The role of preferences in disagreements over scientific hypothesis: Evidence on cognitive bias in formation of beliefs

Have you ever heard the joke that if you ask three economists for an economic policy advice, you will get at least four different answers? This study takes the joke seriously by investigating whether an agent's wish for a scientific hypothesis to be true affects the agent's belief that the hypothesis is true. Using theories in psychology of cognitive bias we argue that, given certain circumstances, a positive preference–expectation relationship is actually expected, and we test the theoretical prediction using a sample of students in economics and science. The scientific hypothesis used in our empirical inquiry is the highly debated Porter hypothesis. The Porter hypothesis suggests that environmental regulations, such as those restricting firms to reduce pollution, stimulate innovations and create a win-win situation for the environment and for firms. Our results show that the students in economics who care more about the environment are more likely to believe in the Porter hypothesis. The results are in line with Fuchs et al. (1998) and Mayer (2001) who found that there is a correlation between economists’ policy positions and their ideological values.