Quicksand or Bedrock for Behavioral Economics? Assessing Foundational Empirical Questions
84 Pages Posted: 20 Jul 2017
Date Written: July 17, 2017
Behavioral economics lacks empirical evidence on some foundational empirical questions. We adapt standard elicitation methods to measure multiple behavioral factors per person in a representative U.S. sample, along with financial condition, cognitive skills, financial literacy, classical preferences and demographics. Individually, B-factors are prevalent, distinct from other decision inputs, and correlate negatively with financial outcomes in richly-conditioned regressions. Conditioning further on other B-factors does not change the results, validating common practice of modeling B-factors separately. Corrections for low task/survey effort modestly strengthen the results. Our findings provide bedrock empirical foundations for behavioral economics, and offer methodological guidance for research designs.
JEL Classification: D03, D14, D8, D9, E03, G02
Suggested Citation: Suggested Citation