Universität zu Köln

How Economic Laypeople Perceive Economic Growth and Inflation

Christandl, Fabian (2008) How Economic Laypeople Perceive Economic Growth and Inflation. PhD thesis, Universität zu Köln.

[img]
Preview
PDF
Download (472Kb) | Preview

    Abstract

    The present dissertation focuses on biases in the perception of the economy and the stability of peoples� concepts on the economy. In Chapter 2, in a series of four experiments, the accuracy of economic laypeoples� and experts� estimations of economic growth in the long run, what influences the accuracy of their estimations, and which procedures they use were examined. It was found that, for growth rates higher than 1%, the true values were clearly underestimated. The estimations became slightly better when the task was presented in a financial investment scenario. The effect of underestimation was lower for experts compared to laypeople. There was no effect of incentives on the accuracy of the estimations; however, a positive influence of the need for cognition was observed. Male participants provided more accurate estimations than female participants. The common application of different and inappropriate solution procedures accounted for the underestimations. In Chapter 3, using the framework of the Theory of Lay Epistemics, 156 replies to a newspaper article which contradicted the belief that the introduction of the euro was inflationary were content analyzed. As a consequence of the need for cognitive closure 5 different reactions were expected to occur which promote high Perceived Inflation despite counterpersuasive evidence. As expected, the reactions Two-sided Examples and Two-sided Arguments appeared less frequently, Self-centeredness, Emotionality and Discrediting of Statistics more frequently, when subjects were convinced that the introduction of the euro was inflationary. Three clusters of replies were identified, which differed in their pattern of argumentation. It is suggested that lay beliefs on the economy remain stable over time, even in the light of counterpersuasive evidence from a credible source with a high level of expertise. Chapter 4 examined the confirmation bias in a real-world setting, using the example of a value-added tax increase in Germany at the beginning of 2007. Using a within-subjects desing, two surveys were carried out two months before and after the value-added tax increase, where N = 307 participants had to judge the actual, prospective and past prices for eight products. In the first survey, no significant difference for the expected price increases between the products affected (M = 10.14%, SD = 8.41) and not affected by the tax increase (M = 10.42%, SD = 10.31) was observed. In the second survey, again no significant difference for the preceived price increases between the affected (M = 5.00%, SD = 9.14) and the non affected products (M = 5.49%, SD = 7.06) was observed. The results indicate that the real price development was not considered and argue in favour of a top-down approach of the confirmation bias in a real-world setting, which is mainly based on expectations. In Chapter 5, practical and theoretical implications of the previous findings are discussed.

    Item Type: Thesis (PhD thesis)
    Creators:
    CreatorsEmail
    Christandl, Fabianfabian.christandl@uni-koeln.de
    URN: urn:nbn:de:hbz:38-24081
    Subjects: Economics
    Uncontrolled Keywords:
    KeywordsLanguage
    Wirtschaftswachstum , gefühlte Inflation , Biases , LaienwahrnehmungGerman
    economic growth , perceived inflation , biases , lay perceptionEnglish
    Faculty: Wirtschafts- u. Sozialwissenschaftliche Fakultät
    Divisions: Wirtschafts- u. Sozialwissenschaftliche Fakultät > Institut für Wirtschafts- und Sozialpsychologie
    Language: English
    Date: 2008
    Date Type: Completion
    Date of oral exam: 17 July 2008
    Full Text Status: Public
    Date Deposited: 01 Aug 2008 10:35:13
    Referee
    NameAcademic Title
    Fetchenhauer, DetlefProf. Dr.
    URI: http://kups.ub.uni-koeln.de/id/eprint/2408

    Actions (login required)

    View Item