Are Economically Literate Americans More Right-Wing?

Who’s more economically literate: the Left or the Right? On the one hand, Right-wing parties tend to put more emphasis on economic growth in their rhetoric and policy platforms. They claim to prioritise ‘growing the size of the pie’ rather than simply redistributing income. And they often accuse their opponents of being ‘socialists’ or even ‘communists’.

On the other hand, most academic economists actually vote for centrist or Left-wing parties. (Though you have to remember that practically all academic disciplines lean Left, and economics is one of the least Left-leaning.)

In a recent paper, Jared Barton and Cortney Rodet sought to address the question more systematically. They gave a representative sample of Americans a test of economic literacy, and then looked at whether Democrats or Republicans scored higher. They also examined whether respondents’ economic literacy scores were correlated with their views on specific policies.

The authors’ test of economic literacy was based on the Test of Economic Literacy, a high-school assessment developed by the Council for Economic Education. The full test has dozens of questions, but they selected 15 due to the constraints of an online survey. All the questions are multiple choice.

For example, Barton and Rodet’s test included the question, “From an economic point of view, which approach to controlling pollution is most efficient?” The correct answer is, “Reduce pollution as long as the additional benefits are greater than the additional costs.” The incorrect answers are: “Abolish the use of toxic chemicals in all production”, “Use economic resources to eliminate all pollution” and “Adopt laws and regulations that prohibit economic activities that cause pollution problems”.

So what did they find? Average scores for different groups are shown in the table below. (Recall that the test has 15 items, so a score of 8 means getting more than half the questions right.)

Men scored higher than women, the old scored higher than the young, the wealthy scored higher than the poor, whites scored higher than non-whites, and those with more education scored higher than those with less. What about Democrats and Republicans? Looking at the last three rows in the table, we can see that Republicans scored about a point higher than Democrats.

When the authors ran a multivariate model of economic literacy, thereby estimating the independent effect of each characteristic, the difference between Republicans and Democrats remained statistically significant — though it was reduced to about 0.6 points.

Despite this finding, Barton and Rodet found that respondents’ economic literacy scores had generally weak associations with their views on specific policies. For example, those with higher scores were no more likely to oppose government jobs programmes or to favour less regulation of business.

In fact, across 30 specific policies, there were only four that showed significant associations with economic literacy. Respondents with higher scores were more likely to oppose government efforts to control prices and reduce income differences. And they were more likely to say government should spend less on the military and the arts. Yet even these associations were weak.

Note that all the associations with specific policies were estimated in a multivariate model that controlled for the demographic characteristics shown above. The unconditional associations may have been slightly stronger — though these are not reported in the paper.

Overall then, Republicans do seem to be more economically literate than Democrats, even when controlling for race. However, there is no strong tendency for economically literate Americans to favour libertarian or laissez-faire policies. Boosting economic literacy would not substantially help the Right.