That the general public understands very little economics is a claim with which most economists would not disagree. Several studies show that the American people do not hold the same views as economists on many economic issues (Blendon et al. 1997; Caplan 2002; Sapienza and Zingales 2013). The reasons for why the general public seems to disagree with economists could be complicated. Studies which have investigated the reasons for this discrepancy reach seemingly different conclusions. Sapienza and Zingales (2013) conclude that Americans hold different views than economists because they are less willing to believe the assumptions upon which economists’ conclusions are based. The surveys used in their study consisted of questions which required the implicit use of some economic model or theory to arrive at an opinion. Therefore, the differences in the views elicited could be attributed to different models or different assumptions that each group was using. Caplan (2002) and Blendon et al. (1997) studied the results of a different series of surveys which asked economists and the general public several factual questions. Included on the surveys were such questions as, whether the unemployment rate had decreased in recent years, or whether the inflation rate had decreased. On these factual questions as well, Americans displayed a more pessimistic outlook than economists. Blendon et al. (1997) suggest several different explanations for the observed discrepancies between the views of the public and that of economists. Using data from supplements to the survey, they suggest that the public’s mistrust of official statistics,¹ or the tendency to rely on personal experience rather than official statistics, or bias induced by media stories which tend to focus more on bad news than good, might be some reasons for the discrepancy. Other economists and non-economists suggested that self-serving, or ideological biases of economists might be to blame for the differences in views. Caplan (2002) using data from the same survey investigates whether controlling for any self-serving bias or ideological bias among the surveyed economists would reduce the gap in the views of the two groups. Caplan concludes that biases of economists (whether self-serving or ideological) cannot explain the differences in views, and finds that higher levels of education seemed to bring the general public closer to economists’ views, but not close enough to eliminate the gap. Whether these results mean that economists’ views are more accurate than the public’s or vice versa is a different question. It cannot be denied, however, that these findings call for better communication with the public. If Sapienza and Zingales (2013) are correct and people hold different views because they disagree with our assumptions, then we do not seem to be successfully carrying the burden of persuading the public about the value of our methods, theories, and assumptions. If Caplan (2002) is correct and the differences are due to the public’s poor knowledge, or their cognitive biases, or their poor education, then too we are not doing our part in educating the public. Similar results are obtained from the many studies on financial literacy of the general public. Lusardi and Mitchell (2014) provide an excellent review of the literature on financial literacy and its importance for economic outcomes.

Are we more successful in communicating the scientific, philosophical, and ideological reasons for our strongly held beliefs to the students who take our courses? What is the evidence on the amount of learning that occurs in undergraduate economics courses? Much of the evidence that we have is based on standardized tests of economic literacy. Empirical studies of student learning have shown that college courses in economics do very little to enhance the economics knowledge of students (Walstad and Allgood 1999). Data from two sources, a Gallup poll on basic knowledge about the economy and a standardized test of more formal knowledge of economic models and theories, were used. The study shows that students who took college level economics courses answered more questions correctly on the Gallup poll (the Gallup poll included factual questions about who sets monetary policy, and so on) than those who did not take an economics course. But the average score of those who took economics courses was only about 60 percent. On the standardized field test of formal models and theories, college seniors who had taken one or more economics courses did not score much higher than seniors who did not take any economics courses. Similar results are obtained from other standardized tests, like the Test of Understanding in College Economics (TUCE) as well. While the shortcomings of standardized tests as measures of real learning are well known, the questions on these tests are not very different from the questions that students might see on typical college economics exams. It is also likely that the deep learning that we would like to see in our students requires foundational knowledge of the models and theories tested on these exams. If students are unable to answer questions that are based on the models and theories, they would probably also be unlikely to competently apply the models and theories to real-world problems.

If the reader is, at this point, tempted to dismiss the evidence of poor learning as mostly an undergraduate level phenomenon, or tempted to attribute it to unmotivated or under-prepared students, there is some evidence to consider on graduate students and successful PhDs.