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The causal impact of economics education on decision-making: Evidence from a natural experiment in China

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  • Chen, Binkai
  • Lin, Wei
  • Wang, Ao

Abstract

We investigate the causal impact of collegiate economics courses on students’ decision-making. By exploiting a Chinese college-admission system that quasi-randomly assigns students to economics/business majors given students’ preferences and the College Entrance Exam’s cutoff scores for economics/business majors, we are able to isolate the treatment effects of an economics education on students’ responses to a decision-making survey. Specifically, we compare the survey responses of students who narrowly meet the cutoffs for the economics/business majors to those who do not and find that students educated in economics/business courses are more likely to be risk neutral and less prone to common biases in probabilistic beliefs. While students in economics/business majors do not show significant changes in social preferences, they appear more inclined to believe that others behave selfishly.

Suggested Citation

  • Chen, Binkai & Lin, Wei & Wang, Ao, 2021. "The causal impact of economics education on decision-making: Evidence from a natural experiment in China," Journal of Economic Behavior & Organization, Elsevier, vol. 188(C), pages 1124-1143.
    • Handle: RePEc:eee:jeborg:v:188:y:2021:i:c:p:1124-1143
    DOI: 10.1016/j.jebo.2021.06.018
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    Cited by:

    1. Kaiser, Tim & Oberrauch, Luis, 2021. "Economic education at the expense of indoctrination? Evidence from Germany," EconStor Preprints 245801, ZBW - Leibniz Information Centre for Economics.

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    More about this item

    Keywords

    Decision-making; College majors; Preferences;
    All these keywords.

    JEL classification:

    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • A13 - General Economics and Teaching - - General Economics - - - Relation of Economics to Social Values
    • A22 - General Economics and Teaching - - Economic Education and Teaching of Economics - - - Undergraduate

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