Economists have long been aware of voters’ rational ignorance. But the beliefs of many voters seem anomalous even taking their severe ignorance into account. Voters frequently have systematic biases rather than random errors. They underestimate the economic benefits of free trade, overestimate the percentage of the budget spent on welfare, and misinterpret low economic growth as absolute economic decline (Caplan, 2002; National Survey of Public Knowledge of Welfare Reform and the Federal Budget, 1995; Survey of Americans and Economists on the Economy, 1996). From a rational expectations standpoint, such systematic errors are by definition a sign of “irrationality” rather than ignorance. Even on less restrictive cognitive assumptions, the further beliefs diverge from the truth, the harder it becomes to interpret them as honest mistakes.
KeywordsPublic Choice Irrational Belief Kaiser Family Foundation True Believer Rational Ignorance
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