IP network member Dan Silverman spoke to HCEO recently about his research tracking economic decision-making and outcomes.
In recent work, Silverman has been melding survey and experimental research with administrative data to understand wealth inequality. "We're interested, broadly speaking, in why people have such different outcomes in their economic lives," Silverman says.
He notes that most differences stem from three areas: constraints, preferences, and luck. He has been working to better understand the differences in constraints through the use of financial aggregator applications found on smart phones. "With those kinds of data, we can see at a very granular level how people spend, how people save, how people use credit cards," he says.
In one example, he used such data to look at how the recent government shutdown affected government employees who were unable to work and thus did not get paid. It would be hard to study such an economic shock using traditional data, but using this granular data the researchers could see how people weathered the loss of income and what sorts of credit they relied on.
Silverman has also looked at hetereogeneity in preferences, using choice experiments to study risk and time preferences and how those affect individual behavior. Similarly, recent work has examined people's decision-making abilities. "Everything in the world differs in its quality, so why wouldn't economic choices?" Silverman notes.