nep-neu New Economics Papers
on Neuroeconomics
Issue of 2017‒01‒15
three papers chosen by

  1. Non-Cognitive Abilities and Financial Delinquency: The Role of Self-Efficacy in Avoiding Financial Distress By Camelia M. Kuhnen; Brian T. Melzer
  2. The Effect of Opposite Sex Siblings on Cognitive and Noncognitive Skills in Early Childhood By Cyron, Laura; Schwerdt, Guido; Viarengo, Martina
  3. Explaining Gender Differences in Confidence and Overconfidence in Math By Seo-Young Cho

  1. By: Camelia M. Kuhnen; Brian T. Melzer
    Abstract: We investigate a novel determinant of household financial delinquency, namely, people’s subjective expectations regarding the cost-benefit trade-off in default decisions. These expectations are determined by individuals’ self-efficacy, which is a non-cognitive ability that measures how strongly people believe that their effort will influence future outcomes. Using longitudinal household survey data, we show that people with higher self-efficacy, measured earlier in life, are less likely to be financially delinquent later on and to face consequences such as losing assets or access to traditional credit markets, are more likely to prepare for dealing with potential adverse shocks such as a job loss or a health event, and when faced with such shocks, are less likely to become financially delinquent. Complementing prior findings regarding the effects of cognitive abilities, financial literacy and education on economic behavior, our evidence suggests that non-cognitive abilities have an important role in household financial decision making.
    JEL: D03 D1 D14 D84 G02
    Date: 2017–01
  2. By: Cyron, Laura (Asian Development Bank Institute); Schwerdt, Guido (Asian Development Bank Institute); Viarengo, Martina (Asian Development Bank Institute)
    Abstract: We investigate the effect of having opposite sex siblings on cognitive and noncognitive skills of children in the United States at the onset of formal education. Our identification strategy rests on the assumption that, conditional on covariates, the sibling sex composition of the two firstborn children in a family is arguably exogenous. With regard to cognitive skills, learning skills, and self-control measured in kindergarten, we find that boys benefit from having a sister, while there is no effect for girls. We also find evidence for the effect fading out as early as first grade.
    Keywords: sibling gender effects; gender peer effects; education; cognitive skills; noncognitive skills; early childhood
    JEL: I20 J13 J16
    Date: 2016–12–31
  3. By: Seo-Young Cho (University of Marburg)
    Abstract: This paper investigates empirically how and why men and women are different in their confidence levels. Using the data of the PISA test in math, confidence is decomposed into two dimensions: confidence in correct math knowledge and overconfidence in over-claiming false knowledge. The findings highlight that female students are not less confident than male students, but they are rather less overconfident. Furthermore, mathematical abilities have different effects on male and female students. While ability alone increases confidence and decreases overconfidence, the interaction effect of feminine gender and ability is negative. This means that the negative effect of ability on overconfidence is larger for female students than male ones, while the positive effect of ability on confidence is smaller for females. That being said, the negative gender gap in overconfidence against girls is greater for students in the higher quartiles of math scores than those in the lower quartiles. Also, the positive gender gap in confidence for girls is smaller for well-performing students than underperforming ones. The empirical evidence further reveals that such gender-asymmetric effects of ability can be explained by gender socialization that limits women’s roles and undermines their achievements.
    Keywords: gender differences in confidence and overconfidence; gender gaps in math; genderasymmetric effects of ability; gender equality; gender socialization effects
    JEL: C31 I21 I24 J16 J24
    Date: 2017

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