Bias in economics

Nature

Bias in economics refers to systematic errors or prejudices that distort economic analysis, research, or policy decisions. These biases can stem from personal beliefs, cultural influences, methodological flaws, or data selection, leading to inaccurate conclusions and ineffective policies. Bias undermines objectivity, affecting economic forecasts, market assessments, and the evaluation of social welfare. Recognizing and addressing bias is crucial for ensuring reliable economic insights and equitable policy outcomes.

Background

Bias in economics emerged as a recognized global concern in the mid-20th century, when scholars began scrutinizing the influence of cultural, institutional, and methodological prejudices on economic theory and policy. Landmark critiques, such as Gunnar Myrdal’s analysis of development economics and feminist economists’ challenges in the 1970s, highlighted persistent distortions. Since then, international debates and empirical studies have increasingly exposed the pervasive impact of bias on economic research, policy-making, and global inequality.

Incidence

The widespread misconception that economics is essentially business and commerce creates a major hurdle to attracting students into economics. Since high schools introduced business studies in 1991, enrolments in Year 12 economics have fallen by almost 70%.

The lack of female participation in high school economics is equally stark. A 2016 study for the Reserve Bank found only about one-third of Year 12 economics students were female in 2016, down from around half 25 years ago. At Australian universities, women account for between 25% and 45% of undergraduate economics students.

Low female participation in economics at school flows on to a lack of women in economics, especially in academia. Less than 10% of economics professors at Group of Eight universities are women.

Too few high schools teach economics. Even when it is taught, its importance in solving social issues is neglected. Most high school students don’t get to know what an economist actually does and what the potential of economics can truly be.

Moreover, economics is offered mostly in private and boys’ schools. That helps explain why mostly students from a certain gender and socioeconomic background choose it as their career. This contributes to the lack of diversity in economic leadership and the related consequences for public policy and business decisions.

Claim

Bias in economics is a deeply troubling and urgent problem. It distorts research, policy, and real-world outcomes, perpetuating inequality and injustice. When economic models and decisions are shaped by hidden prejudices or narrow perspectives, entire communities suffer. Ignoring bias undermines the credibility and effectiveness of economics as a discipline. We must confront and correct these biases now—our collective prosperity and fairness depend on it. This issue cannot be dismissed or delayed any longer.

Counter-claim

Concerns about bias in economics are vastly overstated. The discipline relies on rigorous data analysis and peer review, minimizing personal prejudices. Economic models and theories are constantly tested and refined, ensuring objectivity. Focusing on bias distracts from real economic challenges like poverty and unemployment. Obsessing over potential bias undermines trust in valuable research and policy recommendations. In reality, bias in economics is not a significant problem and does not warrant the attention it receives.