Cognitive abilities,self-efficacy,and financial behavior

This paper investigates the effect of cognitive abilities on financial behavior among older adults. Using the U.S. Health and Retirement Study, I find that cognitive abilities significantly affect financial behavior through two channels: ability and self-efficacy. People with higher cognition scores achieve better financial outcomes. This positive association is especially strong in tasks having high demand of cognitive abilities, which confirms the ability channel of the cognitive ability effect. In addition, there is evidence for the self-efficacy channel as a secondary source of cognitive influence. Lower cognitive abilities decrease people’s sense of self-efficacy, which, in turn, significantly decreases financial management efficiency. The findings have important policy implications, specifically that more effort is needed to assist the growing older population through the cognitive aging process and that noncognitive skills, as a secondary source of influence, also warrant attention.     

Effects of urbanization on trust: Evidence from an experiment in the field

I conducted a trust game in the field within a natural experiment paradigm to test the effects of urbanization on both in- and out-group trust. I found that urbanization has a larger positive effect on out-group trust than on in-group trust. My findings provide new knowledge to the literature on the intricacy of the urbanization-trust relationship and contribute to the ongoing discourse on the different foundations underpinning in-group and out-group trust.     

Behavior Change and the Freshman 15: Tracking Physical Activity and Dietary Patterns in 1st-Year University Women

Objective and Participants: The authors assessed the stability of diet and physical activity and their relationship to weight changes in first-year university women. Methods: They collected anthropometric and body composition data from 101 resident women at the beginning of their first year of college and again at 12 months. The authors obtained physical activity and dietary logs 4 times throughout the year. Results: Caloric intake decreased over 12 months in all participants (p = .01). There was little change in physical activity in participants who lost weight (p = .73, d = .18). Those who gained weight experienced a trend toward decreased physical activity (p = .13, d = .38). A significant Time X Group interaction on physical activity (p = .04) suggests that physical activity patterns differed substantially between individuals who gained weight and those who lost weight. Conclusions: Reduction in physical activity appears to be the defining characteristic in freshman weight gain.     

Consumer bankruptcy and default: The role of individual social capital

In this paper, we empirically assess the role of individual social capital on personal bankruptcy and default outcomes in the consumer credit market. After controlling for a borrower’s risk score, debt, income, wealth, and legal and economic environments, we find that default/bankruptcy risk rises and then falls over the lifecycle, while a borrower who owns a home or is married has a lower risk of default/bankruptcy. Moreover, a borrower who migrates 190 miles from his “state of birth” is 17% more likely to default and 15% more likely to file for bankruptcy, while a borrower who continues to live in his state of birth is 14% and 10% less likely to default and file for bankruptcy, respectively. A borrower who moves to a rural area is 9% and 7% less likely to default and declare bankruptcy, respectively. We also find that measures of social networks, norms, and cooperation and trust (i.e., aggregate social capital) are inversely related to consumer bankruptcy.     

An exploratory analysis of composite choices: Weighing rationality versus irrationality

Humans are engineered neurologically to make rational and irrational choices. This paper introduces a new paradigm for decision making – a composite choice model – in which economic agents are constantly weighing rationality versus irrationality when encountering options. In an exploratory, deterministic, two-period model, an assumption of a two-way cross-embedment (i.e., a two-way interaction between the rational and irrational components) results in a paradoxical phenomenon, an outcome of either tending toward bliss or abyss at the end of the first period. This implies, for instance, a psychological struggle between two selves within the mind. The paradigm proposed is compared to the dual-process theories recently developed by the cognitive sciences. Future research will explore implications for public policy design and implementation.     

Demographic change, macroeconomic conditions, and the murder rate: The case of the United States, 1934–2006

Fluctuations in aggregate crime rates contrary to recent shifts in the age distribution of the U.S. population have cast doubt on the predictive power of the age–crime hypothesis. By examining a longer time horizon, back to the early 1930s, we show that the percentage of the young population is a robust predictor of the observed large swings in the U.S. murder rate over time. However, changes in the misery index—the sum of the inflation and unemployment rates—significantly contribute to explaining changes in the murder rate. This applies, in particular, to those changes that are at odds with the long-run trend of the U.S. age distribution, such as the decline in the murder rate in the latter part of the 1970s or its increase starting around the middle of the 1980s.     

Birth order effects on young students’ academic achievement

We examine birth order effects on academic achievement for ten-year-old students using data for the entire population of fifth graders in Norway 2007/2008. The analysis thus adds to a thin empirical literature focusing on birth order effects among young children. We find that being firstborn confers a significant advantage in families with two, three and four children. The analysis makes two other contributions. First, we provide evidence that unless mother's age at childbirth is included among the control variables, only small and imprecise birth order effects are revealed in families with low socioeconomic status. Second, we provide some evidence that the birth order effects differ across families with highly educated and less educated mothers, which lend support to the resource dilution model over the confluence model.     

Are people in the South less intelligent than in the North? IQ and the North–South disparity in Italy

Socioeconomic disparity between North and South Italy has been recently explained by Lynn (2010) as the result of a lower intelligence quotient (IQ) of the Southern population. The present article discusses the procedure followed by Lynn, supplementing his data with new information on school assessments and per head regional income. Genetic North–South differences are then discussed on the basis of the most recent literature on the subject. The results do not confirm the suggested IQ-economy causal link.     

Sanctioning as a social norm: Expectations of non-strategic sanctioning in a public goods game experiment

Sanctioning increases cooperation in public goods games, but not indiscriminately under all conditions and in all societies, and the mechanisms by which sanctioning exercises its impact on behavior are yet to be studied in detail. We show experimentally that in the presence of sanctioning, our experimental subjects adjust their behavior in order to avoid being a free rider. They do this not only in the STANDARD sanctions treatment, where they directly experience any sanctions assigned to them, but also in our main treatment, the SECRET sanctions treatment, where no information on sanctions received is available until the end of the experiment. We observe no such free riding avoidance in the treatment without sanctioning. The mere knowledge that sanctions might be assigned increases cooperation among the members of our subject pool; subjects expect that non-strategic sanctioning occurs against the free riders. Moreover, these expectations are correct as we observe a similar pattern and extent of sanctioning in both treatments. We propose that sanctioning in itself is a social norm and may be culturally dependent, as suggested in the literature.     

Simple inference in multinomial and ordered logit

This paper provides some simple methods of interpreting the coefficients in multinomial logit and ordered logit models. These methods are summarized in Propositions concerning the magnitudes, signs, and patterns of partial derivatives of the outcome probabilities with respect to the exogenousvariables. The paper also provides an empirical example illustrating the use of these Propositions.