Podcast Summary: "The Economist Who (Gasp!) Asks People What They Think"
People I (Mostly) Admire — Episode 165, August 30, 2025
Host: Steve Levitt
Guest: Stephanie Stantcheva (Harvard economist, John Bates Clark Medalist)
Overview
In this episode, Steve Levitt interviews Stephanie Stantcheva, a Harvard economist recognized for her pioneering research methodology—using carefully designed surveys to directly study how people think about economic policies. The episode explores why Stantcheva bucked tradition, how her work has reshaped economics, and what her findings reveal about public perceptions of immigration, taxation, climate policy, and fairness. The conversation also dives into her personal background, how growing up in Bulgaria, East Germany, and France shaped her interests, and what all this tells us about bridging the gap between what economists assume and what people actually believe.
Key Discussion Points and Insights
Introducing Stephanie Stantcheva & Her Bold Pivot
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Awards & Background: Stantcheva won the John Bates Clark Medal for her original contributions and shares remarkable career parallels with Levitt.
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Breaking with Tradition: She left a conventional (and safe) path in "optimal tax" research to focus on survey-based work, a method dismissed by most economists as unreliable and low-status.
"You were an absolute superstar graduate student...and then you decide that instead you’re going to focus your research around conducting surveys. And there are few things economists hate more than survey research. It is obviously career suicide to do it. What in the world were you thinking...?"
— Steve Levitt (03:02) -
Her Motivation: She was driven by a desire to understand how people “actually think and reason” about policy, which raw behavioral data can’t capture.
"For those who are non-economists, essentially, we economists do not believe what people say. We only believe what they do or what they show you through their behavior. But this has its limitations."
— Stephanie Stantcheva (03:43)
Methodology: The Art of Designing Economically Meaningful Surveys
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Why Surveys?: Many crucial policymaking insights (beliefs, perceptions, values) are invisible in regular data.
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Challenge: Designing surveys is difficult and considered “too easy” by the profession, but actually requires rigor, nuance, and creativity to avoid bias and extract real understanding.
"I think there’s this view among economists that it’s just too easy to design a survey and go ask people what they think. So there shouldn’t be any credit for that in economics."
— Steve Levitt (07:05)
Case Study: Public Perceptions of Immigration
[09:10–18:50]
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How the Survey Was Done:
- 20–25 minute long, detailed surveys across six countries (US, UK, Sweden, Germany, Italy, France).
- Asked about basic facts (e.g., percentage of immigrants, their origins, religion, employment), and policy preferences.
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Findings:
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Misperceptions: Public vastly overestimates immigrant populations and their reliance on welfare.
"The actual share of documented immigrants...was around 10%. And the average perception of people was 36%."
— Stephanie Stantcheva (11:43) -
Religious and Employment Misconceptions: People overestimated Muslim immigrants and unemployment rates among immigrants.
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Priming Effect: Merely thinking about immigrants before answering policy questions reduced people’s support for welfare—an effect Levitt summarizes as:
"...having been prompted to think about immigration...you’re likely going to say no or support [redistribution] less than someone who didn’t just see that story. This is our first finding..."
— Stephanie Stantcheva (19:15) -
Testing Interventions:
- Simple facts do little to change minds.
- Narratives (anecdotes about hardworking immigrants) increased sympathy and support for redistributive policy.
"What does work is this anecdote or narrative about a hardworking immigrant...it actually has really positive effects in terms of making people support more redistribution and support more immigration."
— Stephanie Stantcheva (23:24)
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Policy Application: Estate Tax and the Power of Facts
[24:58–29:43]
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Survey Results:
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Americans think about 1-in-3 people pay the estate tax; in reality, it’s less than 1-in-1,000.
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Learning the true numbers shifts people’s policy preferences significantly in favor of the estate tax.
"This is a case where just providing that information...changes people’s views on it drastically."
— Stephanie Stantcheva (27:42) -
Narratives (e.g., showing a mansion) help a bit, but not as much as cold, hard facts in this domain.
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Contrast with Immigration: For topics like tax policy, facts persuade; for emotional topics like immigration, stories are more powerful.
Understanding Public Attitudes: Fairness, Trust, and Mindsets
[31:44–42:20]
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Beyond Economics: People's opinions are shaped by fairness, trust in government, and confusion—not just self-interest.
"Economics rarely is the most important thing... it’s considerations of fairness, whether they have trust in government or confusion. All of these other things matter much more."
— Steve Levitt (32:24) -
Zero Sum Mindset:
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A lens where people believe one group’s gain comes at another’s expense.
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More common among younger cohorts in the US (opposite pattern in developing countries).
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Predicts support for very different policies—can cut across or scramble traditional left/right politics.
"Zero sum thinking is not a clearly partisan issue. It’s not a left-wing or right-wing mindset...It leads people to support very different, very specific policies."
— Stephanie Stantcheva (40:18)
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What to Do?:
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Stantcheva cautions against blaming the mindset—it often reflects real experiences.
"...it is really a result of people’s reality. It is not a bias or misperception."
— Stephanie Stantcheva (42:24)
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Insights from Climate & Carbon Tax Research
[34:41–36:10]
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Carbon Tax Unpopularity: Even strong environmentalists are uneasy about carbon taxes unless revenues are redistributed or earmarked, reflecting a deep concern for equity.
"A carbon tax, where the revenues are to just be plugged back into the government budget, has really low support. It critically matters what you do with the revenues."
— Stephanie Stantcheva (35:03)
Personal Story: Growing Up Behind the Iron Curtain
[45:25–47:52]
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Early Life: Born in Bulgaria, spent early childhood in East Germany, moved to France.
- Economic concepts (inflation, exchange rates, scarcity) were part of daily family life, sparking her later academic passions.
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Why People Hate Inflation:
- People feel wages never keep up; distrust of employers.
- Perceived inequity—high-earners keep up with prices better than low-earners.
- People’s “inflation experience” is broader than what the CPI measures; interest burdens, asset purchases, etc., matter deeply to them.
The Academic Life and the Role of Empathy
[51:08–51:50]
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Stantcheva is motivated by curiosity about economic life and a drive to inform policy, rather than money.
"I’m just really curious about these important questions. It’s been a very long standing quest to try to inform better policies, to try to learn as much as we can about this."
— Stephanie Stantcheva (51:16)
Memorable Quotes
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On the Profession's Bias:
"We economists do not believe what people say. We only believe what they do or what they show you through their behavior. But this has its limitations."
— Stephanie Stantcheva (03:50) -
On Designing Surveys:
"It took more than a year to get that survey in a state where we thought this is going to be understandable, be clear, be simple..."
— Stephanie Stantcheva (09:17) -
On Overestimating Immigration:
"At the time of the study, the actual share of documented immigrants...was around 10%. And the average perception of people was 36%."
— Stephanie Stantcheva (11:43) -
On What Changes Minds:
"What does work is this anecdote or narrative about a hardworking immigrant… because immigration is something that's very prone to misperceptions and to narratives already."
— Stephanie Stantcheva (23:24) -
On Misperceptions about the Estate Tax:
"It was pretty clear that people's view of this tax is incredibly distorted when the perceptions are so far off."
— Steve Levitt (27:11) -
On Inflation:
"People have perceived this cost of living to be increasing much more for valid reasons than what our headline numbers say. And they also have reasons for disliking it that we might not take into account but that we really should."
— Stephanie Stantcheva (50:44)
Important Segment Timestamps
- [01:00] — Episode theme and guest introduction
- [03:21] — Why economists traditionally dislike survey research
- [09:13] — Immigration study methodology and findings
- [11:43] — Public’s misperceptions about immigration numbers
- [13:31] — Public misconceptions: religion and unemployment among immigrants
- [18:52] — How perceptions of immigrants shape attitudes toward redistribution
- [24:58] — Estate tax: perceptions versus reality
- [31:44] — Limitations of traditional studies; importance of fairness and trust
- [36:52] — Zero sum thinking and its impact on policy attitudes
- [45:38] — Stantcheva’s personal journey from Bulgaria to Western Europe
- [46:46] — Why people hate inflation
- [51:16] — Stantcheva on choosing academia for curiosity and impact
Episode Tone & Takeaways
Levitt and Stantcheva’s exchange is thoughtful, candid, and intellectually generous. The tone is one of mutual admiration and humility—Levitt is forthright about his own blind spots and the profession’s status games, while Stantcheva is focused on the complexity and richness of human reasoning. The episode’s big message is that understanding policy preferences and economic behavior requires listening to people, not just observing them. Carefully constructed surveys can uncover the real drivers behind public attitudes—whether equity, fairness, trust, or narratives—and can inform better policy and economic modeling. Stantcheva’s work demonstrates the power of empathy, curiosity, and methodological innovation in economics.
For more on Stephanie Stantcheva’s research:
socialeconomicslab.org