New Economics Papers
on Neuroeconomics
Issue of 2010‒04‒17
eight papers chosen by

  1. Are Attitudes Towards Economic Risk Heritable? Analyses Using the Australian Twin Study of Gambling By Le, Anh Tram; Miller, Paul W.; Slutske, Wendy S.; Martin, Nicholas G.
  2. Overconfident Behavior In Informational Cascades: An Eye-Tracking Study By Alessandro Innocenti; Alessandra Rufa; Jacopo Semmoloni
  3. On a dubious theory of cross-country differences in intelligence By Kevin Denny
  4. The scourge of Asian Flu: in utero exposure to pandemic influenza and the development of a cohort of British children By Elaine Kelly
  5. Intertemporal Decision Making with Present Biased Preferences By Zafer Akin
  6. Measuring and Understanding Subjective Well-Being By John F. Helliwell; Christopher P. Barrington-Leigh
  7. Medium-term consequences of low birth weight on health and behavioral deficits – is there a catch-up effect? By Datta Gupta, Nabanita; Deding, Mette; Lausten, Mette
  8. Endogenizing Prospect Theory's Reference Point By Ulrich Schmidt; Horst Zank

  1. By: Le, Anh Tram (Curtin University of Technology); Miller, Paul W. (Curtin University of Technology); Slutske, Wendy S. (University of Missouri-Columbia); Martin, Nicholas G. (Queensland Institute of Medical Research)
    Abstract: This study employs multiple regression models based on DeFries and Fulker (1985), and a large sample of twins, to assess heritability in attitudes towards economic risk, and the extent to which this heritability differs between males and females. Consistent with Cesarini, Dawes, Johannesson, Lichtenstein and Wallace (2009), it is found that attitudes towards risk are moderately heritable, with about 20 percent of the variation in these attitudes across individuals being linked to genetic differences. This value is less than one-half the estimates reported by Zyphur, Narayanan, Arvey and Alexander (2009) and Zhong, Chew, Set, Zhang, Xue, Sham, Ebstein and Israel (2009). While females are more risk averse than males, there is no evidence that heritability in attitudes towards risk differs between males and females. Even though heritability is shown to be important to economic risk taking, the analyses suggest that multivariate studies of the determinants of attitudes towards risk which to not take heritability into consideration still provide reliable estimates of the partial effects of other key variables, such as gender and educational attainment.
    Keywords: gender, heritability, risk
    JEL: G00 J01
    Date: 2010–03
  2. By: Alessandro Innocenti; Alessandra Rufa; Jacopo Semmoloni
    Abstract: This paper investigates the validity of the Dual Process theory by using eye-tracking methods to trace the process of attention during a non-preference-based problem solving task, i.e. informational cascades. In this setting, gaze direction may convey evidence on how automatic detection is modified or sustained by controlled search. We provide laboratory evidence that gaze direction is driven by cognitive biases, such as overconfidence. In particular, we find a significant statistical correlation between first fixations and subjects’ actual choices. Our results suggest that attentional strategies are not necessarily consistent with efficient patterns of information collecting.
    Keywords: dual process theory, eye-tracking, cognitive biases, overconfidence, informational cascades.
    JEL: C91 D82 D83 D87
    Date: 2009–09
  3. By: Kevin Denny (University College Dublin)
    Abstract: Kanazawa (2007) offers an explanation for the variation across countries of average intelligence. It is based on the idea human intelligence is a domain specific adaptation and that both temperature and the distance from some putative point of origin are proxies for the degree of novelty that humans in a country have experienced. However the argument ignores many other considerations and is a priori weak and the data used questionable. A particular problem is that in calculating distances between countries it implicitly assumes that the earth is flat. This makes all the estimates biased and unreliable.
    Keywords: intelligence, measurement error, international comparisons
    Date: 2009–10–01
  4. By: Elaine Kelly (Institute for Fiscal Studies and University College London)
    Abstract: <p><p><p>This paper examines the impact of <i>in utero</i> exposure to the Asian influenza pandemic of 1957 upon physical and cognitive development in childhood. Outcome data is provided by the National Child Development Study (NCDS), a panel study of a cohort of British children who were all potentially exposed in the womb. Epidemic effects are identified using geographic variation in a surrogate measure of the epidemic. Results indicate significant detrimental effects of the epidemic upon birth weight and height at 7 and 11, but only for the offspring of mother's with certain health characteristics. By contrast, the impact of the epidemic on childhood cognitive test scores is more general: test scores are reduced at the mean, and effects remain constant across maternal health and socioeconomic indicators. Taken together, our results point to multiple channels linking foetal health shocks to childhood outcomes.</p></p></p>
    Keywords: NCDS; foetal origins; birth weight; influenza
    JEL: I12 I29 D13
    Date: 2009–09
  5. By: Zafer Akin
    Date: 2010–02
  6. By: John F. Helliwell; Christopher P. Barrington-Leigh
    Abstract: Increasing attention is being paid in academic, policy, and public arenas to subjective measures of well-being. This promising trend represents a shift towards measuring positive outcomes in psychology and greater realism in the study of economic behaviour. After a general review of past and potential uses for subjective well-being data, and a discussion of why some economists have previously been sceptical of SWB data, we present global and Canadian examples from our own research to illustrate what can be learned. Differences in subjective well-being will be shown to be large and sustained across individuals, communities, provinces and nations. Although the patterns of subjective well-being are very different across Canada than across the world, we show that in both cases the differences can be fairly well accounted for by the same set of life circumstances. Our examples of policy-relevant research findings include new accountings of the differences in individual-level SWB assessments around the world and across Canada. These highlight the importance of social factors whose role has otherwise been hard to quantify in income-equivalent terms.
    JEL: A13 I3 J1 P51 P52
    Date: 2010–04
  7. By: Datta Gupta, Nabanita (Department of Economics, Aarhus School of Business); Deding, Mette (The Danish National Centre for Social Research); Lausten, Mette (The Danish National Centre for Social Research)
    Abstract: A number of studies have documented negative long term effects of low birth weight. Yet, not much is known about the dynamics of the process leading to adverse health and educational outcomes in the long-run. While some studies find effects of the same size at both school age and young adulthood, others find a diminishing negative effect over time due to a catching-up process. The purpose of this paper is to try to resolve this puzzle by analyzing the medium term consequences of low birth weight measured as various child outcomes at ages 6 months, 3, 7 and 11, using data from the Danish Longitudinal Survey of Children. Observing the same children at different points in time allows us to chart the evolution of health and behavioral deficits among children born with low birth weight and helps inform the nature and timing of interventions
    Keywords: low birth weight; medium term effects; health and behavioral outcomes; longitudinal child-mother survey
    JEL: I12
    Date: 2010–01–01
  8. By: Ulrich Schmidt; Horst Zank
    Abstract: In previous models of (cumulative) prospect theory reference-dependence of preferences is imposed beforehand and the location of the reference point is exogenously determined. This note provides a foundation of prospect theory, where reference-dependence is derived from preference conditions and a unique reference point arises endogenously
    Keywords: Prospect theory, reference point, diminishing sensitivity, loss aversion
    JEL: D81
    Date: 2010–03

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