Understanding Preference Formation
Paper Session
Sunday, Jan. 5, 2025 8:00 AM - 10:00 AM (PST)
- Chair: Uwe Sunde, University of Munich
Separating Preferences from Endogenous Effort and Cognitive Noise in Observed Decisions
Abstract
Preferences, like skills and other latent personal attributes, are key drivers of inequalities in life outcomes. We develop a micro-founded framework for accounting for individuals' effort and cognitive noise which confound estimates of preferences based on observed behavior. Using a large-scale experimental dataset we estimate that failure to properly account for decision errors due to (rational) inattention on a more complex, but commonly used, task design biases estimates of risk aversion by 50\% for the median individual. Effort propensities recovered from preference elicitation tasks generalize to other settings and predict performance on an OECD-sponsored achievement test used to make international comparisons. Furthermore, accounting for endogenous effort allows us to empirically reconcile competing models of discrete choice.Political Talk Radio and Rural Conservatism
Abstract
This paper studies the impact of conservative talk radio on electoral outcomes in the United States. I focus on the rise of conservative radio over the airwaves following the national syndication of the Rush Limbaugh Show in 1988. To isolate the effect of conservative radio programs, I identify two plausibly exogenous factors that could, theoretically, affect exposure to political talk radio: 1) competition for attention based on the choice of non-talk radio programming available and 2) the amount of time people spend driving in vehicles as a captive audience to car radio. First, using the American National Election Studies, I provide empirical evidence that these two factors jointly affected individual consumption of political talk radio. Next, utilizing a triple-difference specification, I show that following 1988, Republican vote share disproportionately increased in counties with fewer radio stations and where people average a longer commute. Finally, because rural areas are more likely to have those characteristics, I hypothesize that the resulting impact of conservative radio may have been disproportionately borne in such places. To directly make this connection, I show that rural counties became more conservative following 1988 only in areas with greater exposure to conservative radio. Rural regions with more robust radio offerings and where people had shorter commute times experienced no differential increase in conservatism.Long-Run Impact of Early-Life Adversity on Prosocial Behavior: Evidence from China’s 1959-1961 Great Famine
Abstract
This paper investigates the enduring impact of early-life exposure to the Great Chinese Famine on prosocial behaviors. Employing a cohort difference-in-differences approach, we find a significant increase in charitable donations even five decades after the famine by those exposed to the famine in early childhood, particularly among individuals with siblings during the famine period. We find suggestive evidence that the heightened prosociality is driven by increased empathy. Our findings contribute causal evidence to the long-term impact of traumatic events on prosocial behavior.JEL Classifications
- D9 - Micro-Based Behavioral Economics