New Center of Excellence: Economic Behavior and Inequality (CEBI) – University of Copenhagen

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19 April 2017

New Center of Excellence: Economic Behavior and Inequality (CEBI)

CEBI is our opportunity for groundbreaking answers to a question long posed throughout the world: In relation to inequality what is the role of peoples' different choices in education, job, consumption, mortgage, and pension?

This is a fundamental question about inequality and redistribution policy that the Danish Research Foundation has granted Claus Thustrup Kreiner DKK 57 mill to answer. With him in this endeavor Claus has co-managers David Dreyer Lassen and Søren Leth-Petersen and a team of core center members picked from the global elite within the field.

Current state-of-the-art work on inequality focuses primarily on the importance of circumstances in terms of local environments and neighborhoods, early childhood education and skill formation, or policy. CEBI focuses on individual decisions and the importance of behavioral heterogeneity, defined as individuals making different choices in a given situation.

The results obtained will inform normative policy discussions and provide the basis for a new political economy of inequality. For example, under some normative theories, inequality created by differences in choices does not call for policy interventions to the same extent as if generated by differences in circumstances. At the same time, differences in savings patterns may occur because some individuals prefer early consumption to an irrational extent and policies correcting these behavioral biases, identifiable in the CEBI framework, would increase well-being and reduce inequality.

CEBI rolls out  a unique empirical approach that requires novel combinations of data. Denmark is one of the few countries in the world where such an approach is possible; The CEBI team follows a broad set of real-life choices and outcomes with unparalleled accuracy over the lifecycle of an individual, and at the same time link this observational data to information from controlled experiments and surveys.

Besides a number of not yet unnamed junior researcher the strong CEBI team consists of:

Contact: Claus Thustrup Kreiner
Grant provider: The Danish National Research Foundation
Project period: 2017 -2023