ECONOMIC COSTS OF POPULAR BELIEFS: Experimental evidence from pregnant women in Israel

15 Apr 2019

More than a third of pregnant women offered a free gift of baby furniture worth more than £600 turned it down because of the popular belief that it might bring bad luck. The tendency to avoid the furniture was strongest among women in the second half of pregnancy, which is consistent with evidence that mother’s anxiety grows throughout their pregnancies.

These are among the findings of research on the economic impact of superstitious beliefs by Ya'akov Bayer, Bradley Ruffle, Zeev Shtudiner and Ro'i Zultan, to be presented at the Royal Economic Society's annual conference at the University of Warwick in April 2019.

Popular beliefs, rituals and magical practices are central to many cultures. These beliefs are sometimes called ‘superstitions’, stemming from the view that they are irrational, unfounded or vague beliefs. A prevalent popular belief in Israel is that a baby’s room should remain unfurnished until after the baby is born.

Using a unique sample of 434 pregnant women at various stages of pregnancy, the researchers designed an experiment that quantified the extent to which each pregnant participant maintains this belief.

The women chose between a sequence of pairs of options. One constant option is the immediate receipt of baby furniture (gift certificate). The other option in each pair is an ever-increasing cash payment. In the first pair, the cash payment is zero. Thus, it was possible to anticipate that all but the most superstitious participants will prefer the furniture.

Of the respondents, 35% preferred to forgo the grand prize even for a zero payment. In other words, when faced with the choice of receiving the baby furniture worth 3,000 shekels (more than £600) and being paid nothing at all, these subjects chose the latter.

From an economic standpoint, this choice is irrational. Even if they value the baby furniture below its retail value of 3,000 shekels, they ought to attribute some positive value to it, if nothing else to sell it or give it away as gift. Assigning zero value to the furniture attests to their desire to avoid receiving it because they view its receipt negatively.

The degree of faith in popular beliefs predicts the economic decisions of pregnant women in the experiment. Specifically, pregnant women who are inclined to accept popular beliefs forgo the receipt of baby furniture for miniscule monetary amounts, far below the value of the furniture.

The tendency to avoid the furniture, namely, to avoid tempting fate is strongest in the second half of pregnancy. This result is consistent with the observation that anxiety continues to increase throughout pregnancy.

This increase may be attributed to the approaching date of delivery as anxiety over childbirth may include several aspects: labour that will be accompanied by intolerable pain; doubts about the competence of the hospital staff to provide adequate support during delivery; and fears about survival.

This research contributes to a body of evidence acknowledging cultural constraints on markets. The researchers demonstrate that people may view certain transactions as repugnant because of popular beliefs.

Fully 35% of their participants prefer zero cash payment over the receipt of the baby furniture. As with other instances of repugnance, economists, social scientists and policy-makers need to be aware of the constraints that popular beliefs place on markets.

‘Costly superstitious beliefs: Experimental evidence’ by Ya'akov Bayer, Bradley Ruffle, Zeev Shtudiner and Ro'i Zultan