nep-neu New Economics Papers
on Neuroeconomics
Issue of 2022‒06‒27
three papers chosen by

  1. The Relationship between Cognitive Ability and Risk Preferences in a Developing Nation: Findings from the Field By Kelishomi, Moghaddasi Ali; Sgroi, Daniel
  2. Predicting Emotional Volatility Using 41,000 Participants in the United Kingdom By George MacKerron; Nattavudh Powdthavee
  3. Cognitive Behavior Therapy Reduces Crime and Violence over 10 Years: Experimental Evidence By Christopher Blattman; Sebastian Chaskel; Julian C. Jamison; Margaret Sheridan

  1. By: Kelishomi, Moghaddasi Ali (Loughborough University); Sgroi, Daniel (University of Warwick)
    Abstract: We find a strong relationship between risk-loving preferences and cognitive ability which becomes stronger as adherence to the generalized axiom of revealed preference (a proxy for rationality) increases. Our results are taken from a field study of individuals at the very bottom of the income distribution in a developing nation. Our results for some of the poorest in the world support recent findings drawn from subjects in wealthy Western nations, suggesting there may be a stable relationship between risk preferences and cognitive ability for the human population as a whole irrespective of socio-economic status.
    Keywords: risk, cognitive ability, rationality, generalized axiom of revealed preference, field experiment, low incomes, developing nation
    JEL: I11 I12 I18 C93 D03
    Date: 2022–04
  2. By: George MacKerron; Nattavudh Powdthavee
    Abstract: Emotional volatility is a human universal. Yet there has been no large-scale scientific study of predictors of that phenomenon. Building from previous works, which had been ad hoc and based on tiny samples, this paper reports the first large-scale estimation of volatility in human emotional experiences. Our study draws from a large sample of intrapersonal variation in moment-to-moment happiness from over three million observations by 41,023 UK individuals. Holding other things constant, we show that emotional volatility is highest among women with children, the separated, the poor, and the young. Women without children report substantially greater emotional volatility than men with and without children. For any given rate of volatility, women with children also experience more frequent extreme emotional lows than any other socio-demographic group. Our results, which are robust to different specification tests, enable researchers and policymakers to quantify and prioritise different determinants of intrapersonal variability in human emotions.
    Date: 2022–05
  3. By: Christopher Blattman; Sebastian Chaskel; Julian C. Jamison; Margaret Sheridan
    Abstract: In most societies, a small number of people commit the most serious violence. Short-term studies have shown that cognitive behavioral therapy (CBT) can reduce such antisocial behaviors. These behavior changes may be temporary, however, especially from therapy on its own. This is unsettled, however, for there has been little randomized, long-term research. We follow 999 high-risk men in Liberia 10 years after randomization into either: 8 weeks of a therapy; a $200 grant; both; or a control group. A decade later, both therapy alone and therapy with economic assistance produce dramatic reductions in antisocial behaviors. Drug-selling and participation in thefts and robberies, for example, fall by about half. These impacts are greatest among the highest-risk men. The effects of therapy alone, however, are smaller and more fragile. The effects of therapy plus economic assistance are more sustained and precise. Since the cash did not increase earnings for more than a few months, we hypothesize that the grant, and the brief legitimate business activity, reinforced the habit formation embodied in CBT. Overall, results suggest that targeted CBT plus economic assistance is an inexpensive and effective way to prevent violence, especially when policymakers are searching for alternatives to aggressive policing and incarceration.
    JEL: D83 K42 O15 O17
    Date: 2022–05

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