Blog

 

Monday, June 17, 2013

Customs

Borders and Big Macs

Anthony Landry
Economics Letters, August 2013, Pages 318-322

Abstract:
I provide new estimates of border frictions for 14 countries using local, national, and international Big Mac prices. I find that borders generally introduce only small price wedges, far smaller than those observed across New York City neighboring locations.

----------------------

Import Competition and the Great U.S. Employment Sag of the 2000s

Daron Acemoglu et al.
MIT Working Paper, May 2013

Abstract:
Even before the Great Recession, U.S. employment growth was unimpressive. Between 2000 and 2007, the economy gave back the considerable jump in employment rates it had achieved during the 1990s, with major contractions in manufacturing employment being a prime contributor to the slump. The U.S. employment "sag" of the 2000s is widely recognized but poorly understood. In this paper, we explore an under-appreciated force contributing to sluggish U.S. employment growth: the swift rise of import competition from China. We find that the increase in U.S. imports from China, which accelerated after 2000, was a major force behind recent reductions in U.S. manufacturing employment and that through input-output linkages with the rest of the economy this negative trade shock has helped suppress overall U.S. job growth.

----------------------

Paying a Visit: The Dalai Lama Effect on International Trade

Andreas Fuchs & Nils-Hendrik Klann
Journal of International Economics, forthcoming

Abstract:
Is political compliance a precondition for healthy trade relations with China? The Chinese government frequently threatens that meetings between its trading partners' officials and the Dalai Lama will be met with animosity and ultimately harm trade ties. We run a gravity model of exports to China from 159 partner countries between 1991 and 2008 to test the extent to which bilateral tensions affect trade with autocratic China. In particular, we empirically investigate whether countries that receive the Dalai Lama despite China's opposition experience a significant reduction in their exports to China. In order to account for the potential endogeneity of meetings with the Dalai Lama, the number of Tibet Support Groups and the travel pattern of the Tibetan leader are used as instruments. Our empirical results support the idea that countries officially receiving the Dalai Lama at the highest political level are punished through a reduction of their exports to China. However, this ‘Dalai Lama Effect' is only observed for the Hu Jintao era and not for earlier periods. Furthermore, we find that this effect is mainly driven by reduced exports of machinery and transport equipment and that it disappears in the second year after a meeting took place.

----------------------

Digital Piracy Justification: Asian Students Versus American Students

Szde Yu
International Criminal Justice Review, June 2013, Pages 185-196

Abstract:
The literature has shown that digital piracy is more rampant in Asia and Asians are often found to have a more favorable attitude toward digital piracy in research. This study examines the attitude toward justifying digital piracy in light of the techniques of neutralization. A comparison is made between Asian international students and American students. The result shows Asian international students are significantly more likely to justify digital piracy, but their general morality is not significantly different from American students. This finding supports neutralization theory in that people do not need to change their moral belief to favor criminal behavior as long as they can apply the techniques of neutralization to justify it. Moreover, Asian Americans, among all racial groups in the American sample, are the only group that does not show significant difference in their digital piracy justification, compared to the Asian international students. Considering that Asian Americans and Asian international students rarely share the same social environment in their upbringing, this finding further suggests there is something about being Asian, rather than social factors, that endorses digital piracy justification.

----------------------

Globalization, Factor Mobility, Partisanship, and Compensation Policies

Wonjae Hwang & Hoon Lee
International Studies Quarterly, forthcoming

Abstract:
This paper examines the relationship between economic globalization, factor mobility, government partisanship, and the relative budgetary salience of two different instruments of compensation policies: social welfare spending and industrial subsidy provision. While welfare spending directly benefits labor, industrial subsidies benefit both capital owners and labor along the sectoral line. Based on both factoral and sectoral models of trade, we theoretically argue and empirically show that governments are more likely to use welfare politics as compensation policies if free trade generates class-based interests in the society, and subsidy politics if trade openness promotes industry-based interests. We also argue that the interactions of the three variables are contingent on government partisanship. When non-class-based interests are salient as a consequence of trade openness, left-wing governments are likely to focus on welfare politics while right-wing governments favor provision of subsidies. However, when class-based interests are salient, even right-wing governments behave similarly to left-wing governments, favoring welfare spending over subsidies as the key compensation policy. In the analysis of compensation policies in the OECD countries between 1980 and 2001, the test results confirm our expectations.

----------------------

Offshoring, Wages, and Employment: Theory and Evidence

Guru Sethupathy
European Economic Review, August 2013, Pages 73-97

Abstract:
This paper investigates the wage and employment effects of offshoring. I use firm-level data and two events in Mexico as a natural experiment to identify the effects of a fall in the marginal cost of offshoring to Mexico. I find that domestic wages actually rise at U.S. firms likely to take advantage of this new offshoring opportunity. At the same time, domestic wages fall at U.S. firms unlikely to take advantage of this opportunity. Furthermore, I find no evidence of greater domestic job loss at the former compared to the latter firms. These findings are consistent with productivity effects from offshoring. To explain the mechanism, I develop a theoretical framework that combines heterogeneous firms with imperfect labor markets and rent-sharing. Firms likely to take advantage of new offshoring opportunities increase their productivity and profitability at the expense of their competitors. Through rent-sharing, this channel leads to higher domestic wages at the former firms relative to the latter. Further, there is no empirical evidence of greater domestic job loss at the firms likely to expand their offshoring compared to their competitors that are unlikely to increase their offshoring.

----------------------

Trade expansion and employment generation: How mercantilist does China have to be?

Xiao Jiang
International Review of Applied Economics, forthcoming

Abstract:
We conduct an input-output analysis of China's employment changes due to changes in trade structure on a sectoral level. We find that between 2002 and 2007 China generated about 71 million jobs due to trade expansion. We also estimate the additional amount of trade that would be needed if China were using its trade surplus as the main tool to absorb its excess labour. Given the magnitude of this estimated amount, we conclude that this ‘mercantilist' approach to excess labour absorption is not feasible. Finally, using Spearman rank correlation analysis, we find that the ranking of China's sectors' employment generation capacities is inversely related to the ranking of these sectors' trade performances. This suggests that the ‘mercantilist' approach to excess labour absorption is not only infeasible but also inefficient. We end the paper by suggesting a more balanced growth path for China.

----------------------

How Foreign Direct Investment Promote Institutional Quality: Evidence from Vietnam

Anh Duc Dang
Journal of Comparative Economics, forthcoming

Abstract:
Using a unique dataset from a provincial competitiveness survey and the rising foreign direct investment (FDI) from joining the World Trade Organization (WTO), I find that variations in economic institutions across the provinces of Vietnam are associated with the flow of foreign investment. To overcome endogeneity problems, I use the minimum distance from each province to a main economic centre as an instrument for foreign investment inflows. The instrumental variable approach shows that the direction of influence is from greater foreign investment to better institutions. These results hold after controlling for various additional covariates, and are also robust to various alternative measures of institutions. I also find that foreign direct investment has greater short-term impacts on institutional quality in the northern provinces.

----------------------

Is the Washington Consensus Dead? Growth, Openness, and the Great Liberalization, 1970s-2000s

Antoni Estevadeordal & Alan Taylor
Review of Economics and Statistics, forthcoming

Abstract:
According to the Washington Consensus, developing countries' growth would benefit from reductions in barriers to trade. However, the empirical basis for judging trade reforms is weak. Econometrics are mostly ad hoc; results are typically not judged against models; policies are poorly measured; and most studies are based on pre-1990 experience. We address these concerns - by employing a model with capital and intermediate goods; by compiling new disaggregated tariff measures; and by employing treatment/control regression analysis with differences-in-differences. We find that a specific treatment, liberalizing tariffs on imported capital and intermediate goods, did lead to faster growth, consistent with the model.

----------------------

Antidumping and Production-Line Exit: The Case of the US Steel Industry

Bruce Blonigen, Benjamin Liebman & Wesley Wilson
Review of Industrial Organization, June 2013, Pages 395-413

Abstract:
We present and examine a novel data set that contains production line information inside US steel plants. We exploit this highly disaggregated data to perform the first study of entry and exit behavior at the level of the production line within individual plants. Our empirical analysis reveals a number of interesting results. First, smaller production lines are more likely to shut down, as are lines that are owned by larger firms. Younger production lines and lines that have undergone modernization are more likely to survive. Our results indicate that lines that are operated by integrated producers are more likely to exit. We find no evidence, however, that antidumping decreases the likelihood of exit, despite the steel industry's frequent use of antidumping protection.

----------------------

Does China's trade expansion help African development? - An empirical estimation

Yong He
China Economic Review, September 2013, Pages 28-38

Abstract:
This paper uses Comtrade panel data to assess the impacts of imports from China, in comparison with those from the United States and France, on Sub-Saharan African manufactured exports (as proxies of production performance). It is found that Chinese impacts are significantly positive in all sectors and in general Chinese impacts are stronger than those of the United States and France. A South-South trade theoretical framework is then explored to interpret this finding: When the absorptive capability of a poorly-developed country is quite limited and (or) a sizeable substitution effect of importing intermediate goods on this country's local production is present, it is better to import from a Southern country with a superior technology than from a Northern country with a very advanced technology. Therefore, my finding has provided evidence that China's increasing trade with Africa is helpful to African economic development.

----------------------

Social Psychology and Public Support for Trade Liberalization

Karl Kaltenthaler & William Miller
International Studies Quarterly, forthcoming

Abstract:
This study argues that a central factor in the determinants of citizen attitudes toward trade is the social psychology of the individual in question. Namely, we contend that the level of social trust an individual has will condition the degree to which an individual wants to open her country to imports from other countries. Those individuals with lower relative levels of social trust are less likely to support the notion of freer trade. We base this contention on the logic that those people who are distrustful of people in general are more likely to distrust that which comes from people who are unknown to them, such as goods coming into their country from abroad. This argument is a departure from previous studies of public attitudes toward trade, which have focused on various economic utilitarian considerations and xenophobia that shape citizen attitudes toward trade liberalization. To test our argument, we employ data from the 1995-1997 wave of the World Values Survey. Using a logit regression analysis, we find, as predicted, that the more social trust an individual has, the more likely that person is to support the idea of liberalized trade.

----------------------

Dispositional Sources of Economic Protectionism

Christopher Johnston
Public Opinion Quarterly, forthcoming

Abstract:
Despite the increasing salience of issues related to free trade, research on citizen preferences over trade is sparse, and largely limited to economic explanations related to objective exposure. The present paper extends this literature by examining the psychological sources of the protectionist impulse. More specifically, I theoretically and empirically examine how citizens' chronic needs for security and certainty, key traits identified by recent work in the political realm, influence their preferences for protectionism. Examining data from three different national surveys in the U.S. context, I find strong support for the role of these dispositions. In addition to extending our understanding of the antecedents of trade preferences, the present paper has implications for the study of personality and politics, suggesting heterogeneity in the relationship of dispositions to ideology across issue domains. I also discuss the broader implications for American politics, arguing that these findings suggest latent tensions within contemporary party coalitions.

----------------------

Estimating the foreign circulation of banknotes

Nikolaus Bartzsch, Gerhard Rösl & Franz Seitz
Economics Letters, May 2013, Pages 165-167

Abstract:
In this paper, we analyze the volume of Euro banknotes issued by Germany and circulating in other Euro area countries as well as outside the Euro area with a banknotes' age model. Our approach suggests that about 60% of banknotes, the equivalent of around € 225 billion, is held abroad.

----------------------

The impact of corruption on FDI: Is MENA an exception?

Heba Helmy
International Review of Applied Economics, forthcoming

Abstract:
The eruption of the Arab Spring in Tunisia and Egypt was ensued by deterioration in FDI inflows. Whether a new Middle East free of corruption accompanying previous dictatorships will offset the negative ramifications of the uprisings and enhance FDI in the long run remains debatable. Since the evidence on the causal relationship between corruption and FDI is inconclusive, this study attempts to take another step. The paper investigates the link between corruption and FDI flows to the Middle East and North Africa (MENA) and assesses whether or not corruption has more importance than other FDI determinants. By employing several panel settings with various econometric specifications on 21 MENA countries over the period 2003 to 2009, it is demonstrated that FDI varies positively with corruption. Additionally, FDI in MENA was found to vary positively with per capita income, openness, freedom and security of investments and negatively with the tax and homicide rates. Since corruption was not found to hinder FDI inflows, treating corruption should be based on sound legal procedures that infringe neither on the rights, freedom and security of FDI nor on the degree of openness and freedom of the economy, which are the real stimulants of FDI in MENA.

----------------------

Culture, geography and institutions: Empirical evidence from small-scale banking

Franz Hahn
Economic Journal, forthcoming

Abstract:
Empirical evidence increasingly supports the notion that cultural closeness plays a role in economics. In this paper we explore one of the channels through which culture may directly affect economic activities. We find evidence that common cultural heritage has a statistically and economically significant effect on cross-border bank loans (even after geographical closeness and institutional convergence has been taken into account) flowing from Austria's local and regional banks to clients residing in one of the neighbouring Eastern European EU member states. In order to compile formal statistical evidence that common culture plays a role in cross-border bank lending we developed a new instrument of cultural distance that measures Austria's cultural proximity to its neighbouring Eastern countries on the basis of the prevalence of common Austrian surnames with onomastic origins lying in geographic areas of the present-day Czech Republic, Slovak Republic, Hungary and Slovenia, respectively.

----------------------

Why Trucks Jump: Offshoring and Product Characteristics

Phillip McCalman & Alan Spearot
Journal of International Economics, forthcoming

Abstract:
In this paper, we study the role of vertical product differentiation in the decision to allocate production between domestic and foreign plants. To do so, we examine the first wave of light-truck offshoring to Mexico that occurred due to substantially lower post-NAFTA trade barriers and a coincident increase in US demand for light trucks. In contrast to the typical assumption, but similar to many other industries, the need for additional capacity was accommodated by investment in both the US and Mexico for the same models of light trucks. Using a new dataset that details the extent of offshoring and domestic production within models, we document sharp differences in how capacity was utilized. Specifically, within models, we find that automakers offshored varieties which tend to be older in design vintage, lower scale, and less complex to produce. In contrast, we find that varieties "inshored" to newer capacity in the US exhibit the opposite characteristics. This highlights the important role of vertical differentiation and the associated variation in production complexity for the sorting of production across borders. A product with a large degree of vertical differentiation may provide scope for a firm to maximize profits by "inshoring" the more complex varieties while offshoring the less complex versions.

----------------------

Business in troubled waters: Does adverse attitude affect firm value?

Jung Chul Park et al.
Journal of Corporate Finance, forthcoming

Abstract:
This paper investigates the relationship between US MNCs' valuations and anti-Americanism in countries where MNCs' foreign subsidiaries are located. We find that MNCs suffer value-destruction when they enter markets where people express severe anti-Americanism. However, we uncover that geographic diversification into these high anti-Americanism countries significantly increases firm value if the MNC has high levels of intangibles such as technological know-how and marketing expertise. Our findings are consistent with the notion that the advantages from internalizing the cross-border transfer of intangibles are greater when barriers to competition are higher.

----------------------

Strong Walk and Cheap Talk: The Effect of the International Covenant of Economic, Social, and Cultural Rights on Policies and Practices

Wade Cole
Social Forces, forthcoming

Abstract:
Economic and social rights are understudied, and the core international treaty covering these rights - the International Covenant on Economic, Social, and Cultural Rights (ICESCR) - has rarely been analyzed. This paper examines the effect of the ICESCR on (1) labor rights in law and practice and (2) the constitutionalization of socioeconomic rights. Membership in the ICESCR paradoxically improves de facto labor practices but not de jure labor rights laws. This effect represents an instance of "substance without ceremony," and is consistent with recent empirical findings on the effects of global institutionalization. Treaty membership also prompts countries to enact constitutional provisions regarding socioeconomic rights, albeit in purely aspirational language. Countries that ratify the ICESCR remain hesitant to formulate such rights in enforceable terms.

----------------------

Evaluating the Trade Restrictiveness of Phytosanitary Measures on U.S. Fresh Fruit and Vegetable Imports

Everett Peterson et al.
American Journal of Agricultural Economics, forthcoming

Abstract:
Empirically assessing sanitary and phytosanitary regulations has proven difficult because most data sources indicate whether a regulation exists but provide no information on the type or importance of the respective measure. In this article, we construct a novel database of U.S. phytosanitary measures and match these to 47 fresh fruit and vegetable product imports from 89 exporting countries over the period 1996-2008. A product-line gravity equation that accounts for zero trade flows is developed to investigate the trade impact of different pest-mitigation measures. While the results suggest that phytosanitary treatments generally reduce trade, the actual restrictiveness of these measures diminishes dramatically as exporters accumulate experience, and it vanishes when exporters reach a certain threshold. The results have important policy implications considering the number of empirical studies that find a negative impact of non-tariff measures on trade.

----------------------

The Heterogeneous Effects of Trade Protection: A Study of US Antidumping Duties on Portland Cement

Maya Cohen-Meidan
Review of Industrial Organization, June 2013, Pages 369-394

Abstract:
For many traded products, high transportation and trade costs can lead to regionally segmented markets, which affect both the pattern of trade and the impact of trade policy. This paper studies the imposition of antidumping duties in the cement industry and finds striking regional variation in their impact on domestic prices, sales and imports. Duties that were imposed on Japanese producers that were shipping cement to the US West-Coast coastal markets led to imperfect substitution to other imports, which allowed domestic prices and production to increase. Imperfect substitution also occurred following duties that were imposed on Mexican producers that were shipping cement to the US Gulf of Mexico coastal markets. But in the US Southwest border markets, the same duties had no impact on the domestic prices of cement. I link the variation in responses across regions to hysteresis that was due to high exit costs.

By KEVIN LEWIS | 09:00:00 AM

Sunday, June 16, 2013

I feel your pain

Cool, but understanding...Experiencing cooler temperatures promotes perspective-taking performance

Claudia Sassenrath, Kai Sassenberg & Gün Semin
Acta Psychologica, June 2013, Pages 245-251

Abstract:
The current research examined the impact of temperature cues on perspective-taking. Individuals often start with their own point-of-view when taking another's perspective and thereby unintentionally project their own perspective onto others, which ultimately leads to egocentrically biased inferences of others' perspectives. Accordingly, perspective-taking is enhanced under conditions reducing this egocentric anchoring. In two studies, we show that perspective-taking is enhanced when participants are exposed to cooler rather than warmer temperature cues. Specifically, this is shown to be the case, because cooler temperatures reduce egocentric anchoring in perspective-taking (Study 2). Results are discussed with reference to the literature on (temperature) grounded cognition indicating a link between cold temperatures and social distance. Hence, whereas earlier research has shown that individuals feel more distant from each other when undergoing cooler thermal experiences, the present research suggests that this thermal experience prevents them from over-imputing their own perspectives onto others.

----------------------

The Harm-Made Mind: Observing Victimization Augments Attribution of Minds to Vegetative Patients, Robots, and the Dead

Adrian Ward, Andrew Olsen & Daniel Wegner
Psychological Science, forthcoming

Abstract:
People often think that something must have a mind to be part of a moral interaction. However, the present research suggests that minds do not create morality but that morality creates minds. In four experiments, we found that observing intentional harm to an unconscious entity - a vegetative patient, a robot, or a corpse - leads to augmented attribution of mind to that entity. A fifth experiment reconciled these results with extant research on dehumanization by showing that observing the victimization of conscious entities leads to reduced attribution of mind to those entities. Taken together, these experiments suggest that the effects of victimization vary according to victims' preexisting mental status and that people often make an intuitive cognitive error when unconscious entities are placed in harm's way. People assume that if apparent moral harm occurs, then there must be someone there to experience that harm - a harm-made mind. These findings have implications for political policies concerning right-to-life issues.

----------------------

Enactment of one-to-many communication may induce self-focused attention that leads to diminished perspective taking: The case of Facebook

Wen-Bin Chiou & Chun-Chia Lee
Judgment and Decision Making, May 2013, Pages 372-380

Abstract:
Social networking sites (SNSs) provide users with an efficient interface for distributing information, such as photos or wall posts, to many others simultaneously. We demonstrated experimentally that this type of indiscriminate one-to-many (i.e., monologue) communication may induce self-focused attention and thereby impair perspective taking. The present study used multiple paradigms to explore the link between engaging in online one-to-many communication and a decrease in perspective taking. Experiment 1 revealed that Facebookers who published a personal photo to the public or their friends were less likely to adopt another person's visual perspective than were those in the control group. Experiment 2 showed that Facebookers who engaged in indiscriminate one-to-many wall posting were more likely than those in the control group to rely heavily on their own perspectives. A state of self-focus, as measured by greater Stroop interference in naming the color of self-relevant versus neutral words, mediated the detrimental effect of indiscriminate one-to-many communication on cognitive perspective taking. These findings suggest that indiscriminate one-to-many communication on SNSs may promote public self-focus, leading to self-referential processing when making social judgments. Online monologue communication may be more harmful to perspective taking than previously understood.

----------------------

The Belief in a Just World as a Personal Resource in the Context of Inflation and Financial Crises

Fabian Christandl
Applied Psychology, July 2013, Pages 486-518

Abstract:
This paper examines the role of the belief in a just world as a personal resource when people are faced with the adverse consequences of inflation and financial crises by presenting results from two longitudinal studies. The first study, based on responses from 262 German residents, found that participants with a strong personal belief in a just world perceived a lower economic impact in light of price increases following a tax increase. This effect remained stable after controlling for the socioeconomic variables of gender, age, household income, and education. The second study, based on a sample of 177 German residents, found that residents with a strong personal belief in a just world perceived a lower economic impact in light of the global subprime mortgage crisis. Again, this effect remained stable after controlling for the socioeconomic variables of gender, age, household income, and education. Furthermore, the personal belief in a just world influenced perceived economic impact over time and the relationship between personal belief in a just world and perceived economic impact was partially mediated by differences between life satisfaction in the future as measured in a first wave and current life satisfaction as measured in a second wave.

----------------------

Essentialist Beliefs About Bodily Transplants in the United States and India

Meredith Meyer et al.
Cognitive Science, May/June 2013, Pages 668-710

Abstract:
Psychological essentialism is the belief that some internal, unseen essence or force determines the common outward appearances and behaviors of category members. We investigated whether reasoning about transplants of bodily elements showed evidence of essentialist thinking. Both Americans and Indians endorsed the possibility of transplants conferring donors' personality, behavior, and luck on recipients, consistent with essentialism. Respondents also endorsed essentialist effects even when denying that transplants would change a recipient's category membership (e.g., predicting that a recipient of a pig's heart would act more pig-like but denying that the recipient would become a pig). This finding runs counter to predictions from the strongest version of the "minimalist" position (Strevens,2000), an alternative to essentialism. Finally, studies asking about a broader range of donor-to-recipient transfers indicated that Indians essentialized more types of transfers than Americans, but neither sample essentialized monetary transfer. This suggests that results from bodily transplant conditions reflect genuine essentialism rather than broader magical thinking.

----------------------

Accent imitation positively affects language attitudes

Patti Adank et al.
Frontiers in Psychology, May 2013

Abstract:
People in conversation tend to accommodate the way they speak. It has been assumed that this tendency to imitate each other's speech patterns serves to increase liking between partners in a conversation. Previous experiments examined the effect of perceived social attractiveness on the tendency to imitate someone else's speech and found that vocal imitation increased when perceived attractiveness was higher. The present experiment extends this research by examining the inverse relationship and examines how overt vocal imitation affects attitudes. Participants listened to sentences spoken by two speakers of a regional accent (Glaswegian) of English. They vocally repeated (speaking in their own accent without imitating) the sentences spoken by a Glaswegian speaker, and subsequently imitated sentences spoken by a second Glaswegian speaker (order counterbalanced across participants). After each repeating or imitation session, participants completed a questionnaire probing the speakers' perceived power, competence, and social attractiveness. Imitating had a positive effect on the perceived social attractiveness of the speaker compared to repeating. These results are interpreted in light of Communication Accommodation Theory.

----------------------

Rich Contexts Do Not Always Enrich the Accuracy of Personality Judgments

Helen Wall et al.
Journal of Experimental Social Psychology, forthcoming

Abstract:
We test the common assumption that information ‘rich' contexts lead to more accurate personality judgments than information ‘lean' contexts. Pairs of unacquainted students rendered judgments of one another's personalities after interacting in one of three, increasingly rich, contexts: Internet ‘chat', telephone, or face-to-face. Accuracy was assessed by correlating participants' judgments with a measure of targets' personalities that averaged self and informant ratings. As predicted, the visible traits of extraversion and conscientiousness were judged more accurately than the less visible traits of neuroticism and openness. However, judgment accuracy also depended on context. Judgments of extraversion and neuroticism improved as context richness increased (i.e., from Internet ‘chat' to face-to-face), whereas judgments of conscientiousness and openness improved as context richness decreased (i.e., from face-to-face to Internet ‘chat'). Our findings suggest that context richness shapes not only the availability of personality cues but also the relevance of cues in any given context.

----------------------

Too Fat to Fit through the Door: First Evidence for Disturbed Body-Scaled Action in Anorexia Nervosa during Locomotion

Anouk Keizer et al.
PLoS ONE, May 2013

Abstract:
To date, research on the disturbed experience of body size in Anorexia Nervosa (AN) mainly focused on the conscious perceptual level (i.e. body image). Here we investigated whether these disturbances extend to body schema: an unconscious, action-related representation of the body. AN patients (n = 19) and healthy controls (HC; n = 20) were compared on body-scaled action. Participants walked through door-like openings varying in width while performing a diversion task. AN patients and HC differed in the largest opening width for which they started rotating their shoulders to fit through. AN patients started rotating for openings 40% wider than their own shoulders, while HC started rotating for apertures only 25% wider than their shoulders. The results imply abnormalities in AN even at the level of the unconscious, action oriented body schema. Body representation disturbances in AN are thus more pervasive than previously assumed: They do not only affect (conscious) cognition and perception, but (unconscious) actions as well.

----------------------

The mirror effect: Self-awareness alone increases suicide thought accessibility

Leila Selimbegović & Armand Chatard
Consciousness and Cognition, September 2013, Pages 756-764

Abstract:
According to objective self-awareness theory, when individuals are in a state of self-awareness, they tend to compare themselves to their standards. Self-to-standard comparison often yields unfavorable results and can be assimilated to a failure, activating an escape motivation. Building on recent research on the link between failure and suicide thought accessibility, the present experiment tested the hypothesis that mirror exposure alone provokes an increase in suicide thought accessibility. Participants were exposed to their mirror reflection (or not) while completing a lexical decision task with suicide-related words. Self-to-standard discrepancy salience was manipulated by asking participants to list actual and ideal traits before versus after the lexical decision task. As predicted, mirror-exposed participants recognized suicide-related words quicker than those unexposed to their mirror image. Self-to-standard discrepancy salience did not moderate this effect. Discussion focuses on the role of the motivation to escape self-awareness in the availability of suicide-related ideas.

----------------------

Social Rejection Biases Estimates of Interpersonal Distance

Megan Knowles, Allison Green & Alicia Weidel
Social Psychological and Personality Science, forthcoming

Abstract:
Given the power of belonging needs to shape individuals' thoughts, feelings, and behavior, we posited that people's desire for reconnection even influences judgments of physical distance. We hypothesized that rejection motivates individuals to distance themselves from sources of rejection and draw near those who are accepting. We tested this hypothesis in five studies. Participants recalled someone who had rejected or accepted them previously (Study 1), tossed a ball with inclusive and exclusive confederates (Study 2), and relived a past rejection, acceptance, or failure in the presence of an uninvolved other (Studies 3-5). Participants provided retrospective estimates of distance to rejecting and accepting others (Studies 1-2) and to uninvolved others (Studies 3-5). Participants reported that (1) accepting others were closer than rejecting others and (2) uninvolved others were closer than nonsocial targets after rejection but not acceptance or failure. Findings suggest that individuals distort perceptions of distance to serve belonging needs.

----------------------

Increases in muscle sympathetic nerve activity, heart rate, respiration, and skin blood flow during passive viewing of exercise

Rachael Brown, Ursula Kemp & Vaughan Macefield
Frontiers in Neuroscience, June 2013

Abstract:
The cardiovascular and respiratory effects of exercise have been widely studied, as have the autonomic effects of imagined and observed exercise. However, the effects of observed exercise in the first person have not been documented, nor have direct recordings of muscle sympathetic nerve activity (MSNA) been obtained during observed or imagined exercise. The aim of the current study was to measure blood pressure, heart rate, respiration, skin blood flow, sweat release, and MSNA (via microelectrodes inserted into the common peroneal nerve), during observation of exercise from the first person point of view. It was hypothesized that the moving stimuli would produce robust compensatory increases in the above-mentioned parameters as effectively as those generated by mental imagery and - to a lesser extent - actual exercise. Nine subjects watched a first-person running video, allowing them to view the action from the perspective of the runner rather than viewing someone else perform the exercise. On average, statistically significant increases from baseline during the running phase were seen in heart rate, respiratory rate, skin blood flow, and burst amplitude of MSNA. These results suggest that observation of exercise in the first person is a strong enough stimulus to evoke "physiologically appropriate" autonomic responses that have a purely psychogenic origin.

----------------------

Processing of invisible social cues

Ida Gobbini et al.
Consciousness and Cognition, September 2013, Pages 765-770

Abstract:
Successful interactions between people are dependent on rapid recognition of social cues. We investigated whether head direction - a powerful social signal - is processed in the absence of conscious awareness. We used continuous flash interocular suppression to render stimuli invisible and compared the reaction time for face detection when faces were turned towards the viewer and turned slightly away. We found that faces turned towards the viewer break through suppression faster than faces that are turned away, regardless of eye direction. Our results suggest that detection of a face with attention directed at the viewer occurs even in the absence of awareness of that face. While previous work has demonstrated that stimuli that signal threat are processed without awareness, our data suggest that the social relevance of a face, defined more broadly, is evaluated in the absence of awareness.

By KEVIN LEWIS | 09:00:00 AM

Saturday, June 15, 2013

Making babies

Abortion Before & After Roe

Ted Joyce, Ruoding Tan & Yuxiu Zhangc
Journal of Health Economics, forthcoming

Abstract:
We use unique data on abortions performed in New York State from 1971-1975 to demonstrate that women travelled hundreds of miles for a legal abortion before Roe. A 100-mile increase in distance for women who live approximately 183 miles from New York was associated with a decline in abortion rates of 12.2 percent whereas the same change for women who lived 830 miles from New York lowered abortion rates by 3.3 percent. The abortion rates of nonwhites were more sensitive to distance than those of whites. We found a positive and robust association between distance to the nearest abortion provider and teen birth rates but less consistent estimates for other ages. Our results suggest that even if some states lost all abortion providers due to legislative policies, the impact on population measures of birth and abortion rates would be small as most women would travel to states with abortion services.

----------------------

Community-Wide Job Loss and Teenage Fertility

Elizabeth Ananat, Anna Gassman-Pines & Christina Gibson-Davis
NBER Working Paper, April 2013

Abstract:
We estimate the effects of economic downturns on the birth rates of 15- to 19-year-olds, using county-level business closings and layoffs in North Carolina over 1990-2010 as a plausibly exogenous source of variation in the strength of the local economy. We find little effect of job losses on the white teen birth rate. For black teens, however, job losses to 1% of the working-age population decrease the birth rate by around 2%. Birth declines start five months after the job loss and then last for over a year. Linking the timing of job losses and conceptions suggests that black teen births decline due to increased terminations and perhaps also changes in pre-pregnancy behaviors; national data on risk behaviors also provide evidence that black teens reduce sexual activity and increase contraception use in response to job losses. Job losses seven to nine months after conception do not affect teen birth rates, indicating that teens do not anticipate job losses and lending confidence that job losses are "shocks" that can be viewed as quasi-experimental variation. We also find evidence that relatively advantaged black teens disproportionately abort after job losses, implying that the average child born to a black teen in the wake of job loss is relatively more disadvantaged.

----------------------

Sex Ratios and Crime: Evidence from China

Lena Edlund et al.
Review of Economics and Statistics, forthcoming

Abstract:
Since the introduction of the One-Child policy in China in 1979, abnormally many boys to girls have been born, foreshadowing a sizeable bride shortage. What do young men unable to find wives do? This paper focuses on criminality, an asocial activity that has seen a marked rise since the mid-1990s. Exploiting province-year level variation, we find an elasticity of crime with respect to the sex ratio of 16-25 years olds of 3.4, suggesting that male sex ratios can account for 1/7th of the rise in crime. We hypothesize that adverse marriage market conditions drive the found association.

----------------------

Natural Selection in Utero: Evidence from the Great East Japan Earthquake

R. Catalano, T. Yorifuji & I. Kawachi
American Journal of Human Biology, forthcoming

Objectives: Controversy remains over whether declines in male births reported after population stressors result from either or both reduced conception of males or increased selection in utero against male fetuses. We use monthly birth cohorts to determine if Japanese male births following the Great East Japan Earthquake of 2011 fell below levels expected from female births and from history (i.e., autocorrelation) among cohorts exposed to the Earthquake at or after conception.

Methods: We apply interrupted time-series methods to 69 months (i.e., April, 2006 through December, 2011) of birth data from the most and least affected prefectures as well as from the remainder of Japan. We estimate expected male births from female births and from autocorrelation.

Results: Findings varied by distance from the greatest damage but suggest sensitive periods both early and late in gestation when population stressors may induce selection against males in utero. Support for reduced conception of males appeared only in the prefectures most damaged by the Earthquake.

Conclusions: Results align with the claim that natural selection has conserved mechanisms that reduce the odds of a male live birth during stressful times by reducing the conception of males and by increasing the rate of spontaneous abortion among male fetuses.

----------------------

Differences in fertility behavior and uncertainty: An economic theory of the minority status hypothesis

Bastien Chabé-Ferret & Paolo Melindi Ghidi
Journal of Population Economics, July 2013, Pages 887-905

Abstract:
We revisit the question of why fertility behaviors and educational decisions appear to vary systematically across ethnic groups. We assess the possibility that differences in fertility across groups remain even though their socio-economic characteristics are similar. More specifically, we consider that parents' fertility decisions are affected by the uncertainty concerning the future economic status of their offspring. We assume that this uncertainty varies across groups and is linked to the size of the group one belongs to. We find theoretical support for the minority status hypothesis according to which members of large minorities usually have a higher fertility than those in the majority facing low potential for social mobility while small minorities have lower fertility.

----------------------

Understanding Measures of Nonmarital Fertility: The Roles of Marriage and Access to Human Capital

Jo Anna Gray & Joe Stone
Contemporary Economic Policy, forthcoming

Abstract:
This paper proposes an explanation for several decades of rising U.S. nonmarital birth rates and shares, and for cross-sectional differences in black-white fertility. Significantly, the explanation does not rely on changes over time or differences across races in individual fertility behavior. It is consistent with the rising nonmarital fertility measures observed in the United States since the mid-1970s, higher measured fertility for unmarried blacks than whites, and differences across races in the timing of childbearing, despite nearly constant total fertility rates and increasingly similar target family sizes for blacks and whites. The explanation relies on a selection effect associated with changes in the marriage rate and on racial differences in access to human capital investment opportunities. We find strong support for the explanation using U.S. data over the period 1957-2002. Our findings suggest caution in interpreting the results of empirical studies of childbearing that examine marital and nonmarital fertility rates separately, as these studies typically ignore the selection effect of marriage.

----------------------

Racial and Ethnic Differences in the Transition To a Teenage Birth in the United States

Jennifer Manlove et al.
Perspectives on Sexual and Reproductive Health, June 2013, Pages 89-100

Context: Rates of teenage childbearing are high in the United States, and they differ substantially by race and ethnicity and nativity status.

Methods: Data from the National Longitudinal Survey of Youth 1997 cohort were used to link characteristics of white, black, U.S.-born Hispanic and foreign-born Hispanic adolescents to teenage childbearing. Following a sample of 3,294 females aged 12-16 through age 19, discrete-time logistic regression analyses were used to examine which domains of teenagers' lives were associated with the transition to a teenage birth for each racial and ethnic group, and whether these associations help explain racial and ethnic and nativity differences in this transition.

Results: In a baseline multivariate analysis controlling for age, compared with whites, foreign-born Hispanics had more than three times the odds of a teenage birth (odds ratio, 3.5), while blacks and native-born Hispanics had about twice the odds (2.1 and 1.9, respectively). Additional controls (for family environments; individual, peer and dating characteristics; characteristics of first sexual relationships; and subsequent sexual experience) reduced the difference between blacks and whites, and between foreign-born Hispanics and whites, and eliminated the difference between U.S.-born Hispanics and whites. Further, if racial or ethnic minority adolescents had the same distribution as did white teenagers across all characteristics, the predicted probability of a teenage birth would be reduced by 40% for blacks and 35% for U.S.-born Hispanics.

Conclusions: Differences in the context of adolescence may account for a substantial portion of racial, ethnic and nativity differences in teenage childbearing.

----------------------

Employment protection and fertility: Evidence from the 1990 Italian reform

Ervin Prifti & Daniela Vuri
Labour Economics, August 2013, Pages 77-88

Abstract:
The aim of this paper is to investigate the effect of Employment Protection Legislation (EPL) on fertility decisions of Italian working women using administrative data. We exploit a reform that introduced in 1990 costs for dismissals unmotivated by a 'fair cause' or 'justified motive' in firms below 15 employees and left firing costs unchanged for bigger firms. We use this quasi-experimental setup to study the hypothesis that increased EPL reduces future job insecurity and positively affects a female worker's proneness to take childbearing decisions. We use a difference in difference (OLS-DID) model to control for possible period-invariant sorting bias and an instrumental variable (IV-DID) model to account for time-varying endogeneity of the treatment status. We find that reduced economic insecurity following a strengthening of the EPL regime has a positive and sizable effect on fertility decisions of Italian working women. This result is robust to a number of checks regarding possible interactions with other policy reforms occurring around 1990, changes in the sample of workers and firms, and use of an alternative set of exclusion restrictions.

----------------------

The Demographic Transition Influences Variance in Fitness and Selection on Height and BMI in Rural Gambia

Alexandre Courtiol et al.
Current Biology, 20 May 2013, Pages 884-889

Abstract:
Recent human history is marked by demographic transitions characterized by declines in mortality and fertility. By influencing the variance in those fitness components, demographic transitions can affect selection on other traits. Parallel to changes in selection triggered by demography per se, relationships between fitness and anthropometric traits are also expected to change due to modification of the environment. Here we explore for the first time these two main evolutionary consequences of demographic transitions using a unique data set containing survival, fertility, and anthropometric data for thousands of women in rural Gambia from 1956-2010. We show how the demographic transition influenced directional selection on height and body mass index (BMI). We observed a change in selection for both traits mediated by variation in fertility: selection initially favored short females with high BMI values but shifted across the demographic transition to favor tall females with low BMI values. We demonstrate that these differences resulted both from changes in fitness variance that shape the strength of selection and from shifts in selective pressures triggered by environmental changes. These results suggest that demographic and environmental trends encountered by current human populations worldwide are likely to modify, but not stop, natural selection in humans.

----------------------

Maternal Stress and Infant Mortality: The Importance of the Preconception Period

Quetzal Class et al.
Psychological Science, forthcoming

Abstract:
Although preconception and prenatal maternal stress are associated with adverse outcomes in birth and childhood, their relation to infant mortality remains uncertain. We used logistic regression to study infant mortality risk following maternal stress within a population-based sample of infants born in Sweden between 1973 and 2008 (N = 3,055,361). Preconception (6-0 months before conception) and prenatal (between conception and birth) stress were defined as death of a first-degree relative of the mother. A total of 20,651 offspring were exposed to preconception stress, 26,731 offspring were exposed to prenatal stress, and 8,398 cases of infant mortality were identified. Preconception stress increased the risk of infant mortality independently of measured covariates, and this association was timing specific and robust across low-risk groups. Prenatal stress did not increase risk of infant mortality. These results suggest that the period immediately before conception may be a sensitive developmental period with ramifications for infant mortality risk.

----------------------

A model comparison approach shows stronger support for economic models of fertility decline

Mary Shenk et al.
Proceedings of the National Academy of Sciences, 14 May 2013, Pages 8045-8050

Abstract:
The demographic transition is an ongoing global phenomenon in which high fertility and mortality rates are replaced by low fertility and mortality. Despite intense interest in the causes of the transition, especially with respect to decreasing fertility rates, the underlying mechanisms motivating it are still subject to much debate. The literature is crowded with competing theories, including causal models that emphasize (i) mortality and extrinsic risk, (ii) the economic costs and benefits of investing in self and children, and (iii) the cultural transmission of low-fertility social norms. Distinguishing between models, however, requires more comprehensive, better-controlled studies than have been published to date. We use detailed demographic data from recent fieldwork to determine which models produce the most robust explanation of the rapid, recent demographic transition in rural Bangladesh. To rigorously compare models, we use an evidence-based statistical approach using model selection techniques derived from likelihood theory. This approach allows us to quantify the relative evidence the data give to alternative models, even when model predictions are not mutually exclusive. Results indicate that fertility, measured as either total fertility or surviving children, is best explained by models emphasizing economic factors and related motivations for parental investment. Our results also suggest important synergies between models, implicating multiple causal pathways in the rapidity and degree of recent demographic transitions.

----------------------

The Effect of Education on Fertility: Evidence from a Compulsory Schooling Reform

Kamila Cygan-Rehm & Miriam Maeder
Labour Economics, forthcoming

Abstract:
This paper investigates the effect of education on fertility under inflexible labor market conditions. We exploit exogenous variation from a German compulsory schooling reform to deal with the endogeneity of education. By using data from two complementary datasets, we examine different fertility outcomes over the life cycle. In contrast to evidence for other developed countries, we find that increased education causally reduces completed fertility. This negative effect operates through a postponement of first births away from teenage years and no catch-up later in life. We attribute these findings to the particularly high opportunity costs of childrearing in Germany.

----------------------

Economic Insecurity and Fertility Intentions: The Case of Italy

Francesca Modena, Concetta Rondinelli & Fabio Sabatini
Review of Income and Wealth, forthcoming

Abstract:
We aim to provide an explanation for the combination of the relatively low female participation rates and lowest-low fertility levels in Italy. Starting from the assumption that childbearing decisions also depend on uncertainty about future employment, income, and wealth, we empirically assess how fertility intentions are affected by job instability, which may severely compromise the employment stability of workers, and economic disadvantages in terms of household income and wealth, which may imply insufficient means to deal with potential adverse future events, thereby generating in the household feelings of anxiety and economic insecurity. We show that the instability of women's work status (i.e., the holding of occasional and precarious jobs) significantly discourages the decision to attempt having a first child. Low levels of household wealth significantly and positively influence the decision to postpone attempting a first child. The chances of further childbirth are significantly and negatively influenced by household income insecurity.

----------------------

The Relation between Handedness Indices and Reproductive Success in a Non-Industrial Society

Sara Schaafsma et al.
PLoS ONE, May 2013

Abstract:
The evolution of handedness in human populations has intrigued scientists for decades. However, whether handedness really affects Darwinian fitness is unclear and not yet studied in a non-industrial society where selection pressures on health and handedness are likely to be similar to the situation in which handedness has evolved. We measured both hand preference and asymmetry of hand skill (speed of fine motor control, measured by a pegboard task, and accuracy of throwing), as they measure different aspects of handedness. We investigated the associations between both the direction (left versus right) and strength (the degree to which a certain preference or asymmetry in skill is manifested, independent of the direction) of handedness. We analyzed to what extent these measures predict the number of offspring and self-reported illness in a non-industrial society in Papua, Indonesia. As it is known that body height and fitness are correlated, data on body height was also collected. Due to low numbers of left-handers we could not investigate the associations between direction of hand preference and measures of Darwinian fitness. We found a positive association between strength of asymmetry of hand skill (pegboard) and the number of children men sired. We also found a positive association for men between strength of hand preference and number of children who died within the first three years of life. For women we found no such effects. Our results may indicate that strength of handedness, independent of direction, has fitness implications and that the persistence of the polymorphism in handedness may be ascribed to either balancing selection on strength of asymmetry of hand skill versus strength of hand preference, or sexual antagonistic selection. No relationships between health and handedness were found, perhaps due to disease related selective disappearance of subjects with a specific handedness.

----------------------

Role of Young Women's Depression and Stress Symptoms in Their Weekly Use and Nonuse of Contraceptive Methods

Kelli Stidham Hall et al.
Journal of Adolescent Health, forthcoming

Purpose: We prospectively examined the influence of young women's depression and psychological stress symptoms on their weekly contraceptive method use.

Methods: We examined data from 689 women ages 18-20 years participating in a longitudinal cohort study. Women completed 8,877 weekly journals over the first year, which assessed reproductive, relationship, and health information. We focused on baseline depression (Center for Epidemiologic Studies-Depression Scale) and stress (Perceived Stress Scale) symptoms and weekly contraceptive method use. Analyses used multivariate random effects and multinomial logistic regression.

Results: Approximately one quarter of women exhibited moderate/severe depression (27%) and stress (25%) symptoms at baseline. Contraception was not used in 10% of weekly journals, whereas coital and noncoital methods were used in 42% and 48% of weeks, respectively. In adjusted models, women with moderate/severe stress symptoms had more than twice the odds of contraception nonuse than women without stress (odds ratio [OR] 2.23, confidence interval [CI] 1.02-4.89, p = .04). Additionally, women with moderate/severe depression (RR .52, CI .40-.68, p < .001) and stress (relative risk [RR] .75, CI .58-.96, p = .02) symptoms had lower relative risks of using long-acting methods than oral contraceptives (OCs; reference category). Women with stress symptoms also had higher relative risks of using condoms (RR 1.17, CI 1.00-1.34, p = .02) and withdrawal (RR 1.29, CI 1.10-1.51, p = .001) than OCs. The relative risk of dual versus single method use was also lower for women with stress symptoms.

Conclusion: Women's psychological symptoms predicted their weekly contraceptive nonuse and use of less effective methods. Further research can determine the influence of dynamic psychological symptoms on contraceptive choices and failures over time. 

By KEVIN LEWIS | 09:00:00 AM

Friday, June 14, 2013

In good company

Political Ideologies of CEOs: The Influence of Executives' Values on Corporate Social Responsibility

M.K. Chin, Donald Hambrick & Linda Treviño
Administrative Science Quarterly, June 2013, Pages 197-232

Abstract:
This article examines the influence on organizational outcomes of CEOs' political ideology, specifically political conservatism vs. liberalism. We propose that CEOs' political ideologies will influence their firms' corporate social responsibility (CSR) practices, hypothesizing that (1) liberal CEOs will emphasize CSR more than will conservative CEOs; (2) the association between a CEO's political ideology and CSR will be amplified by a CEO's relative power; and (3) liberal CEOs will emphasize CSR even when recent financial performance is low, whereas conservative CEOs will pursue CSR initiatives only as performance allows. We test our ideas with a sample of 249 CEOs, measuring their ideologies by coding their political donations over the ten years prior to their becoming CEOs. Results indicate that the political ideologies of CEOs are manifested in their firms' CSR profiles. Compared with conservative CEOs, liberal CEOs exhibit greater advances in CSR; the influence of CEOs' political liberalism on CSR is amplified when they have more power; and liberal CEOs' CSR initiatives are less contingent on recent performance than are those of conservative CEOs. In a corroborative exploration, we find that CEOs' political ideologies are significantly related to their corporate political action committee (PAC) allocations, indicating that this largely unexplored executive attribute might be more widely consequential.

----------------------

How Directors' Prior Experience with Other Demographically Similar CEOs Affects Their Appointments onto Corporate Boards and the Consequences for CEO Compensation

David Zhu & James Westphal
Academy of Management Journal, forthcoming

Abstract:
In recent years, new director appointments have increasingly posed a dilemma for corporate leaders: while CEOs prefer individuals who have similar backgrounds to them, they face increased pressure to appoint new directors who have a different demographic profile. We suggest that CEOs may resolve this dilemma by appointing new directors who have prior experiences working with other demographically similar CEOs. We then explain why this tendency is stronger when new directors are demographically more different from CEOs. Moreover, we posit that new directors' prior experiences with other similar CEOs will reduce the negative effect of their demographic differences from the CEO on CEO compensation. Longitudinal analysis of Fortune 500 companies' new director appointments and subsequent CEO compensation provided support for our theoretical expectations. This study identifies an important new role that interlock ties to other CEOs can play in corporate governance and leadership. In particular, we suggest that such ties are a means by which CEOs evaluate whether a new director will support their leadership and decision making. In explaining the role of directors' ties to other CEOs in influencing director appointments and CEO compensation, this study also highlights the important influence of triads on CEO-director dyadic relations.

----------------------

Narcissism is a Bad Sign: CEO Signature Size, Investment, and Performance

Charles Ham, Nicholas Seybert & Sean Wang
University of Maryland Working Paper, March 2013

Abstract:
Using the size of the CEO signature on annual SEC filings to measure CEO narcissism, we find that narcissism is positively associated with several measures of firm overinvestment, yet lower patent count and patent citation frequency. Abnormally high investment by narcissists predicts lower future revenues and lower sales growth. Narcissistic CEOs also deliver worse current performance as measured by return on assets, particularly for firms in early life-cycle stages and with uncertain operating environments, where a CEO's decisions are most likely to impact the firm's future value. Despite these negative performance indicators, more narcissistic CEOs enjoy higher compensation, both unconditionally and relative to the next highest paid executive at their firm.

----------------------

CEO Narcissism, Audience Engagement, and Organizational Adoption of Technological Discontinuities

Wolf-Christian Gerstner et al.
Administrative Science Quarterly, June 2013, Pages 257-291

Abstract:
We examine the responses of major pharmaceutical firms to the advent of biotechnology over the period 1980 to 2008 to explain why established firms vary in their adoption of technological discontinuities. Combining insights from upper echelons theory, personality theory, and research on organizational responses to new technologies, we posit that narcissistic chief executive officers (CEOs) of established firms will be relatively aggressive in their adoption of technological discontinuities. We propose, however, that the effect of a CEO's narcissism on organizational outcomes will be moderated by audience engagement - the degree to which observers view a phenomenon as noteworthy and provocative - which varies over time. When audience engagement is high, narcissistic CEOs will anticipate widespread admiration for their bold actions and thus will invest especially aggressively in a discontinuous technology. Drawing from work on managerial cognition, we further hypothesize that CEOs' narcissism will influence their top managers' attention to a discontinuous technology, an association that will also be moderated by audience engagement. Finally, we suggest that managerial attention to the discontinuous technology will subsequently be reflected in company investments in the new technological domain. Results provide considerable support for our hypotheses and highlight the role of narcissism in the context of radical organizational change, the influence of audience engagement on executive behavior, and the effect of executive personality on managerial attention.

----------------------

Does the director labor market offer ex post settling-up for CEOs? The case of acquisitions

Jarrad Harford & Robert Schonlau
Journal of Financial Economics, forthcoming

Abstract:
We examine the rewards for experience and ability in the director labor market. We show that large acquisitions are associated with significantly higher numbers of subsequent board seats for the acquiring CEO, target CEO, and the directors. We also find that, in the case of acquisitions, experience is more important than ability. Both value-destroying and value-increasing acquisitions have significant and positive effects on a CEO's future prospects in the director labor market. In addition to increasing our understanding of the director labor market, these results suggest that the ex post settling-up incentives thought to exist in the director labor market are weak for acquisitions.

----------------------

CEO Pay and Firm Size: An Update after the Crisis

Xavier Gabaix, Augustin Landier & Julien Sauvagnat
NBER Working Paper, May 2013

Abstract:
In the "size of stakes" view quantitatively formalized in Gabaix and Landier (2008), CEO compensation is determined in a competitive talent market, and reflects the size of firms affected by talent. This paper offers an empirical update on this view. The years 2004-2011, which include the recent crisis, were not part of the initial study and offer a laboratory to examine the theory as they include new positive and negative shocks to the size of large firms. Executive compensation at the top (ex ante) did closely track the evolution of average firm value during those years. During the crisis (2007 - 2009), average total firm value decreased by 17%, and CEO pay decreased by 28%. During 2009-2011, we observe a rebound of firm value by 19% and of CEO pay increased by 22%. These fairly proportional changes provide a validity check in favor of the "size of stakes" view.

----------------------

When Do Outsider CEOs Generate Strategic Change? The Enabling Role of Corporate Stability

Ayse Karaevli & Edward Zajac
Journal of Management Studies, forthcoming

Abstract:
When academic researchers, business commentators, and boards of directors have debated the merits of hiring new CEOs from outside the firm, the implicit or explicit assumption typically made is that outsider CEOs will provide an advantage in achieving strategic change. In this study, we challenge this assumption by employing a duality perspective on stability/change, and we provide an original conceptual framework to posit that it is the presence of corporate stability (ordinary succession, a long-tenured predecessor CEO, and good firm performance) that allows outsider CEOs to generate a greater degree of post-succession strategic change. We use extensive longitudinal data from U.S. airline and chemical industries between 1972 and 2010 to test our hypotheses, and we discuss how our supportive findings challenge long-standing assumptions regarding the outsider succession-strategic change relationship, and we advocate embracing the non-intuitive notion that stable (unstable) conditions can be enablers (barriers) of strategic change for outsider CEOs.

----------------------

The Role of the Media in Corporate Governance: Do the Media Influence Managers' Capital Allocation Decisions?

Baixiao Liu & John McConnell
Journal of Financial Economics, forthcoming

Abstract:
Using 636 large acquisition attempts that are accompanied by a negative stock price reaction at their announcement ("value-reducing acquisition attempts") from 1990-2010, we find that, in deciding whether to abandon a value-reducing acquisition attempt, managers' sensitivity to the firm's stock price reaction at the announcement is influenced by the level and the tone of media attention to the proposed transaction. We interpret the results to imply that managers have reputational capital at risk in making corporate capital allocation decisions and that the level and tone of media attention heighten the impact of a value-reducing acquisition on the managers' reputational capital. To the extent that value-reducing acquisition attempts are more likely to be abandoned, the media can play a role in aligning managers' and shareholders' interests.

----------------------

Insider Trading Restrictions and Top Executive Compensation

David Denis & Jin Xu
Journal of Accounting and Economics, July 2013, Pages 91-112

Abstract:
The use of equity incentives is significantly greater in countries with stronger insider trading restrictions, and these higher incentives are associated with higher total pay. These findings are robust to alternative definitions of insider trading restrictions and enforcement, and to panel regressions with country fixed effects. We also find significant increases in top executive pay and the use of equity-based incentives in the period immediately following the initial enforcement of insider trading laws. We conclude that insider trading laws are one channel through which cross-country differences in pay practices can be explained.

----------------------

How insiders traded before rules

Fabio Braggion & Lyndon Moore
Business History, Spring 2013, Pages 562-581

Abstract:
UK company insiders, such as directors, were legally allowed to trade in the shares of their own companies up until the Companies Act of 1980. This article investigates the trading behaviour of directors over the period 1890 to 1909 in the UK. It finds relatively few instances of directors who exploited their informational advantage. However when they did sell their own shares, it tended to be before a period of poor profitability and poor stock market performance.

----------------------

Board Composition and Corporate Social Responsibility: An Empirical Investigation in the Post Sarbanes-Oxley Era

Jason Zhang, Hong Zhu & Hung-bin Ding
Journal of Business Ethics, May 2013, Pages 381-392

Abstract:
Although the composition of the board of directors has important implications for different aspects of firm performance, prior studies tend to focus on financial performance. The effects of board composition on corporate social responsibility (CSR) performance remain an under-researched area, particularly in the period following the enactment of the Sarbanes-Oxley Act of 2002 (SOX). This article specifically examines two important aspects of board composition (i.e., the presence of outside directors and the presence of women directors) and their relationship with CSR performance in the Post-SOX era. With data covering over 500 of the largest companies listed on the U.S. stock exchanges and spanning 64 different industries, we find empirical evidence showing that greater presence of outside and women directors is linked to better CSR performance within a firm's industry. Treating CSR performance as the reflection of a firm's moral legitimacy, our study suggests that deliberate structuring of corporate boards may be an effective approach to enhance a firm's moral legitimacy.

----------------------

Do they walk the talk or just talk the talk? Gauging acquiring CEO and director confidence in the value-creation potential of announced acquisitions

Cynthia Devers et al.
Academy of Management Journal, forthcoming

Abstract:
We explore whether acquiring CEOs and directors act consistently with the idea that their newly announced acquisitions will increase long-term firm value. Specifically, we examine post-announcement adjustments to CEOs' equity-based holdings and find acquiring CEOs tend to exercise options and sell firm stock following acquisition announcements. Moreover, positive short-term market performance exacerbates this effect. Further, we find directors tend to grant their acquiring CEOs stock options, post-acquisition announcement, presumably to more tightly align CEO-shareholder interests. These findings suggest CEOs and directors manage acquiring CEOs' equity-based holdings such that they do not appear to anticipate long-term value creation from their acquisitions.

----------------------

Corporate Governance and Employee Power in the Boardroom: An Applied Game Theoretic Analysis

Benjamin Balsmeier, Andreas Bermig & Alexander Dilger
Journal of Economic Behavior & Organization, July 2013, Pages 51-74

Abstract:
The debate on employee representation on corporate boards has received considerable attention from scholars and politicians around the world. We provide new insights to this ongoing discussion by applying power indices from game theory to examine the actual voting power of employees on boards and its effect on firm performance. Based on unique panel data on the largest listed companies in Germany, we find an inverse U-shaped relationship between labor power and Tobin's Q. Moderate employee participation in corporate board decision-making can enhance firm value.

----------------------

Determinants of Corporate Cash Policy: Insights from Private Firms

Huasheng Gao, Jarrad Harford & Kai Li
Journal of Financial Economics, forthcoming

Abstract:
We provide one of the first large sample comparisons of cash policies in public and private U.S. firms. We first show that despite higher financing frictions, private firms hold, on average, about half as much cash as public firms do. By examining the drivers of cash policies for each group, we are able to attribute the difference to the much higher agency costs in public firms. By combining evidence from across public and private firms as well as within public firms across different qualities of governance, we are able to reconcile existing mixed evidence on the effects of agency problems on cash policies. Specifically, agency problems affect not only the target level of cash, but also how managers react to cash in excess of the target.

----------------------

Entrenchment or incentive? CEO employment contracts and acquisition decisions

Jing Zhao
Journal of Corporate Finance, September 2013, Pages 124-152

Abstract:
A long-standing controversy is whether CEO employment contracts insulate inferior managers from discipline leading to shareholder wealth destruction, or whether contracts alleviate managerial risk aversion and encourage value-enhancing decisions. Using a unique dataset on S&P 500 CEO employment contracts during 1993-2005, I find that acquirers with a CEO contract obtain better announcement returns, pay lower premiums for their targets, garner superior long-run post-acquisition operating performance, and undertake riskier deals than acquirers without a contract. Further investigation of individual contract provisions reveals substantial heterogeneity. Specifically, the fixed term rather than at will contract, longer contract duration, long-term equity incentives, accelerated stock and option vesting provisions in severance arrangement, and more refined definitions of just cause (good reason) for CEO termination (resignation) alleviate managerial risk aversion, reduce contracting ambiguity, and motivate value-creating decisions.

----------------------

Director Ownership, Governance, and Performance

Sanjai Bhagat & Brian Bolton
Journal of Financial and Quantitative Analysis, February 2013, Pages 105-135

Abstract:
We study the impact of the Sarbanes-Oxley Act on the relationship between corporate governance and company performance. We consider 5 measures of corporate governance during the period 1998-2007. We find a significant negative relationship between board independence and operating performance during the pre-2002 period, but a positive and significant relationship during the post-2002 period. Our most important contribution is a proposal of a governance measure, namely, dollar ownership of the board members, that is simple, intuitive, less prone to measurement error, and not subject to the problem of weighting a multitude of governance provisions in constructing a governance index.

----------------------

Liability protection, director compensation, and incentives

Iness Aguir et al.
Journal of Financial Intermediation, forthcoming

Abstract:
We examine the effect of liability protection on the compensation of directors and on takeover outcomes. Consistent with the hypothesis that directors require additional compensation if they bear liability, we find that director compensation is higher for firms that provide less liability protection. Examining takeovers, we find evidence that takeovers of firms with protected directors are less likely to succeed. Moreover, firms with protected directors are more likely to accept a lower bid premium, and this finding is consistent with protected directors having reduced incentives to negotiate for the highest possible price during the acquisition. Overall, the results are consistent with the notion that director liability provisions have a significant impact both on director compensation and director duty.

----------------------

Optimal CEO Compensation with Search: Theory and Empirical Evidence

Melanie Cao & Rong Wang
Journal of Finance, forthcoming

Abstract:
We integrate an agency problem into search theory to study executive compensation in a market equilibrium. A CEO can choose to stay or quit and search after privately observing an idiosyncratic shock to the firm. The market equilibrium endogenizes CEOs' and firms' outside options and captures contracting externalities. We show that the optimal pay-to-performance ratio is less than one even when the CEO is risk neutral. Moreover, the equilibrium pay-to-performance sensitivity depends positively on a firm's idiosyncratic risk and negatively on the systematic risk. Our empirical tests using executive compensation data confirm these results.

----------------------

The Prevention of Excess Managerial Risk Taking

Edward Van Wesep & Sean Wang
Journal of Corporate Finance, forthcoming

Abstract:
Executives with poor prior performance may be inclined to take excessive risk in the hope of meeting performance targets, in which case a compensation contract featuring severance pay can be optimal. While prior work has shown that severance can induce managers to take positive NPV risks, we show that it can also keep them from taking negative NPV risks. We show that severance should be contingent on results: complete failure should nullify any payments. We also show that mandating a firm size that is larger than first-best, while costly, can help screen for good managers.

----------------------

Some consequences of the early twentieth-century British divorce of ownership from control

James Foreman-Peck & Leslie Hannah
Business History, Spring 2013, Pages 540-561

Abstract:
Because ownership was already more divorced from control in the largest stock market of 1911 (London) than in the largest stock market of 1995 (New York), the consequences for the economy, for good or ill, could have been considerable. Using a large sample of quoted companies with capital of £1 million or more, this article shows that this separation did not generally operate against shareholders' interests, despite the very substantial potential for agency problems. More directors were apparently preferable to fewer over a considerable range, as far as their influence on company share price and return on equity was concerned: company directors were not simply ornamental. A greater number of shareholders was more in shareholders' interest than a smaller, despite the enhanced difficulties of coordinating shareholder ‘voice'. A larger share of votes controlled by the board combined with greater board share ownership was also on average consistent with a greater return on equity. Corporate governance thus appears to have been well adapted to the circumstances of the Edwardian company capital market. Hence the reduction in the cost of capital for such a large proportion of British business conferred a substantial advantage on the economy.

----------------------

How do powerful CEOs view corporate social responsibility (CSR)? An empirical note

P. Jiraporn & P. Chintrakarn
Economics Letters, June 2013, Pages 344-347

Abstract:
We explore how powerful CEOs view investments in corporate social responsibility (CSR). The agency view suggests that CEOs invest in CSR to enhance their own private benefits. On the contrary, the conflict resolution view argues that CSR investments are made to resolve the conflicts among various stakeholders. Using Bebchuk et al. (2011) CEO Pay Slice (CPS) to measure CEO power, we show that the association between CEO power and CSR is non-monotonic. When the CEO is relatively less powerful, an increase in CEO power leads to more CSR engagement. However, as the CEO becomes substantially more powerful, he is more entrenched and no longer invests more in CSR. In fact, when CEO power goes beyond a certain threshold, more powerful CEOs significantly reduce CSR investments.

----------------------

Settling up in CEO compensation: The impact of divestiture intensity and contextual factors in refocusing firms

Seemantini Pathak, Robert Hoskisson & Richard Johnson
Strategic Management Journal, forthcoming

Abstract:
We examine the relationship between strategic change and CEO compensation by studying how a firm's refocusing program influences CEO compensation after completing the change. We contribute to the "settling up" literature by arguing that strategic change is often uncertain for both the CEO and the board of directors responsible for executive compensation. As such the firm is likely to settle up with the CEO by paying for compensation risk and effort undertaken during refocusing after the extent and impact of strategic change are better known. We find that refocusing intensity is positively related to post-refocusing CEO total compensation, suggesting that "settling up" through post-hoc compensation is an important factor in strategic change. We also find that prior firm performance, governance structure and industry dynamism are important moderators of this relationship.

----------------------

Nonmonetary Benefits, Quality of Life, and Executive Compensation

Xin Deng & Huasheng Gao
Journal of Financial and Quantitative Analysis, February 2013, Pages 197-218

Abstract:
We examine the effects of nonmonetary benefits on overall executive compensation from the perspective of the living environment at the firm headquarters. Companies in polluted, high crime rate, or otherwise unpleasant locations pay higher compensation to their chief executive officers (CEOs) than companies located in more livable locations. This premium in pay for quality of life is stronger when firms face tougher competition in the managerial labor market, when the CEO is hired from outside, and when the CEO has short-term career concerns. Overall, the geographic desirability of the corporate headquarters is an effective substitute for CEO monetary pay.

By KEVIN LEWIS | 09:00:00 AM

Thursday, June 13, 2013

Let there be light

Scientific faith: Belief in science increases in the face of stress and existential anxiety

Miguel Farias et al.
Journal of Experimental Social Psychology, forthcoming

Abstract:
Growing evidence indicates that religious belief helps individuals to cope with stress and anxiety. But is this effect specific to supernatural beliefs, or is it a more general function of belief - including belief in science? We developed a measure of belief in science and conducted two experiments in which we manipulated stress and existential anxiety. In Experiment 1, we assessed rowers about to compete (high-stress condition) and rowers at a training session (low-stress condition). As predicted, rowers in the high-stress group reported greater belief in science. In Experiment 2, participants primed with mortality (vs. participants in a control condition) reported greater belief in science. In both experiments, belief in science was negatively correlated with religiosity. Thus, some secular individuals may use science as a form of "faith" that helps them to deal with stressful and anxiety-provoking situations.

----------------------

The Impact of Repealing Sunday Closing Laws on Educational Attainment

Dara Lee
Journal of Human Resources, Spring 2013, Pages 286-310

Abstract:
Adolescents face daily tradeoffs between human capital investment, labor, and leisure. This paper exploits state variation in the repeal of Sunday closing laws to examine the impact of a distinct and plausibly exogenous rise in the quantity of competing diversions available to youth on their educational attainment. The results suggest that the repeals led to a significant decline in both years of education and the probability of high school completion. I explore increased employment and risky behaviors as potential mechanisms. Further, I find a corresponding decline of the repeals on adult wages.

----------------------

God and Governance: Development, State Capacity, and the Regulation of Religion

David Buckley & Luis Felipe Mantilla
Journal for the Scientific Study of Religion, June 2013, Pages 328-348

Abstract:
In this article, we propose a new approach to an old question: How does development affect religion-state relations? We argue that because development increases states' ability to effectively formulate and implement policy, it will be associated with greater state regulation of religion. This stands in contrast to predominant theories that examine development's negative impact on individual religiosity while largely overlooking the impact that development may have on state institutions. We test our theory using data drawn from over 160 countries, and demonstrate that the effect of economic development on state regulation of religion is consistently positive, substantively significant, and robust to alternative measurements and the inclusion of a broad range of controls. Statistical analysis also demonstrates that the correlation between development and state regulation of religion is primarily a result of economic development's impact on state capacity, rather than social dislocation or improved coordination by religious communities. Incorporating state capacity recasts the study of religious regulation-and suggests that economic growth is unlikely to take religion off the political agenda.

----------------------

Activating Christian religious concepts increases intolerance of ambiguity and judgment certainty

Christina Sagioglou & Matthias Forstmann
Journal of Experimental Social Psychology, forthcoming

Abstract:
How does living in a society in which one is frequently exposed to reminders of its Christian foundations shape one's basic cognitions and behaviors? Following contextual priming logic, being exposed to Christian religious content should render associated norms accessible. One prototypical Christian norm is the reliance on dichotomous moral categories such as right vs. wrong (virtuous vs. sinful). If Christian primes indeed activate this normative structure, it should manifest itself in an increased ambiguity intolerance. We tested this reasoning in five studies. Specifically, we demonstrated that semantically activating Christian concepts increases self-reported ambiguity intolerance (Study 1), preference for a non-ambiguous (vs. ambiguous) visual stimulus (Study 2), as well as judgment certainty as means to reduce experienced ambiguity (Studies 3a & 3b). Finally, we extended our laboratory findings to real-life environments by showing that individuals exposed to a cathedral (vs. a place with civic buildings) reported increased ambiguity intolerance (Study 4).

----------------------

Religious Discrimination and International Crises: International Effects of Domestic Inequality

Özgür Özdamar & Yasemin Akbaba
Foreign Policy Analysis, forthcoming

Abstract:
This paper explores religious discrimination against ethnic groups and foreign policy crisis linkages as part of the broader foreign policy approaches developed by McGowan and Shapiro, and James and Özdamar. Informed by the literature suggesting that domestic policies of repression and inequality may result in similar patterns of behavior internationally, this study tests whether states characterized by high levels of religious discrimination against ethnoreligious minorities are more likely to initiate or become involved in foreign policy crises with other states in general. A broad range of data sources, including an independently collected religious discrimination index, are used to test the hypothesized relationship between religious discrimination and international crisis during the period 1990-2003. The results suggest that religious discrimination is an important predictor of initiating and becoming involved in international crises.

----------------------

Two Happiness Puzzles

Angus Deaton & Arthur Stone
American Economic Review, May 2013, Pages 591-597

Abstract:
We consider two happiness puzzles. First, many studies show that only relative income matters for well-being. Yet the Gallup data for the United States and from the rest of the world show no such result, at least for life evaluation. There may be relative income effects in hedonic well-being though other interpretations are available. Second, more religious people typically report higher experiential well-being but more religious places have worse well-being on average, both across US states and across countries. More religious states and counties in the US also have worse murder rates, deaths from cardiovascular disease and from cancer.

----------------------

Religion and Medicalization: The Case of ADHD

Kati Li
Journal for the Scientific Study of Religion, June 2013, Pages 309-327

Abstract:
As a medicalized condition, Attention Deficit Hyperactivity Disorder (ADHD) sparks considerable public controversy. Previous research has highlighted the importance of examining the factors that influence attitudes toward ADHD. This article examines an understudied factor, religion, and its relationship with ADHD attitudes. Using data from the 2002 General Social Survey National Stigma Study-Children, this research finds that compared to the rest of the population, evangelical Christians are less likely to view ADHD as a real disease and to believe children with ADHD should be treated with medication. Results also demonstrate that evangelicals are more likely to think doctors are overmedicating children with common behavior problems and to think medication prevents families from working out problems themselves. On the other hand, church attendance is unrelated to beliefs about ADHD treatment but is positively associated with thinking ADHD is a real disease. These findings add new insights to the existing literature on religion and medicalization.

----------------------

In Defense of Civil and Religious Liberty: Anti-Sabbatarianism in the United States before the Civil War

Tim Verhoeven
Church History, June 2013, Pages 293-316

Abstract:
The decades before the Civil War witnessed a series of battles over the meaning and legal status of the American Sabbath. Scholarship has focused on the Sabbatarian movement, a cluster of evangelical churches that sought to institutionalize the Sunday Sabbath. This article takes a new approach by investigating the anti-Sabbatarian movement. In a series of controversies, from Sunday mail in the Jacksonian era to the running of Sunday streetcars on the eve of the Civil War, anti-Sabbatarians rallied against Sabbath laws as an infringement of civil and religious liberty. Though diverse in orientation, anti-Sabbatarians agreed that religion and politics should be kept apart, and that the United States was not, in constitutional terms, a Christian nation. A study of anti-Sabbatarianism is thus of rich significance for the history of Church-State relations in the United States.

----------------------

Uncertainty avoidance moderates the link between faith and subjective well-being around the world

Aleksandr Kogan et al.
Journal of Positive Psychology, May/June 2013, Pages 242-248

Abstract:
Theorists have suggested that faith in God can play an important role in the relief of anxiety associated with uncertainty. Yet little is known about the impact of national differences in uncertainty avoidance - the degree to which uncertainty is threatening to members of a culture - on the relationship between faith and subjective well-being. In the present study, we investigated faith's relationships with psychological well-being in the World and European Values Surveys for nearly 240,000 people in 92 countries, and the role national uncertainty avoidance plays in modifying these relationships. We found that faith was positively related to subjective well-being around the world overall, but this relationship was moderated by uncertainty avoidance. In particular, the relationship between faith and well-being was strongest in nations characterized by the highest levels of uncertainty avoidance. Our results suggest that cultural norms of uncertainty avoidance play a role in determining faith's role in psychological functioning.

----------------------

A Religious Profile of American Entrepreneurs

Kevin Dougherty et al.
Journal for the Scientific Study of Religion, June 2013, Pages 401-409

Abstract:
The entrepreneur is a celebrated figure in American society. These innovative risk-takers hold an influential place in the economy and in popular culture. Substantial research has gone into identifying characteristics associated with these individuals, but research on entrepreneurs and religion is surprisingly sparse and inconsistent. Using national survey data, we examine religious affiliation, belief, and behavior for Americans who have started or are trying to start a business. American entrepreneurs appear no different than nonentrepreneurs in religious affiliation, belief in God, or religious service attendance. They do tend to see God as more personal, pray more frequently, and are more likely to attend a place of worship that encourages business activity. A discussion of implications concludes the research note.

----------------------

The Sacralization of the Individual: Human Rights and the Abolition of the Death Penalty

Matthew Mathias
American Journal of Sociology, March 2013, Pages 1246-1283

Abstract:
In the latter half of the 20th century, countries abolished the death penalty en masse. What factors help to explain this global trend? Conventional analyses explain abolition by focusing primarily on state level political processes. This article contributes to these studies by analyzing world cultural factors that lend to the abolition trend. The main finding in three separate models on full, ordinary, and de facto cumulative measures of abolition show that the global sacralization of the individual, measured as the institutionalization of the human rights regime, represents a significant driver of states' abolition. Countries' predominant religion is also found to significantly affect the probability of abolition: predominantly Catholic nation-states are most likely to abolish the death penalty, and predominantly Muslim nation-states are least likely to abolish. These findings provide evidence for world cultural factors that structure the abolition trend globally.

----------------------

An Afterlife Capital Model of Religious Choice

Derek Pyne
Journal of Economic Behavior & Organization, August 2013, Pages 32-44

Abstract:
This paper uses a modified version of the afterlife capital model to study religious choice. It compares a religious monopoly with various duopolies. The duopolies involve both exclusivist and nonexclusivist religions. Contrary to the supply side literature, it finds that religious choice does not necessarily increase religiosity and in some cases decreases it. It also finds that adopting exclusivist doctrines is a dominant strategy for a religion. Possible extensions of the framework to other issues in the economics of religion are also discussed.

----------------------

"Secularization of Consciousness" or Alternative Opportunities? The Impact of Economic Growth on Religious Belief and Practice in 13 European Countries

Jochen Hirschle
Journal for the Scientific Study of Religion, June 2013, Pages 410-424

Abstract:
This research note contributes to an evaluation of the validity of secularization theory by studying the relationship between economic modernization and patterns of religious change. Both the disenchantment narrative of Berger and Weber and the existential security perspective of Inglehart hypothesize that economic development should be accompanied by a weakening of religious values. Using macro-level panel regressions, my analysis reveals that while economic growth is directly associated with diminishing church attendance rates, it is not directly associated with a decline in belief. The relation between economic growth and religious decline is therefore not primarily mediated by a "secularization of consciousness." Findings instead indicate that economic prosperity leads to a change in consumption patterns on the part of individuals due to increased income and availability of alternative, secular opportunities to meet needs previously fulfilled by traditional religion. A decline in religious belief may occur as a secondary consequence of this behavioral change, since diminishing worship attendance rates reduce the influence of religion on value socialization.

----------------------

Witchcraft Beliefs and Witch Hunts

Niek Koning
Human Nature, June 2013, Pages 158-181

Abstract:
This paper proposes an interdisciplinary explanation of the cross-cultural similarities and evolutionary patterns of witchcraft beliefs. It argues that human social dilemmas have led to the evolution of a fear system that is sensitive to signs of deceit and envy. This was adapted in the evolutionary environment of small foraging bands but became overstimulated by the consequences of the Agricultural Revolution, leading to witch paranoia. State formation, civilization, and economic development abated the fear of witches and replaced it in part with more collectivist forms of social paranoia. However, demographic-economic crises could rekindle fear of witches - resulting, for example, in the witch craze of early modern Europe. The Industrial Revolution broke the Malthusian shackles, but modern economic growth requires agricultural development as a starting point. In sub-Saharan Africa, witch paranoia has resurged because the conditions for agricultural development are lacking, leading to fighting for opportunities and an erosion of intergenerational reciprocity.

----------------------

The longitudinal relationships between adolescent religious values and personality

Lee Huuskes, Joseph Ciarrochi & Patrick Heaven
Journal of Research in Personality, October 2013, Pages 483-487

Abstract:
This research examined the longitudinal relationships between personality and religious values. High school students in Grades 10 (381 males, 384 females; mean age 15.40 yrs.) and Grade 12 (195 males, 215 females; mean age = 17.02 yrs.) completed personality and religious measures as part of the Wollongong Youth Study. Structural equation modelling (SEM) indicated that religious values at Time 1 predicted an increase in Agreeableness and a decrease in Psychoticism at Time 2. These effects were confirmed to be independent of each other when the SEMs included both Agreeableness and Psychoticism. Results are discussed with reference to the implications of religious values for the development of personality.

----------------------

Religion and Whites' Attitudes Toward Interracial Marriage with African Americans, Asians, and Latinos

Samuel Perry
Journal for the Scientific Study of Religion, June 2013, Pages 425-442

Abstract:
Religious factors have been shown to influence whites' attitudes toward interracial marriage, but this relationship has yet to be studied in depth. This study examines how religious affiliation, beliefs, practices, and congregational composition affect whites' attitudes toward interracial marriage with African Americans, Asians, and Latinos. Employing data from Wave 2 of the Baylor Religion Survey, I estimate ordered logit regression models to examine the influence of religious factors on whites' attitudes toward racial exogamy, net of sociodemographic controls. Analyses reveal that, relative to evangelicals, religiously unaffiliated whites report greater support of intermarriage with all minority groups. Biblical literalists are less likely to support interracial marriage to Asians and Latinos. However, whites who frequently engage in devotional religious practices are more likely to support interracial marriage with all racial groups, as are whites who attend multiracial congregations. My findings suggest that the relationship between religion and whites' attitudes toward racial exogamy is more complex than previously thought and that the influence of religious practices and congregational composition should not be overlooked.

----------------------

Emotional intelligence: What is it, and do Anglican clergy have it?

Kelvin John Randall
Mental Health, Religion & Culture, forthcoming

Abstract:
The development of the term "emotional intelligence" (EI), its conceptualisation and three attempts to measure it are outlined. The Assessing Emotions Scale is used as part of a longitudinal study with Anglican clergy in England and Wales in their 14th year in ordained ministry. Clergy by their role are expected to be pastors, counsellors and visitors. Contrary to expectations, the clergy scored lower on EI than any other group reported by the authors of the Assessing Emotions Scale.

----------------------

Changes in Americans' Views of Prayer and Reading the Bible in Public Schools: Time Periods, Birth Cohorts, and Religious Traditions

Philip Schwadel
Sociological Forum, June 2013, Pages 261-282

Abstract:
I use repeated cross-sectional survey data spanning the years 1974 to 2010 to examine changes in Americans' views of prayer and reading the Bible in public schools. Results from logistic regression models show that support for prayer and reading the Bible in public schools was relatively high in the 1970s and that differences between evangelical Protestants and both Catholics and mainline Protestants grew from the 1970s to the first decade of the twenty-first century. Hierarchical age-period-cohort models demonstrate that changes in support for school prayer are due to both period and birth cohort changes, that baby boom cohorts are relatively likely to oppose prayer and reading the Bible in school, and that growing differences in support for prayer and reading the Bible in school between evangelical Protestants and both Catholics and mainline Protestants are predominantly due to changes across birth cohorts. Although religious liberals and conservatives have become more alike in many ways, evangelical Protestants have diverged from affiliates of other major religious traditions in their support for prayer in public schools. These results are relevant to debates regarding the social impact of religious affiliation, generational differences, and Americans' views of the role of religion in the public sphere.

----------------------

Exploration of Charity toward Busking (Street Performance) as a Function of Religion

John Lemay & Larry Bates
Psychological Reports, April 2013, Pages 578-592

Abstract:
To examine conceptions of religion and charity in a new venue - busking (street performance) - 103 undergraduate students at a regional university in the southeastern U.S. completed a battery of surveys regarding religion, and attitudes and behaviors toward busking. For those 85 participants who had previously encountered a busker, stepwise regression was used to predict increased frequency of giving to buskers. The best predictive model of giving to buskers consisted of three variables including less experienced irritation toward buskers, prior experience with giving to the homeless, and lower religious fundamentalism.

By KEVIN LEWIS | 09:00:00 AM

Wednesday, June 12, 2013

Educated guess

What Can Be Done to Improve Struggling High Schools?

Julie Berry Cullen et al.
Journal of Economic Perspectives, Spring 2013, Pages 133-152

Abstract:
In spite of decades of well-intentioned efforts targeted at struggling high schools, outcomes today are little improved. A handful of innovative programs have achieved great success on a small scale, but more generally, the economic futures of the students at the bottom of the human capital distribution remain dismal. In our view, expanding access to educational options that focus on life skills and work experience, as opposed to a focus on traditional definitions of academic success, represents the most cost-effective, broadly implementable source of improvements for this group.

----------------------

Late Interventions Matter Too: The Case of College Coaching New Hampshire

Scott Carrell & Bruce Sacerdote
NBER Working Paper, May 2013

Abstract:
We present evidence from an ongoing field experiment in college coaching/mentoring. The experiment is designed to ask whether mentoring plus cash incentives provided to high school students late in their senior year have meaningful impacts on college going and persistence. For women, we find large impacts on the decision to enroll in college and to remain in college. Intention to treat estimates are an increase in 15 percentage points in the college going rate (against a base rate of 50 percent) while treatment on the treated estimates are 30 percentage points. Offering cash bonuses alone without mentoring has no effect. There are no effects for men in the sample. The absence of effects for men is not explained by an interaction of the program with academic ability, work habits, or family and guidance support for college applications. However, differential returns to college and/or occupational choice may explain some of the differences in treatment effects for men and women.

----------------------

The Effects of School Calendar Type on Maternal Employment across Racial Groups: A Story of Child Care Availability

Jennifer Graves
American Economic Review, May 2013, Pages 279-283

Abstract:
This paper presents evidence that school districts' use of an alternative academic calendar, the year-round school calendar, results in a reduction in maternal employment for women with school-aged children that varies in magnitude across racial groups. Negative employment effects are larger in districts with a particularly high proportion white and smaller in districts with a particularly high proportion of minorities. The larger effects in primarily white school districts is not likely to be explained by income differences, yet could potentially be explained by the lower reliance on relatives for child care among whites than minorities.

----------------------

Intergenerational Long Term Effects of Preschool - Structural Estimates from a Discrete Dynamic Programming Model

James Heckman & Lakshmi Raut
NBER Working Paper, May 2013

Abstract:
This paper formulates a structural dynamic programming model of preschool investment choices of altruistic parents and then empirically estimates the structural parameters of the model using the NLSY79 data. The paper finds that preschool investment significantly boosts cognitive and non-cognitive skills, which enhance earnings and school outcomes. It also finds that a standard Mincer earnings function, by omitting measures of non-cognitive skills on the right hand side, overestimates the rate of return to schooling. From the estimated equilibrium Markov process, the paper studies the nature of within generation earnings distribution and intergenerational earnings and schooling mobility. The paper finds that a tax financed free preschool program for the children of poor socioeconomic status generates positive net gains to the society in terms of average earnings and higher intergenerational earnings and schooling mobility.

----------------------

The Relationship between Schooling and Migration: Evidence from Compulsory Schooling Laws

Peter McHenry
Economics of Education Review, August 2013, Pages 24-40

Abstract:
I estimate the effect of schooling on the propensity to migrate by exploiting variation in schooling due to compulsory schooling laws (CSLs) in the United States. I obtain negative estimates of this effect among those with relatively little schooling. In contrast, previous research estimates positive schooling effects on migration at higher levels of schooling. I speculate that additional schooling at low levels enhances local labor market contacts and thereby increases the opportunity cost of migration (leaving those contacts behind).

----------------------

Making College Worth It: A Review of Research on the Returns to Higher Education

Philip Oreopoulos & Uros Petronijevic
NBER Working Paper, May 2013

Abstract:
Recent stories of soaring student debt levels and under-placed college graduates have caused some to question whether a college education is still a sound investment. In this paper, we review the literature on the returns to higher education in an attempt to determine who benefits from college. Despite the tremendous heterogeneity across potential college students, we conclude that the investment appears to payoff for both the average and marginal student. During the past three decades in particular, the earnings premium associated with a college education has risen substantially. Beyond the pecuniary benefits of higher education, we suggest that there also may exist non-pecuniary benefits. Given these findings, it is perhaps surprising that among recent cohorts college completion rates have stagnated. We discuss potential explanations for this trend and conclude by succinctly interpreting the evidence on how to make the most out of college.

----------------------

Parental Credit Constraints and Children's College Education

Olga Sorokina
Journal of Family and Economic Issues, June 2013, Pages 157-171

Abstract:
What fraction of college-age youths in the United States comes from liquidity-constrained families? This question is important because such youths may have difficulties borrowing for college education and be less likely to enroll. While most earlier studies have concluded that credit constraints in education are not pervasive, these studies have relied on indirect measures and data sources from the 1980s. The contribution of this descriptive study is the use of parents' reports of borrowing limitations in the National Longitudinal Survey of Youth (NLSY79) Young Adult Supplement to evaluate the pervasiveness of credit constraints in the early 2000s. The results indicate that about 20 percent of college-age youths are potentially credit-constrained and are less likely to attend college.

----------------------

Information and Student Achievement: Evidence from a Cellular Phone Experiment

Roland Fryer
NBER Working Paper, June 2013

Abstract:
This paper describes a field experiment in Oklahoma City Public Schools in which students were provided with free cellular phones and daily information about the link between human capital and future outcomes via text message. Students' reported beliefs about the relationship between education and outcomes were influenced by treatment, and treatment students also report being more focused and working harder in school. However, there were no measureable changes in attendance, behavioral incidents, or test scores. The patterns in the data appear most consistent with a model in which students cannot translate effort into measureable output, though other explanations are possible.

----------------------

How fair is access to more prestigious UK universities?

Vikki Boliver
British Journal of Sociology, June 2013, Pages 344-364

Abstract:
Now that most UK universities have increased their tuition fees to £9,000 a year and are implementing new Access Agreements as required by the Office for Fair Access, it has never been more important to examine the extent of fair access to UK higher education and to more prestigious UK universities in particular. This paper uses Universities and Colleges Admissions Service (UCAS) data for the period 1996 to 2006 to explore the extent of fair access to prestigious Russell Group universities, where ‘fair' is taken to mean equal rates of making applications to and receiving offers of admission from these universities on the part of those who are equally qualified to enter them. The empirical findings show that access to Russell Group universities is far from fair in this sense and that little changed following the introduction of tuition fees in 1998 and their initial increase to £3,000 a year in 2006. Throughout this period, UCAS applicants from lower class backgrounds and from state schools remained much less likely to apply to Russell Group universities than their comparably qualified counterparts from higher class backgrounds and private schools, while Russell Group applicants from state schools and from Black and Asian ethnic backgrounds remained much less likely to receive offers of admission from Russell Group universities in comparison with their equivalently qualified peers from private schools and the White ethnic group.

----------------------

Do First Impressions Matter? Improvement in Early Career Teacher Effectiveness

Allison Atteberry, Susanna Loeb & James Wyckoff
NBER Working Paper, June 2013

Abstract:
Educational policymakers struggle to find ways to improve the quality of the teacher workforce. The early career period represents a unique opportunity to identify struggling teachers, examine the likelihood of future improvement, and make strategic pre-tenure investments in improvement as well as dismissals to increase teaching quality. To date, only a little is known about the dynamics of teacher performance in the first five years. This paper asks how much teachers vary in performance improvement during their first five years of teaching and to what extent initial job performance predicts later performance. We find that, on average, initial performance is quite predictive of future performance, far more so than typically measured teacher characteristics. Predictions are particularly powerful at the extremes. We employ these predictions to explore the likelihood of personnel actions that inappropriately distinguish performance when such predictions are mistaken as well as the much less discussed costs of failure to distinguish performance when meaningful differences exist. The results have important consequences for improving the quality of the teacher workforce.

----------------------

The Design of Teacher Incentive Pay and Educational Outcomes: Evidence from the New York City Bonus Program

Sarena Goodman & Lesley Turner
Journal of Labor Economics, April 2013, Pages 409-420

Abstract:
Teacher compensation schemes are often criticized for lacking a performance-based component. Proponents argue that teacher incentive pay can raise student achievement and stimulate system-wide innovation. We examine a group-based teacher incentive scheme implemented in New York City and investigate whether specific features of the program contributed to its ineffectiveness. Although overall the program had little effect on student achievement, we show that in schools where incentives to free ride were weakest, the program led to small increases in math achievement. Our results underscore the importance of carefully considering the design of teacher incentive pay programs.

----------------------

Academic Performance and College Dropout: Using Longitudinal Expectations Data to Estimate a Learning Model

Todd Stinebrickner & Ralph Stinebrickner
NBER Working Paper, April 2013

Abstract:
We estimate a dynamic learning model of the college dropout decision, taking advantage of unique expectations data to greatly reduce our reliance on assumptions that would otherwise be necessary for identification. We find that forty-five percent of the dropout that occurs in the first two years of college can be attributed to what students learn about their about academic performance, but that this type of learning becomes a less important determinant of dropout after the midpoint of college We use our model to quantify the importance of the possible avenues through which poor grade performance could influence dropout. Our simulations show that students who perform poorly tend to learn that staying in school is not worthwhile, not that they fail out or learn that they are more likely (than they previously believed) to fail out in the future. We find that poor performance both substantially decreases the enjoyability of school and substantially influences beliefs about post-college earnings.

----------------------

The Effectiveness of Extended Day Programs: Evidence from a Randomized Field Experiment in the Netherlands

Erik Meyer & Chris Van Klaveren
Economics of Education Review, forthcoming

Abstract:
Policies that aim at improving student achievement frequently increase instructional time, for example by means of an extended day program. There is, however, hardly any evidence that these programs are effective, and the few studies that allow causal inference indicate that we should expect neutral to small effects of such programs. This study conducts a randomized field experiment to estimate the effect of an extended day program in seven Dutch elementary schools on math and language achievement. The empirical results show that this three-month program had no significant effect on math or language achievement.

----------------------

Education, Cognition and Health: Evidence from a Social Experiment

Costas Meghir, Mårten Palme & Emilia Simeonova
NBER Working Paper, April 2013

Abstract:
In this paper we examine how an education policy intervention - the introduction of a comprehensive school in Sweden that increased the number of compulsory years of schooling, affected cognitive and non-cognitive skills and long-term health. We use detailed administrative data combined with survey information to create a data set with background information, child ability and long-term adult outcomes. We show that extra education results in significant gains in skills among children, but the effects on long-term health are overall negligible. However, we demonstrate that the schooling reform had heterogeneous effects across family socio-economic backgrounds and initial skill endowments, with significant improvements in cognition and skills for lower Socio-economic status individuals and lower ability people.

----------------------

Class-size effects on adolescents' mental health and well-being in Swedish schools

Niklas Jakobsson, Mattias Persson & Mikael Svensson
Education Economics, Spring 2013, Pages 248-263

Abstract:
This paper analyzes whether class size has an effect on the prevalence of mental health problems and well-being among adolescents in Swedish schools. We use cross-sectional data collected in year 2008 covering 2755 Swedish adolescents in ninth grade from 40 schools and 159 classes. We utilize different econometric approaches to address potential between- and within-school endogeneity including school-fixed effects and regression discontinuity approaches. Our results indicate no robust effects of class size on the prevalence of mental health problems and well-being, and we cannot reject the hypothesis that class size has no effect on mental health and well-being at all.

----------------------

Universities Scale Like Cities

Anthony van Raan
PLoS ONE, March 2013

Abstract:
Recent studies of urban scaling show that important socioeconomic city characteristics such as wealth and innovation capacity exhibit a nonlinear, particularly a power law scaling with population size. These nonlinear effects are common to all cities, with similar power law exponents. These findings mean that the larger the city, the more disproportionally they are places of wealth and innovation. Local properties of cities cause a deviation from the expected behavior as predicted by the power law scaling. In this paper we demonstrate that universities show a similar behavior as cities in the distribution of the ‘gross university income' in terms of total number of citations over ‘size' in terms of total number of publications. Moreover, the power law exponents for university scaling are comparable to those for urban scaling. We find that deviations from the expected behavior can indeed be explained by specific local properties of universities, particularly the field-specific composition of a university, and its quality in terms of field-normalized citation impact. By studying both the set of the 500 largest universities worldwide and a specific subset of these 500 universities - the top-100 European universities - we are also able to distinguish between properties of universities with as well as without selection of one specific local property, the quality of a university in terms of its average field-normalized citation impact. It also reveals an interesting observation concerning the working of a crucial property in networked systems, preferential attachment.

----------------------

Prelude to the Common Core: Internationally Benchmarking a State's Math Standards

Christopher Woolard
Educational Policy, July 2013, Pages 615-644

Abstract:
As states struggle with the notion of international competitiveness, the quality and rigor of academic content standards has come into question. While Ohio's content standards are well regarded, the state initiated a process to revise the standards and eventually joined with the majority of states in adopting a voluntary set of national standards - the Common Core. This study uses the Surveys of Enacted Curriculum (SEC) methodology to examine Ohio's current math content standards in comparison to TIMSS, PISA, high performing international counterparts, and the recently released Common Core. Specifically, it examines whether the state's standards are "a mile wide and inch deep." Second, this study analyzes whether high performing countries' standards are more aligned to Trends in International Mathematics and Science Study (TIMSS) and Program for International Student Assessment (PISA) through the SEC lens of topic and cognitive expectations. Ohio's standards generally are less focused than the international comparisons, not very aligned to TIMSS and PISA, and have lower cognitive expectations. The CCSS have greatly increased that focus by reducing the number of topics in the analyzed grade levels while increasing the levels of cognitive expectations. These results provide a baseline for comparison to the full implementation of the Common Core. Once fully implemented, policy makers will have a reference point for evaluation of policy goals.

----------------------

The role of social media in shaping first-generation high school students' college aspirations: A social capital lens

Donghee Yvette Wohn et al.
Computers & Education, April 2013, Pages 424-436

Abstract:
Using survey data collected from a sample of high school students in the United States (N = 504), this study examined how different types of social capital associated with parents, close friends, and Facebook Friends were related to students' confidence about their knowledge of the college application process and their expectations about succeeding in college. We found that social media use plays a significant role only for first-generation students - students whose parents did not graduate from college. For first-generation students, finding information about college through social media was associated with higher levels of efficacy about college application procedures. Having access via social media to a broader network of people who could actively answer questions and provide informational support was positively related with first-generation students' expectations about their ability to be successful in college, but was not the case for non first-generations.

----------------------

The impact of accountability on teachers' assessments of student performance: A social cognitive analysis

Sabine Krolak-Schwerdt, Matthias Böhmer & Cornelia Gräsel
Social Psychology of Education, June 2013, Pages 215-239

Abstract:
Research on teachers' judgments of student performance has demonstrated that educational assessments may be biased or may more correctly take the achievements of students into account depending on teachers' motivations while making the judgment. Building on research on social judgment formation the present investigation examined whether the accountability of teachers has an influence on judgment formation. We predicted that unaccountable teachers would activate social categories and use them for the assessment, whereas accountable teachers' attention would be directed to individual attributes of students. Using secondary school teachers as participants, three studies investigating teachers' assessments, inferences and memory for students' attributes supported these hypotheses. Thus, accountability appears to be a moderator of social information processing and judgment formation in the domain of educational assessments.

----------------------

The Influence of Students' Social Background and Parental Involvement on Teachers' School Track Choices: Reasons and Consequences

Katherin Barg
European Sociological Review, June 2013, Pages 565-579

Abstract:
In France, the transition from lower to upper secondary education is quite particular: families are involved in an institutionalized dialogue with the school. In the first step of this dialogue, the families pronounce a school track request; in the second step, the staff meeting formulates a school track proposition. As a third step, the families have the option to reject the staff's decision and if they do so, they are invited to discuss their request with the headmaster. Based on this obligatory talk, a decision is taken by the headmaster. This article investigates the influence of students' social background on the second step, i.e. the staff meeting's proposition. Based on rational action theory, first, a model is developed to explain the staff's decision-making and, second, this model is empirically tested with rich longitudinal data. In sum, the findings reveal that the staff's decisions are extremely driven by families' requests and, thus, reproduce the social class differentials that emerge through families' decision-making. Moreover, given the same request and school performance, the staff is even more likely to propose the general school track to families from higher social classes. Finally, the results show a notable impact of parental involvement on school staff's decision-making.

----------------------

Leftmost-digit-bias in an enumerated public sector? An experiment on citizens' judgment of performance information

Asmus Leth Olsen
Judgment and Decision Making, May 2013, Pages 365-371

Abstract:
Numerical performance information is increasingly important to political decision-making in the public sector. Some have suggested that biases in citizens' processing of numerical information can be exploited by politicians to skew citizens' perception of performance. I report on an experiment on how citizens evaluate numerical performance information from a public school context. The experiment is conducted with a large and diverse sample of the Danish population (N=1156). The analysis shows a strong leftmost-digit-bias in citizens' evaluation of school grading information. Thus, very small changes in reported average grades, which happen to shift the leftmost grade digit, can lead to very large shifts in citizens' evaluation of performance. The rightmost digit on the grade is almost fully ignored.

----------------------

Central School Exit Exams and Labor-Market Outcomes

Marc Piopiunik, Guido Schwerdt & Ludger Woessmann
European Journal of Political Economy, September 2013, Pages 93-108

Abstract:
Many countries use centralized exit exams as a governance devise of the school system. While abundant evidence suggests positive effects of central exams on achievement tests, previous research on university-bound students shows no effects on subsequent earnings. We suggest that labor-market effects may be more imminent for students leaving school directly for the labor market and, on rigid labor markets, for unemployment. Exploiting variation in exit-exam systems across German states, we find that central exams are indeed associated with higher earnings for students from the school type directly bound for the labor market, as well as with lower unemployment.

----------------------

Schools and Location: Tiebout, Alonso, and Governmental Finance Policy

Eric Hanushek & Kuzey Yilmaz
Journal of Public Economic Theory, forthcoming

Abstract:
Many discussions of school finance policy fail to consider how households respond to policies that change the attractiveness of different residential locations. We develop a general equilibrium model that incorporates workplace choice, residential choice, and political choice of tax and expenditure levels. Importantly, we consider multiple workplaces, a fundamental feature of today's metropolitan landscape. This basic model permits investigating how accessibility and public goods interact in a metropolitan area. The model is used to analyze two conventional policy initiatives: school district consolidation and district power equalization. The surprising conclusion is that school quality and welfare can fall for all families when these restrictions on choice are introduced.

By KEVIN LEWIS | 09:00:00 AM

Tuesday, June 11, 2013

Dealer

Can Marijuana Reduce Social Pain?

Timothy Deckman et al.
Social Psychological and Personality Science, forthcoming

Abstract:
Social and physical pain share common overlap at linguistic, behavioral, and neural levels. Prior research has shown that acetaminophen - an analgesic medication that acts indirectly through cannabinoid 1 receptors - reduces the social pain associated with exclusion. Yet, no work has examined if other drugs that act on similar receptors, such as marijuana, also reduce social pain. Across four methodologically diverse samples, marijuana use consistently buffered people from the negative consequences associated with loneliness and social exclusion. These effects were replicated using cross-sectional, longitudinal, and experimental designs. These findings offer novel evidence supporting common overlap between social and physical pain processes.

----------------------

Alcohol Reverses Religion's Prosocial Influence on Aggression

Aaron Duke & Peter Giancola
Journal for the Scientific Study of Religion, June 2013, Pages 279-292

Abstract:
The relationship between religion and violence is controversial. Discrepant findings exist between survey studies and the limited number of experimental investigations of religiosity's influence on aggressive behavior. We have attempted to resolve this discrepancy by addressing previous limitations in the literature and assessing a heretofore-untested moderator of religiosity and aggression: alcohol intoxication. This investigation included a community sample of 251 men and 269 women randomly assigned to either an acute alcohol intoxication condition or a placebo condition. Participants completed a series of questions drawn from standardized instruments of religiosity and spirituality prior to competing on an aggression laboratory paradigm in which electric shocks were received from, and administered to, a fictitious opponent under the guise of a competitive reaction-time task. Hierarchical regression analyses revealed a significant beverage-by-religiosity interaction. Religiosity predicted lower levels of aggression for participants in the placebo group and higher levels of aggression for intoxicated participants. Results indicated that high religiosity coupled with alcohol intoxication may be a risk factor for aggression. This novel finding may help to clarify previous discrepancies in studies of religiosity and aggression.

----------------------

Drinking drivers and drug use on weekend nights in the United States

Robert Voas et al.
Drug and Alcohol Dependence, 1 June 2013, Pages 215-221

Background: Studies of drinking drivers in alcohol-related crashes have shown that high breath-alcohol concentrations (BrACs) are associated with illegal drug use. Until the 2007 National Roadside Survey (NRS), the prevalence of drugs among drinking drivers on U.S. roads was unknown. Using NRS data, we explore how many drivers with positive BrACs may also be using drugs and their significance to current drinking-driving enforcement procedures.

Methods: Based on a stratified, random sample covering the 48 U.S. contiguous states, we conducted surveys on weekend nights from July-November 2007. Of the 8384 eligible motorists contacted, 85.4% provided a breath sample; 70.0%, an oral fluid sample; and 39.1%, a blood sample. We conducted regression analyses on 5912 participants with a breath test and an oral fluid or blood test. The dependent variables of interest were illegal drugs (cocaine, cannabinoids, street drugs, street amphetamines, and opiates) and medicinal drugs (prescription and over-the-counter).

Results: 10.5% of nondrinking drivers were using illegal drugs, and 26 to 33% of drivers with illegal BrACs (≥0.08 g/dL) were using illegal drugs. Medicinal drug use was more common among nondrinking drivers (4.0%) than among drivers with illegal BrACs (2.4%).

Conclusions: The significant relationship between an illegal BrAC and the prevalence of an illegal drug suggests as many as 350,000 illegal drug-using drivers are arrested each year for DWI by U.S. alcohol-impaired driving enforcement. These drug-using drivers need to be identified and appropriate sanctions/treatment programs implemented for them in efforts to extend per se laws to unapprehended drug users.

----------------------

Offender Diversion Into Substance Use Disorder Treatment: The Economic Impact of California's Proposition 36

Douglas Anglin et al.
American Journal of Public Health, June 2013, Pages 1096-1102

Objectives: We determined the costs and savings attributable to the California Substance Abuse and Crime Prevention Act (SACPA), which mandated probation or continued parole with substance abuse treatment in lieu of incarceration for adult offenders convicted of nonviolent drug offenses and probation and parole violators.

Methods: We used individually linked, population-level administrative data to define intervention and control cohorts of offenders meeting SACPA eligibility criteria. Using multivariate difference-in-differences analysis, we estimated the effect of SACPA implementation on the total and domain-specific costs to state and county governments, controlling for fixed individual and county characteristics and changes in crime at the county level.

Results: The additional costs of treatment were more than offset by savings in other domains, primarily in the costs of incarceration. We estimated the statewide policy effect as an adjusted savings of $2317 (95% confidence interval = $1905, $2730) per offender over a 30-month postconviction period. SACPA implementation resulted in greater incremental cost savings for Blacks and Hispanics, who had markedly higher rates of conviction and incarceration.

Conclusions: The monetary benefits to government exceeded the additional costs of SACPA implementation and provision of treatment.

----------------------

Racial/Ethnic and Nativity Patterns of U.S. Adolescent and Young Adult Smoking

Becky Wade, Joseph Lariscy & Robert Hummer
Population Research and Policy Review, June 2013, Pages 353-371

Abstract:
We document racial/ethnic and nativity differences in U.S. smoking patterns among adolescents and young adults using the 2006 Tobacco Use Supplement to the Current Population Survey (n = 44,202). Stratifying the sample by nativity status within five racial/ethnic groups (Asian American, Mexican-American, other Hispanic, non-Hispanic black, and non-Hispanic white), and further by sex and age, we compare self-reports of lifetime smoking across groups. U.S.-born non-Hispanic whites, particularly men, report smoking more than individuals in other racial/ethnic/nativity groups. Some groups of young women (e.g., foreign-born and U.S.-born Asian Americans, foreign-born and U.S.-born Mexican-Americans, and foreign-born blacks) report extremely low levels of smoking. Foreign-born females in all of the 25-34 year old racial/ethnic groups exhibit greater proportions of never smoking than their U.S.-born counterparts. Heavy/moderate and light/intermittent smoking is generally higher in the older age group among U.S.-born males and females, whereas smoking among the foreign-born of both sexes is low at younger ages and remains low at older ages. Taken together, these findings highlight the importance of considering both race/ethnicity and nativity in assessments of smoking patterns and in strategies to reduce overall U.S. smoking prevalence and smoking-attributable health disparities.

----------------------

Curbing coca cultivation in Colombia - A framed field experiment

Marcela Ibanez & Peter Martinsson
Journal of Public Economics, forthcoming

Abstract:
This paper investigates the efficiency of carrot and stick policies to reduce investment in coca cultivation in rural Colombia. To measure behavioral responses to anti-drug policies, we conducted a framed field experiment with farmers living in one of the most important coca growing areas. Our experimental design allows identifying heterogeneous producer types and measuring their behavioral response to carrots and sticks. We provide an example on how knowledge on distribution types can be used to design an optimal anti-drug policy. We find that about one third of the farmers have moral costs that are high enough to deter them from investing in coca and hence, would require no external incentives. Yet destroying coca completely is prohibitively costly for two fifths of the participants who would require an extremely high compensation or risk of eradication.

----------------------

Toward primary prevention of extra-medical OxyContin® use among young people

David DeAndrea, John Troost & James Anthony
Preventive Medicine, forthcoming

Objective: The prevention research context includes current epidemic levels of hazards associated with extra-medical use of OxyContin® (to get high or otherwise outside prescribed boundaries) among teenagers and young adults, and a recent OxyContin® re-formulation with an intent to reduce these hazards, plus hope for possibly beneficial primary prevention impact. The aim is to create a benchmark of risk estimates for the years just prior to OxyContin® re-formulation in anticipation of potential public health benefit in future years, with a focus on teens and the youngest adults in the United States, and to compare two methods for estimating peak risk.

Method: The data are from nationally representative probability sample surveys of 12-21 year olds, yielding estimates for incidence of extra-medical OxyContin® use. Samples are of the non-institutionalized United States population, recruited and assessed in National Surveys on Drug Use and Health (NSDUH), each year from 2004 through 2008. In aggregate, the sample includes 135,552 young people who had not used OxyContin® extra-medically prior to their year of survey assessment.

Results: The main outcome was the estimated population-level age-specific incidence of extra-medical OxyContin® use, 2004-2008. We found that during the 2004-2008 interval the estimated risk accelerated from age 12 years, reached a peak value in mid-adolescence at roughly five newly incident users per 1000 persons per year (95% confidence intervals, 0.3%, 0.7%), and then declined. A meta-analysis approach to year-by-year data differentiated age patterns more clearly than a pooled estimation approach.

Conclusion: Studying young people in the United States, we have discovered that the risk of starting to use OxyContin® extra-medically rises to a peak by mid-adolescence and then declines. From a methods standpoint, the meta-analysis serves well in this context; there is no advantage to pooling survey data across years. We also discovered that during any given year a pediatrician might rarely see even one patient who has just started to use OxyContin® to get high or for other extra-medical purposes. Implications for screening are discussed.

----------------------

Drinking to Dampen Affect Variability: Findings From a College Student Sample

Nisha Gottfredson & Andrea Hussong
Journal of Studies on Alcohol and Drugs, July 2013, Pages 576-583

Objective: We hypothesized that individuals who are unable to effectively regulate emotional reactivity, which we operationalized as variability in self-reported affect throughout the day, would use alcohol more frequently and would report higher levels of drinking to cope. Further, we hypothesized that affect variation would be a stronger predictor of alcohol use or drinking to cope than level of negative affect.

Method: A total of 86 college-age students (53% female, 77% White) participated in an intensive longitudinal study for 28 days. Participants reported positive and negative affect thrice daily and reported alcohol use once daily. Participant coping motives were assessed at study initiation.

Results: Affect variability predicted increased drinking frequency and higher levels of self-reported drinking to cope. Mean level of negative affect was not related to an increased probability of drinking, nor was it related to self-reported drinking to cope. Both individual differences in affect variation and intra-individual daily fluctuations in affect were associated with an increased likelihood of drinking.

Conclusions: Our results imply that individuals with higher-than-average levels of affect variation are at risk for high levels of alcohol involvement and that people are more likely to drink on days characterized by higher-than-normal levels of fluctuation in affect. Future studies on self-medication should consider negative affect variability in addition to - or instead of - level of negative affect.

----------------------

Illicit use of prescription stimulants in a college student sample: A theory-guided analysis

Niloofar Bavarian et al.
Drug and Alcohol Dependence, forthcoming

Background: The illicit use of prescription stimulants (IUPS) has emerged as a high-risk behavior of the 21st century college student. As the study of IUPS is relatively new, we aimed to understand (1) characteristics of IUPS (i.e., initiation, administration routes, drug sources, motives, experiences), and (2) theory-guided intrapersonal, interpersonal, and environmental correlates associated with use.

Methods: Using one-stage cluster sampling, 520 students (96.3% response rate) at one Pacific Northwest University completed a paper-based, in-classroom survey on IUPS behaviors and expected correlates. Aim 1 was addressed using descriptive statistics and aim 2 was addressed via three nested logistic regression analyses guided by the Theory of Triadic Influence.

Results: The prevalence of ever engaging in IUPS during college was 25.6%. The majority (>50.0%) of users reported initiation during college, oral use, friends as the drug source, academic motives, and experiencing desired outcomes. Intrapersonal correlates associated with use included identifying as White, lower grade point average, diagnoses of attention deficit disorder, and lower avoidance self-efficacy. Interpersonal correlates of use included off-campus residence, varsity sports participation, IUPS perceptions by socializing agents, and greater behavioral norms. Exposure to prescription drug print media, greater prescription stimulant knowledge, and positive attitudes towards prescription stimulants were environmental correlates associated with use. In all models, IUPS intentions were strongly associated with use.

Conclusions: IUPS was prevalent on the campus under investigation and factors from the intrapersonal, interpersonal and environmental domains were associated with the behavior. Implications for prevention and future research are discussed.

----------------------

The Effect of Internal Possession Laws on Underage Drinking Among High School Students: A 12-State Analysis

Lynn Disney, Robin LaVallee & Hsiao-ye Yi
American Journal of Public Health, June 2013, Pages 1090-1095

Objectives: We assessed the effect of internal possession (IP) laws, which allow law enforcement to charge underage drinkers with alcohol possession if they have ingested alcohol, on underage drinking behaviors.

Methods: We examined Youth Risk Behavior Survey (YRBS) data from 12 states with IP laws and with YRBS data before and after each law's implementation. We used logistic regression models with fixed effects for state to assess the effects of IP laws on drinking and binge drinking among high school students.

Results: Implementation of IP laws is associated with reductions in the odds of past-month drinking. This reduction was bigger among male than among female adolescents (27% vs 15%) and only significant among younger students aged 14 and 15 years (15% and 11%, respectively). Male adolescents also reported a significant reduction (24%) in the odds of past-month binge drinking under IP laws.

Conclusions: These findings suggest that IP laws are effective in reducing underage drinking, particularly among younger adolescents.

----------------------

Longitudinal Relationships Between College Education and Patterns of Heavy Drinking: A Comparison Between Caucasians and African-Americans

Pan Chen & Kristen Jacobson
Journal of Adolescent Health, forthcoming

Purpose: The current study compared longitudinal relationships between college education and patterns of heavy drinking from early adolescence to adulthood for Caucasians and African-Americans.

Methods: We analyzed data from 9,988 non-Hispanic Caucasian and African-American participants from all four waves of the National Longitudinal Study of Adolescent Health. Growth curve modeling tested differences in rates of change and levels of heavy drinking from ages 13 to 31 years among non-college youth, college withdrawers, 2-year college graduates, and 4-year college graduates, and compared these differences for Caucasians and African-Americans.

Results: There were significant racial differences in relationships between college education with both changes in and levels of heavy drinking. Rates of change of heavy drinking differed significantly across the college education groups examined for Caucasians but not for African-Americans. In addition, Caucasians who graduated from 4-year colleges showed the highest levels of heavy drinking after age 20 years, although differences among the four groups diminished by the early 30s. In contrast, for African-Americans, graduates from 2- or 4-year colleges did not show higher levels of heavy drinking from ages 20 to 31 years than the non-college group. Instead, African-American participants who withdrew from college without an associate's, bachelor's, or professional degree consistently exhibited the highest levels of heavy drinking from ages 26 to 31 years.

Conclusions: The relationship between college education and increased levels of heavy drinking in young adulthood is significant for Caucasians but not African-Americans. Conversely, African-Americans are likely to be more adversely affected than are Caucasians by college withdrawal.

----------------------

Adenovirus Capsid-based Anti-cocaine Vaccine Prevents Cocaine from Binding to the Nonhuman Primate CNS Dopamine Transporter

Anat Maoz et al.
Neuropsychopharmacology, forthcoming

Abstract:
Cocaine addiction is a major problem for which there is no approved pharmacotherapy. We have developed a vaccine to cocaine (dAd5GNE), based on the cocaine analog GNE linked to the capsid proteins of a serotype 5 adenovirus, designed to evoke anti-cocaine antibodies which sequester cocaine in the blood, preventing access to the CNS. To assess the efficacy of dAd5GNE in a large animal model, positron emission tomography (PET) and the radiotracer [11C]PE2I were used to measure cocaine occupancy of the dopamine transporter (DAT) in nonhuman primates. Repeat administration of dAd5GNE induced high anti-cocaine titers. Before vaccination, cocaine displaced PE2I from DAT in the caudate and putamen, resulting in 62±4% cocaine occupancy. In contrast, dAd5GNE vaccinated animals showed reduced cocaine occupancy such that when anti-cocaine titers were >4 × 105, the cocaine occupancy was reduced to levels of less than 20%, significantly below the 47% threshold required to evoke the subjective "high" reported in humans.

----------------------

Peer Effects in UK Adolescent Substance Use: Never Mind the Classmates?

Duncan McVicar & Arnold Polanski
Oxford Bulletin of Economics and Statistics, forthcoming

Abstract:
This article estimates peer influences on the alcohol, tobacco and cannabis use of UK adolescents. We present evidence of large, positive and statistically significant peer effects in all three behaviours when classmates are taken as the reference group. We also find large, positive and statistically significant associations between own substance use and friends' substance use. When both reference groups are considered simultaneously, the influence of classmates either disappears or is much reduced, whereas the association between own and friends' behaviours does not change. The suggestion is that classmate behaviour is primarily relevant only inasmuch as it proxies for friends' behaviour.

----------------------

The effects of exposure to violence and victimization across life domains on adolescent substance use

Emily Wright, Abigail Fagan & Gillian Pinchevsky
Child Abuse & Neglect, forthcoming

Abstract:
This study uses longitudinal data from the Project on Human Development in Chicago Neighborhoods (PHDCN) to examine the effects of exposure to school violence, community violence, child abuse, and parental intimate partner violence (IPV) on youths' subsequent alcohol and marijuana use. We also examine the cumulative effects of being exposed to violence across these domains. Longitudinal data were obtained from 1,655 adolescents and their primary caregivers participating in the PHDCN. The effects of adolescents' exposure to various forms of violence across different life domains were examined relative to adolescents' frequency of alcohol and marijuana use three years later. Multivariate statistical models were employed to control for a range of child, parent, and family risk factors. Exposure to violence in a one-year period increased the frequency of substance use three years later, though the specific relationships between victimization and use varied for alcohol and marijuana use. Community violence and child abuse, but not school violence or exposure to IPV, were predictive of future marijuana use. None of the independent measures of exposure to violence significantly predicted future alcohol use. Finally, the accumulation of exposure to violence across life domains was detrimental to both future alcohol and marijuana use. The findings support prior research indicating that exposure to multiple forms of violence, across multiple domains of life, negatively impacts adolescent outcomes, including substance use. The findings also suggest that the context in which exposure to violence occurs should be considered in future research, since the more domains in which youth are exposed to violence, the fewer "safe havens" they have available. Finally, a better understanding of the types of violence youth encounter and the contexts in which these experiences occur can help inform intervention efforts aimed at reducing victimization and its negative consequences.

----------------------

Adolescents' Access to Their Own Prescription Medications in the Home

Paula Lynn Ross-Durow, Sean Esteban McCabe & Carol Boyd
Journal of Adolescent Health, forthcoming

Purpose: The objective of this descriptive study was to determine adolescents' access to their own medications at home, specifically prescription pain, stimulant, antianxiety, and sedative medications.

Methods: Semistructured interviews were conducted with a cohort of 501 adolescents from two southeastern Michigan school districts. Participants were asked what medications had been prescribed to them during the previous 6 months; if they had received prescription medications, they were asked in-depth questions about them, including how medications were stored and supervised at home.

Results: The sample was comprised of adolescents in the 8th and 9th grades, and 50.9% were male. Participants were primarily white (72.9%, n = 365) or African-American (21.6%, n = 108). Slightly less than half of the adolescents (45.9%, n = 230) reported having been prescribed medications in the previous 6 months. Of this group, 14.3% (n = 33) had been prescribed pain medications, 9.6% (n = 22) stimulants, 1.7% (n = 4) antianxiety medications, and .9% (n = 2) sedatives. In total, 57 adolescents were prescribed medications in the pain, stimulant, antianxiety, or sedative categories (including controlled medications), and the majority (73.7%, n = 42) reported that they had unsupervised access to medications with abuse potential.

Conclusions: The majority of adolescents who were prescribed medications in the pain, stimulant, antianxiety, or sedative categories during the previous 6 months had unsupervised access to them at home. It is critical that clinicians educate parents and patients about the importance of proper storage and disposal of medications, particularly those with abuse potential.

----------------------

Playing Through Pain: Sports Participation and Nonmedical Use of Opioid Medications Among Adolescents

Philip Veliz, Carol Boyd & Sean McCabe
American Journal of Public Health, May 2013, Pages e28-e30

Abstract:
We assessed the nonmedical use of prescription opioids (NMUPO) among adolescents who participate in competitive sports. Using data from Monitoring the Future, we found that adolescent participants in high-injury sports had 50% higher odds of NMUPO than adolescents who did not participate in these types of sports (i.e., nonparticipants and participants in other sports). Detecting certain subpopulations of youths at risk for NMUPO should be a central concern among health care providers.

----------------------

Individual Differences in Reproductive Strategy are Related to Views about Recreational Drug Use in Belgium, The Netherlands, and Japan

Katinka Quintelier et al.
Human Nature, June 2013, Pages 196-217

Abstract:
Individual differences in moral views are often explained as the downstream effect of ideological commitments, such as political orientation and religiosity. Recent studies in the U.S. suggest that moral views about recreational drug use are also influenced by attitudes toward sex and that this relationship cannot be explained by ideological commitments. In this study, we investigate student samples from Belgium, The Netherlands, and Japan. We find that, in all samples, sexual attitudes are strongly related to views about recreational drug use, even after controlling for various ideological variables. We discuss our results in light of reproductive strategies as determinants of moral views.

By KEVIN LEWIS | 09:00:00 AM

Monday, June 10, 2013

Having what it takes

The Ancestral Logic of Politics: Upper-Body Strength Regulates Men's Assertion of Self-Interest Over Economic Redistribution

Michael Bang Petersen et al.
Psychological Science, forthcoming

Abstract:
Over human evolutionary history, upper-body strength has been a major component of fighting ability. Evolutionary models of animal conflict predict that actors with greater fighting ability will more actively attempt to acquire or defend resources than less formidable contestants will. Here, we applied these models to political decision making about redistribution of income and wealth among modern humans. In studies conducted in Argentina, Denmark, and the United States, men with greater upper-body strength more strongly endorsed the self-beneficial position: Among men of lower socioeconomic status (SES), strength predicted increased support for redistribution; among men of higher SES, strength predicted increased opposition to redistribution. Because personal upper-body strength is irrelevant to payoffs from economic policies in modern mass democracies, the continuing role of strength suggests that modern political decision making is shaped by an evolved psychology designed for small-scale groups.

----------------------

Financialization and U.S. Income Inequality, 1970-2008

Ken-Hou Lin & Donald Tomaskovic-Devey
American Journal of Sociology, March 2013, Pages 1284-1329

Abstract:
Focusing on U.S. nonfinance industries, we examine the connection between financialization and rising income inequality. We argue that the increasing reliance on earnings realized through financial channels decoupled the generation of surplus from production, strengthening owners' and elite workers' negotiating power relative to other workers. The result was an incremental exclusion of the general workforce from revenue-generating and compensation-setting processes. Using time-series cross-section data at the industry level, we find that increasing dependence on financial income, in the long run, is associated with reducing labor's share of income, increasing top executives' share of compensation, and increasing earnings dispersion among workers. Net of conventional explanations such as deunionization, globalization, technological change, and capital investment, the effects of financialization on all three dimensions of income inequality are substantial. Our counterfactual analysis suggests that financialization could account for more than half of the decline in labor's share of income, 9.6% of the growth in officers' share of compensation, and 10.2% of the growth in earnings dispersion between 1970 and 2008.

----------------------

Family, Education, and Sources of Wealth among the Richest Americans, 1982-2012

Steven Kaplan & Joshua Rauh
American Economic Review, May 2013, Pages 158-162

Abstract:
We examine characteristics of the 400 wealthiest individuals in the United States over the past three decades as tabulated by Forbes Magazine, and analyze which theories of increasing inequality are most consistent with these data. The people of the Forbes 400 in recent years did not grow up as advantaged as in decades past. They are more likely to have started their businesses and to have grown up upper-middle class, not wealthy. Today's Forbes 400 were able to access education while young, and apply their skills to the most scalable industries: technology, finance, and mass retail. Most of the change occurred by 2001.

----------------------

The Top 1 Percent in International and Historical Perspective

Facundo Alvaredo et al.
NBER Working Paper, May 2013

Abstract:
The top 1 percent income share has more than doubled in the United States over the last thirty years, drawing much public attention in recent years. While other English speaking countries have also experienced sharp increases in the top 1 percent income share, many high-income countries such as Japan, France, or Germany have seen much less increase in top income shares. Hence, the explanation cannot rely solely on forces common to advanced countries, such as the impact of new technologies and globalization on the supply and demand for skills. Moreover, the explanations have to accommodate the falls in top income shares earlier in the twentieth century experienced in virtually all high-income countries. We highlight four main factors. The first is the impact of tax policy, which has varied over time and differs across countries. Top tax rates have moved in the opposite direction from top income shares. The effects of top rate cuts can operate in conjunction with other mechanisms. The second factor is indeed a richer view of the labor market, where we contrast the standard supply-side model with one where pay is determined by bargaining and the reactions to top rate cuts may lead simply to a redistribution of surplus. Indeed, top rate cuts may lead managerial energies to be diverted to increasing their remuneration at the expense of enterprise growth and employment. The third factor is capital income. Overall, private wealth (relative to income) has followed a U-shaped path over time, particularly in Europe, where inherited wealth is, in Europe if not in the United States, making a return. The fourth, little investigated, element is the correlation between earned income and capital income, which has substantially increased in recent decades in the United States.

----------------------

The Grandparents Effect in Social Mobility: Evidence from British Birth Cohort Studies

Tak Wing Chan & Vikki Boliver
American Sociological Review, forthcoming

Abstract:
Using data from three British birth cohort studies, we examine patterns of social mobility over three generations of family members. For both men and women, absolute mobility rates (i.e., total, upward, downward, and outflow mobility rates) in the partial parents-children mobility tables vary substantially by grandparents' social class. In terms of relative mobility patterns, we find a statistically significant association between grandparents' and grandchildren's class positions, after parents' social class is taken into account. The net grandparents-grandchildren association can be summarized by a single uniform association parameter. Net of parents' social class, the odds of grandchildren entering the professional-managerial class rather than the unskilled manual class are at least two and a half times better if the grandparents were themselves in professional-managerial rather than unskilled manual-class positions. This grandparents effect in social mobility persists even when parents' education, income, and wealth are taken into account.

----------------------

Does Perceived Physical Attractiveness in Adolescence Predict Better Socioeconomic Position in Adulthood? Evidence from 20 Years of Follow Up in a Population Cohort Study

Michaela Benzeval, Michael Green & Sally Macintyre
PLoS ONE, May 2013

Abstract:
There is believed to be a ‘beauty premium' in key life outcomes: it is thought that people perceived to be more physically attractive have better educational outcomes, higher-status jobs, higher wages, and are more likely to marry. Evidence for these beliefs, however, is generally based on photographs in hypothetical experiments or studies of very specific population subgroups (such as college students). The extent to which physical attractiveness might have a lasting effect on such outcomes in ‘real life' situations across the whole population is less well known. Using longitudinal data from a general population cohort of people in the West of Scotland, this paper investigated the association between physical attractiveness at age 15 and key socioeconomic outcomes approximately 20 years later. People assessed as more physically attractive at age 15 had higher socioeconomic positions at age 36 - in terms of their employment status, housing tenure and income - and they were more likely to be married; even after adjusting for parental socioeconomic background, their own intelligence, health and self esteem, education and other adult socioeconomic outcomes. For education the association was significant for women but not for men. Understanding why attractiveness is strongly associated with long-term socioeconomic outcomes, after such extensive confounders have been considered, is important.

----------------------

Income Inequality, Mobility, and Turnover at the Top in the US, 1987-2010

Gerald Auten, Geoffrey Gee & Nicholas Turner
American Economic Review, May 2013, Pages 168-172

Abstract:
While cross-sectional data show increasing income inequality in the United States, it is also important to examine how incomes change over time. Using income tax data, this paper provides new evidence on long-term and intergenerational mobility, and persistence at the top of the income distribution. Half of those aged 35-40 in the top or bottom quintile in 1987 remain there in 2007; the others have moved up or down. While 30 percent of dependents aged 15-18 from bottom quintile households are themselves in the bottom quintile after 20 years, most have moved up. Persistence is lower in the highest income groups.

----------------------

Levels and Trends in United States Income and Its Distribution: A Crosswalk from Market Income Towards a Comprehensive Haig-Simons Income Approach

Philip Armour, Richard Burkhauser & Jeff Larrimore
NBER Working Paper, June 2013

Abstract:
Recent research on United States levels and trends in income inequality vary substantially in how they measure income. Piketty and Saez (2003) examine market income of tax units based on IRS tax return data, DeNavas-Walt, Proctor, and Smith (2012) and most CPS-based research uses pre-tax, post-transfer cash income of households, while the CBO (2012) uses both data sets and focuses on household size-adjusted comprehensive income of persons, including taxable realized capital gains. This paper provides a crosswalk of income growth across these common income measures using a unified data set. It then uses a more consistent Haig-Simons income definition approach to comprehensive income by incorporating yearly-accrued capital gains to measure yearly changes in wealth rather than focusing solely on the realized taxable capital gains that appear in IRS tax return data. Doing so dramatically reduces the observed growth in income inequality across the distribution, but most especially the rise in top-end income since 1989.

----------------------

The Capitalist Machine: Computerization, Workers' Power, and the Decline in Labor's Share within U.S. Industries

Tali Kristal
American Sociological Review, June 2013, Pages 361-389

Abstract:
This article addresses an important trend in contemporary income inequality - a decline in labor's share of national income and a rise in capitalists' profits share. Since the late 1970s, labor's share declined by 6 percent across the U.S. private sector. As I will show, this overall decline was due to a large decline (5 to 14 percent) in construction, manufacturing, and transportation combined with an increase, albeit small (2 to 5 percent), in labor's share within finance and services industries. To explain the overall decline and the diverse trends across industries, I argue that the main factor leading to the decline in labor's share was the erosion in workers' positional power, and this erosion was partly an outcome of class-biased technological change, namely computerization that favored employers over most employees. I combine data from several sources to test for the independent effects of workers' positional power indicators (i.e., unionization, capital concentration, import penetration, and unemployment) and the direct and indirect effects of computer technology on changes in labor's share within 43 nonagricultural private industries and 451 manufacturing industries between 1969 and 2007. Results from error correction models with fixed-effect estimators support the study's arguments.

----------------------

Inequality of opportunity and growth

Gustavo Marrero & Juan Rodríguez
Journal of Development Economics, forthcoming

Abstract:
Theoretical and empirical studies exploring the effects of income inequality upon growth reach a disappointing inconclusive result. This paper postulates that one reason for this ambiguity is that income inequality is actually a composite measure of inequality of opportunity and inequality of effort. They may affect growth through opposite channels, thus the relationship between inequality and growth depends on which component is larger. Using the PSID database for U.S. in 1970, 1980 and 1990 we find robust support for a negative relationship between inequality of opportunity and growth, and a positive relationship between inequality of effort and growth.

----------------------

Consumption and Income Inequality and the Great Recession

Bruce Meyer & James Sullivan
American Economic Review, May 2013, Pages 178-183

Abstract:
We examine changes in consumption and income inequality between 2000 and 2011. During the most recent recession, unemployment rose and asset values declined sharply. We investigate how the recession affected inequality while addressing concerns about underreporting in consumption data. Income inequality rose throughout the period from 2000 to 2011. The 90/10 ratio was 19 percent higher at the end of this period than at the beginning. In contrast, consumption inequality rose during the first half of this period but then fell after 2005. By 2011, the 90/10 ratio for consumption was slightly lower than it was in 2000.

----------------------

Measuring the Trends in Inequality of Individuals and Families: Income and Consumption

Jonathan Fisher, David Johnson & Timothy Smeeding
American Economic Review, May 2013, Pages 184-188

Abstract:
We present evidence on the level of and trend in inequality from 1985-2010 in the United States, using disposable income and consumption for a sample of individuals from the Consumer Expenditure (CE) Survey. Differing from the findings in other recent research, we find that the trends in income and consumption inequality are broadly similar between 1985 and 2006, but diverge during the Great Recession with consumption inequality decreasing and income inequality increasing. Given the differences in the trends in inequality in the last four years, using both income and consumption provides useful information.

----------------------

Perceived system longevity increases system justification and the legitimacy of inequality

John Blanchar & Scott Eidelman
European Journal of Social Psychology, forthcoming

Abstract:
In two studies, we test the prediction that perceived longevity increases system justification and the legitimacy of inequality. In Study 1, the foundations of the capitalist system were portrayed as younger or older on a timeline. Participants scored higher on economic system justification and perceived capitalism as more legitimate when they were led to believe that this economic system was older. In Study 2, we manipulated the longevity of the Indian caste system and recruited both Indians and Americans. Both groups judged the caste system as more justifiable and legitimate when it was described as more longstanding. In addition, Indians reported more system dependence and judged the caste system as more justifiable and legitimate than Americans. Feelings of system dependence explained the effects of nationality, but not the effects of longevity, on the justification and legitimacy of the caste system. Perceived longevity is a novel contributor to system justification.

----------------------

The Payoff to Skill in the Third Industrial Revolution

Yujia Liu & David Grusky
American Journal of Sociology, March 2013, Pages 1330-1374

Abstract:
Is the third industrial revolution indeed driven by rising payoffs to skill? This simple but important question has gone unanswered because conventional models of earnings inequality are based on exceedingly weak measurements of skill. By attaching occupational skill measurements to the 1979-2010 Current Population Surveys, it becomes possible to adjudicate competing accounts of the changing returns to cognitive, creative, technical, and social skill. The well-known increase in between-occupation inequality is fully explained when such skills are taken into account, while returns to schooling prove to be quite stable once correlated changes in workplace skills are parsed out. The most important trend, however, is a precipitous increase in the wage payoff to synthesis, critical thinking, and related "analytic skills." The payoff to technical and creative skills, often touted in discussions of the third industrial revolution, is shown to be less substantial.

----------------------

Taking Technology to Task: The Skill Content of Technological Change in Early Twentieth Century United States

Rowena Gray
Explorations in Economic History, forthcoming

Abstract:
This paper uses new data on the task content of occupations to present a new picture of the labor market effects of technological change in pre-WWII United States. I show that, similar to the recent computerization episode, the electrification of the manufacturing sector led to a "hollowing out" of the skill distribution whereby workers in the middle of the distribution lost out to those at the extremes. OLS estimates show that electrification increased the demand for clerical, numerical, planning and people skills relative to manual skills while simultaneously reducing relative demand for the dexterity-intensive jobs which comprised the middle of the skill distribution. Thus, early twentieth century technological change was unskill-biased for blue collar tasks but skill-biased on aggregate. These results are in line with the downward trend in wage differentials within U.S. manufacturing up to 1950.

----------------------

The Care Economy? Gender, Economic Restructuring, and Job Polarization in the U.S. Labor Market

Rachel Dwyer
American Sociological Review, June 2013, Pages 390-416

Abstract:
The U.S. job structure became increasingly polarized at the turn of the twenty-first century as high- and low-wage jobs grew strongly and many middle-wage jobs declined. Prior research on the sources of uneven job growth that focuses on technological change and weakening labor market institutions struggles to explain crucial features of job polarization, especially the growth of low-wage jobs and gender and racial differences in job growth. I argue that theories of the rise of care work in the U.S. economy explain key dynamics of job polarization - including robust growth at the bottom of the labor market and gender and racial differences in job growth - better than the alternative theories. By seeing care work as a distinctive form of labor, care work theories highlight different dimensions of economic restructuring than are emphasized in prior research on job polarization. I show that care work jobs contributed significantly and increasingly to job polarization from 1983 to 2007, growing at the top and bottom of the job structure but not at all in the middle. I close by considering whether the care economy will continue to reinforce job polarization, or whether it will provide new opportunities for revived growth in middle-wage jobs.

----------------------

The Estate Tax and Inter Vivos Transfers over Time

Kathleen McGarry
American Economic Review, May 2013, Pages 478-483

Abstract:
The strong dislike evidenced by the American public towards the estate tax suggests that the wealthy wish to transfer resources to their heirs tax-free and would thus exploit mechanisms allowing them to reduce the tax burden whenever possible. However, I find strong evidence that the wealthy fail to utilize what is perhaps the simplest method of tax avoidance -- that of making transfers to eventual heirs up to the annual exclusion. Instead they transfer far less than the amount permitted by the tax code, whether measured in cross-section or over time. In failing to give more, they forgo significant tax savings.

----------------------

Income and Substitution Effects of Estate Taxation

James Hines
American Economic Review, May 2013, Pages 484-488

Abstract:
This paper evaluates the effect of estate taxes on labor supply. The analysis decomposes the effect of estate taxation into the substitution effect of relative price changes and the two income effects for which the estate tax is responsible. These two income effects arise from tax burdens on those who leave estates plus tax burdens on those who receive them. Despite the double income burden of the estate tax, existing empirical evidence suggests that the net effect of estate taxation on aggregate labor supply is uncertain.

----------------------

Earnings inequality and skill mismatch in the U.S.: 1973-2002

Fabián Slonimczyk
Journal of Economic Inequality, June 2013, Pages 163-194

Abstract:
This paper shows that skill mismatch is a significant source of inequality in real earnings in the U.S. and that a substantial fraction of the increase in wage dispersion during the period 1973-2002 was due to the increase in mismatch rates and mismatch premia. In 2000-2002, surplus and deficit qualifications taken together accounted for 4.3 and 4.6% of the variance of log earnings, or around 15% of the total explained variance. The dramatic increase in over-education rates and premia accounts for around 20 and 48% of the increase in the Gini coefficient during the 30 years under analysis for males and females respectively. The surplus qualification factor is important in understanding why earnings inequality polarized in the last decades.

----------------------

Socio-Economic Inequalities in Happiness in China and U.S.

Kit-Chun Joanna Lam & Pak-Wai Liu
Social Indicators Research, forthcoming

Abstract:
Our paper studies the determinants of happiness in China and U.S. and provides a better understanding of the issue of inequalities in happiness beyond income inequality. Based on the two waves of nation-wide survey data on happiness collected by World Values Survey in 1995 and 2007, Probit and ordinary least square methods are used to estimate effects of various factors on happiness. Our findings show that socio-economic inequalities increase inequalities in happiness in China. The poor are the least happy even though the income effect flats out at the high end. Individuals with below high school education attainment are less happy than those with more education. Agricultural workers are the most unhappy and are becoming even more unhappy over time. However, in U.S., there is no systematic difference in happiness across income and education groups and between agricultural and non-agricultural workers. In both countries health is a major factor contributing to happiness. Our study implies that adequate provision of national health care services should be an effective way to improve social welfare. Besides, since the probability of being happy for agricultural workers is still considerably less after controlling for income in China, policies to improve their welfare should not be limited to enhancing current income.

----------------------

The Spirit of Capitalism Among the Income Classes

H.J. Smoluk & John Voyer
Review of Financial Economics, forthcoming

Abstract:
This paper tests the consumption-based capital asset model within the context of the spirit of capitalism. The spirit of capitalism asserts that consumers gain utility not just from consumption of goods and services, but also from the social status obtained from wealth. We examine two asset pricing models developed by Bakshi and Chen (1996) that employ wealth in the utility function, for households sorted by income quintiles. In the first model, households obtain utility from both consumption and the social status that comes from their own wealth. In the second model, households gain utility from both consumption and the social status obtained from their own wealth relative to the wealth of other peer households. Our results indicate that both models are inconsistent with the data regardless of income. However, using cointegration methods as a diagnostic tool, we find that the data are "loosely" consistent with the spirit of capitalism, at least for the upper income quintiles.

----------------------

Relative Income and Job Satisfaction: Evidence from Australia

Temesgen Kifle
Applied Research in Quality of Life, June 2013, Pages 125-143

Abstract:
Using the first six waves of the Household, Income and Labour Dynamics in Australia (HILDA) Survey dataset, a linear fixed effects model is used to examine the link between relative income and overall job satisfaction in Australia. In this paper, relative income is constructed using cell average by age group, gender and education level. The findings indicate that (i) relative income has a significant negative impact on overall job satisfaction for men but not for women; and (ii) for the whole sample and for men, income comparisons are asymmetric and upwards, meaning that the loss in overall job satisfaction by the poor from having an income below that of their reference group is significantly greater than the gain by the rich from knowing that they earn above that of their reference group. Overall, the evidence found is consistent with Dueseneberry's hypothesis that relative income matters and comparison effect is asymmetric and mostly upwards.

----------------------

Optimal Progressive Labor Income Taxation and Education Subsidies When Education Decisions and Intergenerational Transfers Are Endogenous

Dirk Krueger & Alexander Ludwig
American Economic Review, May 2013, Pages 496-501

Abstract:
We quantitatively characterize the optimal mix of progressive income taxes and education subsidies in a model with endogenous human capital formation, borrowing constraints, income risk and incomplete financial markets. In addition to the distortions of labor supply, progressive taxes weaken the incentives to acquire education. The latter distortion can potentially be mitigated by an education subsidy. We find that the welfare-maximizing fiscal policy is indeed characterized by a substantially progressive labor income tax code and a positive subsidy for college education. Both the degree of tax progressivity and the education subsidy are larger than in the current US status quo.

----------------------

High School Graduation in the Context of Changing Elementary and Secondary Education Policy and Income Inequality: The Last Half Century

Nora Gordon
NBER Working Paper, May 2013

Abstract:
Goldin and Katz (2008) document the key role that the educational attainment of native-born workers in the U.S. has played in determining changing returns to skill and income distribution in the twentieth century, emphasizing the need to understand the forces driving the supply of educated workers. This paper examines stagnation in high school graduation rates from about 1970 to 2000, alongside dramatic changes in elementary and secondary educational institutions and income inequality over those years. I review the policy history of major changes in educational institutions, including but not limited to the massive increase in school spending, and related literature. I then present descriptive analysis of the relationships between income inequality and both graduation and school spending from 1963 to 2007. Results suggest that inequality at the top of the income distribution, which was negatively correlated with the establishment of public secondary schooling earlier in the twentieth century, was positively correlated not only with education spending levels but also with aggregate high school graduation rates at the state level in this later period.

----------------------

The distribution of income between labor and capital is not stable: But why is that so and why does it matter?

Josef Brada
Economic Systems, forthcoming

Abstract:
I review the literature on labor's share of national income in developed and developing countries. These shares have varied systematically over the post-World War II period, rising until the late 1970s and then falling until now. Explanations for the decline in labor's share include technical progress, globalization and a decline in labor's bargaining power, but none of these explanations can account for both the rise and decline of labor shares over time and the similar pattern in developed and developing countries. However, movements in oil prices can account for these movements if energy is included in the production function. Such an explanation has broad implications for income distribution, energy conservation and for the modern theory of growth.

----------------------

Inequality, Self-Interest and Public Support for "Robin Hood" Tax Policies

William Franko, Caroline Tolbert & Christopher Witko
Political Research Quarterly, forthcoming

Abstract:
Influential economic models predict that as inequality increases, the public will demand greater redistribution. However, there is limited research into the determinants of support for redistributive tax increases because such proposals have been so rare in America in recent decades. We use Washington State's Proposition 1098 to examine how economic self-interest, concerns about inequality, and partisanship influence support for redistributive taxation. The results show that all of these factors influenced support, with strong support among the lower income, indicating that when the distributional implications of policies are clear, citizens can translate their self-interest and broad attitudes into congruent redistributive preferences.

----------------------

Keeping Up with the Joneses Affects Perceptions of Distributive Justice

Tyler Burleigh & Daniel Meegan
Social Justice Research, June 2013, Pages 120-131

Abstract:
An experimental field study investigated why people of higher social standing might jump to the conclusion that an injustice has occurred when an authority implements a program that benefits some constituents but not others. High-status individuals are uniquely vulnerable to downward mobility, especially in the event that a situation does not benefit them, but does benefit their high-status peers. In our study, students in a university course were asked to judge a bonus program by which the grades for some would increase and the grades for others would remain the same. Two framing conditions were used, each providing an example in which only one of two students would benefit from the program. In the peer-gets-ahead condition, the two students were of equal status before the program acted to differentiate them, and in the inferior-catches-up condition, the two students differed in status before the program acted to equate them. A majority of students responded favorably to the program, although this number was affected strongly by framing, with almost unanimous approval in the inferior-catches-up condition and comparatively modest approval in the peer-gets-ahead condition. Objections in the latter condition were most frequent among high-status students, who were implicitly uncomfortable with the possibility that their status could decrease relative to some of their high-status peers. Explicitly, their objections used the language of social injustice, especially claims of distributive unfairness. We argue that these perceptions of injustice are a cognitive manifestation of an aversion to any situation that could result in downward mobility.

----------------------

The effect of macroeconomic and social conditions on the demand for redistribution: A pseudo panel approach

Mads Meier Jæger
Journal of European Social Policy, May 2013, Pages 149-163

Abstract:
This paper analyses the effect of macroeconomic and social conditions on the demand for redistribution. Using a synthetic cohort design to generate panel data at the level of socio-demographic groups, analysis of fives waves of data from the European Social Survey (2002-2010) shows that differences across countries in macroeconomic and social conditions have an effect on the demand for redistribution. Consistent with theoretical expectations, economic growth generates a lower demand for redistribution, while higher income inequality generates a higher demand. By contrast, differences across countries in unemployment levels and social expenditure are unrelated to the demand for redistribution. The analysis also suggests that empirical results depend to a considerable extent on the assumptions underlying different methodological approaches.

----------------------

Beyond the Joneses: Inter-country income comparisons and happiness

Leonardo Becchetti et al.
Journal of Socio-Economics, forthcoming

Abstract:
Our paper provides novel evidence on the burgeoning literature on life satisfaction and relative comparisons by showing that in the last 30 years comparisons with the wellbeing of top income neighboring countries have generated negative feelings on a large sample of individuals in the Eurobarometer survey. The paper shows that neighboring countries, and not just our individual neighbors or peers, can be reference groups and that the above mentioned effect depends on the intensity of media exposure.

----------------------

Income, Occupation, and Preferences for Redistribution in the Developing World

Stephan Haggard, Robert Kaufman & James Long
Studies in Comparative International Development, June 2013, Pages 113-140

Abstract:
Much of the theoretical work on preferences for redistribution begins with the influential Melzer-Richard model, which makes predictions derived both from position in the income distribution and the overall level of inequality. Our evidence, however, points to limitations on such models of distributive politics. Drawing on World Values Survey evidence on preferences for redistribution in 41 developing countries, we find that the preferences of low-income groups vary significantly depending on occupation and place of residence, union members do not hold progressive views, and inequality has limited effects on demands for redistribution and may even dampen them.

----------------------

Inequality and Personal Income Taxation: The Origins and Effects of Legislative Malapportionment

Martin Ardanaz & Carlos Scartascini
Comparative Political Studies, forthcoming

Abstract:
Why does personal income taxation (PIT) remain relatively low in many developing countries despite a period of democratic advancement and rapid economic growth? This stylized fact is hard to reconcile with standard political economy models of taxation that expect democratic regimes to bring about redistribution in countries that suffer from high inequality. This article argues that the details of political institutions are key to understand why PIT remains low in many developing and unequal countries. In particular, we show how legislative malapportionment may prevent the use of personal income taxes as a major revenue source by skewing the distribution of political power across groups. Malapportionment is usually not exogenous but the result of design by those with political power at the transition or reform moment. As such, it depends on the structure of political and economic power in society. Based on a sample of more than 50 countries between 1990 and 2007, this article finds that (a) countries with historically more unequal distributions of wealth and income tend to systematically present higher levels of legislative malapportionment and (b) higher levels of malapportionment are associated with lower shares of personal income taxes in GDP.

----------------------

Intergenerational transmission of occupational status: The role of voluntary association membership as an emerging compensatory strategy of reproduction

Jasper van Houten, Maurice Gesthuizen & Maarten Wolbers
Research in Social Stratification and Mobility, September 2013, Pages 13-26

Abstract:
In this article, we raised the question as to what extent members from higher status groups effectuated social resources, more specifically voluntary association membership, as a possible new compensatory strategy to guarantee a successful intergenerational transmission of their occupational status. For that purpose, we investigated whether voluntary association membership (of parents and their child) mediate the positive effect of parental occupational status on that of their child and whether it has become more important over time as an explanation of social reproduction. In the empirical analysis, we incorporated voluntary association membership into the classic status attainment model and estimated path models using retrospective life course data from the Family Survey Dutch Population 2000. The empirical results showed that voluntary association membership does not play a mediating role in the intergenerational transmission of occupational status for the 1916-1947 birth cohort. However, it does so for the 1948-1960 birth cohort, thereby becoming an effective compensatory strategy in the intergenerational transmission of occupation status.

----------------------

Needs versus Entitlements - An International Fairness Experiment

Alexander Cappelen et al.
Journal of the European Economic Association, June 2013, Pages 574-598

Abstract:
What is the relative importance of needs, entitlements, and nationality in people's social preferences? To study this question, we conducted a real-effort dictator experiment where students in two of the world's richest countries, Norway and Germany, were matched directly with students in two of the world's poorest countries, Uganda and Tanzania. The experimental design made the participants face distributive situations where different moral motives came into play, and based on the observed behavior we estimate a social preference model focusing on how people make trade-offs between entitlements, needs, and self-interest. The study provides four main findings. First, entitlement considerations are crucial in explaining distributive behavior in the experiment; second, needs considerations matter a lot for some participants; third, the participants acted as moral cosmopolitans and did not assign importance to nationality in their distributive choices; and, finally, the participants' choices are consistent with a self-serving bias in their social preferences.

----------------------

A case for maximum wage

Tomer Blumkin, Efraim Sadka & Yotam Shem-Tov
Economics Letters, forthcoming

Abstract:
In this paper we demonstrate that supplementing the optimal non-linear income tax system with a binding maximum wage rule attains a Pareto improvement, by serving to mitigate the mimicking incentives of the high-skill individuals without entailing distortions.

----------------------

Resource allocation, affluence and deadweight loss when relative consumption matters

Curtis Eaton & Jesse Matheson
Journal of Economic Behavior & Organization, July 2013, Pages 159-178

Abstract:
We explore the link between affluence and well-being using a simple general equilibrium model with a pure Veblen good. Individuals derive utility from the pure Veblen good based solely on how much they consume relative to others. In equilibrium, consumption of the pure Veblen good is the same for everyone, so the Veblen good contributes nothing to utility. Hence, resources devoted to the Veblen good provide us with a measure of deadweight loss. We ask: Under what preference conditions does the proportion of productive capacity devoted to the pure Veblen good increase as an economy becomes more affluent? In a relatively general preference framework we derive a sufficient condition for which the Veblen good crowds out standard forms of consumption and leisure, resulting in an inverse relationship between affluence and utility. With additional structure on the model we are able to fully characterize the behavior of deadweight loss and utility as an economy becomes more affluent.

----------------------

Timing of death and the repeal of the Swedish inheritance tax

M. Eliason & H. Ohlsson
Journal of Socio-Economics, forthcoming

Abstract:
In response to the repeal of the Swedish inheritance tax people postponed death to avoid taxes. This is an example of the far-reaching behavioral effects of economic incentives and of unintended consequences of policy changes. Using individual data, including information on taxable estates, we find that deceased with, compared to those without, tax incentives to postpone death were 10 percentage points more likely to die the day after rather than the day before the repeal. An extended analysis suggests that the timing of deaths was affected not only during these two days but during a longer surrounding period.

----------------------

Estimating male and female height inequality

Matthias Blum
Economics & Human Biology, forthcoming

Abstract:
This study investigates the coefficient of variation (CV) of height of males and females as a measure of inequality. We have collected a data set on corresponding male and female height CVs from 124 populations, spanning the period between the 1840s and 1980s. The results suggest that the R2 between the two CVs is 0.39, with the male CV being greater, indicating higher plasticity.

----------------------

Socioeconomic Effects on the Stature of Nineteenth-Century US Women

Scott Alan Carson
Feminist Economics, Spring 2013, Pages 122-143

Abstract:
Using a new source of nineteenth-century state prison records and robust statistics, this study contrasts the effects of social conditions on the stature of comparable African American and white women during the economic development of the United States. Across the stature distribution, Great Lakes, Plains, and Southern women were taller than women with other US and international nativities. Women from the Northeast and Middle Atlantic were the shortest within the US, but were taller than British and European immigrants. White women were consistently taller than black women. Stature also varied over time with industrialization and emancipation. Across the stature distribution, women in outdoor, unskilled occupations were taller than women in indoor, skilled occupations. These results show that US women's average statures reflect net nutritional conditions that are not available in traditional measures of economic well-being.

By KEVIN LEWIS | 09:00:00 AM

Sunday, June 9, 2013

Kind of you

Compassion Training Alters Altruism and Neural Responses to Suffering

Helen Weng et al.
Psychological Science, forthcoming

Abstract:
Compassion is a key motivator of altruistic behavior, but little is known about individuals' capacity to cultivate compassion through training. We examined whether compassion may be systematically trained by testing whether (a) short-term compassion training increases altruistic behavior and (b) individual differences in altruism are associated with training-induced changes in neural responses to suffering. In healthy adults, we found that compassion training increased altruistic redistribution of funds to a victim encountered outside of the training context. Furthermore, increased altruistic behavior after compassion training was associated with altered activation in brain regions implicated in social cognition and emotion regulation, including the inferior parietal cortex and dorsolateral prefrontal cortex (DLPFC), and in DLPFC connectivity with the nucleus accumbens. These results suggest that compassion can be cultivated with training and that greater altruistic behavior may emerge from increased engagement of neural systems implicated in understanding the suffering of other people, executive and emotional control, and reward processing.

----------------------

Are Psychopaths and Heroes Twigs off the Same Branch? Evidence from College, Community, and Presidential Samples

Sarah Francis Smith et al.
Journal of Research in Personality, forthcoming

Abstract:
We examine the relation between psychopathy, especially its fearless dominance dimension, and heroism in two undergraduate samples (N=124 and 119), a community sample (N=457) and 42 U.S. presidents. The first undergraduate and community sample revealed significant positive correlations between fearless dominance and heroism and altruism toward strangers; the presidential sample provided some evidence for an association between fearless dominance and war heroism. In the second undergraduate sample, fearless dominance was related only to altruism toward strangers; heroism was instead significantly positively correlated with the impulsive antisociality component of psychopathy. These findings raise the possibility that some psychopathic personality traits are modestly associated with heightened levels of heroic altruism, and raise questions for future research on the personality correlates of heroism.

----------------------

Rational bystanders

Tobias Greitemeyer & Dirk Mügge
British Journal of Social Psychology, forthcoming

Abstract:
The bystander effect, the phenomenon that the (real or imagined) presence of others inhibits helping, has often been ascribed to bystanders' apathy. In the present research, we demonstrate that the occurrence of the bystander effect has rational roots. Three studies reveal that the presence of other bystanders does not inhibit helping when effective helping requires more than one help-giver. Mediation analyses showed that the bystander effect did not occur when many responses were needed because bystanders did not shift responsibility to others when in the presence of other bystanders. These findings suggest that the rational considerations underlying the bystander effect can mitigate the effects of the presence of other bystanders on helping behaviour when more than one help-giver is needed.

----------------------

Natural-field dictator game shows no altruistic giving

Jeffrey Winking & Nicholas Mizer
Evolution and Human Behavior, forthcoming

Abstract:
Economic experiments are increasingly being used in a number of research areas and are a major source of data guiding the debate surrounding the nature of human prosociality. The degree to which experiment behavior accurately reflects external behavior, however, has long been debated. A number of recent studies have revealed just how remarkably sensitive participants are to cues of a lack of anonymity. Similarly, others have suggested that the very structure of the experimental context induces participants to choose prosocial options. In order to truly create anonymous conditions and to eliminate the effects of experimental contexts, participants must not be aware of their participation. Here, I present the results of a natural-field Dictator Game in which participants are presented with a believable endowment and provided an opportunity to divide the endowment with a stranger without knowing that they are taking part in an experiment. No participants gave any portion of the endowment to the stranger. Baseline frequencies of prosocial behaviors exhibited under experimental contexts might therefore be substantially inflated compared to those exhibited under natural contexts.

----------------------

The external validity of giving in the dictator game

Axel Franzen & Sonja Pointner
Experimental Economics, June 2013, Pages 155-169

Abstract:
We investigate the external validity of giving in the dictator game by using the misdirected letter technique in a within-subject design. First, subjects participated in standard dictator games (double blind) conducted in labs in two different studies. Second, after four to five weeks (study 1) or two years (study 2), we delivered prepared letters to the same subjects. The envelopes and the contents of the letters were designed to create the impression that they were misdirected by the mail delivery service. The letters contained 10 Euros (20 Swiss Francs in study 2) corresponding to the endowment of the in-lab experiments. We observe in both studies that subjects who showed other-regarding behavior in the lab returned the misdirected letters more often than subjects giving nothing, suggesting that in-lab behavior is related to behavior in the field.

----------------------

Why Do People Volunteer? An Experimental Analysis of Preferences for Time Donations

Alexander Brown, Jonathan Meer & Forrest Williams
NBER Working Paper, May 2013

Abstract:
We conduct a laboratory experiment to test if there are differences in behavior when subjects can donate either time or money to charity. Our subjects perform an effort task to earn money. In one condition they can have their efforts accrue to a charity instead of themselves. In other conditions subjects may only earn money for their private account but then donate it to a charity. We vary the timing and availability of donation opportunities in the monetary donation settings to test the impact of subtle solicitation pressure. We find that subjects with more opportunities to donate will donate more often and in larger amounts. Further, subjects giving effort to charity give far more than subjects who give monetary donations - between two and five times as much, on average. We posit that this difference is driven by different warm glow from the two donation types.

----------------------

Perceived Utility (not Sympathy) Mediates the Proportion Dominance Effect in Helping Decisions

Arvid Erlandsson, Fredrik Björklund & Martin Bäckström
Journal of Behavioral Decision Making, forthcoming

Abstract:
The proportion dominance effect (PDE) refers to a higher motivation to help when the victims are part of a small (you can help 56 out of 60) rather than a large (you can help 56 out of 560) reference group. In two studies using different experimental paradigms, we investigated possible mediators of the PDE. Study 1 (N = 168) was conducted in three separate steps in order to test each link of the mediator model independently. Students read six vignettes where it was possible to help a fixed number of victims but where the size of the reference group was either small or large. When the reference group was small, helping motivation and perceived utility were higher, whereas sympathy toward the victims and perceived rights were not. A within-subject mediation analysis showed that perceived utility mediated the PDE. Study 2 (N = 36) presented four versions of a single helping situation in a joint evaluation mode where the size of the reference group became gradually smaller in each version. All participants compared and responded to each version. Helping motivation increased as the reference group became smaller, and this effect was mediated by perceived utility rather than by distress, sympathy, or perceived responsibilities. Our results suggest that unlike, for example, the identifiability and singularity effects, which have been suggested to be mediated by emotional reactions, the PDE is mediated by perceived utility.

----------------------

Small is beautiful - Experimental evidence of donors' preferences for charities

Sarah Borgloh, Astrid Dannenberg & Bodo Aretz
Economics Letters, August 2013, Pages 242-244

Abstract:
This paper studies the effect of information about a charity's size on individuals' donations to that charity. We conducted a framed field experiment with a non-student sample, in which subjects had the opportunity to donate to various charitable causes. The results show that if subjects are to choose between large organizations with high annual revenues and small organizations with low revenues, they prefer the small organizations, supporting thereby the predictions of the impact philanthropy model.

----------------------

Psychological Characteristics of Swedish Mandatory Enlisted Soldiers Volunteering and not Volunteering for International Missions: An Exploratory Study

Leif Rydstedt & Johan Österberg
Psychological Reports, April 2013, Pages 678-688

Abstract:
The purpose of this study was to assess personality traits, psychological fitness, and hardiness among conscript soldiers volunteering for international missions (n = 146), by comparing them with conscripts from the same year class and unit who did not apply for international missions (n = 275). The sample consisted of all mandatory enlisted soldiers assigned to a supply and maintenance regiment. There were no demographic differences between the groups. The volunteers reported greater stress tolerance, concern for others, extraversion, and self-confidence than the non-volunteers. There were no differences between the groups in orderliness, temper instability, or independence. Volunteers repeatedly reported greater psychological fitness for military missions and greater hardiness over the period of military service compared to the non-volunteers.

----------------------

The ultimate sacrifice: Perceived peer honor predicts troops' willingness to risk their lives

David Mandel & Amrit Litt
Group Processes & Intergroup Relations, May 2013, Pages 375-388

Abstract:
Honor is a central concept in the profession of arms. The present study of 2,254 Canadian Forces (CF) members examined how they viewed the honor of their peers at ranks below, at, or above their own. Although rank is itself a form of vertical honor, participants' mean assessments of honor were inversely related to these relative-rank distinctions. As well, averaged across vertical honor, the assessed honor of other CF members directly predicted their willingness to risk their lives in combat operations. This effect was fully mediated by participants' affective commitment to the CF and it was partially mediated by their sense of duty. The findings show that how professionals perceive the honor of their peers does not simply follow vertical indices of honor, and that those perceptions predict attitudinal states (e.g., affective commitment) and behavioral intentions (willingness to risk one's life to perform one's duties).

----------------------

Self-selection and variations in the laboratory measurement of other-regarding preferences across subject pools: Evidence from one college student and two adult samples

Jon Anderson et al.
Experimental Economics, June 2013, Pages 170-189

Abstract:
We measure the other-regarding behavior in samples from three related populations in the upper Midwest of the United States: college students, non-student adults from the community surrounding the college, and adult trainee truckers in a residential training program. The use of typical experimental economics recruitment procedures made the first two groups substantially self-selected. Because the context reduced the opportunity cost of participating dramatically, 91 % of the adult trainees solicited participated, leaving little scope for self-selection in this sample. We find no differences in the elicited other-regarding preferences between the self-selected adults and the adult trainees, suggesting that selection is unlikely to bias inferences about the prevalence of other-regarding preferences among non-student adult subjects. Our data also reject the more specific hypothesis that approval-seeking subjects are the ones most likely to select into experiments. Finally, we observe a large difference between self-selected college students and self-selected adults: the students appear considerably less pro-social.

----------------------

Do Grants to Charities Crowd Out Other Income? Evidence from the UK

James Andreoni, Abigail Payne & Sarah Smith
NBER Working Paper, April 2013

Abstract:
We present new evidence on the effect of grants on charities' incomes. We employ a novel identification strategy, focusing on charities that applied for lottery grant funding and comparing outcomes for successful and unsuccessful applicants. Overall, grants do not crowd out other income but the effect of grant-funding is not uniform. Looking in more detail we show first, that the positive effects of receiving a grant can persist for several years post-award; second, that grants have a stronger positive effect for small charities; and, third, that grants may have a more positive effect when they provide seed funding.

----------------------

Too smart to be selfish? Measures of cognitive ability, social preferences, and consistency

Chia-Ching Chen et al.
Journal of Economic Behavior & Organization, June 2013, Pages 112-122

Abstract:
Although there is an increasing interest in examining the relationship between cognitive ability and economic behavior, less is known about the relationship between cognitive ability and social preferences. We investigate the relationship between consequential measures of cognitive ability and measures of social preferences. We have data on a series of small-stakes dictator-type decisions, known as Social Value Orientation (SVO), in addition to choices in a larger-stakes dictator game. We also have access to the grade point averages (GPA) and SAT (formerly referred to as the Scholastic Aptitude Test) outcomes of our subjects. We find that subjects who perform better on the Math portion of the SAT are more generous in both the dictator game and the SVO measure. By contrast we find that subjects with a higher GPA are more selfish in the dictator game and more generous according to the SVO. We also find some evidence that the subjects with higher GPA and higher SAT outcomes offer more consistent responses. Our results involving GPA and social preferences complement previous work which employ measures of cognitive ability which are sensitive to the intrinsic motivation of the subject. Our results involving SAT scores are without precedent in the literature and suggest that measures of cognitive ability, which are less sensitive to the intrinsic motivation of the subject, are positively related to generosity.

----------------------

Identifying Social Norms Using Coordination Games: Why Does Dictator Game Sharing Vary?

Erin Krupka & Roberto Weber
Journal of the European Economic Association, June 2013, Pages 495-524

Abstract:
We introduce an incentivized elicitation method for identifying social norms that uses simple coordination games. We demonstrate that concern for the norms we elicit and for money predict changes in behavior across several variants of the dictator game, including data from a novel experiment and from prior published laboratory studies, that are unaccounted for by most current theories of social preferences. Moreover, we find that the importance of social norm compliance and of monetary considerations is fairly constant across different experiments. This consistency allows prediction of treatment effects across experiments, and implies that subjects have a generally stable willingness to sacrifice money to take behaviors that are socially appropriate.

By KEVIN LEWIS | 09:00:00 AM

Saturday, June 8, 2013

Making calls

Perceived Hotness Affects Behavior of Basketball Players and Coaches

Yigal Attali
Psychological Science, forthcoming

Abstract:
Although "hot hands" in basketball are illusory, the belief in them is so robust that it not only has sparked many debates but may also affect the behavior of players and coaches. On the basis of an entire National Basketball Association season's worth of data, the research reported here shows that even a single successful shot suffices to increase a player's likelihood of taking the next team shot, increase the average distance from which this next shot is taken, decrease the probability that this next shot is successful, and decrease the probability that the coach will replace the player.

----------------------

The pricing of soft and hard information: Economic lessons from screenplay sales

William Goetzmann, Abraham Ravid & Ronald Sverdlove
Journal of Cultural Economics, May 2013, Pages 271-307

Abstract:
This paper uses a unique data set on screenplay sales to learn how the information content of a sales pitch affects sale prices. This is one of the few studies that analyze "soft information" outside the banking industry. We find that "soft information" proxies, such as the descriptive complexity of a pitch, depress prices, in particular for less experienced writers, supporting the common industry view that high concept (short and simple) screenplays sell better. "Hard information" (measurable experience) variables are priced as well. We also find that large studios shun "soft information", whereas small companies handle it better, as predicted by most theories. In the last part of the paper, we find that, surprisingly, buyers seem to be able to forecast the eventual success of a project based upon the purchased script, paying more for screenplays which will eventually culminate in more successful movies. In other words, perhaps "somebody knows something".

----------------------

The Hobgoblin of Consistency: Algorithmic Judgment Strategies Underlie Inflated Self-Assessments of Performance

Elanor Williams, David Dunning & Justin Kruger
Journal of Personality and Social Psychology, June 2013, Pages 976-994

Abstract:
People often hold inflated views of their performance on intellectual tasks, with poor performers exhibiting the most inflation. What leads to such excessive confidence? We suggest that the more people approach such tasks in a "rational" (i.e., consistent, algorithmic) manner, relative to those who use more variable or ad hoc approaches, the more confident they become, irrespective of whether they are reaching correct judgments. In 6 studies, participants completed tests involving logical reasoning, intuitive physics, or financial investment. Those more consistent in their approach to the task rated their performances more positively, including those consistently pursuing the wrong rule. Indeed, completely consistent but wrong participants thought almost as highly of their performance as did completely consistent and correct participants. Participants were largely aware of the rules they followed and became more confident in their performance when induced to be more systematic in their approach, no matter how misguided that approach was. In part, the link between decision consistency and (over)confidence was mediated by a neglect of alternative solutions as participants followed a more uniform approach to a task.

----------------------

The Devil Is in the Specificity: The Negative Effect of Prediction Specificity on Prediction Accuracy

Song-Oh Yoon et al.
Psychological Science, forthcoming

Abstract:
In the research reported here, we proposed and demonstrated the prediction-specificity effect, which states that people's prediction of the general outcome of an event (e.g., the winner of a soccer match) is less accurate when the prediction question is framed in a more specific manner (e.g., guessing the score) rather than in a less specific manner (e.g., guessing the winner). We demonstrated this effect by examining people's predictions on actual sports games both in field and laboratory studies. In Study 1, the analysis of 19 billion bets from a commercial sports-betting business provided evidence for the effect of prediction specificity. This effect was replicated in three controlled laboratory studies, in which participants predicted the outcomes of a series of soccer matches. Furthermore, the negative effect of prediction specificity was mediated by participants' underweighting of important holistic information during decision making.

----------------------

Opening the Closed Mind: The Effect of Exposure to Literature on the Need for Closure

Maja Djikic, Keith Oatley & Mihnea Moldoveanu
Creativity Research Journal, Spring 2013, Pages 149-154

Abstract:
The need for cognitive closure has been found to be associated with a variety of suboptimal information processing strategies, leading to decreased creativity and rationality. This experiment tested the hypothesis that exposure to fictional short stories, as compared with exposure to nonfictional essays, will reduce need for cognitive closure. One hundred participants were assigned to read either an essay or a short story (out of a set of 8 essays and 8 short stories matched for length, reading difficulty, and interest). After reading, their need for cognitive closure was assessed. As hypothesized, when compared to participants in the essay condition, participants in the short story condition experienced a significant decrease in self-reported need for cognitive closure. The effect was particularly strong for participants who were habitual readers (of either fiction or non-fiction). These findings suggest that reading fictional literature could lead to better procedures of processing information generally, including those of creativity.

----------------------

Information Processing Constraints and Asset Mispricing

Alasdair Brown
Economic Journal, forthcoming

Abstract:
I analyse a series of natural quasi-experiments -- centered on betting exchange data on the Wimbledon Tennis Championships -- to determine whether information processing constraints are partially responsible for mispricing in asset markets. I find that the arrival of information during each match leads to substantial mispricing between two equivalent assets, and that part of this mispricing can be attributed to differences in the frequency with which the two prices are updated in play. This suggests that information processing constraints force the periodic neglect of one of the assets, thereby causing substantial, albeit temporary, mispricing in this simple asset market.

----------------------

The Effectiveness of Airline Pilot Training for Abnormal Events

Stephen Casner, Richard Geven & Kent Williams
Human Factors, June 2013, Pages 477-485

Objective: To evaluate the effectiveness of airline pilot training for abnormal in-flight events.

Background: Numerous accident reports describe situations in which pilots responded to abnormal events in ways that were different from what they had practiced many times before. One explanation for these missteps is that training and testing for these skills have become a highly predictable routine for pilots who arrive to the training environment well aware of what to expect. Under these circumstances, pilots get plentiful practice in responding to abnormal events but may get little practice in recognizing them and deciding which responses to offer.

Method: We presented 18 airline pilots with three abnormal events that are required during periodic training and testing. Pilots were presented with each event under the familiar circumstances used during training and also under less predictable circumstances as they might occur during flight.

Results: When presented in the routine ways seen during training, pilots gave appropriate responses and showed little variability. However, when the abnormal events were presented unexpectedly, pilots' responses were less appropriate and showed great variability from pilot to pilot.

Conclusion: The results suggest that the training and testing practices used in airline training may result in rote-memorized skills that are specific to the training situation and that offer modest generalizability to other situations. We recommend a more complete treatment of abnormal events that allows pilots to practice recognizing the event and choosing and recalling the appropriate response.

----------------------

Short- and Long-Term Effects of Conscious, Minimally Conscious and Unconscious Brand Logos

Charlotte Muscarella et al.
PLoS ONE, May 2013

Abstract:
Unconsciously presented information can influence our behavior in an experimental context. However, whether these effects can be translated to a daily life context, such as advertising, is strongly debated. What hampers this translation is the widely accepted notion of the short-livedness of unconscious representations. The effect of unconscious information on behavior is assumed to rapidly vanish within a few hundreds of milliseconds. Using highly familiar brand logos (e.g., the logo of McDonald's) as subliminal and supraliminal primes in two priming experiments, we assessed whether these logos were able to elicit behavioral effects after a short (e.g., 350 ms), a medium (e.g., 1000 ms), and a long (e.g., 5000 ms) interval. Our results demonstrate that when real-life information is presented minimally consciously or even unconsciously, it can influence our subsequent behavior, even when more than five seconds pass between the presentation of the minimally conscious or unconscious information and the behavior on which it exerts its influence.

----------------------

Enhanced Cardiac Perception Is Associated With Increased Susceptibility to Framing Effects

Stefan Sütterlin et al.
Cognitive Science, forthcoming

Abstract:
Previous studies suggest in line with dual process models that interoceptive skills affect controlled decisions via automatic or implicit processing. The "framing effect" is considered to capture implicit effects of task-irrelevant emotional stimuli on decision-making. We hypothesized that cardiac awareness, as a measure of interoceptive skills, is positively associated with susceptibility to the framing effect. Forty volunteers performed a risky-choice framing task in which the effect of loss versus gain frames on decisions based on identical information was assessed. The results show a positive association between cardiac awareness and the framing effect, accounting for 24% of the variance in the framing effect. These findings demonstrate that good interoceptive skills are linked to poorer performance in risky choices based on ambivalent information when implicit bias is induced by task-irrelevant emotional information. These findings support a dual process perspective on decision-making and suggest that interoceptive skills mediate effects of implicit bias on decisions.

----------------------

Gist Memory in the Unconscious-Thought Effect

Marlène Abadie, Laurent Waroquier & Patrice Terrier
Psychological Science, forthcoming

Abstract:
The unconscious-thought effect (UTE) occurs when people are better able to make complex decisions after a period of distraction rather than immediately or after a period of conscious deliberation. This finding has often been interpreted as evidence of unconscious thinking. In two experiments, we provided the first evidence that the UTE is accompanied by enhanced memory for the gist of decision-relevant attributes and demonstrated that the cognitive demands of a distraction task moderate its effect on decision making and gist memory. It was only following a low-demand distraction task that participants chose the best alternative more often and displayed enhanced gist memory for decision-relevant attributes. These findings suggest that the UTE occurs only if cognitive resources are available and that it is accompanied by enhanced organization of information in memory, as shown by the increase in gist memory.

----------------------

Impartiality in humans is predicted by brain structure of dorsomedial prefrontal cortex

Thomas Baumgartner et al.
NeuroImage, 1 November 2013, Pages 317-324

Abstract:
The moral force of impartiality (i.e. the equal treatment of all human beings) is imperative for providing justice and fairness. Yet, in reality many people become partial during intergroup interactions; they demonstrate a preferential treatment of ingroup members and a discriminatory treatment of outgroup members. Some people, however, do not show this intergroup bias. The underlying sources of these inter-individual differences are poorly understood. Here we demonstrate that the larger the gray matter volume and thickness of the dorsomedial prefrontal cortex (DMPFC), the more individuals in the role of an uninvolved third-party impartially punish outgroup and ingroup perpetrators. Moreover, we show evidence for a possible mechanism that explains the impact of DMPFC's gray matter volume on impartiality, namely perspective-taking. Large gray matter volume of DMPFC seems to facilitate equal perspective-taking of all sides, which in turn leads to impartial behavior. This is the first evidence demonstrating that brain structure of the DMPFC constitutes an important source underlying an individual's propensity for impartiality.

----------------------

The power of precise numbers: A conversational logic analysis

Charles Zhang & Norbert Schwarz
Journal of Experimental Social Psychology, forthcoming

Abstract:
The role of conversational processes in quantitative judgment is addressed. In three studies, precise numbers (e.g., $29.75) had a stronger influence on subsequent estimates than round numbers (e.g., $30), but only when they were presented by a human communicator whose contributions could be assumed to observe the Gricean maxims of cooperative conversational conduct. Numeric precision exerted no influence when the numbers were presented as the result of an automated procedure that lacks communicative intent (Study 1) or when the level of precision was pragmatically irrelevant for the estimation task (Study 2).

----------------------

Limits in decision making arise from limits in memory retrieval

Gyslain Giguère & Bradley Love
Proceedings of the National Academy of Sciences, 7 May 2013, Pages 7613-7618

Abstract:
Some decisions, such as predicting the winner of a baseball game, are challenging in part because outcomes are probabilistic. When making such decisions, one view is that humans stochastically and selectively retrieve a small set of relevant memories that provides evidence for competing options. We show that optimal performance at test is impossible when retrieving information in this fashion, no matter how extensive training is, because limited retrieval introduces noise into the decision process that cannot be overcome. One implication is that people should be more accurate in predicting future events when trained on idealized rather than on the actual distributions of items. In other words, we predict the best way to convey information to people is to present it in a distorted, idealized form. Idealization of training distributions is predicted to reduce the harmful noise induced by immutable bottlenecks in people's memory retrieval processes. In contrast, machine learning systems that selectively weight (i.e., retrieve) all training examples at test should not benefit from idealization. These conjectures are strongly supported by several studies and supporting analyses. Unlike machine systems, people's test performance on a target distribution is higher when they are trained on an idealized version of the distribution rather than on the actual target distribution. Optimal machine classifiers modified to selectively and stochastically sample from memory match the pattern of human performance. These results suggest firm limits on human rationality and have broad implications for how to train humans tasked with important classification decisions, such as radiologists, baggage screeners, intelligence analysts, and gamblers.

By KEVIN LEWIS | 09:00:00 AM


Previous   22  23  24  25  26  27  28  29  30  31  32  33  34  35  36  37  38  39  40  41  42   Next


RSS Subscribe to this feed