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378
Why Don’t the Poor Save More? Evidence from Health Savings Experiments,” American Economic Review,
, 2013
"... Abstract Using data from a field experiment in Kenya, we document that providing individuals with simple informal savings technologies can substantially increase investment in preventative health and reduce vulnerability to health shocks. Simply providing a safe place to keep money was sufficient t ..."
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Cited by 53 (8 self)
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Abstract Using data from a field experiment in Kenya, we document that providing individuals with simple informal savings technologies can substantially increase investment in preventative health and reduce vulnerability to health shocks. Simply providing a safe place to keep money was sufficient to increase health savings by 66%. Adding an earmarking feature was only helpful when funds were put towards emergencies, or for individuals that are frequently taxed by friends and relatives. Group-based savings and credit schemes had very large effects. JEL Codes: D14, D91, O16 Keywords: Mental accounting, labeling, earmarking, commitment, sharing norms, present-bias. * Dupas: Economics Department, Stanford University, 579 Serra Mall, Stanford CA 94305 (pdupas@stanford.edu); Robinson: Economics Department, University of California at Santa Cruz, 457 Engineering 2, Santa Cruz, CA 95064 (jmrtwo@ucsc.edu). We thank the editor Penny Goldberg, two anonymous referees, Sandro Ambuehl, Nava Ashraf, Esther Duflo, Sarah Green, Seema Jayachandran, Anthony Keats, Erik Snowberg, John Strauss and Diego Ubfal for helpful comments, as well as numerous seminar audiences. We are grateful to the California Center for Population Research for funding, to IPA Kenya for administrative assistance coordinating the project, and to
Value from hedonic experience and engagement
- Psychological Review
, 2006
"... Recognizing that value involves experiencing pleasure or pain is critical to understanding the psychology of value. But hedonic experience is not enough. I propose that it is also necessary to recognize that strength of engagement can contribute to experienced value through its contribution to the e ..."
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Cited by 50 (6 self)
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Recognizing that value involves experiencing pleasure or pain is critical to understanding the psychology of value. But hedonic experience is not enough. I propose that it is also necessary to recognize that strength of engagement can contribute to experienced value through its contribution to the experience of motivational force—an experience of the intensity of the force of attraction to or repulsion from the value target. The subjective pleasure/pain properties of a value target influence strength of engagement, but factors separate from the hedonic properties of the value target also influence engagement strength and thus contribute to the experience of attraction or repulsion. These additional sources of engagement strength include opposition to interfering forces, overcoming personal resistance, using the right or proper means of goal pursuit, and regulatory fit between the orientation and manner of goal pursuit. Implications of the contribution of engagement strength to value are discussed for judgment and decision making, persuasion, and emotional experiences.
2004), “Spending Time versus Spending Money
- Journal of Consumer Research
"... Ben Franklin warned all who would listen that time is money and economists ever since have concurred. Although we agree that an understanding of the opportunity costs of time is important to making good decisions, in this research we find systematic differences in the way that people ex ante spend t ..."
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Cited by 43 (1 self)
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Ben Franklin warned all who would listen that time is money and economists ever since have concurred. Although we agree that an understanding of the opportunity costs of time is important to making good decisions, in this research we find systematic differences in the way that people ex ante spend time versus money and ex post differences in how they evaluate decision outcomes experienced after spending time or money. Specifically, people ex post are able to more easily accommodate negative outcomes by adjusting the value of their temporal inputs. Also, ex ante people are willing to spend more time for higher risk, higher return options whereas when spending money the pattern is reversed and the more standard pattern of risk aversion is observed. The inherent ambiguity of the value of time promotes accommodation and rationalization and may explain the rather obvious observation that most people are a lot more willing to waste time than money. Spending Time versus Spending Money Benjamin Franklin said, “Remember time is money ” implying that time is
Reference-Dependent Consumption Plans
, 2009
"... We develop a rational dynamic model in which people are loss averse over changes in beliefs about present and future consumption. Because changes in wealth are news about future consumption, preferences over money are reference-dependent. If news resonates more when about imminent consumption than w ..."
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Cited by 41 (2 self)
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We develop a rational dynamic model in which people are loss averse over changes in beliefs about present and future consumption. Because changes in wealth are news about future consumption, preferences over money are reference-dependent. If news resonates more when about imminent consumption than when about future consumption, a decision maker might (to generate pleasant surprises) overconsume early relative to the optimal committed plan, increase immediate consumption following surprise wealth increases, and delay decreasing consumption following surprise losses. Since higher wealth mitigates the effect of bad news, people exhibit an unambiguous first-order
Advances in Behavioral Economics
- Princeton, Princeton University
, 2004
"... Behavioral economics uses evidence from psychology and other disciplines to create models of limits on rationality, willpower and self-interest, and explore their implications in economic aggregates. This paper reviews the basic themes of behavioral economics: Sensitivity of revealed preferences to ..."
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Cited by 35 (3 self)
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Behavioral economics uses evidence from psychology and other disciplines to create models of limits on rationality, willpower and self-interest, and explore their implications in economic aggregates. This paper reviews the basic themes of behavioral economics: Sensitivity of revealed preferences to descriptions of goods and procedures; generalizations of models of choice over risk, ambiguity, and time; fairness and reciprocity; non-Bayesian judgment; and stochastic equilibrium and learning. A central issue is what happens in equilibrium when agents are imperfect but heterogeneous; sometimes firms “repair ” limits through sorting, but profitmaximizing firms can also exploit limits of consumers. Frontiers of research are careful formal theorizing about psychology and studies with field data. Neuroeconomics extends the psychological data use to inform theorizing to include details of neural circuitry. It is likely to support rational choice theory in some cases, to buttress behavioral economics in some cases, and to suggest different constructs as well.
Stretching the truth: Elastic justification and motivated communication of uncertain information
- Journal of Risk and Uncertainty
, 2002
"... Although both cognitive and motivational factors can influence the communication of uncertain information, most of the work investigating the communication of uncertainty has focused on cognitive factors. In this article, we demonstrate that motivational factors influence the communication of privat ..."
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Cited by 35 (2 self)
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Although both cognitive and motivational factors can influence the communication of uncertain information, most of the work investigating the communication of uncertainty has focused on cognitive factors. In this article, we demonstrate that motivational factors influence the communication of private, uncertain information and we describe the relationship between elasticity (i.e. uncertainty and vagueness) and motivated communication. We report results from four experiments that demonstrate that motivated communication is not purely opportunistic. The values people report are constrained by the elasticity of private information even when the costs and benefits of misrepresenting information are held constant. Perceptions of justifiability mediate the relationship between elasticity and motivated communication, and we explain our results in terms of the self-justification process.
E-Z Tax: Tax Salience and Tax Rates
- Quarterly Journal of Economics
, 2009
"... Abstract: This paper tests the hypothesis that the salience of a tax system affects equilibrium tax rates. To do this, I analyze how toll rates change after toll facilities adopt electronic toll collection. Unlike manual toll collection, in which the driver must hand over cash at the toll collection ..."
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Cited by 33 (1 self)
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Abstract: This paper tests the hypothesis that the salience of a tax system affects equilibrium tax rates. To do this, I analyze how toll rates change after toll facilities adopt electronic toll collection. Unlike manual toll collection, in which the driver must hand over cash at the toll collection plaza, electronic toll collection automatically debits the toll amount as the car drives through the toll plaza, thereby plausibly decreasing the salience of the toll. I find robust evidence that toll rates increase following the adoption of electronic toll collection. My estimates suggest that, in steady state, toll rates are 20 to 40 percent higher than they would have been without electronic toll collection. Consistent with the hypothesis that decreased tax salience is responsible for the increase in toll rates, I also find evidence that the short run elasticity of driving with respect to the actual toll declines (in absolute value) following the adoption of electronic toll collection. I consider a variety of alternative explanations for these results and conclude that these are unlikely to be able to explain the findings. Key Words: tax salience; size of government; tolls, electronic toll collection
Decision under risk
- In
, 2004
"... experimental medical treatment, or steal a base, involve risk. Purchasing insurance is sensible if you believe a flood will happen, but a bad idea if you are convinced it won’t. The study of risky decision making has addressed two broad questions. How should individuals behave when faced with a risk ..."
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Cited by 30 (2 self)
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experimental medical treatment, or steal a base, involve risk. Purchasing insurance is sensible if you believe a flood will happen, but a bad idea if you are convinced it won’t. The study of risky decision making has addressed two broad questions. How should individuals behave when faced with a risky choice like the ones above? How do individuals behave when faced with a risky choice? The first question is normative; the second, descriptive. 1 Although the first question is clearly important, our aim in this chapter is to provide answers to the second question. The study of risky decision making has a long, distinguished, and interdisciplinary history. The list of contributors include some of the most prominent figures in economics and psychology, including several Nobel Prize winners in Economics, and these ideas have in turn been applied with great success to business, law, medicine, political science, and public policy. 2 We hope to give the reader an overview of the exciting developments made by these researchers and others. In particular, the goals of this chapter are fourfold: (i) survey the evolution of questions asked by researchers of risky decision making; (ii) review the major intellectual contributions; (iii) summarize the present state of knowledge; and (iv) offer a research agenda for
Bargaining power in marriage: Earnings, wage rates and household production. Working Paper
, 2005
"... together with an analysis of the role of joint taxation in family bargaining, was presented at ..."
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Cited by 23 (2 self)
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together with an analysis of the role of joint taxation in family bargaining, was presented at
