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Quicksand or Bedrock for Behavioral Economics? Assessing Foundational Empirical Questions

Listed author(s):
  • Victor Stango
  • Joanne Yoong
  • Jonathan Zinman

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.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 23625.

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Date of creation: Jul 2017
Handle: RePEc:nbr:nberwo:23625
Note: AG AP DEV EEE EFG HE IO LE LS PE
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