20 Pages Posted: 22 Feb 2007 Last revised: 8 May 2012
Date Written: August 13, 2008
Does current utility bias predictions of future utility for high stakes decisions? Here I provide field evidence consistent with such Projection Bias in one of life's most thought about decisions: college enrollment. After arguing and documenting with survey evidence that cloudiness increases the appeal of academic activities, I analyze the enrollment decisions of 1,284 prospective students who visited a university known for its academic strengths and recreational weaknesses. Consistent with the notion that current weather conditions influence decisions about future academic activities, I find that an increase in cloudcover of one standard deviation on the day of the visit is associated with an increase in the probability of enrollment of 9 percentage points.
Keywords: Behavioral Economics, college choice, predicted utility, psychology, projection bias
JEL Classification: D00, D01, D91, M37
Suggested Citation: Suggested Citation