Working Paper: NBER ID: w23625
Authors: Victor Stango; Joanne Yoong; Jonathan Zinman
Abstract: 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.
Keywords: Behavioral Economics; Financial Decision-Making; Empirical Evidence
JEL Codes: D03; D14; D6; D8; D9; E03; G02
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| behavioral factors (D91) | financial outcomes (G39) |
| cross-sectional heterogeneity in behavioral factors (D91) | financial condition (G32) |
| behavioral factors are distinct from classical factors (D91) | financial outcomes (G39) |
| behavioral factors influence financial outcomes independently (G41) | financial outcomes (G39) |