Essays on the Behavioral Economics of Mental Health and Belief Formation

Abstract

These three essays use the lens of behavioral economics to study topics in mental health, decision-making, and belief formation. They leverage randomized experiments to evaluate the impact of three interventions, and new ``lab-in-the-field'' incentivized surveys and games to measure outcomes.

The first chapter studies the effects of mindfulness meditation on mental health, productivity and decision-making. We model a simple mechanism through which emotions and worries can reduce individuals' available attention and affect economic decisions. In a four-week experiment with 2,384 US adults, offering free access to a popular mindfulness meditation app that costs \$13 per month improves mental health, productivity and decision-making. First, it causes a 0.44 standard deviation reduction in symptoms of stress, anxiety, and depression, comparable to the impacts of expensive in-person therapy, with improvements even among participants with minimal or mild symptoms at baseline. Second, it increases earnings on a proofreading task by 1.9 percent. Third, it makes decision-making more stable across emotional states, reducing the interference of personal worries with risk choices. Overall, our results demonstrate the potential of affordable mindfulness meditation apps to improve mental health, productivity, and the impact of emotions on economic decisions.

The second chapter revisits two clinical trials that randomized depressed adults in India (n=775) to a brief course of psychotherapy or a control condition. Four to five years later, the treatment group was 11 percentage points less likely to be depressed than the control group. The more effective intervention averted 9 months of depression on average over five years and cost only \$66 per recipient. Therapy changed people's beliefs about themselves in three ways. First, it reduced their likelihood of seeing themselves as a failure or feeling bad about themselves. Second, when faced with a novel work opportunity, therapy reduced over-optimistic belief updating in response to feedback and thus reduced overconfidence. Third, it increased self-assessed levels of patience and altruism. Therapy did not increase levels of employment or consumption, possibly because of other constraints on employment in the largely female study sample.

The third chapter studies public beliefs in times of crises, and the role of governments' early recommendations about issues that remain uncertain. Do their early positions affect how much people believe the latest recommendations? We investigate this question using an incentivized online experiment with 1,900 US respondents in early April 2020. We present all participants with the latest CDC projection about coronavirus death counts. We randomize exposure to information that highlights how President Trump previously downplayed the coronavirus threat. When the President's inconsistency is salient, participants are less likely to revise their prior beliefs about death counts from the projection. They also report lower trust in the government. These results align with a simple model of signal extraction from government communication, and have implications for the design of changing guidelines in other settings.