Behavioral Economics and Marketing in Aid of Decision Making among the Poor

By Marianne Bertrand, Sendhil Mullainathan, Eldar Shafir. 2006

390 citations recorded by the source corpus.

This article considers several aspects of the economic decision making of the poor from the perspective of behavioral economics, and it focuses on potential contributions from marketing. Among other things, the authors consider some relevant facets of the social and institutional environments in which the poor interact, and they review some behavioral patterns that are likely to arise in these contexts. A behaviorally more informed perspective can help make sense of what might otherwise be considered “puzzles” in the economic comportment of the poor. A behavioral analysis suggests that substantial welfare changes could result from relatively minor policy interventions, and insightful marketing may provide much needed help in the design of such interventions.

Subfields: Economics and Econometrics, General Decision Sciences, Safety Research

View Paper: https://www.semanticscholar.org/paper/1fa7c3328bd1ebd2e11fb06d8f02f97ed1a1b30d

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Citations in the corpus

Access to Finance (2010, neutral): “The new work shows the roles of limited self-control, loss aversion, and mental accounting and their implications for product design and marketing (Bertrand, et al., 2006).”
Financial Literacy, Financial Education, and Downstream Financial Behaviors (2014, background): “We found that financial literacy has less effect in low-income samples; the financial behavior of the poor is arguably more controlled by circumstances independent of intention (Bertrand et al. 2006).”
The dynamics of behavior change: Evidence from energy conservation (2016, background): “…Thaler, 2007); paying for charity and performance (Gneezy and Rustichini, 2000); reducing poverty and improving access to financial institutions (Bertrand et al., 2006); designing health behavior programs (Rothman and Salovey, 1997; Keller and Lehmann, 2008); and encouraging resource…”
Psychological characteristics and household savings behavior: The importance of accounting for latent heterogeneity (2018, background): “Indeed, Bertrand et al. (2006) argue that the financial behavior of”
When do you Want It? Time, Decisions, and Public Policy (2006, background): “( ) ( , ..., ) ( ) ( )1 0 t t T t k k T t U c c D k u c= + = − ∑ , ( ) .where D k k = + ⎛ ⎝⎜ ⎞ ⎠⎟ 1 1 ρ 1Other articles in this special issue address the issue of the psychology of saving versus spending (see Bertrand, Mullainathan, and Shafir 2006; Botti and Iyengar 2006; Briley and Aaker 2006).”
Psychological Frictions and the Incomplete Take-Up of Social Benefits: Evidence from an IRS Field Experiment (2015, background): “Such models predict that individuals might avoid or postpone the take-up decision altogether due to psychologically aversive " hassle costs " (Bertrand, Mullainathan, and Shafir 2006), limits to self-control (e.g., O'Donoghue and Rabin 1999) or other cognitive resources (e.g., Mullainathan and…”
Behavioral Economics and Tax Policy (2009, background): “…comes from the fact that accumulating evidence suggests that barriers to taking up programs, even minor barriers such as application costs or waiting times, can discourage program participation out of proportion to the magnitude of the costs they impose (Bertrand, Mullainathan, and Shafir, 2006).”