Poverty and Aspirations Failure

This paper models the role of internal constraints in causing aspirations failure at the individual level. It shows how initial disadvantage increases the likelihood of binding internal constraints and hence aspirations failure, thus suggesting a new behavioral explanation for poverty traps. In examining common approaches to relaxing such internal constraints, it describe how an individual’s endogenous choice of a "cognitive window" (i.e. a set of relevant "similar" individuals)can limit the e¤ectiveness of role models. Further, we consider how the distribution of initial status determines the degree of connectedness in a society and hence the individual perception of these constraints. Our work provides a normative justification for programs that aim to empower participants through a direct positive shock to their aspirations.

Characterizing behavioral decisions with choice data

This paper provides an axiomatic characterization of choices in a setting where a decision-maker may not fully internalize all the consequences of her choices on herself. Such a departure from rationality, it turns out, is common across a variety of positive behavioral models and admits the standard rational choice model as a special case. We show that choice data satisfying (a) Senís axioms if and fully characterize behavioral decisions, and (b) Senís axiom if and if fully characterize standard decision-making. In addition, we show that (a) it is possible to identify a minimal and a maximal set of psychological states using choice data alone, and (b) under specific choice scenarios, "revealed mistakes" can be inferred directly from choice data

Behavioural decisions & policy

We study the public policy implications of a model in which agents do not fully internalize all the conscequences of their actions. Such a model uni…es seemingly disconected models with behavioral agents. We evaluate the scope of paternalistic and libertarian-parternalistic policies in the light of our model, and propose an alternative type of approach, called soft-libertarian, which guides the decision makers in the internalization of all the conscequences of their actions. Psychotherapy is one example of a soft-libertarian policy. Moreover, we show that in our behavioral framework, policies that increase the set of opportunities or provide more information to the agent may not longer be individual welfare improving

Decisions with endogenous frames

We develop a model of decision-making with endogenous frames and contrast the normative implications of our model to those of choice theoretic models in which observed choices are determined by exogenous frames or ancillary conditions. We argue that, frames, though they may be taken as given by the decision-maker at the point when choices are made, matter for both welfare and policy purposes

Self-confidence, overconfidence and prenatal testosterone exposure: evidence from the lab

This paper examines whether foetal testosterone exposure predicts the extent of confidence and over-confidence in own absolute ability in adulthood. To study this question, we elicited incentive-compatible measures of confidence and over-confidence in the lab and correlate them with measures of right hand 2D:4D, used as as a marker for the strength of prenatal testosterone exposure. We provide evidence that men with higher prenatal testosterone exposure (i.e., low 2D:4D ratio) are less likely to set unrealistically high expectations about their own performance. This in turn helps them to gain higher monetary rewards. Men exposed to low prenatal testosterone levels, instead, set unrealistically high expectations which results in self-defeating behavior

Behavioural decisions & welfare

If decision-makers (DMs) do not always do what is in their best interest, what do choices reveal about welfare? This paper shows how observed choices can reveal whether the DM is acting in her own best interest. We study a framework that relaxes rationality in a way that is common across a variety of seemingly disconnected positive behavioral models and admits the standard rational choice model as a special case. We model a behavioral DM (boundedly rational) who, in contrast to a standard DM (rational), does not fully internalize all the consequences of her own actions on herself. We provide an axiomatic characterization of choice correspondences consistent with behavioral and standard DMs, propose a choice experiment to infer the divergence between choice and welfare, state an existence result for incomplete preferences and show that the choices of behavioral DMs are, typically, sub-optimal

Poverty and aspirations failure

We develop a model of internal constraints to show that a greater degree of initial disadvantage results in a higher likelihood of low aspirations and low achievement. Our model and results are supported by evidence from anthropology, sociology and social psychology. Our analysis suggests that internal constraints are a key ingredient in perpetuating poverty traps. We show that a poor person will choose to restrict her cognitive window (the set of other individuals who are her role models) and study the conditions under which a role model could alter her aspirations and achievement. We show how enodgenously chosen cognitive windows interact with the inital distribution of status to determine whether or not a society is connected, and hence the transmission of aspirations across individuals in that society. Our work provides a normative justification for programs that aim at empowering disadvantaged individuals by directly shocking their aspirations

Does the unemployment benefit institution affect the productivity of workers? Evidence from a field experiment

We investigate whether and how the type of unemployment benefit institution affects productivity. We designed a field experiment to compare workers' productivity under a welfare system, where the unemployed receive an unconditional monetary transfer, with their productivity under a workfare system, where the transfer is received conditional on the unemployed spending some time on ancillary activities. First, we find that having an unemployment benefit institution, regardless of whether it makes transfers conditional or unconditional, increases workers' productivity. Second, we find that productivity is higher under Welfare than under Workfare. Becoming unemployed under Welfare comes at the psychological cost of a drop in self-esteem, presumably due to the shame or stigma associated with receiving an unconditional unemployment benefit. We document the empirical relevance of precisely this channel. The differences we observe in productivity suggest that this psychological cost acts as an extra nonmonetary incentive for workers under Welfare to put a higher effort in their work

Poverty and Aspirations Failure

We develop a theoretical framework to study the psychology of poverty and ‘aspirations failure’. In our framework, the rich and the poor share the same preferences –and also a behavioral bias in setting aspirations modelled as endogeneous reference points. Poverty exacerbates the e¤ects of this behavioral bias leading to behavioral poverty traps and aspirations failure. Mitigating behavioral poverty traps require policies which go beyond reducing material deprivation. JEL Classi…cation: O10,O15,O12, D03

DNA multigene characterization of Fasciola hepatica and Lymnaea neotropica and its fascioliasis transmission capacity in Uruguay, with historical correlation, human report review and infection risk analysis

Fascioliasis is a highly pathogenic zoonotic disease emerging in recent decades, in part due to the effects of climate and global changes. South America is the continent presenting more numerous human fascioliasis endemic areas and the highest Fasciola hepatica infection prevalences and intensities known in humans. These serious public health scenarios appear mainly linked to altitude areas in Andean countries, whereas lowland areas of non-Andean countries, such as Uruguay, only show sporadic human cases or outbreaks. To understand this difference, we characterized F. hepatica from cattle and horses and lymnaeids of Uruguay by sequencing of ribosomal DNA ITS-2 and ITS-1 spacers and mitochondrial DNA cox1, nad1 and 16S genes. Results indicate that vectors belong to Lymnaea neotropica instead of to Lymnaea viator, as always reported from Uruguay. Our correlation of fasciolid and lymnaeid haplotypes with historical data on the introduction and spread of livestock species into Uruguay allow to understand the molecular diversity detected. We study the life cycle and transmission features of F. hepatica by L. neotropica of Uruguay under standardized experimental conditions to enable a comparison with the transmission capacity of F. hepatica by Galba truncatula at very high altitude in Bolivia. Results demonstrate that although L. neotropica is a highly efficient vector in the lowlands, its transmission capacity is markedly lower than that of G. truncatula in the highlands. On this baseline, we review the human fascioliasis cases reported in Uruguay and analyze the present and future risk of human infection in front of future climate change estimations