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on Experimental Economics |
| By: | Tomohito Aoyama; Nobuyuki Hanaki |
| Abstract: | The random incentive system (RIS) is a standard incentive scheme used to elicit preferences in economic experiments. However, it has been speculated that RIS may not be incentive compatible when participants are concerned about ambiguity, i.e., that the choices observed under RIS do not reflect the underlying preferences. To examine the performance of RIS under ambiguity, we conducted three experiments online and in a laboratory. The results of the experiments suggest that RIS is incentive compatible. We argue that presenting choice situations in isolation may improve the incentive compatibility of RIS. We also argue that using RIS, together with an experimental guideline called Prince, may reduce the observed ambiguity aversion. |
| Date: | 2024–03 |
| URL: | http://d.repec.org/n?u=RePEc:dpr:wpaper:1236&r=exp |
| By: | Gergely Horvath; Mofei Jia |
| Abstract: | We study whether competition for social status induces higher effort provision and efficiency when individuals collaborate with their network neighbors. We consider a laboratory experiment in which individuals choose a costly collaborative effort and their network neighbors. They benefit from their neighbors' effort and effort choices of direct neighbors are strategic complements. We introduce two types of social status in a 2x2 factorial design: 1) individuals receive monetary benefits for incoming links representing popularity; 2) they receive feedback on their relative payoff ranking within the group. We find that link benefits induce higher effort provision and strengthen the collaborative ties relative to the Baseline treatment without social status. In contrast, the ranking information induces lower effort as individuals start competing for higher ranking. Overall, we find that social status has no significant impact on the number of links in the network and the efficiency of collaboration in the group. |
| Date: | 2024–03 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2403.05830&r=exp |
| By: | Nghiem, Giang; Dräger, Lena; Dalloul, Ami |
| Abstract: | This paper explores communication strategies for anchoring households' medium-term inflation expectations in a high inflation environment. We conducted a survey experiment with a representative sample of 4, 000 German households at the height of the recent inflation surge in early 2023, with information treatments including a qualitative statement by the ECB president and quantitative information about the ECB's inflation target or projected inflation. Inflation projections are most effective, but combining information about the target with a qualitative statement also significantly improves anchoring. The treatment effects are particularly pronounced among respondents with high financial literacy and high trust in the central bank. |
| Keywords: | anchoring of inflation expectations, central bank communication, survey experiment, randomized controlled trial (RCT) |
| JEL: | E52 E31 D84 |
| Date: | 2024–04 |
| URL: | http://d.repec.org/n?u=RePEc:han:dpaper:dp-719&r=exp |
| By: | Vincenzo Galasso; Massimo Morelli; Tommaso Nannicini; Piero Stanig |
| Abstract: | We evaluate how traditional parties may respond to populist parties on issues aligning with populist messages. During the 2020 Italian referendum on the reduction of members of Parliament, we conducted a large-scale field experiment, exposing 200 municipalities to nearly a million impressions of programmatic advertisement. Our treatments comprised two video ads against the reform: one debunking populist rhetoric and another attributing blame to populist politicians. This anti-populist campaign proved effective through demobilization, as it reduced both turnout and the votes in favor of the reform. Notably, the effects were more pronounced in municipalities with lower rates of college graduates, higher unemployment, and a history of populist votes. This exogenous influence introduced a unique populist dynamic, observable in the 2022 national election where treated municipalities showed increased support for Brothers of Italy, a rising populist party, and decreased support for both traditional parties and the populists behind the 2020 reform. A follow-up survey further showed increased political interest and diminished trust in political institutions among the residents of municipalities targeted by the campaign. |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_10949&r=exp |
| By: | Ro’i Zultan (BGU); Eldar Dadon (BGU) |
| Keywords: | incentives, multitasking, working from home, laboratory experiment |
| JEL: | C92 D86 J30 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:bgu:wpaper:2319&r=exp |
| By: | Roberto Galbiati (ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique); Emeric Henry (Institut d'Études Politiques [IEP] - Paris); Nicolas Jacquemet (PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | Formal enforcement punishing defectors can sustain cooperation by changing incentives. In this paper, we introduce a second effect of enforcement: it can also affect the capacity to learn about the group's cooperativeness. Indeed, in contexts with strong enforcement, it is difficult to tell apart those who cooperate because of the threat of fines from those who are intrinsically cooperative types. Whenever a group is intrinsically cooperative, enforcement will thus have a negative dynamic effect on cooperation because it slows down learning about prevalent values in the group that would occur under a weaker enforcement. We provide theoretical and experimental evidence in support of this mechanism. Using a lab experiment with independent interactions and random rematching, we observe that, in early interactions, having faced an environment with fines in the past decreases current cooperation. We further show that this results from the interaction between enforcement and learning: the effect of having met cooperative partners has a stronger effect on current cooperation when this happened in an environment with no enforcement. Replacing one signal of deviation without fine by a signal of cooperation without fine in a player's history increases current cooperation by 10%; while replacing it by a signal of cooperation with fine increases current cooperation by only 5%. |
| Keywords: | Enforcement, social values, cooperation, learning, spillovers, repeated games, experiments |
| Date: | 2024–03 |
| URL: | http://d.repec.org/n?u=RePEc:hal:cesptp:hal-04511257&r=exp |
| By: | Choi, S.; Goyal, S.; Guo, F.; Moisan, F. |
| Abstract: | Social interactions shape individual behaviour and public policy increasingly uses networks to improve effectiveness. It is therefore important to understand if the theoretical predictions on the relation between networks and individual choice are empirically valid. This paper tests a key result in the theory of games on networks: an individual’s action is proportional to their (Bonacich) centrality. Our experiment shows that individual efforts increase in centrality but at a rate of increase that is lower than the theoretical prediction. Moreover, efforts are higher than predicted in some cases and lower than predicted in other cases. These departures from equilibrium have large effects on individual earnings. We propose a model of network based imitation decision rule to explain these deviations. |
| JEL: | C92 D83 D85 Z13 |
| Date: | 2024–01–16 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camdae:2401&r=exp |
| By: | Christopher Roth (University of Cologne); Peter Schwardmann (Carnegie Mellon University); Egon Tripodi (Hertie School) |
| Abstract: | Throughout history, people with mental illness have been discriminated against and stigmatized. Our experiment provides a new measure of perceived depression stigma and then investigates the causal effect of perceived stigma on help-seeking in a sample of 1, 844 Americans suffering from depression. A large majority of our participants overestimate the extent of stigma associated with depression. In contrast to prior correlational evidence, lowering perceived social stigma through an information intervention leads to a reduction in the demand for psychotherapy. A mechanism experiment reveals that this information increases optimism about future mental health, thereby reducing the perceived need for therapy. |
| Keywords: | depression; stigma; information; psychotherapy; |
| Date: | 2024–03–24 |
| URL: | http://d.repec.org/n?u=RePEc:rco:dpaper:499&r=exp |
| By: | Breitkopf, Laura (Max Planck Institute for Research on Collective Goods); Chowdhury, Shyamal (University of Sydney); Priyam, Shambhavi (World Bank); Schildberg-Hörisch, Hannah (Heinrich Heine University Düsseldorf); Sutter, Matthias (Max Planck Institute for Research on Collective Goods) |
| Abstract: | We use novel data on nearly 6, 000 children and adolescents aged 6 to 16 that combine incentivized measures of social, time, and risk preferences with rich information on child behavior and family environment to study whether children's economic preferences predict their behavior. Results from standard regression specifications demonstrate the predictive power of children's preferences for their prosociality, educational achievement, risky behaviors, emotional health, and behavioral problems. In a second step, we add information on a family's socio-economic status, family structure, religion, parental preferences and IQ, and parenting style to capture household environment. As a result, the predictive power of preferences for behavior attenuates. We discuss implications of our findings for research on the formation of children's preferences and behavior. |
| Keywords: | social preferences, time preferences, risk preferences, experiments with children, origins of preferences, human capital, behavior |
| JEL: | C91 D01 |
| Date: | 2024–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16834&r=exp |
| By: | Carlsson, Magnus (Department of Economics and Statistics); Eriksson, Stefan (Department of Economics, Uppsala University); Rooth, Dan-Olof (The Swedish Institute for Social Research, Stockholm University) |
| Abstract: | Labor markets in advanced economies have undergone substantial change in recent decades due to globalization, technological improvements, and organizational changes. Due to these developments, oral and written language skills have become increasingly important even in less skilled jobs. Immigrants – who often have limited skills in the host country language upon arrival – are likely to be particularly affected by the increase in language requirements. Despite this increase in literacy requirements, little is known about how immigrants’ language proficiency is rewarded in the labor market. However, estimating the causal effect of immigrants’ language skills on hiring is challenging due to potential biases caused by omitted variables, reverse causality, and measurement error. To address identification problems, we conduct a large-scale field experiment, where we send thousands of fictitious resumes to employers with a job opening. With the help of a professional linguist, we manipulate the cover letters by introducing common second-language features, which makes the resumes reflect variation in the language skills of real-world migrants. Our findings show that better language proficiency in the cover letter has a strong positive effect on the callback rate for a job interview: moving from the lowest level of language proficiency to a level similar to natives almost doubles the callback rate. Consistent with the recent development that language proficiency is also important for many low- and medium- skilled jobs, the effect of better language skills does not vary across the vastly different types of occupations we study. Finally, the results from employer surveys suggest that it is improved language skills per se that is the dominant explanation behind the language proficiency effect, rather than language skills acting as a proxy for other unobserved abilities or characteristics. |
| Keywords: | Labor migrants; Language proficiency; Language skills; Human capital; Field experiment |
| JEL: | F22 J15 J24 |
| Date: | 2023–02–09 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:vxesta:2023_001&r=exp |
| By: | Anup Malani; Cynthia Kinnan; Gabriella Conti; Kosuke Imai; Morgen Miller; Shailender Swaminathan; Alessandra Voena; Bartosz Woda |
| Abstract: | Universal health coverage is a widely shared goal across lower-income countries. We conducted a large-scale, 4-year trial that randomized premiums and subsidies for India’s first national, public hospital insurance program, RSBY. We find roughly 60% uptake even when consumers were charged premiums equal to the government’s cost for insurance. We also find substantial adverse selection into insurance at positive prices. Insurance enrollment increases insurance utilization, partly due to spillovers from use of insurance by neighbors. However, many enrollees attempted to use insurance but failed, suggesting that learning is critical to the success of public insurance. We find very few statistically significant impacts of insurance access or enrollment on health. Because there is substantial willingness-to-pay for insurance, and given how distortionary it is to raise revenue in the Indian context, we calculate that our sample population should be charged a premium for RSBY between INR 500-1000 rather than a zero premium to maximize the marginal value of public funds. |
| JEL: | G52 I13 I38 |
| Date: | 2024–03 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:32239&r=exp |
| By: | Malani, Anup (University of Chicago); Kinnan, Cynthia (NBER); Conti, Gabriella (University College London); Imai, Kosuke (Harvard University); Miller, Morgen (University of Chicago); Swaminathan, Shailender (Sai University); Voena, Alessandra (Stanford University); Woda, Bartosz (Amazon) |
| Abstract: | Universal health coverage is a widely shared goal across lower-income countries. We conducted a large-scale, 4-year trial that randomized premiums and subsidies for India's first national, public hospital insurance program, RSBY. We find roughly 60% uptake even when consumers were charged premiums equal to the government's cost for insurance. We also find substantial adverse selection into insurance at positive prices. Insurance enrollment increases insurance utilization, partly due to spillovers from use of insurance by neighbors. However, many enrollees attempted to use insurance but failed, suggesting that learning is critical to the success of public insurance. We find very few statistically significant impacts of insurance access or enrollment on health. Because there is substantial willingness-to-pay for insurance, and given how distortionary it is to raise revenue in the Indian context, we calculate that our sample population should be charged a premium for RSBY between INR 500-1000 rather than a zero premium to maximize the marginal value of public funds. |
| Keywords: | health insurance, adverse selection, spillovers, marginal value of public funds |
| JEL: | D1 I13 |
| Date: | 2024–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16861&r=exp |
| By: | Seungjin Han; Andrew Leal |
| Abstract: | This paper proposes Competing Mechanism Games Played Through Agent (CMGPTA), an extension of the GPTA (Prat and Rustichini (2003)), where a Principal can offer any arbitrary mechanism that specifies a transfer schedule for each agent conditional on all Agents' messages. We identify the set of equilibrium allocations using deviator-reporting mechanisms (DRMs) on the path and single transfer schedules off the path. We design a lab experiment implementing DRMs. We observe that implemented outcomes are efficient more often than random. A majority of the time, Agents do tell the truth on the identity of a deviating Principal, despite potential gains from (tacit) collusion on false reports. As play progresses, Agents learn to play with their counterparty Agent with the average predicted probability of collusion on false reports across groups increasing from about 9% at the beginning of the experiment to just under 20% by the end. However, group heterogeneity is significant. |
| Date: | 2024–03 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2403.03317&r=exp |
| By: | KOIZUMI Hideto |
| Abstract: | Progressive societies aspire to eliminate discrimination and promote equal opportunities and meritocracy. The crucial question remains: does the pursuit of equal opportunities and merit-based evaluation truly lead to a fair society? To test the presumed fairness of meritocracy, this paper quantitatively analyzes the impact of luck on merit in the absence of initial differences in individual characteristics. This study utilizes a distinctive experimental setting involving Japanese speedboat races. Participants are randomly assigned engines with different capacities in each tournament, ensuring probabilistic fairness across racers but introducing variability in the timing of luck. By identifying racers who are assigned “lucky†motors during their debut periods as the treatment group, we trace their performance trajectory, examining factors such as the number of first-place finishes and earnings. The findings indicate a growing performance gap over time, accompanied by increased opportunities and tendency for risk-taking behavior. Over four years, the initially modest advantage of the treatment group results in a remarkable 69% more cumulative first-place finishes and 48% more cumulative earnings for male racers. Additionally, male racers in the treatment group exhibit a 10% lower market exit rate compared to the control group. These results underscore the pivotal role of early-stage luck in shaping substantial differences in merit, challenging the presumed fairness of meritocracy. |
| Date: | 2024–03 |
| URL: | http://d.repec.org/n?u=RePEc:eti:dpaper:24035&r=exp |
| By: | Zanoni, Wladimir; Díaz, Lina M.; Díaz, Emily; Paredes, Jorge; Acevedo, Paloma |
| Abstract: | This study examines the impact of a behavioral intervention on reducing discrimination against Venezuelan migrants in the screening of home rental applications conducted by Ecuadorian real estate agents (REAs). Given that Venezuelan migrants represent the second-largest migratory group globally, with over seven million individuals seeking refuge primarily in other Latin American countries, understanding and addressing discrimination against them is of significant importance. Our artifactual field experiment involved providing information to REAs that highlighted the extra efforts Venezuelan migrants must make to achieve the same goals as nonmigrants in host countries. The results demonstrated a meaningful increase of 33.67% in the preference for Venezuelan migrants over native applicants, with this effect mainly driven by changes in male REAs discriminatory behaviors. The findings suggest that challenging the information value of Venezuelan migrant stereotypes, which often underlie assumptions about their qualities, can effectively diminish discrimination during the rental application process. This research contributes valuable insights to the ongoing efforts to identify effective means to deal with discrimination against migrants. |
| Keywords: | field experiments;behavioral interventions;Nudges;Migration;prejudice |
| JEL: | F22 J15 R31 |
| Date: | 2023–10 |
| URL: | http://d.repec.org/n?u=RePEc:idb:brikps:13200&r=exp |
| By: | Christopher Roth (University of Cologne); Peter Schwardmann (Carnegie Mellon University); Egon Tripodi (Hertie School) |
| Abstract: | While psychotherapy has been shown to be effective in treating depression, take-up remains low. In a sample of 1, 843 depressed individuals, we document that effectiveness concerns are top-of-mind when respondents consider the value of therapy. We then show that the average respondent underestimates the effectiveness of therapy and that an information treatment correcting this misperception increases participants’ incentivized willingness to pay for therapy. Information affects therapy demand by changing beliefs rather than by shifting attention. Our results suggest that information interventions that target the perceived effectiveness of therapy are a potent tool in combating the ongoing mental health crisis. |
| Keywords: | mental health; depression; psychotherapy; beliefs; effectiveness; information policy; |
| Date: | 2024–03–24 |
| URL: | http://d.repec.org/n?u=RePEc:rco:dpaper:500&r=exp |
| By: | Beber, Bernd (RWI); Ebert, Cara (RWI); Sievert, Maximiliane (RWI) |
| Abstract: | We investigate the extent to which asylum policies that aim to deter individuals from migrating irregularly in fact do so. We specifically consider effects of Germany's recent and high-profile asylum policy adjustments, which include accelerated asylum decision processes, the prospect of asylum processing outside of Europe, the introduction of a payment card to replace cash benefits, and an extended waiting period for native-level benefits. In order to estimate effects of these policy measures on irregular migration intent, we implement a conjoint experiment with 989 men aged 18–40 in four cities in Senegal, a population of most-likely migrants in a country where irregular migration to Europe is highly salient. We find that offshoring the asylum process significantly and substantially lowers irregular migration intentions across nearly all types of subjects. Extending the waiting time for native-level benefits only has a small, marginally significant effect on intent, and no effect among the poorest subjects and those that are most motivated to migrate internationally. Neither reducing asylum processing times nor replacing cash benefits with a payment card significantly alters intentions. We note that the presence or absence of an effect does not resolve political and normative questions concerning these policies, which are beyond the scope of this particular study. |
| Keywords: | asylum policy, irregular migration, conjoint experiment |
| JEL: | F22 J61 K37 |
| Date: | 2024–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16850&r=exp |
| By: | Valerio Capraro; Roberto Di Paolo; Matjaz Perc; Veronica Pizziol |
| Abstract: | Understanding human behaviour in decision problems and strategic interactions has wide-ranging applications in economics, psychology, and artificial intelligence. Game theory offers a robust foundation for this understanding, based on the idea that individuals aim to maximize a utility function. However, the exact factors influencing strategy choices remain elusive. While traditional models try to explain human behaviour as a function of the outcomes of available actions, recent experimental research reveals that linguistic content significantly impacts decision-making, thus prompting a paradigm shift from outcome-based to language-based utility functions. This shift is more urgent than ever, given the advancement of generative AI, which has the potential to support humans in making critical decisions through language-based interactions. We propose sentiment analysis as a fundamental tool for this shift and take an initial step by analyzing 61 experimental instructions from the dictator game, an economic game capturing the balance between self-interest and the interest of others, which is at the core of many social interactions. Our meta-analysis shows that sentiment analysis can explain human behaviour beyond economic outcomes. We discuss future research directions. We hope this work sets the stage for a novel game theoretical approach that emphasizes the importance of language in human decisions. |
| Date: | 2024–03 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2403.08944&r=exp |
| By: | Oparina, Ekaterina (CEP, London School of Economics); Krekel, Christian (London School of Economics); Srisuma, Sorawoot (University of Surrey) |
| Abstract: | Common mental health problems impose significant costs on individuals and societies, yet healthcare systems often overlook them. We provide the first causal evidence on the effectiveness of a pioneering, nationwide mental health service for treating depression and anxiety disorders in England using non-experimental data and methods. We exploit variations in waiting times to identify treatment effects, based on a novel dataset of over one million patients that well represent the English population. Our findings show that treatment improved mental health and reduced impairment in work and social life. We also provide suggestive evidence of enhanced employment. However, effects vary across patients, services, and areas. The programme is cost-effective and provides a blueprint for treating mental health in other countries. |
| Keywords: | policy evaluation, mental health, psychological therapies, quasi- natural experiment, machine learning, cost-benefit analysis |
| JEL: | C31 C32 D61 I12 I38 |
| Date: | 2024–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16839&r=exp |
| By: | Lichtin, Florian; Smith, E. Keith; Axhausen, Kay W.; Bernauer, Thomas |
| Abstract: | The twin challenge of increasing capacity to accommodate growing travel demand while simultaneously decarbonizing the transport sector places enormous pressure on public transport (PT) systems globally. Arguably the most fundamental policy choice and trade-off in designing and operating PT systems in the coming years will be service levels versus cost implications. On the presumption that public (citizen and consumer) opinion is crucial to making such choices, we study this question with a focus on Switzerland by using a factorial experiment (n = 1'634) that considers the frequency and geographic coverage of PT services as well as the cost implications for PT users and taxpayers. We find that support for increased frequency of connections and more services to peripheral regions is high as long as such service expansion is funded mainly by the government, rather than PT users. Preferences are generally consistent across subgroups, except in the case of government funding, where preferences differ by political orientation. This suggests that there is substantial demand across the board for PT services expansion funded primarily by the government, but that the question of funding is also potentially politically the most controversial. While our findings are specific to a country with a highly developed PT system, our research provides a template for similar research in other countries that struggle with a similar challenge. |
| Date: | 2024–03–13 |
| URL: | http://d.repec.org/n?u=RePEc:osf:osfxxx:2m6a7&r=exp |
| By: | Oriana De Saint Priest; Franciska Krings; Claudia Toma |
| Abstract: | Older employees often face discrimination and exclusion from work teams. In two scenario studies, we tested the impact of age diversity statements on the representation and inclusion of older employees in teams. In Study 1 (N= 304), participants were either exposed to a diversity statement or not, before selecting two teammates out of a list of four differing in age and gender for a project team. Then, we measured participants’ inclusive behavior towards a new older member joining this team. Age diversity statements were effective in boosting representation, but not inclusion. In Study 2 (N= 518), we further manipulated the content of the statement (diversity or diversity and inclusion) and the organizational motive (reputation or change). We replicated the effects of diversity statements on representation and additionally found an effect on inclusive behaviors, but only when the statement targeted diversity and inclusion while reflecting an organizational commitment to change. |
| Date: | 2024–03–10 |
| URL: | http://d.repec.org/n?u=RePEc:sol:wpaper:2013/369712&r=exp |
| By: | Alberto Prati (University of Oxford, UCL - University College of London [London], LSE - London School of Economics and Political Science); Charlotte Saucet (UP1 UFR02 - Université Paris 1 Panthéon-Sorbonne - École d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne, CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | The paper estimates the causal effect of a health treatment on patients' beliefs, preferences and memories about the treatment. It exploits a natural experiment which occurred in the United Kingdom during the COVID-19 vaccination campaign. UK residents could choose to opt into the vaccination program, but not which vaccine they received. The assignment to a vaccine offered little objective information for learning about its qualities, but triggered strong psychological demand for reassuring beliefs. We surveyed a sample of UK residents about their beliefs on the different COVID-19 vaccines before and after receiving their jab. Before vaccination, individuals exhibit similar prior beliefs and stated preferences about the different vaccines. After vaccination, however, they update their beliefs overly optimistically about the safety and effectiveness of the vaccine they received, state that they would have chosen it if they could, and have distorted memories about their past beliefs. These results cannot be explained by conventional experience effects. At the aggregated level, they show that random assignment to a health treatment predicts a polarization of opinions about its quality. At the individual level, these findings provide evidence in line with the predictions of motivated beliefs and over-inference from weak signals in a real-world health setting. |
| Keywords: | COVID-19, Motivated beliefs, Motivated memory, Over-inference, Natural experiment, Behavioral health economics |
| Date: | 2024–02–06 |
| URL: | http://d.repec.org/n?u=RePEc:hal:cesptp:hal-04512861&r=exp |
| By: | David Rhys Bernard (Paris School of Economics); Gharad Bryan (London School of Economics); Sylvain Chabé-Ferret (Toulouse School of Economics); Jonathan de Quidt (Queen Mary University of London and Institute for International Economic Studies); Jasmin Claire Fliegner (University of Manchester); Roland Rathelot (Institut Polytechnique de Paris (ENSAE)) |
| Abstract: | The use of observational methods remains common in program evaluation. How much should we trust these studies, which lack clear identifying variation? We propose adjusting confidence intervals to incorporate the uncertainty due to observational bias. Using data from 44 development RCTs with imperfect compliance (ICRCTs), we estimate the parameters required to construct our confidence intervals. The results show that, after accounting for potential bias, observational studies have low effective power. Using our adjusted confidence intervals, a hypothetical infinite sample size observational study has a minimum detectable effect size of over 0.3 standard deviations. We conclude that – given current evidence – observational studies are uninformative about many programs that in truth have important effects. There is a silver lining: collecting data from more ICRCTs may help to reduce uncertainty about bias, and increase the effective power of observational program evaluation in the future. |
| Date: | 2023–01–12 |
| URL: | http://d.repec.org/n?u=RePEc:qmw:qmwecw:976&r=exp |