nep-neu New Economics Papers
on Neuroeconomics
Issue of 2015‒10‒04
four papers chosen by

  1. Fetal Origins of Personality: Effects of early life circumstances on adult personality traits By Sonya Krutikova; Helene Bie Lilleør
  2. Beyond qualifications : returns to cognitive and socio-emotional skills in Colombia By Acosta,Pablo Ariel; Muller,Noel; Sarzosa,Miguel Alonso
  3. Does Age-Related Decline in Ability Correspond with Retirement Age? By Anek Belbase; Geoffrey T. Sanzenbacher; Christopher M. Gillis
  4. Diversity in cognitive ability enlarges mispricing By Nobuyuki Hanaki; Eizo Akiyama; Yukihiko Funaki; Ryuichiro Ishikawa

  1. By: Sonya Krutikova (Centre for the Evaluation of Development Policies, The Institute for Fiscal Studies); Helene Bie Lilleør (Rockwool Foundation)
    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: 2015–09
  2. By: Acosta,Pablo Ariel; Muller,Noel; Sarzosa,Miguel Alonso
    Abstract: This paper examines the relationship between individuals? skills and labor market outcomes for the working-age population of Colombia?s urban areas. Using a 2012 unique household survey, the paper finds that cognitive skills (aptitudes to perform mental tasks such as comprehension or reasoning) and socio-emotional skills (personality traits and behaviors) matter for favorable labor market outcomes in the Colombian context, although they have distinct roles. Cognitive skills are greatly associated with higher earnings and holding a formal job or a high-qualified occupation. By contrast, socio-emotional skills appear to have little direct influence on these outcomes, but play a stronger role in labor market participation. Both types of skills, especially cognitive skills, are largely associated with pursuing tertiary education. The analysis applies standard econometric techniques as a benchmark and structural estimations to correct for the measurement error of skill constructs.
    Keywords: Labor Markets,Education For All,Educational Sciences,Effective Schools and Teachers,Primary Education
    Date: 2015–09–30
  3. By: Anek Belbase; Geoffrey T. Sanzenbacher; Christopher M. Gillis
    Abstract: While declines in physical and mental performance are inevitable as workers age, they are not uniform across the various systems of the body – some physical and cognitive abilities decline much earlier than others. This variance implies that workers in occupations that rely on skills that decline early may be unable to work until late ages, even as policy changes like increases in the Full Retirement Age (FRA) encourage them to. Researchers often estimate models of early retirement that include a control for whether a worker is in a blue-collar job – basically assuming that less-physical white-collar work allows longer careers. But this assumption ignores the fact that even workers in white-collar occupations may find themselves relying on skills that have declined. This paper instead reviews the literature on aging and constructs a Susceptibility Index meant to reflect how susceptible an occupation is to declines in ability, regardless of whether the occupation relies on physical abilities (as blue-collar occupations do) or cognitive ones.
    Date: 2015–09
  4. By: Nobuyuki Hanaki (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - UNS - Université Nice Sophia Antipolis - CNRS); Eizo Akiyama (Faculty of Engineering, Information and Systems, University of Tsukuba - University of Tsukuba); Yukihiko Funaki (School of political science and economics, Waseda University - Waseda university); Ryuichiro Ishikawa (Faculty of Engineering, Information and Systems, University of Tsukuba - University of Tsukuba)
    Abstract: How does known diversity in cognitive ability among market participants influence market outcomes? We investigated this question by first measuring subjects' cognitive ability and categorizing them as `H' type for those above median ability and `L' type for those below median ability. We then constructed three kinds of markets with six traders each: 6H, 6L, and 3H3L. Subjects were informed of their own cognitive type and that of the others in their market. We found heterogeneous markets (3H3L) generated significantly larger mispricing than homogeneous markets (6H or 6L). Thus, known diversity in cognitive ability among market participants impacts mispricing.
    Keywords: Cognitive ability, Heterogeneity, Mispricing, Experimental asset markets
    Date: 2015–09–18

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