Update Dec 17 2011: The paper was eventually published in the Journal of Economic Behavior and Organization (79: 318-327, 2011) and featured in the NY Times (“The dismal education”, Dec 18 2011).
Elaina Rose and I have a new working paper out: Why are economics students more selfish than the rest?
The abstract: A substantial body of research suggests that economists are less generous than other professionals and that economics students are less generous than other students. We address this question using administrative data on donations to social programs by students at the University of Washington. Our data set allows us to track student donations and economics training over time in order to distinguish selection effects from indoctrination effects. We find that economics majors are less likely to donate than other students and that there is an indoctrination effect for non-majors but not for majors. Women majors and non-majors are less likely to contribute than comparable men.
Comments are welcome!
Hey Yoram,
Your paper touches a great subject. This week, with one of my teachers in the international affairs department at HEC Montreal, we talked about the differences in student cooperation in an international affair course versus a finance course (I am doing my Master Degree in International Affairs, specialization in Finance, therefore I have courses in both fields) and I told my teacher that I find finance students, on average, way more selfish versus the International Affair courses (i.e. sharing of class notes if you missed a course, cooperation to solve difficult questions, the overall vibe in the class, peoples’ openness to others Q&A intervention etc…). I personally feel that the share of knowledge and the overall vibe way more interesting in my non-finance courses…even if I love finance.
Your paper touches on an aspect that can be easily comparable to finance students (…well let’s face…economics and finance is very intertwined)
Good work…will it be publish?
Charles
Hey Yoram,
Your paper touches a great subject. This week, with one of my teachers in the international affairs department at HEC Montreal, we talked about the differences in student cooperation in an international affair course versus a finance course (I am doing my Master Degree in International Affairs, specialization in Finance, therefore I have courses in both fields) and I told my teacher that I find finance students, on average, way more selfish versus the International Affair courses (i.e. sharing of class notes if you missed a course, cooperation to solve difficult questions, the overall vibe in the class, peoples’ openness to others Q&A intervention etc…). I personally feel that the share of knowledge and the overall vibe way more interesting in my non-finance courses…even if I love finance.
Your paper touches on an aspect that can be easily comparable to finance students (…well let’s face…economics and finance is very intertwined)
Good work…will it be publish?
Charles
I’m struggling to see how whether students donate to either of two university-selected lobby groups is indicative of “generosity.” The paper seems to implicitly equate them, or maybe just assumes a strong correlation between the two. I don’t think the correlation can be rightly assumed. The data displays students’ revealed preferences only for these two groups, not charitable giving in general. Willingness to donate to these two organizations is strongly dependent on how the students’ value the causes specifically. The fact that someone values other charitable causes more and chooses to donate to them instead does not imply that they are less generous–it just means that they value other causes more than the ones that happen to be available in the data set.
It seems likely that students of economics, having spent considerable time coming to appreciate the scarcity of resources, would more carefully weigh their charitable options when deciding how they would like to allocate their scarce resources. They would therefore be less likely to follow the path of least resistance by donating to the most convenient cause (a la behavioral economics) and more likely to donate to the causes they value most. Does homo economicus donate to a lobby group or to cancer research?
I find the concluding section to be especially confusing. It is spent exploring the idea that training in economics is detrimental to its students and the rest of society because it makes students selfish. But, the hedonistic paradox only arises if the economic agent gets his calculations wrong by leaving out some components of the hypothetical utility function (such as the utility derived from others’ happiness). If maximizing utility makes you worse off than before, then you haven’t really maximized utility. So, studying economics and coming to understand it well would prevent this, no?
You seem to address this at the end by suggesting the introductory economics classes should do more to address topics like altruism and reciprocal behavior, but you seem to present altruism as an exception to the standard theory–I don’t think it is.
I’m struggling to see how whether students donate to either of two university-selected lobby groups is indicative of “generosity.” The paper seems to implicitly equate them, or maybe just assumes a strong correlation between the two. I don’t think the correlation can be rightly assumed. The data displays students’ revealed preferences only for these two groups, not charitable giving in general. Willingness to donate to these two organizations is strongly dependent on how the students’ value the causes specifically. The fact that someone values other charitable causes more and chooses to donate to them instead does not imply that they are less generous–it just means that they value other causes more than the ones that happen to be available in the data set.
It seems likely that students of economics, having spent considerable time coming to appreciate the scarcity of resources, would more carefully weigh their charitable options when deciding how they would like to allocate their scarce resources. They would therefore be less likely to follow the path of least resistance by donating to the most convenient cause (a la behavioral economics) and more likely to donate to the causes they value most. Does homo economicus donate to a lobby group or to cancer research?
I find the concluding section to be especially confusing. It is spent exploring the idea that training in economics is detrimental to its students and the rest of society because it makes students selfish. But, the hedonistic paradox only arises if the economic agent gets his calculations wrong by leaving out some components of the hypothetical utility function (such as the utility derived from others’ happiness). If maximizing utility makes you worse off than before, then you haven’t really maximized utility. So, studying economics and coming to understand it well would prevent this, no?
You seem to address this at the end by suggesting the introductory economics classes should do more to address topics like altruism and reciprocal behavior, but you seem to present altruism as an exception to the standard theory–I don’t think it is.
Heh, looks like you got some play in the WSJ: http://online.wsj.com/article/SB126238854939012923.html
“In recent research, University of Washington economists Yoram Bauman and Elaina Rose found that economics majors were less likely to donate money to charity than students who majored in other fields. After majors in other fields took an introductory economics course, their propensity to give also fell.”
Yoram,
I do agree with many of the conclusions with respect to the curriculum and the content of the economics classes. The role of volunteering and philanthropy should be studied together with optimization theories and consumer behavior. Or at least a mention of it should be made somewhere in between the ‘invisible hand’ and the power of capitalism. I also agree that the selfless are happier than the selfish. It worked for me…
However, I also have to agree with Michael on the ambiguous definition of ‘generosity’ or its absence thereof. Also, lobbying and public policy causes are not usually the most typical recipients of charitable donations. They are more so for people with special interests. Even my untrained eye could not ignore several other drawbacks of the paper.
1. Omitted Variables: individual characteristics were mentioned but only in the personality aspect while neither parent’s income nor monthly expenses were taken into consideration. Is it possible that economics majors tend to be less wealthy on average? Maybe women have higher monthly expense than man? Maybe international students rely on scholarships and private loans to attend college and they don’t really have the option to add a couple of extra dollars to their education bill.
2. The paper is unconvincing that taking economics class causes non-economics majors to decrease their giving. A simple reason might be that they have already donated in a previous semester. Especially given the hard nature of economics and the fact that most non-economics majors are intimidated by the core requirement of microeconomics, they are very likely to procrastinate and take it in their 3rd or 4th semester after already donating in the first two semesters
3. I do not agree with the statement that older students donate less because they are less likely to realize the benefit of their donation. The statement simply contradicts the very meaning of the word ‘donation.’ Donations are usually given without return considerations, let alone expecting personal realization of the benefits of your donation. Donation is not like the Social Security or an investment fund where people expect returns. Donation is for others to make use of the benefits of the gift.
In general, the paper raises a good question but seems to me that there is a lot more work to be done in order to make it a convincing piece that can be cited even if only for fun amongst economists.