One of really cool studies that really shows economics is much more than dismal science:
The paper by Savastano, titled "The Impact of Soft Traits and Cognitive Abilities on Life Outcomes" (link here) "combines neuroscience, psychology, and behavioral economics to empirically analyze the extent to which academic achievement, the relative weight of rationality vs. fairness in decision-making, and life satisfaction are affected by cognitive ability, persistent personality traits, and short-term stimuli based on psychological priming techniques."
The paper sets an experiment: "Prior to undertaking a course exam and playing the role of the respondent in an ultimatum game, a group of Masters and PhD students were stimulated either emotionally (via chocolate tasting) or rationally (via mathematical problem solving)."
The experiment involved "a chocolate tasting ...on a sample of 83 graduate students who were asked to play the role of the respondent in a one-shot ultimatum game against a computer. A sub-sample of 50 students also undertook one of their exams of their M.Sc or first year of the PhD program in Economics right after receiving the treatment. Students were also asked to complete a standard Big Five Test which was complemented by an Emotion Regulation (ER) Tests to allow disentangling broader aspects of their personality." Other controls were implemented as well.
The core questions were:
- "how personality traits (Big Five and ER scores) and cognitive abilities (proxied by past school performance) affect educational outcomes, namely the exam score for the two subsamples of students who, respectively, had chocolate or were rationally stimulated prior to undertaking this stressful activity;
- the nexus between short-term and long-term determinants of life satisfaction, as well as the extent to which personality traits can help to explain subjective assessment of well-being; and
- the relationship between personality traits and cognitive abilities on the threshold value of acceptance of the ultimatum game, therefore on rational choices.
Core results are:
- "This analysis brings good news for “chocolate and its derivatives” lovers. Theobroma cacao is not a placebo; it is statistically confirmed that the brown nectar provides individuals with a shot of positive energy that helps them feel happier.
- "If a piece of chocolate is also associated with “positive” soft personality traits, one can also experience some form of persistence in life satisfaction, or other life outcome.
- "Like any other external and exogenous shocks, the long-term effects are the sum of different factors, and the relative weight associated to it. There can be a positive relationship between a positive (negative) shock and its short-term impact.
- "However cognitive abilities, enduring positive personal traits and rationality help to mitigate the effects in the long-run, when individuals use reappraisal and revise their initial expectations, which together lead to more rational choices.
- "It appears that the homo economicus hypothesis is justified in the long term, but subject to the weight of emotionality in the short- run.
If you might think this is all just esoteric academism, don't. The author provides an example of where this knowledge can be applied to specific industry outcomes analysis, e.g. farming.
