We asked 188 economists. And the survey says...

Key takeaways

Economics frequently uses terms that can confuse the general public, often leading to misunderstandings.
Humor plays a significant role in engaging students and making the complex subject of economics more relatable.
Price discrimination, while often viewed negatively, can actually increase access to goods and services for lower-income consumers.
Understanding terms like 'moral hazard' is vital, as they relate to real-world consequences concerning behavior and decision-making in economics.

Summary

Humor in Economics Education

Professor Bouland Temal from the University of Texas at San Antonio shares his routine of incorporating humor into his economics classes with a two-joke minimum during each session. He recounts a humorous incident where a typical economic term, "pegging," took on a very different connotation for his college students, leading to unexpected laughter. This serves as a segue into the episode's main theme, addressing the complexity of economic terminology.

Misunderstood Economic Terms

The hosts of Planet Money introduce a survey conducted with 188 economists about the most misunderstood terms in economics. They look into everyday words that have taken on strict definitions in the economic context, which often leads to confusion among the public. Various economists share insights and personal anecdotes regarding terms like 'public good,' 'capitalist,' 'welfare,' and 'price discrimination,' illustrating how outside perceptions differ significantly from technical definitions.

The Dilemma of Price Discrimination

The podcast highlights a field trip with an economist, Allison Schringer, who goes to a movie theater to illustrate 'price discrimination.' By interviewing patrons who paid different ticket prices for the same film, they demonstrate how this pricing strategy allows for broader access to services, showing that while some terms like 'price discrimination' may sound negative, they can also have positive implications for consumers. The discussion extends to how customers feel about price differences in various scenarios.

Understanding 'Moral Hazard'

Concluding the exploration of economic terminology, the term 'moral hazard' is dissected by Vivian Ho, a health economist. The concept explains situations where individuals may take risks because they do not bear the full consequences of their actions. Ho shares an example from healthcare related to flu vaccinations, illustrating how insurance changes behavior. She and the hosts reflect on the confusion created by the term's wording and suggest alternatives to make it more understandable.

Show notes

(For our story on this year's Nobel in Economics, check out our daily show, The Indicator!)

Let's face it. Economics is filled with terms that don't always make sense to the average person. Terms that sometimes mean what you think they mean, but sometimes not at all. Not even close.

We surveyed 188 economists. And we asked them: What are the most misunderstood terms in the field of economics?

On today's show, their answers! Hear stories about near recessions, a problem with insurance, econ at your local movie theater, and... an economics term that will make undergrads blush. Strap in, and bring your popcorn!

This episode was hosted by Amanda Aronczyk and Alexi Horowitz-Ghazi. It was produced by Sam Yellowhorse Kesler with help from Sean Saldana. It was edited by Jess Jiang, engineered by Valentina Rodríguez Sánchez and fact-checked by Sierra Juarez. Alex Goldmark is our executive producer.

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