nep-evo New Economics Papers
on Evolutionary Economics
Issue of 2022‒08‒22
nine papers chosen by
Matthew Baker
City University of New York

  1. Natural Selection and Innovation-Driven Growth By Chu, Angus; Cozzi, Guido; Fan, Haichao
  2. How costly are cultural biases? By D'Acunto, Francesco; Ghosh, Pulak; Jain, Rajiv; Rossi, Alberto G.
  3. Cooperation in Social Dilemmas with Correlated Noisy Payoffs: Theory and Experimental Evidence By Evans, Alecia; Sesmero, Juan
  4. Homo economicus to model human behavior is ethically doubtful and mathematically inconsistent By M. Lunkenheimer; A. Kracklauer; G. Klinkova; M. Grabinski
  5. The Kaldor-Verdoorn Law’s at the Age of Robots and AI. By Andrea Borsato; Andre Lorentz
  6. Human capital in Europe, 1830s – 1930s: towards a new spatial dataset By Gabriele Cappelli; Leonardo Ridolfi; Michelangelo Vasta; Johannes Westberg
  7. Environmental Cognitive Dissonance and Subjective Well-being By Zhang, Shouyu; Ferreira, Susana; Karali, Berna
  8. The great retreat: pastoralism in the arid tropics By Roy, Tirthankar
  9. Health and Economic Growth: Reconciling the Micro and Macro Evidence By David E. Bloom; David Canning; Rainer Kotschy; Klaus Prettner; Johannes Schünemann; Rainer Franz Kotschy

  1. By: Chu, Angus; Cozzi, Guido; Fan, Haichao
    Abstract: This study develops an innovation-driven growth model with natural selection of heterogeneous households and endogenous takeoff. Families differ in their ability to accumulate human capital. In an early stage of development, households with lower education ability accumulate less human capital but choose to have more children and enjoy an evolutionary advantage. In a later stage of development, families with high education ability increase their number of children as their human capital rises over time. In the long run, high-ability households accumulate more human capital, and all families choose the same steady-state fertility rate. Therefore, households' population share and human capital converge to stationary distributions. Initially, the heterogeneity of households makes it more likely for an endogenous takeoff to occur; however, the temporary evolutionary disadvantage of high-ability families has a lasting negative impact on long-run growth. Finally, we provide evidence that heterogeneity in education indeed has adverse effects on education, innovation and economic growth in the long run.
    Keywords: natural selection; innovation; economic development
    JEL: O3 O4
    Date: 2022–06
  2. By: D'Acunto, Francesco; Ghosh, Pulak; Jain, Rajiv; Rossi, Alberto G.
    Abstract: We estimate the cost of cultural biases in high-stake economic decisions by comparing agents' peer-to-peer lending choices with those the same agents make under the assistance of an automated robo-advisor. We first confirm substantial in-group vs. out-group and stereotypical discrimination, which are stronger for lenders who reside where historical cultural biases are higher. We then exploit our unique setting to document that cultural biases are costly: agents face 8% higher default rates on favored-group borrowers when unassisted. The returns they earn on favored groups increase by 7.3 percentage points when assisted. The high riskiness of the marginal borrowers from favorite groups largely explains the bad performance of culturally-biased choices. Because varying economic incentives do not reduce agents' biases, inaccurate statistical discrimination-unconscious biased beliefs about borrowers' quality-can explain our results better than taste-based discrimination.
    Keywords: Trust,Social Capital,Discrimination,Cultural Norms,Robo-Advising,Biased Beliefs,Inter-ethnic Conflict,Social Conditioning,Religion,Caste
    Date: 2022
  3. By: Evans, Alecia; Sesmero, Juan
    Keywords: Institutional and Behavioral Economics
    Date: 2022–08
  4. By: M. Lunkenheimer; A. Kracklauer; G. Klinkova; M. Grabinski
    Abstract: In many models in economics or business a dominantly self-interested homo economicus is assumed. Unfortunately (or fortunately), humans are in general not homines economici as e.g. the ultimatum game shows. This leads to the fact that all these models are at least doubtful. Moreover, economists started to set a quantitative value for the feeling of social justice, altruism, or envy and the like to execute utilitarian calculation. Besides being ethically doubtful, it delivers an explanation in hindsight with little predicting power. We use examples from game theory to show its arbitrariness. It is even possible that a stable Nash equilibrium can be calculated while it does not exist at all, due to the wide differences in human values. Finally, we show that assigned numbers for envy or altruism and the like do not build a field (in a mathematical sense). As there is no homomorphism to real numbers or a subset of it, any calculation is generally invalid or arbitrary. There is no (easy) way to fix the problem. One has to go back to ethical concepts like the categorical imperative or use at most semi quantitative approaches like considering knaves and knights. Mathematically one can only speculate whether e.g. surreal numbers can make ethics calculable.
    Date: 2022–07
  5. By: Andrea Borsato; Andre Lorentz
    Abstract: This paper contributes to the literature around the Kaldor-Verdoorn’s law and analyses the impact of robotisation on the channel through which the law shapes labour-productivity growth. We start with a simple evolutionary interpretation of the law that combines Kaldorian and Post-Keynesian arguments with the neo-Schumpeterian theory of innovation and technological change. Then we apply a GMM estimator to a panel of 17 industries in 25 OECD capitalist economies for the period 1990-2018. After elaborating on the general evidence of the Kaldor-Verdoorn’s law in the sample, we investigate the effect of increasing robotisation. The estimates suggest that for industries with a higher-than-average robot density, the increasing adoption of robots weakens, at least, the meso-economic channel that relates productivity growth to mechanisation. Yet, the higher degree of robotisation strengthens the mechanism that links labour productivity growth at the industrial level to the macro-level dynamic increasing returns to scale that emerge from a general expansion of economic activities through the many interactions between sectors. Such results are in agreement with the empirical literature that suggests different impacts from robotisation on the basis of the level of economic activity considered.
    Keywords: Labour productivity, Kaldor-Verdoorn’s law, Robotisation, GMM.
    JEL: J23 O33 O47
    Date: 2022
  6. By: Gabriele Cappelli; Leonardo Ridolfi; Michelangelo Vasta; Johannes Westberg
    Abstract: The literature on the causes of economic growth has emphasized the major role played by human capital accumulation. This survey shows that education and human capital are at the centre stage of the historical literature on industrialization and long-term economic development. Our contribution is threefold: first, we review the literature on the determinants of educational levels focusing on Europe in the period 1830 – 1930. We find that the lack of fine-grain spatial and (at the same time) harmonized data is preventing research on some important aspects of rising education. Secondly, we provide a preliminary taxonomy of European school acts and reforms in the 19th and early-20th century. Finally, we present the first version of a dataset under construction, which aims at providing spatial data covering gross enrolment rates and literacy across European regions from c. 1830 to 1930. Our preliminary results show that, in c. 1850, educational clusters appear to have often crossed national borders. By contrast, the effect of national institutions and regulations seems to have become an important determinant of schooling (and literacy) rates on the eve of the 20th century.
    Keywords: Education, literacy, Europe, regional, comparative.
    JEL: N30 O43 O52
    Date: 2022–03
  7. By: Zhang, Shouyu; Ferreira, Susana; Karali, Berna
    Keywords: Health Economics and Policy, Institutional and Behavioral Economics, Environmental Economics and Policy
    Date: 2022–08
  8. By: Roy, Tirthankar
    Abstract: The decline of pastoralism in the arid tropics during the twentieth century, generating livelihood stress and violent conflicts, remains an under-researched subject in economic history. Although political stances were sometimes discriminatory towards pastoralists, the decline was largely the unintended consequence of four factors: colonial legacy, property right, development policy, and technological shifts. The paper discusses these four factors and shows that each one of these drivers represented a response to the challenges of development of the world’s dry tropics.
    Keywords: tropical; pastoralism; transhumance; drought; development
    JEL: N10 N50 N55 N57
    Date: 2022–07
  9. By: David E. Bloom; David Canning; Rainer Kotschy; Klaus Prettner; Johannes Schünemann; Rainer Franz Kotschy
    Abstract: Economists use micro-based and macro-based approaches to assess the macroeconomic return to population health. The macro-based approach tends to yield estimates that are either negative and close to zero or positive and an order of magnitude larger than the range of estimates derived from the micro-based approach. This presents a micro-macro puzzle regarding the macroeconomic return to health. We reconcile the two approaches by controlling for the indirect effects of health, which macro-based approaches usually include but micro-based approaches deliberately omit when isolating the direct effect of health. Our results show that the macroeconomic return to health lies in the range of plausible microeconomic estimates, demonstrating that both approaches are in fact consistent with one another.
    Keywords: productivity, population health, human capital, economic development
    JEL: I15 I25 J11 O11 O15
    Date: 2022

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