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on Neuroeconomics |
| By: | Zhang, Zheyuan; Xu, Hui; Liu, Ruilin; Zhao, Zhong |
| Abstract: | This paper estimates the impact of the Free Education Policy, a major education reform implemented in rural China in 2006, as a natural experiment on the intergenerational transmission of cognitive skills. The identification strategy relies on a difference-in-differences approach and exploits the fact that the reform was implemented gradually at different times across different provinces. By utilizing nationally representative data from the China Family Panel Studies, we find that an additional semester of exposure to the Free Education Policy reduces the intergenerational transmission of parent and child cognitive scores by an approximately 1% standard deviation in rural China, indicating a reduction of 3.5% in intergenerational cognitive persistence. The improvement in cognitive mobility across generations might be attributed to enhanced school attainment, the relaxation of budget constraints, and increased social contact for children whose parents are less advantaged in terms of cognitive skills. |
| Keywords: | Free Education Policy, intergenerational transmission, cognitive skills |
| JEL: | H52 I24 J24 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:glodps:1494 |
| By: | Minyu Shen; Feng Xiao; Weihua Gu; Hongbo Ye |
| Abstract: | When making route decisions, travelers may engage in a certain degree of reasoning about what the others will do in the upcoming day, rendering yesterday's shortest routes less attractive. This phenomenon was manifested in a recent virtual experiment that mimicked travelers' repeated daily trip-making process. Unfortunately, prevailing day-to-day traffic dynamical models failed to faithfully reproduce the collected flow evolution data therein. To this end, we propose a day-to-day traffic behavior modeling framework based on the Cognitive Hierarchy theory, in which travelers with different levels of strategic-reasoning capabilities form their own beliefs about lower-step travelers' capabilities when choosing their routes. Two widely-studied day-to-day models, the Network Tatonnement Process dynamic and the Logit dynamic, are extended into the framework and studied as examples. Calibration of the virtual experiment is performed using the extended Network Tatonnement Process dynamic, which fits the experimental data reasonably well. We show that the two extended dynamics have multiple equilibria, one of which is the classical user equilibrium. While analyzing global stability is intractable due to the presence of multiple equilibria, local stabilities near equilibria are developed analytically and verified by numerical experiments. General insights on how key parameters affect the stability of user equilibria are unveiled. |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2409.11908 |
| By: | Zhang, Xin (Beijing Normal University); Wang, Yixuan (Ohio State University); Hu, Xingyi (Ohio State University); Chen, Xi (Yale University) |
| Abstract: | This paper examines the impact of fetal exposure to air pollution on low-stakes test performance across a broad age range, with a focus on gender-specific parental responses to this negative shock. Using data from a nationally representative survey in China, we find that fetal PM2.5 exposure significantly reduce cognitive ability in women, particularly those with brothers. Gender-biased human capital investment by families tends to amplify the harmful effects for girls, while diminishing these effects for boys. Specifically, when exposed to the same level of fetal PM2.5, females receive less homework assistance from their families and attain lower levels of education. |
| Keywords: | air pollution, cognitive ability, fetal exposure, gender bias, parental investment |
| JEL: | Q53 I24 D13 J16 |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17288 |
| By: | Brunello, Giorgio (University of Padova); Rocco, Lorenzo (University of Padova) |
| Abstract: | We produce estimates of the pecuniary costs of inadequate investment in human capital for countries, macro regions and the world at large. These costs are borne by individuals (private costs), the government (fiscal costs), and society, which includes both individuals and the government (social costs). We estimate that, in 2030, the global annual private costs of having a share of children with less than basic skills at its 2021 value rather than at zero are equal to 9, 154 billion 2015 dollars, or 17.1 percent of global GDP in 2030. |
| Keywords: | early school leaving, low basic skills, private, fiscal and social costs |
| JEL: | I24 I25 |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17296 |
| By: | Benjamin Enke; Thomas Graeber; Ryan Oprea; Jeffrey Yang |
| Abstract: | We report a large-scale examination of behavioral attenuation: due to information-processing constraints, the elasticity of people’s decisions with respect to economic fundamentals is generally too small. We implement more than 30 experiments, 20 of which were crowd-sourced from leading experts. These experiments cover a broad range of economic decisions, from choice and valuation to belief formation, from strategic games to generic optimization problems, involving investment, savings, effort supply, product demand, taxes, environmental externalities, fairness, cooperation, beauty contests, information disclosure, search, policy evaluation, memory, forecasting and inference. In 93% of our experiments, the elasticity of decisions to fundamentals decreases in participants’ cognitive uncertainty, our measure of the severity of information-processing constraints. Moreover, in decision problems with objective solutions, we observe elasticities that are universally smaller than is optimal. Many widely-studied decision anomalies represent special cases of behavioral attenuation. We discuss both its limits and why it often gives rise to the classic phenomenon of diminishing sensitivity. |
| JEL: | D03 |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:32973 |