Quicksand or Bedrock for Behavioral Economics? Assessing Foundational Empirical Questions

84 Pages Posted: 20 Jul 2017

See all articles by Victor Stango

Victor Stango

UC Davis Graduate School of Management

Joanne Yoong

National University of Singapore (NUS)

Jonathan Zinman

Dartmouth College; Innovations for Poverty Action; Jameel Poverty Action Lab; National Bureau of Economic Research (NBER)

Multiple version iconThere are 3 versions of this paper

Date Written: July 17, 2017

Abstract

Behavioral economics lacks empirical evidence on some foundational empirical 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, B-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.

JEL Classification: D03, D14, D8, D9, E03, G02

Suggested Citation

Stango, Victor and Yoong, Joanne and Zinman, Jonathan, Quicksand or Bedrock for Behavioral Economics? Assessing Foundational Empirical Questions (July 17, 2017). Available at SSRN: https://ssrn.com/abstract=3004116 or http://dx.doi.org/10.2139/ssrn.3004116

Victor Stango

UC Davis Graduate School of Management ( email )

One Shields Avenue
Davis, CA 95616
United States

Joanne Yoong

National University of Singapore (NUS) ( email )

1E Kent Ridge Road
NUHS Tower Block Level 7
Singapore, 119228
Singapore

Jonathan Zinman (Contact Author)

Dartmouth College ( email )

Hanover, NH 03755
United States
603-646-0075 (Phone)

HOME PAGE: http://https://sites.dartmouth.edu/jzinman/

Innovations for Poverty Action

1731 Connecticut Ave, 4th floor
New Haven, CT 20009
United States

Jameel Poverty Action Lab

E60-246
77 Massachusetts Avenue
Cambridge, MA 02139
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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