On Policy, Fact Experts Ignore Facts

I teach Health Economics starting today, and every year I start with data assuring students that learning data will not change their health policy opinions.  Regarding health economics:

In a survey of 50 leading health economists, Fuchs (1996) found considerable disagreement regarding major issues of health policy.  The extent of disagreement was particularly striking when compared with the high level of agreement among the same economists about the determinants of health and the determinants of health expenditures.   Furthermore, the small disagreement that did exist regarding the positive questions seemed to play no role in explaining policy differences.  ….

Regarding labor and public economics, Fuchs, Krueger, and Poterba (1997) found

Only one of the 13 [policy] proposals (a 25 cent per gallon increase in the gasoline tax) elicited a strong consensus either in favor or in opposition.  … Economists, like experts in many fields, reveal considerable "overconfidence" in their estimates of the economic parameters.  For most questions, a large portion [typically 30-40%] of the individual [95%] confidence intervals do not include the average best estimate, or even include the value that is covered by the largest number of confidence intervals. … respondents whose best estimates are farther from the median tend to give wider confidence intervals for those estimates.

Fuchs et. al. estimated economists’ policy opinions from their opinions on factual economic parameters, their values, and their political party.  Political party was never (10%) significant.  For 65 labor economists, values were always (3%) significant, but parameters were (10%) significant only on eliminating affirmative action.   For 69 public economists’ opinions on five topics, values were always (2%) significant, and parameters were never (30%) significant.  On expanding IRAs both parameters and values were (3%) significant, on state education financing only parameters were (1%) significant, and on mandatory savings accounts neither were (10%) significant.   (The other topics were increase AFDC benefits, increase gasoline tax, adopt VAT, eliminate OASI Cap, increase minimum wage, eliminate job training, and increase unionization.)

While most economists think that the facts they spend years studying influence their policy positions, most policy opinions are apparently determined almost entirely by values.  Since it is obvious that facts are very relevant, this all makes me ashamed to be … human. 

Added: Bryan Caplan suggests that learning facts may change our values, thereby making our policy opinions fact-dependent.   This seems a slim hope to me, but I hope we can check it with data on how opinions change with time. 

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  • David J. Balan

    The first example seems to say that people really do agree on facts, but that these agreed facts don’t affect their policy positions. The second example seems to be that people don’t agree on facts, but that the facts that they believe to be true also don’t affect their policy positions. That seems a bit odd but OK.

    If we are prepared to take “values” as primitives (which in most cases is probably a bad idea but will work here), then it could easily be the case that some questions will depend more on values than on facts, and so the facts (whether agreed or not) will play little role in policy preferences. Beliefs about facts should predict policy preferences only in those cases where agreement on the facts would lead people of widely different values to the same policy conclusion. There certainly are such matters (just about everyone would agree that whether or not it is OK to sell a bottle full of liquid and marked “DRINK ME” should depend on whether the liquid is a poison). But the topics discussed in the post don’t seem to be of that variety. So I don’t really see how this is bias, and I certainly don’t see how it should generate shame in being human.

  • There was in fact considerable disagreement on facts in the health case. And it is not just a few questions where policy opinions depended more on values than facts; on almost all topics policy opinions depended not at all on facts. This includes the minimum wage, where I hit a nerve making a relevant fact claim here.

  • Paul Gowder

    Robin, don’t be ashamed! This result is only a problem if you believe economists (or people in general) are or should be consequentialists. Deontological moral theory is perfectly ok with values being a stronger determiner of policy choices than factual beliefs. It just means that, e.g., even if the economist believes that redistributive taxation will cause unemployment, (s)he believes that the act of making the wealthy responsible for a fairer share of the social safety net is right in a less-consequence sensitive fashion.

  • Paul, wanting to transfer from the wealthy to the poor is a consequentialist desire. Ignoring facts puts you at risk of favoring policies that seem to take accomplish this transfer, but in fact do not. For example many are fooled to think that employer-provided health care is provided by company executives and rich shareholders, instead of by employees and customers.

  • Carl Shulman

    Values predict policy preferences better than facts, but could changes in factual beliefs shift values, introducing some degree of fact-sensitivity indirectly? Time-series data might be illuminating.

  • Carl, more studies, including on time trends, would be welcome.

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  • Paul Gowder

    I don’t know that redistributive values are always consequentialist, or at least always strongly so. Suppose you think that a society where there are a large number of super-rich people is flatly bad independent of the level of the poorest people (i.e. because you think that super-rich people have the power to unfairly influence elections and that’s really, really bad). I suppose that’s a consequentialist belief, but it’s not really about maximizing social utility or anything — your beliefs about redistributive policies should rationally stay the same whether you believe that taking from the super-rich to give to the poor would be effective or just a deadweight loss.

    Also, if there was very low variance in the factual beliefs of the economists surveyed, it may be that this study doesn’t capture “ignoring the facts” at all. For example, if all economists believe that employer-provided health care shifts a *little* of the cost away from employees and customers (because of economies of scale (or believed in a narrow band of opinions close to this), because employers can’t perfectly pass through costs to customers, etc.), then, on those beliefs, both positions about whether employers should provide health care have consequences that reasonable people could defend. We’d expect to see variance in positions due to ideology. What we wouldn’t see is the change in positions as economists had different factual positions, because the n for the contrary factual position would be too small.

  • eric

    “No conqueror believes in chance”

  • Paul, there was substantial factual variance. As always, for details follow the link.