nep-neu New Economics Papers
on Neuroeconomics
Issue of 2018‒11‒12
three papers chosen by

  1. Explaining Divorce Gaps in Cognitive and Noncognitive Skills of Children By Gloria Moroni
  2. Smog, Cognition and Real-World Decision Making By Chen, Xi
  3. Incidental emotions and risk-taking: An experimental analysis By Annarita Colasante; Matteo M. Marini; Alberto Russo

  1. By: Gloria Moroni
    Abstract: To what extent does parental selection into divorce explain the gap in skills between children of intact and disrupted families? Using the UK Millennium Cohort Study this paper shows that the disadvantage in skills typically found among children of divorce mainly reflects the selection effect, whereby more disadvantaged parents are more likely to divorce. In an Oaxaca-Blinder decomposition of children’s cognitive and noncognitive skills up until age 11, evidence indicates that pre-divorce characteristics, namely parents’ education, family financial resources and interparental conflicts are the most important factors accounting for the divorce gaps in children’s skills, implying a negligible impact of divorce itself. Interparental conflicts are often neglected in the literature but are shown to play a major role particularly for noncognitive skills of children. These results suggest that to reduce the disadvantage in skills among children of divorce, interventions targeting these pre-divorce characteristics would be potentially more effective than policies discouraging divorce.
    Keywords: Divorce, Interparental conflicts, Cognitive and Noncognitive skills, Decomposition
    JEL: J12 J13 J24 C21 D1
    Date: 2018–11
  2. By: Chen, Xi
    Abstract: Cognitive functioning is critical as in our daily life a host of real-world complex decisions in high-stakes markets have to be made. The decision-making process can be vulnerable to environmental stressors. Summarizing the growing economic and epidemiologic evidence linking air pollution, cognition performance and real-world decision making, we first illustrate key physiological and psychological pathways between air pollution and cognition. We then document the main patterns of air pollution affecting cognitive test performance by type of cognitive tests, gender, window of exposure, age profile, and educational attainment. We further extend to a review of real-world decision making that has been found to be affected by air pollution and the resulting cognitive impairments. Finally, rich implications on environmental health policies are drawn based on existing evaluations of social costs of air pollution.
    Keywords: Air Pollution,Cognitive Performance,Intelligence,Decision Making
    JEL: I24 Q53 Q51 G11 J24
    Date: 2018
  3. By: Annarita Colasante (LEE & Economics Department, Universitat Jaume I, Castellón-Spain); Matteo M. Marini (LEE & Economics Department, Universitat Jaume I, Castellón-Spain; Università degli Studi dell’Insubria, Italy); Alberto Russo (Dept. de Teoría e Historia Económica, University of Granada, Spain)
    Abstract: In this paper we conduct a laboratory experiment in order to investigate the effect of incidental sadness and happiness on risky decision making. An emotion induction procedure is the treatment variable of a between-subjects design where two sessions aim at eliciting either sadness or happiness, respectively. Two further groups are characterized by neutral conditions and serve as baseline. After a manipulation check verifies the validity of the induction procedure, we use a multiple price list à la Holt and Laury (2002) to elicit individual risk preferences in the context of a lottery-choice task. The analysis reveals that both sadness and happiness promote greater risk aversion with respect to neutral conditions, a result which might be moderated by the risk elicitation task. Therefore, as compelling explanation we propose the theory of ego depletion, whereby regulating emotions so as to subsequently process information consumers a limited self-control resource, which is needed to take risks as well.
    Keywords: laboratory experiment, emotions, preference elicitation, risk aversion, ego depletion
    JEL: C91 D81
    Date: 2018

General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.