That shortcut in thinking helps to explain why African Americans often experience irrational barriers to jobs or good pay. Before you could have said, well being black is a signal and it is rational to take that signal. There is an element to that, but behaviorists say you need to go deeper. With a colleague, Marianne Bertrand, Mullainathan explored whether people who have friends on welfare also tend to follow the same route due to their social network. Those areas are poor areas.
Poor people live there and poor people use lots of welfare.
We had to come up with an empirical technique to separate that. Mullainathan's teaching courses have included courses on psychology and economics, corporate finance, and consumption and investment. This year he was awarded the National Bureau of Economic Research fellowship which frees him up from his teaching schedule. The availability of candidates with Ph Ds in economics has been far outstripped by the number of undergraduate students opting for economic courses. My teaching is also relatively low, relative to historical past.