Research Corner
Research Corner
Climate Change, Univeristy Choices, and Financial Literacy
Research Corner is a new series developed by the Economics with Dr. A team.
Our goal is to help increase awareness of the diverse questions economists ask, and the areas in which future economists can contribute. Economics is a broad field with diverse interests. Sign up to our newsletter to receive these updates.
Adaptation to climate change: Air-conditioning and the role of remittances
Can remittances help households adapt to global warming? That's the question explored in a recent study focusing on households in Mexico, a country that receives a significant amount of remittances regularly. The researchers used a unique approach to find some fascinating insights.
They discovered that remittances play a crucial role in helping households adapt to the changing climate. Specifically, many households use remittances to invest in air-conditioning, a vital tool for combating high temperatures and maintaining comfort at home during extreme weather.
The study also uncovered interesting variations based on location and income levels. There are significant differences in how remittances are used for climate adaptation between coastal and inland regions, as well as among different income groups.
Adopting air-conditioning systems has a positive impact on households' overall welfare. This research highlights the important role remittances can play in assisting households in coping with global warming challenges and the significance of technologies like air-conditioning in creating a more comfortable living environment during extreme weather conditions.
Preferred field of study and academic performance
In this study, researchers explore how studying their first-choice university subject affects students' decisions to stay or switch fields of study in Germany. They collected detailed survey data and used a special method called instrumental variable strategy, focusing on differences in the availability of fields of study in different regions.
The results revealed that students who didn't get into their preferred field of study were more likely to switch to a different subject, delay graduation, or even drop out of university altogether. This effect was especially significant for students from lower socio-economic backgrounds, and it appears to be linked to decreased effort and motivation.
The findings shed light on the importance of getting into the right university subject and how it can impact a student's academic journey. For those who don't initially get their desired field of study, it's essential to consider the potential challenges they might face and offer support to help them stay on track and motivated towards their educational goals.
Racial differences in the returns to financial literacy education
In our study, we looked into the level of financial literacy and the impact of financial education, with a particular focus on the racial financial literacy gap. What we found is that, on average, white individuals tend to have higher financial literacy scores compared to minorities. Additionally, we observed that financial literacy increases when people participate in financial education programs.
However, there's an important finding we want to highlight: the benefit of participating in financial education programs is greater for white individuals than it is for minorities. This means that even with financial literacy education, there's still a persistent difference in financial literacy and behavior between white individuals and minorities.
These results have important implications for policymakers who are interested in reducing the racial wealth gap through financial literacy education. It's clear that more targeted efforts are needed to ensure that financial education programs are equally effective for everyone, regardless of their racial background. By addressing this disparity, we can take a step closer to creating a more equitable financial landscape for all individuals, regardless of their race or ethnicity.