Wednesday, November 26, 2014

PhD position working with the Behavioural Insights Team and Institute of Education

The BIT and IOE are accepting applications for a very interesting looking PhD with a deadline of 19 December 2014. The topic is adult literacy and numeracy. Details below:

"The Behavioural Research Centre for Adult Skills and Knowledge (ASK) and the Institute of Education’s National Research and Development Centre for adult literacy and numeracy (NRDC) are seeking a PhD candidate to work on a collaborative project.

The candidate will undertake the PhD with Integrated Research and Methods Training at the Institute of Education (IOE) full time over the course of three or four years. 

They will be co-supervised by:

  • an academic from the IOE’s National Research and Development Centre for Adult Literacy and Numeracy (NRDC), who will provide expert guidance on the elements of study related to numeracy and/ or literacy; and
  • the Head of Research at the Behavioural Insights Team, who will provide expert guidance on running randomised control trials in the field. 

Course costs and a salary will be fully funded by the BIT."

Full details of the position and details on how to apply are available here.

Workshop on Unemployment and Well-Being: Evidence and Policy Directions (5/12/14)

Unemployment and Well-Being: Evidence and Policy Directions
A key question for policy is the relationship between well-being and unemployment. A substantial body of literature has demonstrated a causal impact of unemployment on a wide range of measures of well-being. However, there has been increasing interest in the extent to which well-being and psychological distress may themselves condition labour market outcomes.

This workshop will examine key evidence in this area and discuss implications for policy and for future research. It will take place in Stirling University on December 5th 2014. The workshop is funded by the Marie Curie Career Integration scheme and is organised by Professor Liam Delaney and Dr Michael Daly of Stirling Management School’s Behavioural Science Centre. Registration is free and participants can sign up on the link below. 

Sign up to attend the workshop here

Speakers confirmed so far include:

11:00-11:30: Registration & Coffee

11:30-12:15:Childhood psychological factors influencing life-long unemployment trajectories.
Professor Liam Delaney (Stirling Behavioural Science Centre)

12:15-13:00: Do open youth unemployment and youth programs leave the same mental health scars? Evidence from a Swedish 27-year cohort study.
Professor Matthias Strandh (Umea University)

Abstract: Unemployment experiences have long been linked with reduced mental health. Recent findings suggest that the mental health costs of unemployment may have been underestimated in the past and that youth unemployment in particular can create both short- and long-term mental health scars. The main policy tools for dealing with young people at risk of labor market exclusion are Active Labor Market Policy programs for youths (youth programs). Research on these programs has primarily focused on labor market effects; there has been little emphasis on their potential effects on mental health and even less on whether participation in such programs alleviates the long-term mental health scarring caused by unemployment. This study uses a Swedish 27-year prospective cohort study initiated in 1981 with waves at ages 16, 18, 21, 30 and 43 to investigate how open unemployment and participation in youth programs between ages 18 and 21 are related to internalized mental health symptoms at ages 21 and 43. Our results indicate that open unemployment among youths leads to significant mental health scarring at both 21 and 43 whereas there was little or no such scarring among youth program participants.

13:00-14:00: Lunch

14:00-14:45: Well-Being in Welfare-to-Work Jobs.
Professor Andreas Knabe (Madgeburg University):

We used the Day Reconstruction Methods to measure the emotional well-being of people in welfare-to-work jobs in Germany. We interviewed about 350 persons in such employment schemes (along with equal numbers of employed and unemployed persons). Our data show that people in welfare-to-work jobs are less satisfied with their life than regularly employed people, but their life satisfaction is much higher than that of unemployed persons. Interestingly, their emotional well-being appears to be the highest of the three groups. We discuss potential explanations of these findings and policy implications.

14:45-15:30: Childhood Self-Control, Recession and Unemployment.
Mark Egan (Stirling Behavioural Science Centre)
Abstract: The capacity for self-control may underlie successful labor force entry and job retention, particularly in times of economic uncertainty. Our analysis of unemployment data from two nationally representative British cohort studies (N=16,941) found that low childhood self-control was associated with the emergence and persistence of patterns of unemployment across four decades. On average a 1SD increase in self-control was associated with a reduction in unemployment of a quarter or 1.4 percentage points after adjustment for intelligence and social class. From labor market entry to middle-age those with low self-control experienced 1.7 times more months of unemployment than those with high self-control. Analysis of monthly unemployment data during the 1980s recession showed that those with low self-control suffered the greatest increases in unemployment during this period. Our results underscore the critical role of self-control in shaping lifespan trajectories of occupational success and in affecting how macroeconomic conditions shape population unemployment levels.

15:30-16:00: Coffee

16:00-16:45: Behavioural Insights into the Youth Employment Services.
Dr. Denise Hawkes (Institute of Education)

Saturday, November 22, 2014

Summary of our fourth ESRC Workshop on Preferences and Personality (21/11/14)

Thanks everybody for attending our fourth ESRC workshop on “Personality and Preferences” in Stirling on Friday November 21st. It was the fourth of our six workshops funded by the ESRC that are taking place in 2014/15. 

We had excellent presentations and interesting discussions with many new ideas emerging from the different economic and psychological perspectives on common topics. Some of the main talking points which arose were:
  • The importance of the subjective versus the objective.
  • Average effects versus individual heterogeneity.
  • The differences between the measurement of economic preference parameters in experimental settings versus the psychological measurement of traits using scales and how both approaches can complement each other.
  • The external and internal validity of various economic and psychological measures.
  • Different standards to evaluate the quality of measures in economics and psychology.
  • The use of personality psychology to explain individual differences in biased decision-making.
  • The importance of background variables (e.g. social context) on economic preferences.
  • The malleability of preferences. 
  • The question why incentivised experiments are considered best practice in economics.
  • The domain-specificity of preferences.
  • The psychometrics of economic preferences and economic games. 
  • The change of preferences and personality over the life course. 
  • Preference measures in children and adults.
  • The difference between averages in personality and the distribution of personality.

Some more information about the workshop's aims, the abstracts of the talks, and pictures are below. Details of future workshops will be provided via the mailing list, the blog and our twitter account


One of the major challenges in economics is understanding the statistical properties of measures of time, risk, and social preferences and evaluating the validity of such measures. This workshop focuses on empirical research examining economic preferences in laboratory and real-world settings. Speakers addressed the reliability of traditional preference measures, their structure across demographic characteristics, innovations in measurement, and links between preference estimates and objective economic and biological measures. We have invited speakers who are engaged in the theoretical and empirical mapping of preference measures to personality traits which have been shown to have substantial predictive validity for important life outcomes (e.g. income, disease morbidity and mortality, employment). Taken together, this workshop aimed to enhance cross-talk and expand the common conceptual ground that exists between personality psychologists and economists interested in the assessment of preferences in the UK and Europe. Furthermore, aimed to cultivate frontier thinking regarding the future data-collection priorities for social science in the UK and further afield.

Professor Alex Wood (Stirling Behavioural Science Centre)
Integrating personality psychology and economics

Alex introduced the day's topic and gave an overview of the research conducted at the Centre on preferences and personality, suggesting that we need a second wave of behavioural economics that integrates personality psychology into economics in order to better explain individual differences.

Bernardo Fonseca Nunes (Stirling Behavioural Science Centre)
Transition to retirement and home production: personality explains heterogeneous changes in housework at retirement 

Previous studies on home-production at retirement do not consider the role of individual personality traits on the time retirees devote to housework. Here we examine whether personality determines the heterogeneous changes on the time individuals devote to housework due to a transition to retirement from the labour market. We use British longitudinal data which included individuals’ personality measures, and responses about the amount of hours spent per week on housework tasks. We find a positive change in housework hours for male and female retirees. Personality traits are shown to be more relevant on the explanation of housework changes at retirement than consumption expenditures, household income, and gender.

Dr. Christopher Boyce (Stirling Behavioural Science Centre)
Individual differences in loss aversion: Does personality predict how life satisfaction responds to losses versus gains in income? (with Alex Wood and Eamonn Ferguson).
Loss aversion is generally regarded as a pervasive bias occurring regardless of context or decision-maker. No studies have examined the relationship between personality and loss aversion. Here, using data from Germany (N = 18,039), we examine whether the effect of income losses (versus income gains) on life satisfaction differ by personality. We show that, although there are no personality differences in how gains relate to life satisfaction, when experiencing an income reduction people higher on conscientiousness (versus those lower) exhibited larger declines in life satisfaction. Similarly, those lower on openness (versus those higher) experienced larger life satisfaction falls. Our results suggest; (a) important individual differences in loss aversion, (b) personality interacts with socio-economic events to influence life satisfaction, (c) some personality traits may promote resilience in this context, and (d) income relates to life satisfaction only for individuals that experience income losses, and have high conscientiousness or low openness.

Professor Marjon Van Pol (University of Aberdeen)
Measuring time preferences: insights from the health context 

There is a relatively large empirical literature on individual time preferences for health outcomes. This interest has been stimulated by policy concerns around health behaviours such as obesity and smoking and by the debate on the appropriate discount rate in the case of health outcomes. It could be argued that the literature on time preferences for health has been more innovative in terms of elicitation methodologies used and methodological questions that have been examined. This presentation will reflect on a range of measurement issues that have been observed in the context of time preferences for health including framing effects, decision heuristics and negative time preferences. Measurement issues will be demonstrated using a number of case studies. General lessons for the elicitation of time preferences will be drawn out. The presentation will finish with a discussion around predictive validity: does type of outcome in time preferences tasks matter for the predictive validity of life outcomes such as health?

Dr. Bart Golsteyn (University of Maastricht)
Risk attitudes across the life course 

This paper investigates how risk attitudes change over the life course. Even with panel data that span several years, age patterns are generally difficult to identify separately from cohort or calendar period effects. We provide first evidence on the age profile of risk attitudes all the way from early adulthood until old age, in large representative panel data sets from the Netherlands and Germany, using a proxy variable approach to achieve identification. The main result is that willingness to take risks decreases over the life course, linearly until approximately age 65 after which the slope becomes flatter.

Dr. Elisa Cavatorta (King's London)
Measuring ambiguity preferences (with David Schroeder Birkbeck).
Ambiguity preferences are important in explaining human decision-making in many areas in economics and finance. To measure ambiguity preferences, the experimental economics literature advocates using incentivized laboratory experiments. However, in many circumstances, carrying out complex lab-experiments is not feasible. In this paper, we evaluate the ability of thought experiments and attitudinal questions to generate a behaviourally valid measure of ambiguity preferences. We find that a small set of thought experiments and attitudinal questions can serve as an alternative measure when carrying out laboratory experiments is impractical. Our results can be useful in many situations that require measuring ambiguity preferences in an easily implementable and cost-effective way, such as large surveys, field experiments, or everyday business and finance applications.

Dr. Hannah Schildberg-Hörisch (University of Bonn)
How does parental socio-economic status shape a child’s personality? (with Thomas Deckers, Armin Falk, Fabian Kosse).

We show that socio-economic status (SES) is a powerful predictor of many facets of a child's personality. The facets of personality we investigate encompass time preferences, risk preferences, and altruism, as well as crystallized and fluid IQ. We measure a family's SES by the mother's and father's average years of education and household income. Our results show that children from families with higher SES are more patient, tend to be less likely to be risk seeking and more altruistic, and score higher on IQ tests. About 20 to 40% of this relationship can be explained by dimensions of a child's environment that are shown to differ by SES: parenting style, quantity and quality of time parents spend with their children, the mother's IQ and economic preferences, a child's initial conditions at birth, and family structure. Moreover, we use panel data to show that the relationship between SES and personality is fairly stable over time at age 7 to 10.

Personality profiles that vary systematically with SES offer an explanation for social immobility. In a companion study, we present evidence on a randomly assigned variation in life-circumstances, providing children with a mentor for the duration of one year. Our data reveal a significant increase in altruism in the treatment relative to the control group. These findings thus provide evidence in favor of a causal effect of social environment on the formation of altruism. Moreover, we show that enriching life-circumstances bears the potential to close the observed developmental gap in altruism between low and high SES children.

Professor Sule Alan (University of Essex)
Good Things Come to Those Who (Are Taught How to) Wait: Results from a Randomized Educational Intervention
We report results from a randomized evaluation of a unique educational intervention targeted at elementary school children in 3rd and 4th-grade in Turkey. The program, which lasts eight weeks, uses case studies to discuss issues related to forward looking behavior, improve the ability to imagine future-selves and evaluate different contingencies arising from different actions, supplemented by classroom activities supervised by trained teachers. We find that treated students make more patient intertemporal choices in incentivized experimental tasks. The effect is stronger for students who are identified as present-biased in the baseline. Furthermore, using official school administrative records, we find that treated children are significantly less likely to receive a low “behavioral grade”. These results are persistent one year after the intervention, replicate well in a different sample, and are robust across different experimental preference elicitation methods.

Professor Eamonn Ferguson (Nottingham)
Personality and Pro-Social Preferences 

In his presentation, Eamonn highlighted some differences between personality psychology and economic preference elicitation procedures and suggested to apply psychometric principles to economic games in order to better understand what these games actually measure, showcasing his recent research on social preferences elicited through economic games such as ultimatum and dictator games.  

 Group picture with speakers and organisers:

Thursday, November 20, 2014

Lecture on Identity, Motivation and Incentives

I am currently giving a set of lectures as part of a module "Behavioural Economic: Concepts and Theories" in Stirling. I am posting brief informal summaries of some of these lectures on the blog to generate discussion. Thanks to Mark Egan for a lot of help in putting these together online. 

The section on Identity, Motivation and Incentives contains a lot of interlocking aspects. Many of these topics are very heavily connected to the idea that emotions influence behaviour and peoples responses to outcomes and we will revisit some of these ideas in the next topic - also many of them are connected to other topics in the course such as rationality more broadly and well-being, which we will look at also. 

1. Introduction

The basic idea behind the lecture is that self-interest is generally conceived as the main motivation for different types of behaviour such as saving, investing, working and so on but that, increasingly, behavioural economics is examining how other motivations such as altruism and the desire to conform might influence economic behaviour and outcomes. The first point we make in the lecture is that self-interest is an "add-on" to rationality. Technically, it is quite possible to be rational, as outlined in the first few lectures, and also be motivated by concern for others and so on. However, there are a number of points during the lecture where wider influences on behaviour clash with the idea that people are rational, as defined by having stable preferences and making consistent choices. A way of thinking about this topic is to ask some questions like: do I care about other people outside my family so much that I would genuinely give up things to help them? Do I change my core preferences as those around me change theirs? Would I be independent in situations where I was asked to do something wrong by someone in a position of authority?

2. The influence of peers and groups
The first aspect of motivation that goes beyond self-interest is the idea of herding and peer effects. There is a high correlation between an individual's behaviour in any economic domain and the behaviour of their peer group. We looked at the very famous "Dartmouth paper" that showed that the pre-college characteristics of flatmates that students were randomly assigned to live with had big effects on their behaviour. If you are randomly assigned to someone who drank before coming to college, you are more likely to drink during college - similarly, you are more likely to study if you are assigned to someone who did well at school. These results raise questions about the idea of fully stable economic preferences. 

Fig 1. The set-up
Moving on from this, we examined the idea that "group processes" may influence behaviour. The most striking example of this is Milgram's 'Behavioural Study of Obedience'. During the most famous of these experiments, Stanley Milgrim had 40 male participants between the ages of 20 and 50 play the role of 'teacher' to the 'learner' in the adjacent room. In the room with the teacher was a stern looking experimenter wearing an official looking coat (Fig 1). The task of the teacher was to administer increasingly powerful electric shocks to the learner whenever he made a mistake on the ostensible memory task he was working on - in reality the learner was a confederate working with the experimenter. There were no real electric shocks being administered, although the learner was trained to react to them as if they were real.

Anticipating that many of the participants would become uncomfortable as they heard increasing pained screams from the next room, the experimenters were allowed to prod them. In the case of objections, the experimenter told the teacher "Please continue". If objections continued, they would reply in the following order: "The experiment requires that you continue", followed by "It is absolutely essential that you continue" and lastly "You have no other choice, you must go on".

Fig 2. The results
Before running the experiment, Milgram polled 40 psychiatrists who agreed that "only 0.1% of the subjects would administer the highest shock on the board" - essentially it was thought that only a psychopath would continue all the way to the end where the voltage level was marked XXX and clearly hazardous. In reality (Fig 2), almost 2/3rds of participants went all the way to the end, even when some of them were clearly uncomfortable with the process.

It seems, from a long line of psychological research, that people will do extreme things well beyond what they would predict they would if they are told to do so by someone in a position of authority. In terms of historical context this study came out in the same year as Eichmann in Jerusalem, which popularized the concept of the 'banality of evil'.

As an addition factor, conformity to norms and reaction to persuasion may also have complex effects on individual behaviour. The Zimbardo prison experiment is a classic example of how randomly assigned social categories can have strong effects on people's actions.

3. Motivation to Behave in Group Situations

Fig 3. The Ultimatum Game
We focus on complex social and economic situations, as are represented in the Prisoner's Dilemma and Ultimatum (Fig 3) bargaining games which are two of the most famous experiments in economics.

The key paper for this topic is the paper by Ernst Fehr on Trust. While this paper does not discuss every aspect of how people behave in group situations, it serves as a good example of how this works and is sufficient to use to explain these concepts. Fehr provides a very useful working definition of trust and explains how trust can help to solve social problems that mirror those of the prisoner dilemma. He argues that trust, in some sense, involves processing risk but that it involves more than just risk preferences. Specifically, trust contains elements of an emotional engagement with others and that "betrayal aversion" can lead people to feel a lot worse if they lose in a game involving trust than simply if they lose a gamble. This is a key insight for behaviour economics; namely that one solution to cooperative games is that people trust each other and reach the pareto-optimal solution.

Fehr argues that countries with better social institutions arguably grow better and have better all-round outcomes, basically because in such countries it is easier to do business and interact in economic and social contexts because there is a basic degree of confidence in other people. We have spoken a lot about the difference between libertarianism and paternalism. This is another concept that we will talk a lot about - namely that markets are not perfect and a pure libertarian solution has many flaws but the state is not the only solution. The basic idea is that many economic problems are solved not by contracts but by social norms and implicit cooperation that is regulated not by laws or by fines but rather by complex social emotions such as trust. Trust is the example you should focus on, but in the next section of the lecture we will look at other examples of complex emotions and motivations that regulate economic behaviour in different ways. The basic idea is still the same.

4. Other Emotions & Economic Behaviour

We will look at this topic in more depth in the Emotion lecture. One consequence of relaxing the assumption of pure self-interest as a driver and looking at a broader range of emotions is that we open up a number of facets of human economic behaviour and attitudes that may have seemed outside of the realm of economics beforehand. As discussed above, trust and the emotions surrounding it are involved in some of the most important non-financial motivations of behaviour - but there are many other different types of motivations and emotions that arguably play a role in regulating complex economic situations involving groups. A few of them are discussed below:

(i) Discrimination and Hate: One consequence of being in different groups is that we may form a preference for our group over other groups. I referred in the lecture to a series of experiments that show that women and ethnic minorities are less likely to get called back to job interviews compared to whites even when the characteristics of each group have been randomly assigned on the CVs. Furthermore, we know that many people dislike people not of their own ethnicity and that many people favour restrictions in trade and migration. The real question (and one we will speak about in the Emotion lecture also) is whether such preferences are actually just irrational hangovers from the fact that we are basically animals with faulty cognitive equipment or whether they are rational preferences (albeit selfish preferences). For example, I may oppose globalization because of an irrational fear of foreigners but I may also oppose it because my industry has lots of nice protections from competition that would be eroded if restrictions were lifted. The Ku Klux Klan may have outwardly behaved in very silly and deplorable ways but as well as spreading hate it is arguable that their members may have been using the situation to improve their economic position.

(ii) Abhorrence: We discussed the idea that we may have motivations beyond just self-interest. For example, we may have strong beliefs that some markets simply should not exist. Al Roth, who won the Nobel Prize partly for his work on market design in organ donation, has a paper called "Repugnance as a constraint on markets" that addresses this in the context of whether it should be legal for a person to sell their own organs. 

(iii) Reference Effects: Another consequence of being in groups is that we evaluate ourselves relative to others. We will look at this in more depth in the well-being lecture.

(iv) Intrinsic Motivation: As discussed by Fehr and Falk and others, many people engage in tasks because they are intrinsically interested. Furthermore, people may have a desire to keep control over their own behaviour. 

5. Identity & Economics
The key paper for this is the paper on Economics and Identity by Akerlof and Kranton. This paper takes the view that looking at identity is vital to understand a wide range of economic phenomenon such as welfare dependency, ghettos, integration into the labour market, globalisation and economic growth. Identity emerges from the social categories we identify with or are members of by default. They outline a very simple model, which we will cover in the lecture, where membership of social categories enters directly into utility functions and use this to explain a range of economic phenomena such as gender discrimination 

Recommended Readings:
2. Akerlof (1998), Men without Children, The Economic Journal.
4. Fehr (2008), On the economics and biology of trust, IZA Discussion Paper.
3. Fehr & Falk (2001), Psychological Foundations of Incentives, Schumpeter Lecture at the European Economic Association Meeting.
4. Falk, Fehr & Fischbacher (2005), Driving Forces Behind Informal Sanctions, Econometrica.
5. Falk & Kosfeld (2006), The Hidden Costs of Control, American Economic Review.
6. Andreoni (1995), Cooperation in Public-Goods Experiments: Kindness or Confusion?, American Economic Review.
7. Milgram (1963), Behavioral Study of Obedience, Journal of Abnormal and Social Psychology.
8. Sacerdote (2001), Peer effects with random assignment: results for Dartmouth roommates, Quarterly Journal of Economics.

Supplementary Material:

7th Irish Economics and Psychology Conference in Dublin 31.10.14

The seventh annual one day conference on Economics and Psychology, co-organised by researchers from UCD, ESRI and NUIM, took place on October 31st in the UCD Geary Institute. The purpose of these sessions is to develop the link between Economics, Psychology and cognate disciplines in Ireland. A special theme of these events is the implications of behavioural economics for public policy though the workshops have covered work across all areas of intersection of Economics and Psychology. Programmes from the previous six events are here.


09.00-09.20: Registration

09:20-09:30: Introduction

09:30-10:00: Dr. Michael Daly (Stirling)
Time preferences predict inflammation in later life
Prominent economic and psychological models suggest that impatient individuals with high discount rates invest less in their health leading to adverse physiological consequences (Grossman, 1972; Hall & Fong, 2007). The aim of this study is to test, for the first time, whether time discount rates elicited from an incentivised experiment become biologically embedded via changes in C-reactive protein (CRP) and fibrinogen levels over time. The sample was drawn from the population-based English Longitudinal Study of Ageing. Those who completed a preference module and provided blood plasma samples at two time-points for analysis were included in the study (n=427; Age=63.6 (SD=5.7); 52.8% Female). Discount rates were calculated from a set of 12 choices between smaller sooner and larger later rewards (e.g. £25 in two weeks or £30 in one month) where the participant won the value of a randomly selected choice (median reward £28). Our results indicate a substantial relationship between high discount rates and high levels of inflammation two years later as gauged by CRP (β=.18; p<.001) and fibrinogen (β=.1; p<.05) in analyses which adjusted for age, gender, marital status, wealth and prior inflammation levels. This pattern was robust to the inclusion of controls for BMI, cardiovascular disease, arthritis, other long-term illnesses, smoking, physical activity, and alcohol consumption. Further adjustment for cognitive functioning and the Big Five personality traits did not affect the associations observed. This study provides strong evidence that incentivised elicited discount rates robustly predict longitudinal changes in inflammation in a national sample.

10:00-10:30: Marek Bohacek (ESRI)
The Integration of Visual, Numeric and Categorical Information in Judgements of Value
Pete Lunn, Marek Bohacek*, & Jason Somerville, ESRI and Trinity College Dublin
We investigate how accurately consumers can integrate information about multiple product attributes into judgements of value, while manipulating the nature of the attributes. Using a 2AFC “objective valuation” (OV) task, we compare performance in multi-attribute judgements when attribute magnitudes are provided as visual cues, numeric magnitudes, or between two and four categories of quality. Across three experiments with different products, we find no improvement in the accuracy of judgements when attribute magnitudes are provided as numbers, rather than as visual cues. We do find small improvements when an attribute consists of just two categories (good versus bad), or when categories are correlated with the likelihood of obtaining a surplus relative to a price. Overall, our results suggest that: (1) precise numeric attribute scales do not improve multi-attribute judgement; (2) it is the difficulty of integrating information from incommensurate attribute scales determines performance in multi-attribute judgement.
10:30-11:00: Coffee

11:00-11:45:  Prof. Rowena Pecchenino (NUIM)
The Economic Consequences of Despair
This paper examines despair, the total loss of hope, from the perspectives of many disciplines to characterize the despairing individual, his motivations, and his capacity for decision-making.  It then examines the extent to which economics has recognized despair and whether economics should incorporate despair into its theoretical and policy analyses, and, if so, how.

11:45-12:30: Dr. Pete Lunn (ESRI)
Do Consumers Value Products they are Familiar with more Accurately? (with Marek Bohacek & Féidhlim McGowan).
We investigate how the precision of consumer valuations is affected by familiarity with the product. Using a within-subject design, we compare performance in a 2AFC "objective valuation" task across four products: houses, contracts for broadband services, and two unfamiliar computer-generated products. Participants decide whether each product, with a given set of attributes at a particular price, represents good or bad value. The value of the familiar products is objectively defined by two statistical models relating attributes to prices in the market. The same models also determine the mathematical relationship between attributes and prices of the two unfamiliar products, allowing us to identify the effect due to familiarity. Data collection is to be completed by end-September. We will present an initial analysis of the experimental data at the conference.

12:30 - 13:30: Lunch

13:30-14:00: Prof. Liam Delaney (Stirling)
Behavioural Economics and Irish Public Policy 
This presentation will outline the relevance of the last ten years of behavioural economics and behavioural science for research across a number of domains including pensions policy, financial regulation, education, health and consumer policy.

14:00-14:45: Dr. Edel Walsh, (School of Economics, University College Cork)
An Examination of Life Satisfaction in Ireland: Evidence from the European Social Survey 5 (2010)

The aim of this research is to establish the most significant factors affecting life satisfaction, at an individual level, in Ireland during the recent economic recession. The global financial crisis significantly impacted the Irish economy and by 2010 Ireland was experiencing its third consecutive year of negative growth. During the period 2007 to 2010 the level and rate of unemployment increased substantially in Ireland with an average unemployment rate of 13.8 per cent being reported in 2010. In addition, unemployment affected men more than women and in particular the 20-24 year age group. Given the well-established link between life satisfaction, income and unemployment, the economic conditions in Ireland in 2010 make it an interesting case to study. The data used in this analysis were obtained from the Irish component of the European Social Survey 5 (2010).

Using both OLS and ordered probit models the determinants of life satisfaction are estimated. The paper also tests if there are significant gender differences in the results but find no significant differences in the determinants of male and female life satisfaction in Ireland at that time. The main findings suggest that unemployment has a statistically significant effect on reducing life satisfaction. Income is found to have a significant, but modest effect on improving life satisfaction. The results also suggest that being young (24 or younger) or old (over 65) and having social connections have the largest positive effects on life satisfaction. Other findings suggest that having children positively impacts on one’s life satisfaction. Living in a rural area of Ireland is a positive factor affecting an individual’s satisfaction with their life. Further significant results indicate that life satisfaction is largely, negatively influenced by marital status (being divorced or separated) and suffering from a disability. The overall findings are important in the context of the current policy focus on well-being in Ireland.

14:45-15:30pm: Dr. Ronan Lyons (Trinity College Dublin & Spatial Economics Research Centre, LSE)
What house price equation do households use? Insights from the Irish housing market, 2003-2014
Housing is the most important good in the typical household’s consumption basket and the largest asset in its portfolio. Given this, and given that expectations about house prices act as a demand shifter, the measurement of house price expectations is a topic of importance for economic policy. This research attempts to answer two related questions. Firstly, to what extent are expectations backward-looking, rather than based on perceptions of future fundamentals? And secondly, how do households believe that changes in fundamentals will affect house prices? These questions are answered combining national surveys (2003-2008), national and local surveys (2011-2014) and an experimental survey, drawing on methods from the willingness-to-pay literature.

15:30-16:00: Coffee 

16:00-17:00:  Prof. Ruth Byrne (TCD)
The Cognitive Science of the Human Imagination
The human imagination remains one of the last uncharted terrains of the mind. In everyday imaginative thought, people often create alternatives to reality and imagine how events might have turned out ‘if only’ something had been different. People engage in such flights of the imagination for more than entertainment – psychological experiments show that the alternatives to reality that people create ensure that they learn the causes of outcomes and how to prevent them in the future; they contribute to the experience of emotions such as regret, guilt, relief and hope; and they underlie social ascriptions of blame, responsibility, and fault. The loss of these imaginative thoughts following certain sorts of brain injury has devastating consequences for normal cognition.

New discoveries suggest that, just as experiments have shown that rational thought is more imaginative than previously supposed, so too imaginative thought is more rational than previously supposed.  Cognitive scientists have established that people tend to change the same sorts of things in their ‘if only’ thoughts, such as events within their control, actions rather than inactions, exceptions rather than usual events. These ‘fault-lines’ in the human imagination provide important clues about its logic and its limitations, and indicate that imaginative thoughts are guided by the same principles that underlie rational thoughts. 

Tuesday, November 18, 2014

The changing meaning of the Trait Self-Control scale

The trait self-control scale, developed by Tangney, Baumeister and Boone (2004) is one of the most used instruments in social science. It is the main modern reference for measuring a person's self-control, as evidenced by its 1,400 citations on Google Scholar. However, recent research suggests that the scale does not measure what researchers originally thought it did. Although suggested by its first item “I am good at resisting temptation”, the scale does not appear to measure the ability to resist temptation. Rather, it seems to measure people's ability to avoid temptations in the first place. Below is brief summary of some parts of a lecture I gave to the MSc Behavioural Science students on the changing meaning of the trait self-control scale.

The 13-item trait self-control scale asks people to rate on a scale from 1 to 5 how much certain statements reflect how they are. The questions include, for example, “I am lazy”, “I say inappropriate things”, and “I wish I had more self-discipline” and a higher cumulative score is considered indicative of better trait self-control. Higher scores on this measure have been used to predict outcomes as diverse as interpersonal popularity, healthy relationships, academic success, coping skills, mental health, psychological well-being, obesity, substance abuse, criminality, impulsive buying, and procrastination (for a comprehensive list of references see the meta-analysis by de Ridder et al., 2012). Members of the Stirling Behavioural Science Centre have also used the scale to examine how it relates to time preferences and emotion (see Daly et al., 2009 and  Daly et al. 2012). Until recently, it was commonly assumed that trait self-control predicts these lifetime outcomes so well because the outcomes are related to our ability to be strong in the face of temptations and resist them.

Sticky Toffee Pudding (STP)
A recent study by Hofmann, Baumeister, Foerster & Vohs (2012) suggests otherwise. The authors investigated the relationship between scores on the trait self-control scale and real-life self-control failures. In their “beeper study”, they provided 205 participants with smartphones and beeped them at random times, 7 times per day for a full week. Whenever the participants heard the beep, they were supposed to indicate (i) whether they felt a desire (e.g. for sticky toffee pudding), (ii) how strong the desire was (e.g. irresistible), (iii) whether the desire conflicted with higher order goals (e.g. being healthy), (iv) whether they tried to resist the desire (i.e. used self-control), and (v) whether the desire led to actual behaviour (e.g. eating the STP).

The authors expected that people with a high trait self-control score who found themselves tempted by desires (e.g. for STP or for cookies) would be better at resisting the temptation than people with a low trait self-control score. Exercising this kind of willpower has been the canonical conception of what it means to have good self-control since Walter Mischel's famous experiments in the 1960s examined the ability of children to resist the temptation of eating a marshmallow placed in front of them. However, to the surprise of Hofmann and his colleagues, the results of the study revealed that trait self-control was negatively related to the use of self-control in everyday life. In other words, the higher a person's score on the trait self-control scale, the less often they used self-control in their daily lives.

Resisting the Sirens or taking a different route home?
This is clearly at odds with the conventional view that high trait self-control is related to a strong ability to resist temptations which conflict with higher order goals. On the contrary, it suggests that trait self-control is a proactive trait. Individuals with high scores on the trait self-control scale aren't necessary better at resisting temptations; rather they appear to encounter fewer problematic desires by structuring their lives such that they avoid being exposed to the temptations in the first place. Instead of tying themselves to the mast to resist the sirens of temptation, people with high trait self-control just “take a different route home” (as Roy Baumeister explains here).

Further evidence suggesting that trait self-control is indeed related to avoiding, rather than resisting, temptations is described in Ent et al. (2015) and the meta analysis by de Ridder et al. (2012). There are several things we can learn from this recent shift in researchers' perceptions of what the trait self-control scale really measures:

1. Critically reflecting on what psychological scales mean is important even when the scales are extremely popular. New ways of data gathering may shed new light on scales.
2. Leaving the lab and testing things in the real-world can lead to new insights. In the future, we should conduct more behavioural science research in people's real lives.
3. Understanding what leads to temptations is as important as understanding what helps us to resist them. We need to better understand the person-specific and situation-specific factors that lead to temptations, and trait self-control is just one of them. For example, in my 2012 paper I described an economic formalization of how situational factors such as cues can trigger temptations.


Daly, M., Harmon, C. P., & Delaney, L. (2009). Psychological and biological foundations of time preference. Journal of the European Economic Association, 7(2‐3), 659-669.

Daly, M., Baumeister, R. F., Delaney, L., & MacLachlan, M. (2014). Self-control and its relation to emotions and psychobiology: evidence from a Day Reconstruction Method study. Journal of behavioral medicine, 37(1), 81-93.

deRidder, D. T., Lensvelt-Mulders, G., Finkenauer, C., Stok, F. M., & Baumeister, R. F. (2012). Taking stock of self-control a meta-analysis of How trait self-control relates to a wide range of behaviors. Personality and Social Psychology Review, 16(1), 76-99.

Ent, M. R., Baumeister, R. F., & Tice, D. M. (2015). Trait self-control and the avoidance of temptation. Personality and Individual Differences, 74, 12-15. 

Hofmann, W., Baumeister, R. F., Förster, G., & Vohs, K. D. (2012). Everyday temptations: an experience sampling study of desire, conflict, and self-control. Journal of Personality and Social Psychology, 102(6), 1318.

Lades, L. K. (2012). Towards an incentive salience model of intertemporal choice. Journal of Economic Psychology, 33(4), 833-841

Tangney, J. P., Baumeister, R. F., & Boone, A. L. (2004). High self‐control predicts good adjustment, less pathology, better grades, and interpersonal success. Journal of Personality, 72(2), 271-324.

Sunday, November 16, 2014

Childhood psychological distress and youth unemployment: Evidence from two British cohort studies

Liam, Michael and I have a new paper out in Social Science & Medicine which looks at the relationship between psychological distress in early life and youth unemployment. This paper is part of my PhD thesis which looks more broadly at psychological predictors of unemployment.

The abstract and Figure 2 from the paper are reproduced below:

AbstractThe effect of childhood mental health on later unemployment has not yet been established. In this article we assess whether childhood psychological distress places young people at high risk of subsequent unemployment and whether the presence of economic recession strengthens this relationship. This study was based on 19,217 individuals drawn from two nationally-representative British prospective cohort studies; the Longitudinal Study of Young People in England (LSYPE) and the National Child Development Study (NCDS). Both cohorts contain rich contemporaneous information detailing the participants' early life socioeconomic background, household characteristics, and physical health. In adjusted analyses in the LSYPE sample (N = 10,232) those who reported high levels of distress at age 14 were 2 percentage points more likely than those with low distress to be unemployed between ages 16 and 21. In adjusted analyses of the NCDS sample (N = 8985) children rated as having high distress levels by their teachers at age 7 and 11 were 3 percentage points more likely than those with low distress to be unemployed between ages 16 and 23. Our examination of the 1980 UK recession in the NCDS cohort found the difference in average unemployment level between those with high versus low distress rose from 2.6 pct points in the pre-recession period to 3.9 points in the post-recession period. These findings point to a previously neglected contribution of childhood mental health to youth unemployment, which may be particularly pronounced during times of economic recession. Our findings also suggest a further economic benefit to enhancing the provision of mental health services early in life.

Figure 2. Descriptive unemployment statistics in Study 2 from August 1974–November 1981 by levels of childhood distress. The year above the cohort members' age refers to March of that year, the month when the cohort members were born. The vertical line denotes the onset of the U.K. recession in January 1980.