Habit Formation Research Papers - Academia.edu (original) (raw)

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- Psychology, Behavior Modification, Autism, Autism Spectrum Disorders

To investigate the process of habit formation in everyday life, 96 volunteers chose an eating, drinking or activity behaviour to carry out daily in the same context (for example ‘after breakfast’) for 12 weeks. They completed the self-report habit index (SRHI) each day and recorded whether they carried out the behaviour. The majority (82) of participants provided sufficient data for analysis, and increases in automaticity (calculated with a sub-set of SRHI items) were examined over the study period. Nonlinear regressions fitted an asymptotic curve to each individual's automaticity scores over the 84 days. The model fitted for 62 individuals, of whom 39 showed a good fit. Performing the behaviour more consistently was associated with better model fit. The time it took participants to reach 95% of their asymptote of automaticity ranged from 18 to 254 days; indicating considerable variation in how long it takes people to reach their limit of automaticity and highlighting that it can take a very long time. Missing one opportunity to perform the behaviour did not materially affect the habit formation process. With repetition of a behaviour in a consistent context, automaticity increases following an asymptotic curve which can be modelled at the individual level. Copyright © 2009 John Wiley & Sons, Ltd.

- by Henry Potts
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- Sociology, Psychology, Cognitive Science, Behavior

Three field experiments were conducted to test the hypothesis that complex social behavior that appears to be enacted mindfully instead may be performed without conscious attention to relevant semantics. Subjects in compliance paradigms received communications that either were or were not semantically sensible, were or were not structurally consistent with their previous experience, and did or did not request an effortful response. It was hypothesized that unless the communication occasioned an effortful response or was structurally (rather than semantically) novel, responding that suggests ignorance of relevant information would occur. The predictions were confirmed for both oral and written communications. Social psychological theories that rely on humans actively processing incoming information are questioned in light of these results.

- by Arthur Blank
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- Marketing, Psychology, Cognitive Science, Personality

The present model outlines the mechanisms underlying habitual control of responding and the ways in which habits interface with goals. Habits emerge from the gradual learning of associations between responses and the features of performance contexts that have historically covaried with them (e.g., physical settings, preceding actions). Once a habit is formed, perception of contexts triggers the associated response without a mediating goal. Nonetheless, habits interface with goals. Constraining this interface, habit associations accrue slowly and do not shift appreciably with current goal states or infrequent counterhabitual responses. Given these constraints, goals can (a) direct habits by motivating repetition that leads to habit formation and by promoting exposure to cues that trigger habits, (b) be inferred from habits, and (c) interact with habits in ways that preserve the learned habit associations. Finally, the authors outline the implications of the model for habit change, especially for the selfregulation of habit cuing.

- by Ger man
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- Psychology, Cognitive Science, Motivation, Automatism

This book articulates a theory of learning based on learning research and translates that theory into a model of classroom instruction. This model is based on the assumption that the process of learning involves the interaction of five types, or dimensions of thinking, which are loose metaphors for the way the mind works during learning. These dimensions are: (1) developing positive attitudes and perceptions about learning; (2) acquiring and integrating knowledge; (3) extending and refining knowledge; (4) using knowledge meaningfully; and (5) developing productive habits of mind. The first six of the book's seven chapters describe ways for classroom teachers to foster these dimensions of learning in their students; offer suggestions for planning instruction that addresses each dimension of learning; and discuss topics with practical relevance to each dimension of learning. The final chapter proposes three models for integrating the five dimensions in classroom instruction and discusses the assessment of instructional methods that are based on the dimensions of learning. A reference list of arproximately 230 items is provided. (BC)

- by Robert Marzano
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- Instructional Design, Learning theories, Habit Formation, Teaching Methods

In the light of repeated rejections of the version of the life cycle-permanent income hypothesis and other empirical puzzles, the habit formation hypothesis has increased in popularity since the 1980s. However, existing formulations of habit persistence do not always perform well empirically. This paper pursues two objectives: (i) to outline the habit persistence hypothesis, and (ii) to review the theory of addiction with a focus on issues of relevance to the theory of consumption. In the literature on addiction, two research traditions are discernible: rational addiction and myopic addiction. The former approach emphasises forward-looking behaviour and defines memory loss as a univariate process. The latter relies on multiple objectives and highlights the role of contractual behaviour. The paper argues that future research in consumption with habits ought to pay more attention to non-separabilities, allow for multivariate processes when modelling memory loss and consider rational habit modification.

- by George Messinis
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- Econometrics, Consumption, Applied Economics, Habit Formation

This paper estimates a small open economy Dynamic Stochastic General Equilibrium (DSGE) model for Pakistan using Bayesian simulation approach. Model setup is based on new Keynesian framework, characterized by nominal rigidity in prices with habit formation in household's consumption. The core objective is to study whether an estimated small open economy DSGE model provides a realistic behavior about the structure Pakistan economy with fully articulated description of the monetary policy transmission mechanism vis-à-vis domestic firm's price setting behavior. To do so, we analyze the impulse responses of key macro variables; domestic inflation, imported inflation, output, consumption, interest rate, exchange rate, term of trade to different structural/exogenous shocks. From several interesting results, few are; (a) high inflation in Pakistan do not hit domestic consumption significantly; (b) Central bank of Pakistan responds to high inflation by increasing the policy rate by 100 to 200 bps; (c) exchange rate appreciates in both the cases of high domestic and imported inflation; (d) tight monetary policy stance helps to curb domestic inflation as well as imported inflation but appreciates exchange rate significantly (f) pass through of exchange rate to domestic inflation is very low; finally parameter value of domestic price stickiness shows that around 24 percent domestic firms do not re-optimize their prices which implies averaged price contract is about two quarters. JEL Classifications: E32, E47, E52, F37, F47 for their support, guidance and helpful discussions.

- by Safdar Khan
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- Applied Economics, Monetary Policy, Habit Formation, Impulse response
- by Paul J Crittenden
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- Moral Development, Habit Formation, Behavior change, Philosophy Education

Trichotillomania is an impulse control disorder not so commonly encountered in psychiatric clinical practice. Usually patients visit to dermatologists for hair loss and subsequently being referred to psychiatrists. It is characterized by impulsive hair pulling leading to hair loss. It may follow biting the hairs and even swallowing of hairs leading to adverse sequel like trichobezoars. In the treatment of trichotillomania, selective serotonin reuptake inhibitors (SSRI), behaviour therapy and cognitive behaviour therapy are found to be effective. Among the behavioural techniques, Habit Reversal Therapy (HRT) is being proved to be highly effective. HRT is commonly tried in adult populations in comparison to paediatric population. Among the SSRIs, fluoxetine and paroxetine are commonly used. In this case report, unique combination of habit reversal therapy with Escitalopram was tried in an adolescent girl with trichotillomania which was found to be highly effective.

- by Sujit Kar
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- Behavior Modification, Case Studies, Self Control, Habit Formation
- by ginti man
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- Social Change, Socialization, Division of labor, Educational Philosophy

Video game play research and recent statistics reveal that 155 million players in America alone contribute to the 23 billion dollar industry; worldwide, it is a 71 billion dollar industry. Behavioral change theory has been intertwined with apps and games, building on players’ emotions with the game environment. The new, albeit limited, literature demonstrates the positive effect that electronic games have facilitating behavioral change. Medical research also correlates game use to improve patients’ health outcomes. This research project builds on the existing research to examine a conceptual prototype of a serious game with behavioral change knowledge in its design. The researcher takes a human centered design approach to ask, how can the game mechanics communicate to the player for behavior change?
This thesis research designed a conceptual prototype connecting habit formation with fantasy JRPG battle system for players to setup their own habit formation that would connect the virtual world with the real world. Testing of the conceptual prototype reveals general interest and a diverse range of applications. Further design and research is needed to fully complete this model within a complete video game. And findings support of the future development.

- by Spencer Kay Raymond
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- Serious Games, Game Design, Virtual Worlds, Habit Formation

Although a significant number of empirical studies provide evidence of sequencing in drug use, economic theory remains focused on addiction to a single substance. This paper presents a general model of substance use that allows for the possibility of multi-commodity habit formation and can be used to analyze the intertemporal relationship between the consumption of legal and illicit drugs, or the gateway effect. A simple two drug model is analyzed and conditions for the existence of multicommodity habit formation are examined. It is found in the case of multi-commodity habit formation that the marginal utility of initiating a new drug is higher when there is prior consumption of the other drug. Further, it is found that the individual will initiate drug consumption with that drug that has the lowest marginal cost. The particular sequencing of drug use that is observed in empirical data is explained by differences in the marginal cost of consuming legal and illegal drugs.

- by Rosalie Pacula
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- Economics, Health Economics, Economic Theory, Drug Use

Area da ANPEC:Área 09 -Microeconomia, Métodos Quatitativos e Finanças.

- by Vladimir K. Teles and +1
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- General Equilibrium, Crime and punishment, Habit Formation

Evolution of consumers' preferences has been recognized by many scholars as being key to understanding technological change. However, mainstream economics cannot account for the seemingly irrational be-havior of consumers based on... more

- by Abraham Garcia
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- Economics, Consumer Behavior, Technological change, Habit Formation

| Many organisms, especially humans, are characterized by their capacity for intentional, goal-directed actions. However, similar behaviours often proceed automatically, as habitual responses to antecedent stimuli. How are goal-directed actions transformed into habitual responses? Recent work combining modern behavioural assays and neurobiological analysis of the basal ganglia has begun to yield insights into the neural basis of habit formation.

- by Barbara Knowlton
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- Cognitive Science, Animal Behavior, Behavior, Habit Formation

In this paper, we explore the determinants of one aspect of religious behaviour -church attendanceat the individual level using British data derived from the National Child Development Study (NCDS). To be specific, we focus on the relationship between education and church attendance, which has attracted some attention in the existing literature. In contrast to the previous literature in this area, our data allows us to explore the dynamic dimension to religious activity since the NCDS provides information on church attendance at three stages of an individual's life cycle. The findings from our cross-section and panel data analysis, which treats education as an endogenous variable, support a positive association between education and church attendance. In addition, our findings suggest that current participation in religious activities is positively associated with past religious activities. Furthermore, our findings suggest that levels of religious activity tend to vary less over time suggesting that factors such as habit formation may be important.

- by Karl Taylor
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- Human Capital, Applied Economics, Panel Data, Habit Formation

This paper compares the dynamics of two general equilibrium models of endogenous growth in which agents have \comparison utility." In the \inward-looking" economy, individuals care about how their consumption in the current period compares to their own consumption in the past (one way to describe this is \habit-formation" in consumption). In the \outwardlooking" economy, individuals care about how their own level of consumption compares with others' consumption. While steady state growth rates are identical in the two economies, transition paths dier. For example, consider the eect of negative shock to capital. In an endogenous growth model with standard preferences, there will be no eect on the saving rate or the growth rate of output. In both of the models that we consider, however, saving and growth will temporarily fall in response to the shock. The initial decline in saving and growth will belarger in the inward-looking case. However, since agents in the outward-looking case do not take i n to account the externality eect of their consumption, higher growth in this case will lead to lower utility than in the inward-looking case. 1 Inward-looking utility more frequently goes by the name \habit formation." We use the former designation to maintain parallelism. Outward-looking utility i s sometimes called \interdependent preferences," \external habit formation," \Keeping up with the Joneses," or \the Relative Income Hypothesis." The general class of utility that we call \comparison utility" is also called \endogenous utility." See Pollak (1978) and Kapteyn, Wansbeek and Buyze (1980) for surverys of previous literature in this area.

- by David Weil
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- Economic Growth, Applied Economics, Developing Country, Habit Formation

This paper generalizes the standard habit formation model to an environment in which agents form habits over individual varieties of goods as opposed to over a composite consumption good. We refer to this preference specification as 'deep habit formation.' Under deep habits, the demand function faced by individual producers depends on past sales. This feature is typically assumed ad-hoc in customer market and brand switching cost models. A central result of the paper is that deep habits give rise to countercyclical markups, which is in line with the empirical evidence. This result is important because ad-hoc formulations of customer-market and switching-cost models have been criticized for implying procyclical and hence counterfactual markup movements. Under deep habits, consumption and wages respond procyclically to government spending shocks. The paper provides econometric estimates of the parameters pertaining to the deep habit model. JEL Classification: D10, D12, D42, E30.

- by Morten Ravn
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- Economics, Habit Formation, Business Cycle, Empirical evidence

Potential foraging and social traditions have been identified in groups of wild capuchin monkeys (Cebus spp.). Verification of traditions requires documentation that socially mediated learning contributes to acquisition by new practitioners. We investigated the emergence and maintenance of a foraging tradition in two generations of infant tufted capuchins (Cebus apella) in captive social groups. In baseline, we provided the first cohort of infants with a foraging apparatus that dispensed juice via two methods inside a small enclosure away from adult interference (the crèche). Later in phase 1, we provided a second apparatus to all group members with only one method of solution available (in the group setting); the crèche apparatus, with both methods available, remained accessible to infants only. Two years later (phase 2), we replicated phase 1 with a new cohort of infants from the same social groups. As adult activity and expertise with the apparatus increased across baseline (no adult activity), phase 1 (initially unskilled) and phase 2 (initially skilled), the proportion of infants in each cohort that acquired the foraging skill increased and their latency to skill acquisition decreased. Despite ambiguous evidence that the infants conformed to the specific method of solution common in their group, the social context clearly contributed to the development and maintenance of a general foraging tradition. The results provide support for the existence of traditions in wild capuchin groups.

- by Dorothy Fragaszy
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- Skill Acquisition, Animal Behaviour, Biological Sciences, Habit Formation

This dissertation benefitted from many individuals' contributions along the way. I would like to express my deep appreciation and gratitude to those who inspired and helped me through this long process. First of all, I wish to thank my advisor Dr. Cem Karayalcin for his support and guidance throughout the Ph.D. program. He has spent a lot of time discussing research with me and going over the ideas. I am proud to call him my advisor.

- by Amr Hosny
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- Economic Growth, Social Insurance, Fiscal policy, Stock Market

Extending existing theory in social and environmental psychology, we develop a model to study important predictors of water consumption behavior. Overall results provide support for the predictive ability of stimuli (e.g., environmental awareness), reasoned processes (e.g., personal involvement), unreasoned processes (e.g., habits), and situational factors (e.g., income) on water consumption behavior. Findings indicate that households with lower water usage display greater awareness of water conservation issues, are more highly involved in the decision to use water, and tend to form habits associated with lower usage levels. Furthermore, the results are consistent with past research that attitudes toward water usage appear to be poor predictors of water consumption behavior. After controlling for situational factors (e.g., household size), the findings substantiate the role of personal involvement and habit formation in explaining water consumption, lending further support to the adaptation and development of repeated behavior models in environmental psychology.

- by Gary Gregory
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- Marketing, Psychology, Cognitive Science, Environmental Psychology

- by jacob abudu
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- Psychology, Cognitive Science, Motivation, Automatism

This paper introduces a new class of nonaffine models of the term structure of interest rates that is supported by an economy with habit formation. Distinguishing features of the model are that the interest rate dynamics are nonlinear, interest rates depend on lagged monetary and consumption shocks, and the price of risk is not a constant multiple of interest rate volatility. We find that habit persistence can help reproduce the nonlinearity of the spot rate process, the documented deviations from the expectations hypothesis, the persistence of the conditional volatility of interest rates, and the lead-lag relationship between interest rates and monetary aggregates.

- by Alexei Jiltsov
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- Habit Formation, Interest Rate, Term Structure, Conditional Volatility

The purpose of this paper is to test for the presence of habit formation in consumption decisions using household panel data. We apply the test proposed by to a Spanish panel data set in which households are observed for up to eight consecutive quarters. This temporal dimension is crucial, because it allows us to take into account time invariant unobserved heterogeneity across households ('fixed effects') and, therefore, to investigate whether the relationship between current and past consumption reflects habits or heterogeneity. Our results confirm the importance of accounting for fixed effects when ana lysing intertemporal consumption decisions allowing for time non separabilities.

- by David Lopez
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- Economics, Panel Data, Habit Formation, Economic

Deterministic lifestyling (the gradual switch from equities to bonds according to preset rules) is a popular asset allocation strategy during the accumulation phase of defined contribution pension plans and is designed to protect the pension fund from a catastrophic fall in the stock market just prior to retirement. We show that this strategy, although easy to understand and implement, can be highly suboptimal, since it does not take into account either the degree of risk aversion or the correlation over time between the plan member's salary and the stock market. It is dominated by a dynamic asset allocation strategy, which we call stochastic lifestyling, that does take these factors into account. It is even dominated by a static asset allocation strategy taking these factors into account.

- by Kevin Dowd
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- Economic Theory, Asset Allocation, Applied Economics, Stock Market

This paper compares two approaches towards the empirical inertia of inflation and output. Two variants that produce persistence are added to a baseline DSGE model of sticky prices: 1) sticky information applied to firms, workers, and households; and 2) a backward-looking inflation indexation along with habit formation. The rival models are then estimated using U.S. data in order to determine their plausibility. It is shown that the sticky information model is better at predicting inflation, wage inflation, and the degree of price stickiness. Output dynamics, however, are better explained by habit persistence.

- by julio carrillo
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- Habit Formation, DSGE Model, Indexation, Price Stickiness

In an earlier paper, 'Peter Geach on nonsense, confusion and sin' 1 , I suggested that what one can say in explanation of one's own actions suffers from a severe limitation: one can shed little light on the question why one acted on one's reasons for an action rather than on one's reasons against that action. In this paper I want to explore this suggestion further. One of my tasks will be to distinguish my question from three standard philosophical questions that have tended to overshadow it: the question of freewill and determinism; that of the relation between fact and value; and that of the possibility of weakness of will. On these I shall, on the whole, maintain a studied agnosticism.

- by ian dearden
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- Ethics, Philosophy of Agency, Meta-Ethics, Self and Identity

We introduce a specification of habit formation featuring non-separability between consumption and leisure into an otherwise standard New Keynesian model. The model can be estimated with standard Bayesian techniques and the bond pricing implications are evaluated using higher-order approximations. The model is able to reproduce a sizeable risk premium on long-term bonds and the cyclicality of fiscal policy has an impact on the bond premium that is quantitatively important. Technology, government spending, and mark-up shocks are the main drivers of the time-variation in bond premia.

- by Juha Kilponen
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- Monetary Policy, Habit Formation, DSGE Model, Risk Premia

In this paper I will investigate whether the struggle of behavioral change can be enhanced with the entertaining and engaging benefits of video game playing. Can behavioral change decision making be applied to video game decision making and still be entertainment, but help people align their ideal self with actual self through instant feedback and other benefits of video games? To answer this question, I will first explore the complexities of decisions in video games and assess whether they overlap or are similar to behavioral change decision making. Then I will switch to looking at behavioral change decision making processes and assess if video game decision making mechanics can be overlaid. By looking at each in its own right and aligning the other, this will reduce missing opportunities for design. Each topic needs to strengthen the benefits of the other for a positive design outcome.

- by Spencer Kay Raymond
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- Design, Habit Formation, Game Mechanics, Behavioral Change

In this paper, Canadian meat consumption patterns are analyzed using a dynamic version of the almost ideal demand system (AIDS). Structural change in the demand for meats is examined by testing for non-constancy of the parameters of the non-linear system. It is concluded that Canadian meat consumption patterns can be explained by a combination of habit persistence as well as changes in prices, consumer expenditures and tastes. Incorporating the dynamic element of a habit effect in the AIDS model improves the consistency between demand theory and the observed data. The hypothesis of structural change in demand during the late 1970s cannot be rejected. The detected structural shift is related to the intercept terms of the expenditure share equations, suggesting changes in taste in the demand for different meats. Consumption expenditures have shifted from beef to chicken but remained stable for pork; a 6% decline in the expenditure share of beef and a 33% increase in the expenditure share of chicken seem to have been due to this structural shift.

- by Michele Veeman
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- Applied Economics, Habit Formation, Structural Change, Almost Ideal Demand System

In many ways, the modern market for food exemplifies the economist's conception of perfect competition, with many buyers, many sellers, and a robust and dynamic marketplace. But over the course of the last century, the U.S. has witnessed a dramatic shift away from traditional diets and toward a diet comprised primarily of processed brand-name foods with deleterious long-term health effects. This, in turn, has generated increasingly urgent calls for policy interventions aimed at improving the quality of the American diet. In this paper, we examine the question of whether the current state of affairs represents a market failure, and-if so-what might be done about it. We review evidence that most of the nutritional deficiencies associated with today's processed foods were unknown to nutrition science at the time these products were introduced, promoted, and adopted by American consumers. Today more is known about the nutritional implications of various processing technologies, but a number of forces-including consumer habits, costly information, and the market power associated with existing brands-are working in concert to maintain the status quo. We argue that while the current brand-based industrial food system (developed historically as a means of preventing competition from small-scale producers) may have its advantages, the time may have come to consider expanding the system of quality grading employed in commodity markets into the retail market for food. Date revised2 Preliminary draft. Questions, comments, and suggestions are very welcome.

- by Hayley Chouinard and +1
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- Habit Formation, Perfect Competition, Market Failure, Market Power
- by Elena Pisano
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- Asset Allocation, Social Security, Wealth Distribution, Income inequality

We use a log-normal framework to examine the effect of preferences on the market price for risk, that is, the Sharpe ratio. In our framework, the Sharpe ratio can be calculated directly from the elasticity of the stochastic discount factor with respect to consumption innovations as well as the volatility of consumption innovations. This can be understood as an analytical shortcut to the calculation of the Hansen-Jagannathan volatility bounds, and therefore provides a convenient tool for theorists searching for models capable of explaining asset-pricing facts. To illustrate the usefulness of our approach, we examine several popular preference specifications, such as CRRA, various types of habit formation, and the recursive preferences of Epstein-Zin-Weil. Furthermore, we show how the models with idiosyncratic consumption shocks can be studied.

- by Martin Lettau and +1
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- Economic Theory, Habit Formation, Sharpe Ratio, Equity Premium

Recent papers have drawn a contrast between habits of mind in science and religion and it has been argued that, because of the different nature of these habits of mind, science education and religious education are necessarily in conflict with each other. The present paper draws on research into habits of mind in science and their relationship with wider scholarly activity and decision making and presents a case that habits of mind in science and religion are much more alike than has been presumed. In contrast to the dogmatic materialism which others have claimed lies behind the practice of modern science a more tentative form of naturalism is advocated in this paper for those who carry out scientific research. Some aspects of the nature of exemplary religious education are pointed out and implications for science education are discussed.

- by Colin Gauld
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- Religion, Philosophy, Science Education, Religious Education

Yes. I aim to establish empirically that the "equity premium" puzzle, with its 6% excess return per annum over Treasury bills for the last 100 years on the NYSE, can be explained once the value of endogenous stock market trading is incorporated into investor preferences. Within my framework, investors enjoy trading. According to my model, the "investor surplus" from trading liquid Treasury bills relative to illiquid equity is exactly compensated for by the expected equity premium. Observed transaction cost and liquidity differentials between equity and bills are consistent with the premium. Extensive tests are carried out on Australian and US NYSE data for 1955-98. The puzzle concerning the volatility of the stochastic discount factor also appears to be explained by trading behavior, which is of comparable volatility. Reasonably accurate estimates of transactions costs are extracted just from daily dividend yields and turnover.

- by Peter Swan
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- Habit Formation, Equity Premium, Equity Premium Puzzle, Transaction Cost
- by Hafedh Bouakez
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- Monetary Economics, Economic Theory, Applied Economics, Monetary Policy

We analyze how the presence of endogenous preferences affects the altruistic bequest motive from parents to children. We will show that the existence of habits raises the threshold value of the intergenerational discount factor above which altruistic bequests are positive, while aspiration formation could push this value down. Therefore, the dynamic inefficiency of the economy with no altruism is not sufficient to prevent the bequest motive from being operative under aspiration formation. We also discuss the implications of public debt when the bequest motive is inoperative and preferences exhibit habit and aspiration formation.

- by Jordi Caballe
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- Economics, Habit Formation, Public Debt, Standard of Living

This paper studies the extent of the error that is made in standard con- tingent claim analysis, which underlies modern asset pricing theories and real option theory within a two-period general equilibrium model with incomplete markets. It is well-known that in mean-variance, or CARA-normal economies the introduction of new assets leaves the prices of existing assets, relative to the bond, unchanged. Simulations show that contingent claim valuation remains a good predictor of a new asset's equilibrium price in CRRA-lognormal economies with habit formation. Present value, however, performs badly. Equilibria are computed via a difierentially implementable homotopy.

- by Jacco Thijssen
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- General Equilibrium, Habit Formation, Net Present Value, Real options theory

Tourette's syndrome is characterized by simple, involuntary muscle contractions and/or more complex movements or stereotyped behaviors, including vocalizations. There are strong indications that the basal ganglia play an important role in the pathophysiology of Tourette's syndrome. The present account reviews the functional anatomy of the basal ganglia, with an emphasis on the prefrontal cortex-ventral striatopallidal system. Different parts of the basal ganglia and thalamocortical system, with a focus on the premotor and prefrontal cortices, are connected with each other via parallel, functionally segregated basal ganglia-thalamocortical systems. These parallel circuits, representing sensorimotor, cognitive and emotional-motivational behavioral processes, are connected with each other through specific pathways that serve to integrate these various functions. In the context of the discussion on the pathophysiological mechanisms that lead to the expression of tics, emphasis is placed on the pathways that lead from the ventral striatum via the dopaminergic substantia nigra to the dorsal striatum. The dorsal striatum is crucial for habit formation. A conclusion of this overview of the anatomical organization of the basal ganglia is that via dopaminergic pathways limbic-relation information can influence the expression of (fragments of) motor and behavioral repertoires. Whether such mechanisms indeed play a role in the expression of tics in Tourette's syndrome remains to be established.

- by Henk Groenewegen and +1
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- Prefrontal Cortex, Brain development, Dopamine, Brain

This paper presents estimates for the consumption Euler equation for Russia. The estimation is based on micro-level panel data and accounts for the preference heterogeneity, measurement errors, and the impact of macroeconomic shocks. The presence of multiplicative habits is checked with the LM-test in a GMM framework. We obtain estimates of the elasticity of intertemporal substitution and of the subjective discount factor, which are consistent with the theoretical model and can be used for calibration, as well as for a Bayesian estimation of DSGE models for the Russian economy. We also show that the effects of habit formation are not significant. The hypotheses on habits (external, internal, and both external and internal) are not supported by the data.

- by Irina Khvostova
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- Habit Formation, Euler Equation

This Working Paper should not be reported as representing the views of the IMF. The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate. While models based on Friedman's (1957) permanent-income hypothesis can provide oilproducing countries with long-run fiscal targets, they usually abstract from short-run costs associated with consolidation. This paper proposes a model that takes such adjustment costs (or "habits") into account. Further operational realism is added by permitting differential interest rates on sovereign debt and financial assets. The approach is applied to Gabon, where oil reserves are expected to be exhausted in 30 years. The results suggest that Gabon's current fiscal-policy stance cannot be maintained, while the presence of habits justifies smoothing the bulk of the adjustment toward the sustainable level over three to five years.

- by Jan-Peter Olters
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- Fiscal policy, Sovereign Debt, Habit Formation, Economic Model

Habits are situated inconsistently across performance theorists’ taxonomies of ritual, play and performance. Below I briefly outline a selection of references to habit within the theories of Richard Schechner, Roy Rappaport, John L. Lewis, Ian Maxwell and Victor Turner with the aim of supplementing and contrasting them with habit formation research from neuroscience.

- by Ripley Stark
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- Ritual Theory, Habit Formation
- by Gerry Stahl
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- Genetics, Cultural Studies, Cognitive Science, Set Theory
- by Paulo Brito
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- Cultural Economics, Applied Economics, Habit Formation, Consumer Behaviour

In a recent paper, Chang, Gomes, and Schorfheide (American Economic Review 2002, p. 1498-1520 extend the standard real business cycle (RBC) model to allow for a learning-bydoing (LBD) mechanism whereby current labor supply affects future productivity. They show that this feature magnifies the propagation of shocks and improves the matching performance of the standard RBC model. In this paper, we show that the LBD model is nearly observationally equivalent to an RBC model with habit formation in labor (or, equivalently, in leisure). Under the same calibration of the parameters, the two models share the same equilibrium paths of output, consumption, and investment, but have different implications for hours worked. Using Bayesian techniques, we investigate which of the LBD and Habit models fits the U.S. data better. Our results suggest that the Habit specification is more strongly supported by the data.

- by Hafedh Bouakez
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- Economics, Bayesian Analysis, Habit Formation, Learning by doing

We suggest an iterated GMM approach to estimate and test the consumption based habit persistence model of Campbell and Cochrane (1999), and we apply the approach on annual and quarterly Danish stock and bond returns. For comparative purposes we also estimate and test the standard CRRA model. In addition, we compare the pricing errors of the different models using Hansen and Jagannathan's (1997) specification error measure. The main result is that for Denmark the Campbell-Cochrane model does not seem to perform markedly better than the CRRA model. For the long annual sample period covering more than 80 years there is absolutely no evidence of superior performance of the Campbell-Cochrane model. For the shorter and more recent quarterly data over a 20-30 year period, there is some evidence of counter-cyclical time-variation in the degree of risk-aversion, in accordance with the Campbell-Cochrane model, but the model does not produce lower pricing errors or more plausible parameter estimates than the CRRA model.

- by Tom Engsted
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- Finance, Parameter estimation, Risk Aversion, Habit Formation

The compulsive nature of weight loss behaviors central to anorexia nervosa (AN), such as relentless self-starvation and over-exercise, has led to the suggestion of parallels between AN and other compulsive disorders such as obsessive-compulsive disorder (OCD) and addictions. There is a huge unmet need for effective treatments in AN, which has high rates of morbidity and the highest mortality rate of any psychiatric disorder, yet a grave paucity of effective treatments. Viewing compulsivity as a transdiagnostic concept, seen in various manifestations across disorders, may help delineate the mechanisms responsible for the persistence of AN, and aid treatment development. We explore models of compulsivity that suggest dysfunction in cortico-striatal circuitry underpins compulsive behavior, and consider evidence of aberrancies in this circuitry across disorders. Excessive habit formation is considered as a mechanism by which initially rewarding weight loss behavior in AN may become compulsive over time, and the complex balance between positive and negative reinforcement in this process is considered. The physiological effects of starvation in promoting compulsivity, positive reinforcement, and habit formation are also discussed. Further research in AN may benefit from a focus on processes potentially underlying the development of compulsivity, such as aberrant reward processing and habit formation. We discuss the implications of a transdiagnostic perspective on compulsivity, and how it may contribute to the development of novel treatments for AN.

- by Lauren Godier
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- Neuroscience, Clinical Psychology, Psychiatry, Addiction

- by nikhil patel
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- Economics, Economic Growth, Fiscal policy, Monetary Policy

The equity premium puzzle, identified by Mehra and Prescott, states that, for plausible values of the risk aversion coefficient, the difference of the expected rate of return on the stock market and the riskless rate of interest is too large, given the observed small variance of the growth rate in per capita consumption. The puzzle is resolved in the context of an economy with rational expectations once the time separability of von Neumann-Morgenstern preferences is relaxed to allow for adjacent complementarity in consumption, a property known as habit persistence. Essentially habit persistence drives a wedge between the relative risk aversion of the representative agent and the intertemporal elasticity of substitution in consumption.

- by B. Ravikumar
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- Economics, Monetary Economics, Economic Theory, Applied Economics