Economists Help Fed Organize Consumer Event
Apr. 9, 2010
Economists from UT Dallas’ School of Economic, Political and Policy Sciences are partnering with the Federal Reserve Bank of Dallas to sponsor a conference aimed at better understanding how people make money decisions.
Scheduled for April 29-30, “Consumer Decisionmaking: Insights from Behavioral Economics” will take place at the Dallas Federal Reserve. The conference features a dinner keynote address on April 29 by Dr. George A. Akerlof, 2001 Nobel laureate in economics and professor at the University of California at Berkeley.
Dr. James Murdoch, a UT Dallas economics professor, is a visiting scholar at the Dallas Federal Reserve Bank.
Dr. James Murdoch, professor of economics at UT Dallas and a visiting scholar at the Dallas Federal Reserve, enlisted his behavioral economics colleagues to organize the event. UT Dallas has one of the most active behavioral economics programs in the nation.
Many economists believe that people usually make the best possible decisions for themselves, Murdoch said. “But behavioral economists, like psychologists, look around and find that people make bad decisions all the time,” he said.
With various consumer protection bills pending before the U.S. Congress, Federal Reserve officials wanted to address behavioral issues during the conference, he said. Experts and policymakers currently are debating measures that might protect consumers from unethical services – such as high-rate “payday” loans – and are considering implementing simplified 401(k) selection procedures to encourage retirement savings.
Alfreda Norman, assistant vice president and community affairs officer at the Dallas Federal Reserve, said financial products have become so complicated in recent years that it is not surprising when consumers have a tough time determining which financial products and services best meet their needs.
“Our conference is a response to this situation,” she said. “It is designed to examine factors that guide consumer’ decision-making process — such as immediate gratification, unwillingness to change behavior or a lack of knowledge and understanding about the costs and benefits of financial products and services.”
Top economists from around the country will present their research, which will focus generally on financial decision-making by low- to moderate-income Americans. Speakers will discuss issues such as how and when people spend money, how lower-income people have different financial options and decisions to make than others, and how Americans invest in their 401(k)s. The conference will also feature a discussion among financial industry insiders, researchers and regulators about ways to develop better financial products, services and policies.
While the event is open to the public, Murdoch expects the audience to consist primarily of academics, individuals who work for non-profit agencies counseling consumers, and private-sector financial executives who do business with low- to moderate-income consumers.
“We hope everyone will pick up some ideas for how to better inform the people they work with and help them make smarter decisions,” he said. “We also hope the discussion might lead to crafting some better policies to protect these consumers.”
Dr. Rachel Croson, director of UT Dallas’ Negotiations Center, helped select speakers for the event. She also will be among the presenters, along with another leading behavioral economist at UT Dallas, Dr. Catherine Eckel, director of the school’s Center for Behavioral and Experimental Economic Science.
Croson said the event offers a rare opportunity to provide potential policymakers with the type of input that could lead to real action.
“There’s been a lot of evidence lately that people don’t always make the best decisions about their finances,” Croson said. “This event is different from most conferences discussing financial decision-making because it’s focused on consumers who are on the lower end of the income distribution and who could be substantially affected by new regulations the government is considering.”
‘Consumer Decisionmaking: Insights from Behavioral Economics’
The conference at the Dallas Federal Reserve takes place from 5:30 p.m. to 8:30 p.m. April 29 and 8:30 a.m. to 4 p.m. April 30. For more information or to register, visit the Federal Reserve Bank of Dallas site.
The registration fee is $75 before April 16 and $100 after that date. Participants are asked to register by April 23. UT Dallas students and faculty can contact Murdoch for more details.