In neuroscience news this week, a newly published study by Scott Huettel, Ph.D. (Associate Professor of psychology and neuroscience and director of the Duke Center for Neuroeconomic Studies) attempts to help disprove the myth that simply aging makes us inferior at financial decision making compared to our younger counterparts. Dr. Huettel’s study was published earlier this month in the journal Psychology and Aging. In his study, Huettel makes a compelling argument that it is the lack of cognitive reserve, and not simply the age of the brain, which attributes to one’s declining economic decision making abilities.
In layman’s terms what that means is that just because your father has turned 80, you shouldn’t make the assumption that he is unable to tend to his own affairs. Huettel’s new research suggests that it could be your father who it actually better than you when it comes to sound financial decisions.
“It’s not age, it’s cognition that makes the difference in decision-making,” says Dr. Huettel, “Once we accounted for cognitive abilities like memory and processing speed, age had nothing to do with predicting whether an individual would make the best economic decisions on the tasks we assigned.”
In the study Huettel and his team tested the cognitive abilities of 54 adults between the ages of 66 and 76 and the same amount of people between the ages of 18 and 35. They were all assigned a variety of financial tasks that had varying levels of respective risk. Using path analyses what they found was that age-related effects only correlated to individual differences in processing speed and memory but that cognitive ability, not age, is a more useful predictor of decision quality. Based on these findings Huettel stated, “The stereotype of all older adults becoming more risk-averse is simply wrong.”
These new findings shed more light on the importance of cognitive reserve and keeping our brains healthy at any age. As we age we are at a higher risk of cognitive decline. Processing speed and memory will natural decline in most of us. However, Huettel’s study provides further evidence that if we keep our brains healthy, we actually continue to improve many of our most important cognitive abilities into our golden years.