People are generally overconfident. A prior IFOD discussed this: Are You Overconfident? (Yes). One aspect of our overconfidence is that we think we understand the world around us and how things work much better than we actually do. This is a distinct aspect of our general overconfidence and is called “The Illusion of Explanatory Depth.”

Illusion of Explanatory Depth

The seminal study concerning the illusion of explanatory depth is by researchers at Yale and concerned how well people thought they could explain how common items worked vs. how well they could actually explain how such items worked.

In the study the participants were asked to rank how well they could explain how 48 different items work. Things such as zippers, flush toilets, helicopters, ball point pens, and sewing machines, among others. After ranking their perceived knowledge they were asked to write detailed explanations of how a handful of selected items worked.

After they wrote out their explanations they were asked a specific question about each item. For example, for a helicopter they might be asked to explain, step-by-step, how a helicopter changes from hovering to flying forward.

Finally, they were given an expert explanation about how the item worked so they could compare the expert explanation to their own. At each step of the process they were asked to rate their knowledge of the items.

How did the test work out? The participants overestimated their knowledge of how items worked. Once they had to actually explain in depth how an item worked, they realized they didn’t know as much as they thought they did. After being asked a tough question, they realized they knew even less. Finally, after reading an expert explanation they realized how little they really knew.

Why Does it Matter?

Thinking we know more about the world works than we do affects our opinions and beliefs. Our opinions and beliefs shape who we interact with, how we view the world and how we vote.

Many of the most important issues facing society—from climate change to health care to poverty—require complex policy solutions about which citizens hold polarized political preferences. A central puzzle of modern American politics is how so many voters can maintain strong political views concerning complex policies yet remain relatively uninformed about how such policies would bring about desired outcomes.

Source: Philip M. Fernbach, et al., “Political Extremism Is Supported by an Illusion of Understanding”

For example, during and after the financial crisis it was common for people of all levels of financial knowledge to criticize the Federal Reserve for expanding the size of its balance sheet. The big concern was that it was going to lead to inflation. Yet, the vast majority of people who held that opinion had never heard of the concept of “monetary velocity.” If you don’t know understand the concept of monetary velocity you cannot possibly have an informed opinion on inflation.

A fascinating study out of the University of Colorado investigated the Illusion of Explanatory Depth and political opinion. Like the Yale study discussed above, the participants (in 2012) were asked to rate their knowledge of various policies such as (a) imposing unilateral sanctions on Iran for its nuclear program, (b) raising the retirement age for Social Security, (c) transitioning to a single-payer health care system, (d) establishing a cap-and-trade system for carbon emissions, (e) instituting a national flat tax, and (f) implementing merit-based pay for teachers.

Like the Yale study, the University of Colorado study found that “people have unjustified confidence in their understanding of policies” and such unjustified confidence tends to lead to extremist beliefs. After being made to explain the details of policy, the participants realized how little they knew and their opinions of policy solutions moderated. After realizing the complexity of the issues, the participants’ views were less extreme.

We can learn a lot from this University of Colorado study. It is important to recognize our own ignorance and moderate our beliefs/views unless we’ve really worked to gain knowledge. We should ask ourselves if we can really explain underlying policy issues before we have an opinion about something. The second most clicked IFOD of all-time relates to this topic: Ignorance and the Dunning-Kruger Effect. Studies have shown that most people mainly read just headlines and not the underlying story and tend to form opinions based on just headlines!

A key is to seek out expert opinion and listen to it. BUT, distinguish between an expert and someone who just has a lot of information. Judgment and analysis is also necessary.

Postscript: If you are a liberal and thinking “those dumb Republicans have extreme opinions without knowledge” or your are a conservative thinking “those stupid liberals have extreme opinions without knowledge” you are missing the point. It is YOU (and me) who thinks they know more than they do. Let’s try and remove the logs from our own eyes.