nep-neu New Economics Papers
on Neuroeconomics
Issue of 2014‒12‒19
three papers chosen by

  1. A Life-Course Perspective on Gender Differences in Cognitive Functioning in India By Velamuri, Malathi; Onur, Ilke
  2. Two birds, one stone? Positive mood makes products seem less useful for multiple-goal pursuit By Anastasiya Pocheptsova; Francine Espinoza Petersen; Jordan Etkin
  3. The Impact of Short Term Exposure to Ambient Air Pollution on Cognitive Performance and Human Capital Formation By Victor Lavy; Avraham Ebenstein; Sefi Roth

  1. By: Velamuri, Malathi; Onur, Ilke
    Abstract: We examine gender differences in four measures of cognitive function among older individuals in India, using the 2010 pilot wave of the Longitudinal Aging Study of India (LASI) survey. We use a life-course approach and estimate the impact of circumstances in childhood, choices in adulthood and current circumstances on current cognitive functioning. Our objective is to understand the correlates of cognitive functioning in later-life more generally, and of female disadvantage in particular. We observe a female disadvantage across all cognitive measures in the raw data. Our estimates indicate that educational attainment and employment status history can account for the entire female disadvantage in verbal skills, but a sizable and significant gap remains in the other cognitive measures even after controlling for these variables. Notably, our estimates indicate that circumstances in childhood have an impact on later-life cognition. A decomposition analysis reveals that the predicted cognition gap is driven by differences in characteristics between men and women, as well as the asymmetric returns to these characteristics. We conclude that policies aimed at correcting the gender imbalance in educational outcomes may not be sufficient to close the gender gaps in cognition. In turn, this has serious implications for a rapidly aging society like India.
    Keywords: Cognition, Gender differences, Early-life conditions, Education, Oaxaca-Blinder decomposition
    JEL: C21 I12 J16 N35
    Date: 2014–10
  2. By: Anastasiya Pocheptsova (R. H. Smith School of Business, University of Maryland); Francine Espinoza Petersen (ESMT European School of Management and Technology); Jordan Etkin (Fuqua School of Business, Duke University)
    Abstract: Negotiating the pursuit of multiple goals often requires making difficult trade-offs between goals. In these situations, consumers can benefit from using products that help them pursue several goals at the same time. But do consumers always prefer these multipurpose products? We propose that consumers’ incidental mood state alters perceptions of products in a multiple-goals context. Four studies demonstrate that being in a positive mood amplifies perceptions of differences between multiple conflicting goals. As a consequence, consumers are less likely to evaluate multipurpose products as being able to serve multiple distinct goals simultaneously. We conclude by discussing implications of these findings for marketers of multipurpose products.
    Keywords: Goals, product evaluation, positive mood
    Date: 2014–11–11
  3. By: Victor Lavy; Avraham Ebenstein; Sefi Roth
    Abstract: Cognitive performance is critical to productivity in many occupations and potentially linked to pollution exposure. We evaluate this potentially important relationship by estimating the effect of pollution exposure on standardized test scores among Israeli high school high-stakes tests (2000-2002). Since students take multiple exams on multiple days in the same location after each grade, we can adopt a fixed effects strategy estimating models with city, school, and student fixed effects. We focus on fine particulate matter (PM2.5) and carbon monoxide (CO), which are considered to be two of the most dangerous forms of air pollution. We find that while PM2.5 and CO levels are only weakly correlated with each other, both exhibit a robust negative relationship with test scores. We also find that PM2.5, which is thought to be particularly damaging for asthmatics, has a larger negative impact on groups with higher rates of asthma. For CO, which affects neurological functioning, the effect is more homogenous across demographic groups. Furthermore, we find that exposure to either pollutant is associated with a significant decline in the probability of not receiving a Bagrut certificate, which is required for college entrance in Israel. The results suggest that the gain from improving air quality may be underestimated by a narrow focus on health impacts. Insofar as air pollution may lead to reduced cognitive performance, the consequences of pollution may be relevant for a variety of everyday activities that require mental acuity. Moreover, by temporarily lowering the productivity of human capital, high pollution levels lead to allocative inefficiency as students with lower human capital are assigned a higher rank than their more qualified peers. This may lead to inefficient allocation of workers across occupations, and possibly a less productive workforce.
    JEL: I21 J24
    Date: 2014–10

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