This Week in Behavioral #1

What's really going through the mind of a payday borrower and can a math app make your kid do better in school?

We spend a lot of time explaining the behavioral research that underpins Frank because we think it's both interesting and impactful. But the value of all the great behavioral research goes much farther than just Frank. That's why we're going to be sharing TWIB Notes (This Week in Behavioral).

Each week we'll share a few of the most interesting and relevant behavioral studies/articles from the week. We hope you enjoy.

Math Apps Improve Grades? Maybe just for Anxious Parents

Researchers at the University of Chicago made waves this week with Math at home adds up to achievement in school (it's in Science after all). They randomly gave kids iPads with different learning applications and tested the outcomes.

While their main conclusion that kids who use the math app see improved school performance is suspect given the selection bias (i.e., kids interested in math both use the app more and do better in school) the researchers may have actually stumbled onto something even more interesting:

For the sub-set of parents "anxious about math", kids randomly given an iPad bedtime math app see improvements equivalent to three months of schooling across all types of students.

So for all the math-anxious parents out there, there is a great discussion of the results here.

What's Someone Thinking When They Take Out a Payday Loan?

Researchers at Columbia published a fascinating paper the prestigious American Economic Review on the mental state of payday borrowers.

They did a battery of tests just before and just after someone takes out a payday loan and their data suggests that not having cash-on-hand does not affect cognitive abilities. This may seem obvious, but it's at odds with other ground-breaking research on the Scarcity mindset (which we highly recommend reading).

We're still trying to figure out how to account for the differences in the research: Maybe payday borrowers are not really in a state of scarcity or, more provocatively, maybe they're still in a state of (perceived) scarcity even after getting the loan?

We'll keep you updated!

Frank - Luke Coffman

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