Financial student aid reduces social inequality and improves educational and economic outcomes, yet a persistent gap exists between take-up and eligibility. To investigate this gap and the means to close it, I conducted an experiment with 6,225 non-receivers of student aid embedded in a survey of 22,222 university students across Germany. Using hypothetical scenarios, I find that 63% of non-receivers systematically underestimate the financial value of student aid, and 86% misperceive their eligibility. Concise information about student aid and individual eligibility increases take-up by 1.1 pp (43%), especially among disadvantaged students. Correcting misperceptions causally increases take-up by up to 55 pp. After take-up, students have a higher total income despite reducing their earned income and financial support from their parents. The findings suggest that correcting misperceptions through concise information can reduce social inequality by alleviating financial concerns among disadvantaged students and their parents.

Paper available on request.

While take-up of social benefits is low across the world, it remains unclear if people do not know they are eligible (eligibility barrier) or actively decide against take-up (application barrier). Using survey data from 22,222 students in Germany, we identify students who are eligible but do not take up means-tested student aid. Among them, we find an eligibility barrier of 82.5% students who do not believe to be eligible, and an application barrier of 13.0% of students who know about their eligibility but still do not take up aid. Both barriers are severely driven by misperceptions. At the eligibility barrier, 59% of students think they will not pass the means-test, but 61% of them underestimate the eligibility conditions. At the application barrier, 63% do not take up aid due to debt aversion, but 76% of them overestimate the repayment. The results show that misperceptions are a main inhibitor of social benefit take-up at both barriers.

Paper available on request.

Most interventions fail to change behavior. We argue that the reason for this failure is that the interventions do not address the underlying problem. Identifying the type of underlying problem requires systematic pre-intervention diagnostics. Yet, a systematic, parsimonious, and generalizable survey tool (anamnesis) to identify problems is hitherto missing. Our anamnesis classifies the underlying type of problem along three fundamental diagnoses: awareness, intention, and implementation problems. We then test whether we can use our anamnesis results to predict the effectiveness of three typical interventions (reminders, incentives, simplifications) across three different settings in an online experiment with 7,500 subjects. We find high context-specificity of the interventions across the three different settings, which can be predicted by our anamnesis results. On average, a predicted effectiveness of 100% ex-ante translates into an actual effectiveness of an intervention of 89.2%. Choosing an intervention based on our diagnosis increases the effect size by around 58% compared to randomly choosing one of the tested interventions.

Manuscript in preparation.

We design a comprehensive experimental setup to study (i) intrinsic preferences for gradual information revelation (ii) with different skewness (positive, negative, or symmetric) (iii) in two information environments. In a “compound lottery” environment, symmetric information revelation is preferred, while in an otherwise equivalent “information structure” environment, positively skewed information revelation is preferred. In both environments, early resolution is preferred over late resolution, with the three types of gradual resolution positioned in between. Our study integrates the three dimensions (timing, skewness, environment) of intrinsic preferences only studied separately to date, relates the findings to behavioral theories, and shows that careful consideration of the information environment is necessary when investigating preferences for gradual information revelation.

Revised manuscript in preparation.

We study utility-based intensity measures of higher-order risk preferences and their relation to field behavior in a representative German sample of 2970 adults. Using a new method based on the elicitation of certainty equivalents and a machine learning approach, we find that 85%, 77%, and 62% express risk-averse, prudent, and temperate behavior, respectively. Interestingly, also among risk seekers, more than 70% behave prudentially, which extends to the intensive margin and documents mixed risk aversion and mixed risk-seeking behavior. Age, gender, education, and religion are significantly related to risk aversion, prudence, and temperance. Our intensity measures of risk preferences are significantly related to financial decision-making, job choice, and addictive behaviors. Importantly, field behavior that according to economic theory is insufficiently explained by risk aversion alone is significantly predicted by prudence, where risk aversion mostly remains insignificant.

Manuscript in preparation.