically literate policy views and political polarization.</p> <p>We note first that, aside from current public policy issues (panel D of figure 1), Democrats and Republicans are on the same side on all questions on the government's role in the economy (panel A), on most government spending priorities (panel B), and on 80 percent of the government's responsibilities (panel C).[<reflink idref="bib12" id="ref47">12</reflink>] While partisan respondents in our sample do not support or oppose each item that we presented with equal intensity—the average gap in net favorability between the parties on these questions is 45 percentage points—Democrats and Republicans are, on net, on the same side of 17 of the 26 issues.</p> <p>That broad agreement, however, diminishes considerably when we consider FEL estimates. The average difference in net favorability across all our questions grows to 85 percentage points. On only one question is the difference in opinion smaller than the FEL difference: FEL estimated support for "financial aid or other support for declining industries to protect jobs" is lower for both Democrats and Republicans relative to the original views, although Democrats' support falls more, reducing the gap between the parties by roughly two percentage points. On all other questions, the difference between the parties' FEL estimates is greater than the original views. Additionally, on two questions on the government's role in the economy, one question on government spending, and four questions on government responsibilities, FEL estimates indicate that Republicans and Democrats are opposed on issues where the original data indicate that respondents from the two parties agreed, on average. On no questions where there was partisan disagreement in respondents' original views (i.e., opposite-signed net favorabilities) did the FEL estimates converge. Inasmuch as FEL estimated views are different from uninformed views, they are more polarized across party lines.</p> <hd id="AN0188100604-9">Survey of AEA members</hd> <p>Another potentially fruitful comparison of the relationship between economic literacy and policy views is to compare experts and laypeople to see if greater literacy among the latter correlates with viewing policy like the former. After conducting our initial survey, we surveyed members of the AEA.[<reflink idref="bib13" id="ref48">13</reflink>] Of the 1,176 AEA members who responded to our survey, 1,140 held a graduate degree (master's or PhD). Of these, 1,050 passed the attention check question, and 1,010 answered all demographic questions. We restrict our analysis to these AEA members. A comparison of their demographic and socioeconomic characteristics relative to the U.S. population and our U.S. resident respondents (from table 1) is presented in table 5.[<reflink idref="bib14" id="ref49">14</reflink>]</p> <p>Table 5. AEA members' characteristics compared to the U.S.</p> <p> <ephtml> <table><thead><tr><td>Characteristic</td><td>U.S. Adult Population</td><td>U.S. Survey Respondents</td><td>AEA Survey</td></tr></thead><tbody valign="top"><tr><td>Observations</td><td /><td char=".">1,157</td><td char=".">1,010</td></tr><tr><td> Female</td><td char=".">0.514</td><td char=".">0.475</td><td char=".">0.236</td></tr><tr><td>Age (years)</td><td char=".">47</td><td char=".">47.9</td><td char=".">55.18</td></tr><tr><td> Family income (0,000)</td><td char=".">108.56</td><td char=".">59.50</td><td char=".">156.50</td></tr><tr><td><italic>Marital status</italic></td><td /><td /><td /></tr><tr><td> Married</td><td char=".">0.476</td><td char=".">0.396</td><td char=".">0.749</td></tr><tr><td> Widowed</td><td char=".">0.057</td><td char=".">0.067</td><td char=".">0.023</td></tr><tr><td> Divorced</td><td char=".">0.109</td><td char=".">0.154</td><td char=".">0.054</td></tr><tr><td> Separated</td><td char=".">0.018</td><td char=".">0.030</td><td char=".">0.005</td></tr><tr><td> Never married</td><td char=".">0.339</td><td char=".">0.354</td><td char=".">0.185</td></tr><tr><td><italic>Race & ethnicity</italic></td><td /><td /><td /></tr><tr><td> White</td><td char=".">0.641</td><td char=".">0.773</td><td char=".">0.787</td></tr><tr><td> Black</td><td char=".">0.120</td><td char=".">0.122</td><td char=".">0.032</td></tr><tr><td> Asian</td><td char=".">0.061</td><td char=".">0.035</td><td char=".">0.074</td></tr><tr><td> Native/Pac. Islander/Other</td><td char=".">0.178</td><td char=".">0.070</td><td char=".">0.035</td></tr><tr><td> Hispanic</td><td char=".">0.168</td><td char=".">0.100</td><td char=".">0.067</td></tr><tr><td><italic>Education</italic><xref ref-type="table-fn" rid="tfn10">a</xref></td><td /><td /><td /></tr><tr><td> Less than high school</td><td char=".">0.114</td><td char=".">0.046</td><td char=".">0.000</td></tr><tr><td> High school</td><td char=".">0.269</td><td char=".">0.268</td><td char=".">0.000</td></tr><tr><td> Some college, no degree</td><td char=".">0.200</td><td char=".">0.201</td><td char=".">0.000</td></tr><tr><td> Associate's degree</td><td char=".">0.086</td><td char=".">0.166</td><td char=".">0.000</td></tr><tr><td> College graduate</td><td char=".">0.203</td><td char=".">0.194</td><td char=".">0.000</td></tr><tr><td> Postgraduate degree</td><td char=".">0.128</td><td char=".">0.122</td><td char=".">1.000</td></tr><tr><td><italic>Employment</italic></td><td /><td /><td /></tr><tr><td> Full time<xref ref-type="table-fn" rid="tfn11">b</xref></td><td char=".">0.490</td><td char=".">0.358</td><td char=".">0.708</td></tr><tr><td> Part time<xref ref-type="table-fn" rid="tfn12">c</xref></td><td char=".">0.095</td><td char=".">0.139</td><td char=".">0.086</td></tr><tr><td> Unemployed</td><td char=".">0.032</td><td char=".">0.121</td><td char=".">0.018</td></tr><tr><td> Not in labor force<xref ref-type="table-fn" rid="tfn13">d</xref></td><td char=".">0.214</td><td char=".">0.113</td><td char=".">0.014</td></tr><tr><td> Retired<xref ref-type="table-fn" rid="tfn13">d</xref></td><td char=".">0.169</td><td char=".">0.269</td><td char=".">0.174</td></tr><tr><td><italic>Political party</italic></td><td /><td /><td /></tr><tr><td> Republican</td><td char=".">0.43</td><td char=".">0.33</td><td char=".">0.145</td></tr><tr><td> Democrat</td><td char=".">0.46</td><td char=".">0.47</td><td char=".">0.720</td></tr></tbody></table> </ephtml> </p> <ulist> <item>9 <emph>Sources:</emph> American Community Survey (ACS) 2019 1-year estimates: Percentage female over age 18, age, (median) family income, marital status, and educational attainment (for population 25 years and over); 2020 U.S. Census Redistricting Data Summary File: Race & ethnicity; Bureau of Labor Statistics' August 2021 Employment Situation News Release: Employment status; August 2–17, 2021, wave of the Gallup survey (party affiliation plus leaners): Political views.</item> <item>10 <sups>a</sups>We include respondents with technical or vocational training with associate's degree holders and sum master's and professional/PhD degrees to match the ACS categories.</item> <item>11 <sups>b</sups>Full-time is the employed percentage less the part-time percentage.</item> <item>12 <sups>c</sups>The part-time employment percentage (0.095) is calculated based on seasonally adjusted persons in August 2021 who worked as part-time for economic or noneconomic reasons.</item> <item>13 <sups>d</sups>We divide "not in labor force" from the Bureau of Labor Statistics between "not in labor force" and "retired," based on the proportion of "not in labor force" that was retired in Hipple ([<reflink idref="bib15" id="ref50">15</reflink>]).</item> </ulist> <p>To test whether more economically literate respondents hold policy views closer to professional economists, we calculate the economists' average view on each policy question (i.e., the average point on the respective Likert scale for AEA members) and then take the absolute value of the difference between each noneconomist's answer and the economists' answer. We then regress this difference from the average economist on economic literacy, our remaining controls, and state-of-residence fixed effects. We present the coefficients on economic literacy (with both unadjusted and multiple-comparison-corrected <emph>p</emph>-values) for each public policy question in table 6.</p> <p>Table 6. Economic literacy as a correlate of policy views.</p> <p> <ephtml> <table><thead><tr><td><italic>A. Government & the economy</italic></td></tr><tr><td>Here are some things that the government might do for the economy. Please indicate which actions you are in favor of and which you are against:</td></tr><tr><td /><td><italic>β</italic></td><td><italic>p</italic>-value</td><td>Corrected <italic>p</italic>-value</td></tr></thead><tbody valign="top"><tr><td>Government financing of projects to create jobs</td><td char=".">0.007</td><td char=".">0.270</td><td char=".">0.960</td></tr><tr><td>Less government regulation of business</td><td char=".">0.031</td><td char=".">0.000</td><td char=".">0.000***</td></tr><tr><td>Financial aid (tax cuts or subsidies) for industry to develop new products and technology</td><td char=".">0.003</td><td char=".">0.612</td><td char=".">0.995</td></tr><tr><td>Financial aid (tax cuts or subsidies) or other support (for example, import restrictions) for declining industries to protect jobs</td><td char=".">−0.020</td><td char=".">0.025</td><td char=".">0.284</td></tr></tbody></table> </ephtml> </p> <p></p> <p> <ephtml> <table><thead><tr><td><italic>B. Government spending</italic></td></tr><tr><td>Listed below are various areas of government spending. Please indicate whether you would like to see more or less government spending in each area. Remember that if you say "more" or "much more," it might require a tax increase or cuts to other spending to pay for it.</td></tr></thead><tbody valign="top"><tr><td /><td><italic>β</italic></td><td><italic>p</italic>-value</td><td>Corrected <italic>p</italic>-value</td></tr><tr><td>The environment</td><td char=".">0.011</td><td char=".">0.157</td><td char=".">0.859</td></tr><tr><td>Health</td><td char=".">0.007</td><td char=".">0.258</td><td char=".">0.963</td></tr><tr><td>The police and law enforcement</td><td char=".">0.002</td><td char=".">0.738</td><td char=".">0.978</td></tr><tr><td>Education</td><td char=".">0.003</td><td char=".">0.695</td><td char=".">0.991</td></tr><tr><td>The military and defense</td><td char=".">−0.022</td><td char=".">0.004</td><td char=".">0.058*</td></tr><tr><td>Old age pensions</td><td char=".">0.007</td><td char=".">0.336</td><td char=".">0.978</td></tr><tr><td>Culture and the arts</td><td char=".">0.003</td><td char=".">0.651</td><td char=".">0.995</td></tr></tbody></table> </ephtml> </p> <p></p> <p> <ephtml> <table><thead><tr><td><italic>C. Government responsibilities</italic></td></tr><tr><td>On the whole, do you think it should or should not be the government's responsibility to...</td></tr><tr><td /><td><italic>β</italic></td><td><italic>p</italic>-value</td><td>Corrected <italic>p</italic>-value</td></tr></thead><tbody valign="top"><tr><td>Keep prices under control</td><td char=".">0.005</td><td char=".">0.536</td><td char=".">0.998</td></tr><tr><td>Provide health care for the sick</td><td char=".">0.006</td><td char=".">0.448</td><td char=".">0.994</td></tr><tr><td>Provide a decent standard of living for the old</td><td char=".">0.004</td><td char=".">0.581</td><td char=".">0.995</td></tr><tr><td>Provide industry with the help it needs to grow</td><td char=".">−0.012</td><td char=".">0.116</td><td char=".">0.780</td></tr><tr><td>Reduce income differences between the rich and the poor</td><td char=".">0.045</td><td char=".">0.000</td><td char=".">0.000***</td></tr><tr><td>Give financial help to university students from low-income families</td><td char=".">0.007</td><td char=".">0.455</td><td char=".">0.994</td></tr><tr><td>Provide decent housing for those who can't afford it</td><td char=".">0.016</td><td char=".">0.023</td><td char=".">0.275</td></tr><tr><td>Impose strict laws to make industry do less damage to the environment</td><td char=".">0.003</td><td char=".">0.749</td><td char=".">0.932</td></tr><tr><td>Promote equality between men and women</td><td char=".">0.034</td><td char=".">0.000</td><td char=".">0.000***</td></tr><tr><td>Promote equality between different racial groups in America</td><td char=".">0.024</td><td char=".">0.007</td><td char=".">0.108</td></tr></tbody></table> </ephtml> </p> <p></p> <p> <ephtml> <table><thead><tr><td><italic>D. Current public policies</italic></td></tr><tr><td>Finally, listed below are some specific policy proposals that have been in the news lately. For each one, please indicate whether you support or oppose that policy being enacted into law at the national level.</td></tr><tr><td /><td><italic>β</italic></td><td><italic>p</italic>-value</td><td>Corrected <italic>p</italic>-value</td></tr></thead><tbody valign="top"><tr><td>Abolishing the death penalty</td><td char=".">0.029</td><td char=".">0.000</td><td char=".">0.000***</td></tr><tr><td>Restricting the sale of firearms</td><td char=".">0.005</td><td char=".">0.549</td><td char=".">0.996</td></tr><tr><td>Legalizing the possession and use of marijuana</td><td char=".">−0.002</td><td char=".">0.770</td><td char=".">0.770</td></tr><tr><td>Taxing carbon-based fuels to reduce carbon emissions</td><td char=".">0.022</td><td char=".">0.014</td><td char=".">0.192</td></tr><tr><td>Creating a pathway to citizenship for illegal immigrants to the U.S.</td><td char=".">0.052</td><td char=".">0.000</td><td char=".">0.000***</td></tr></tbody></table> </ephtml> </p> <p>14 <emph>Notes:</emph> Each row reports the coefficient on economic literacy from a regression of the absolute value of the difference between the average AEA member's view on the particular policy question and the respondent's answer on that question on economic literacy (measured as the number of correct answers), sex, age, family income, political party, marital status, parental status, race and Hispanic origin, education, employment status, and state-of-residence fixed effects. The first column reports the coefficient, the second reports the unadjusted p-value, and the third column reports the <emph>p</emph>-value corrected for the familywise error rate across 26 hypotheses (List, Shaikh, and Xu [<reflink idref="bib18" id="ref51">18</reflink>]; Barsbai et al. [<reflink idref="bib3" id="ref52">3</reflink>]).</p> <p>If higher levels of economic literacy were associated with "thinking like an economist," we would expect negative coefficients on economic literacy across the board, as greater literacy would be associated with smaller differences between the average respondent and the average economist.[<reflink idref="bib15" id="ref53">15</reflink>] That is not, however, what we find. Examining all panels of table 6, we find only four of 26 coefficients signed as expected, and none of these is statistically significant at the 5 percent level. Several coefficients are <emph>positive</emph> and statistically significant; respondents with greater economic literacy held views <emph>further</emph> from the average economist's views. In short, it seems we can reject the possibility that greater economic literacy (as measured here) is associated with thinking like a professional economist.</p> <hd id="AN0188100604-10">Conclusion</hd> <p>Our results suggest that economic literacy has little influence on policy views. While economic literacy among our respondents is correlated with sex, age, race, education, and parental and occupational status, which is consistent with past studies of Americans' political knowledge and economic literacy, their views on government's role in the economy, government spending, government's responsibilities, and several contemporary public policies are not statistically significantly correlated with their economic literacy. Indeed, when considering FEL estimates, our primary finding is that economic literacy matters little, save for greater partisan divide in FEL estimates than in respondents' original responses.</p> <p>While the specific claim that more economically literate partisans are more divided is novel, Palfrey and Poole ([<reflink idref="bib20" id="ref54">20</reflink>]) previously found that politically better-informed voters are more ideologically extreme than less informed voters. More recently, Kahan et al. ([<reflink idref="bib16" id="ref55">16</reflink>]) perform an experiment where subjects had to draw causal inferences from empirical data presented as the results on a neutral (skin cream) or ideologically charged (gun control) topic. They find that numeracy is positively related to drawing the correct causal inference in the neutral frame, but that more numerate partisans are more polarized in their answers (and no more accurate than less numerate co-partisans) under the ideologically charged topic when the frame goes against their ideology. If partisan identity can lead people to use basic numeracy to protect that identity rather than absorb new information, it should not be surprising that economic literacy appears to be used in a similar way, but this conjecture merits further investigation.</p> <p>Of course, our findings may have issues of omitted variables or reverse causation, as argued by Fowler and Margolis ([<reflink idref="bib11" id="ref56">11</reflink>]) in their experimental treatment of political information provision on U.S. vote choice. 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Our research was reviewed as "Exempt/Expedited" and approved by the Institutional Review Board of California State University Channel Islands, Study Number IO5580.</bibtext> </blist> <blist> <bibtext> As discussed below, we adopt this approach.</bibtext> </blist> <blist> <bibtext> Economists have also examined the role institutional-specific knowledge plays in policy views. For example, Hayat and Farvaque ([14]) find that European residents with greater knowledge of the European Union are more likely to support European Central Bank independence.</bibtext> </blist> <blist> <bibtext> Centiment recruits and maintains a panel of paid survey respondents across many countries. It adjusts survey availability to its subject pool throughout data collection to provide an as-representative-as-possible sample of U.S. adults along demographic (race/ethnicity, age, and sex) lines. As such, we apply no weights to the respondents, nor do we cluster standard errors.</bibtext> </blist> <blist> <bibtext> These results are available upon request.</bibtext> </blist> <blist> <bibtext> Not all respondents answered all policy questions—nonresponse on these items ranges from zero to 15 respondents. Restricting the sample to respondents who answered all questions does not substantially change our findings; results available upon request.</bibtext> </blist> <blist> <bibtext> This increases to 25 percent if we round to the nearest whole number and include respondents who answered four questions correctly.</bibtext> </blist> <blist> <bibtext> The coefficients on all education levels following high school are statistically significantly different from the coefficient on high school graduation. The coefficient for college graduates is statistically significantly different from that for those with some college, trade, or vocational training, or an associate degree. The coefficient for those completing a master's degree is statistically significantly different from the coefficient for those with an associate degree. We cannot reject the null hypothesis of equality of coefficients across all other pairwise educational comparisons. We thank an anonymous reviewer for inquiring about these differences; results of all tests are available upon request.</bibtext> </blist> <blist> <bibtext> We also perform the same regression on the first principal component of each set of questions. When we prespecified our analyses, we anticipated the possibility that more items from each individual topic would correlate with economic literacy, and, as such, it might be worthwhile to calculate the first principal component of each section to look for a core or underlying factor driving the relationship. This turned out not to be necessary.</bibtext> </blist> <blist> <bibtext> We use ordered probit here with all interaction terms, but not above, for two reasons. For table 4, we use OLS above to demonstrate whether there is a simple, linear conditional correlation between economic literacy and public policy views without having to deal with interaction effects. But for a comparison of estimated FEL policy views, it is more accurate to (a) allow the correlation between economic literacy and views to vary with respondent characteristics (i.e., allow for respondent heterogeneity) and (b) to constrain the estimated FEL policy views to the set of actual possible answers (which a fully interacted OLS model would not do).</bibtext> </blist> <blist> <bibtext> We did not include this analysis in our pre-registered analysis plan.</bibtext> </blist> <blist> <bibtext> Despite polarization among party leaders, this is not an unusual finding: the Program for Public Consultation at the University of Maryland reports that, in deliberative surveys of several tens of thousands of U.S. residents over five years, Republicans and Democrats jointly supported over two-thirds of the 150 proposals discussed by margins of 60 percent or more (Program for Public Consultation [21]).</bibtext> </blist> <blist> <bibtext> We discussed this idea in our pre-analysis plan but did not include it at the time due to financial constraints.</bibtext> </blist> <blist> <bibtext> See Geide-Stevenson and Perez ([12]) for additional survey results on professional economists' public policy views.</bibtext> </blist> <blist> <bibtext> Becker, Walstad, and Watts ([5]), in a comparison of economists' views to those of economic educators, other educators, and journalists, offer an alternative approach to comparing economists' views to laypeople's and examine the distribution of responses between economists and others. They find that there is considerable consensus among economists, in particular on questions of policy means or tools, and that teachers of economics agree with economists to a greater extent than journalists and other educators.</bibtext> </blist> </ref> <aug> <p>By Jared Barton and Cortney Rodet</p> <p>Reported by Author; Author</p> </aug> <nolink nlid="nl1" bibid="bib22" firstref="ref1"></nolink> <nolink nlid="nl2" bibid="bib30" firstref="ref3"></nolink> <nolink nlid="nl3" bibid="bib10" firstref="ref4"></nolink> <nolink nlid="nl4" bibid="bib17" firstref="ref13"></nolink> <nolink nlid="nl5" bibid="bib23" firstref="ref16"></nolink> <nolink nlid="nl6" bibid="bib32" firstref="ref18"></nolink> <nolink nlid="nl7" bibid="bib31" firstref="ref19"></nolink> <nolink nlid="nl8" bibid="bib28" firstref="ref20"></nolink> <nolink nlid="nl9" bibid="bib26" firstref="ref21"></nolink> <nolink nlid="nl10" bibid="bib29" firstref="ref22"></nolink> <nolink nlid="nl11" bibid="bib13" firstref="ref23"></nolink> <nolink nlid="nl12" bibid="bib19" firstref="ref24"></nolink> <nolink nlid="nl13" bibid="bib25" firstref="ref26"></nolink> <nolink nlid="nl14" bibid="bib24" firstref="ref28"></nolink> <nolink nlid="nl15" bibid="bib15" firstref="ref33"></nolink> <nolink nlid="nl16" bibid="bib27" firstref="ref39"></nolink> <nolink nlid="nl17" bibid="bib11" firstref="ref46"></nolink> <nolink nlid="nl18" bibid="bib12" firstref="ref47"></nolink> <nolink nlid="nl19" bibid="bib14" firstref="ref49"></nolink> <nolink nlid="nl20" bibid="bib18" firstref="ref51"></nolink> <nolink nlid="nl21" bibid="bib20" firstref="ref54"></nolink> <nolink nlid="nl22" bibid="bib16" firstref="ref55"></nolink>
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Items – Name: Title
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  Group: Ti
  Data: Economic Literacy and Public Policy Views
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  Label: Language
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  Data: English
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  Data: <searchLink fieldCode="AR" term="%22Jared+Barton%22">Jared Barton</searchLink> (ORCID <externalLink term="https://orcid.org/0000-0001-9327-6492">0000-0001-9327-6492</externalLink>)<br /><searchLink fieldCode="AR" term="%22Cortney+Rodet%22">Cortney Rodet</searchLink>
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  Data: <searchLink fieldCode="SO" term="%22Journal+of+Economic+Education%22"><i>Journal of Economic Education</i></searchLink>. 2025 56(4):290-305.
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  Data: Routledge. Available from: Taylor & Francis, Ltd. 530 Walnut Street Suite 850, Philadelphia, PA 19106. Tel: 800-354-1420; Tel: 215-625-8900; Fax: 215-207-0050; Web site: http://www.tandf.co.uk/journals
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  Data: 16
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  Label: Publication Date
  Group: Date
  Data: 2025
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  Data: Journal Articles<br />Reports - Evaluative
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  Data: <searchLink fieldCode="DE" term="%22Economics%22">Economics</searchLink><br /><searchLink fieldCode="DE" term="%22Public+Policy%22">Public Policy</searchLink><br /><searchLink fieldCode="DE" term="%22Attitudes%22">Attitudes</searchLink><br /><searchLink fieldCode="DE" term="%22Gender+Differences%22">Gender Differences</searchLink><br /><searchLink fieldCode="DE" term="%22Racial+Differences%22">Racial Differences</searchLink><br /><searchLink fieldCode="DE" term="%22Educational+Attainment%22">Educational Attainment</searchLink><br /><searchLink fieldCode="DE" term="%22Political+Affiliation%22">Political Affiliation</searchLink><br /><searchLink fieldCode="DE" term="%22Expertise%22">Expertise</searchLink><br /><searchLink fieldCode="DE" term="%22Lay+People%22">Lay People</searchLink>
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  Label: Geographic Terms
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  Data: <searchLink fieldCode="DE" term="%22United+States%22">United States</searchLink>
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  Data: <searchLink fieldCode="SU" term="%22Test+of+Economic+Literacy%22">Test of Economic Literacy</searchLink>
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  Data: 10.1080/00220485.2025.2518155
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  Data: 0022-0485<br />2152-4068
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  Label: Abstract
  Group: Ab
  Data: The authors measure economic literacy among a representative sample of U.S. residents, explore demographic correlates with the measure, and examine how respondents' policy views correlate with it. They then analyze policy view differences among Republicans and Democrats and among economists and non-economists. They find significant differences in economic literacy by sex, race/ethnicity, and education, but little evidence that respondents' policy views relate to their level of economic literacy. Examining heterogeneity by political party, they find that estimated fully economically literate policy views (i.e., predicted views as if respondents scored perfectly on the authors' economic literacy assessment) for Democrats and Republicans are farther apart than respondents' original views. Greater economic literacy among general survey respondents also does not result in thinking like an economist on policy.
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  Data: 2025
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        Value: 10.1080/00220485.2025.2518155
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      – Text: English
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        PageCount: 16
        StartPage: 290
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      – SubjectFull: Public Policy
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      – SubjectFull: Attitudes
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      – SubjectFull: Gender Differences
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      – SubjectFull: Racial Differences
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      – SubjectFull: Educational Attainment
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      – SubjectFull: Test of Economic Literacy
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      – TitleFull: Economic Literacy and Public Policy Views
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            NameFull: Jared Barton
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            NameFull: Cortney Rodet
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              Y: 2025
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