Behavioral Biases Are Temporally Stable

Working Paper: NBER ID: w27860

Authors: Victor Stango; Jonathan Zinman

Abstract: Social scientists often consider temporal stability when assessing the usefulness of a construct and its measures, but whether behavioral biases display such stability is relatively unknown. We estimate stability for 25 biases, in a nationally representative sample, using repeated elicitations three years apart. Bias level indicators are largely stable in the aggregate and within-person. Within-person intertemporal rank correlations imply moderate stability and increase dramatically when using other biases as instrumental variables. Additional results reinforce three key inferences: biases are stable, accounting for classical measurement error in bias elicitation data is important, and eliciting multiple measures of multiple biases is valuable.

Keywords: behavioral biases; temporal stability; measurement error; consumer finance

JEL Codes: C36; C81; D90; E70


Causal Claims Network Graph

Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.


Causal Claims

CauseEffect
changes in financial conditions (G19)changes in bias stability (C46)
subjective well-being (I31)changes in bias stability (C46)
temporal stability (C41)biases are largely stable at the aggregate level (D91)
within-person stability (C62)biases are stable at the individual level (D91)
rank stability (C69)individual biases do not fluctuate dramatically over time (D91)
measurement error (C20)obscures true stability of biases (D91)
classical measurement error (C20)accurate inferences about stability (C62)

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