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Contribution Details
| Type | Journal Article |
| Scope | Discipline-based scholarship |
| Title | Evaluating deliberative competence: a simple method with an application to financial choice |
| Organization Unit | |
| Authors |
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| Item Subtype | Original Work |
| Refereed | Yes |
| Status | Published in final form |
| Language |
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| Journal Title | American Economic Review |
| Publisher | American Economic Association |
| Geographical Reach | international |
| ISSN | 0002-8282 |
| Volume | 112 |
| Number | 11 |
| Page Range | 3584 - 3626 |
| Date | 2022 |
| Abstract Text | We examine methods for evaluating interventions designed to improve decision-making quality when people misunderstand the consequences of their choices. In an experiment involving financial education, conventional outcome metrics (financial literacy and directional behavioral responses) imply that two interventions are equally beneficial even though only one reduces the average severity of errors. We trace these failures to violations of the assumptions embedded in the conventional metrics. We propose a simple, intuitive, and broadly applicable outcome metric that properly differentiates between the interventions, and is robustly interpretable as a measure of welfare loss from misunderstanding consequences even when additional biases distort choices. |
| Free access at | DOI |
| Related URLs | |
| Digital Object Identifier | 10.1257/aer.20210290 |
| Other Identification Number | merlin-id:23262 |
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| Keywords | Economics and econometrics |