Present bias predicts participation in payments for environmental services: evidence from a behavioral experiment in Uganda

Farmers are necessary agents in global efforts to conserve the environment now that croplands and pastures together constitute the largest terrestrial system on Earth – covering some 48% of ice-free land surface. Whereas standard economic models predict that farmers will participate in conservation programs so long as they are profitable, empirical findings from behavioral economics point to a number of normally unobservable preferences that may influence the decision-making process. This study tests, for the first time, whether heterogeneity in behavioral preferences correlates with decisions to participate in Payments for Environmental Services (PES) programs. We elicit individual trust and time preferences using economic experiments and link resulting measures to household survey data and participation decisions in a Ugandan PES program. We find that farmers who exhibit a preference for proximate gains – present-biased preferences – are 47.7% more likely to participate in the program than those who show time-consistent or future-biased preferences. This result has implications for ongoing and planned PES programs involving farmers, particularly in Africa, by highlighting a potential relationship between payment timing and participation, and further validates the use of behavioral experiments in explaining real-world decisions.

Can institutional investors bias real estate portfolio appraisals? Evidence from the market downturn

This paper investigates the extent to which institutional investors may have influenced independent real estate appraisals during the financial crisis. A conceptual model of the determinants of client influence on real estate appraisals is proposed. It is suggested that the extent of clients’ ability and willingness to bias appraisal outputs is contingent upon market and regulatory environments (ethical norms and legal and institutional frameworks), the salience of the appraisal(s) to the client, financial incentives for the appraiser to respond to client pressure, organisational culture, the level of moral reasoning of both individual clients and appraisers, client knowledge and the degree of appraisal uncertainty. The potential of client influence to bias ostensibly independent real estate appraisals is examined using the opportunity afforded by the market downturn commencing in 2007 in the UK. During the market turbulence at the end of 2007, the motivations of different types of owners to bias appraisals diverged clearly and temporarily provided a unique opportunity to assess potential appraisal bias. We use appraisal-based performance data for individual real estate assets to test whether there were significant ownership effects on performance during this period. The results support the hypothesis that real estate appraisals in this period reflected the differing needs of clients.

The ratio bias phenomenon: fact or artifact?

The ratio bias—according to which individuals prefer to bet on probabilities expressed as a ratio of large numbers to normatively equivalent or superior probabilities expressed as a ratio of small numbers—has recently gained momentum, with researchers especially in health economics emphasizing the policy importance of the phenomenon. Although the bias has been replicated several times, some doubts remain about its economic significance. Our two experiments show that the bias disappears once order effects are excluded, and once salient and dominant incentives are provided. This holds true for both choice and valuation tasks. Also, adding context to the decision problem does not alter this finding. No ratio bias could be found in between-subject tests either, which leads us to the conclusion that the policy relevance of the phenomenon is doubtful at best.

Associations between interpretation bias and depression in adolescents

Interpretation biases have been shown to play a role in adult depression and are a target in cognitive behavioural therapy. Adolescence is a key risk period for the development of depression and a period of rapid cognitive and emotional development but little research has investigated the relationship between interpretation biases and depression in adolescents. This study adapted a measure of interpretation bias, the Ambiguous Scenarios Test for Depression, for adolescents and evaluated its reliability and validity. A community sample of 206 young people aged 12 to 18 years completed a validated measure of depression symptoms (Mood and Feelings Questionnaires) and the adapted Ambiguous Scenarios Test. The Ambiguous Scenarios Test for Depression in Adolescents had good internal consistency and split half reliability. Depression symptoms were associated with participants’ ratings of the valence of ambiguous situations and with interpretation biases. Importantly, symptoms of depression and anxiety were independently associated with interpretation bias. This research suggests that interpretation biases can be measured in this age group, that negative interpretation biases exist in adolescents and that these are associated with depression symptoms.

Task relevance of emotional information affects anxiety-linked attention bias in visual search

Task relevance affects emotional attention in healthy individuals. Here, we investigate whether the association between anxiety and attention bias is affected by the task relevance of emotion during an attention task. Participants completed two visual search tasks. In the emotion-irrelevant task, participants were asked to indicate whether a discrepant face in a crowd of neutral, middle-aged faces was old or young. Irrelevant to the task, target faces displayed angry, happy, or neutral expressions. In the emotion-relevant task, participants were asked to indicate whether a discrepant face in a crowd of middle-aged neutral faces was happy or angry (target faces also varied in age). Trait anxiety was not associated with attention in the emotion-relevant task. However, in the emotion-irrelevant task, trait anxiety was associated with a bias for angry over happy faces. These findings demonstrate that the task relevance of emotional information affects conclusions about the presence of an anxiety-linked attention bias.

Attention bias to emotional faces varies by IQ and anxiety in Williams syndrome

Individuals with Williams syndrome (WS) often experience significant anxiety. A promising approach to anxiety intervention has emerged from cognitive studies of attention bias to threat. To investigate the utility of this intervention in WS, this study examined attention bias to happy and angry faces in individuals with WS (N=46). Results showed a significant difference in attention bias patterns as a function of IQ and anxiety. Individuals with higher IQ or higher anxiety showed a significant bias toward angry, but not happy faces, whereas individuals with lower IQ or lower anxiety showed the opposite pattern. These results suggest that attention bias interventions to modify a threat bias may be most effectively targeted to anxious individuals with WS with relatively high IQ.