nep-neu New Economics Papers
on Neuroeconomics
Issue of 2015‒02‒28
four papers chosen by
Daniel Houser
George Mason University

  1. Fetal Origins of Personality: Effects of early life circumstances on adult personality traits By Sonya Krutikova ; Helene Bie Lilleor
  2. The Effect of Intelligence on Financial Development: A Cross-Country Comparison By Oasis Kodila-Tedika ; Simplice Asongu
  3. Digit ratio (2D:4D) and altruism: evidence from a large, multi-ethnic sample By Matteo M. Galizzi ; Jeroen Nieboer
  4. Poverty and Self Control By Sevin Yeltekin ; Debraj Ray ; B. Douglas Bernheim

  1. By: Sonya Krutikova ; Helene Bie Lilleor
    Abstract: Personality traits are highly predictive of life outcomes and successes.  However, little is known about their formation and what can hamper their development.  There is ample evidence that conditions in early-life can have persistent influence on health and cognitive skills.  In this paper, we ask whether this is also the case for the formation and development of personality traits.  We find strong and robust evidence of persistent impacts among siblings of early-life rainfall fluctuations on measures of a latent personality trait, known as core self-evaluation, in adulthood.  The results are driven by females, irrespective of the gender composition of siblings within the household.  There is heterogeneity across households likely to have different levels of credit access, suggesting a household wealth mechanism; effects are strongest for households with lowest durable asset holdings.  Effects on other outcomes in adulthood suggest that early life rainfall may impact adult core self-evaluation through health, schooling and wealth, although we cannot rule out reverse causality.
    Date: 2015–01–05
    URL: http://d.repec.org/n?u=RePEc:oxf:wpaper:wps/2015-03&r=neu
  2. By: Oasis Kodila-Tedika (Université de Kinshasa Département d’Eco ); Simplice Asongu (Yaoundé/Cameroun )
    Abstract: We assess the correlations between intelligence and financial development in 123 countries using data averages from 2000-2010. Human capital is measured in terms of IQ, cognitive ability & cognitive skills, while financial development is appreciated both from financial intermediary and stock market development perspectives. Short-term financial measures are private and domestic credits whereas long-term financial indicators include: stock market capitalization, stock market value traded and turnover ratio. The following findings are established. (1) With respect to private credit, the positive correlations of IQ and cognitive ability are broadly similar while that of cognitive skills is substantially higher in terms of magnitude. (2) The correlation between intelligence and other financial variables are broadly similar. (3) The underlying findings are broadly confirmed in terms of sign of correlation, though the magnitude of correlation is higher (lower) with the addition of social capital or ethnic fractionalization (institutions or income). (4) When continents are excluded to control for extreme effects, baseline results are confirmed and the following on order of continental importance in financial development is established in increasing magnitude: Africa, Americas, Oceania, Europe & Asia.
    Keywords: Financial development, Intelligence, Skill, Human Capital
    JEL: E01 G20 I20 I29
    Date: 2015–02
    URL: http://d.repec.org/n?u=RePEc:agd:wpaper:15/002&r=neu
  3. By: Matteo M. Galizzi ; Jeroen Nieboer
    Abstract: We look at the links between the Digit Ratio - the ratio of the length of the index finger to the length of the ring finger – for both right and left hands, and giving in a Dictator Game. Unlike previous studies with exclusively Caucasian subjects, we recruited a large, ethnically diverse sample. Our main results are as follows. First, for Caucasian subjects we estimate a significant positive regression coefficient for the right hand digit ratio and a significant negative coefficient for its squared measure. These results replicate the findings of Brañas-Garza et al. (2013), who also observe an inverted U-shaped relationship for Caucasian subjects. Second, we are not able to find any significant association of the right hand digit ratio with giving in the Dictator Game for the other main ethnic groups in our sample. Third, we find no significant association between giving in the Dictator Game and the left hand digit ratio.
    Keywords: testosterone; digit ratio; social preferences; altruism; dictator game
    JEL: C91 C92 D44 D81
    Date: 2015–02
    URL: http://d.repec.org/n?u=RePEc:ehl:lserod:60982&r=neu
  4. By: Sevin Yeltekin (Carnegie Mellon University ); Debraj Ray (New York University ); B. Douglas Bernheim (Stanford University )
    Abstract: The absence of self-control is often viewed as an important correlate of persistent poverty. Using a standard intertemporal allocation problem with credit constraints faced by an individual with quasi-hyperbolic preferences, we argue that poverty damages the ability to exercise self-control. Our theory invokes George Ainslie’s notion of “personal rules,†interpreted as subgame-perfect equilibria of an intrapersonal game played by a time-inconsistent decision maker. Our main result pertains to situations in which the individual is neither so patient that accumulation is possible from every asset level, nor so impatient that decumulation is unavoidable from every asset level. Such cases always possess a threshold level of assets above which personal rules support unbounded accumulation, and a second threshold level of assets below which there is a “poverty trapâ€: no personal rule permits the individual to avoid depleting all liquid wealth. In short, poverty perpetuates itself by undermining the ability to exercise self-control. Thus policies designed to help the poor accumulate assets may be highly effective, even if they are temporary. We also explore the implications for saving with easier access to credit, the demand for commitment devices, the design of accounts to promote saving, and the variation of the marginal propensity to consume across classes of resource claims.
    Date: 2014
    URL: http://d.repec.org/n?u=RePEc:red:sed014:1156&r=neu

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