The Economic Consequences of Emotions, Superstitions and False Assumptions

Economics is about making decisions based on the limited options and resources we have. And since most of our decisions are based off the correlation between our actions and the effect, such correlations are important. However, they become flawed and costly over time when our biases influence us into seeing such correlations as causes. We take Panadol (Painkiller) because we believe it’ll take care of our headache. That’s a correlation, not a causation. The headache could have been alleviated because you got some rest, drank some water, or ate some food. So yeah, correlation does not imply causation. Repeat that to yourself over and over again.

You’ll need to remember it as you live life in Nigeria or any other African country where a majority of decision are made based off superstitions, emotions or assumptions. Nigerians have a habit of confusing correlation with causation. We enter into the assumption that the pattern we happen to see solely explains the situation. And we do this while ignoring or refusing to search for other evidence that might disconfirm our hypothesis. Essentially, we see what we choose to see. This phenomenon is known as confirmation bias.


 Hmm..I wonder if this ever worked

It’s why Nigerian Christians assume that if they had a Christian president, the nation would progress economically (By the way, how’s that working out for us now?) and the Muslims believe the same of a Muslim president. Also, some of us don’t shake with our left hands because we believe it’s bad luck. What’s the correlation between left hand and back luck? Zero. These are examples of confirmation bias that makes us draw connections where none exist.

Another prevalent example in Nigeria: a woman who goes mad. We conclude that some evil witch in the village caused her mental illness. So, the family spends exorbitant amounts of money on ‘healers’ that can free her of her demons. However, once she’s diagnosed with Schizophrenia and given the right medication, she gets better. Yet, we still hold on to our confirmation biases in spite of the clear and irrefutable evidence. And this happens because we choose to look at the indicators we’re biased towards rather than the factual measurable ones.

The average Governor or Minister builds 20 schools or buys 10,000 iPads for the students and blows his/her horn on the assumption that education has improved due to his/her effort. All everyone sees are the new buildings. However, he/she takes that as a great indicator of academic improvement. So because he/she sees the result he/she has set out to find, he/she finds that result, when instead, the real marginal effect of the policy is ignored. A smarter way to tease out the real effect would be to find out the marginal number of students who passed the WAEC exam. But then, shiny new buildings make for better news headlines and 4 hour-long documentaries on AIT.

It’s also why our top finance gurus in Nigeria can boldly say that a rise in GDP explains the supposed economic development of the nation…That’s either an intense dose of confirmation bias; an outstanding ignorance of economics and disregard for the Human Development Index or an amazing talent for lying. I’d say a cocktail of all, considering how the World Bank’s report and well…the average Nigerian’s life seems to be asynchronous to that of the Government’s opinion on how Nigerians are faring economically.

Unfortunately, it doesn’t just end at us making wrong decisions due to our biases. For every wrong decisions made, there is an opportunity cost. And this opportunity cost is a function of time. So the nation gets stuck with a president who doesn’t “give a damn” for the next 2 years (and potentially more). The schizophrenic woman’s family keeps spending valuable resources in vain on spiritual healers; the kids leave the shiny new schools with no academic knowledge; and Nigeria eventually combusts from the burgeoning inequality in the midst of our rising GDP. Essentially, for every single second that we stick to a biased notion, the cost of such an action increases. In mathematical terms, I suppose it would look like this:

Total Cost of Bias= Cost of Action + Opportunity Cost

Where: Opportunity Cost (t)= (Benefit from Right Decision) x (Time)

So, Nigerians, because it barks like a dog doesn’t mean it’s a dog. And if you don’t know what a dog looks like, Google it. A few seconds of research or finding an established indicator can save you from a lifetime of horrid decision-making due to confirmation bias.

Oh…and by the way, I added the equation because research shows that people perceive a work to be more credible/intellectual when it’s got an equation…..even if the equation doesn’t make any sense. How about that for correlations and causations, eh? 😉


Look at the Big Picture, People!

NB: I would love to hear of other instances of confirmation bias you’ve encountered in the comment section! Cheers.

  • Wow! Wow! Wooow! OMG! This has got to be your best so far! Sincerely! I was enthralled! This is amazing! And absolutely true! Most people see what they want to see, not necessarily what really is and that’s because it’s mostly convenient that way. It’s one of the reasons they say love is blind. You care about someone so much, you’re blinded to some strong flaws they have that could endanger you. Think about it, a lady who is constantly being battered but refuses to leave the man saying “oh he’s really nice, it’s just that I get him really angry sometimes.”
    This is really brilliant, indeed we should try often to see the big picture wholesomely and objectively.
    Brilliant piece! Kudos

  • ibrahim adeniran

    If only we can get this kinda stuff into the heads of average Nigerian, more importantly the youth! Oh God of creation…help our youths the truth to know.

  • chidi umeh-ujubuonu

    Great stuff Chuba, we live in a society where mediocrity is celebrated and religious jingoism is elevated above meritocracy, The legendary founding fathers of Israel and Singapore–David Ben Gurion and Lee Kuan Yew have both shown that you don’t need to be a christian to build a nation.Nations evolve through policies, vision and strategies. Thanks for your constant re-awakening through your articles.

  • Omoniyi

    This is very very deep … Thanks for d insight !!!

  • anuoluwapo

    I think that a research work needs a mathematical equation to be more credible should definitely count as another confirmation bias…I’ll say the bias is a human problem though that goes beyond Nigeria, that’s why US has also produced just one black president, is it that blacks are incapable of being great leaders? Or the whites won’t just vote for them. why did Okonjo Iweala lose her bid to be the first African worldbank president? I’m sure its definitely not because she wasn’t qualified, a match between Brazil (South America) and Japan (Asia) could av been refereed by an African for the sake of fairness at least, but a Portuguese was picked instead ( brazil was once portugal’s most valuable colony), maybe those in charge av d black or African bias. As for Nigeria, I think we can’t kill ourselves because of this things, we are humans after all…we can only learn from our errors and make better judgements in the future.

    • haha. You’re right. The best thing we can do it learn from our biases and watch out for assumptions that we make. Thank you for reading and commenting! 🙂

  • padayi

    Brilliant perspective, excellent delivery. But the problem will arise when a “confirmationally biased” section of readers begin to identify political undertones and stick a pro-this, anti-that tag on you. Nevertheless, this is just beautiful.

  • Pingback: The Economic Consequences of Emotions, Superstitions and False Assumptions | rinzystilblazin()

  • you sir, are amazing! I don’t know squat about economics: Never did it in secondary school but everytime i read your work I’m educated on both economics and the sad reality of Nigeria’s current state. Thank you for this! i don’t know you and i don’t know what your future plans are but if i ever have to vote for anything and your name comes up, you’ll get my vote. Amazing Piece! God bless you!

    • Cheers! I’m really glad when people get impacted by what I write and I’m certainly ecstatic that you are!

  • your articles are really cool(this is the first one I’m commenting on tho) and its not every time you met someone that is really concerned about the the situation of this country and is willing to do something about it in their own little way.most Nigerians have just accepted that the country is what it is and nothing can be done about it (i actually fall into this category).so please keep up the good work and hopefully the situations and our mindset about things in the country will change. Then the issues about the madman woman in this article,i hope you’re not naive or ignorant of the fact that the supernatural actually exists and this country has deep rooted spiritual issues ,so maybe the woman is really chased from her village.we can only pray that God continues to have mercy on us that we fall victims to the hands of such evil ones (nw i tink i’m a lil bit scared myself).looking forward to your next piece .

    • Haha. Thanks Dike. I’m really glad you like it! But yeah. This example was just specific to the fact that she was diagnosed and that the drugs showed obvious improvement to her mental health. But I get ya Bro. Next one will be out by Monday. Always Monday. Thanks again for reading and commenting bro.

  • Chukwudi Ezekwesili

    Lovely piece Chuba. I just love how it all comes down to supposedly basic analysis. From clunky religious dogma (which ensures that 90% of the time, people consider it a crime to think), to the fine mix of deliberately hammered statistics and properly channeled political marketing- recipe for democratic mediocrity.

  • Leah

    Wow, I loved it! The sad truth is the intense psychological desire for people to want correlations between isolated events and/or perceived phenomenon. The same is presented with non-euclidean architecture and how silly it is that people are only comfortable with straight-lined Euclidean rules: simple geometry and particularly in the examples that you mentioned above- the straight line between one event and another.

    Especially as the daughter of a psychologist, time and time again I hear about patients who ignore facts in order to correlate events that create harmful psychological repercussions. A common example- a woman develops an eating disorder because her boyfriend repeatedly calls her fat/ugly and yet she only remembers that he was “there for her” during her recovery and actually convinces herself that her boyfriend’s support was the cause (believing causation) of her recovery. So you’re completely right and the consequences are far reaching- in the individual human psyche, localized community and greater society as a whole.

    Great piece of writing Chuba, important topic!

  • emmanuel

    what can i say other than that this is a short but deep piece.


    Just stumbled on this blog & I’m sold already. I’m particularly impressed with this piece because it touches on one of our biggest drawbacks in this country.

  • Being a member of the Student Christian Movement back in school, our leaders drummed it into our heads that we were students first. Our academics needed to be given priority as part of serving God. However I did observe those who thought that spending the whole day in their fellowship, missing classes (i heard of one hat skipped an exam just to attend a church program) would earn them a miracle at the end of the day. sadly it took some ‘police numbers’ to wake a lot of them up to reality.

    Great write up Chuba 🙂

  • Pingback: The Burden Of Superstition And Irrational Pandemonium In Africa. | Mustard Press()

  • olatoye osunsanya

    It’s a very good read, your argument is simplistic enough to be understood by the lay man and makes your point.

    I enjoyed the way you took down our “post hoc” fallacy which is prevalent in our society. And you’re right about how a little research can save us a lot of wasted time and money when approaching any issue.

    I look forward to reading more of your write ups and possibly exchanging banter with you.


    • Cheers! Thanks for reading. You can me on @chubaezeks 🙂