Poverty, Development, and Behavioral Economics: Comprises Findings of UNU-WIDER Project New Approaches to Measuring Poverty and Vulnerability

Review of Income and Wealth 60 (1), March 2014, DOI: 10.1111/roiw.12085

Posted: 8 Sep 2014

See all articles by Jukka Pirttila

Jukka Pirttila

United Nations - World Institute for Development Economics Research (UNU/WIDER); Tampere University of Technology

Markus Jantti

Stockholm University

Ravi Kanbur

Cornell University; Centre for Economic Policy Research (CEPR); IZA Institute of Labor Economics

Date Written: March 1, 2014

Abstract

In the last two decades, questioning of the textbook model of individual choice behavior has accelerated. 'Imperfections' of individual choice behavior are increasingly accepted by the profession as viable empirical phenomena to be explained and incorporated. Non-standard objectives and decision making — procrastination; overweighting low probability outcomes; focus on changes from current wealth as a reference point; choice between two alternatives depending on which is presented as the default option; willingness to sacrifice return for fairness of process or outcome, etc — have been investigated theoretically, empirically, and experimentally. The award of Nobel Prizes to Daniel Kahneman and Vernon Smith (2002), of the Clark Medal to Matthew Rabin (2001), Esther Duflo (2010), and Raj Chetty (2013), and of the MacArthur Award to Michael Kremer (1997), Sendhil Mullainathan (2002), Esther Duflo (2009), and Raj Chetty (2012), have confirmed the recognition of behavioral economics as an important new departure in economics.

Suggested Citation

Pirttila, Jukka and Jantti, Markus and Kanbur, Ravi, Poverty, Development, and Behavioral Economics: Comprises Findings of UNU-WIDER Project New Approaches to Measuring Poverty and Vulnerability (March 1, 2014). Review of Income and Wealth 60 (1), March 2014, DOI: 10.1111/roiw.12085. Available at SSRN: https://ssrn.com/abstract=2492534

Jukka Pirttila (Contact Author)

United Nations - World Institute for Development Economics Research (UNU/WIDER) ( email )

Katajanokanlaituri 6B
Helsinki, FIN-00160
Finland

Tampere University of Technology ( email )

P.O. 541, Korkeakoulunkatu 8 (Festia building)
Tampere, FI-33101
Finland

Markus Jantti

Stockholm University ( email )

Swedish Institute for Social Research
Stockholm, SE-10691
Sweden
+468162645 (Phone)

HOME PAGE: http://www.abo.fi/~mjantti/

Ravi Kanbur

Cornell University ( email )

301-J Warren Hall
Ithaca, NY 14853
United States
607-255-7966 (Phone)
607-255-9984 (Fax)

HOME PAGE: http://www.kanbur.dyson.cornell.edu

Centre for Economic Policy Research (CEPR)

London
United Kingdom

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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