Behavioral Econ in Development

3 Credits · Level: Graduate

How should policymakers in developing countries take account of the fact that people are not hyper-rational, individualistic utility-maximizing machines? In this class we will examine the tools of behavioral economics and its consequences for development policy. Each week, we will examine specific ‘behavioral’ departures from the neoclassical model, discussing how lab- and field-experiments provide ways of measuring this phenomenon, evidence of its importance, and implications for policymaking. Specific topics will include attitudes toward risk and uncertainty; learning; attention and bandwidth; present bias; trust and altruism. These will be applied to policy areas ranging from the adoption of agricultural technologies, to the management of health and income risks, the encouragement of savings, the motivation of public servants, and the provision of public goods. Students will acquire knowledge of the theory, methods, and development policy implications of behavioral economics