Potterian Economics

TL;DR

This paper examines the economic ideas presented in Harry Potter books, comparing them to professional economic models, and discusses how these fictional ideas influence economic literacy and folk economics.

Contribution

It introduces the concept of Potterian economics, analyzing its principles, and evaluates their alignment or distortion relative to established economic theories.

Findings

Some Potterian principles align with economic models.

Many principles are distorted and contain inaccuracies.

The books influence public perceptions of economic concepts.

Abstract

Recent studies in psychology and neuroscience offer systematic evidence that fictional works exert a surprisingly strong influence on readers and have the power to shape their opinions and worldviews. Building on these findings, we study what we term Potterian economics, the economic ideas, insights, and structure, found in Harry Potter books, to assess how the books might affect economic literacy. A conservative estimate suggests that more than 7.3 percent of the world population has read the Harry Potter books, and millions more have seen their movie adaptations. These extraordinary figures underscore the importance of the messages the books convey. We explore the Potterian economic model and compare it to professional economic models to assess the consistency of the Potterian economic principles with the existing economic models. We find that some of the principles of Potterian economics are consistent with economists models. Many other principles, however, are distorted and contain numerous inaccuracies, contradicting professional economists views and insights. We conclude that Potterian economics can teach us about the formation and dissemination of folk economics, the intuitive notions of naive individuals who see market transactions as a zero-sum game, who care about distribution but fail to understand incentives and efficiency, and who think of prices as allocating wealth but not resources or their efficient use.