| Abstract: |
Recent studies in psychology and neuroscience offer systematic evidence that
fictional works exert a surprisingly strong influence on readers and have the
power to shape their opinions and worldviews. Building on these findings, we
study what we term Potterian economics, the economic ideas, insights, and
structure, found in Harry Potter books, to assess how the books might affect
economic literacy. A conservative estimate suggests that more than 7.3 percent
of the world population has read the Harry Potter books, and millions more
have seen their movie adaptations. These extraordinary figures underscore the
importance of the messages the books convey. We explore the Potterian economic
model and compare it to professional economic models to assess the consistency
of the Potterian economic principles with the existing economic models. We
find that some of the principles of Potterian economics are consistent with
economists models. Many other principles, however, are distorted and contain
numerous inaccuracies, contradicting professional economists views and
insights. We conclude that Potterian economics can teach us about the
formation and dissemination of folk economics, the intuitive notions of naive
individuals who see market transactions as a zero-sum game, who care about
distribution but fail to understand incentives and efficiency, and who think
of prices as allocating wealth but not resources or their efficient use. |