IDEAS home Printed from https://ideas.repec.org/a/eee/jeborg/v188y2021icp1124-1143.html
   My bibliography  Save this article

The causal impact of economics education on decision-making: Evidence from a natural experiment in China

Author

Listed:
  • Chen, Binkai
  • Lin, Wei
  • Wang, Ao

Abstract

We investigate the causal impact of collegiate economics courses on students’ decision-making. By exploiting a Chinese college-admission system that quasi-randomly assigns students to economics/business majors given students’ preferences and the College Entrance Exam’s cutoff scores for economics/business majors, we are able to isolate the treatment effects of an economics education on students’ responses to a decision-making survey. Specifically, we compare the survey responses of students who narrowly meet the cutoffs for the economics/business majors to those who do not and find that students educated in economics/business courses are more likely to be risk neutral and less prone to common biases in probabilistic beliefs. While students in economics/business majors do not show significant changes in social preferences, they appear more inclined to believe that others behave selfishly.

Suggested Citation

  • Chen, Binkai & Lin, Wei & Wang, Ao, 2021. "The causal impact of economics education on decision-making: Evidence from a natural experiment in China," Journal of Economic Behavior & Organization, Elsevier, vol. 188(C), pages 1124-1143.
    • Handle: RePEc:eee:jeborg:v:188:y:2021:i:c:p:1124-1143
    DOI: 10.1016/j.jebo.2021.06.018
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0167268121002511
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.jebo.2021.06.018?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Bauman, Yoram & Rose, Elaina, 2011. "Selection or indoctrination: Why do economics students donate less than the rest?," Journal of Economic Behavior & Organization, Elsevier, vol. 79(3), pages 318-327, August.
    2. Tanjim Hossain & Ryo Okui, 2013. "The Binarized Scoring Rule," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 80(3), pages 984-1001.
    3. Davide Cantoni & Yuyu Chen & David Y. Yang & Noam Yuchtman & Y. Jane Zhang, 2017. "Curriculum and Ideology," Journal of Political Economy, University of Chicago Press, vol. 125(2), pages 338-392.
    4. Erin L. Krupka & Roberto A. Weber, 2013. "Identifying Social Norms Using Coordination Games: Why Does Dictator Game Sharing Vary?," Journal of the European Economic Association, European Economic Association, vol. 11(3), pages 495-524, June.
    5. Kagel, John H. & Kim, Chung & Moser, Donald, 1996. "Fairness in Ultimatum Games with Asymmetric Information and Asymmetric Payoffs," Games and Economic Behavior, Elsevier, vol. 13(1), pages 100-110, March.
    6. Matthew Rabin, 2000. "Risk Aversion and Expected-Utility Theory: A Calibration Theorem," Econometrica, Econometric Society, vol. 68(5), pages 1281-1292, September.
    7. Melanie Lührmann & Marta Serra-Garcia & Joachim Winter, 2018. "The Impact of Financial Education on Adolescents' Intertemporal Choices," American Economic Journal: Economic Policy, American Economic Association, vol. 10(3), pages 309-332, August.
    8. Faravelli, Marco, 2007. "How context matters: A survey based experiment on distributive justice," Journal of Public Economics, Elsevier, vol. 91(7-8), pages 1399-1422, August.
    9. M. Keith Chen & Venkat Lakshminarayanan & Laurie R. Santos, 2006. "How Basic Are Behavioral Biases? Evidence from Capuchin Monkey Trading Behavior," Journal of Political Economy, University of Chicago Press, vol. 114(3), pages 517-537, June.
    10. Camerer, Colin F, 1987. "Do Biases in Probability Judgment Matter in Markets? Experimental Evidence," American Economic Review, American Economic Association, vol. 77(5), pages 981-997, December.
    11. James Banks & Leandro S. Carvalho & Francisco Perez-Arce, 2019. "Education, Decision Making, and Economic Rationality," The Review of Economics and Statistics, MIT Press, vol. 101(3), pages 428-441, July.
    12. Marwell, Gerald & Ames, Ruth E., 1981. "Economists free ride, does anyone else? : Experiments on the provision of public goods, IV," Journal of Public Economics, Elsevier, vol. 15(3), pages 295-310, June.
    13. John R. Carter & Michael D. Irons, 1991. "Are Economists Different, and If So, Why?," Journal of Economic Perspectives, American Economic Association, vol. 5(2), pages 171-177, Spring.
    14. Chen, Yan & Kesten, Onur, 2019. "Chinese college admissions and school choice reforms: An experimental study," Games and Economic Behavior, Elsevier, vol. 115(C), pages 83-100.
    15. Davide Cantoni & Yuyu Chen & David Y. Yang & Noam Yuchtman & Y. Jane Zhang, 2017. "Curriculum and Ideology," Journal of Political Economy, University of Chicago Press, vol. 125(2), pages 338-392.
    16. Yan Chen & Onur Kesten, 2017. "Chinese College Admissions and School Choice Reforms: A Theoretical Analysis," Journal of Political Economy, University of Chicago Press, vol. 125(1), pages 99-139.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Kaiser, Tim & Oberrauch, Luis, 2021. "Economic education at the expense of indoctrination? Evidence from Germany," EconStor Preprints 245801, ZBW - Leibniz Information Centre for Economics.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Li, Jingheng & Xi, Tianyang & Yao, Yang, 2020. "Empowering knowledge: Political leaders, education, and economic liberalization," European Journal of Political Economy, Elsevier, vol. 61(C).
    2. Kaiser, Tim & Oberrauch, Luis, 2021. "Economic education at the expense of indoctrination? Evidence from Germany," EconStor Preprints 245801, ZBW - Leibniz Information Centre for Economics.
    3. Sundemo, Mattias & Löfgren, Åsa, 2022. "Do business and economics studies erode prosocial values?," Working Papers in Economics 827, University of Gothenburg, Department of Economics, revised Jan 2024.
    4. João Carlos Graça & João Carlos Lopes & Rita Gomes Correia, 2014. "Economics education: literacy or mind framing? Evidence from a survey on the social building of trust in Portugal," Working Papers Department of Economics 2014/20, ISEG - Lisbon School of Economics and Management, Department of Economics, Universidade de Lisboa.
    5. İbrahim Erdem SEÇİLMİŞ, 2014. "Seniority: A Blessing or A Curse? The Effect of Economics Training on the Perception of Distributive Justice," Sosyoekonomi Journal, Sosyoekonomi Society, issue 22(22).
    6. Gerald Eisenkopf & Pascal A. Sulser, 2016. "Randomized controlled trial of teaching methods: Do classroom experiments improve economic education in high schools?," The Journal of Economic Education, Taylor & Francis Journals, vol. 47(3), pages 211-225, July.
    7. Charness, Gary & Gneezy, Uri & Rasocha, Vlastimil, 2021. "Experimental methods: Eliciting beliefs," Journal of Economic Behavior & Organization, Elsevier, vol. 189(C), pages 234-256.
    8. Jonas Pilgaard Kaiser & Kasper Selmar Pedersen & Alexander K. Koch, 2018. "Do Economists Punish Less?," Games, MDPI, vol. 9(4), pages 1-17, September.
    9. Eli Spiegelman, 2021. "Embracing The Dark Side? Testing The Socialization Of A Maximizing Mindset," Economic Inquiry, Western Economic Association International, vol. 59(2), pages 740-761, April.
    10. Miragaya-Casillas, Cristina & Aguayo-Estremera, Raimundo & Ruiz-Villaverde, Alberto, 2023. "University students, economics education, and self-interest. A systematic literature review," International Review of Economics Education, Elsevier, vol. 43(C).
    11. Stephanie Owings-Edwards, 2021. "Charity Case: A Class Competition that Combats Economics Students' Proclivity Toward Self-Interested Behavior," Journal of Economics Teaching, Journal of Economics Teaching, vol. 6(1), pages 40-52, May.
    12. Brinja Meiseberg & Thomas Ehrmann & Aloys Prinz, 2017. "“Anything worth winning is worth cheating for”? Determinants of cheating behavior among business and theology students," Journal of Business Economics, Springer, vol. 87(8), pages 985-1016, November.
    13. Simon Niklas Hellmich, 2019. "Are People Trained in Economics “Different,†and if so, Why? A Literature Review," The American Economist, Sage Publications, vol. 64(2), pages 246-268, October.
    14. Joanna Dzionek-Kozłowska & Sharaf N. Rehman, 2017. "Indoctrination, Preselection or Culture? Economic Education and Attitudes towards Cooperation," Gospodarka Narodowa. The Polish Journal of Economics, Warsaw School of Economics, issue 6, pages 57-77.
    15. Baader, Malte & Vostroknutov, Alexander, 2017. "Interaction of reasoning ability and distributional preferences in a social dilemma," Journal of Economic Behavior & Organization, Elsevier, vol. 142(C), pages 79-91.
    16. Dirk C. Moosmayer & Sandra Waddock & Long Wang & Matthias P. Hühn & Claus Dierksmeier & Christopher Gohl, 2019. "Leaving the Road to Abilene: A Pragmatic Approach to Addressing the Normative Paradox of Responsible Management Education," Journal of Business Ethics, Springer, vol. 157(4), pages 913-932, July.
    17. Maité Laméris & Pierre-Guillaume Méon & Anne-Marie Van Prooijen, 2019. "What have we done? The impact of choosing and studying different academic disciplines on beliefs and values," Working Papers CEB 19-007, ULB -- Universite Libre de Bruxelles.
    18. René Ruske, 2015. "Does Economics Make Politicians Corrupt? Empirical Evidence from the United States Congress," Kyklos, Wiley Blackwell, vol. 68(2), pages 240-254, May.
    19. Gerald Eisenkopf & Pascal Sulser, 2013. "A Randomized Controlled Trial of Teaching Methods: Do Classroom Experiments improve Economic Education in High Schools?," TWI Research Paper Series 80, Thurgauer Wirtschaftsinstitut, Universität Konstanz.
    20. Maite D. Laméris & Pierre-Guillaume Méon & Anne-Marie Prooijen, 2023. "What have we done?! The impact of economics on the beliefs and values of business students," Journal of Business Economics, Springer, vol. 93(3), pages 433-483, April.

    More about this item

    Keywords

    Decision-making; College majors; Preferences;
    All these keywords.

    JEL classification:

    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • A13 - General Economics and Teaching - - General Economics - - - Relation of Economics to Social Values
    • A22 - General Economics and Teaching - - Economic Education and Teaching of Economics - - - Undergraduate

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:jeborg:v:188:y:2021:i:c:p:1124-1143. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/jebo .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.