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With Stephan Meier


Economic Inquiry 2003, title and abstract:

"Are political economists selfish and indoctrinated? Evidence from a natural experiment", 41(3), 448–62 DOI: 10.1093/ei/cbg020

“Most professional economists believe that economists in general are more selfish than other people and that this increased selfishness is due to economics education. This article offers empirical evidence against this widely held belief Using a unique data set about giving behavior in connection with two social funds at the University of Zurich, it is shown that economics education does not make people act more selfishly. Rather, this natural experiment suggests that the particular behavior of economists can be explained by a selection effect.”


International Journal of the Economics of Business 2004 (does cite EI), title and abstract:

"Do Business Students Make Good Citizens?", 11(2), 141-163 DOI: 10.1080/1357151042000222492

“Business students are often portrayed as behaving too egoistically. The critics call for more social responsibility and good citizenship behavior by business students. We present evidence of pro-social behavior of business students. With a large panel data set for real-life behavior at the University ofzurich, two specific hypotheses are tested: do selfish students select into business studies or does the training in business studies negatively indoctrinate students? The evidence points to a selection effect. Business education does not seem to change the citizenship behavior of business students.”


European Journal of Law and Economics 2005 (does not cite the other papers), title and abstract:

"Selfish and Indoctrinated Economists", 19(2), 165-171.DOI: 10.1007/s10657-005-5425-8

“Many people believe that economists in general are more selfish than other people and that this greater selfishness is due to economics education. This paper offers empirical evidence against this widely held belief. Using a unique data set on giving behaviour in connection with two social funds at the University of Zurich, it is shown that economics education does not make people act more selfishly. Rather, this natural experiment suggests that the particular behaviour of economists can be explained by a selection effect.”

comparison EI 2003/EJLE 2005:

Economic science is constantly being accused of having a blind spot. It is said that, compared to efficiency, equity is not given its just weight in the education of economists. Moreover, it is argued that the Homo econom- icus is too narrowly defined and that it does not explain the behavior of human beings accurately. According to the critics, the consequences of this oversimplified view of human behavior is that the students of econom- ics act in a more selfish way than students of other social sciences.1 Economists create the type of selfish persons (the Homo economicus) they axiomatically assume in their theories. Many people believe that economists in general are more selfish than other people and that this greater selfishness is due to economics education. This paper offers empirical evidence against this widely held belief. Using a unique data set on giving behaviour in connection with two social funds at the University of Zurich, it is shown that economics education does not make people act more selfishly. Rather, this natural experiment suggests that the particular behaviour of economists can be explained by a selection effect.
In contrast, we use a unique and extremely large data set (more than observations) to study the behavior of economics students in a natural setting. We use a large data set of more than 96,500 observations to study the behaviour of economics students in a natural setting .
Each semester, all the students at the University of Zurich have to decide of whether or not they want to contribute to two official social fundsÐin addition to paying the com- pulsory tuition fee. On the official letter for renewing their registration, the students are asked whether they want to voluntarily give a specific sum of money (CHF7, about US$4.20) to a fund that offers cheap loans to needy students (Loan Fund) and/or a specific sum of money (CHF5, about US$3) to a second und supporting foreigners who study at the University of Zurich (Foreigner Fund). […] Our data refers to the decisions made in the five semesters from the winter semester 1998/99 up to and including the winter semester 2000/2001. The fact that every student of the University of Zurich has to decide each semester if he or she is willing to contribute to one or both of the social funds generates a large number of observa- tions. We examine the choices of 28,586 stu- dents who decide an average of 3.4 times, depending on the number of semesters they have attended. The decisions of the five seme- sters are pooled, which yields 96,783 observa- tions. Each semester, students at the University of Zurich have to decide whether they want to contribute to two official social funds, in addition to paying the compulsory tuition fee. On the official letter for renewing their registration, the students are asked whether they want to voluntarily donate CHF 7.– (about US$ 4.20) to a fund which offers cheap loans to needy students and/or CHF 5.– (about US$ 3) to a second fund supporting foreigners who study at the University of Zurich. Our data take into account the decisions of 28,586 students over a period of five semesters (winter semester 1998/99 up to and including the winter semester 2000/2001). The students decide an average 3.4 times (depending on the number of semesters attended), generating a total of 96,783 observations.
To distinguish between the selection and the indoctrination hypothesis, we need to take a closer look at the choice of whether contribute or not when first starting university (Freshmen). Differences between students of various disciplines at the very beginning of their studies (before they've been to a single lecture in economics) support the selection hypothesis. To distinguish between the selection and the indoctrination hypothesis, we look at the decision of whether to contribute or not to a social fund when first starting university (freshmen ). Differences between students of various disciplines at the very beginning of their studies (without having been to a single lecture in economics) support the selection hypothesis.
The first part of model I of Table 2 suggests that a selection effect exists. Economists in the broad sense (students cannot choose between business and political economics until they reach the main stage of their studies) donate less to the funds compared to noneconomists. The probability that an economist contributes is about 3 percentage points less than for a noneconomist. To show that this lower wil- lingness to contribute exists at the very begin- ning of the studies, the variable for economists has to be interpreted along with ``being a freshman in economics ( Freshman * Economist). The results suggest that already when the very first choice is made whether to contribute or not (it happens before the first lecture in economics), economics students act more selfishly than noneconomists do. The first part of Table 2 suggests that a selection effect indeed exists. Students of economics in the broad sense (students cannot choose between business and political economics until they reach the main stage of their studies) donate less to the funds compared to non-economics students. The probability that an economist contributes to one or both of the funds is about 3 percentage points less than for a non-economist. To show that this lower willingness to contribute exists at the very beginning of the studies, the variable for economists has to be interpreted along with “being a freshman in economics” (freshman economist ). The results suggest that already when the very first decision is made whether to contribute or not (it happens before the first lecture in economics), economics students act more selfishly than non-economists do.
The more the students of economics learn about the prisoner's dilemma game, the more aware they are that cooperation should tend toward the Nash equilibrium, that is, toward no contribution. For students who are not familiar with economic theory, such a decline in cooperation is not expected to take place. If the difference in giving behavior between thestudents of economics and the other disciplines increases with every additional semester, the indoctrination hypothesis is not rejected. To capture specific knowledge in economics, we compare the behavior of the students at each stage of their studies. The reference group consists of noneconomists in the basic stage of their studies. The results of model I in Table 2 provide an inconsistent picture with respect to the indoctrination effect: Moving from the basic stage to the main stage of uni- versity education raises students' readiness to help other students financially by 4.0 percen- tage points. The coefficient on the dummy for Main stage * Economist measures the differ- ences between economists and noneconomists when entering the main stage of their studies,and hence serves as a test for possible indoctrination effects. For economics students entering the main stage of their studies, the probability of contributing to the fund is reduced by 6.9 percentage pointsÐin addition to the general effect for entering the main stage of their studies. But this result does not neces- sarily indicate the impact of indoctrination, because the probability of contributing increases for doctoral students in economics, whereas for doctoral students in other disci- plines the willingness to donate decreases. If indoctrination really influences the behavior of students, the effect should be most marked at the doctoral level, when the students have absorbed the largest amount of economics teaching. The more students of economics learn about the Prisoner’s Dilemma Game, the more they become aware that it is “rational” not to contribute. For students not familiar with economic theory, such a decline in cooperation should not take place. If the difference in giving behaviour between the students of economics and the other disciplines increases with each additional semester, the indoctrination hypothesis is not rejected. In order to capture specific knowledge in economics, we compare the behaviour of the students at each stage of their studies. The reference group consists of non-economists in the basic stage of their studies. The results in Table 2 provide an inconsistent picture with respect to the indoctrination effect: Moving from the basic stage to the main stage of University education raises students’ readiness to help other students financially by 4.0 percentage points. The coefficient on the dummy for Main stage Economist measures the differences between economists and non-economists when entering the main stage, and hence serves as a test for possible indoctrination effects. For economics students entering the main stage of their studies, the probability of contributing to the fund is reduced by 6.9 percentage points—in addition to the general effect for entering the main stage. But this result does not necessarily indicate the impact of indoctrination, because the probability of contributing increases for doctoral students in economics, while the willingness to donate decreases for doctoral students in other disciplines. If indoctrination really influences the behaviour of students, the effect should be strongest at the doctoral level, where the students have absorbed the largest amount of economics teaching.
Students in the main stage of their studies represent a particular selection of people compared to students in the basic stage because a large proportion of students do not pass the exam enabling them to enter the main stage. The same argument can be raised with respect to doctoral students, who certainly differ in many respects from students working only for their master's degree. Compared to students in the basic stage, students in the main stage of their studies may possibly reflect the selection process that has taken place because a high number of students do not pass the exam enabling them to enter the main stage. The same argument can be raised with respect to Ph.D. students, who certainly differ in many respects from students working only for their Masters Degree.
Table 4 focuses on the differences in contributing to the fund between the two types of students of the economic sciences; political economists on the one hand, and business economists on the other hand. Students are allowed to choose between the two economics majors only when they enter the main stage of their studies, that is, after they pass the exams concluding the basic stage of their studies (after approximately two years). Most prior studies (e.g., Frank et al., 1993, and Carter and Irons, 1991) concentrate exclusively on political economists. The analysis presented here allows us to distinguish between political economics students and those who study business economics. Table 3 focuses on the differences in contributing to the funds between the two types of students of the economic sciences, between “political economists” on the one hand and “business economists” on the other hand. Students are allowed to choose between the two economics majors only when entering the main stage of their studies, i.e. after they pass the exams concluding the basic stage of their studies (after approximately two years). Most prior studies (e.g., Carter and Irons, 1991) have concentrated exclusively on political economists. The analysis presented here allows us to distinguish between the different types of economics students and include those who study business economics.
The effect of political economists entering the main stage (Main stage * Political Economist) is positive. Thus, political econo- mists even get less selfish compared to noneco- nomists, but this effect is not statistically significant. In contrast, the probability of business students contributing to the social funds isÐin addition to the general effectÐ over 7 percentage points lower in the main stage than in the basic stage. The results do not support the effect of education in econom- ics, because political economists do not show any (statistically significant) behavioral differ- ences from noneconomics students. But weÐas well asprior studiesÐareprimarily interested in the behavior of political economists, because theylearneconomictheorythemostintensively. Thus, any alleged indoctrination effect should be the greatest in this group. Again we run a conditional fixed-effect logit model (model II in Table 4) to control for unobserved heteroge- neity. The results support the conclusion that economics education does not have a negative impacton the willingness tocontribute. None of variables testing the indoctrination effect has the right sign or is statistically significant. The effect of political economists entering the main stage (Main stage Political Economist ) is positive. Thus, the differences between economists and non-economists even decreases, but this effect is not statistically significant. In contrast, the probability of business students contributing to the social funds is—in addition to the general effect—over 7 percentage points lower in the main stage than in the basic study. The results do not support the effect of education in economics, because political economists do not show any (statistically significant) behavioural differences from non-economics students. But the paper—as well as prior studies—is primarily interested in the behaviour of political economists because they study economic theory most intensively. Thus, an alleged indoctrination effect should be the greatest in this group. Again we ran a conditional fixed-effect logit model (model II in Table 3) to control for unobserved heterogeneity. The results support the conclusion that economics education does not have a negative impact on the willingness to contribute.
As already mentioned, students can only choose between studying political or business economics only after the initial two years, and we therefore do not know if the general effect of Economist (in the widest sense) is to be attri- buted to political or business economists. But the five semesters enable us to observe how students who later chose to study either poli- tical or business economics behaved in the basic stage of their studies. The raw data is already convincing: Among business economists, whose behavior we know in the basic stage, 61% donated money to at least one fund. In contrast, 73% of political economists contri- buted in the basic stage to at least one fund. This suggests that the selection effect identified is almost entirely due to business students. As students can only choose between studying political or business economics after the initial 2 years, we do not know if the general effect of Economist (in the widest sense) has to be attributed to political or business economists. But the five semesters enable us to observe how students, who later chose to study either political or business economics, behaved in their basic study. The raw data is already convincing: among business economists, whose behaviour we know from the basic study, 61 percent donated money to at least one fund. In contrast, 73 percent of political economists contributed in the basic stage to at least one fund. This suggests that the selection effect identified is almost entirely due to business students.
V. Conclusions
The analysis of the actual behavior of the students with respect to donating money to a fund as a pure public good, as well as an online survey of the same population, allows us to draw three conclusions:
1. Political economists' willingness to donate money does not diminish by studying economic theory;
2. It is the students of business economics who give significantly less than other students;
3. The lower contribution of business economists, compared to other students, is due to self-selection rather than indoctrination.
Conclusions
The analysis of the actual behaviour of the students with respect to donating money to a fund as a pure public good allows us to draw three conclusions:
(i) Political economists’ willingness to donate money does not diminish by studying economic theory;
(ii) The students of business economics give significantly less than other students;
(iii) The lower contribution of business economists, compared to other students, is due to self-selection rather than indoctrination.
The conclusions drawn are important for two quite different reasons:
- Political economists need not fear that they have a negative effect on students' behavior with respect to altruistic giving. The students, in particular the graduates studying for a doctoral degree, understand that political economics does not offer any normative advice with respect to giving.
- The charge often made against political economists, that they produce the type of selfish Homo economicus they assume in their theories, is unfounded.
The conclusions are important for two quite different reasons:
– Political economists need not fear that they have a negative effect on students’ behaviour with respect to altruistic giving. The students and, in particular, the graduates studying for a doctoral degree, well understand that political economics does not offer any normative advice with respect to giving.
– The charge often made against political economists, that they produce the type of selfish homo oeconomicus they assume in their theories, is therefore unfounded.

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