Naïve economic beliefs: Empirical evidence on their prevalence

In making decisions, people rely on a wide variety of information — qualitative and quantitative, objective and subjective, accurate and mistaken, scientific and non-scientific. About two decades ago, researchers identified a cluster of beliefs on how the economy works that differed markedly from how it is understood in economics. These beliefs appear to be remarkably consistent across countries and often lead to decisions that may reduce individual welfare. This set of ideas has come to be known as folk or naïve economics. The article provides an overview of this “theory” and presents empirical findings on its prevalence among certain groups in Russia — specifically, university students and senior government officials. The first group was surveyed using questionnaires, while the second one was examined through computer-assisted narrative analysis. The pilot studies suggest that the overall prevalence of naïve economic beliefs is relatively low, though this does not diminish the importance of improving economic education in the country.