Education can help improve decision-making ability, says study
Washington DC: Turns out, getting proper education can enhance a person's decision-making ability.
A new study led by Hyuncheol Bryant Kim, of Cornell University, found that education can be leveraged to help enhance an individual's economic decision-making quality or economic rationality.
Kim said, "Using a randomized controlled trial of education support and laboratory experiments that mimic real-life examples, we established causal evidence that an educational intervention increases not only educational outcomes but also economic rationality in terms of measuring how consistently people make decisions to seek their economic goals."
Kim and his colleagues examined this hypothesis through a controlled trial of education support in Malawi, arranged by a nongovernmental organization, which provided financial support for education in a sample of nearly 3,000 female ninth and 10th graders.
"We found that those who took part in the education intervention had higher scores of economic rationality, suggesting that education is a tool for enhancing an individual's economic decision-making quality," added Kim.
Traditional economic analysis assumes that humans make rational choices. However, mounting evidence shows that people tend to make systematic errors in judgment and decision-making and that there is a high level of diversity in how rational individuals are.
Kim also pointed out that most other research on improving the quality of decision-making targets the reduction of decision biases. For example, behavioural economists have urged policymakers to intervene in markets and restructure choice environments, the way that a decision is presented, without restraining people's freedom of choice.
"We take a different stand: proper policy tools can enhance general capabilities of decision making," Kim said. "Education can better equip people for high-quality decision-making for their lives."
The study is present in the journal- Science.