Congratulations to Richard Thaler, who today won the Nobel Prize in economics for his research into how human behavior affects economic decision making and economic markets. RIIPL faculty research featured prominently in the scientific background document for the 2017 Nobel Prize in Economics:
“Hastings and Shapiro (2013) provide evidence for a key aspect of mental accounting: the lack of fungibility of money. They studied the choice between regular and premium gasoline when the price of gasoline fell by about 50% in 2008 and found that the shift from regular gasoline to premium gasoline was 14 times greater than predicted by a standard demand model. Mental accounting – with a specific account for gasoline – explains this excessive shift. Interestingly, and also predicted by mental accounting, they found no similar shifts from lower to higher quality products in other product categories for which prices had not changed.”
New RIIPL research, by Hastings and Shapiro, demonstrates how mental accounting influences the impact of SNAP (food stamps) on benefit recipients’ food purchases, non-food purchases, and bargain-hunting behavior. This new work expands what we know about how consumer psychology impacts policy, and particularly in one of the largest safety-net programs in the United States. Read more here.
RIIPL is proud to use data and science to support innovative, research-driven policy which improves lives through a better understanding of human needs.