nep-sog New Economics Papers
on Sociology of Economics
Issue of 2007‒09‒16
two papers chosen by
Jonas Holmström
Swedish School of Economics and Business Administration

  1. Experimental Economics: Contributions, Recent Developments, and New Challenges By Marie-Claire Villeval
  2. The Role of Mathematical and Verbal Skills on the Returns to Graduate and Professional Education By Song, Moohoun; Orazem, Peter; Wohlgemuth, Darin

  1. By: Marie-Claire Villeval (GATE CNRS)
    Abstract: Although economics has long been considered as a non-experimental science, the development of experimental economics and behavioral economics is amazingly rapid and affects most fields of research. This paper first attempts at defining the main contributions of experiments to economics. It also identifies four main trends in the development of experimental research in economics. The third contribution of this paper is to identify the major theoretical and methodological challenges faced by behavioral and experimental economics.
    Keywords: behavioral economy, Experimental economics, field experiment, quantitative methods
    JEL: A12 C90 D0
    Date: 2007–03
  2. By: Song, Moohoun; Orazem, Peter; Wohlgemuth, Darin
    Abstract: Students in majors with higher average quantitative GRE scores are less likely to attend graduate school while students in majors with higher average verbal GRE scores are more likely to attend graduate school. This sorting effect means that students whose cognitive skills are associated with lower earnings at the bachelor’s level are the most likely to attend graduate school. As a result, there is a substantial downward bias in estimated returns to graduate education. Correcting for the sorting effect raises estimated annualized returns to a Master’s or doctoral degree from about 5% to 7.3% and 12.8% respectively. Estimated returns to professional degrees rise from 13.9% to 16.6%. These findings correspond to a large increase in relative earnings received by postgraduate degree holders in the United States over the past 20 years.
    Keywords: Postgraduate, Rate of return, Demand for schooling, Quantitative skills, Qualitative skills, Sorting
    JEL: J3
    Date: 2007–09–07

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