Does Local Financial Development Matter? Guiso, Luigi; Sapienza, Paola; Zingales, Luigi
The Quarterly journal of economics,
08/2004, Volume:
119, Issue:
3
Journal Article
Peer reviewed
Open access
We study the effects of differences in local financial development within an integrated financial market. We construct a new indicator of financial development by estimating a regional effect on the ...probability that, ceteris paribus, a household is shut off from the credit market. By using this indicator, we find that financial development enhances the probability an individual starts his own business, favors entry of new firms, increases competition, and promotes growth. As predicted by theory, these effects are weaker for larger firms, which can more easily raise funds outside of the local area. These effects are present even when we instrument our indicator with the structure of the local banking markets in 1936, which, because of regulatory reasons, affected the supply of credit in the following 50 years. Overall, the results suggest local financial development is an important determinant of the economic success of an area even in an environment where there are no frictions to capital movements.
► We ran an experiment where groups select a leader to compete against other groups. ► Groups select women much less often than their abilities suggest. ► Could be due to differences in ...overconfidence, truthfulness, and/or agency problems. ► Overconfidence in their own abilities explains why men predominate as leaders.
We present evidence from an experiment in which groups select a leader to compete against the leaders of other groups in a real-effort task that they have all performed in the past. We find that women are selected much less often as leaders than is suggested by their individual past performance. We study three potential explanations for the underrepresentation of women, namely, gender differences in overconfidence concerning past performance, in the willingness to exaggerate past performance to the group, and in the reaction to monetary incentives. We find that men's overconfidence is the driving force behind the observed prevalence of male representation.
People's opium? Religion and economic attitudes Guiso, Luigi; Sapienza, Paola; Zingales, Luigi
Journal of monetary economics,
2003, 2003-1-00, 20030101, Volume:
50, Issue:
1
Journal Article
Peer reviewed
Open access
Since Max Weber, there has been an active debate on the impact of religion on people's economic attitudes. Much of the existing evidence, however, is based on cross-country studies in which this ...impact is confounded by differences in other institutional factors. We use the World Values Surveys to identify the relationship between intensity of religious beliefs and economic attitudes, controlling for country-fixed effects. We study several economic attitudes toward cooperation, the government, working women, legal rules, thriftiness, and the market economy. We also distinguish across religious denominations, differentiating on whether a religion is dominant in a country. We find that on average, religious beliefs are associated with “good” economic attitudes, where “good” is defined as conducive to higher per capita income and growth. Yet religious people tend to be more racist and less favorable with respect to working women. These effects differ across religious denominations. Overall, we find that Christian religions are more positively associated with attitudes conducive to economic growth.
Procrastination and impatience Reuben, Ernesto; Sapienza, Paola; Zingales, Luigi
Journal of behavioral and experimental economics,
10/2015, Volume:
58
Journal Article
Peer reviewed
Open access
•We study the relation between preferences for immediacy (impatience) and procrastination.•Impatience is measured with choices between smaller-sooner and larger-later rewards.•Procrastination is ...measured by recording how fast participants complete three unrelated tasks.•Impatient individuals are more likely to procrastinate.•Impatient individuals are also likely to make time inconsistent choices.
We use a combination of lab and field evidence to study whether highly-impatient individuals are more likely to procrastinate. To measure impatience, we elicit individual discount rates by giving participants choices between smaller-sooner and larger-later rewards. To measure procrastination, we record how quickly participants complete three tasks: an online game, their application to the university, and a mandatory survey. We find that, consistent with the theory, impatient individuals procrastinate more, but only in tasks where there are costs to delay (the online game and university application). Since we pay participants by check, we are also able to determine whether the participants’ cashing behavior is consistent with the timing of their payment choice. We find substantial evidence of time inconsistency. Namely, more than half of the participants who receive their check straight away instead of waiting 2 weeks for a reasonably larger amount, subsequently take more than 2 weeks to cash it.
Individuals with a propensity to wake up early in the morning (“early-morning” types) and those who like to stay up late at night (“night owls”) often exhibit distinctive psychological and ...physiological profiles. Previous research has shown that night owls score higher than early-morning people on different measures of cognitive ability and academic achievement. Baseline cortisol is one of the physiological variables associated with variation in chronotype and cognitive function. In this study we investigated whether a relationship between chronotype and performance is present also in the high range of intellectual ability and academic achievement, namely, among graduate students in a top-ranked MBA program in the US. In addition, we measured baseline cortisol levels in saliva samples collected in the early afternoon and analyzed them in relation to chronotype and GMAT scores. As predicted, GMAT scores were significantly higher among night owls than among early-morning types, regardless of sex. GMAT scores were also significantly higher among men than women, regardless of chronotype. Morningness/eveningness was not significantly associated with variation in sleep amount or in undergraduate or graduate GPA scores, suggesting that the association between eveningness and high GMAT scores was not due to differences in study effort or skills. Sex, chronotype and baseline cortisol jointly accounted for 14% of the total variance in GMAT scores; baseline cortisol, however, did not mediate the effect of chronotype on GMAT scores. Consistent with the results of previous research, our study shows that the effects of chronotype on cognitive ability and academic performance are relatively small but detectable even among high-achieving individuals. The mechanism linking eveningness and high cognitive function remains unclear but the role of personality traits and neuroendocrine function warrants further investigation.
In entering a currency union without any political union European countries have taken a gamble: will the needs of the currency unions force a political integration (as anticipated by Monnet) or will ...the tensions create a backlash, as suggested by Kaldor, Friedman and many others? We try to answer this question by analyzing the cross sectional and time series variation in pro-European sentiments in the EU 15 countries. The 1992 Maastricht Treaty seems to have reduced the pro-Europe sentiment as does the 2010 Eurozone crisis. Yet, in spite of the worst recession in recent history, the Europeans still support the common currency. Europe seems trapped: there is no desire to go backward, no interest in going forward, but it is economically unsustainable to stay still.
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