NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Quicksand or Bedrock for Behavioral Economics? Assessing Foundational Empirical Questions

Victor Stango, Joanne Yoong, Jonathan Zinman

NBER Working Paper No. 23625
Issued in July 2017
NBER Program(s):AG, AP, DEV, EEE, EFG, HE, IO, LE, LS, PE

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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Document Object Identifier (DOI): 10.3386/w23625

 
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