Projection Bias in Catalog Orders

S-Tier
Journal: American Economic Review
Year: 2007
Volume: 97
Issue: 4
Pages: 1217-1249

Score contribution per author:

2.681 = (α=2.01 / 3 authors) × 4.0x S-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

Evidence suggests that people understand qualitatively how tastes change over time, but underestimate the magnitudes. This evidence is limited, however, to laboratory evidence or surveys of reported happiness. We test for such projection bias in field data. Using data on catalog orders of cold-weather items, we find evidence of projection bias over the weather—specifically, people's decisions are overinfluenced by the current weather. Our estimates suggest that if the order-date temperature declines by 30°F, the return probability increases by 3.95 percent. We also estimate a structural model to measure the magnitude of the bias. (JEL D12, L81)

Technical Details

RePEc Handle
repec:aea:aecrev:v:97:y:2007:i:4:p:1217-1249
Journal Field
General
Author Count
3
Added to Database
2026-01-25