credit card. They do not treat the dollars as fungible so it looks irrational to traditional economists.

Which view is right, the behavioral economists’ or the traditional view? Both have their advantages, but

behavioral economists have at least identified trying to describe and explain behavior that economists have

historically dismissed as irrational. If most of us are engaged in some “irrational behavior,” perhaps there are

deeper underlying reasons for this behavior in the first place.

BRING IT HOME

Making Choices
In what category did consumers worldwide increase their spending during the Great Recession? Higher education.

According to the United Nations Educational, Scientific, and Cultural Organization (UNESCO), enrollment in colleges

and universities rose one-third in China and almost two-thirds in Saudi Arabia, nearly doubled in Pakistan, tripled in

Uganda, and surged by three million—18 percent—in the United States. Why were consumers willing to spend on
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