nep-neu New Economics Papers
on Neuroeconomics
Issue of 2018‒04‒16
six papers chosen by

  1. Noncognitive Abilities and Financial Distress: Evidence from a Representative Household Panel By Peijnenburg, Kim; Parise, Gianpaolo
  2. The long-reach of fathers’ earnings on children’s skills in two-parent families: Parental investments, family processes, and children’s language skills By Natasha Cabrera; Ronald Mincy; Hyunjoon Um
  3. The long-reach of nonresident fathers’ financial support on children’s skills in fragile families : Parental investments, family processes, and children’s language skills By Ronald Mincy; Natasha Cabrera; Elia De La Cruz Toledo; Hyunjoon Um
  4. Inferring Cognitive Heterogeneity from Aggregate Choices By Valentino Dardanoni; Paola Manzini; Marco Mariotti; Christopher J. Tyson
  5. Government Education Expenditures, Pre-Primary Education and School Performance: A Cross-Country Analysis By Del Boca, Daniela; Monfardini, Chiara; See, Sarah Grace
  6. Estimating the Associations between SNAP and Food Insecurity, Obesity, and Food Purchases with Imperfect Administrative Measures of Participation By Charles Courtemanche; Augustine Denteh; Rusty Tchernis

  1. By: Peijnenburg, Kim; Parise, Gianpaolo
    Abstract: This paper provides evidence for a causal effect of noncognitive abilities on financial distress. In a representative panel of households, we find that people in the bottom decile of noncognitive abilities are five times more likely to experience financial distress than those in the top decile. This relation arises largely from worse financial choices and lack of financial insight by low-ability individuals, and only to a lesser degree reflects differential exposure to income shocks. We account for potential confounding factors including preferences, cognitive abilities, and demographics. Implications for policy and finance research are discussed.
    Keywords: Noncognitive abilities; financial distress; financial choices; behavioral finance; psychology and economics
    JEL: D10 D14
    Date: 2017–03–01
  2. By: Natasha Cabrera (University of Maryland); Ronald Mincy (Columbia University); Hyunjoon Um (Columbia University)
    Abstract: Using a sample of 735 two-parent families drawn from the FFCWS, we examined the direct and indirect associations between fathers’ permanent earnings during the early childhood and children’s cognitive and behavioral outcomes at ages 5 and 9 through parental investments, family processes, and children’s skills at age 3. We found that fathers’ earnings in the early years were significantly related to children’s language skills at age 5 but not to aggressive behavior or to any outcomes at age 9. The association between earnings and language skills at age 5 and math and reading at age 9 were mediated by cognitively stimulating materials and children’s language skills at age 5. The effect sizes are small and the mediating effects of fathers’ earnings on reading and math are only for children of the highest earning fathers. For two-parent families, policies to increase fathers’ earnings alone will have little impact on children’s development.
    Keywords: Early and middle childhood, FFCW, parental investment, coresidence
    JEL: I24 J31
    Date: 2018
  3. By: Ronald Mincy (Columbia University); Natasha Cabrera (University of Maryland); Elia De La Cruz Toledo (University of Chicago); Hyunjoon Um (Columbia University)
    Abstract: Using a sample of 692 children in mother-headed families drawn from the FFCWS, we examined the direct and indirect associations between nonresident fathers’ financial support during early childhood and children’s cognitive, behavioral, and achievement outcomes at ages 5 and 9 through parental investments, family processes, and children’s skills at age 3. We found significant direct effects of fathers’ financial support: measured continuously on children’s math and reading scores at age 9 and above the median on reading achievement at age 9. Financial support well-above the median was also significantly associated with math achievement at age 9 and both aggressive behavior and receptive vocabulary at age 5. Children’s language skills mediated the associations between financial support, measured continuously and provided through a formal order/agreement and math and reading achievement at age 9 and the association between financial support above the median and reading achievement at age 9. Most associations were small.
    JEL: I24 J31
    Date: 2018
  4. By: Valentino Dardanoni (Università degli Studi di Palermo, Italy); Paola Manzini (University of Sussex, Falmer, UK; IZA (Institute of Labor Economics), Bonn, Germany); Marco Mariotti (Queen Mary University of London, UK); Christopher J. Tyson (Queen Mary University of London, UK)
    Abstract: We study the problem of identifying the distribution of cognitive characteristics in a population of agents when only aggregate choice behavior from a single menu is observable. Focusing on two models of limited attention, we demonstrate that both “consideration probability” and “consideration capacity” distributions are substantially identified by aggregate choice shares when tastes are homogeneous. We then show how our methodology can be extended to allow for heterogeneous tastes, and suggest how the attention models can be embedded in an econometric specification of the inference problem. Finally, we conduct Monte Carlo simulations of both models and use our results to recover the true parameters.
    Keywords: attention, bounded rationality, consideration set, stochastic choice
    JEL: D01 D12 D91
    Date: 2018–04
  5. By: Del Boca, Daniela (University of Turin); Monfardini, Chiara (University of Bologna); See, Sarah Grace (University of York)
    Abstract: Using data from OECD's PISA, Eurostat and World Bank's WDI, we explore how child cognitive outcomes at the aggregate country level are related to macroeconomic conditions, specifically government education expenditures and early education experience. We find that both government expenditures in education and attendance to early child care are associated with better later school performance. We also consider different childcare characteristics such as duration and quality, which appear to have significant effects Our results may imply that policies encouraging childcare expansion should also take into account quality issues.
    Keywords: early childcare and education, school performance, test scores
    Date: 2018–02
  6. By: Charles Courtemanche (Georgia State University); Augustine Denteh (Georgia State University); Rusty Tchernis (Georgia State University)
    Abstract: Administrative data are considered the “gold standard” when measuring program participation, but little evidence exists on the potential problems with administrative records or their implications for econometric estimates. We explore issues with administrative data using the FoodAPS, a unique dataset that contains two different administrative measures of Supplemental Nutrition Assistance Program (SNAP) participation as well as a survey-based measure. We first document substantial ambiguity in the two administrative participation variables and show that they disagree with each other almost as often as they disagree with self-reported participation. Estimated participation and misreporting rates can be meaningfully sensitive to choices made to resolve this ambiguity and disagreement. We then document similar sensitivity in regression estimates of the associations between SNAP and food insecurity, obesity, and the Healthy Eating Index. These results serve as a cautionary tale about uncritically relying on linked administrative records when conducting program evaluation research.
    Keywords: Supplemental Nutrition Assistance Program, Food stamps, SNAP, food insecurity, obesity, body mass index, food purchases, food expenditures, healthy eating index, misreporting, measurement error
    JEL: C81 H51 I12 I18
    Date: 2018–04

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