Essays in Behavioral Economics

Abstract

This thesis consists of four independent research papers. Chapter 1 ("Media Persuasion and Consumption: Evidence from the Dave Ramsey Show") examines whether entertaining mass media programs can influence individual consumption and savings decisions. I study this question by examining the impact of the Dave Ramsey Show, an iconic US radio talk show which encourages people to spend less and save more. I combine household-level expenditure records from a large scanner panel with fine-grained information about the geographic coverage of the radio show over time. Exploiting the quasi-natural experiment created by the staggered expansion of the radio show from 2004 to 2019, I find that exposure to the radio show decreases monthly household expenditures. This effect is driven by households with initially high expenditures relative to their income. In a mechanism experiment, I document that listening to the radio show has a persistent effect on people's attitudes towards consumption and debt. My findings highlight the potential of entertaining mass media programs for interventions aimed at changing people's financial decisions. Chapter 2 ("Do People Demand Fact-Checked News? Evidence from U.S. Democrats", joint work with Ingar Haaland and Christopher Roth) studies how the demand for a newsletter about an economic relief plan changes when the newsletter content is fact-checked. In a large-scale online experiment with U.S. Democrats, we first document an overall muted demand for fact-checking when the newsletter features stories from an ideologically aligned source, even though fact-checking increases the perceived accuracy of the newsletter. The average impact of fact-checking masks substantial heterogeneity by ideology: fact-checking reduces demand among Democrats with strong ideological views and increases demand among ideologically moderate Democrats. Furthermore, fact-checking increases demand among all Democrats when the newsletter features stories from an ideologically non-aligned source. Chapter 3 ("Fighting Climate Change: The Role of Norms, Preferences, and Moral Values", joint work with Peter Andre, Teodora Boneva, and Armin Falk) investigates individual willingness to fight climate change and its behavioral determinants in a large representative sample of US adults. Willingness to fight climate change, as measured through an incentivized donation decision, is highly heterogeneous across the population. Individual beliefs about social norms, economic preferences such as patience and altruism, as well as universal moral values positively predict climate preferences. Moreover, we document systematic misperceptions of prevalent social norms. Respondents vastly underestimate the prevalence of climate-friendly behaviors and norms among their fellow citizens. Providing respondents with correct information causally raises individual willingness to fight climate change as well as individual support for climate policies. The effects are strongest for individuals who are skeptical about the existence and threat of global warming. Chapter 4 ("Intertemporal Altruism", joint work with Philipp Eisenhauer, Armin Falk, and Thomas Graeber) starts from the observation that most prosocial decisions involve intertemporal tradeoffs. Yet, the timing of prosocial utility flows is ambiguous and has largely disregarded in models of other-regarding preferences. We study the behavioral implications of the time structure of prosocial utility, leveraging a conceptual distinction between consequence-dated and choice-dated utility flows. We conduct a high-stakes donation experiment that comprehensively characterizes discounting behavior in self-other tradeoffs and allows us to identify different prosocial motives from their distinct time profiles. Our data can only be explained by a combination of choice- and consequence-dated prosocial utility. Both motives are pervasive and negatively correlated at the individual level.