New Economics Papers
on Neuroeconomics
Issue of 2014‒06‒28
four papers chosen by

  1. Gender gaps in primary school achievement. A decomposition into endowments and returns to IQ and non-cognitive factors By Golsteyn B.H.H.; Schils T.
  2. Visual Tools and Narratives: New Ways to Improve Financial Literacy By Annamaria Lusardi; Anya Savikhin Samek; Arie Kapteyn; Lewis Glinert; Angela Hung; Aileen Heinberg
  3. Early retirement and cognitive decline. A longitudinal analysis using SHARE data By Martina Celidoni; Chiara Dal Bianco; Guglielmo Weber
  4. Public to Private transactions and cognitive biases: A European study By Olivier MEIER; Aurélie SANNAJUST

  1. By: Golsteyn B.H.H.; Schils T. (GSBE)
    Abstract: In elementary school, girls typically outperform boys in languages and boys typically outperform girls in math. The determinants of these differences have remained largely unexplored. Using rich data from Dutch elementary schools, we decompose the differences in achievement into gender differences in endowments and returns to IQ and non-cognitive factors. This descriptive analysis is a thought experiment in which we show the consequences for school performance if girls and boys would have similar resources and take similar advantage of these resources. Our findings indicate that gender differences in resources with respect to social and instrumental skills and need for achievement can explain part of the differences in performance. Boys seem to be better equipped with these resources. Additionally, boys and girls employ their skills differently. Girls take more advantage of their IQ than boys. Yet, the largest part of this parameter effect is left unexplained by IQ and non-cognitive factors.
    Keywords: Analysis of Education; Education and Inequality;
    JEL: I21 I24
    Date: 2014
  2. By: Annamaria Lusardi; Anya Savikhin Samek; Arie Kapteyn; Lewis Glinert; Angela Hung; Aileen Heinberg
    Abstract: We developed and experimentally evaluated four novel educational programs delivered online: an informational brochure, a visual interactive tool, a written narrative, and a video narrative. The programs were designed to inform people about risk diversification, an essential concept for financial decision- making. The effectiveness of these programs was evaluated using the RAND American Life Panel. Participants were exposed to one of the programs, and then asked to answer questions measuring financial literacy and self-efficacy. All of the programs were found to be effective at increasing self-efficacy, and several improved financial literacy, providing new evidence for the value of programs designed to help individuals make financial decisions. The video was more effective at improving financial literacy scores than the written narrative, highlighting the power of online media in financial education.
    JEL: D14 D91
    Date: 2014–06
  3. By: Martina Celidoni (University of Padova); Chiara Dal Bianco (University of Venezia); Guglielmo Weber (University of Padova)
    Abstract: We use a new measure of cognitive decline that is highly predictive of the onset of dementia and can be computed in standard surveys where recall memory tests are administered to the same individuals over the years. Using SHARE data, we investigate the association between cognitive decline and years in retirement controlling for age, physical health, early life conditions and socio-economic status. We find a positive association and an even stronger causal effect. The evidence we produce confirms the Ômental retirementÕ hypothesis and suggests its relevance for the onset of dementia.
    Keywords: Ageing, cognition, retirement, instrumental variable estimation. Classification-JEL: I12, I1, J26.
    Date: 2013–12
  4. By: Olivier MEIER; Aurélie SANNAJUST
    Abstract: We extend the research on private equity by studying the decision to go private in Europe. We consider a new dimension by using two main theories: corporate finance and cognitive biases. It is the first time that these two theories are used to explain Public to Private decisions. To conduct our study, we use Capital IQ as database as well as a hand- collected dataset covering Public to Private transactions in Europe from 2000 to 2010. We select five biases to explain the decision to go private: anchoring, momentum, confirmation, entrenchment and hubris biases. Our empirical results show that managers attribute an important role to recent results in their decision making. Results are largely significant. However, the problem of entrenchment shows that his influence has an important role of the decision to go private: informational asymmetry is used. Indeed we show in our results a lower valuation of the firm one year before the transaction than the results of three years before the transaction.
    Keywords: going private, cognitive biases, manager, public to private transactions
    JEL: G24 G34
    Date: 2014–06–16

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