Helping Economists Get Better

New research from Kenya, soon to be published, shows the remarkable extent to which savings group members keep forming new groups, mostly because they want to share a good thing with their family and friends. They aren’t paid for doing this.

“Ah,” some will argue, “But people who form groups ought to be paid.” 

Huh? This rejection of volunteerism befuddles me. I just saw  a precis of some new research that shines more light on this (thanks to the Harvard Business Review):

Econ Courses Make Students Less Generous

College economics courses have the effect of making non-econ majors less generous, at least toward nonprofits. Taking introductory microeconomics reduces a nonmajor’s likelihood of donating to specific nonprofits by 2 percentage points, and an intermediate course reduces the likelihood by 3.7 to 7.9 percentage points, according to Yoram Bauman and Elaina Rose of the University of Washington. It’s unclear whether this is the result of exposure to economics concepts, exposure to econ faculty and students, or some other cause, the researchers say.

Source: Selection or indoctrination: Why do economics students donate less than the rest?

That’s a useful insight, and helps me understand why some people continue to conceive of savings groups primarily as profit-maximizing investment vehicles. They also automatically assume that proportional distribution is “right” because it somewhat mirrors banker practice, and that trainers “ought to be” paid for training, perhaps because they are paid for training. If you’re in this category, I understand that you have come down with a case of economists’ world view. I’m sorry. I will continue to work, lovingly and patiently, to help you get better. 

(Interested readers can read what the philosopher David Hume said about “ought” - he couldn’t understand how we move so suddenly from “is” to “ought”. But that’s another discussion.)

Reader Comments (1)

Paul -

Thought-provoking post. I do wonder if students are donating less because their professors taught them that charities were inefficient (which they often are) or perhaps that instead of delegating charitable intent to an institution, the students should go out and perform acts of charity themselves. If this is in fact what teachers are teaching, maybe that's a good thing.

But you make a good point. All too often our analysis is reduction ad absurdum. We reduce things to their economic costs and benefits missing the real point along the way.

Mon, December 5, 2011 | Kim Wilson