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Essays in Behavioral Household Finance
Get PDFThis dissertation investigates some of the factors affecting modern household finance decisions in the United States using natural experimental variation and administrative data. In Chapter 1 I estimate the effects of financial education on retirement savings decisions. Between 2007 and 2008 the U.S. Army implemented a mandatory 8 hour Personal Financial Management Course (PFMC) for new soldiers. Staggered implementation across locations and time provides quasi-experimental variation in whether an individual received the training. I find that the course has large and lasting effects on individual retirement savings in the Thrift Savings Plan, a tax-deferred account similar to a 401(k). The course doubles savings, has significant effects throughout the distribution of savings and the effects persist out to two years. The mechanism for the effects is likely a combination of both human capital and behavioral assistance. In Chapter 2 I estimate the effects of financial education on a variety of other economic behaviors. I rely on the same natural experiment as in Chapter 1 but I use individually matched credit data to estimate the effects of financial education on credit scores, credit balances for several types of accounts, monthly payments and adverse legal actions. In some areas I find that the PFMC has beneficial effects, reducing cumulative account balances (especially for automobile accounts) and aggregate monthly payments. In other areas, including credit scores, the probability of being active in the credit market and the number of adverse legal actions, the PFMC has no statistically significant effects on financial behavior. In Chapter 3 I estimate the effects of stress on financial decision-making. I use the natural variation in the casualty rates faced by individuals deploying overseas an exogenous source of stress and I measure the effects of this stress on individuals' participation in the Savings Deposit Program (SDP), a risk-free 10% annual percentage rate savings account. I find a modest and statistically significant negative relationship between the stress of casualties and SDP participation on the order of 5%. Some failures of the randomization test and the confounding effects of overall activity levels and rural locations cannot be eliminated as a source of the observed savings differences and as a result, these results should be considered suggestive evidence of the adverse effects of stress on financial decision-making
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Gradualism in Coordination and Trust Building
Get PDFCoordination and cooperation on public projects, as well as trust among society members are important for economic, social and political activities. This dissertation presents essays on the role of gradualism - increasing the stakes of projects slowly over time rather than starting with large-stake projects immediately - in coordination and trust building under various settings. The first two essays are on simultaneous coordination games when there are multiple equilibria in the one-shot game; the third essay is on sequential trust games when the only subgame perfect equilibrium in the one-shot game predicts that no cooperation occurs at all. The first essay, One Step at A Time: Does Gradualism Build Coordination? (joint with Sam Asher, Lorenzo Casaburi, and Plamen Nikolov), uses a multiple-period binarychoice weakest-link coordination experiment and finds that gradualism leads to better coordination in high-stake projects. The findings point to a voluntary mechanism to promote coordination when the capacity to impose sanctions is limited. This second essay, Gradualism, Weakest Link and Information: Theory and Coordination Experiments, extends the first essay and compares the effects of gradualism under various information and payoff structures. It proposes a belief-based learning framework to explore why and when gradualism may help coordination. It compares the role of gradualism in two weakest-link games under two different information structures: a limited information structure when subjects are only informed whether all group members contribute, and a richer information structure when they are informed exactly how many group members contribute. It finds that richer information feedback facilitates later coordination for the big-bang approach when a group is close to success, thus shrinking the advantage of gradualism. Finally, in a third experiment it finds that allowing free riding worsens coordination in all treatments, and gradualism with imperfect monitoring does not perform better. The third essay, Does Gradualism Build Trust? Evidence from A Multi-round Experiment, examines the effect of gradualism in trust building using a multi-round binarychoice trust (investment) experiment. It finds that gradualism leads to higher trustworthiness at the beginning and higher subsequent trust. However, trustworthiness and trust for all treatments sharply decrease in the end; even gradualism cannot avoid this end-of-game effect
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Field Experiments in Behavioral and Public Economics
No full textThe three essays in this dissertation present field experiments exploring phenomena in behavioral and public economics in real-world settings.
The first essay outlines a field experiment that uses mailers with peer rank information to motivate water conservation. The essay contributes some of the first pieces of evidence on how comparisons with specific peers might influence behavior. The main finding is that while competitive framing of peer information has positive impacts on efficient homes, it has simultaneous negative impacts on inefficient homes, which are larger in magnitude. In particular, the essay finds that households who rank last in a displayed peer comparison are demotivated by their poor performance, and increase their water use relative to controls.
The second essay studies the impact of signing an explicit promise statement at loan initiation on ensuing loan repayment behavior. The essay provides one of the first field tests of a phenomenon observed in laboratory studies, namely that making a promise can change people's ensuing behavior. Interestingly, the essay does not find support for this claim, and shows the potential difficulty in generalizing laboratory results to real-world settings.
The third essay focuses on decision making about risk. Specifically, it presents two field studies that use quasi-random, real-world events to explore how emotions influence risk decisions. These studies are among the first field tests of the relationship between emotion and risk preferences. The essay offers mixed results, finding that negative emotions seem to increase risk aversion only when the emotions derive from events linked to individual self-responsibility.Public PolicyBehavioral Economics; Public Economics; Experimental Economics; Economics; Public Policy; Social Psychology; Water; Conservation; Promises; Emotion; Risk; Behavioral Scienc
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Essays in Health and Behavioral Economics
No full textThis dissertation consists of three chapters, each of which is an independent essay in the fields of health or behavioral economics. The first chapter explores the use of heuristics among highly-trained physicians diagnosing heart disease in the emergency department (ED), a common task with life-or-death consequences. Using data from a large private-payer claims database, I find compelling evidence of heuristic thinking in this setting: patients arriving in the ED just after their 40th birthday are roughly 10% more likely to be tested for and 20% more likely to be diagnosed with ischemic heart disease (IHD) than patients arriving just before this date, despite the fact that the incidence of heart disease increases smoothly with age. Moreover, I show that this shock to diagnostic intensity has meaningful implications for patient health, as it reduces the number of missed IHD diagnoses among patients arriving in the emergency department just after their 40th birthday, thereby preventing future heart attacks. I then develop a model that ties this behavior to an existing literature on representativeness heuristics, and discuss the implications of this class of heuristics for diagnostic decision-making.
The second chapter examines the admitting decisions of ED physicians. Roughly half of all hospital admissions in the US flow through EDs, making emergency physicians important gatekeepers for expensive, high-intensity inpatient care. However, despite the high costs associated with hospital admissions, even physicians working in the same ED exhibit wide variation in their tendencies to admit patients to the hospital. This begs the question: are the additional admissions made by high-admitting physicians conferring benefits that are sufficient to outweigh their substantial costs? By exploiting quasi-random assignment of patients to physicians in a large Boston-area ED, I find that physicians with above-median admission rates are on average at least 20% more likely to admit a given patient than those with below-median admission rates. Although patients assigned to high-admitting physicians receive significantly greater treatment intensity, I find that this makes them no less likely to experience adverse health outcomes in the future. This suggests that these marginal admissions are of low value.
The final chapter proposes a methodological contribution to the design of randomized control trials (RCTs), which are ubiquitous in the health sciences. Statistical power increases in the compliance rate of an experiment, so selecting participants with the highest likelihoods of compliance can provide the experiment with more power than if participants were chosen randomly. In this paper, I explore how data from prior experiments or quasi-experiments can allow researchers to systematically select the potential participants that are most likely to be compliers, and discuss the potential benefits and drawbacks of incorporating such an approach into RCT design. Using publicly available data from the Oregon Health Insurance Experiment, I empirically demonstrate the feasibility of these methods.Public PolicyHealth Economics; Behavioral Economics; Health Polic
Going Beyond Counting First Authors in Author Co-citation Analysis
Get PDFThe present study examines one of the fundamental aspects of author co-citation analysis (ACA) - the way co-citation
counts are defined. Co-citation counting provides the data on which all subsequent statistical analyses and mappings
are based, and we compare ACA results based on two different types of co-citation counting - the traditional type that
only counts the first one among a cited work's authors on the one hand and a non-traditional type that takes into
account the first 5 authors of a cited work on the other hand. Results indicate that the picture produced through this non-traditional author co-citation counting contains more coherent author groups and is therefore considerably clearer. However, this picture represents fewer specialties in the research field being studied than that produced through the traditional first-author co-citation counting when the same number of top-ranked authors is selected and analyzed. Reasons for these effects are discussed
Applying Insights from Behavioral Economics to Policy Design
Get PDFThe premise of this article is that an understanding of psychology and other social science disciplines can inform the effectiveness of the economic tools traditionally deployed in carrying out the functions of government, which include remedying market failures, redistributing income, and collecting tax revenue. An understanding of psychology can also lead to the development of different policy tools that better motivate desired behavior change or that are more cost-effective than traditional policy tools. The article outlines a framework for thinking about the psychology of behavior change in the context ofmarket failures. It then describes the research on the effects of a variety of interventions rooted in an understanding of psychology that have policy-relevant applications. The article concludes by discussing how an understanding of psychology can also inform the use and design of traditional policy tools for behavior change, such as financial incentives.Author's Origina
Variations on the Author
Get PDF“Variations on the Author” discusses two of Eduardo Coutinho’s recent films (Um Dia na Vida, from 2010, and Últimas Conversas, posthumously released in 2015) and their contribution to the general question of documentary authorship. The director’s filmography is characterized by a consistent yet self-effacing form of authorial self-inscription: Coutinho often features as an interviewer that rather than express opinions propels discourses; an interviewer that is good at listening. This mode of self-inscription characterizes him as an author who is not expressive but who is nonetheless markedly present on the screen. In Um Dia na Vida, however, Coutinho is completely absent form the image, while Últimas Conversas, on the contrary, includes a confessional prologue that moves the director from the margins to the center of his films. This article examines the ways in which these works stand out in the filmography of a director who offers new insights into the notion of cinematic authorship
Appropriate Similarity Measures for Author Cocitation Analysis
Get PDFWe provide a number of new insights into the methodological discussion about author cocitation analysis. We first argue that the use of the Pearson correlation for measuring the similarity between authors’ cocitation profiles is not very satisfactory. We then discuss what kind of similarity measures may be used as an alternative to the Pearson correlation. We consider three similarity measures in particular. One is the well-known cosine. The other two similarity measures have not been used before in the bibliometric literature. Finally, we show by means of an example that our findings have a high practical relevance.information science;Pearson correlation;cosine;similarity measure;author cocitation analysis
Brigitte Madrian and Personal Happiness
No full textEver feel inadequate when competing with others? Brigitte Madrian, dean of the Marriott School of Business, explains the importance of competing with yourself and becoming the best version of yourself
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