Links of the Week 6.6.14

1. Haushofer & Fehr (2014), On the psychology of poverty, Science
Abstract: Poverty remains one of the most pressing problems facing the world; the mechanisms through which poverty arises and perpetuates itself, however, are not well understood. Here, we examine the evidence for the hypothesis that poverty may have particular psychological consequences that can lead to economic behaviors that make it difficult to escape poverty. The evidence indicates that poverty causes stress and negative affective states which in turn may lead to short-sighted and risk-averse decision-making, possibly by limiting attention and favoring habitual behaviors at the expense of goal-directed ones. Together, these relationships may constitute a feedback loop that contributes to the perpetuation of poverty. We conclude by pointing toward specific gaps in our knowledge and outlining poverty alleviation programs that this mechanism suggests.

2. Jewell & Kambhampati (2014), Are Happy Youth Also Satisfied Adults? An Analysis of the Impact of Childhood Factors on Adult Life Satisfaction, Social Indicators Research
Abstract: This paper aims to consider whether there is a link between youth happiness levels and adult life satisfaction. Our results are unequivocal that such a link exists both because demographic and socio-economic conditions are persistent over a lifetime and also because there is a persistence in personality effects. To test this link, we estimate a model of happiness for a sample of young people. This model provides us with a range of variables measuring socio-economic effects and personality effects amongst young people. These variables are then included in the adult life satisfaction model. The model is estimated using data from the British Household Panel Survey for 1994–2008. In addition to childhood happiness levels influencing adult life satisfaction significantly, we also find that the youthful personality trait for happiness has a larger effect on adult life satisfaction than demographic and socio-economic conditions.

3. The United States of Metrics, NYTimes

4. The Long Shadow is a new book which describes a study tracking 800 Baltimore schoolchildren for 25 years. Some of their striking findings include:
(i) Almost none of the children from low-income families made it through college.
(ii) Among those who did not attend college, white men from low-income backgrounds found the best-paying jobs.
(iii) White women from low-income backgrounds benefit financially from marriage and stable live-in partnerships.
"The implication is where you start in life is where you end up in life," [one author] said. "It's very sobering to see how this all unfolds."

5. Check the hashtag #bx2014 to see the tweets from the 2 day Behavioural Exchange conference in Sydney, which took place on June 2-3.