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on Neuroeconomics |
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Issue of 2023‒03‒20
five papers chosen by |
| By: | Goldfayn-Frank, Olga; Vellekoop, Nathanael |
| Abstract: | We explore how personality traits are related to household borrowing behavior. Using survey data representative for the Netherlands, we consider the Big Five personality traits (openness, conscientiousness, agreeableness, extraversion and neuroticism), as well as the belief that one is master of one's fate (locus of control). We hypothesize that personality traits can complement as well as substitute financial knowledge of a household. We present three sets of results. First, we find that personality traits are positively correlated with borrowing expectations. Locus of control, extraversion and agreeableness are correlated with informal borrowing expectations, which is the expectation that one can borrow from family and friends. With respect to expectations on the approval of a formal loan application, it is locus of control and conscientiousness that are positively associated. Effect sizes are large and economically meaningful. Second, we find that personality traits are important for borrowing constraints. A more internal locus of control and higher neuroticism are correlated with being denied for credit, as well as discouraged borrowing. Our third set of results reports findings on personality traits and loan regret, and how traits are correlated with dealing with loan troubles. Many households in our sample express regret (21%), but more open, more agreeable and more neurotic individuals are more likely to express regret. Our results are not driven by financial knowledge, time preferences or risk attitudes. Overall these findings imply that non-cognitive traits are important for borrowing behavior of households. |
| Keywords: | borrowing constraints, personality traits, household finance |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:safewp:381&r=neu |
| By: | Lin, Zhuoer; Fu, Mingqi; Chen, Xi |
| Abstract: | Cognitive misperception contributed to poor decision-making; yet their impact on health-related decisions is less known. We examined how self-perceived memory was associated with chronic disease awareness among older Chinese adults. Data were obtained from the China Health and Retirement Longitudinal Study. Nationally representative blood biomarkers identify participants' dyslipidemia and diabetes status. Among participants with biomarker identified dyslipidemia or diabetes, disease awareness was defined as self-reported diagnosis of the conditions. The proportions of disease awareness were lower for individuals with better self-perceived memory and those with more impaired cognitive ability, showing opposite patterns. Controlling for cognitive ability and covariates, self-perceived memory was negatively associated with the dyslipidemia and diabetes awareness. In particular, older adults with the highest level of self-perceived memory had significantly lower disease awareness as compared to those with the lowest level of self-perceived memory. Our findings were robust to alternative cognitive measures and were stronger for less educated rural residents or those living without children. Cognitive misperception poses great challenges to chronic disease management. Targeted interventions and supports are needed, particularly for the disadvantaged. |
| Keywords: | Cognitive impairment, Self-perceived memory, Chronic disease awareness, Dyslipidemia, Diabetes |
| JEL: | I12 J14 D91 I18 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:1239&r=neu |
| By: | Mathias Allemand (University of Zurich); Martina Kirchberger (Trinity College Dublin); Sveta Milusheva (The World Bank); Carol Newman (Trinity College Dublin); Brent Roberts (University of Illinois at Urbana-Champaign); Vincent Thorne (Trinity College Dublin) |
| Abstract: | Non-cognitive skills are increasingly recognized as important determinants of labor market outcomes. To what extent specific skills can be affected in adulthood remains an open question. We conducted a randomized controlled trial with low-skilled employed workers in Senegal where workers were randomly assigned to receive a training intervention designed to affect conscientiousness-related skills. We found that treated workers were significantly more likely to stay in their job and have higher wages nine months after the intervention. Our findings suggest that non-cognitive skills can be affected even later in the life cycle and can have substantial labor market returns. |
| Keywords: | non-cognitiveskills, labormarkets, conscientiousness |
| JEL: | J24 M53 O15 |
| Date: | 2023–01 |
| URL: | http://d.repec.org/n?u=RePEc:tcd:tcduee:tep0123&r=neu |
| By: | Zhang, Xin (Beijing Normal University); Chen, Xi (Yale University); Zhang, Xiaobo (Peking University) |
| Abstract: | This paper offers one of the first evidence in a developing country context that transitory exposure to high temperatures may disrupt low-stakes cognitive activities across a range of age cohorts. By matching eight years of repeated cognitive tests among all the participants in a nationally representative longitudinal survey in China with weather data according to the exact time and geographic location of their assessment, we show that exposure to a temperature above 32 °C on the test date, relative to a moderate day within 22–24 °C, leads to a sizable decline in their math scores by 0.066 standard deviations (equivalent to 0.23 years of education). Also, the effect on the math test scores becomes more pronounced as people age, especially for males and the less educated. However, the test takers living in hotter regions or those with air conditioning installed on site are less vulnerable to extreme high temperatures, indicating the role of adaptation. |
| Keywords: | cognition, high temperatures, climate change, adaptation, age gradients |
| JEL: | I24 Q54 Q51 D91 J14 J16 |
| Date: | 2023–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp15972&r=neu |
| By: | Beatrice Baaba Tawiah (Paderborn University); Valentin Schiele (University of Paderborn) |
| Abstract: | This paper replicates the analysis of Schneeweis et al. (2014) using their sample as well as an extended sample. Schneeweis et al. (2014) use the Survey of Health, Ageing and Retirement in Europe (SHARE) dataset and exploit compulsory schooling reforms implemented in six European countries to analyse the impact of education on cognitive functioning decades after leaving school. They find a positive effect of education on memory scores and some evidence of a protective effect of education on the decline in verbal fluency. Our results support their findings when we use the same waves as they do, but also when we extend the sample by including more countries and interview waves and use different variables for years of education. |
| Keywords: | Replication; Education; Cognitive abilities;Compulsory schooling |
| JEL: | I21 D91 J14 |
| Date: | 2023–03 |
| URL: | http://d.repec.org/n?u=RePEc:pdn:dispap:102&r=neu |