journal of Economic Psychology 4 (1983) 297-317 North-Holland 297 CHILDREN’S CONCEPTIONS OF ECONOMICS - THE CONSTITUTION OF A COGNITIVE DOMAIN DAVID LEISER * The Ben - Gurion University of the Negev, Israel Received June 21, 1982; accepted May 18, 1983 The understanding of economics of 89 Israeli children, aged 7 - 17, was probed by means of interviews and questionnaires. Questions asked covered a broad range, including: commerce, production, strikes, capital investment, and the causes of inflation. The answers are analyzed in a cognitive framework. It is argued that economic understanding is initially based on “conceptions”, small but growing interpretative vignettes which provide a meaningful account of economic actions. Macro-economic phenomena which lie outside the explanatory scope of single conceptions are understood later than the behavior of individual actors. What do children understand about economics, and how does this knowledge develop? Generally speaking, the development of complex cognitive structures is composed of two processes: the development of substructures which are understandable in isolation - possibly at the cost of some distortion; and the integration of these substructures in an overall organization. The lack of cohesiveness expected of any cognitive domain in formation is compounded, in the case of economics, by the variety of sources on which subjects draw, and the diversity of the kinds of knowledge involved: (a) concepts such as those studied in “social cognition” research, like fairness, friendship, equality, blackmail, etc. (Berti and Bombi 1981; Chandler 1977; Damon 1977; Furby 1979; Moessinger 1974; Shantz 1975; Siegal 1981), are mainly acquired * * Author’s address: David Leiser, Dept. of Behavioral Sciences, The Ben-Gurion University of the Negev, P.O. Box 653, Beer Sheva 84120, Israel. The collaboration of D. Rosen in the analysis of the pilot study and the preparation of the questionnaire is gratefully acknowledged. H. Zukier, of the New School for Social Research, provided us with the American transcripts. Data collection by S. Barazani, N. Hailan, Z. Sass, D. Sapir and L. Rabinowitz. Thanks to R. Melkman, S. Dreman, M. Gorodetsky and the anonymous reviewers for valuable comments, and to L. Genevitve for her help. 0167-4870/83/$3.00 0 1983, Elsevier Science Publishers B.V. (North- Holland)