Past work has shown that college undergraduates are systematically misinformed about how their choice of major is likely to affect future earnings. This is puzzling given that an undergraduate’s major choice is a high-stakes decision that has a sizable impact on their future earnings, and information on expected earnings by major is readily available online and can be obtained at low cost.
In this project, I investigated whether this information gap amongst college undergraduates is the result of information avoidance—a phenomenon in which an individual is averse to obtaining costless information. Though preferences for information avoidance cannot be captured in standard economic models of individual decision-making, such behavior has nonetheless been observed in economically relevant contexts, and this project attempts to add to this growing empirical literature on information avoidance.
In a laboratory experiment, I elicited Penn undergraduates’ willingness-to-pay for information on how their choice of major may affect their future earnings in order to test for information avoidance. In addition, I gather subjective beliefs data on subject’s future earnings to test for relationships between beliefs and information avoidance. The results establish the presence for information avoidance, as a non-trivial proportion of subjects are willing to pay to avoid receiving the earnings information. However, we find no meaningful relationships between beliefs and information avoidance, suggesting an avenue for future work investigating the mechanisms driving preferences for information avoidance.