Neoclassical Economics and the Australian Community: Hoes Does the Public Arrange Economic Knowledge?
Melbourne Institute Working Paper No. 25/98
Date: November 1998
With the success of neoclassical economic policy applications among governments in OECD (and other) nations, ordinary citizens find themselves increasingly living in societies with new 'ground rules'. Privatisation, competition policies, efficiency and 'user pays' principles, together with labour market reform, imply that individuals and families and other groups may find that a lack of economic 'nouse' may well be welfare reducing. This paper utilises the results of a survey of 236 Australian respondents (drawn from electoral rolls) which probed the extent to which the economic ideas of 'ordinary' Australians were consistent with neoclassical economics (loosely defined). The paper uses principal component analysis to determine the arrangement of lay economic 'knowledge' across three broad areas: trade and tariffs, market clearing, and efficiency. The results have implications for both the teaching of economics in schools, and the communication of economics through economic journalism.