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Languages differ widely in the ways they encode time. I test the hypothesis that the languages that grammatically associate the future and the present, foster future-oriented behavior. This prediction arises naturally when well-documented effects of language structure are merged with models of intertemporal choice. Empirically, I find that speakers of such languages: save more, retire with more wealth, smoke less, practice safer sex, and are less obese. This holds both across countries and within countries when comparing demographically similar native households. The evidence does not support the most obvious forms of common causation. I discuss implications for theories of intertemporal choice.

We provide evidence from field experiments with three different banks that reminder messages increase commitment attainment for clients who recently opened commitment savings accounts. Messages that mention both savings goals and financial incentives are particularly effective, whereas other content variations such as gain versus loss framing do not have significantly different effects. Nor do we find evidence that receiving additional late reminders has an additive effect. These empirical results do not map neatly into existing models, so we provide a simple model where limited attention to exceptional expenses can generate undersaving that is in turn mitigated by reminders. Data, as supplemental material, are available at http://dx.doi.org/10.1287/mnsc.2015.2296 . This paper was accepted by Teck-Hua Ho, behavioral economics .

Across the social sciences, a key question is how societies manage to enforce cooperative behavior in social dilemmas such as public goods provision or bilateral trade. According to an influential body of theories in psychology, anthropology, and evolutionary biology, the answer is that humans have evolved moral systems: packages of functional psychological and biological mechanisms that regulate economic behavior, including a belief in moralizing gods; moral values; negative reciprocity; and emotions of shame, guilt, and disgust. Based on a stylized model, this article empirically studies the structure and evolution of these moral traits as a function of historical heterogeneity in extended kinship relationships. The evidence shows that societies with a historically tightly knit kinship structure regulate behavior through communal moral values, revenge taking, emotions of external shame, and notions of purity and disgust. In loose kinship societies, on the other hand, cooperation appears to be enforced through universal moral values, internalized guilt, altruistic punishment, and an apparent rise and fall of moralizing religions. These patterns point to the presence of internally consistent but culturally variable functional moral systems. Consistent with the model, the relationship between kinship ties, economic development, and the structure of the mediating moral systems amplified over time.

Many of the insights of economics seem to be qualitative, with many fewer reliable quantitative laws. However a series of power laws in economics do count as true and nontrivial quantitative laws—and they are not only established empirically, but also understood theoretically. I will start by providing several illustrations of empirical power laws having to do with patterns involving cities, firms, and the stock market. I summarize some of the theoretical explanations that have been proposed. I suggest that power laws help us explain many economic phenomena, including aggregate economic fluctuations. I hope to clarify why power laws are so special, and to demonstrate their utility. In conclusion, I list some power-law-related economic enigmas that demand further exploration. A formal definition may be useful.

Societies adapt to climate variations and develop unique cultures that lead to distinctive economic behaviour across different regions. To estimate the climate-economic link and test the hypothetical role of culture, this paper uses a nationwide survey at the household level in China, together with historical temperature data at the prefectural city level for empirical analysis. The results show the significant role of local climate variations on consumption, savings and investment decisions by households. Harsh weather conditions are associated with lower consumption, lower income and higher savings. Such climate characteristics are also associated with a lower probability of purchasing risky financial assets. Using a sample of migrating families, we find strong evidence that culture is an important channel in the climate-economic relationship. Additional support for this view is found through the “catching up with the Joneses” effect documented in the economics literature. Overall, this research provides an alternative perspective for understanding the long-term behavioural impact of climate change.

News—or foresight—about future economic fundamentals can create rational expectations equilibria with non-fundamental representations that pose substantial challenges to econometric efforts to recover the structural shocks to which economic agents react. Using tax policies as a leading example of foresight, simple theory makes transparent the economic behavior and information structures that generate non-fundamental equilibria. Econometric analyses that fail to model foresight will obtain biased estimates of output multipliers for taxes; biases are quantitatively important when two canonical theoretical models are taken as data generating processes. Both the nature of equilibria and the inferences about the effects of anticipated tax changes hinge critically on hypothesized information flows. Different methods for extracting or hypothesizing the information flows are discussed and shown to be alternative techniques for resolving a non-uniqueness problem endemic to moving average representations.

We build a game-theoretic model to examine how better demand forecasting resulting from algorithms, machine learning, and artificial intelligence affects the sustainability of collusion in an industry. We find that, although better forecasting allows colluding firms to better tailor prices to demand conditions, it also increases each firm’s temptation to deviate to a lower price in time periods of high predicted demand. Overall, our research suggests that, despite concerns expressed by policy makers, better forecasting and algorithms can lead to lower prices and higher consumer surplus. This paper was accepted by Joshua Gans, business strategy.

Significance We investigate the effectiveness of nonprice incentives to motivate conservation behavior. We test whether tailored information about environmental and health damages produces behavior change in the residential electricity sector. In a randomized controlled trial with real-time appliance-level energy metering over 8 mo, we find that environment and health-based information strategies outperform monetary savings information to drive energy conservation. Environment and health-based messages, which communicate the environmental and public health externalities of electricity production—such as pounds of pollutants, childhood asthma, and cancer—motivated 8% energy savings versus control. This strategy was particularly effective on families with children, who achieved 19% energy savings. However, we do not study the persistence of these behavioral changes after the conclusion of the study. In the electricity sector, energy conservation through technological and behavioral change is estimated to have a savings potential of 123 million metric tons of carbon per year, which represents 20% of US household direct emissions in the United States. In this article, we investigate the effectiveness of nonprice information strategies to motivate conservation behavior. We introduce environment and health-based messaging as a behavioral strategy to reduce energy use in the home and promote energy conservation. In a randomized controlled trial with real-time appliance-level energy metering, we find that environment and health-based information strategies, which communicate the environmental and public health externalities of electricity production, such as pounds of pollutants, childhood asthma, and cancer, outperform monetary savings information to drive behavioral change in the home. Environment and health-based information treatments motivated 8% energy savings versus control and were particularly effective on families with children, who achieved up to 19% energy savings. Our results are based on a panel of 3.4 million hourly appliance-level kilowatt–hour observations for 118 residences over 8 mo. We discuss the relative impacts of both cost-savings information and environmental health messaging strategies with residential consumers.

We study the importance of family ties on economic behavior. We define our measure of family ties using individual responses from the World Value Survey (WVS) regarding the role of the family and the love and respect that children are expected to have for their parents in 81 countries. We show that with strong family ties home production is higher and families larger, labor force participation of women and youngsters, and geographical mobility lower. To assess causality, we look at the behavior of second generation immigrants. Our results overall indicate a significant influence of the strength of family ties on economic outcomes.

Previous product placement trials in supermarkets are limited in scope and outcome data collected. This study assessed the effects on store-level sales, household-level purchasing, and dietary behaviours of a healthier supermarket layout. This is a prospective matched controlled cluster trial with 2 intervention components: (i) new fresh fruit and vegetable sections near store entrances (replacing smaller displays at the back) and frozen vegetables repositioned to the entrance aisle, plus (ii) the removal of confectionery from checkouts and aisle ends opposite. In this pilot study, the intervention was implemented for 6 months in 3 discount supermarkets in England. Three control stores were matched on store sales and customer profiles and neighbourhood deprivation. Women customers aged 18 to 45 years, with loyalty cards, were assigned to the intervention (n = 62) or control group (n = 88) of their primary store. The trial registration number is NCT03518151. Interrupted time series analysis showed that increases in store-level sales of fruits and vegetables were greater in intervention stores than predicted at 3 (1.71 standard deviations (SDs) (95% CI 0.45, 2.96), P = 0.01) and 6 months follow-up (2.42 SDs (0.22, 4.62), P = 0.03), equivalent to approximately 6,170 and approximately 9,820 extra portions per store, per week, respectively. The proportion of purchasing fruits and vegetables per week rose among intervention participants at 3 and 6 months compared to control participants (0.2% versus -3.0%, P = 0.22; 1.7% versus -3.5%, P = 0.05, respectively). Store sales of confectionery were lower in intervention stores than predicted at 3 (-1.05 SDs (-1.98, -0.12), P = 0.03) and 6 months (-1.37 SDs (-2.95, 0.22), P = 0.09), equivalent to approximately 1,359 and approximately 1,575 fewer portions per store, per week, respectively; no differences were observed for confectionery purchasing. Changes in dietary variables were predominantly in the expected direction for health benefit. Intervention implementation was not within control of the research team, and stores could not be randomised. It is a pilot study, and, therefore, not powered to detect an effect. Healthier supermarket layouts can improve the nutrition profile of store sales and likely improve household purchasing and dietary quality. Placing fruits and vegetables near store entrances should be considered alongside policies to limit prominent placement of unhealthy foods. ClinicalTrials.gov NCT03518151 (pre-results).