Should studying economics come with a health warning!!?

Many of you reading the articles on this website will be just about to start, or will have just started, studying economics at university. For some of you this will involve building on the knowledge you obtained prior to university, whereas for others it will be the first time you have ever studied the subject before. Will studying economics change the way you behave? Should it come with a health warning?

Can studying economics change the way you think and behave? The subject is often sold to prospective students on the grounds that it can. For example it is stated on the Economics Network’s Why Study Economics? website that

The economic way of thinking can help us make better choices

However, is it possible that studying economics could change people’s behaviour in a way that would be to the detriment of society? Some observers have argued that it can. They have suggested that students might be influenced by some of the assumptions that are made in traditional economic theory.

As social scientists, economists are always trying to analyse human behaviour. However, people vary in many different ways and have very diverse preferences. If we want to build a theory that predicts how people will behave and respond in different situations, then some type of simplifying assumptions are inevitable.

Traditionally one of the key simplifying assumptions that economists have used in their theories of human behaviour is that people make decisions in their own self-interest. There is some debate about exactly what self-interest means. For example it could be argued that giving £10 to charity is acting in your own self-interest if it gives you more pleasure than spending that £10 on yourself. However, in many of the economic theories that you first study in economics a narrow meaning of self-interest tends to be used. This is clearly illustrated by the following quote from Milgrom and Roberts. Referring to economic theory they state that:

It is often assumed that people behave as if they were entirely motivated by narrow, selfish concerns

It is important to make it clear that economists are not assuming that people behave in a selfish manner all of the time. Instead, they are assuming that the people in their theories are acting in a selfish manner. The value of making this assumption is whether the predictions about human behaviour that follow from using it are supported by evidence from the real world.

Some researchers have argued that when people study economic theory built on this assumption it makes them more likely to behave in a selfish way. The evidence for this comes from a range of research papers. Here are some findings:

Economics students were more likely than those studying other subjects to recommend the most expensive plumber to a student society if that plumber offered the student a side payment.

Students took part in an experiment in a computer room where they could either keep the money they had been given or donate it to a public good. On average the economics students kept more of the money.

Economics professors gave less money to charity than professors of other subjects such as psychology and sociology.

Some studies also found that selfish people were more likely to choose economics as a subject to study and became more selfish after they had studied it for some time.

If you are about to begin your study of economics then perhaps you should take care that your behaviour outside the classroom is not being unduly influenced by some of the assumptions you are learning about inside the classroom. On a more practical note perhaps you should avoid sharing a restaurant bill or buying rounds of drinks when in the company of other economists!!!

However on a brighter note, the evidence in these papers can be interpreted in a number of different ways. There are even some studies that found economics students were less selfish than those on other courses.

Re-Post: Does Studying Economics Make You Selfish? The Splintered Mind (21/11/12)
Does studying economics make you more selfish? BBC (22/10/13)
Does Studying Economics Breed Greed? Huffington Post (22/10/13)
The Dismal Education The New York Times (16/12/11)
Does Economics Make You a Bad Person? Conversable Economist (31/3/14)
Economists aren’t all bad FT Magazine (11/4/14)

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