Child preferences

Economic preferences of children

Project descriptions, links to papers and presentation slides

Patience is a separate driver of field behavior.

Drivers of Behavior at an Early Age

How do the skills developed when children are 3-5 years old drive schooling outcomes in middle childhood and adolescence? Skills map onto three distinct factors - cognitive skills, executive functions, and economic preferences. Executive functions reduce disciplinary referrals, and increase test scores and grades. Cognitive skills increase test scores and weakly reduce disciplinary referrals, but do not predict grades. Economic preferences have an independent effect: children who are patient in early childhood have fewer disciplinary referrals. Finally, random assignment to preschool impacts grades and disciplinary referrals through changes to cognitive skills and executive functions.

Link to paper

Castillo, Marco, John List, Ragan Petrie and Anya Samek, 2020, "Detecting Drivers of Behavior at an Early Age: Evidence from a Longitudinal Field Experiment," conditionally accepted, Journal of Political Economy.

Growth in economic experiments with children

Experiments with Children Inform Economics

In the past several decades the experimental method has lent deep insights into economics. One area that has contributed is the experimental study of children, where advances as varied as the evolution of human behaviors that shape markets and institutions, to how early life influences shape later life outcomes, have been explored. We first develop a framework for economic preference measurement that provides a lens into how to interpret data from experiments with children. Next, we survey work that provides general empirical insights within our framework and provide a comprehensive summary of experimental methods used with children. Finally, we provide 10 tips for pulling off experiments with children, including factors such as taking into account child competencies, causal identification, and logistical issues related to recruitment and implementation. We envision the experimental study of children as a high growth research area in the coming decades as social scientists begin to more fully appreciate that children are active participants in markets who (might) respond predictably to economic incentives.

Link to paper

List, John, Ragan Petrie and Anya Samek, 2020, "How Experiments with Children Inform Economics," forthcoming, Journal of Economic Literature

Impatience is particularly harmful for low academic ability students (17 pp less likely to graduate high school)

Impatience Correlates with High School Dropout

Children who are unwilling to wait for a larger reward and instead prefer a small one earlier (i.e. they have a higher discount rate) are less likely to graduate from high school. Using an incentivized experiment to measure the discount rates of 878 children, we find large effects on human capital accumulation – a one standard deviation increase in the discount rate decreases the probability of graduating from high school by 4 percentage points. Importantly, the impact of a child’s discount rate is distinct from behavioral problems (e.g. disciplinary referrals), academic achievement, risk attitudes, demographics and household environment. Consistent with the existence of non-pecuniary costs to finishing high school, impatient children with poor academic achievement are significantly less likely to graduate than impatient children with high achievement.

Link to paper

Castillo, Marco, Jeffrey L. Jordan and Ragan Petrie, 2019, “Discount Rates of Children and High School Graduation,” The Economic Journal, 129(619), 1153-1181.

More risk averse children are more likely to complete high school.

Rationality of children, risk and field behavior

What is the relationship between risk attitudes, choice consistency and field behavior of children? We conduct economic experiments with 1,275 8th graders. Choices are not completely consistent with any of the economic theories we consider, however, they are not random either. We structurally estimate risk preferences, correct for decision error and find that risk preferences do predict future field behavior. Children who are more risk averse are less likely to receive disciplinary referrals one and two years after the experiment and are more likely to complete high school, even controlling for economic rationality, family background, scholarly achievement and past misbehavior. Accounting for decision error turns out to be important as a simple aggregate measure of risk is not found to be correlated with field behavior.

Link to paper

Castillo, Marco, Jeffrey L. Jordan and Ragan Petrie, 2018, “Children's Rationality, Risk Attitudes, and Field Behavior,” European Economic Review, 102, 62-81.

Misbehavior of children and their impatience

Boys are more impatient than girls, and black boys are the most impatient

How do children's time preferences differ along gender and racial lines? We find that boys are more impatient than girls and black children are more impatient than white children. Black boys have the highest discount rates of all groups. Most importantly, we show that impatience has a direct correlation with misbehavior, i.e. a surrogate for economic success. An increase of one standard deviation in the discount rate is associated with an increase in the number of disciplinary referrals that a child has the following school year by 14%. Our results suggest that impatience plays an important role in determining the success of performance incentive programs for school children.

Link to paper

Castillo, Marco, Paul Ferraro, Jeffrey Jordan and Ragan Petrie, 2011, “The Today and Tomorrow of Kids: Time Preferences and Educational Outcomes of Children ,” Journal of Public Economics, 95(11-12), 1377-1385