Journal des affaires et de l'économie

Decision−Making and the Causal Effect of Economics Education

Abstract

Ao Wang

We look into the how college economics courses affect students' ability to make decisions. We are able to isolate the treatment effects of an economics education on students' responses to a decision-making survey by taking advantage of a Chinese college admissions system that assigns students to economics/business majors based on preferences and the cut-off scores for those majors on the College Entrance Exam. We specifically compare the survey responses of students who just barely meet the cut-offs for majoring in economics or business to those of students who do not, and we discover that those who have taken economics or business courses are more likely to be risk averse and less likely to be subject to common biases in probabilistic beliefs.