The ability to imagine the future has long been considered a possible foundation for intertemporal decision making. In contrast to standard notions of time preferences, imagining the future can be conceptualised as a skill that requires effort and can be developed through practice (Becker and Mulligan, 1997). However, there is very little empirical work linking the ability to imagine the future with economic outcomes. This project seeks to bridge this link in the context of entrepreneurship.
Recent work in neuroscience and psychology has explored the impact of imagining the future on decision making and suggests that there is heterogeneity in how well and how often people use mental imagery constructively to make decisions. Defined as the process of mental imagining by drawing on the memory, mental imagery can be used to imagine a future outcome, mentally map out the steps needed to achieve the outcome and overcome potential obstacles along the way. In contrast to thinking about future scenarios in words, imagining future experiences increases their concreteness and realism. This skill is particularly important for populations who make regular forward-looking decision making under uncertainty and risk, such as entrepreneurs. However, past traumatic events can adversely affect the brain and its memory function, which in turns undermines the ability to imagine the future.
This research project explores the importance of mental imagery for entrepreneurship outcomes. Our inter-disciplinary team designed a ten-session entrepreneurship programme that trains micro-entrepreneurs in mental imagery. In collaboration with the local government of Bogotá, the team implemented and evaluated the programme through a randomised control trial. The project seeks to shed light on whether mental imagery can be taught and its impact on economic outcomes. By targeting a sample who have high levels of past trauma, the trial further tests the hypothesis that individuals with higher levels of past trauma benefit most from this training. Lastly, governments and international organisations invest vast amounts of resources in skills training to promote entrepreneurship and employment every year and very little in mental health programmes. This project serves to showcase an example integrating psychological techniques within scalable policy programmes.
ABOUT THE PROJECT
Inspired by recent work in neuroscience and psychology on mental imagery (Holmes et al., 2019), an interdisciplinary research team created a ten-session business training programme that teaches the ability to imagine the future with vividness and emotion, and evaluate its impact on entrepreneurship outcomes. The training teaches participants to use imagery to imagine future scenarios and the pathways to achieving these outcomes, and mentally practice useful behaviours. This programme targets entrepreneurship, an occupation that requires risky, forward-looking choices. Moreover, this training is catering to entrepreneurs who have experienced traumatic events that may have impeded their ability to imagine the future. To evaluate the effectiveness of the imagery programme, the team collaborated with the local government of Bogotá to implement the training through a randomised control trial using a sample of 1,967 would-be entrepreneurs in Colombia. The sample consists of individuals who have faced challenging life circumstances, including victims of conflict and forced displacement.
Researchers randomly assign entrepreneurs to receive our imagery curriculum, a placebo business training, or a no-intervention control group. The placebo business training was designed to have an identical structure, entrepreneurship content and delivery method as the imagery-based treatment, except that the imagery exercises were replaced with written and verbal group-based activities. Through phone surveys eight and fourteen months post-intervention during the COVID-19 pandemic, we reveal whether mental imagery is an effective buffer strategy against the negative economic consequences of the pandemic.
RESULTS
The impact of teaching imagery can be isolated by comparing the results of the imagery and placebo training. Researchers first observe that imagery training improves the self-reported propensity to use and quality of imagery for future business scenarios relative to the placebo training, largely driven by enhanced vividness (specificity) and emotional intensity of these scenarios. The team then finds that imagery training improves economic outcomes, both before the start of and during the COVID-19 pandemic. Relative to the placebo group, entrepreneurs receiving the imagery training report on average a statistically significant increase in earnings before and during the pandemic. Imagery participants also report significantly higher business survival during the pandemic, but not before the pandemic.
The research team are currently running another round of surveys.
