NUDGE: IMPROVING DECISIONS ABOUT HEALTH, WEALTH, AND HAPPINESS by Richard H. Thaler and Cass R. Sunstein Penguin Books, 2009, 312 pp, ISBN 978-0-14-311526-7This book is best described formally as a general explanation of and advocacy for libertarian paternalism, a term coined by the authors in earlier publications. Informally, it is about how leaders, systems, organizations, and governments can nudge people to do the things the nudgers want and need done for the betterment of the nudgees, or of society. It is paternalism in the sense that "it is legitimate for choice architects to try to influence people's behavior in order to make their lives longer, healthier, and better", (p. 5) It is libertarian in that "people should be free to do what they like - and to opt out of undesirable arrangements if they want to do so", (p. 5) The built-in possibility of opting out or making a different choice preserves freedom of choice even though people's behavior has been influenced by the nature of the presentation of the information or by the structure of the decisionmaking system. I had never heard of libertarian paternalism before reading this book, and I now find it fascinating.Written for a general audience, this book contains mostly social and behavioral science theory and models, but there is considerable discussion of structure and process that has roots in mathematical and quantitative modeling. One of the main applications of this social system is economic choice in investing, selecting and purchasing products and services, systems of taxes, banking (mortgages, borrowing, savings), and retirement systems. Other quantitative social choice systems discussed include environmental effects, health care plans, gambling, and organ donations. Softer issues that are also subject to a nudge-based approach are marriage, education, eating, drinking, smoking, influence, spread of information, and politics. There is something in this book for everyone.The basis for this libertarian paternalism concept is in the social theory called "science of choice", the study of the design and implementation of influence systems on various kinds of people. The terms Econs and Humans, are used to refer to people with either considerable or little rational decision-making talent, respectively. The various libertarian paternalism concepts and systems presented are tested and compared in light of these two types of people. Two foundational issues that this book has in common with another book, Network of Echoes: Imitation, Innovation and Invisible Leaders, that was also reviewed for this issue of the Journal are that 1 ) there are two modes of thinking (or components of the brain) - an automatic (intuitive) process and a reflective (rational) process and 2) the need for conformity and the desire for imitation are powerful forces in human behavior. …

Nudge: Improving Decisions about Health, Wealth, and Happiness

行銷硏究 : Marketing research

25. Multiple Imputation for Nonresponse in Surveys. By D. B. Rubin. ISBN 0 471 08705 X. Wiley, Chichester, 1987. 258 pp. £30.25.

Multiple Imputation for Nonresponse in Surveys

We investigate conditions sufficient for identification of average treatment effects using instrumental variables. First we show that the existence of valid instruments is not sufficient to identify any meaningful average treatment effect. We then establish that the combination of an instrument and a condition on the relation between the instrument and the participation status is sufficient for identification of a local average treatment effect for those who can be induced to change their participation status by changing the value of the instrument. Finally we derive the probability limit of the standard IV estimator under these conditions. It is seen to be a weighted average of local average treatment effects.

Evolution and Rationality Some Recent Game-Theoretic Results. Identification and Estimation of Local Average Treatment Effects

This paper undertakes an assessment of a rapidly growing body of economic research on financial literacy. We start with an overview of theoretical research which casts financial knowledge as a form of investment in human capital. Endogenizing financial knowledge has important implications for welfare as well as policies intended to enhance levels of financial knowledge in the larger population. Next, we draw on recent surveys to establish how much (or how little) people know and identify the least financially savvy population subgroups. This is followed by an examination of the impact of financial literacy on economic decision-making in the United States and elsewhere. While the literature is still young, conclusions may be drawn about the effects and consequences of financial illiteracy and what works to remedy these gaps. A final section offers thoughts on what remains to be learned if researchers are to better inform theoretical and empirical models as well as public policy.

/pdf/the-economic-importance-of-financial-literacy-theory-and-17mb1g4cfb.pdf

The Economic Importance of Financial Literacy: Theory and Evidence

Financial Well-Being of the Millennial Generation: An In-Depth Analysis of Its Drivers and Implications

In <ext-link><bold>Factors Contributing to Financial Well-Being among Black and Hispanic Women</bold></ext-link>, from the Summer 2021 issue of <bold><italic>The Journal of Retirement,</italic></bold> authors <bold>Robert Clark</bold> (of <bold>North Carolina State University</bold>), <bold>Annamaria Lusardi</bold> (of <bold>George Washington University</bold>), <bold>Olivia S. Mitchell</bold> (of the <bold>University of Pennsylvania</bold>), and <bold>Hallie Davis</bold> (of <bold>George Washington University</bold>) analyze data on women’s self-reported financial well-being (FWB), plus objective data on their financial circumstances. They find that Black and Hispanic women are more likely to have lower income, to be single, and to have dependent children. Researchers associate these factors with lower FWB—but surprisingly, Black and Hispanic women report slightly higher average FWB than White women. This may stem from factors like culture and family structure. Black and Hispanic women may have a greater sense of financial well-being because they expect their extended family or grown children to support them after a job loss or during retirement. White women, however, experience greater FWB when they become financially literate. The authors conclude that a one-size-fits-all approach to financial education does not work for women. Financial advisors can help their female clients with targeted education tailored to their identified needs. 

Practical Applications of Factors Contributing to Financial Well-Being among Black and Hispanic Women

Financial literacy and well-being in a five generation America: The 2021 TIAA Institute-GFLEC Personal Finance Index

This article examines individuals’ balance sheets, financial situations, and retirement planning steps to understand the barriers to annuity ownership and identifies the financial and sociodemographic factors that contribute to annuity ownership. Using data from the 2018 National Financial Capability Study, we conduct an empirical analysis of individuals in the retirement-planning phase of the life cycle (ages 40–61) and individuals of retirement age (age 62 and over). We find that debt obligations, lack of access to liquidity, and low financial literacy are all likely barriers to annuity ownership; the annuity owners in our sample are more likely than the non-owners to have access to liquidity and to report higher levels of financial satisfaction. Results indicate that access to liquidity and to professional investment management are positively associated with annuity ownership. Furthermore, financial literacy could lead to increased take-up rates through improved access to liquidity and ultimately enhanced retirement outcomes.

Debt, Illiquidity, and Financial Illiteracy as Barriers to Annuity Ownership

Household saving is still little understood, and even the basic facts - for instance: How does saving change over the life cycle? Does saving turn negative in old age? - are controversial. This review article adds an international dimension to the many studies of saving. It presents the results of the 'International Savings Comparison Project'. The main focus of this project is the interaction of household saving with public policy, notably the generosity of public pension systems. Our work is very much in the tradition of Feldstein's (1974) seminal study. However, we transpose the inference from time series data to a set of international panel data drawn from six country studies in Germany, Italy, Japan, the Netherlands, the United Kingdom and the United States.

Annamaria Lusardi

Papers

Financial Well-Being of the Millennial Generation: An In-Depth Analysis of Its Drivers and Implications

Practical Applications of Factors Contributing to Financial Well-Being among Black and Hispanic Women

Financial literacy and well-being in a five generation America: The 2021 TIAA Institute-GFLEC Personal Finance Index

Debt, Illiquidity, and Financial Illiteracy as Barriers to Annuity Ownership

Saving viewed from a cross-national perspective