Behavioral Economics in the Real World

Here’s an interesting discussion on MSNBC regarding behavioral economics and perceptions related to their tax refunds for 2018.

Basically, the anchor and his technology correspondent both support and acknowledge that most people saved a ton of money by paying lower taxes. But because the amount withheld shrank – meaning people got to keep more of their money – refunds are smaller. And some people are outraged.

Believe it or not, I actually sympathize with many of these folks, because they tend to be low income, less likely to use banks for anything other than check cashing, and they probably didn’t get a good financial education… actually do schools even teach this subject.

At any rate, if you ever wanted to see classic behavioral economics in real time, this is it.

And for what it’s worth, behavioral economics is a key pillar in our market timing model. I’ll have more on that in the near future.

Leave a Reply

Your email address will not be published. Required fields are marked *