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The role of preferences in disagreements over scientific hypothesis: Evidence on cognitive bias in formation of beliefs

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  • Kataria, Mitesh

Abstract

Have you ever heard the joke that if you ask three economists for an economic policy advice, you will get at least four different answers? This study takes the joke seriously by investigating whether an agent's wish for a scientific hypothesis to be true affects the agent's belief that the hypothesis is true. Using theories in psychology of cognitive bias we argue that, given certain circumstances, a positive preference–expectation relationship is actually expected, and we test the theoretical prediction using a sample of students in economics and science. The scientific hypothesis used in our empirical inquiry is the highly debated Porter hypothesis. The Porter hypothesis suggests that environmental regulations, such as those restricting firms to reduce pollution, stimulate innovations and create a win-win situation for the environment and for firms. Our results show that the students in economics who care more about the environment are more likely to believe in the Porter hypothesis. The results are in line with Fuchs et al. (1998) and Mayer (2001) who found that there is a correlation between economists’ policy positions and their ideological values.

Suggested Citation

  • Kataria, Mitesh, 2012. "The role of preferences in disagreements over scientific hypothesis: Evidence on cognitive bias in formation of beliefs," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 41(4), pages 364-369.
    • Handle: RePEc:eee:soceco:v:41:y:2012:i:4:p:364-369
    DOI: 10.1016/j.socec.2012.04.005
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    References listed on IDEAS

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    1. Victor R. Fuchs & Alan B. Krueger & James M. Poterba, 1998. "Economists' Views about Parameters, Values, and Policies: Survey Results in Labor and Public Economics," Journal of Economic Literature, American Economic Association, vol. 36(3), pages 1387-1425, September.
    2. Karen Palmer & Wallace E. Oates & Paul R. Portney & Karen Palmer & Wallace E. Oates & Paul R. Portney, 2004. "Tightening Environmental Standards: The Benefit-Cost or the No-Cost Paradigm?," Chapters, in: Environmental Policy and Fiscal Federalism, chapter 3, pages 53-66, Edward Elgar Publishing.
    3. Daniel Bromley, 2004. "Reconsidering Environmental Policy: Prescriptive Consequentialism and Volitional Pragmatism," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 28(1), pages 73-99, May.
    4. Boulding, Kenneth E, 1969. "Economics as a Moral Science," American Economic Review, American Economic Association, vol. 59(1), pages 1-12, March.
    5. Thomas Mayer, 2001. "The role of ideology in disagreements among economists: a quantitative analysis," Journal of Economic Methodology, Taylor & Francis Journals, vol. 8(2), pages 253-273.
    6. Yang, Sha & Markoczy, Livia & Qi, Min, 2007. "Unrealistic optimism in consumer credit card adoption," Journal of Economic Psychology, Elsevier, vol. 28(2), pages 170-185, April.
    7. Maximilian Auffhammer, 2009. "The State of Environmental and Resource Economics: A Google Scholar Perspective," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 3(2), pages 251-269, Summer.
    8. Michael E. Porter & Claas van der Linde, 1995. "Toward a New Conception of the Environment-Competitiveness Relationship," Journal of Economic Perspectives, American Economic Association, vol. 9(4), pages 97-118, Fall.
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    More about this item

    Keywords

    Porter hypothesis; Subjective beliefs; Economic methodology;
    All these keywords.

    JEL classification:

    • B4 - Schools of Economic Thought and Methodology - - Economic Methodology
    • Q00 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - General
    • Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics

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