March 12, 2012 4:22PM

Are Markets Pro‐​Gay?

In case you missed it, this past weekend the Public Choice Society was meeting in Miami. I missed it too, which is unfortunate as there were a number of great papers presented. A particularly interesting paper examined the question, does greater economic freedom, that is more market‐​based institutions, foster tolerance? The results show a strong impact on increasing economic freedom, as measured by the Economic Freedom of the World index, and tolerance for homosexuals, as measured by the World Values Survey. There was also a positive relationship found between economic freedom and tolerance for different racial groups, although the impact was much smaller in terms of significance.

The theory behind this relationship derives from Richard Florida’s work, specifically the author cites Florida’s argument:

Places that are open and possess low entry barriers for people gain creativity advantage from their ability to attract people from a wide range of backgrounds. All else equal, more open and diverse places are likely to attract greater numbers of talented and creative people – the sort of people who power innovation and growth.

On the other hand, another paper, also using data from the Economic Freedom of the World index, found that greater economic freedom was associated with increases in a country’s average body‐​mass index. That is, apparently economic freedom makes us fatter. If the trade‐​off is more tolerance, but also a few more pounds around the waste, that’s a trade‐​off I can live with.