New Economics Papers
on Neuroeconomics
Issue of 2014‒03‒30
three papers chosen by

  1. Wealth Gradients in Early Childhood Cognitive Development in Five Latin American Countries By Norbert Schady; Jere Behrman; Maria Caridad Araujo; Rodrigo Azuero; Raquel Bernal; David Bravo; Florencia López Bóo; Karen Macours; Daniela Marshall; Christina Paxson; Renos Vakis
  2. Effects of stress on economic decision-making: Evidence from laboratory experiments By Delaney, Liam; Fink, Gunther; Harmon, Colm
  3. Happy-go-lucky. Positive emotions boost demand for lotto. By Zuzanna Halicka; Michał Krawczyk

  1. By: Norbert Schady (Inter-American Development Bank (IDB)); Jere Behrman (Department of Economics, University of Pennsylvania); Maria Caridad Araujo (World Bank Group; Inter-American Development Bank (IDB)); Rodrigo Azuero (Department of Economics, University of Pennsylvania); Raquel Bernal (Universidad de los Andes, Colombia - Department of Economics; Northwestern University - Department of Economics); David Bravo (Department of Economics, Universidad de Chile); Florencia López Bóo (Inter-American Development Bank (IDB); IZA); Karen Macours (Paris School of Economics); Daniela Marshall (Populations Study Center, University of Pennsylvania); Christina Paxson (Office of the Dean, Brown University); Renos Vakis (District of Columbia, Washington DC, The World Bank)
    Abstract: Research from the United States shows that gaps in early cognitive and non-cognitive ability appear early in the life cycle. Little is known about this important question for developing countries. This paper provides new evidence of sharp differences in cognitive development by socioeconomic status in early childhood for five Latin American countries. To help with comparability, we use the same measure of receptive language ability for all five countries. We find important differences in development in early childhood across countries, and steep socioeconomic gradients within every country. For the three countries where we can follow children over time, there are few substantive changes in scores once children enter school. Our results are robust to different ways of defining socioeconomic status, to different ways of standardizing outcomes, and to selective non-response on our measure of cognitive development.
    Keywords: early childhood, socioeconomic gaps, Latin-American
    JEL: J13 I38
    Date: 2014–01–16
  2. By: Delaney, Liam; Fink, Gunther; Harmon, Colm
    Abstract: The ways in which preferences respond to the varying stress of economic environments is a key question for behavioral economics and public policy. We conducted a laboratory experiment to investigate the effects of stress on financial decision making among individuals aged 50 and older. Using the cold pressor task as a physiological stressor, and a series of intelligence tests as cognitive stressors, we find that stress increases subjective discounting rates, has no effect on the degree of risk-aversion, and substantially lowers the effort individuals make to learn about financial decisions .
    Keywords: learning; risk aversion; discounting; financial decisions; stress
    Date: 2014–03
  3. By: Zuzanna Halicka (University of Warsaw); Michał Krawczyk (Faculty of Economic Sciences, University of Warsaw)
    Abstract: The objective of this work was to investigate whether situational emotions can influence consumers’ decision to purchase lottery tickets. We conducted a field experiment in which positive or negative emotions were induced immediately prior to such a decision in 685 subjects unaware of their participation in a study. Two methods of induction—gambling related and gambling unrelated—were used to verify the robustness of the results. We found that subjects in whom positive emotions were induced, in both gambling and non-gambling contexts, bought lottery tickets significantly more often than subjects with negative emotions or those in the control group.
    Keywords: decision making, lotteries, induced emotions, gambling-related cues, field experiment
    JEL: D81 L83
    Date: 2014

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