Focus: Understanding Economics in Civics &

GovernmentEcon Camp 2010

• Uses the economic way of thinking and applies it to civics and government.

• While the general consensus is markets generally work best, there are conditions where government can improve economic outcomes and advance social goals.

• Correlates to both the National Content Standards in Economics (CEE) and the National Standards for Civics and Government (Center for Civic Education)

• Works best to enhance the High School Government or Civics class or to extend economic concepts in the High School Economics course.

• Contains 20 lessons for use in any high school level course.

• Topics include: Comparative Politics, Structure of Government, Voting, Economic & Political Freedom, Roles of Government, Taxes, Trade, Immigration and others.

• Each lesson has an introduction and lesson description for the teacher.

• The concepts covered, objectives, content standards time required and materials needed will also be highlighted.

• Detailed, step-by-step procedures along with closure and assessment ideas.

• Complete with reproducible visuals and student activities.

Voters and Elections• Voter turnout in the United States influences the

outcomes of elections. Politicians spend a great deal of time and energy trying to get their supporters to the polls. But why should this be a problem? Why don’t all eligible voters vote?

• Economists who have studied this question believe that the answer has to do with the benefits and costs of voting. One sort of cost—opportunity cost—is especially helpful in explaining why some people choose not to vote.

Voting

We all know that in a democracy, voting is an important right. Questions:

How many of you voted in the Indiana primary election in May?

Did everyone who was eligible to vote in the 2008 general election actually vote?

If the right to vote is so important, why do so many people choose not to vote?

Voting is Expensive!!!• What are the costs of voting?

• Transportation costs, the cost of child care, the cost of time taken away from work, etc.

• (These are called dollar costs.)

• Apart from dollars spent, what other costs might people have to pay in order to vote?

• People who do not take time to vote would have more time for working, shopping, recreation, research on candidates, etc.

Voting is Expensive!!!• These are all examples of opportunity costs – the

opportunity cost of doing something (voting, for example) is the highest-valued alternative a person gives up in choosing to do that particular something.

• The opportunity cost of voting will vary from person to person, and decisions about whether to vote or not will differ accordingly.

• So let’s summarize the costs of voting.

Amendment 24 to the U.S. Constitution supposedly rules out dollar costs: Section 1. The right of citizens of the United States to vote in any primary or other election for President or Vice President, for electors for President or Vice President, or for Senator or Representative in Congress, shall not be denied or abridged by the United States or any state by reason of failure to pay any poll tax or other tax. 2. Other costs. While the Constitution prohibits monetary charges, this does not mean that voting is entirely without costs. Voters will incur opportunity costs. The opportunity cost of voting is what a voter gives up in choosing to vote. Here are some of the possible opportunity costs:• Time taken to register.• Time to find a voting location, or to vote via absentee ballot.• Time taken to vote, which may also mean lost wages for voters who miss work; or babysitting or transportation costs.• Time needed to investigate candidates and issues.

2004 Reason All Voters 18-24

10Transportation

Problems2.1% 1.9%

9Inconvenient Polling Place

3.0% 2.5%

8 Forgot 3.4% 6.1%

7Registration

Problems6.8% 8.2%

6Don’t Know or

Refused to Answer

8.5% 15.2%

5 Out of Town 9.0% 12.8%

4Didn’t Like the

Candidates9.9% 6.4%

3 Not Interested 10.7% 10.0%

2Illness or Disability

15.4% 2.8%

1 Too Busy 19.9% 23.2%

2008 ReasonAll Voters (IN 1,000)

18-24

10Transportation

Problems2.6% 2.4%

9Inconvenient Polling Place

2.7% 2.6%

8Registration

Problems 6.0% 6.9%

7Don’t Know or

Refused to Answer

7.0% 11.2%

6 Out of Town 8.8% 14.2%

5 Other Reason 11.3% 11.6%

4Didn’t Like the

Candidates12.9% 8.0%

3 Not Interested 13.4% 12.1%

2Illness or Disability

14.9% 3.2%

1 Too Busy 17.5% 21.0%

What Does This Tell Us About Younger Voters?• less likely to be ill• but less likely to know why they didn’t vote• more likely to be busy• also tended to be out of town, perhaps at college, where they

were not registered to vote.• note that many of the items reflect judgments about increased

costs of voting or decreased benefits from voting.• Why would any citizen vote when there are opportunity costs

attached to voting and when it seems unlikely that any individual’s vote will change the outcome of an election?

• Your vote might actually make a difference in the actual outcome of the election.

• Personal satisfaction from being a “good citizen”.• People may vote to support a particular politician.• People may vote to remove incumbents (“Throw the rascals

out”).• People may vote in order to feel that they are a part of winning

team.

Who Voted Most – 2008 • Gender?Women• Race?White; non-Hispanic• Native or Naturalized?Native• Married/Never-

Married?Married• Separated or

Divorced?Divorced

• Education Attainment?Advanced Degree• Income Level?+$100,000• Geographic Region?Midwest• Indiana, Illinois or

Kentucky?Kentucky, Illinois, Indiana

The Economics of Voting• We all would like voters to be informed and then

go vote.• Consider the following: 1/x• As x gets larger what happens?• We get closer to zero.• The larger the number of people voting in an

election, the smaller the probability that anyone’s vote will decide the outcome. Or in most elections, the probability that your vote will be decisive is extremely close to zero.

The Economics of Voting• For example, even if the vote is expected to be

very close, with polls showing the public split 51-49 % (much less than the margin of error in even the best polls), and the number of other voters is only 200,000 (much less than almost any state election), the probability that your vote will be decisive is less than 1 in 12.3 million.

• With a million other voters, the probability that your vote will be decisive is considerably less than 1 in a billion.

The Economics of Voting• And when the vote is expected to favor one

candidate, or issue by even a few percentage points, the probability that your vote will be decisive quickly drops to 1 in hundreds of trillions. And this is the case in most congressional elections. In 2002, for example, 4 out of 5 congressional elections were won by more than 20 percentage points.

• In comparison to these probabilities, winning millions in a state lottery is almost a sure thing.

The Economics of Voting

Rational Ignorance

• A decision not to obtain information about political issues or candidates because the costs of doing so outweigh the benefits.

• How can we lower voter costs? • Increase benefits?• Do we want to???• What other questions does this raise?

The Economics of Voting• The fact is, people do vote for programs, or for

politicians who support programs, that will make them financially worse off if they are enacted.

• For example, many young people vote for social security even though they don’t believe they will benefit from it. Or they often vote against programs that would help them and that others would pay for.

The Economics of Voting• Why do so many people vote? • Why is voter turnout higher in national than

local elections? • Why do people sometimes vote against their

own interests?

EXPRESSIVE VOTING

The Economics of VotingExpressive voting is based on: • The previously discussed fact that no one’s vote

is likely to be decisive, and • The desire most people have to express

themselves in support of things they approve of, and in opposition of things they disapprove of.

• People vote because it makes them feel good. (get-well cards, cheering/booing)

The Economics of Voting• Greater education increases our interest in

political issues and our desires to express ourselves on those issues.

• So expressive voting not only explains why a lot of people vote, it also explains the higher voter turnout of the more educated.

• National issues and candidates are publicized to a much greater degree than most local issues and candidates.

• So most people realize more expressive satisfaction voting in national than local elections.

The Economics of Voting• Voting against your interests costs you almost

nothing. • People are more likely to support what they

believe serves the public good when the cost is low.

• There is a downward sloping demand curve for doing the right thing.

• And voting makes contributing to a person’s vision of the public good about as cheap as it gets.

The Economics of Voting• If I vote for a program that, if it passes, will cost

me $1,000, voting for it doesn’t cost me anything close to $1,000.

• For example, if I was 100% sure that my vote would not determine the outcome of the election, then voting for the program would cost me nothing.

• The program might pass, and I will have to pay $1,000, but it would pass no matter how I voted. So if I receive some satisfaction from voting for the program, why give up that satisfaction by voting again it, since I'll end up paying the same no matter how I vote.

• Of course, you don’t know for sure that your vote will not be decisive. It may be, and you will have to pay the $1,000 because you voted for the program.

The Economics of Voting• But if the probability that your vote will be

decisive is say, 1/100,000 (unreasonably high), then the expected cost of voting for the program is only 1 penny (1/100,000 x $1,000 = $.01).

• So if the feeling of virtue that comes from expressing yourself in favor of some noble sounding government program is worth more than a penny to you, voting for that program is a bargain.

• You will vote for it even if you consider only your private benefits and costs.

• Contrast the cost of voting for the program with the cost of writing a $1,000 check for the program.

• This has the same cost as casting a decisive vote for the program—$1,000.

The Economics of Voting• Interest groups must convince a significant

segment of the voting public that their special-interest proposals are either directly beneficial to them, or promote social justice and the public interest.

• Unfortunately, organized interests often have little trouble convincing voters of the social merit of special-interest proposals (even though they destroy wealth and lack social merit), and getting them to feel good about voting for those proposals.

The Economics of Voting• Interest groups must convince a significant

segment of the voting public that their special-interest proposals are either directly beneficial to them, or promote social justice and the public interest.

• Unfortunately, organized interests often have little trouble convincing voters of the social merit of special-interest proposals (even though they destroy wealth and lack social merit), and getting them to feel good about voting for those proposals.

The Economics of Voting• 1st, many uninformed voters are gullible to noble-

sounding, but misleading claims about the social virtue of policies.

• 2nd, when voters accept the noble claims for policies, the temptations of expressive voting will lead them to vote for those policies with little concern about their costs.

• In this way, special-interest groups are able to enlist voters as political allies in support of policies that harm the public interest.

The Economics of Voting• For example, industry groups that want import

restrictions convince voters that those restrictions are needed for the noble goal of protecting American jobs.

• Agricultural interests that want price supports and subsidies convince voters that they are needed for the noble goal of saving the family farm.

• Voters sympathize with the noble goal of helping the poor and are easily convinced that poor people benefit from minimum wages and rent controls.

The Economics of Voting• Expressive voting results in these and other

policies (or the politicians who support them) receiving electoral majorities, even though very few people would vote for them if they were aware of their harmful effects to the general economy and to the very people they are suppose to help.

Questions to Ponder• Which groups of voters would you specifically try

to attract if they were running for office?

• What might you do if you were a candidate for office to lower the opportunity cost of voting for your supporters?