The Confusion Edition
1. Marshmallows: I'm very confused by marshmallows, or at least marshmallow tests. Did you know about the massive attrition in the original work? The fuzzy proposed mechanisms? It's executive control! Trainable mental tricks! Actually it's a measure of trust! No, poor children who choose immediate rewards are calmer and more rational! Did I mention that willpower depletion doesn't replicate (and that physiological measure of calm rationality is suspect)? If the marshmallow test doesn't tell us much, at least there's Grit to rely on. Sigh...
2. The Housing Boom: I'm also newly confused about what was happening in the housing boom. A new working paper from Foote, Loewenstein and Willen shows that low-income borrower mortgage debt didn't increase relative to high-income borrower mortgage debt. Reading that paper I learned thatBhutta earlier found that new home buyers weren't much of a factor during the boom.
3. Consumer Debt: A lot of people are confused about consumer debt, not just housing debt, in the United States. Here's a Slate piece about how to get out of debt which won't tell you anything new if you've ever heard of present bias. Here's a Slate piece from the week before blowing large holes in the "present biased overspending" theory of consumer debt. And remember that link from last week about how behavioral tricks to increase saving still don't yield any increase in poor households ability to save for the long term? One sure fire way to reduce debt is to forgive it--but you might want to acknowledge the source of the idea.
4. Field Experiments: Banerjee and Duflo have edited a new volume on field experiments for Elsevier packed with good stuff (several papers have been linked in the faiV in recent months) but their agreement was conditional on the working paper versions being available for free. My confusion: who is going to pay Elsevier and why?
5. Jobs: Finally some clarity. As it ever was, workers prefer jobs to freelancing and as the job market improves, freelancers trade in "freedom" for regular paychecks. And workers in low-income and middle-income countries really are less productive than workers in high-income countries, putting in longer hours for less output and income. I've heard there's a way to fix that...
Bonus Update: The Swiss voted against basic income, but the Y-combinator experiment in Oakland is moving forward.
Source: VoxEu/Bick, Fuchs-Schundeln and Lagakos
Editor’s Note: I’m going to assume that you are seeing plenty of AI content (news and papers, not AI slop, though I’m sure you’re getting plenty of that too) from other sources, so I’m trying to think hard about the marginal value that the faiV can provide. As far as I’ve gotten so far: a) make sure that directly AI-related content does not take up more than 2 of the 5 items, and b) try to focus specifically on the cybersecurity issue for financial inclusion. Beyond that, I’m open to feedback on the value you get from the faiV in relation to AI to help guide us in the future. On a different note, I’ll be making a brief cameo appearance at the e-MFP Inclusive Finance Conference to moderate the opening plenary. If you haven’t registered, do so and I hope to see you there! - Tim Ogden