nep-neu New Economics Papers
on Neuroeconomics
Issue of 2024‒05‒20
three papers chosen by

  1. Students' grit and their post-compulsory educational choices and trajectories: Evidence from Switzerland By Janine Albiez; Maurizio Strazzeri; Stefan C. Wolter
  2. Macroeconomics of Mental Health By Boaz Abramson; Job Boerma; Aleh Tsyvinski
  3. Overconfidence Due to a Self-reliance Dilemma By Hajdu, Gergely; Frollová, Nikola

  1. By: Janine Albiez; Maurizio Strazzeri; Stefan C. Wolter
    Abstract: We examine the association between the personality trait grit and post-compulsory educational choices and trajectories using a large survey linked to administrative student register data. Exploiting cross sectional variation in students' self-reported grit in the last year of compulsory school, we find that an increase in students' grit is associated with a higher likelihood to start a vocational education instead of a general education. This association is robust to the inclusion of cognitive skill measures and a comprehensive set of other students' background characteristics. Moreover, using novel data on skill requirements of around 240 vocational training occupations, we find that grittier vocational education students sort into math-intensive training occupations. Similarly, students in general education with more grit select themselves more often into the math-intensive track. Finally, we do not find evidence that students with a higher grit have lower dropout rates in post-compulsory education.
    Keywords: Non-cognitive skills, Personality traits, Grit, Educational choices
    JEL: D01 I20
    Date: 2024–04
  2. By: Boaz Abramson; Job Boerma; Aleh Tsyvinski
    Abstract: We develop an economic theory of mental health. The theory is grounded in classic and modern psychiatric literature, is disciplined with micro data, and is formalized in a life-cycle heterogeneous agent framework. In our model, individuals experiencing mental illness have pessimistic expectations and lose time due to rumination. As a result, they work less, consume less, invest less in risky assets, and forego treatment which in turn reinforces mental illness. We quantify the societal burden of mental illness and evaluate the efficacy of prominent policy proposals. We show that expanding the availability of treatment services and improving treatment of mental illness in late adolescence substantially improve mental health and welfare.
    JEL: E0 H0 I10
    Date: 2024–04
  3. By: Hajdu, Gergely; Frollová, Nikola
    Abstract: Choosing between payment based on one’s own performance or others’ is inherent in most delegation decisions. We propose and test that such self-reliance dilemma could result in motivated reasoning about own and others’ performances. Participants in an experiment face this dilemma and learn about it either before or after reporting their beliefs. We find that learning about the dilemma decreases participants’ beliefs about their counterpart’s performance advantage (CPA) by an average of 17%. Furthermore, it causes an average overestimation of one’s own performance and increases the fraction of participants who falsely believe they outperformed their counterpart. Organizations should, therefore, carefully manage delegation decisions and implement measures to curb overconfidence.
    Keywords: overconfidence; self-reliance; motivated reasoning
    Date: 2024–04

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