Quicksand or Bedrock for Behavioral Economics? Assessing Foundational Empirical Questions

62 Pages Posted: 13 Jun 2018

See all articles by Victor Stango

Victor Stango

UC Davis Graduate School of Management

Joanne Yoong

National University of Singapore (NUS)

Jonathan Zinman

Dartmouth College; Innovations for Poverty Action; Jameel Poverty Action Lab; National Bureau of Economic Research (NBER)

Multiple version iconThere are 3 versions of this paper

Date Written: April 1, 2018

Abstract

Behavioral economics lacks empirical evidence on some foundational 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, behavioral 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.

Keywords: behavioral economics, financial well-being, b-factors, empirical evidence

JEL Classification: D03, D14, D6, D8, D9, E03, G02

Suggested Citation

Stango, Victor and Yoong, Joanne and Zinman, Jonathan, Quicksand or Bedrock for Behavioral Economics? Assessing Foundational Empirical Questions (April 1, 2018). Michigan Retirement Research Center Research Paper No. 2018-378. Available at SSRN: https://ssrn.com/abstract=3195232 or http://dx.doi.org/10.2139/ssrn.3195232

Victor Stango (Contact Author)

UC Davis Graduate School of Management ( email )

One Shields Avenue
Davis, CA 95616
United States

Joanne Yoong

National University of Singapore (NUS) ( email )

Bukit Timah Road 469 G
Singapore, 117591
Singapore

Jonathan Zinman

Dartmouth College ( email )

Hanover, NH 03755
United States
603-646-0075 (Phone)

HOME PAGE: http://https://sites.dartmouth.edu/jzinman/

Innovations for Poverty Action

1731 Connecticut Ave, 4th floor
New Haven, CT 20009
United States

Jameel Poverty Action Lab

E60-246
77 Massachusetts Avenue
Cambridge, MA 02139
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Register to save articles to
your library

Register

Paper statistics

Downloads
48
Abstract Views
206
PlumX Metrics