The disagreement between these economists is most likely due to
Despite their differences, with which proposition are two economists chosen at random most likely to agree?
Having a single income tax rate would improve economic performance.
Immigrants receive more in goyernment benefits than they contribute in taxes.
Rent ceilings reduce the quantity and quality of available housing.
The Correct Answer and Explanation is :
The correct answer is:
“Rent ceilings reduce the quantity and quality of available housing.”
Explanation:
Economists often have disagreements about many policy issues due to differing assumptions, methodologies, or values. However, there are areas where there tends to be broad consensus among economists, especially when the issue pertains to well-established economic principles and empirical evidence.
Why “Rent ceilings reduce the quantity and quality of available housing” is most agreed upon:
- Basic Economic Theory:
- Rent ceilings (price controls on housing) set a maximum price landlords can charge for rent, which is often below the market equilibrium. This leads to excess demand (a shortage) and reduces the incentive for landlords to maintain or invest in their properties, ultimately lowering the quality and quantity of housing available.
- Empirical Evidence:
- Numerous studies across various cities and countries have consistently shown that rent control policies result in housing shortages and deterioration of housing stock. These findings are robust and widely accepted in the economics community.
- Consensus Among Economists:
- Surveys of economists, such as those conducted by the University of Chicago’s Booth School of Business or other professional organizations, indicate overwhelming agreement that rent ceilings have these adverse effects.
Why the other statements are less likely to receive consensus:
- “Having a single income tax rate would improve economic performance”:
- Economists are divided on this. Some argue that a flat tax simplifies the system and reduces distortions, while others contend it could exacerbate inequality or fail to generate sufficient revenue for public goods.
- “Immigrants receive more in government benefits than they contribute in taxes”:
- There is significant debate and variation depending on the country, type of immigrant, and study methodology. While some studies suggest immigrants are net contributors, others find different results based on the timeframe and population studied.
Thus, the principle about rent ceilings garners the broadest agreement due to its grounding in fundamental economic principles and strong empirical support.