Quicksand or Bedrock for Behavioral Economics? Assessing Foundational Empirical Questions

Victor Stango, Joanne Yoong and Jonathan Zinman
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Victor Stango: University of California-Davis
Joanne Yoong: University of Southern California, National University of Singapore, and the London School of Hygiene and Tropical Medicine

Working Papers from University of Michigan, Michigan Retirement Research Center

Abstract: Behavioral economics lacks empirical evidence on some foundational questions. We adapt standard elicitation methods to measure multiple behavioral factors per person in a representative U.S. sample, along with financial condition, cognitive skills, financial literacy, classical preferences, and demographics. Individually, behavioral factors are prevalent, distinct from other decision inputs, and correlate negatively with financial outcomes in richly-conditioned regressions. Conditioning further on other B-factors does not change the results, validating common practice of modeling B-factors separately. Corrections for low task/survey effort modestly strengthen the results. Our findings provide bedrock empirical foundations for behavioral economics, and offer methodological guidance for research designs.

Pages: 62 pages
Date: 2018-04
New Economics Papers: this item is included in nep-evo, nep-exp, nep-fle, nep-hme, nep-knm, nep-sea and nep-upt
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Working Paper: Quicksand or Bedrock for Behavioral Economics? Assessing Foundational Empirical Questions (2017)
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