Learning economics and attitudes to market solutions to environmental problem

Climate change challenges governments to reduce emissions, and to gain support for such actions from their citizens. This can be in the form of taxation or legislation, or other forms of government interventions. In previous research, several instruments have been developed to capture attitudes towards the roles of markets and governments in the economy. Some of these instruments have assumed that respondents will have the same attitude towards the role of markets and governments, regardless of the context (e.g., welfare, environment, health) or the form of government intervention (law, taxation, subsidy, spending etc.). However, these studies have not examined attitudes towards, or belief in, the efficacy of government intervention in markets, through microeconomic policies on taxation (e.g., duties levied on particular products) or subsidies. This paper reports on the results of taking such a specific focus, that is, investigating economics students’ knowledge of, and attitudes towards, government interventions in markets, specifically addressing the problem of climate change. We make use of unique, two-wave longitudinal data from Swedish university students. The data were collected during their initial semester at the university. The first data collection was performed at the beginning of the semester, August/September 2014, and the second wave of data collection was performed in December/January 2014/2015, at the end of the semester. We were able to match 414 students between the first and second survey. The results show that students of economics change their policy attitudes and become more knowledgeable in economics. After one semester, they are more likely to think of economic instruments/incentives (taxes and subsidies) as good and efficient policy instruments, and less likely to think that other instruments (regulation and information) are good and efficient policy instruments. However, further analyses show that knowledgeable students do not have different attitudes toward environmental policy instruments, compared to students who do not answer the questions correctly. Hence, there seems to be some other factor affecting students in economics during their first semester, that changes their attitudes towards environmental policy instruments.