Misconceptions

This map comparing the size of Africa to various nations has been making the rounds. It's a nice piece of work to be sure.

The first thing I think of when I see these sorts of "OMG! Americans are so misinformed about [this thing I think is important]!" is "Yeah, true. They're also misinformed about most other important things." For instance:

Marginal Revolution | Alex Tabarrok | Economic Misconceptions

Students typically come to an economics class with many misconceptions, not just random errors but systematic biases (see especially Caplan 2002).

Bill Goffe recently (2009) surveyed [pdf] one of his macro principles classes and found, for example, that the median student believes that 35% of workers earn the minimum wage and a substantial fraction think that a majority of workers earn the minimum wage (Actual rate in 2007: 2.3% of hourly-paid workers and a smaller share of all workers earn the minimum wage, rates are probably somewhat higher today since the min. wage has risen and wages have not).

When asked about profits as a percentage of sales the median student guessed 30% (actual rate, closer to 4%).

When asked about the inflation rate over the last year (survey was in 2009) the median student guessed 11%. Actual rate: much closer to 0%. Note, how important such misconceptions could be to policy.

When asked by how much has income per person in the United States changed since 1950 (after adjusting for inflation) the median student said an increase of 25%. Actual rate an increase of about 248%, thus the median student was off by a factor of 10.

I would add that there are also theoretical misconceptions that are probably even more important than factual misconceptions.

Note that these are people who are interested enough in this matters to sign up for econ courses in the first place. I would imagine the misinformation would be even worse amongst people who don't bother to take econ. I would be interested to know if there is a difference between non-econ taking college students and people of the same age who do not attend ocllege. Also, how do people answer these question at the end of their semester? And how do they do a year or ten years later? My guess is that 45 year olds who took 6 credits of econ do almost as badly.

To take us back to the landmass thing, note the stat in in the text on the left that says the most common answer American students gave to "How big is America?" is "The largest country in the world."  There's a similar situation with population.  My teachers must have known about this back in the 90's because the fact that America is not the biggest or most populous country in the world has been drilled into my cohort so thoroughly that many people I have talked to think that the US is much, much smaller than it really is.  I've heard many well-educated friends say that America is about "average" in size and population.  For the record, it's fourth in size and third in population.  Not that I think either of those things are particularly important.