nep-neu New Economics Papers
on Neuroeconomics
Issue of 2010‒08‒28
three papers chosen by
Daniel Houser
George Mason University

  2. Human Capital Investment by the Poor: Informing Policy with Laboratory and Field Experiments By Catherine Eckel; Cathleen Johnson; Claude Montmarquette
  3. Are Older Workers Worthy of Their Pay? An Empirical Investigation of Age-Productivity and Age-Wage Nexuses By Cardoso, Ana Rute; Guimaraes, Paulo; Varejão, José

  1. By: Yoshiro Tsusui (Graduate School of Economics, Osaka University, Japan; CREED, FEB, University of Amsterdam, Netherlands); Uri Benzion (Department of Economics, Ben Gurion University; Interdisciplinary Department of Social Sciences, Western Galilee College, Israel); Shosh Shahrabani (Economics and Management Department, Max Stern Academic College of Emek Yezreel, Israel)
    Abstract: This paper investigates how people decide to take influenza vaccination in Japan. Using a large-scale survey, we found that people decide rationally, considering the costs and benefits of vaccination. Specifically, people take into account the probability of infection, severity of the disease, and effectiveness and side effects of vaccination, discounting the future benefits of the vaccination and being affected by risk aversion. In addition, we found that behavioral variables such as altruism and overconfidence are also important. Our survey suggests that dissemination of information on the effectiveness of vaccination may raise the vaccination rate, while information on the probability of infection may have the opposite effect.
    Keywords: influenza; inoculation; survey; time preference; Japan
    JEL: I19
    Date: 2010–08
  2. By: Catherine Eckel; Cathleen Johnson; Claude Montmarquette
    Abstract: The purpose of the study is to collect information that can be used to design a policy to induce the poor to invest in human capital. We use laboratory experimental methodology to measure the preferences and choices of the target population of a proposed government policy. We recruited 256 subjects in Montreal, Canada; 72 percent had income below 120 percent of the Canadian poverty level. The combination of survey measures and actual decisions allows us to better understand individual heterogeneity in responses to different subsidy levels. Two behavioral characteristics, patience and attitude towards risk, are key to understanding the determinants of educational investment for the low-income individuals in this experiment. The decision to save for a family member’s education is somewhat different from that of investing in one’s own education. Again, patient participants were more likely to save for a family member’s education, but in contrast to investing in one’s own education, a subject’s attitude towards risk played no role. <P>Le but de cette étude est de recueillir des informations pour concevoir une politique publique afin d’inciter les pauvres à investir en capital humain. Nous utilisons l’approche expérimentale pour mesurer les préférences et les choix de la population ciblée. Nous avons recruté 256 sujets à Montréal. 72 % avaient un revenu inférieur à 120 % pour cent du seuil de faible revenu de Statistique Canada. La combinaison de mesures d'enquête et les décisions réelles nous permettent de mieux comprendre l'hétérogénéité individuelle dans les réponses aux différents niveaux de subvention. Deux caractéristiques comportementales, la patience (désir d’épargne) et l'attitude envers le risque, sont essentielles à la compréhension des déterminants de l'investissement éducatif pour les personnes à faible revenu dans cette expérience. La décision d’investir dans l'éducation d'un membre de la famille est quelque peu différente de celle d'investir dans sa propre éducation. Encore une fois, les participants les plus patients sont les plus susceptibles d'épargner pour l'éducation d'un membre de la famille, mais au contraire, investir dans sa propre éducation, l'attitude d'un sujet vis-à-vis le risque ne joue aucun rôle.
    Keywords: Intertemporal choice, field experiments, risk attitudes, working poor, choix intertemporels, expériences sur le terrain, les attitudes vis-à-vis le risque, travailleurs pauvres
    JEL: C93 D91 D81
    Date: 2010–08–01
  3. By: Cardoso, Ana Rute (IAE Barcelona (CSIC)); Guimaraes, Paulo (University of South Carolina); Varejão, José (University of Porto)
    Abstract: Using longitudinal employer-employee data spanning over a 22-year period, we compare age-wage and age-productivity profiles and find that productivity increases until the age range of 50-54, whereas wages peak around the age 40-44. At younger ages, wages increase in line with productivity gains but as prime-age approaches, wage increases lag behind productivity gains. As a result, older workers are, in fact, worthy of their pay, in the sense that their contribution to firm-level productivity exceeds their contribution to the wage bill. On the methodological side, we note that failure to account for the endogenous nature of the regressors in the estimation of the wage and productivity equations biases the results towards a pattern consistent with underpayment followed by overpayment type of policies.
    Keywords: aging, productivity, wages
    JEL: J14 J24 J31
    Date: 2010–08

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