nep-neu New Economics Papers
on Neuroeconomics
Issue of 2020‒06‒29
seven papers chosen by
Daniel Houser
George Mason University

  1. The Impact of Working Memory Training on Children's Cognitive and Noncognitive Skills By Berger, Eva M.; Fehr, Ernst; Hermes, Henning; Schunk, Daniel; Winkel, Kirsten
  2. Drinking is Different! Examining the Role of Locus of Control for Alcohol Consumption By Marco Caliendo; Juliane Hennecke
  3. Evaluating the Sunk Cost Effect By Ronayne, David; Sgroi, Daniel; Tuckwell, Anthony
  4. Negative shocks predict change in cognitive function and preferences: Assessing the negative affect and stress hypothesis in the context of the COVID-19 pandemic and the lockdown mitigation strategy By Bogliacino, Francesco; codagnone, cristiano; Montealegre, Felipe; Folkvord, F.; Gómez, Camilo Ernesto; Charris, Rafael Alberto; Liva, Giovanni; Villanueva, Francisco Lupiañez; Veltri, Giuseppe Alessandro Prof
  5. Non Cognitive Skills and Childcare Attendance By Daniela Del Boca; Enrica Maria Martino; Chiara Pronzato
  6. Treatment Effects and the Measurement of Skills in a Prototypical Home Visiting Program By Heckman, James J.; Liu, Bei; Lu, Mai; Zhou, Jin
  7. 2D:4D Does Not Predict Economic Preferences: Evidence from a Large, Representative Sample By Levent Neyse; Magnus Johannesson; Anna Dreber

  1. By: Berger, Eva M. (University of Mainz); Fehr, Ernst (University of Zurich); Hermes, Henning (NHH Bergen,Norway); Schunk, Daniel (University of Mainz); Winkel, Kirsten (University of Mainz)
    Abstract: Working memory capacity is thought to play an important role for a wide range of cognitive and noncognitive skills such as fluid intelligence, math, reading, the inhibition of pre-potent impulses or more general self-regulation abilities. Because these abilities substantially affect individuals' life trajectories in terms of health, education, and earnings, the question of whether working memory (WM) training can improve them is of considerable importance. However, whether WM training leads to improvements in these far-transfer skills is contested. Here, we examine the causal impact of WM training embedded in regular school teaching by a randomized educational intervention involving a sample of 6–7 years old first graders. We find substantial immediate and lasting gains in working memory capacity. In addition, we document relatively large positive effects on geometry skills, reading skills, Raven's fluid IQ measure, the ability to inhibit pre-potent impulses and self-regulation abilities. Moreover, these far-transfer effects emerge over time and only become fully visible after 12-13 months. Finally, we document that 3–4 years after the intervention, the children who received training have a roughly 16 percentage points higher probability of entering the academic track in secondary school.
    Keywords: field experiment, academic outcomes, noncognitive skills, cognitive skills, working memory, education
    JEL: J24 I2 C93
    Date: 2020–06
  2. By: Marco Caliendo; Juliane Hennecke
    Abstract: Unhealthy behavior can be extremely costly from a micro- and macroeconomic perspective and exploring the determinants of such behavior is highly important from an economist’s point of view. We examine whether locus of control (LOC) can explain alcohol consumption as an important domain of health behavior. LOC measures how much an individual believes in the causal relationship between her own actions and her life’s outcomes. While earlier literature showed that an increasing internal LOC is associated with increased health-conscious behavior in domains such as smoking, exercise or diets, we find that drinking seems to be different. Using German panel data, we find a significant positive effect of having an internal LOC on the probability of moderate and regular drinking. We discuss two likely mechanisms for this relationship and find interesting gender differences. While social investments play an important role for men and women, risk perceptions are especially relevant for men.
    Keywords: locus of control, alcohol consumption, health behavior, risk perception, social investment
    JEL: I12 D91
    Date: 2020
  3. By: Ronayne, David (University of Oxford and Nuffield College); Sgroi, Daniel (University of Warwick, ESRC CAGE Centre and IZA Bonn); Tuckwell, Anthony (University of Warwick, ESRC CAGE Centre and the Alan Turing Institute)
    Abstract: We provide experimental evidence of behavior consistent with the sunk cost effect. Subjects who earned a lottery via a real-effort task were given an opportunity to switch to a dominant lottery; yet 23% chose to stick with their dominated lottery. The endowment effect accounts for roughly only one third of the effect. Subjects’ capacity for cognitive reflection is a significant determinant of sunk cost behavior. We also find stocks of knowledge or experience (crystallized intelligence) predict sunk cost behavior, rather than algorithmic thinking (fluid intelligence) or the personality trait of openness. We construct and validate a scale, the “SCE-8”, which encompasses many resources individuals can spend, and offers researchers an efficient way to measure susceptibility to the sunk cost effect.
    Keywords: sunk cost effect, sunk cost fallacy, endowment effect, cognitive ability, fluid intelligence, crystallized intelligence, reflective thinking, online experiment, online survey, psychological scales, scale validation, Raven’s progressive matrices, international cognitive ability resource, cognitive reflection test, openness. JEL Classification: D91, C83, C90
    Date: 2020
  4. By: Bogliacino, Francesco (Universidad Nacional de Colombia); codagnone, cristiano; Montealegre, Felipe (Universidad Nacional de Colombia); Folkvord, F.; Gómez, Camilo Ernesto (Centro de Investigaciones para el Desarrollo); Charris, Rafael Alberto (Universidad Nacional de Colombia); Liva, Giovanni; Villanueva, Francisco Lupiañez; Veltri, Giuseppe Alessandro Prof (University of Trento)
    Abstract: In the context of the current COVID-19 pandemic, households throughout the world have to cope with negative shocks, either because of the disease or the various mitigation strategies that have caused massive unemployment and financial insecurity. Previous research has shown that negative shocks impair cognitive function and change risk, time and social preferences. In this study, we analyze the results of a longitudinal multi-country survey conducted in Italy (N=1,652), Spain (N=1,660) and the United Kingdom (N=1,578). We measure cognitive function using the Cognitive Reflection Test and preferences traits using an experimentally validated set of questions to assess the differences between people exposed to a shock compared to the rest of the sample. We measure four possible types of shocks: labor market shock, health shock, occurrence of stressful events, and mental health shock. Additionally, we randomly assign participants to groups with either a recall of negative events (more specifically, a mild reinforcement of stress or of fear/anxiety), or to a control group (to recall neutral or joyful memories), in order to assess whether or not stress and negative emotions drive a change in preferences. Results show that people affected by shocks performed worse in terms of cognitive functioning, are more risk loving, and are more prone to punish others (negative reciprocity). Data do not support the hypotheses that the result is driven by stress or by negative emotions.
    Date: 2020–06–01
  5. By: Daniela Del Boca; Enrica Maria Martino; Chiara Pronzato
    Abstract: While several studies have explored the determinants of cognitive outcomes, this paper focuses on non-cognitive skills, for which there is less empirical evidence. Non- cognitive skills have been recognized as important determinants of cognitive skills and later life outcomes. We analyze the impact of attending formal childcare at ages 0-2 on attitudes toward schooling and on the social behavior of children at the end of their first year of primary school and at the end of high school. We find that attendance of childcare significantly improves school readiness and social behavior in elementary school but the impact disappears in high school. The e ects are more beneficial for boys and for children of mothers with lower educational attainment and of fathers in low-level occupations. In addition, we find that formal childcare attendance enhances the social behavior of children without siblings and improves attitudes toward school of children with siblings.
    Keywords: non-cognitive ability, child development, childcare
    Date: 2020
  6. By: Heckman, James J. (University of Chicago); Liu, Bei (China Development Research Foundation); Lu, Mai (China Development Research Foundation); Zhou, Jin (University of Chicago)
    Abstract: This paper evaluates the causal impacts of an early childhood home visiting program for which treatment is randomly assigned. We estimate multivariate latent skill profiles for individual children and compare treatments and controls. We identify average treatment effects of skills on performance in a variety of tasks. The program substantially improves child language and cognitive, fine motor, and social-emotional skills development. Impacts are especially strong in the most disadvantaged communities. We go beyond reporting treatment effects as unweighted sums of item scores. Instead, we examine how the program affects the latent skills generating item scores and how the program affects the mapping between skills and item scores. We find that enhancements in latent skills explain at least 90% of conventional unweighted treatment effects on language and cognitive tasks. The program enhances some components of the function mapping latent skills into item scores. This can be interpreted as a measure of enhanced productivity in using given bundles of skills to perform tasks. This source explains at most 10% of the average estimated treatment effects.
    Keywords: experiment, scaling, mechanisms, home visiting programs, measurement
    JEL: J13 Z18
    Date: 2020–06
  7. By: Levent Neyse; Magnus Johannesson; Anna Dreber
    Abstract: The digit ratio (2D:4D) is considered a proxy for testosterone exposure in utero, and there has been a recent surge of studies testing whether 2D:4D is associated with economic preferences. Although the results are not conclusive, previous studies have reported statistically significant correlations between 2D:4D and risk taking, altruism, positive reciprocity, negative reciprocity and trust. Many “researcher degrees of freedom” and small sample sizes are important limitations of previous studies. We present results from a pre-registered large sample study testing if 2D:4D is associated with economic preferences. Data were collected in a representative sample of adults in the German Socioeconomic Panel-Innovation Sample (SOEP-IS), in a sample of about 3,450 respondents (about 5 times larger than the previously largest study in this field). We find no statistically significant association between 2D:4D and economic preferences in the largest study to this date on the topic.
    Keywords: Economic behavior, prenatal hormones, testosterone, digit ratio
    JEL: D03 D87
    Date: 2020

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