nep-neu New Economics Papers
on Neuroeconomics
Issue of 2022‒12‒05
four papers chosen by

  1. Impact of Early Life Shocks on Educational Pursuits – Does a Fade out Co-exist with Persistence? By Gaurav Dhamija; Gitanjali Sen
  2. Understanding cognitive impairment in the U.S. through the lenses of intersectionality and (un)conditional cumulative (dis)advantage By Jo M. Hale; Daniel C. Schneider; Neil K. Mehta; Mikko Myrskylä
  3. The applicability of Big Five facets and Dark Tetrad traits on Yukio Mishima’s novel protagonists By Boman, Bjorn
  4. Motivated beliefs, social preferences, and limited liability in financial decision-making By Ahrens, Steffen; Bosch-Rosa, Ciril

  1. By: Gaurav Dhamija (Indian Institute of Technology, Hyderabad); Gitanjali Sen (Department Of Economics, Shiv Nadar University)
    Abstract: Background: Changes in climatic conditions have increased the variability in rainfall patterns worldwide. A negative rainfall shock faced by children in the initial 1000 days of life and the resulting malnutrition can harm the likelihood of children’s survival, overall growth, development of the brain, motor skills, and cognitive abilities, leading to poor performance in education and labor market. While the existing findings about the long-run outcomes are mixed, it is essential to understand the nuances in such an estimation. Methods: Using the exogenous variation in rainfall in India, we estimate the impact of adverse shocks at birth on the cognitive abilities of children at ages 5, 8, 12, and 15, on educational attainments, and the likelihood of studying STEM at higher secondary school. Results: The Young Lives Survey data from Andhra Pradesh, India, presents evidence of the negative impact of rainfall shocks at birth on cognitive abilities from age 5 to 8, attenuating at age 12. Using nationally representative data, while we investigate the impact of adverse rainfall shocks at birth on academic performance measured by the high school grades and STEM choice at higher secondary school, we do not find a persistent impact. Conclusion: We unfold the impact of rainfall shocks on a chain of outcomes connected to long-run educational pursuits, as it helps to identify the most crucial stage for policymaking. Since STEM subjects are strongly associated with the labor market, connecting the association with early life shocks seems to be an essential addition to the literature. While we find evidence of reduced cognitive abilities in the early years, those do not seem to persist in the long run. The potential sample selection or attrition biases and the estimates of those biases can explain the nuances of estimating the long-run impact of adverse shocks at birth.
    Keywords: Rainfall shocks, Education, STEM, Cognitive Development, Young Lives, India.
    JEL: I1 I3 I25 I28 J1 O2
    Date: 2022–10–14
  2. By: Jo M. Hale (Max Planck Institute for Demographic Research, Rostock, Germany); Daniel C. Schneider (Max Planck Institute for Demographic Research, Rostock, Germany); Neil K. Mehta; Mikko Myrskylä (Max Planck Institute for Demographic Research, Rostock, Germany)
    Abstract: Grounded in theories of intersectionality and cumulative (dis)advantage, we develop complementary formalizations of (dis)advantage to study disparities in cognitive impairment: Conditional Cumulative (Dis)Advantage that reflects inequalities in outcomes and Unconditional Cumulative (Dis)Advantage that additionally accounts for inequalities in opportunities. We study the properties of these formalizations and show that cumulative disadvantage does not imply cumulative advantage. Using these formalizations and incidence-based multistate models, we analyze the Health and Retirement Study to assess how racial/ethnic, nativity, gender, early-life adversity, and educational (dis)advantages accumulate into three important metrics for characterizing later-life cognitive impairment—lifetime risk, mean age at first impairment, and cognitive health expectancies. We find that the benefits and penalties of one (dis)advantage depend on positionality on the other axes of inequality. Black women and Latinas experience Conditional Cumulative Disadvantage in cognitive impairment: they are penalized more from having lower education than Whites. White men experience Conditional Cumulative Advantage: they benefit more from higher education than Blacks or Latinx. However, when accounting for racial/ethnic inequities in educational opportunities, results ubiquitously show Unconditional Cumulative Disadvantage. Our formalization provides a mathematical grounding for cumulative (dis)advantage, and the empirical results comprehensively document the multi-dimensional, intersecting axes of stratification that perpetuate inequities in cognitive impairment.
    JEL: J1 Z0
    Date: 2022
  3. By: Boman, Bjorn
    Abstract: Psychological accounts of literature research are chiefly associated with a psychoanalytical nomenclature, while research on personality psychology like the Five Factor Model and the Dark Tetrad has mostly been investigated using questionnaires and quantitative statistics. However, building upon a lexical understanding of the 30 Big Five personality facets, in tandem with the application of Dark Tetrad traits on popular culture analysis initiated by Jonason et al., this article analyses the personality profiles of five fictional protagonists, specifically five well-known novels of the renowned Japanese author Yukio Mishima.
    Date: 2021–03–31
  4. By: Ahrens, Steffen; Bosch-Rosa, Ciril
    Abstract: Using a new experimental design, we compare how subjects form beliefs in an investor-client setup under varying degrees of liability. Our results reflect the importance of social preferences when making investment decisions for others. We show that when investors have no liability, those with stronger social preferences are more optimistic about the probability that their investment results in a gain. In other words, we find that social preferences appear to be correlated with motivated beliefs. This finding suggests the existence of cognitive biases in financial decision-making and supports the recent literature on the formation of motivated beliefs under limited liability (Barberis, 2015; Bénabou and Tirole, 2016).
    Keywords: Moral Hazard,Experiment,Motivated Beliefs,Social Preferences
    JEL: C91 D84 G11 G41
    Date: 2022

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