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Wednesday, December 18, 2013

Hot and bothered

Conservative Protestantism and skepticism of scientists studying climate change

John Evans & Justin Feng
Climatic Change, December 2013, Pages 595-608

Abstract:
Politicians who proclaim both their skepticism about global warming and their conservative religious credentials leave the impression that conservative Protestants may be more skeptical about scientists’ claims regarding global warming than others. The history of the relationship between conservative Protestantism and science on issues such as evolution also suggests that there may be increased skepticism. Analyzing the 2006 and 2010 General Social Survey, we find no evidence that conservative Protestantism leads respondents to have less belief in the conclusiveness of climate scientists’ claims. However, a second type of skepticism of climate scientists is an unwillingness to follow scientists’ public policy recommendations. We find that conservative Protestantism does lead to being less likely to want environmental scientists to influence the public policy debate about what to do about climate change. Existing sociological research on the relationship between religion and science suggests that this stance is due to a long-standing social/moral competition between conservative Protestantism and science.

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Attenuating Initial Beliefs: Increasing the Acceptance of Anthropogenic Climate Change Information by Reflecting on Values

Anne-Marie van Prooijen & Paul Sparks
Risk Analysis, forthcoming

Abstract:
Anthropogenic climate change information tends to be interpreted against the backdrop of initial environmental beliefs, which can lead to some people being resistant toward the information. In this article (N = 88), we examined whether self-affirmation via reflection on personally important values could attenuate the impact of initial beliefs on the acceptance of anthropogenic climate change evidence. Our findings showed that initial beliefs about the human impact on ecological stability influenced the acceptance of information only among nonaffirmed participants. Self-affirmed participants who were initially resistant toward the information showed stronger beliefs in the existence of climate change risks and greater acknowledgment that individual efficacy has a role to play in reducing climate change risks than did their nonaffirmed counterparts.

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Feeling the Heat: Temperature, Physiology & the Wealth of Nations

Geoffrey Heal & Jisung Park
NBER Working Paper, December 2013

Abstract:
Does temperature affect economic performance? Has temperature always affected social welfare through its impact on physical and cognitive function? While many studies have explored the indirect links between climate and welfare (e.g. agricultural yield, violent conflict, or sea-level rise), few address the possibility of direct impacts operating through human physiology. This paper presents a model of labor supply under thermal stress, building on a longstanding physiological literature linking thermal stress to health and task performance. A key prediction is that effective labor supply – defined as a composite of labor hours, task performance, and effort – is decreasing in temperature deviations from the biological optimum. We use country-level panel data on population-weighted average temperature and income (1950-2005), to illustrate the potential magnitude of the effect. Using a fixed effects estimation strategy, we find that hotter-than-average years are associated with lower output per capita for already hot countries and higher output per capita for cold countries: approximately 3%-4% in both directions. We then use household data on air conditioning and heating expenditures from the US to provide further evidence in support of a physiologically based causal mechanism. This more direct causal link between climate and social welfare has important implications for both the economics of climate change and comparative development.

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Impacts of 21st century climate change on global air pollution-related premature mortality

Yuanyuan Fang et al.
Climatic Change, November 2013, Pages 239-253

Abstract:
Climate change modulates surface concentrations of fine particulate matter (PM2.5) and ozone (O3), indirectly affecting premature mortality attributed to air pollution. We estimate the change in global premature mortality and years of life lost (YLL) associated with changes in surface O3 and PM2.5 over the 21st century as a result of climate change. We use a global coupled chemistry-climate model to simulate current and future climate and the effect of changing climate on air quality. Epidemiological concentration-response relationships are applied to estimate resulting changes in premature mortality and YLL. The effect of climate change on air quality is isolated by holding emissions of air pollutants constant while allowing climate to evolve over the 21st century according to a moderate projection of greenhouse gas emissions (A1B scenario). Resulting changes in 21st century climate alone lead to an increase in simulated PM2.5 concentrations globally, and to higher (lower) O3 concentrations over populated (remote) regions. Global annual premature mortality associated with chronic exposure to PM2.5 increases by approximately 100 thousand deaths (95 % confidence interval, CI, of 66–130 thousand) with corresponding YLL increasing by nearly 900 thousand (95 % CI, 576–1,128 thousand) years. The annual premature mortality due to respiratory disease associated with chronic O3 exposure increases by +6,300 deaths (95 % CI, 1,600–10,400). This climate penalty indicates that stronger emission controls will be needed in the future to meet current air quality standards and to avoid higher health risks associated with climate change induced worsening of air quality over populated regions.

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Locked into Copenhagen pledges — Implications of short-term emission targets for the cost and feasibility of long-term climate goals

Keywan Riahi et al.
Technological Forecasting and Social Change, forthcoming

Abstract:
This paper provides an overview of the AMPERE modeling comparison project with focus on the implications of near-term policies for the costs and attainability of long-term climate objectives. Nine modeling teams participated in the project to explore the consequences of global emissions following the proposed policy stringency of the national pledges from the Copenhagen Accord and Cancún Agreements to 2030. Specific features compared to earlier assessments are the explicit consideration of near-term 2030 emission targets as well as the systematic sensitivity analysis for the availability and potential of mitigation technologies. Our estimates show that a 2030 mitigation effort comparable to the pledges would result in a further “lock-in” of the energy system into fossil fuels and thus impede the required energy transformation to reach low greenhouse-gas stabilization levels (450 ppm CO2e). Major implications include significant increases in mitigation costs, increased risk that low stabilization targets become unattainable, and reduced chances of staying below the proposed temperature change target of 2 °C in case of overshoot. With respect to technologies, we find that following the pledge pathways to 2030 would narrow policy choices, and increases the risks that some currently optional technologies, such as carbon capture and storage (CCS) or the large-scale deployment of bioenergy, will become “a must” by 2030.

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US biofuels subsidies and CO2 emissions: An empirical test for a weak and a strong green paradox

Quentin Grafton et al.
Energy Policy, forthcoming

Abstract:
Using energy data over the period 1981–2011 we find that US biofuels subsidies and production have provided a perverse incentive for US fossil fuel producers to increase their rate of extraction that has generated a weak green paradox. Further, in the short-run if the reduction in the CO2 emissions from a one-to-one substitution between biofuels and fossil fuels is less than 26 percent, or less than 57 percent if long run effect is taken into account, then US biofuels production is likely to have resulted in a strong green paradox. These results indicate that subsidies for first generation biofuels, which yield a low level of per unit CO2 emission reduction compared to fossil fuels, might have contributed to additional net CO2 emissions over the study period.

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Continued global warming after CO2 emissions stoppage

Thomas Lukas Frölicher, Michael Winton & Jorge Louis Sarmiento
Nature Climate Change, forthcoming

Abstract:
Recent studies have suggested that global mean surface temperature would remain approximately constant on multi-century timescales after CO2 emissions are stopped. Here we use Earth system model simulations of such a stoppage to demonstrate that in some models, surface temperature may actually increase on multi-century timescales after an initial century-long decrease. This occurs in spite of a decline in radiative forcing that exceeds the decline in ocean heat uptake — a circumstance that would otherwise be expected to lead to a decline in global temperature. The reason is that the warming effect of decreasing ocean heat uptake together with feedback effects arising in response to the geographic structure of ocean heat uptake overcompensates the cooling effect of decreasing atmospheric CO2 on multi-century timescales. Our study also reveals that equilibrium climate sensitivity estimates based on a widely used method of regressing the Earth’s energy imbalance against surface temperature change are biased. Uncertainty in the magnitude of the feedback effects associated with the magnitude and geographic distribution of ocean heat uptake therefore contributes substantially to the uncertainty in allowable carbon emissions for a given multi-century warming target.

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If Anthropogenic CO2 Emissions Cease, Will Atmospheric CO2 Concentration Continue to Increase?

Andrew MacDougall, Michael Eby & Andrew Weaver
Journal of Climate, December 2013, Pages 9563–9576

Abstract:
If anthropogenic CO2 emissions were to suddenly cease, the evolution of the atmospheric CO2 concentration would depend on the magnitude and sign of natural carbon sources and sinks. Experiments using Earth system models indicate that the overall carbon sinks dominate, such that upon the cessation of anthropogenic emissions, atmospheric CO2 levels decrease over time. However, these models have typically neglected the permafrost carbon pool, which has the potential to introduce an additional terrestrial source of carbon to the atmosphere. Here, the authors use the University of Victoria Earth System Climate Model (UVic ESCM), which has recently been expanded to include permafrost carbon stocks and exchanges with the atmosphere. In a scenario of zeroed CO2 and sulfate aerosol emissions, whether the warming induced by specified constant concentrations of non-CO2 greenhouse gases could slow the CO2 decline following zero emissions or even reverse this trend and cause CO2 to increase over time is assessed. It is found that a radiative forcing from non-CO2 gases of approximately 0.6 W m−2 results in a near balance of CO2 emissions from the terrestrial biosphere and uptake of CO2 by the oceans, resulting in near-constant atmospheric CO2 concentrations for at least a century after emissions are eliminated. At higher values of non-CO2 radiative forcing, CO2 concentrations increase over time, regardless of when emissions cease during the twenty-first century. Given that the present-day radiative forcing from non-CO2 greenhouse gases is about 0.95 W m−2, the results suggest that if all CO2 and aerosols emissions were eliminated without also decreasing non-CO2 greenhouse gas emissions CO2 levels would increase over time, resulting in a small increase in climate warming associated with this positive permafrost–carbon feedback.

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Conditional Cooperation and Climate Change

Dustin Tingley & Michael Tomz
Comparative Political Studies, forthcoming

Abstract:
It is widely believed that international cooperation can arise through strategies of reciprocity. In this paper, we investigate whether citizens in the United States and 25 other countries support reciprocity to deal with climate change. We find little public enthusiasm for intrinsic reciprocity, in which countries restrain their consumption of fossil fuels if and only if other countries do the same. In contrast, we find significant support for extrinsic reciprocity, in which countries enforce cooperation by linking issues. Citizens support economic sanctions against polluters and are willing to shame them in international forums, especially when the polluters are violating a treaty. Cooperation could, therefore, emerge from efforts to link climate with other issues and to embed climate commitments in international law.

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Can Negotiating a Uniform Carbon Price Help to Internalize the Global Warming Externality?

Martin Weitzman
NBER Working Paper, November 2013

Abstract:
Thus far, most approaches to resolving the global warming externality have been quantity based. With n different national entities, a meaningful comprehensive treaty involves negotiating n different binding emissions quotas (whether tradeable or not). In post-Kyoto practice this n-dimensional coordination problem has proven intractable and has essentially devolved into sporadic regional volunteerism. By contrast, on the price side there is a natural one-dimensional focus on negotiating a single binding carbon price, the proceeds from which are domestically retained. Significantly (and unlike negotiated quantities) the negotiated uniform price on carbon emissions embodies an automatic "countervailing force" against free-riding self interest by incentivizing agents to internalize the externality. The model of this paper indicates an exact sense in which each agent's extra cost from a higher emissions price is counter-balanced by that agent's extra benefit from inducing (via the higher emissions price) all other agents to simultaneously lower their emissions. With some further restrictions, the theoretical model shows that population-weighted majority rule for a uniform price on carbon emissions can come as close to global efficiency as the median marginal benefit (per capita) is close to the mean marginal benefit (per capita).

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The Role of Emotion in Global Warming Policy Support and Opposition

Nicholas Smith & Anthony Leiserowitz
Risk Analysis, forthcoming

Abstract:
Prior research has found that affect and affective imagery strongly influence public support for global warming. This article extends this literature by exploring the separate influence of discrete emotions. Utilizing a nationally representative survey in the United States, this study found that discrete emotions were stronger predictors of global warming policy support than cultural worldviews, negative affect, image associations, or sociodemographic variables. In particular, worry, interest, and hope were strongly associated with increased policy support. The results contribute to experiential theories of risk information processing and suggest that discrete emotions play a significant role in public support for climate change policy. Implications for climate change communication are also discussed.

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Can Carbon Taxes Be Progressive?

Yazid Dissou & Muhammad Shahid Siddiqui
Energy Economics, forthcoming

Abstract:
Most studies have assessed the distributional impact of carbon taxes through their effects on commodity prices alone, while ignoring their impact on individual welfare brought about by changes in factor prices. Yet, the remunerations of capital and labor are not affected by these taxes similarly, and their shares in earned incomes are not uniform across households. This paper provides a comprehensive analysis of the incidence of carbon taxes on inequality by considering simultaneously the commodity and the income channels. We propose a decomposition of the change in individual welfare metrics. Then, we develop a general equilibrium model to assess the impact of carbon taxes on factor and commodity prices, and subsequently their distributional impact on households, using the Lorenz and concentration curves and the Gini index. Our results suggest that changes in factor prices and changes in commodity prices (especially those of energy commodities) have opposing effects on inequality. Carbon taxes tend to reduce inequality through the changes in factor prices and tend to increase inequality through the changes in commodity prices. Hence, we find a non-monotonic (U-shaped) relationship between carbon taxes and inequality. Our results suggest that the traditional approach of assessing the impact of carbon taxes on inequality through changes in commodity prices alone may be misleading. The findings cast light on the desirability of using both channels in the assessment of carbon taxes on inequality.

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Expert assessment of sea-level rise by AD 2100 and AD 2300

Benjamin Horton et al.
Quaternary Science Reviews, 15 January 2014, Pages 1–6

Abstract:
Large uncertainty surrounds projections of global sea-level rise, resulting from uncertainty about future warming and an incomplete understanding of the complex processes and feedback mechanisms that cause sea level to rise. Consequently, existing models produce widely differing predictions of sea-level rise even for the same temperature scenario. Here we present results of a broad survey of 90 experts who were amongst the most active scientific publishers on the topic of sea level in recent years. They provided a probabilistic assessment of sea-level rise by AD 2100 and AD 2300 under two contrasting temperature scenarios. For the low scenario, which limits warming to <2 °C above pre-industrial temperature and has slowly falling temperature after AD 2050, the median ‘likely’ range provided by the experts is 0.4–0.6 m by AD 2100 and 0.6–1.0 m by AD 2300, suggesting a good chance to limit future sea-level rise to <1.0 m if climate mitigation measures are successfully implemented. In contrast, for the high warming scenario (4.5 °C by AD 2100 and 8 °C in AD 2300) the median likely ranges are 0.7–1.2 m by AD 2100 and 2.0–3.0 m by AD 2300, calling into question the future survival of some coastal cities and low-lying island nations.

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A geological perspective on sea-level rise and its impacts along the U.S. mid-Atlantic coast

Kenneth Miller et al.
Earth's Future, forthcoming

Abstract:
We evaluate paleo-, historical, and future sea-level rise along the U.S. mid-Atlantic coast. The rate of relative sea-level rise in New Jersey decreased from 3.5 ± 1.0 mm/yr at 7.5–6.5 ka, to 2.2 ± 0.8 mm/yr at 5.5–4.5 ka to a minimum of 0.9 ± 0.4 mm/yr at 3.3–2.3 ka. Relative sea level rose at a rate of 1.6 ± 0.1 mm/yr from 2.2 to 1.2 ka (750 Common Era [CE]) and 1.4 ± 0.1 mm/yr from 800 to 1800 CE. Geological and tide-gauge data show that sea-level rise was more rapid throughout the region since the Industrial Revolution (19th century = 2.7 ± 0.4 mm/yr; 20th century = 3.8 ± 0.2 mm/yr). There is a 95% probability that the 20th century rate of sea-level rise was faster than it was in any century in the last 4.3 kyr. These records reflect global rise (∼1.7 ± 0.2 mm/yr since 1880 CE) and subsidence from glacio-isostatic adjustment (∼1.3 ± 0.4 mm/yr) at bedrock locations (e.g., New York City). At coastal plain locations, the rate of rise is 0.3–1.3 mm/yr higher due to groundwater withdrawal and compaction. We construct 21st century relative sea-level rise scenarios including global, regional, and local processes. We project a 22 cm rise at bedrock locations by 2030 (central scenario; low- and high-end scenarios range of 16–38 cm), 40 cm by 2050 (range 28–65 cm), and 96 cm by 2100 (range 66–168 cm), with coastal plain locations having higher rises (3, 5–6, and 10–12 cm higher, respectively). By 2050 CE in the central scenario, a storm with a 10 year recurrence interval will exceed all historic storms at Atlantic City.

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Anthropogenic emissions of methane in the United States

Scot Miller et al.
Proceedings of the National Academy of Sciences, 10 December 2013, Pages 20018-20022

Abstract:
This study quantitatively estimates the spatial distribution of anthropogenic methane sources in the United States by combining comprehensive atmospheric methane observations, extensive spatial datasets, and a high-resolution atmospheric transport model. Results show that current inventories from the US Environmental Protection Agency (EPA) and the Emissions Database for Global Atmospheric Research underestimate methane emissions nationally by a factor of ∼1.5 and ∼1.7, respectively. Our study indicates that emissions due to ruminants and manure are up to twice the magnitude of existing inventories. In addition, the discrepancy in methane source estimates is particularly pronounced in the south-central United States, where we find total emissions are ∼2.7 times greater than in most inventories and account for 24 ± 3% of national emissions. The spatial patterns of our emission fluxes and observed methane–propane correlations indicate that fossil fuel extraction and refining are major contributors (45 ± 13%) in the south-central United States. This result suggests that regional methane emissions due to fossil fuel extraction and processing could be 4.9 ± 2.6 times larger than in EDGAR, the most comprehensive global methane inventory. These results cast doubt on the US EPA’s recent decision to downscale its estimate of national natural gas emissions by 25–30%. Overall, we conclude that methane emissions associated with both the animal husbandry and fossil fuel industries have larger greenhouse gas impacts than indicated by existing inventories.

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Arctic Sea Ice Reduction and Extreme Climate Events over the Mediterranean Region

Barbara Grassi, Gianluca Redaelli & Guido Visconti
Journal of Climate, December 2013, Pages 10101–10110

Abstract:
During the last decade, Arctic sea ice cover has experienced an accelerated decline that has been suggested to drive the increased occurrence of extremely cold winter events over continental Europe. Observations and modeling studies seem to support the idea that Mediterranean climate is also changing. In this work, the authors estimate potential effects on the Mediterranean Basin, during the winter period, of Arctic sea ice reduction. Two sets of simulations have been performed by prescribing different values of sea ice concentrations (50% and 20%) on the Barents–Kara Seas in the NCAR Community Atmosphere Model, version 3 (CAM3), as representative of idealized present and future sea ice conditions. Global model simulations have then been used to run the Abdus Salam International Centre for Theoretical Physics (ICTP) Regional Climate Model, version 4 (RegCM4), over central Europe and the Mediterranean domain. Simulations provide evidence for a large-scale atmospheric circulation response to sea ice reduction, resembling the negative phase of the Arctic Oscillation (AO) and characterized by a wave activity flux from the North Atlantic toward the Mediterranean Basin, during winter months. An increase in the occurrence and intensity of extreme cold events, over continental Europe, and extreme precipitation events, over the entire Mediterranean Basin, was found. In particular, simulations suggest an increased risk of winter flooding in southern Italy, Greece, and the Iberian Peninsula.

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Water–CO2 trade-offs in electricity generation planning

Mort Webster, Pearl Donohoo & Bryan Palmintier
Nature Climate Change, December 2013, Pages 1029–1032

Abstract:
In 2011, the state of Texas experienced the lowest annual rainfall on record, with similar droughts affecting East Africa, China and Australia. Climate change is expected to further increase the likelihood and severity of future droughts. Simultaneously, population and industrial growth increases demand for drought-stressed water resources and energy, including electricity. In the US, nearly half of water withdrawals are for electricity generation, much of which comes from greenhouse gas emitting fossil fuel combustion. The result is a three-way tension among efforts to meet growing energy demands while reducing greenhouse gas emissions and water withdrawals, a critical issue within the so-called water–energy nexus. We focus on this interaction within the electric sector by using a generation expansion planning model to explore the trade-offs. We show that large reductions in CO2 emissions would probably increase water withdrawals for electricity generation in the absence of limits on water usage, and that simultaneous restriction of CO2 emissions and water withdrawals requires a different mix of energy technologies and higher costs than one would plan to reduce either CO2 or water alone.

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The green paradox of the economics of exhaustible resources

Robert Cairns
Energy Policy, February 2014, Pages 78–85

Abstract:
The green paradox states that an increasing tax on emissions of carbon dioxide, consonant with the expected increase in their marginal damages, may induce oil producers to shift their production toward the present and thereby to exacerbate the problem of climatic change. The model is based on Hotelling models of resource use that do not take the natural and technical features of oil production into account. Natural features include the decline of production through time according to a decline curve. Technical features include the requirement to sink investment in productive capacity. A model of a profit-maximizing firm indicates that, if these features are taken into account, the prediction of the green paradox is unlikely.

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An apparent hiatus in global warming?

Kevin Trenberth & John Fasullo
Earth's Future, forthcoming

Abstract:
Global warming first became evident beyond the bounds of natural variability in the 1970s, but increases in global mean surface temperatures have stalled in the 2000s. Increases in atmospheric greenhouse gases, notably carbon dioxide, create an energy imbalance at the top-of-atmosphere (TOA) even as the planet warms to adjust to this imbalance, which is estimated to be 0.5–1 W m−2 over the 2000s. Annual global fluctuations in TOA energy of up to 0.2 W m−2 occur from natural variations in clouds, aerosols, and changes in the Sun. At times of major volcanic eruptions the effects can be much larger. Yet global mean surface temperatures fluctuate much more than these can account for. An energy imbalance is manifested not just as surface atmospheric or ground warming but also as melting sea and land ice, and heating of the oceans. More than 90% of the heat goes into the oceans and, with melting land ice, causes sea level to rise. For the past decade, more than 30% of the heat has apparently penetrated below 700 m depth that is traceable to changes in surface winds mainly over the Pacific in association with a switch to a negative phase of the Pacific Decadal Oscillation (PDO) in 1999. Surface warming was much more in evidence during the 1976–1998 positive phase of the PDO, suggesting that natural decadal variability modulates the rate of change of global surface temperatures while sea-level rise is more relentless. Global warming has not stopped; it is merely manifested in different ways.

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Projected Changes in Late-Twenty-First-Century Tropical Cyclone Frequency in 13 Coupled Climate Models from Phase 5 of the Coupled Model Intercomparison Project

K.J. Tory et al.
Journal of Climate, December 2013, Pages 9946–9959

Abstract:
Changes in tropical cyclone (TC) frequency under anthropogenic climate change are examined for 13 global models from phase 5 of the Coupled Model Intercomparison Project (CMIP5), using the Okubo–Weiss–Zeta parameter (OWZP) TC-detection method developed by the authors in earlier papers. The method detects large-scale conditions within which TCs form. It was developed and tuned in atmospheric reanalysis data and then applied without change to the climate models to ensure model and detector independence. Changes in TC frequency are determined by comparing TC detections in the CMIP5 historical runs (1970–2000) with high emission scenario (representative concentration pathway 8.5) future runs (2070–2100). A number of the models project increases in frequency of higher-latitude tropical cyclones in the late twenty-first century. Inspection reveals that these high-latitude systems were subtropical in origin and are thus eliminated from the analysis using an objective classification technique. TC detections in 8 of the 13 models reproduce observed TC formation numbers and geographic distributions reasonably well, with annual numbers within ±50% of observations. TC detections in the remaining five models are particularly low in number (10%–28% of observed). The eight models with a reasonable TC climatology all project decreases in global TC frequency varying between 7% and 28%. Large intermodel and interbasin variations in magnitude and sign are present, with the greatest variations in the Northern Hemisphere basins. These results are consistent with results from earlier-generation climate models and thus confirm the robustness of coupled model projections of globally reduced TC frequency.

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Trade of woody biomass for electricity generation under climate mitigation policy

Alice Favero & Emanuele Massetti
Resource and Energy Economics, forthcoming

Abstract:
Bio-energy with carbon capture and sequestration (BECCS) has the potential to be a key mitigation option, because it can generate electricity and absorb emissions at the same time. However, biomass is not distributed evenly across the globe and regions with a potentially high demand might be constrained by limited domestic supply. Therefore, climate mitigation policies might create the incentive to trade biomass internationally. This paper uses scenarios generated by the integrated assessment model WITCH to study trade of woody biomass from multiple perspectives: the volume of biomass traded, its value, the impact on other power generation technologies and on the efficiency of mitigation policy. The policy scenarios consist of three representative carbon tax policies (4.8 W/m2, 3.8 W/m2 and 3.2 W/m2 radiative forcing values in 2100) and a cap-and-trade scheme (3.8 W/m2 in 2100). Results show that the incentive to trade biomass is high: at least 50% of biomass consumed globally is traded internationally. Regions trade 13-69 EJ/yr of woody biomass in 2050 and 55-81 EJ/yr in 2100. In 2100 the value of biomass traded is equal to US$ 0.7-7.2 Trillion. Trade of woody biomass substantially increases the efficiency of the mitigation policy. In the tax scenarios, abatement increases by 120-323 Gt CO2 over the century. In the cap-and-trade scenario biomass trade reduces the price of emission allowances by 34% in 2100 and cumulative discounted policy costs by 14%.

By KEVIN LEWIS | 09:00:00 AM

Tuesday, December 17, 2013

Just desserts

The Ironic Effects of Weight Stigma

Brenda Major et al.
Journal of Experimental Social Psychology, March 2014, Pages 74–80

Abstract:
America’s war on obesity has intensified stigmatization of overweight and obese individuals. This experiment tested the prediction that exposure to weight-stigmatizing messages threatens the social identity of individuals who perceive themselves as overweight, depleting executive resources necessary for exercising self-control when presented with high calorie food. Women were randomly assigned to read a news article about stigma faced by overweight individuals in the job market or a control article. Exposure to weight-stigmatizing news articles caused self-perceived overweight women, but not women who did not perceive themselves as overweight, to consume more calories and feel less capable of controlling their eating than exposure to non-stigmatizing articles. Weight-stigmatizing articles also increased concerns about being a target of stigma among both self-perceived overweight and non-overweight women. Findings suggest that social messages targeted at combating obesity may have paradoxical and undesired effects.

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Chocolate Cake: Guilt or Celebration? Associations with Healthy Eating Attitudes, Perceived Behavioural Control, Intentions and Weight-loss

Roeline Kuijer & Jessica Boyce
Appetite, forthcoming

Abstract:
Food and eating are often associated with ambivalent feelings: pleasure and enjoyment, but also worry and guilt. Guilt has the potential to motivate behaviour change, but may also lead to feelings of helplessness and loss of control. This study firstly examined whether a default association of either ‘guilt’ or ‘celebration’ with a prototypical forbidden food item (chocolate cake) was related to differences in attitudes, perceived behavioural control, and intentions in relation to healthy eating, and secondly whether the default association was related to weight change over an 18 month period (and short term weight-loss in a subsample of participants with a weight-loss goal). This study did not find any evidence for adaptive or motivational properties of guilt. Participants associating chocolate cake with guilt did not report more positive attitudes or stronger intentions to eat healthy than did those associating chocolate cake with celebration. Instead, they reported lower levels of perceived behavioural control over eating and were less successful at maintaining their weight over an 18 month period. Participants with a weight-loss goal who associated chocolate cake with guilt were less successful at losing weight over a 3 month period compared to those associating chocolate cake with celebration.

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Overweight Adolescents and Life Events in Childhood

Julie Lumeng et al.
Pediatrics, December 2013, Pages e1506-e1512

Objectives: To test the association of life events in childhood with overweight risk in adolescence; to examine the effects of chronicity, timing, intensity, valence, and type of life events; and to test potential moderators.

Methods: Mothers of children enrolled in the Eunice Kennedy Shriver National Institute of Child Health and Human Development Study of Early Child Care and Youth Development responded to the Life Experiences Survey at ages 4, 9, and 11 years. Using logistic regression analysis, we tested the association of experiencing many negative life events with being overweight at age 15 years, controlling for child gender, race/ethnicity, maternal education, and maternal obesity. Child gender, maternal education, maternal obesity, child’s ability to delay gratification for food, and maternal sensitivity were tested as moderators.

Results: Among the 848 study children (82% non-Hispanic white), experiencing many negative life events was associated with a higher risk of overweight (odds ratio: 1.47 [95% confidence interval: 1.04–2.10]). Greater chronicity and negative valence of the event were associated with greater overweight risk; timing of exposure and maternal reported impact of the event were not. The association was more robust for events related to family physical or mental health and among children of obese mothers and children who waited longer for food.

Conclusions: Children who experience many negative life events are at higher risk of being overweight by age 15 years. Future work should investigate mechanisms involved in this association, particularly those connected to appetitive drive and self-regulation; these mechanisms may hold promise for obesity prevention strategies.

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Perceived weight in youths and risk of overweight or obesity six years later

Hao Duong & Robert Roberts
Journal of Psychosomatic Research, forthcoming

Objective: To examine the association between perceived overweight in adolescents and the development of overweight or obesity later in life.

Methods: This paper uses data from a prospective, two-wave cohort study. Participants are 2445 adolescents 11–17 years of age who reported perceived weight at baseline and also had height and weight measured at baseline and at follow-up six years later sampled from managed care groups in a large metropolitan area.

Results: Youths who perceived themselves as overweight at baseline were approximately 2.5 times as likely to be overweight or obese six years later compared to youths who perceived themselves as average weight (OR = 2.45, 95% CI = 1.77-3.39), after adjusting for weight status at baseline, demographic characteristics, major depression, physical activity and dieting behaviors. Those who perceived themselves as skinny were less likely to be overweight or obese later (OR = 0.36, 95% CI = 0.27-0.49).

Conclusions: Perceived overweight was associated with overweight or obesity later in life. This relationship was not fully explained by extreme weight control behaviors or major depression. Further research is needed to explore the mechanism involved.

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Humans are not fooled by size illusions in attractiveness judgements

Melissa Bateson et al.
Evolution and Human Behavior, forthcoming

Abstract:
Could signallers use size contrast illusions to dishonestly exaggerate their attractiveness to potential mates? Using composite photographs of women from three body mass index (BMI) categories designed to simulate small groups, we show that target women of medium size are judged as thinner when surrounded by larger women than when surrounded by thinner women. However, attractiveness judgements of the same target women were unaffected by this illusory change in BMI, despite small true differences in the BMIs of the target women themselves producing strong effects on attractiveness. Thus, in the context of mate choice decisions, the honesty of female body size as a signal of mate quality appears to have been maintained by the evolution of assessment strategies that are immune to size contrast illusions. Our results suggest that receiver psychology is more flexible than previously assumed, and that illusions are unlikely to drive the evolution of exploitative neighbour choice in human sexual displays.

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A brisk walk, compared with being sedentary, reduces attentional bias and chocolate cravings among regular chocolate eaters with different body mass

Hwajung Oh & Adrian Taylor
Appetite, December 2013, Pages 144–149

Abstract:
Poor self-regulation of high energy snacking has been linked to weight gain. Physical activity can acutely reduce chocolate consumption and cravings but the effects on attentional bias (AB) are unknown. The study aimed to test the effects of exercise among normal and overweight/obese individuals during temporary and longer abstinence. Participants were 20 normal and 21 overweight regular female chocolate eaters (after 24 h abstinence), and 17 females (after ⩾1 week abstinence during Lent). They were randomly assigned to engage in 15 min brisk walking or rest, on separate days. AB was assessed using an adapted dot probe task pre and post-treatment at each session, with chocolate/neutral paired images presented for 200 ms (initial AB; IAB) or 1000 ms (maintained AB; MAB). Chocolate craving was assessed pre, during, immediately after, and 5 min and 10 min after treatment, using a 0–100 visual analogue score. Three-way mixed ANOVAs revealed that there was no significant interaction effect between group (i.e., BMI status, or abstinence status) and condition × time for craving and AB to chocolate cues. Fully repeated 2-way ANOVAS revealed a significant condition × time interaction for IAB (F(1, 57) = 6.39) and chocolate craving (F(2.34, 133.19) = 14.44). After exercise IAB (t(57) = 2.78, p < 0.01) was significantly lower than after the rest condition. Craving was significantly lower than the rest condition at all assessments post-baseline. A short bout of physical activity reduces cravings and AB to chocolate cues, relative to control, irrespective of BMI or abstinence period.

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Personality Traits, Education, Physical Exercise, and Childhood Neurological Function as Independent Predictors of Adult Obesity

Helen Cheng & Adrian Furnham
PLoS ONE, November 2013

Objective: To investigate whether personality traits, education, physical exercise, parental socio-economic conditions, and childhood neurological function are independently associated with obesity in 50 year old adults in a longitudinal birth cohort study.

Method: The sample consisted of 5,921 participants born in Great Britain in 1958 and followed up at 7, 11, 33, 42, and 50 years with data on body mass index measured at 42 and 50 years.

Results: There was an increase of adult obesity from 14.2% at age 42 to 23.6% at 50 years. Cohort members who were reported by teachers on overall clumsiness as “certainly applied” at age 7 were more likely to become obese at age 50. In addition, educational qualifications, traits Conscientiousness and Extraversion, psychological distress, and physical exercise were all significantly associated with adult obesity. The associations remained to be significant after controlling for birth weight and gestation, maternal and paternal BMI, childhood BMI, childhood intelligence and behavioural adjustment, as well as diet.

Conclusion: Neurological function in childhood, education, trait Conscientiousness, and exercise were all significantly and independently associated with adult obesity, each explained unique individual variability.

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Acute Effect of Oatmeal on Subjective Measures of Appetite and Satiety Compared to a Ready-to-Eat Breakfast Cereal: A Randomized Crossover Trial

Candida Rebello et al.
Journal of the American College of Nutrition, July/August 2013, Pages 272-279

Objective: The physicochemical properties of soluble oat fiber (β-glucan) affect viscosity-dependent mechanisms that influence satiety. The objective of this study was to compare the satiety impact of oatmeal with the most widely sold ready-to-eat breakfast cereal (RTEC) when either was consumed as a breakfast meal.

Methods: Forty-eight healthy individuals ≥18 years of age were enrolled in a randomized crossover trial. Following an overnight fast, subjects consumed either oatmeal or RTEC in random order at least a week apart. The breakfasts were isocaloric and contained 363 kcal (250 kcal cereal, 113 kcal milk). Visual analogue scales measuring appetite and satiety were completed before breakfast and throughout the morning. The content and physicochemical properties of oat β-glucan were determined. Appetite and satiety responses were analyzed by area under the curve (AUC). Physicochemical properties were analyzed using t tests.

Results: Oatmeal, higher in fiber and protein but lower in sugar than the RTEC, resulted in greater increase in fullness (AUC: p = 0.005 [120 minute: p = 0.0408, 180 minute: p = 0.0061, 240 minute: p = 0.0102]) and greater reduction in hunger (AUC: p = 0.0009 [120 minute: p = 0.0197, 180 minute: p = 0.0003, 240 minute: p = 0.0036]), desire to eat (AUC: p = 0.0002 [120 minute: p = 0.0168, 180 minute: p < 0.0001, 240 minute: p = 0.0022]), and prospective intake (AUC: p = 0.0012 [120 minute: p = 0.0058, 180 minute: p = 0.006, 240 minute: p = 0.0047]) compared to the RTEC. Oatmeal had higher β-glucan content, higher molecular weight (p < 0.0001), higher viscosity (p = 0.025), and larger hydration spheres (p = 0.0012) than the RTEC.

Conclusion: Oatmeal improves appetite control and increases satiety. The effects may be attributed to the viscosity and hydration properties of its β-glucan content.

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Calories and portion sizes in recipes throughout 100 years: An overlooked factor in the development of overweight and obesity?

Maj Bloch Eidner et al.
Scandinavian Journal of Public Health, December 2013, Pages 839-845

Background: Large portion sizes have been associated with large energy intake, which can contribute to the development of overweight and obesity. Portion sizes of non-home cooked food have increased in the past 20 years, however, less is known about portion sizes of home-cooked food.

Aim: The aim of the study was to assess if the portion sizes measured in calories in Danish cookbook recipes have changed throughout the past 100 years.

Methods: Portion size measured in calories was determined by content-analysis of 21 classic Danish recipes in 13 editions of the famous Danish cookbook “Food” from 1909 to 2009. Calorie content of the recipes was determined in standard nutritional software, and the changes in calories were examined by simple linear regression analyses.

Results: Mean portion size in calories increased significantly by 21% (β = 0.63; p < 0.01) over the past 100 years in the analyzed recipes. The mean portion size in calories from a composed homemade meal increased by 77% (β = 2.88; p < 0.01). The mean portion size in calories from meat increased by 27% (β = 0.85; p = 0.03), starchy products increased by 148% (β = 1.28; p < 0.01), vegetables increased by 37% (β = 0.21; p = 0.13) and sauce increased by 47% (β = 0.56; p = 0.02) throughout the years.

Conclusions: Portion sizes measured in calories in classical Danish recipes have increased significantly in the past 100 years and can be an important factor in increased energy intake and the risk of developing overweight and obesity.

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Maternal Work and Children's Diet, Activity, and Obesity

Ashlesha Datar, Nancy Nicosia & Victoria Shier
University of Southern California Working Paper, November 2013

Abstract:
Mothers’ work hours are likely to affect their time allocation towards activities related to children’s diet, activity and well-being. For example, mothers who work more may be more reliant on processed foods, foods prepared away from home and school meal programs for their children’s meals. A greater number of work hours may also lead to more unsupervised time for children that may, in turn, allow for an increase in unhealthy behaviors among their children such as snacking and sedentary activities such as TV watching. Using data on a national cohort of children, we examine the relationship between mothers’ average weekly work hours during their children’s school years on children’s dietary and activity behaviors, BMI and obesity in 5th and 8th grade. Our results are consistent with findings from the literature that maternal work hours are positively associated with children’s BMI and obesity especially among children with higher socioeconomic status. Unlike previous papers, our detailed data on children’s behaviors allow us to speak directly to affected behaviors that may contribute to the increased BMI. We show that children whose mothers work more consume more unhealthy foods (e.g. soda, fast food) and less healthy foods (e.g. fruits, vegetables, milk) and watch more television. Although they report being slightly more physically active, likely due to organized physical activities, the BMI and obesity results suggest that the deterioration in diet and increase in sedentary behaviors dominate.

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Racial Differences in the Influence of Female Adolescents’ Body Size on Dating and Sex

Mir Ali et al.
Economics & Human Biology, forthcoming

Abstract:
This paper investigates the effect of body size on dating and sexual experiences of white (non-Hispanic) and African American (non-Hispanic) female adolescents. Using data from Add-Health, we estimate the effects of obesity and BMI z-score on the probability of having been involved in a romantic relationship, having ever been touched in the genital area in a sexual way, and having ever engaged in sexual intercourse. We find that obese white teenage girls are less likely to have been in a romantic relationship compared to their non-obese counterparts. In addition, obese white girls are less likely to ever have had sex (intercourse) or to ever have been intimate. There are no systematic differences in relationship experiences and sexual behaviors between obese and non-obese black girls. Overall, the estimated relationships are very robust to common environmental influences at the school-level and to the inclusion of proxies for low self-esteem, attitudes towards sex and interviewer assessment of appearance and personality. Instrumental variables estimates and estimates from models with lagged weight status confirm the overall patterns.

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Change in BMI Accurately Predicted by Social Exposure to Acquaintances

Rahman Oloritun et al.
PLoS ONE, November 2013

Abstract:
Research has mostly focused on obesity and not on processes of BMI change more generally, although these may be key factors that lead to obesity. Studies have suggested that obesity is affected by social ties. However these studies used survey based data collection techniques that may be biased toward select only close friends and relatives. In this study, mobile phone sensing techniques were used to routinely capture social interaction data in an undergraduate dorm. By automating the capture of social interaction data, the limitations of self-reported social exposure data are avoided. This study attempts to understand and develop a model that best describes the change in BMI using social interaction data. We evaluated a cohort of 42 college students in a co-located university dorm, automatically captured via mobile phones and survey based health-related information. We determined the most predictive variables for change in BMI using the least absolute shrinkage and selection operator (LASSO) method. The selected variables, with gender, healthy diet category, and ability to manage stress, were used to build multiple linear regression models that estimate the effect of exposure and individual factors on change in BMI. We identified the best model using Akaike Information Criterion (AIC) and R2. This study found a model that explains 68% (p<0.0001) of the variation in change in BMI. The model combined social interaction data, especially from acquaintances, and personal health-related information to explain change in BMI. This is the first study taking into account both interactions with different levels of social interaction and personal health-related information. Social interactions with acquaintances accounted for more than half the variation in change in BMI. This suggests the importance of not only individual health information but also the significance of social interactions with people we are exposed to, even people we may not consider as close friends.

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Saturated fat consumption may not be the main cause of increased blood lipid levels

C.B. Dias et al.
Medical Hypotheses, forthcoming

Abstract:
Consumption of foods rich in saturated fatty acids (SFA) has often been associated with elevated blood lipid levels and consequently with risk for chronic diseases, including coronary heart disease. However, epidemiological and interventional studies on this topic are contradictory. While some studies have established a positive link, other studies have failed to show a significant association between saturated fat consumption and blood lipid levels, and others have even found an inverse association. Moreover, studies using animal models have demonstrated that dietary saturated fats raise blood lipid (cholesterol and triglycerides) levels only when the diet is deficient in omega-3 polyunsaturated fatty acids (n-3PUFA). The n-3PUFA are known for their potential in the management of hyperlipidaemia for the prevention of coronary heart disease, as well as for their anti-arrhythmic, anti-aggregatory and anti-inflammatory potential. We believe that with an adequate consumption of n-3PUFA dietary saturated fat may not result in elevated blood lipid levels. Therefore, we critically evaluated the literature regarding saturated fat and blood lipid level, with an emphasis on the role of n-3PUFA on this relationship. Evidence from animal studies and few clinical trials lead to the hypothesis that there are beneficial or neutral effects of saturated fatty acids when combined with recommended levels of n-3PUFA in the diet. However, an intervention focusing on the background fat when the volunteers’ diet is supplemented with n-3PUFA is yet to be done. Proving the authenticity of this hypothesis would mean a substantial change in public health messages regarding saturated fats and their health effects; and also a change in the strategies related to prevention of chronic cardiac and artery diseases.

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Density and Proximity of Fast Food Restaurants and Body Mass Index Among African Americans

Lorraine Reitzel et al.
American Journal of Public Health, January 2014, Pages 110-116

Objectives: The purpose of this study was to address current gaps in the literature by examining the associations of fast food restaurant (FFR) density around the home and FFR proximity to the home, respectively, with body mass index (BMI) among a large sample of African American adults from Houston, Texas.

Methods: We used generalized linear models with generalized estimating equations to examine associations of FFR density at 0.5-, 1-, 2-, and 5-mile road network buffers around the home with BMI and associations of the closest FFR to the home with BMI. All models were adjusted for a range of individual-level covariates and neighborhood socioeconomic status. We additionally investigated the moderating effects of household income on these relations. Data were collected from December 2008 to July 2009.

Results: FFR density was not associated with BMI in the main analyses. However, FFR density at 0.5, 1, and 2 miles was positively associated with BMI among participants with lower incomes (P ≤ .025). Closer FFR proximity was associated with higher BMI among all participants (P < .001), with stronger associations emerging among those of lower income (P < .013) relative to higher income (P < .014).

Conclusions: Additional research with more diverse African American samples is needed, but results supported the potential for the fast food environment to affect BMI among African Americans, particularly among those of lower economic means.

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Genetic Analysis of Low BMI Phenotype in the Utah Population Database

William Yates et al.
PLoS ONE, December 2013

Abstract:
The low body mass index (BMI) phenotype of less than 18.5 has been linked to medical and psychological morbidity as well as increased mortality risk. Although genetic factors have been shown to influence BMI across the entire BMI, the contribution of genetic factors to the low BMI phenotype is unclear. We hypothesized genetic factors would contribute to risk of a low BMI phenotype. To test this hypothesis, we conducted a genealogy data analysis using height and weight measurements from driver's license data from the Utah Population Data Base. The Genealogical Index of Familiality (GIF) test and relative risk in relatives were used to examine evidence for excess relatedness among individuals with the low BMI phenotype. The overall GIF test for excess relatedness in the low BMI phenotype showed a significant excess over expected (GIF 4.47 for all cases versus 4.10 for controls, overall empirical p-value<0.001). The significant excess relatedness was still observed when close relationships were ignored, supporting a specific genetic contribution rather than only a family environmental effect. This study supports a specific genetic contribution in the risk for the low BMI phenotype. Better understanding of the genetic contribution to low BMI holds promise for weight regulation and potentially for novel strategies in the treatment of leanness and obesity.

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Does Walkability Influence Housing Prices?

Austin Boyle, Charles Barrilleaux & Daniel Scheller
Social Science Quarterly, forthcoming

Objective: We examine the effects of neighborhood walkability on house values. Recent research claims that walkability makes homes more valuable, ceteris paribus. We contend that some studies report a spurious effect of walkability because of differences between areas with high and low walkability.

Methods: We replicate the positive effect of walkability on prices for single-family homes and condominiums in Miami, Florida, using a unique data set of house values and characteristics. We employ a fixed effects regression model instead of a traditional ordinary least squares regression model to account for the unobserved heterogeneity of neighborhoods.

Results: We find that walkability's impact on housing value becomes statistically insignificant at the margin after controlling for heteroscedasticity and neighborhood fixed effects.

Conclusions: The significant impact of the fixed effects suggests that something other than walkability is affecting prices and that better specified models are needed to discern the real price effects of walkability.

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Extraverted Children Are More Biased by Bowl Sizes than Introverts

Koert van Ittersum & Brian Wansink
PLoS ONE, October 2013

Abstract:
Extraverted children are hypothesized to be most at risk for over-serving and overeating due to environmental cues – such as the size of dinnerware. A within-subject field study of elementary school students found that extraverted children served themselves 33.1% more cereal in larger bowls (16-oz) than in smaller (12-oz) bowls, whereas introverted children were unaffected by bowl size (+5.6%, ns). However, when children were asked by adults how much cereal they wanted to eat, both extraverted and introverted children requested more cereal when given a large versus small bowl. Insofar as extraverted children appear to be more biased by environmental cues, this pilot study suggests different serving styles are recommended for parents and other caregivers. They should serve extraverts, but allow introverts to serve themselves. Still, since the average child still served 23.2% more when serving themselves than when served by an adult, it might be best for caregivers to do the serving whenever possible – especially for extraverted children.

By KEVIN LEWIS | 09:00:00 AM

Monday, December 16, 2013

Labor problem

Amerisclerosis? The Puzzle of Rising U.S. Unemployment Persistence

Olivier Coibion, Yuriy Gorodnichenko & Dmitri Koustas
NBER Working Paper, October 2013

Abstract:
The persistence of U.S. unemployment has risen with each of the last three recessions, raising the specter that future U.S. recessions might look more like the Eurosclerosis experience of the 1980s than traditional V-shaped recoveries of the past. In this paper, we revisit possible explanations for this rising persistence. First, we argue that financial shocks do not systematically lead to more persistent unemployment than monetary policy shocks, so these cannot explain the rising persistence of unemployment. Second, monetary and fiscal policies can account for only part of the evolving unemployment persistence. Therefore, we turn to a third class of explanations: propagation mechanisms. We focus on factors consistent with four other cyclical patterns which have evolved since the early 1980s: a rising cyclicality in long-term unemployment, lower regional convergence after downturns, rising cyclicality in disability claims, and missing disinflation. These factors include declining labor mobility, changing age structures, and the decline in trust among Americans. To determine how these factors affect unemployment persistence, this paper exploits regional variation in labor market outcomes across Western Europe and North America during 1970-1990, in contrast to most previous work focusing either on cross-country variation or regional variation within countries. The results suggest that only cultural factors can account for the rising persistence of unemployment in the U.S., but the evolution in mobility and demographics over time should have more than offset the effects of culture.

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Creating Jobs via the 2009 Recovery Act: State Medicaid Grants Compared to Broadly-Directed Spending

Bill Dupor
Federal Reserve Working Paper, November 2013

Abstract:
Researchers have used cross-state differences to assess the jobs impact of the 2009 American Recovery and Reinvestment Act (the Recovery Act). Existing studies find that the Act's broadly-directed spending (i.e. excluding tax cuts) increased employment, at a cost-per-job of roughly three to five times that of typical employment compensation in the U.S. Other research finds that a particular component of the Act ─ emergency Medicaid grants to states ─ created jobs at a cost of 12% to 20% that of broadly-directed spending. This paper shows that these differences across the components' impacts can be explained by omitted variables in the existing work on the emergency Medicaid grants. Adjusting for the omissions, the jobs effect of the Act's Medicaid grants becomes substantially weaker. The omissions are: (i) not controlling the degree of (non-Recovery Act) federal dependency, (ii) not duly controlling for pre-Act housing and labor market conditions, and (iii) not conditioning on Recovery Act funding beyond that from the Act's Medicaid grants. Adjusting for any one of these omissions, by itself, results in a substantial increase in the cost of job creation and/or no statistically significant jobs effect.

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Economic Freedom and Labor Market Conditions: Evidence from the States

Lauren Heller & Frank Stephenson
Contemporary Economic Policy, January 2014, Pages 56–66

Abstract:
Using 1981–2009 data for the 50 states, this article examines the relationship between economic freedom and the unemployment rate, the labor force participation rate, and the employment-population ratio. After controlling for a variety of state-level characteristics, the results from most specifications indicate that economic freedom is associated with lower unemployment and with higher labor force participation and employment-population ratios.

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Capitalism and Labor Shares: A Cross-Country Panel Study

Andrew Young & Robert Lawson
European Journal of Political Economy, forthcoming

Abstract:
We examine the empirical relationship between the institutions of economic freedom and labor shares in a panel up to 93 countries covering 1970 through 2009. We find that a standard deviation increase in the Fraser Institute’s Economic Freedom of the World (EFW) score is associated about 1/3 standard deviation increase in a country’s labor share. Starting from the sample mean labor share in our panel, this amounts to about 4.26 percentage points. This relationship is robust to considering OECD and non-OECD samples separately. It is also (both qualitatively and quantitatively) robust to controlling for differences in human capital levels, labor productivity, trade union density, and international economic flows. Breaking the EFW into its individual component areas, the regulation of credit, business and labor appears to be the most important source of the positive EFW-labor share relationship.

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Match efficiency and firms' hiring standards

Petr Sedláček
Journal of Monetary Economics, forthcoming

Abstract:
During the last recession, new hires were lower than would be predicted by a standard matching function and the observed ratio of searching workers and firms. This paper first estimates U.S. match efficiency as an exogenous residual in the matching function using a simple search and matching model. It finds match efficiency to be pro-cyclical and to account for about 1/4 of unemployment increases during the most severe recessions. Second, this paper proposes a model with endogenous separations and firing costs that endogenizes match efficiency, which is driven by firms’ hiring standards. The model can explain almost 1/2 of the variation in the initial estimate of match efficiency.

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Entrepreneurship over the business cycle

Li Yu, Peter Orazem & Robert Jolly
Economics Letters, February 2014, Pages 105–110

Abstract:
The fraction self-employed rises in recessions because wage work is more sensitive than self-employment to the business cycle, not because of necessity entrepreneurship. Graduating during a recession reduces the probability of starting a business for the next 11 years.

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Minimum Wages and Aggregate Job Growth: Causal Effect or Statistical Artifact?

Arindrajit Dube
University of Massachusetts Working Paper, October 2013

Abstract:
A recent paper by Meer and West argues that minimum wages reduce aggregate employment growth, and that this relationship is masked by looking at employment levels. I also find a negative association between minimum wages and aggregate employment growth using both the Business Dynamics Statistics and the Quarterly Census of Employment and Wages datasets, and it is sizable for some time periods. However, I show that this negative association is present in exactly the wrong sectors. It is particularly strong in manufacturing which hires very few minimum wage workers. At the same time, there is no such association in retail, or in accommodation and food services – which together hire nearly 2/3 of all minimum wage workers. These results indicate that the negative association between minimum wages and aggregate employment growth does not represent a causal relationship. Rather the association stems from an inability to account for differences between high and low minimum wage states and the timing of minimum wage increases. Consistent with that interpretation, when I use bordering counties to construct more credible control groups, I find no such negative correlation between minimum wages and overall employment growth.

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Worker Replacement Costs and Unionization: Origins of the U.S. Labor Movement

Howard Kimeldorf
American Sociological Review, December 2013, Pages 1033-1062

Abstract:
The embattled state of U.S. labor has generated a voluminous body of research on the processes of deunionization contributing to its decline. Revisiting the less researched topic of unionization, this study explores the social conditions facilitating union growth during the labor movement’s formative years. Focusing on the first decade of the twentieth century — in many respects for labor, a period not unlike the present — I seek to explain the pattern of organizing success and failure across industries and occupations. I find that the most organized settings occurred where workers had greater disruptive capacities due to the high cost of being replaced during work stoppages. The highest replacement costs were associated with three conditions: scarcity of skilled labor, geographically isolated worksites that raised the cost of importing strikebreakers, and time-sensitive tasks that rendered replacement workers economically impractical. Workplaces that had at least one of these conditions formed the backbone of the early U.S. labor movement. The conclusion considers the impact of declining replacement costs on current challenges facing U.S. labor.

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Revisions to US labor market data and the effects on the public’s perception of the economy

Salem Abo-Zaid
Economics Letters, February 2014, Pages 119–124

Abstract:
Using the monthly “Employment Situation” reports for 1994–2013, this paper studies the revisions to US employment data. The paper shows that the first press release underestimates net job creation in expansions and overestimates it in downturns. The “errors” in reporting the data on the labor market can distort the public’s perception about the stance of the labor market and have some political consequences. This is well reflected by the finding that the job approval rate of President Obama, the index of consumer confidence and the economic conditions index of Gallup have all been responding to the initial news on the US labor market as they were published in the Employment Situation reports.

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Recall and Unemployment

Shigeru Fujita & Giuseppe Moscarini
NBER Working Paper, November 2013

Abstract:
Using data from the Survey of Income and Program Participation (SIPP) covering 1990-2011, we document that a surprisingly large number of workers return to their previous employer after a jobless spell and experience more favorable labor market outcomes than job switchers. Over 40% of all workers separating into unemployment regain employment at their previous employer; over a fifth of them are permanently separated workers who did not have any expectation of recall, unlike those on temporary layoff. Recalls are associated with much shorter unemployment duration and better wage changes. Negative duration dependence of unemployment nearly disappears once recalls are excluded. We also find that the probability of finding a new job is more procyclical and volatile than the probability of a recall. Incorporating this fact into an empirical matching function significantly alters its estimated elasticity and the time-series behavior of matching efficiency, especially during the Great Recession. We develop a canonical search-and-matching model with a recall option where new matches are mediated by a matching function, while recalls are free and triggered both by aggregate and job-specific shocks. The recall option is lost when the unemployed worker accepts a new job. A quantitative version of the model captures well our cross-sectional and cyclical facts through selection of recalled matches.

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Cross Country Differences in Job Reallocation: The Role of Industry, Firm Size and Regulations

John Haltiwanger, Stefano Scarpetta & Helena Schweiger
Labour Economics, January 2014, Pages 11–25

Abstract:
Somewhat surprisingly, cross-country empirical evidence (at least in the cross section) does not seem to support the predictions of standard models that economies with stricter regulations on hiring and firing should have a lower pace of job reallocation. One problem in exploring these issues empirically has been the difficulty of comparing countries on the basis of harmonized measures of job reallocation. A related problem is that there may be unobserved measurement errors or other factors accounting for differences in job reallocation across countries. This paper overcomes these challenges by using harmonized measures of job creation and destruction in a sample of 16 industrial and emerging economies, exploiting the country, industry and firm size dimensions. The analysis of variance in the paper shows that firm size effects are a dominant factor in accounting for the variation in the pace of job reallocation across country, industry and size cells. However, even after controlling for industry and size effects there remain significant differences in job flows across countries that could reflect differences in labor market regulations. We use the harmonized data to explore this hypothesis with a difference-in-difference approach. We find strong and robust evidence that stringent hiring and firing regulations tend to reduce the pace of job reallocation.

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Discouraging Workers: Estimating the Impacts of Macroeconomic Shocks on the Search Intensity of the Unemployed

Stephen DeLoach & Mark Kurt
Journal of Labor Research, December 2013, Pages 433-454

Abstract:
Discouraged and marginally attached workers have received increasing attention from policy makers over the past several years. Through slackness in the labor market, periods of high unemployment should reduce the likelihood of receiving a job offer and thus create more discouraged workers. However, the existing literature generally fails to find evidence of such pro-cyclicality in search intensity. Surprisingly, search appears to be acyclical. We hypothesize the observed acyclicality may be the result of coarse measurement of search intensity in previous studies and the failure to account for changes in individuals’ wealth across the business cycle. In this paper we use daily time use dairies from the American Time Use Survey 2003–2011 to examine the cyclicality of search intensity to explain this apparent contradiction between theory and data. Results indicate that workers do reduce their search in response to deteriorating labor market conditions, but these effects appear to be offset by the positive effects on search that are correlated with declines in household wealth.

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Should the US increase subsidies to R&D? Lessons from an endogenous growth theory

Manuel Gómez & Tiago Neves Sequeira
Oxford Economic Papers, January 2014, Pages 254-282

Abstract:
In this article we devise an endogenous growth model with R&D, physical capital, and human capital with several externalities. The model is calibrated to the US economy and used to quantitatively evaluate the effect on growth and welfare of implementing different budget-neutral policies. The welfare effects of different policies are calculated by taking into account the transitional dynamics of the economy after the policy reform. Our main findings have policy implications; mainly, subsidies to research are the most welfare-increasing amongst the budget-neutral policies, and the optimal structure of subsidies entails substantially increasing the subsidy to R&D, maintaining a zero subsidy to production, and reducing the subsidy to education, so as to keep the intertemporal government budget balanced. A detailed sensitivity analysis shows the robustness of these results.

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Housing Collateral and Entrepreneurship

Martin Schmalz, David Sraer & David Thesmar
NBER Working Paper, November 2013

Abstract:
This paper shows that collateral constraints restrict entrepreneurial activity. Our empirical strategy uses variations in local house prices as shocks to the value of collateral available to individuals owning a house and controls for local demand shocks by comparing entrepreneurial activity of homeowners and renters operating in the same region. We find that an increase in collateral value leads to a higher probability of becoming an entrepreneur. Conditional on entry, entrepreneurs with access to more valuable collateral create larger firms and more value added, and are more likely to survive, even in the long run.

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Is Internet Job Search Still Ineffective?

Peter Kuhn & Hani Mansour
Economic Journal, forthcoming

Abstract:
Using NLSY97 data for 2005-2008, we find that unemployed persons who look for work online are re-employed about 25 percent faster than comparable workers who do not search online. This finding contrasts with previous results for 1998-2001 and is robust to controls for cognitive test scores and detailed indicators of Internet access. Internet job search appears to be most effective in reducing unemployment durations when used to contact friends and relatives, to send out resumes or fill out applications, and also to look at ads. We detect a weak positive relationship between IJS and wage growth between jobs.

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Technological unemployment in industrial countries

Horst Feldmann
Journal of Evolutionary Economics, November 2013, Pages 1099-1126

Abstract:
Using annual data on 21 industrial countries from the period 1985 to 2009 and a large number of controls, this paper empirically analyzes the impact of technological change on unemployment. As proxy for technological change, it uses the ratio of triadic patent families to population. According to the regression results, an increase in technological change substantially increases unemployment over 3 years. There is no long-term effect, though. The results are robust to both endogeneity and numerous variations in specifications. They support theoretical contributions according to which faster technological progress may increase unemployment, at least during a transition period.

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Geography and High-Tech Employment Growth in US Counties

Belal Fallah, Mark Partridge & Dan Rickman
Journal of Economic Geography, forthcoming

Abstract:
This article investigates the role of geography in high-tech employment growth across US counties. The geographic dimensions examined include industry cluster effects, urbanization effects, proximity to a research university and proximity in the urban hierarchy. Growth is assessed for overall high-tech employment and for employment in selected high-tech subsectors. Econometric analyses are conducted separately for samples of metropolitan and nonmetropolitan counties. Among our primary findings, we do not find evidence of positive localization or within-industry cluster growth effects, generally finding negative growth effects. We instead find evidence of positive urbanization effects and growth penalties for greater distances from larger urban areas. Universities also appear to play their primary role in creating human capital rather than knowledge spillovers for nearby firms. Quantile regression analysis confirms the absence of within-industry cluster effects and importance of human capital for counties with fastest growth in high-tech industries.

By KEVIN LEWIS | 09:00:00 AM

Sunday, December 15, 2013

Running on empty

Happiness From Ordinary and Extraordinary Experiences

Amit Bhattacharjee & Cassie Mogilner
Journal of Consumer Research, forthcoming

Abstract:
Prior research indicates that experiences bring greater happiness than material possessions, but which experiences result in the greatest happiness? The current investigation is one of the first to categorize types of experiences and highlights one important distinction: the extent to which an experience is ordinary (common and frequent) versus extraordinary (uncommon and infrequent). Eight studies examine the experiences individuals recall, plan, imagine, and post on Facebook finding that the happiness enjoyed from ordinary and extraordinary experiences depends on age. Younger people, who view their future as extensive, gain more happiness from extraordinary experiences; however, ordinary experiences become increasingly associated with happiness as people get older, such that they produce as much happiness as extraordinary experiences when individuals have limited time remaining. Self-definition drives these effects: although extraordinary experiences are self-defining throughout one’s lifespan, as people get older they increasingly define themselves by the ordinary experiences that comprise their daily lives.

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From Tribulations to Appreciation: Experiencing Adversity in the Past Predicts Greater Savoring in the Present

Alyssa Croft, Elizabeth Dunn & Jordi Quoidbach
Social Psychological and Personality Science, forthcoming

Abstract:
Can experiencing adversity enhance people’s appreciation for life’s small pleasures? To examine this question, we asked nearly 15,000 adults to complete a vignette-based measure of savoring. In addition, we presented participants with a checklist of adverse events (e.g., divorce, death of a loved one) and asked them to indicate whether they had experienced any of these events and, if so, to specify whether they felt they had emotionally dealt with the negative event or were still struggling with it. Although people who were currently struggling with adversity reported a diminished proclivity for savoring positive events, individuals who had dealt with more adversity in the past reported an elevated capacity for savoring. Thus, the worst experiences in life may come with an eventual upside, by promoting the ability to appreciate life’s small pleasures.

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Racial differences in depression in the United States: How do subgroup analyses inform a paradox?

David Barnes, Katherine Keyes & Lisa Bates
Social Psychiatry and Psychiatric Epidemiology, December 2013, Pages 1941-1949

Purpose: Non-Hispanic Blacks in the US have lower rates of major depression than non-Hispanic Whites, in national household samples. This has been termed a “paradox,” as Blacks suffer greater exposure to social stressors, a risk factor for depression. Subgroup analyses can inform hypotheses to explain this paradox. For example, it has been suggested that selection bias in household samples undercounts depression in Blacks; if selection is driving the paradox, Black–White differences should be most pronounced among young men with low education.

Methods: We examined Black–White differences in lifetime major depression in subgroups defined simultaneously by sex, age, and education using data from the National Epidemiologic Survey on Alcohol and Related Conditions (NESARC) and the Collaborative Psychiatric Epidemiology Surveys (CPES).

Results: In NESARC and CPES, Blacks had lower odds than Whites of lifetime major depression in 21 and 23 subgroups, respectively, of 24. All statistically significant differences were in subgroups favoring Blacks, and lower odds in Blacks were more pronounced among those with more education.

Conclusions: These results suggest that hypotheses to explain the paradox must posit global mechanisms that pertain to all subgroups defined by sex, age, and education. Results do not lend support for the selection bias hypothesis.

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Prevalence, Risk, and Correlates of Posttraumatic Stress Disorder Across Ethnic and Racial Minority Groups in the United States

Margarita Alegría et al.
Medical Care, December 2013, Pages 1114-1123

Objectives: We assess whether posttraumatic stress disorder (PTSD) varies in prevalence, diagnostic criteria endorsement, and type and frequency of potentially traumatic events (PTEs) among a nationally representative US sample of 5071 non-Latino whites, 3264 Latinos, 2178 Asians, 4249 African Americans, and 1476 Afro-Caribbeans.

Methods: PTSD and other psychiatric disorders were evaluated using the World Mental Health-Composite International Diagnostic Interview (WMH-CIDI) in a national household sample that oversampled ethnic/racial minorities (n=16,238) but was weighted to produce results representative of the general population.

Results: Asians have lower prevalence rates of probable lifetime PTSD, whereas African Americans have higher rates as compared with non-Latino whites, even after adjusting for type and number of exposures to traumatic events, and for sociodemographic, clinical, and social support factors. Afro-Caribbeans and Latinos seem to demonstrate similar risk to non-Latino whites, adjusting for these same covariates. Higher rates of probable PTSD exhibited by African Americans and lower rates for Asians, as compared with non-Latino whites, do not appear related to differential symptom endorsement, differences in risk or protective factors, or differences in types and frequencies of PTEs across groups.

Conclusions: There appears to be marked differences in conditional risk of probable PTSD across ethnic/racial groups. Questions remain about what explains risk of probable PTSD. Several factors that might account for these differences are discussed, as well as the clinical implications of our findings. Uncertainty of the PTSD diagnostic assessment for Latinos and Asians requires further evaluation.

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Serious psychological distress among non-Hispanic whites in the United States: The importance of nativity status and region of birth

Florence Dallo, Tiffany Kindratt & Tracy Snell
Social Psychiatry and Psychiatric Epidemiology, December 2013, Pages 1923-1930

Purpose: Serious psychological distress (SPD) is an understudied health topic. When studied, estimates for minority groups are compared to that of non-Hispanic whites. Non-Hispanic whites are heterogeneous, and comprise individuals from Europe, North Africa or the Middle East. The objectives of this study are to estimate and compare the sex- and age-adjusted prevalence of SPD first by nativity status and then by region of birth (Europe, Middle East and Russia) while controlling for potential confounders.

Methods: The sample consisted of 196,483 participants, 18 years of age or older in the National Health Interview Survey (2000–2010). To measure SPD, Kessler’s K6 Likert scale was used. Individuals with scores greater than or equal to 13 were considered to have SPD.

Results: The age- and sex- adjusted prevalence of SPD was 3 % for foreign-born non-Hispanic whites. Of this, estimates were 6 % for those from the Middle East, 3 % for Europe and 2 % for Russia (p = 0.00). In the fully adjusted multivariable model, foreign-born non-Hispanic whites from the Middle East were more likely (OR = 1.76; 95 % CI = 1.01, 3.04) to report SPD when compared to US-born non-Hispanic whites. Within the foreign-born population, non-Hispanic whites from the Middle East were more than twice as likely to report SPD (OR = 2.43; 95 % CI = 1.15, 5.14) compared to foreign-born non-Hispanic whites from Europe after controlling for confounders.

Conclusions: This study’s findings will help researchers understand which subgroups within non-Hispanic whites suffer most from SPD, which will facilitate tailored prevention intervention efforts.

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Distinct Sources of Self-Discrepancies: Effects of Being Who You Want to Be and Wanting to Be Who You Are on Well-Being

Erin Hardin & Jeff Larsen
Emotion, forthcoming

Abstract:
Self-discrepancy theory contends that well-being depends, in part, on the amount of overlap between one’s actual and ideal selves. There is a variety of supportive evidence, but Rabbi Hyman Schachtel’s (1954, The real enjoyment of living, New York, NY, Dutton) contention that “happiness is not having what you want, but wanting what you have” (p. 37) highlights that a distinction between two potential sources of overlap between one’s actual and ideal selves has been overlooked. Whereas most measures of ideal self-discrepancies index the extent to which people are who they want to be (i.e., ideal self-actualization [ISA]), others index the extent to which people want to be who they are (i.e., actual self-regard [ASR]). In several studies, we measured ideal self-actualization by asking people to identify traits they would ideally like to possess and rate the extent to which they had those traits. We also measured actual self-regard by asking participants to identify traits they possessed and indicate the extent to which they wanted those traits. In all 4 studies, ideal self-actualization and actual self-regard were distinct from one another (rs = .24 to .32) and both were distinct from self-compassion (Study 1) and global self-esteem (Study 4). Moreover, ASR consistently accounted for unique variance in aspects of well-being (e.g., subjective well-being, positive affect, psychological growth) and ISA often did so. Finally, a longitudinal study provided evidence that actual self-regard is a precursor, but not a consequence, of subjective well-being (Study 4).

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When bad gets worse: The amplifying effect of materialism on traumatic stress and maladaptive consumption

Ayalla Ruvio, Eli Somer & Aric Rindfleisch
Journal of the Academy of Marketing Science, forthcoming

Abstract:
Our research explores the amplifying effect of materialism on the experience of traumatic stress and maladaptive consumption via both an Israeli field study and a U.S. national survey. Our field study assesses the moderating impact of materialism upon both traumatic stress and maladaptive consumption among participants from an Israeli town under terrorist attack vs. participants from an Israeli town not exposed to hostilities. Our survey examines the possible underlying processes behind these effects among a nationally representative sample of Americans. The Israeli study reveals that, when faced with a mortal threat such as a terrorist attack, highly materialistic individuals report higher levels of post-traumatic stress, compulsive consumption, and impulsive buying than their less materialistic counterparts. Our U.S. study suggests that these effects are likely due to the fact that materialistic individuals exhibit lower levels of self-esteem, which reduces their ability to cope with traumatic events. Thus, our results indicate that, in addition to its well-documented harmful direct effect on psychological well-being, materialism also exerts an indirect negative effect by making bad events even worse.

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Overeducation and depressive symptoms: Diminishing mental health returns to education

Piet Bracke, Elise Pattyn & Olaf von dem Knesebeck
Sociology of Health & Illness, November 2013, Pages 1242–1259

Abstract:
In general, well-educated people enjoy better mental health than those with less education. As a result, some wonder whether there are limits to the mental health benefits of education. Inspired by the literature on the expansion of tertiary education, this article explores marginal mental health returns to education and studies the mental health status of overeducated people. To enhance the validity of the findings we use two indicators of educational attainment – years of education and ISCED97 categories – and two objective indicators of overeducation (the realised matches method and the job analyst method) in a sample of the working population of 25 European countries (unweighted sample N = 19,089). Depression is measured using an eight-item version of the CES-D scale. We find diminishing mental health returns to education. In addition, overeducated people report more depression symptoms. Both findings hold irrespective of the indicators used. The results must be interpreted in the light of the enduring expansion of education, as our findings show that the discussion of the relevance of the human capital perspective, and the diploma disease view on the relationship between education and modern society, is not obsolete.

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Firearms and suicides in US states

Justin Thomas Briggs & Alexander Tabarrok
International Review of Law and Economics, March 2014, Pages 180–188

Abstract:
This study investigates the relationship between firearm prevalence and suicide in a sample of all US states over the years 2000–2009. We find strong, positive effects of gun prevalence on suicide using OLS estimation, across a variety of measures for gun possession, and with several sets of controls. When using instrumental variable estimation, the effect remains significant, despite also finding significant evidence that gun ownership causes substitution towards gun-suicide rather than other methods of suicide. There is also evidence for non-linearities in the effects of guns on suicide.

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Depression and Oxidative Stress: Results From a Meta-Analysis of Observational Studies

Priya Palta et al.
Psychosomatic Medicine, forthcoming

Objective: To perform a systematic review and meta-analysis that quantitatively tests and summarizes the hypothesis that depression results in elevated oxidative stress and lower antioxidant levels.

Methods: We performed a meta-analysis of studies that reported an association between depression and oxidative stress and/or antioxidant status markers. PubMed and EMBASE databases were searched for articles published from January 1980 through December 2012. A random-effects model, weighted by inverse variance, was performed to pool standard deviation (Cohen’s d) effect size estimates across studies for oxidative stress and antioxidant status measures, separately.

Results: Twenty-three studies with 4980 participants were included in the meta-analysis. Depression was most commonly measured using the Diagnostic and Statistical Manual of Mental Disorders, Fourth Edition criteria. A Cohen’s d effect size of 0.55 (95% confidence interval = 0.47–0.63) was found for the association between depression and oxidative stress, indicating a roughly 0.55 of 1-standard-deviation increase in oxidative stress among individuals with depression compared with those without depression. The results of the studies displayed significant heterogeneity (I2 = 80.0%, p < .001). A statistically significant effect was also observed for the association between depression and antioxidant status markers (Cohen’s d = −0.24, 95% confidence interval = −0.33 to −0.15).

Conclusions: This meta-analysis observed an association between depression and oxidative stress and antioxidant status across many different studies. Differences in measures of depression and markers of oxidative stress and antioxidant status markers could account for the observed heterogeneity. These findings suggest that well-established associations between depression and poor heath outcomes may be mediated by high oxidative stress.

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Are narcissists hardy or vulnerable? The role of narcissism in the production of stress-related biomarkers in response to emotional distress

Joey Cheng, Jessica Tracy & Gregory Miller
Emotion, December 2013, Pages 1004-1011

Abstract:
Does narcissism provide a source of hardiness or vulnerability in the face of adversity? The present research addressed this question by testing whether narcissism is associated with increased physiological reactivity to emotional distress, among women. Drawing on the “fragile-ego” account, we predicted that narcissists would show a heightened physiological stress profile in response to everyday frustrations. Results supported this prediction; across a 3-day period, highly narcissistic individuals showed elevated output of 2 biomarkers of stress — cortisol and alpha-amylase — to the extent that they experienced negative emotions. In contrast, among those low in narcissism there was no association between these biomarkers and emotions. These findings suggest that narcissists’ stress-response systems are particularly sensitive to everyday negative emotions, consistent with the notion that narcissism comes with physiological costs.

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Linking genetic variants of the mineralocorticoid receptor and negative memory bias: Interaction with prior life adversity

Susanne Vogel et al.
Psychoneuroendocrinology, February 2014, Pages 181–190

Abstract:
Substantial research has been conducted investigating the association between life adversity and genetic vulnerability for depression, but clear mechanistic links are rarely identified and investigation often focused on single genetic variants. Complex phenotypes like depression, however, are likely determined by multiple variants in interaction with environmental factors. As variations in the mineralocorticoid receptor gene (NR3C2) have been related to a higher risk for depression, we investigated whether NR3C2 variance is related to negative memory bias, an established endophenotype for depression, in healthy participants. Furthermore, we explored the influence of life adversity on this association. We used a set-based analysis to simultaneously test all measured variation in NR3C2 for an association with negative memory bias in 483 participants and an interaction with life adversity. To further specify this interaction, we split the sample into low and high live adversity groups and repeated the analyses in both groups separately. NR3C2 variance was associated with negative memory bias, especially in the high life adversity group. Additionally, we identified a functional polymorphism (rs5534) related to negative memory bias and demonstrating a gene x life adversity interaction. Variations in NR3C2 are associated with negative memory bias and this relationship appears to be influenced by life adversity. As negative memory bias is implicated in the susceptibility to depression, our findings provide mechanistic support for the notion that variations in NR3C2 - which could compromise the proper function of this receptor - are a risk factor for the development of mood disorders.

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Self-compassion as a predictor of interleukin-6 response to acute psychosocial stress

Juliana Breines et al.
Brain, Behavior, and Immunity, forthcoming

Abstract:
We examined the hypothesis that self-compassion is associated with lower levels of stress-induced inflammation. On two consecutive days, plasma concentrations of interleukin-6 (IL-6) were assessed at baseline and at 30 and 120 min following exposure to a standardized laboratory stressor in a sample of 41 healthy young adults. Participants who were higher in self-compassion exhibited significantly lower day 1 IL-6 responses, even when controlling for self-esteem, depressive symptoms, demographic factors, and distress. Self-compassion was not related to day 2 IL-6 response but was inversely related to day 2 baseline IL-6 levels, and to increase in baseline IL-6 from day 1 to day 2. These findings suggest that self-compassion may serve as a protective factor against stress-induced inflammation and inflammation-related disease.

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Beliefs About Emotion: Links to Emotion Regulation, Well-Being, and Psychological Distress

Krista De Castella et al.
Basic and Applied Social Psychology, November/December 2013, Pages 497-505

Abstract:
People differ in their implicit beliefs about emotions. Some believe emotions are fixed (entity theorists), whereas others believe that everyone can learn to change their emotions (incremental theorists). We extend the prior literature by demonstrating (a) entity beliefs are associated with lower well-being and increased psychological distress, (b) people's beliefs about their own emotions explain greater unique variance than their beliefs about emotions in general, and (3) implicit beliefs are linked with well-being/distress via cognitive reappraisal. These results suggest people's implicit beliefs — particularly about their own emotions — may predispose them toward emotion regulation strategies that have important consequences for psychological health.

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Affective Instability in Daily Life Is Predicted by Resting Heart Rate Variability

Peter Koval et al.
PLoS ONE, November 2013

Abstract:
Previous research has shown that being affectively unstable is an indicator of several forms of psychological maladjustment. However, little is known about the mechanisms underlying affective instability. Our research aims to examine the possibility that being prone to extreme fluctuations in one’s feelings is related to maladaptive emotion regulation. We investigated this hypothesis by relating affective instability, assessed in daily life using the experience sampling method, to self-reported emotion regulation strategies and to parasympathetically mediated heart rate variability (HRV), a physiological indicator of emotion regulation capacity. Results showed that HRV was negatively related to instability of positive affect (as measured by mean square successive differences), indicating that individuals with lower parasympathetic tone are emotionally less stable, particularly for positive affect.

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Intranasal oxytocin as strategy for medication-enhanced psychotherapy of PTSD: Salience processing and fear inhibition processes

Saskia Koch et al.
Psychoneuroendocrinology, forthcoming

Abstract:
About ten percent of people experiencing a traumatic event will subsequently develop post-traumatic stress disorder (PTSD). PTSD is characterized by an exaggerated fear response which fails to extinguish over time and cannot be inhibited in safe contexts. The neurobiological correlates of PTSD involve enhanced salience processing (i.e. amygdala, dorsal anterior cingulate cortex (dACC) and anterior insula (AI) hyperactivity), and reduced top-down inhibitory control over this fear response (i.e. dorsal and ventromedial prefrontal cortex (vmPFC) hypoactivity and diminished structural and functional connectivity between the vmPFC, hippocampus and amygdala). Therefore, dampening the exaggerated fear response (i.e. by reducing amygdala hyperactivity) and enhancing top-down inhibitory control (i.e. by promoting prefrontal control over the amygdala) during psychotherapy is an important target for medication-enhanced psychotherapy (MEP) in PTSD patients. Since the neuropeptide oxytocin (OT) has been found to act on these two processes, we propose that OT is a promising pharmacological agent to boost treatment response in PTSD. Human fMRI studies indicate that intranasal OT attenuates amygdala (hyper)activity and enhances connectivity of the amygdala with the vmPFC and hippocampus, resulting in increased top-down control over the fear response. In addition, intranasal OT was found to attenuate amygdala–brainstem connectivity and to change activity and connectivity in nodes of the salience network (i.e. AI and dACC). Furthermore, OT administration may modulate hypothalamus-pituitary-adrenal (HPA) axis and autonomic nervous system (ANS) function and may enhance social behaviour, which could be beneficial in the therapeutic alliance. We also discuss contextual and interindividual factors (e.g. gender and social context) which may influence the effectiveness of OT in MEP. In all, we propose that intranasal OT given prior to each psychotherapy session may be an effective additive treatment to boost treatment response in PTSD.

By KEVIN LEWIS | 09:00:00 AM

Saturday, December 14, 2013

Gender bender

Neighborhood-Level LGBT Hate Crimes and Current Illicit Drug Use among Sexual Minority Youth

Dustin Duncan, Mark Hatzenbuehler & Renee Johnson
Drug and Alcohol Dependence, forthcoming

Objective: To investigate whether past-30 day illicit drug use among sexual minority youth was more common in neighborhoods with a greater prevalence of hate crimes targeting lesbian, gay, bisexual, and transgender (LGBT, or sexual minority) individuals.

Methods: We used a population-based survey of public school youth in Boston, Massachusetts, consisting of 1,292 9th-12th grade students from the 2008 Boston Youth Survey Geospatial Dataset (sexual minority n = 108). Data on LGBT hate crimes involving assaults or assaults and battery between 2005 and 2008 were obtained from the Boston Police Department and linked to youths’ residential address. Youth reported past-30 day use of marijuana and other illicit drugs. Wilcoxon-Mann-Whitney tests and corresponding p-values were computed to assess differences in substance use by neighborhood-level LGBT assault hate crime rate among sexual minority youth (n = 103).

Results: The LGBT assault hate crime rate in the neighborhoods of sexual minority youth who reported current marijuana use was 23.7 per 100,000, compared to 12.9 per 100,000 for sexual minority youth who reported no marijuana use (p = 0.04). No associations between LGBT assault hate crimes and marijuana use among heterosexual youth (p > 0.05) or between sexual minority marijuana use and overall neighborhood-level violent and property crimes (p > 0.05) were detected, providing evidence for result specificity.

Conclusions: We found a significantly greater prevalence of marijuana use among sexual minority youth in neighborhoods with a higher prevalence of LGBT assault hate crimes. These results suggest that neighborhood context (i.e., LGBT hate crimes) may contribute to sexual orientation disparities in marijuana use.

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Is Rising Obesity Causing a Secular (Age-Independent) Decline in Testosterone among American Men?

Allan Mazur, Ronny Westerman & Ulrich Mueller
PLoS ONE, October 2013

Abstract:
The testosterone of men in industrial societies peaks in their twenties and tends to decline with increasing age. Apart from this individual-level decline, there have been reports of a secular (age-independent population-level) decline in testosterone among American and Scandinavian men during the past few decades, possibly an indication of declining male reproductive health. It has been suggested that both declines in testosterone (individual-level and population-level) are due to increasing male obesity because men in industrial society tend to add body fat as they age, and overall rates of obesity are increasing. Using an unusually large and lengthy longitudinal dataset (991 US Air Force veterans examined in six cycles over 20 years), we investigate the relationship of obesity to individual and population-level declines in testosterone. Over twenty years of study, longitudinal decline in mean testosterone was at least twice what would be expected from cross-sectional estimates of the aging decline. Men who put on weight intensified their testosterone decline, some greatly so, but even among those who held their weight constant or lost weight during the study, mean testosterone declined 117 ng/dl (19%) over 20 years. We have not identified the reason for secular decline in testosterone, but we exclude increasing obesity as a sufficient or primary explanation, and we deny the supposition that men who avoid excessive weight will maintain their youthful levels of testosterone.

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When Do Legislators Defy Popular Sovereignty? Testing Theories of Minority Representation Using DOMA

Benjamin Bishin & Charles Anthony Smith
Political Research Quarterly, December 2013, Pages 794-803

Abstract:
What explains the behavior of legislators on bills that restrict the rights of marginalized minorities? Studies of representation typically focus on factors like party or public opinion but seldom account for theories of minority representation like electoral capture or subconstituency politics. One reason for this is that data allowing for the comparison of these theories are seldom available for U.S. House districts. We overcome this hurdle by implementing multilevel regression with post-stratification to estimate opinion on gay marriage during the 1996 Defense of Marriage Act vote. We show that subconstituency politics explains legislators’ behavior better than electoral capture, party, or public opinion.

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Masculine Men Articulate Less Clearly

Vera Kempe, David Puts & Rodrigo Cárdenas
Human Nature, December 2013, Pages 461-475

Abstract:
In previous research, acoustic characteristics of the male voice have been shown to signal various aspects of mate quality and threat potential. But the human voice is also a medium of linguistic communication. The present study explores whether physical and vocal indicators of male mate quality and threat potential are linked to effective communicative behaviors such as vowel differentiation and use of more salient phonetic variants of consonants. We show that physical and vocal indicators of male threat potential, height and formant position, are negatively linked to vowel space size, and that height and levels of circulating testosterone are negatively linked to the use of the aspirated variant of the alveolar stop consonant /t/. Thus, taller, more masculine men display less clarity in their speech and prefer phonetic variants that may be associated with masculine attributes such as toughness. These findings suggest that vocal signals of men’s mate quality and/or dominance are not confined to the realm of voice acoustics but extend to other aspects of communicative behavior, even if this means a trade-off with speech patterns that are considered communicatively advantageous, such as clarity and indexical cues to higher social class.

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Shape Differences Between the Faces of Homosexual and Heterosexual Men

Jaroslava Varella Valentova et al.
Archives of Sexual Behavior, forthcoming

Abstract:
Previous studies have shown that homosexual men differ from heterosexual men in several somatic traits and lay people accurately attribute sexual orientation based on facial images. Thus, we may predict that morphological differences between faces of homosexual and heterosexual individuals can cue to sexual orientation. The main aim of this study was to test for possible differences in facial shape between heterosexual and homosexual men. Further, we tested whether self-reported sexual orientation correlated with sexual orientation and masculinity–femininity attributed from facial images by independent raters. In Study 1, we used geometric morphometrics to test for differences in facial shape between homosexual and heterosexual men. The analysis revealed significant shape differences in faces of heterosexual and homosexual men. Homosexual men showed relatively wider and shorter faces, smaller and shorter noses, and rather massive and more rounded jaws, resulting in a mosaic of both feminine and masculine features. In Study 2, we tested the accuracy of sexual orientation judgment from standardized facial photos which were assessed by 80 independent raters. Binary logistic regression showed no effect of attributed sexual orientation on self-reported sexual orientation. However, homosexual men were rated as more masculine than heterosexual men, which may explain the misjudgment of sexual orientation. Thus, our results showed that differences in facial morphology of homosexual and heterosexual men do not simply mirror variation in femininity, and the stereotypic association of feminine looking men as homosexual may confound judgments of sexual orientation.

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Sexual Orientation, Prejudice, and Segregation

Erik Plug, Dinand Webbink & Nick Martin
Journal of Labor Economics, January 2014, Pages 123-159

Abstract:
This article examines whether gay and lesbian workers sort into tolerant occupations. With information on sexual orientation, prejudice, and occupational choice taken from Australian Twin Registers, we find that gays and lesbians shy away from prejudiced occupations. We show that our segregation results are largely driven by those gay and lesbian workers with disclosed identities and are robust to the inclusion of unobserved factors that are inherited and observed factors that strongly correlate with productive skills and vocational preferences. Our segregation estimates are consistent with prejudice-based theories of employer and employee discrimination against gay and lesbian workers.

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What’s Love Got to Do with It? Sexual Prejudice Predicts Unitization of Men in Same-Sex Romantic Relationships

Taylor Tuscherer & Kurt Hugenberg
Journal of Experimental Social Psychology, forthcoming

Abstract:
We hypothesized that perceivers high in sexual prejudice would fail to unitize romantically involved men into a single mental representation, instead perceiving the men as separate individuals. Two studies provided support for our hypothesis. In Study 1, sexual prejudice predicted perceptions of compatibility, intimacy, emotional satisfaction, and temporal stability for couples described as same-sex male but not for couples described as opposite sex. In Study 2, participants completed a modified who-said-what task in which men of two different same-sex couples presented facts about their relationships. Those low, versus high, in sexual prejudice committed significantly more within-couple relative to between-couple errors in their ascriptions, indicating that prejudice negatively predicted categorization along the dimension of couple. These results have important implications for how those high in sexual prejudice form impressions of same-sex couples and, ultimately, for how prejudiced attitudes affect mental representations of romantic couples.

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Low 2D:4D Values Are Associated with Video Game Addiction

Johannes Kornhuber et al.
PLoS ONE, November 2013

Abstract:
Androgen-dependent signaling regulates the growth of the fingers on the human hand during embryogenesis. A higher androgen load results in lower 2D:4D (second digit to fourth digit) ratio values. Prenatal androgen exposure also impacts brain development. 2D:4D values are usually lower in males and are viewed as a proxy of male brain organization. Here, we quantified video gaming behavior in young males. We found lower mean 2D:4D values in subjects who were classified according to the CSAS-II as having at-risk/addicted behavior (n = 27) compared with individuals with unproblematic video gaming behavior (n = 27). Thus, prenatal androgen exposure and a hyper-male brain organization, as represented by low 2D:4D values, are associated with problematic video gaming behavior. These results may be used to improve the diagnosis, prediction, and prevention of video game addiction.

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Naturally Designed for Masculinity vs. Femininity? Prenatal Testosterone Predicts Male Consumers' Choices of Gender-Imaged Products

Jaakko Aspara & Bram Van Den Bergh
International Journal of Research in Marketing, forthcoming

Abstract:
In this paper, we find that a proxy of prenatal testosterone exposure (i.e., digit ratio) is a significant predictor of preferences for products that differ in perceived masculinity vs. femininity. A more masculine (feminine) digit ratio predicts choice of products that have an increasingly masculine (feminine) image. This relationship is statistically significant for male consumers, but not for females.

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Weight Status and Sexual Orientation: Differences by Age and Within Racial and Ethnic Subgroups

Nicholas Deputy & Ulrike Boehmer
American Journal of Public Health, January 2014, Pages 103-109

Objectives: We determined differences in weight at age 18 years and at current age and weight change by sexual orientation within different racial/ethnic populations, stratifying by gender.

Methods: We used 2001–2007 data from the California Health Interview Survey, resulting in an unweighted sample of 120 274 individuals aged 18 to 74 years. Using regression models, we examined overweight status and change in weight by sexual orientation, stratifying by race/ethnicity and gender.

Results: Compared with heterosexual women of the same race/ethnicity, White and African American lesbians and bisexuals had increased likelihood of being overweight at age 18 years and maintaining overweight status during adulthood. Sexual minority status was unrelated to weight among Latinas and inconsistently linked to weight among Asian women compared with heterosexual women of the same race/ethnicity. Sexual minority status was protective against unhealthy weight among White, African American, Asian, and Latino men compared with heterosexual counterparts of the same race/ethnicity. This protective effect was seen after age 18 years except among African American bisexual men.

Conclusions: Our findings indicate a need for age- and culture-sensitive interventions that reduce weight or prevent weight gain in sexual minority women and men.

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Biological Markers of Asexuality: Handedness, Birth Order, and Finger Length Ratios in Self-identified Asexual Men and Women

Morag Yule, Lori Brotto & Boris Gorzalka
Archives of Sexual Behavior, forthcoming

Abstract:
Human asexuality is defined as a lack of sexual attraction to anyone or anything and it has been suggested that it may be best conceptualized as a sexual orientation. Non-right-handedness, fraternal birth order, and finger length ratio (2D:4D) are early neurodevelopmental markers associated with sexual orientation. We conducted an Internet study investigating the relationship between self-identification as asexual, handedness, number of older siblings, and self-measured finger-lengths in comparison to individuals of other sexual orientation groups. A total of 325 asexuals (60 men and 265 women; M age, 24.8 years), 690 heterosexuals (190 men and 500 women; M age, 23.5 years), and 268 non-heterosexuals (homosexual and bisexual; 64 men and 204 women; M age, 29.0 years) completed online questionnaires. Asexual men and women were 2.4 and 2.5 times, respectively, more likely to be non-right-handed than their heterosexual counterparts and there were significant differences between sexual orientation groups in number of older brothers and older sisters, and this depended on handedness. Asexual and non-heterosexual men were more likely to be later-born than heterosexual men, and asexual women were more likely to be earlier-born than non-heterosexual women. We found no significant differences between sexual orientation groups on measurements of 2D:4D ratio. This is one of the first studies to test and provide preliminary empirical support for an underlying neurodevelopmental basis to account for the lack of sexual attraction characteristic of asexuality.

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Expressive Writing to Cope with Hate Speech: Assessing Psychobiological Stress Recovery and Forgiveness Promotion for Lesbian, Gay, Bisexual, or Queer Victims of Hate Speech

John Patrick Crowley
Human Communication Research, forthcoming

Abstract:
This study examined whether expressive writing could help lesbian, gay, bisexual, or queer (LGBQ) hate speech victims increase forgiveness for offenders, and accelerate cortisol recovery following a discussion task in which they recalled the details of their experiences. Participants (N = 46) were assigned to a benefit-finding, traumatic disclosure writing, or control condition. The findings indicate that benefit-finding promoted forgiveness and reduced cortisol values, whereas traumatic disclosure writing only accelerated cortisol recovery. Analyses of the linguistic features of victims' narratives revealed that the amount of emotion-related words related to cortisol recovery, whereas the greater use of cognitive words was related with forgiveness. Implications for theory, methodological comparison, and future research are discussed.

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Queer Women in the Hookup Scene: Beyond the Closet?

Leila Rupp et al.
Gender & Society, forthcoming

Abstract:
The college hookup scene is a profoundly gendered and heteronormative sexual field. Yet the party and bar scene that gives rise to hookups also fosters the practice of women kissing other women in public, generally to the enjoyment of male onlookers, and sometimes facilitates threesomes involving same-sex sexual behavior between women. In this article, we argue that the hookup scene serves as an opportunity structure to explore same-sex attractions and, at least for some women, to later verify bisexual, lesbian, or queer sexual identities. Based on quantitative and qualitative data and combining queer theory and identity theory, we offer a new interpretation of women’s same-sex practices in the hookup culture. Our analysis contributes to gender theory by demonstrating the utility of identity theory for understanding how non-normative gender and sexual identities are negotiated within heteronormatively structured fields.

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Olfactory Performance Is Predicted by Individual Sex-Atypicality, but Not Sexual Orientation

Lenka Nováková, Jaroslava Varella Valentová & Jan Havlíček
PLoS ONE, November 2013

Abstract:
Many previous studies have reported robust sex differences in olfactory perception. However, both men and women can be expected to vary in the degree to which they exhibit olfactory performance considered typical of their own or the opposite sex. Sex-atypicality is often described in terms of childhood gender nonconformity, which, however, is not a perfect correlate of non-heterosexual orientation. Here we explored intrasexual variability in psychophysical olfactory performance in a sample of 156 individuals (83 non-heterosexual) and found the lowest odor identification scores in heterosexual men. However, when childhood gender nonconformity was entered in the model along with sexual orientation, better odor identification scores were exhibited by gender-nonconforming men, and greater olfactory sensitivity by gender-conforming women, irrespective of their sexual orientation. Thus, sex-atypicality, but not sexual orientation predicts olfactory performance, and we propose that this might not be limited to olfaction, but represent a more general phenomenon.

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Menarche and Eating Disorders

Sara Martino & David Lester
Psychological Reports, August 2013, Pages 1329-1331

Abstract:
160 undergraduate women (M age = 20.3, SD = 1.52) were assessed for depression, drug abuse, and eating disorders. The age of menarche was positively correlated with higher scores on a screening measure for eating disorders, a finding opposite to past studies for adolescent girls.

By KEVIN LEWIS | 09:00:00 AM

Friday, December 13, 2013

Big governance

Excessive financial services CEO pay and financial crisis: Evidence from calibration estimation

Nathan Dong
Journal of Empirical Finance, forthcoming

Abstract:
The questions of whether there ever existed excessive risk-taking incentives from executive compensation in the financial industry, and whether top executives of financial services firms actually responded to such excessive incentives that eventually led to the crisis remain unanswered. The prior research has attempted to answer the second question, however, with conflicting evidence and without a clear definition of excessive. To answer the first question, this paper uses a numerical calibration approach to estimate the optimal level of CEO pay and derive the excessive compensation which in turn provides excessive risk-taking incentives. We then examine the extent of excessive compensation in the financial industry relative to the non-financial industries during the 2000s and whether there were changes in compensation practices between the post Sarbanes-Oxley period and the prior crisis period. We find mixed evidence in favor of the presence of higher excessive pay in the financial industry, and the CEO compensation practices remained largely unchanged over time. In addition, the relation between excessive pay and excessive risk-taking in the financial industry is somewhat weak, suggesting that CEO compensation might not be a major cause for the crisis in 2008.

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Director Gender and Mergers and Acquisitions

Maurice Levi, Kai Li & Feng Zhang
Journal of Corporate Finance, forthcoming

Abstract:
Does director gender influence CEO empire building? Does it affect the bid premium paid for target firms? Less overconfident female directors less overestimate merger gains. As a result, firms with female directors are less likely to make acquisitions and if they do, pay lower bid premia. Using acquisition bids by S&P 1500 companies during 1997-2009 we find that each additional female director is associated with 7.6 percent fewer bids, and each additional female director on a bidder board reduces the bid premium paid by 15.4 percent. Our findings support the notion that female directors help create shareholder value through their influence on acquisition decisions. We also discuss other possible interpretations of our findings.

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Beauty is Wealth: CEO Appearance and Shareholder Value

Joseph Taylor Halford & Scott Hsu
University of Wisconsin Working Paper, November 2013

Abstract:
This paper examines whether and how the appearance of chief executives officers (CEOs) affects shareholder value. We obtain a Facial Attractiveness Index of 677 CEOs from the S&P 500 companies based on their facial geometry. CEOs with a higher Facial Attractiveness Index are associated with better stock returns around their first days on the job and higher acquirer returns upon acquisition announcements. To mitigate endogeneity concerns, we compare stock returns surrounding CEO television news events with stock returns surrounding a matched sample of news article events. CEOs’ Facial Attractiveness Index positively affects the stock returns on the television news date, but not around the news article date. The findings suggest that CEO appearance matters for shareholder value and provide an explanation why more attractive CEOs receive “beauty premiums” in their compensation.

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Independent director incentives: Where do talented directors spend their limited time and energy?

Ronald Masulis & Shawn Mobbs
Journal of Financial Economics, forthcoming

Abstract:
We study reputation incentives in the director labor market and find that directors with multiple directorships distribute their effort unequally based on the directorship’s relative prestige. When directors experience an exogenous increase in a directorship’s relative ranking, their board attendance rate increases and subsequent firm performance improves. Also, directors are less willing to relinquish their relatively more prestigious directorships, even when firm performance declines. Finally, forced Chief Executive Officer departure sensitivity to poor performance rises when a larger fraction of independent directors view the board as relatively more prestigious. We conclude that director reputation is a powerful incentive for independent directors.

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CEO Compensation and Future Shareholder Returns: Evidence from the London Stock Exchange

Nikolaos Balafas & Chris Florackis
Journal of Empirical Finance, forthcoming

Abstract:
This study examines the ex-post consequences of CEO compensation for shareholder value. The main objective is to explore whether companies that pay their CEO excessive fees (in comparison to those of peer firms in the same industry and size group) generate superior future returns and better operating performance. Our analysis, which separately considers the cash-based and incentive/equity-based components of CEO compensation, is based on a large sample of UK-listed companies over the period 1998–2010. We find that CEO incentive pay is negatively associated with short-term subsequent returns. Interestingly, firms that pay their CEOs at the bottom of the incentive-pay distribution earn positive abnormal returns and, also, significantly outperform those at the top of the incentive-pay distribution. Further analysis reveals that such outperformance can be largely explained by the excessive exposure of low-incentive-pay firms to idiosyncratic risk. Finally, evidence from panel regressions suggests that, in addition to its negative relationship with returns, incentive pay is also inversely associated with future operating performance.

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Do Women Directors Improve Firm Performance in China?

Yu Liu, Zuobao Wei & Feixue Xie
Journal of Corporate Finance, forthcoming

Abstract:
This paper examines the effect of board gender diversity on firm performance in China's listed firms from 1999 to 2011. We document a positive and significant relation between board gender diversity and firm performance. Female executive directors have a stronger positive effect on firm performance than female independent directors, indicating that the executive effect outweighs the monitoring effect. Moreover, boards with three or more female directors have a stronger impact on firm performance than boards with two or fewer female directors, consistent with the critical mass theory. Finally, we find that the impact of female directors on firm performance is significant in legal person-controlled firms but insignificant in state-controlled firms. This paper sheds new light on China's boardroom dynamics. As governments increasingly contemplate board gender diversity policies, our study offers useful empirical guidance to Chinese regulators on the issue.

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The effect of CEO luck on the informativeness of stock prices: Do lucky CEOs improve stock price informativeness?

Pandej Chintrakarn, Pornsit Jiraporn & Napatsorn Jiraporn
Finance Research Letters, forthcoming

Abstract:
CEOs are “lucky” when they are granted stock options on days when the stock price is lowest in the month of the grant, implying opportunistic timing and severe agency problems (Bebchuck, Grinstein, and Peyer, 2010). Using idiosyncratic volatility as our measure of stock price informativeness, we find that lucky CEOs improve the informativeness of stock prices significantly. In particular, CEO luck raises the degree of informativeness by 4.39%. Powerful CEOs who can circumvent governance mechanisms and successfully practice opportunistic timing of options grants are so secured in their positions that they have fewer incentives to conceal information, thereby improving informativeness.

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Are incentives without expertise sufficient? Evidence from Fortune 500 firms

Emilie Feldman & Cynthia Montgomery
Strategic Management Journal, forthcoming

Abstract:
Agency theory predicts that incentives will align agents’ interests with those of principals. However, the resource–based view suggests that to be effective, the incentive to deliver must be paired with the ability to deliver. Using Fortune 500 boards as an empirical context, this study shows that the presence of directors who lack top–level experience but own large shareholdings is negatively associated with firm value, an effect that increases in the number of such directors. Firm value rises after such directors depart from boards, with the greatest increases occurring when many of these directors leave. While agency theory highlights the importance of the right incentives being in place, this research suggests that doing so can be ineffective if the right resources are not also in place.

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CEO Stock Ownership Policies - Rhetoric and Reality

Nitzan Shilon
Harvard Working Paper, November 2013

Abstract:
This paper is the first academic endeavor to analyze the efficacy and transparency of current stock ownership policies (SOPs) in U.S. public firms. SOPs generally require managers to hold some of their firms’ stock for the long term. Firms universally adopted these policies following the 2008 financial crisis and cite them more than any other policy as a key element in their mitigation of risk. However, my analysis of the current SOPs of S&P 500 CEOs disputes what firms claim about their SOPs. First, I find that these policies are extremely ineffective because the way they function generally allows CEOs to immediately unload virtually all the stock they own. Second, I show that firms camouflage this weakness in their public filings. I explain why my findings are troubling, and I propose a regulatory reform to make SOPs transparent in order to improve the content of these policies.

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Knowledge, Compensation, and Firm Value: An Empirical Analysis of Firm Communication

Feng Li et al.
Stanford Working Paper, August 2013

Abstract:
Modern theories of the firm suggest that identifying the location of knowledge within an organization is the key to understanding the organization’s decision-making processes. We hypothesize that external communication patterns reveal the underlying knowledge dispersion within the management team. Using a large database of firm conference call transcripts, we find evidence to support our hypothesis. CEOs speak less in settings where they are unlikely to be fully informed and these CEOs also receive a smaller proportion of total management team compensation. Firms that do not adhere to the above communication-pay pattern have a lower industry-adjusted Tobin’s Q. These findings are consistent with modern theories of the firm.

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Market Forces and CEO Pay: Shocks to CEO Demand Induced by IPO Waves

Jordan Nickerson
University of Texas Working Paper, November 2013

Abstract:
I develop a simple competitive equilibrium model and derive predictions regarding the change in wages when an inelastic supply of CEO labor cannot match an increase in demand. The model predicts that CEO pay-size elasticity increases when more firms compete for a fixed supply of managers. I then empirically test this prediction using industry-level IPO waves as a proxy for increased competition among firms for CEOs. Consistent with the model, I find that pay-size elasticity increases by 5.9% following a one standard deviation increase in an industry’s IPO activity. This effect is stronger in industries which require more specialized skills and prior industry experience, which have less sales overlap from other industries, and have less correlated returns with other industries. I also find that increased IPO activity leads to a greater likelihood of executive transitions between firms. Finally, I find indirect evidence that IPO activity draws down the talent pool of an industry, leading to an increase in the likelihood of a firm hiring an industry outsider following CEO turnover. Overall, the findings indicate that market forces play a key role in the determination of CEO pay.

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Antitakeover Provisions, Managerial Entrenchment and Firm Innovation

Atreya Chakraborty, Zaur Rzakhanov & Shahbaz Sheikh
Journal of Economics and Business, March–April 2014, Pages 30–43

Abstract:
We explore the relation between antitakeover provisions (i.e. managerial entrenchment) and firm performance in innovation. Empirical results indicate that an increase in antitakeover provisions is negatively related to number of patents and number of citations to patents. Thus managers who are protected from takeover market perform worse on innovation. However, the negative relation between antitakeover provisions and firm innovation holds only for low-tech firms. For high-tech firms, this relation is not statistically significant. One possible explanation is that high-tech firms have to innovate continuously to survive in the long run. The competitive pressure to innovate or perish dissipates the negative effect of managerial entrenchment on firm innovation. Overall, our results support the agency based explanation of the relation between antitakeover provisions and firm performance in innovation.

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Director Networks and Takeovers

Luc Renneboog & Yang Zhao
Journal of Corporate Finance, forthcoming

Abstract:
We study the impact of corporate networks on the takeover process. We find that better connected companies are more active bidders. When a bidder and a target have one or more directors in common, the probability that the takeover transaction will be successfully completed augments, and the duration of the negotiations is shorter. Connected targets more frequently accept offers that involve equity. Directors of the target firm (who are not interlocked) have a better chance to be invited to the board of the combined firm in connected M&As. While connections have a clear impact on the takeover strategy and process, we do not find evidence that the market acknowledges connections between bidders and targets as the announcement returns are not statistically different from those bidders and targets which are ex ante not connected.

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The Influence of Capital Structure on Strategic Human Capital: Evidence From U.S. and Canadian Firms

Xiangmin Liu et al.
Journal of Management, forthcoming

Abstract:
Strategic human capital research has emphasized the importance of human capital as a resource for sustained competitive advantage, but firm investments in this intangible asset vary considerably. This article examines whether and how external pressures on firms from capital markets influence their human capital strategy. These pressures have increased over the past three decades due to banking deregulation, technological innovation, and the rise of institutional investors and new financial intermediaries. Against this backdrop, this study examines whether a firm’s capital structure as measured by share turnover, shareholder concentration, and financial leverage is associated with firm investment in strategic human capital. Based on survey and objective financial data from 221 establishments in the United States and Canada, our analysis indicates that firms with greater share turnover, higher shareholder concentration, and higher levels of financial leverage are less likely to invest in human resource systems that create strategic human capital. Differences in national financial systems also lead to differential effects for U.S. and Canadian firms.

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Competition for Talent Under Performance Manipulation: CEOs on Steroids

Ivan Marinovic & Paul Povel
Stanford Working Paper, October 2013

Abstract:
We study how competition for talent affects CEO compensation, taking into consideration that CEO decisions are not contractible, CEO skills or talent are not observable, and CEOs can manipulate performance as measured by outsiders. Firms compete to appoint a CEO by offering contracts that generate large rents for the CEO. However, the incentive problems restrict how such rents can be created. We derive the equilibrium compensation contract offered by the firms, and we describe how the outcome is affected. Competition for talent leads to excessively high-powered performance compensation. Competition for talent can thus explain the increase in pay-performance sensitivity over the last few decades, and the extremely high-powered compensation packages observed in some markets. Given the high-powered incentive compensation, CEOs exert inefficiently high levels of effort and also distort the performance measure excessively. If the cost of manipulating performance is low, competition for talent may reduce the overall surplus, compared with a setup in which one firm negotiates with one potential CEO (and the firm extracts the rents). We discuss possible remedies, including regulatory limits to incentive compensation.

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Communication and Decision-Making in Corporate Boards

Nadya Malenko
Review of Financial Studies, forthcoming

Abstract:
Time constraints, managerial power, and reputational concerns can impede board communication. This paper develops a model where board decisions depend on directors' effort in communicating their information to others. I show that directors communicate more effectively when pressure for conformity is stronger — that is, when directors are more reluctant to disagree with each other. Hence, open ballot voting can be optimal, even though it induces directors to disregard their information and conform their votes to others. I also show that communication can be more efficient when directors' preferences are more diverse. The analysis has implications for executive sessions, transparency, and committees.

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Golden Parachutes and the Wealth of Shareholders

Lucian Bebchuk, Alma Cohen & Charles Wang
Journal of Corporate Finance, forthcoming

Abstract:
Golden parachutes (GPs) have attracted substantial attention from investors and public officials for more than two decades. We find that GPs are associated with higher expected acquisition premiums and that this association is at least partly due to the effect of GPs on executive incentives. However, we also find that firms that adopt GPs experience negative abnormal stock returns both during and subsequent to the period surrounding their adoption. This finding raises the possibility that even though GPs facilitate some value-increasing acquisitions, they do have, on average, an overall negative effect on shareholder wealth; this effect could be due to GPs weakening the force of the market for control and thereby increasing managerial slack, and/or to GPs making it attractive for executives to go along with some value-decreasing acquisitions that do not serve shareholders’ long-term interests. Our findings have significant implications for ongoing debates on GPs and suggest the need for additional work identifying the types of GPs that drive the identified correlation between GPs and reduced shareholder value.

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CEO pay and voting dissent before and after the crisis

Ian Gregory-Smith, Steve Thompson & Peter Wright
Economic Journal, forthcoming

Abstract:
Say on pay - that is empowering shareholders to vote on the remuneration arrangements of their firm's senior executives - has become an international policy response to the perceived explosion in rewards for top management. In this paper we examine the operation of say in pay in the UK, the country which pioneered its adoption, using the population of non-investment trust companies in the FTSE 350 over the period 2003-2012. We find executive remuneration and dissent on the remuneration committee report are positively correlated. However, the magnitude of this effect is small.We find that dissent plays a role in moderating future executive compensation levels, although this effect is restricted to levels of dissent above 10%, and primarily acting upon the higher quantiles of rewards. We find no evidence of an increased restraining effect of dissent on pay following the onset of the financial crisis.

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Board Expertise: Do Directors from Related Industries Help Bridge the Information Gap?

Nishant Dass et al.
Review of Financial Studies, forthcoming

Abstract:
We analyze the role of “directors from related industries” (DRIs) on a firm's board. DRIs are officers and/or directors of companies in the upstream/downstream industries of the firm. DRIs are more likely when the information gap vis-à-vis related industries is more severe or the firm has greater market power. DRIs have a significant impact on firm value/performance, especially when information problems are worse. Furthermore, DRIs help firms handle industry shocks and shorten their cash conversion cycles. Overall, our evidence suggests that firms choose DRIs when the adverse effects due to conflicts of interest are dominated by the benefits due to DRIs' information and expertise.

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Options, Option Repricing in Managerial Compensation: Their Effects on Corporate Investment Risk

Nengjiu Ju, Hayne Leland & Lemma Senbet
Journal of Corporate Finance, forthcoming

Abstract:
While stock options are commonly used in managerial compensation to provide desirable incentives, they can create adverse incentives to distort the choice of investment risk. Relative to the risk level that maximizes firm value, call options in a compensation contract can induce too much or too little corporate risk-taking, depending on managerial risk aversion and the underlying investment technology. We show that inclusion of lookback call options in compensation packages has desirable countervailing effects on managerial choice of corporate risk policies and can induce risk policies that increase shareholder wealth. We argue that lookback call options are analogous to the observed practice of option repricing.

By KEVIN LEWIS | 09:00:00 AM

Thursday, December 12, 2013

Club for growth

Gifts of Mars: Warfare and Europe's Early Rise to Riches

Nico Voigtländer & Voth Hans-Joachim
Journal of Economic Perspectives, Fall 2013, Pages 165-186

Abstract:
Western Europe surged ahead of the rest of the world long before technological growth became rapid. Europe in 1500 already had incomes twice as high on a per capita basis as Africa, and one-third greater than most of Asia. In this essay, we explain how Europe's tumultuous politics and deadly penchant for warfare translated into a sustained advantage in per capita incomes. We argue that Europe's rise to riches was driven by the nature of its politics after 1350 -- it was a highly fragmented continent characterized by constant warfare and major religious strife. No other continent in recorded history fought so frequently, for such long periods, killing such a high proportion of its population. When it comes to destroying human life, the atomic bomb and machine guns may be highly efficient, but nothing rivaled the impact of early modern Europe's armies spreading hunger and disease. War therefore helped Europe's precocious rise to riches because the survivors had more land per head available for cultivation. Our interpretation involves a feedback loop from higher incomes to more war and higher land-labor ratios, a loop set in motion by the Black Death in the middle of the 14th century.

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Trade, Institutions, and Ethnic Tolerance: Evidence from South Asia

Saumitra Jha
American Political Science Review, November 2013, Pages 806-832

Abstract:
I provide evidence that the degree to which medieval Hindus and Muslims could provide complementary, nonreplicable services and a mechanism to share the gains from exchange has resulted in a sustained legacy of ethnic tolerance in South Asian towns. Due to Muslim-specific advantages in Indian Ocean shipping, interethnic complementarities were strongest in medieval trading ports, leading to the development of institutional mechanisms that further supported interethnic exchange. Using novel town-level data spanning South Asia's medieval and colonial history, I find that medieval ports, despite being more ethnically mixed, were five times less prone to Hindu-Muslim riots between 1850 and 1950, two centuries after Europeans disrupted Muslim overseas trade dominance, and remained half as prone between 1950 and 1995. Household-level evidence suggests that these differences reflect local institutions that emerged to support interethnic medieval trade, continue to influence modern occupational choices and organizations, and substitute for State political incentives in supporting interethnic trust.

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Military Conflict and the Economic Rise of Urban Europe

Mark Dincecco & Massimiliano Gaetano Onorato
University of Michigan Working Paper, October 2013

Abstract:
We present new city-level evidence about the military origins of Europe's economic "backbone," the prosperous urban belt that runs from the Low Countries to northern Italy. Military conflict was a defining feature of pre-industrial Europe. The destructive effects of conflict were worse in the countryside, leading rural inhabitants to relocate behind urban fortifications. Conflict-related city population growth in turn had long-run economic consequences. Using GIS software, we construct a novel conflict exposure measure that computes city distances from nearly 300 major conflicts from 1000 to 1799. We find a significant, positive, and robust relationship between conflict exposure and historical city population growth. Next, we use luminosity data to construct a novel measure of current city-level economic activity. We show evidence that the economic legacy of historical conflict exposure endures to the present day.

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Inclusive Institutions and Long-Run Misallocation

Oded Galor, Kaivan Munshi & Nicholas Wilson
Brown University Working Paper, October 2013

Abstract:
This research advances the hypothesis that resource abundant economies characterized by a socially cohesive workforce and network externalities triggered the emergence of efficiency-enhancing inclusive institutions designed to restrict mobility and to enhance the attachment of community members to the local labor market. However, the persistence of these institutions, and the inter-generational transmission of their value, ultimately resulted in the misallocation of talents across occupations and a reduction in the long-run level of income per capita in the economy as a whole. Exploiting variation in resource intensity across the American Midwest during its initial development, the empirical analysis establishes that higher initial resource-intensity in 1860 is indeed associated with greater community participation over the subsequent 150 years, and reduced mobility and labor misallocation in the contemporary period.

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A Story of Large Landowners and Math Skills: Inequality and Human Capital Formation in Long-Run Development, 1820-2000

Joerg Baten & Dácil Juif
Journal of Comparative Economics, forthcoming

Abstract:
We create a new dataset to test the influence of land inequality on long-run human capital formation in a global cross-country study and assess the importance of land inequality relative to income inequality. Our results show that early land inequality has a detrimental influence on math and science skills even a century later. We find that this influence is causal, using an instrumental variable (IV) approach with geological, climatic and other variables that are intrinsically exogenous. A second major contribution of our study is our assessment of the persistence of numerical cognitive skills, which are an important component of modern human capital measures. Early numeracy around 1820 is estimated using the age-heaping strategy. We argue that countries with early investments in numerical education entered a path-dependency of human capital-intensive industries, including skill-intensive agriculture and services. The combined long-run effects of land inequality and human capital path-dependence are assessed for the first time in this article.

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Globalization, Democracy and Development

Jorge Braga de Macedo et al.
NBER Working Paper, October 2013

Abstract:
This paper addresses the interactions between globalization, the quality of democracy, and economic convergence using simultaneous estimation techniques. To reflect process, we use multi-dimensional, de facto, and continuous measures of democracy and globalization. To reflect context, as defined by space (geography) and time (history), we control for the distance to the income frontier. Using this measure of development, we extend the test for the two-way relationship between democracy and globalization put forward by Eichengreen and Leblang (2008) for the period 1870-2000. Focusing on the more recent wave of globalization (1970-2005), we find a two-way relationship between democracy and globalization and also significant two-way relationships with development. In the restricted sample of non-OECD countries, however, democracy hurts development.

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Is trust the missing root of institutions, education, and development?

Christian Bjørnskov & Pierre-Guillaume Méon
Public Choice, December 2013, Pages 641-669

Abstract:
We report evidence that trust is the missing root relating education, institutions, and economic development. We observe that more trust both increases education and improves legal and bureaucratic institutions, which in turn spurs economic development. We substantiate this intuition with a series of regressions that provide evidence that trust determines both education and the quality of institutions, and that education and institutions in turn affect GDP per capita.

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Growth in Per Capita GDP in the West Bank and Gaza 1950–2005

Andrew Schein
Middle Eastern Studies, November/December 2013, Pages 973-989

Abstract:
This paper examines the growth of per capita GDP in the West Bank and Gaza Strip (WBG) from 1950 to 2005. Data from Israel's Central Bureau of Statistics and the World Bank is integrated with Angus Maddison's estimates of per capita GDP of the WBG and Israel to produce new estimates of per capita GDP for the WBG from 1950–2005 in 1990 international dollars. With these new estimates, it is possible to compare the growth in WBG from an international perspective. One finding is that from 1968 to 1999 the economic growth in WBG was the tenth highest in the world.

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Human Capital and Fertility in Chinese Clans Before Modern Growth

Carol Shiue
NBER Working Paper, November 2013

Abstract:
This paper studies the pre-industrial origins of modern-day fertility decline. The setting is in Anhwei Province, China over the 13th to 19th centuries, a period well before the onset of China’s demographic transition and industrialization. There are four main results. First, we observe non-Malthusian effects in which high income households had relatively fewer children. Second, higher income households had relatively more educated sons, consistent with their greater ability to support major educational investments. Third, those households that invested in education had fewer children, suggesting that households producing educated children were reallocating resources away from child quantity and towards child quality. Fourth, over time, demand for human capital fell significantly. The most plausible reason is the declining returns to educational investments. The findings point to a role for demography in explaining China’s failure to industrialize early on.

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Is the Demographic Dividend an Education Dividend?

Jesús Crespo Cuaresma, Wolfgang Lutz & Warren Sanderson
Demography, forthcoming

Abstract:
The effect of changes in age structure on economic growth has been widely studied in the demography and population economics literature. The beneficial effect of changes in age structure after a decrease in fertility has become known as the “demographic dividend.” In this article, we reassess the empirical evidence on the associations among economic growth, changes in age structure, labor force participation, and educational attainment. Using a global panel of countries, we find that after the effect of human capital dynamics is controlled for, no evidence exists that changes in age structure affect labor productivity. Our results imply that improvements in educational attainment are the key to explaining productivity and income growth and that a substantial portion of the demographic dividend is an education dividend.

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The Long-run Macroeconomic Impacts of Fuel Subsidies

Michael Plante
Journal of Development Economics, forthcoming

Abstract:
Many developing and emerging market countries have subsidies on fuel products. Using a small open economy model with a non-traded sector, I show how these subsidies impact the steady state levels of macroeconomic aggregates such as consumption, labor supply, and aggregate welfare. These subsidies can lead to crowding out of non-oil consumption, inefficient inter-sectoral allocations of labor, and other distortions in macroeconomic variables. Across steady states, aggregate welfare is reduced by these subsidies. This result holds for a country with no oil production and for a net exporter of oil. The distortions in relative prices introduced by the subsidy create most of the welfare losses. How the subsidy is financed is of secondary importance. Aggregate welfare is significantly higher if the subsidies are replaced by lump sum transfers of equal value.

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School, what is it good for? Useful Human Capital and the History of Public Education in Central Europe

Tomas Cvrcek & Miroslav Zajicek
NBER Working Paper, December 2013

Abstract:
The rise of education has featured prominently in the debate on the sources of modern long-term economic growth. Existing accounts stress the positive role of public education and the importance of political support for its provision. We argue that such an explanation for the spread of schooling is probably a poor fit for many nations’ schooling histories and provide an example, using detailed data on schooling supply from the Habsburg Empire. We show that while economic development made schooling more affordable and widespread, the politics of demand for schools was not motivated by expectations of economic development but by the ongoing conflict between nationalities within the Empire. We find that public schools offered practically zero return education on the margin, yet they did enjoy significant political and financial support from local political elites, if they taught in the “right” language of instruction. Our results suggest that, for some countries at least, the main link, historically, went from economic development to public schooling, not the other way round.

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The Formative Years of the Modern Corporation: The Dutch East India Company VOC, 1602–1623

Oscar Gelderblom, Abe de Jong & Joost Jonker
Journal of Economic History, December 2013, Pages 1050-1076

Abstract:
With their legal personhood, permanent capital, transferable shares, separation of ownership and management, and limited liability, the Dutch and English colonial trading companies VOC and EIC are considered institutional breakthroughs. We analyze the VOC's business operations and financial policy and show that its novel corporate form owed less to foresight than to piecemeal engineering to remedy design flaws. The crucial feature of managerial limited liability was not, as previously thought, integral to that design, but emerged only after protracted experiments with various solutions to the company's financial bottlenecks. Legal form followed economic function, not the other way around.

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Russia's Fiscal Gap

Eugene Goryunov et al.
NBER Working Paper, November 2013

Abstract:
Every country faces what economists call an intertemporal (across time) budget constraint, which requires that its government’s future expenditures, including the servicing of its outstanding official debt, be covered by its government’s future receipts when measured in present value. The difference between the present value of a country’s future expenditures and its future receipts is called its fiscal gap. This study estimates Russia’s 2013 fiscal gap at 890 trillion rubles or $28 trillion. This longterm budget shortfall is 8.4 percent of the present value of projected GDP. Consequently, eliminating Russia’s fiscal gap on a smooth basis requires fiscal tightening by 8.4 percent of each future year’s projected GDP. One means of doing this is to immediately and permanently raise all Russian taxes by 29 percent. Another is to immediately and permanently cut all spending, apart from servicing outstanding debt, by 22.4 percent. How can a country with vast energy resources and foreign reserves and other financial assets that exceed its official debt still have very major fiscal problems? The answer is that the Russia’s energy resources are finite, whereas its expenditure needs are not. Moreover, Russia is aging and facing massive obligations from its pension system and other age related expenditures.

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Economic Integration in China: Politics and Culture

Carsten Herrmann-Pillath, Alexander Libman & Xiaofan Yu
Journal of Comparative Economics, forthcoming

Abstract:
The aim of the paper is to explicitly disentangle the role of political and cultural boundaries as factors of fragmentation of economies within large countries. On the one hand, local protectionism plays a substantial role in many federations and decentralized states. On the other hand, if the country exhibits high level of cultural heterogeneity, it may also contribute to the economic fragmentation; however, this topic has received significantly less attention in the literature. This paper looks at the case of China and proxies the cultural heterogeneity by the heterogeneity of local dialects. It shows that the effect of politics clearly dominates that of culture: while provincial borders seem to have a strong influence disrupting economic ties, economic linkages across provinces, even if the regions fall into the same linguistic zone, are rather weak and, on the contrary, linguistic differences within provinces do not prevent economic integration. For some language zones we do, however, find a stronger effect on economic integration.

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Malaria and Early African Development: Evidence from the Sickle Cell Trait

Emilio Depetris-Chauvin & David Weil
NBER Working Paper, October 2013

Abstract:
We examine the effect of malaria on economic development in Africa over the very long run. Using data on the prevalence of the mutation that causes sickle cell disease we measure the impact of malaria on mortality in Africa prior to the period in which formal data were collected. Our estimate is that in the more afflicted regions, malaria lowered the probability of surviving to adulthood by about ten percentage points, which is roughly twice the current burden of the disease. The reduction in malaria mortality has been roughly equal to the reduction in other causes of mortality. We then ask whether the estimated burden of malaria had an effect on economic development in the period before European contact. Examining both mortality and morbidity, we do not find evidence that the impact of malaria would have been very significant. These model-based findings are corroborated by a more statistically-based approach, which shows little evidence of a negative relationship between malaria ecology and population density or other measures of development, using data measured at the level ethnic groups.

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Who bribes in public contracting and why: Worldwide evidence from firms

Anna D’Souza & Daniel Kaufmann
Economics of Governance, November 2013, Pages 333-367

Abstract:
We study procurement bribery utilizing survey data from 11,000 enterprises in 125 countries. About one-third of managers report that firms like theirs bribe to secure a public contract, paying about 8 % of the contract value. Econometric estimations suggest that national governance factors, such as democratic accountability, press freedom, and rule of law, are associated with lower bribery. Larger and foreign-owned firms are less likely to bribe than smaller domestic ones. But among bribers, foreign and domestic firms pay similar amounts. Multinational firms appear sensitive to reputational risks in their home countries, but partially adapt to their host country environments.

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Short-Term Pain, Long-Term Gain? The Effects of IMF Economic Reform Programs on Public Health Performance

Matthew Hoddie & Caroline Hartzell
Social Science Quarterly, forthcoming

Objectives: In this study, we evaluate the effects of the International Monetary Fund's structural adjustment programs (SAPs) on the public health performance of countries. We test the claim made by proponents of SAPs that although these programs may produce short-term hardship for the countries adopting them, they will generate positive developmental effects in the long term.

Methods: Our study draws on a global data set and employs a model that takes into account the potential for selection bias in the adoption of SAPs by states.

Results: The central finding of the article is that SAPs in the short term raise the exposure of populations to conditions that increase incidences of disability and death. Contrary to the assertions made by the advocates of SAPs, we also find evidence that these programs have attenuated but still harmful effect on public health performance in the long term.

Conclusions: This study highlights the negative influences of SAPs on public health and suggests that a need exists to reevaluate the claims that have been made regarding the developmental effects of these programs.

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Does development reduce fatalities from natural disasters? New evidence for floods

Susana Ferreira, Kirk Hamilton & Jeffrey Vincent
Environment and Development Economics, December 2013, Pages 649-679

Abstract:
We analyze the impact of development on flood fatalities using a new data set of 2,171 large floods in 92 countries between 1985 and 2008. Our results challenge the conventional wisdom that development results in fewer fatalities during natural disasters. Results indicating that higher income and better governance reduce fatalities during flood events do not hold up when unobserved country heterogeneity and within-country correlation of standard errors are taken into account. We find that income does have a significant, indirect effect on flood fatalities by affecting flood frequency and flood magnitude, but this effect is nonmonotonic, with net reductions in fatalities occurring only in lower income countries. We find little evidence that improved governance affects flood fatalities either directly or indirectly.

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Does foreign aid reduce tax revenue? Further evidence

John Thornton
Applied Economics, Winter 2014, Pages 359-373

Abstract:
A common criticism of foreign aid is that it reduces domestic tax effort. Empirical research on the issue has been hampered by the failure to tackle endogeneity issues effectively. We use measures of geographical and cultural distance to donor countries as instrumental variables to uncover the causal effect of aid on tax revenue in a panel of 93 countries. The tax to GDP ratio is found to decrease following aid inflows. This reduction in tax effort is statistically and economically significant; a one SD increase in aid causes a 0.52 percentage point drop in the tax-to-GDP ratio. The results indicate that the effect is driven by unconditional grants, whereas aid given as loans induces recipient governments to improve their tax effort. Our results are robust to changes in the sample and the use of a nearest neighbour matching technique to account for nonrandom assignment of aid. Our identification strategy is sharpened by the use of a difference-in-difference estimation strategy that leverages a natural experiment in which aid flows exogenously increased for some countries following the Iranian Revolution in 1979.

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Digging in the dirt? Extractive industry FDI and corruption

Ivar Kolstad & Arne Wiig
Economics of Governance, November 2013, Pages 369-383

Abstract:
Does corruption attract or deter foreign investment in the extractive sectors? This article presents an econometric analysis of extractive industry foreign direct investment (FDI) inflows to 81 countries in the period 1996–2009. The results suggest that increased corruption within a country is associated with increased extractive industry FDI, but at a diminishing rate as corruption increases grow larger. For realistic changes in corruption, however, more corruption is associated with more extractive industry investment.

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Breaking the resource curse: Transparency in the natural resource sector and the extractive industries transparency initiative

Caitlin Corrigan
Resources Policy, forthcoming

Abstract:
This article critically examines the impact, up until 2009, of the Extractive Industries Transparency Initiative (EITI). The EITI is an international policy intervention that aims to mitigate the negative effects of resource abundance by promoting the transparency of resource revenues and accountability of the governments of resource rich states. Its effectiveness can be assessed by examining two outcomes that are suggested to be negatively affected by resource abundance: economic development and quality of governance. Through a panel study, including approximately 200 countries, the influence of the EITI in these two areas is examined. Results suggest that the negative effect of resource abundance on GDP per capita, the capacity of the government to formulate and implement sound policies and the level of rule of law is mitigated in EITI countries. However, the EITI has little effect on level of democracy, political stability and corruption. The study concludes that there are some early indications that the EITI has been successful in protecting some nations from selected elements of the resource curse. This is encouraging given the relatively short time period since the founding of the EITI, however the mixed results suggest that a similar study should be repeated in 5 to 10 years when EITI policies have had enough time to fully take effect.

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Money for nothing: How firms have financed R&D-projects since the Industrial Revolution

Gerben Bakker
Research Policy, December 2013, Pages 1793–1814

Abstract:
We investigate the long-run historical pattern of R&D-outlays by reviewing aggregate growth rates and historical cases of particular R&D projects, following the historical-institutional approach of Chandler (1962), North (1981) and Williamson (1985). We find that even the earliest R&D-projects used non-insignificant cash outlays and that until the 1970s aggregate R&D outlays grew far faster than GDP, despite five well-known challenges that implied that R&D could only be financed with cash, for which no perfect market existed: the presence of sunk costs, real uncertainty, long time lags, adverse selection, and moral hazard. We then review a wide variety of organisational forms and institutional instruments that firms historically have used to overcome these financing obstacles, and without which the enormous growth of R&D outlays since the nineteenth century would not have been possible.

By KEVIN LEWIS | 09:00:00 AM

Wednesday, December 11, 2013

Degrees of freedom

Daily Online Testing in Large Classes: Boosting College Performance while Reducing Achievement Gaps

James Pennebaker, Samuel Gosling & Jason Ferrell
PLoS ONE, November 2013

Abstract:
An in-class computer-based system, that included daily online testing, was introduced to two large university classes. We examined subsequent improvements in academic performance and reductions in the achievement gaps between lower- and upper-middle class students in academic performance. Students (N = 901) brought laptop computers to classes and took daily quizzes that provided immediate and personalized feedback. Student performance was compared with the same data for traditional classes taught previously by the same instructors (N = 935). Exam performance was approximately half a letter grade above previous semesters, based on comparisons of identical questions asked from earlier years. Students in the experimental classes performed better in other classes, both in the semester they took the course and in subsequent semester classes. The new system resulted in a 50% reduction in the achievement gap as measured by grades among students of different social classes. These findings suggest that frequent consequential quizzing should be used routinely in large lecture courses to improve performance in class and in other concurrent and subsequent courses.

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Evaluating Education Programs That Have Lotteried Admission and Selective Attrition

John Engberg et al.
Journal of Labor Economics, January 2014, Pages 27-63

Abstract:
We study the effectiveness of magnet programs in an urban district that ration excess demand by admission lotteries. Differential attrition arises since students who lose the lottery are more likely to pursue options outside the school district than students who win the lottery. When students leave the district, important outcome variables are often not observed. The treatment effects are not point-identified. We exploit known quantiles of the outcome distribution to construct informative bounds on treatment effects. We find that magnet programs improve behavioral outcomes but have no significant effect on achievement.

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The Effect of Income on Educational Attainment: Evidence from State Earned Income Tax Credit Expansions

Katherine Michelmore
Cornell Working Paper, November 2013

Abstract:
As of the early 2000s, the gap in college enrollment between children growing up in the highest income quartile and the lowest income quartile was over 50 percentage points (Bailey and Dynarski 2011). There is much debate in the literature about what role household income plays in producing this gap. A major impediment in studying this question is the lack of plausibly exogenous variation in income. The Earned Income Tax Credit (EITC) is one potential source of exogenous variation in household income that may increase educational attainment among low-income youth. Using variation in state EITC benefit generosity, I use a difference-in-difference framework to analyze how an increase in household income affects the educational attainment of children from low socioeconomic status households. Conservative estimates suggest that following an increase in the maximum EITC by $1,000, 18-23 year olds growing up in likely EITC- eligible households are 1 percentage point more likely to have ever enrolled in college and 0.3 percentage points more likely to complete a bachelor’s degree. These results are concentrated among individuals who were younger than 12 at the time of state EITC implementation, suggesting that the EITC increases educational attainment primarily by providing extra income to households with young children. I find no effect of EITC expansions on older children, for whom the EITC acts as a form of financial aid.

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Does it pay to pay teachers more? Evidence from Texas

Matthew Hendricks
Journal of Public Economics, January 2014, Pages 50–63

Abstract:
This study presents robust evidence on the relationship between teacher pay and turnover using detailed panel data from Texas. While controlling for changes in district and local labor market characteristics, I estimate an overall turnover elasticity of -1.4 and show that the effect is largest for inexperienced teachers, declines with experience, and disappears around 19 years of experience. Combining these results with what we know about the relationship between teacher value-added and experience, I show that paying teachers more improves student achievement through higher retention rates. The results also suggest that adopting a flat salary schedule may be a cheap way to improve student performance. I find no evidence that pay effects vary by the teacher’s gender or subject taught.

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Do College-Preparatory Programs Improve Long-Term Outcomes?

Kirabo Jackson
Economic Inquiry, January 2014, Pages 72–99

Abstract:
This paper presents an analysis of the longer-run effects of a college-preparatory program implemented in inner-city schools that provided teacher training in addition to payments to 11th- and 12th-grade students and their teachers for passing scores on Advanced Placement (AP) exams. Affected students passed more AP exams, were more likely to remain in college beyond their first and second years, and earned higher wages. Effects are particularly pronounced for Hispanic students who experienced a 2.5-percentage-point increase in college degree attainment and an 11% increase in earnings. While the study is based on nonexperimental variation, the results are robust across a variety of specifications, and most plausible sources of bias are ruled out. The results provide credible evidence that implementing high-quality college-preparatory programs in existing urban schools can improve the long-run educational and labor-market outcomes of disadvantaged youth.

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Teachers’ Support of Students’ Vocabulary Learning During Literacy Instruction in High Poverty Elementary Schools

Joanne Carlisle, Ben Kelcey & Dan Berebitsky
American Educational Research Journal, December 2013, Pages 1360-1391

Abstract:
The purpose of this study was to examine third-grade teachers’ support for students’ vocabulary learning in high poverty schools characterized by underachievement in reading. We examined the prevalence and nature of discourse actions teachers used to support vocabulary learning in different literacy lessons (e.g., phonics); these actions varied in the cognitive demands placed on the students. Results showed that teachers rarely engaged students in cognitively challenging work on word meanings. Various lesson features and student and teacher characteristics were associated with teachers’ support for students’ vocabulary learning (e.g., teachers’ knowledge about reading). A major finding was that the extent of teachers’ support of their students’ vocabulary learning was significantly related to gains in reading comprehension across the year.

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Learning from the Test: Raising Selective College Enrollment by Providing Information

Sarena Goodman
Federal Reserve Working Paper, September 2013

Abstract:
In the last decade, five U.S. states adopted mandates requiring high school juniors to take a college entrance exam. In the two earliest-adopting states, nearly half of all students were induced into testing, and 40-45% of them earned scores high enough to qualify for selective schools. Selective college enrollment rose by 20% following implementation of the mandates, with no effect on overall attendance. I conclude that a large number of high-ability students appear to dramatically underestimate their candidacy for selective colleges. Policies aimed at reducing this information shortage are likely to increase human capital investment for a substantial number of students.

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The Potential of Urban Boarding Schools for the Poor: Evidence from SEED

Vilsa Curto & Roland Fryer
Journal of Labor Economics, January 2014, Pages 65-93

Abstract:
The SEED schools, which combine a “No Excuses” charter model with a 5-day-a-week boarding program, are America’s only urban public boarding schools for the poor. We provide the first causal estimate of the impact of attending SEED schools on academic achievement, with the goal of understanding whether changing a student’s environment is an effective strategy to increase achievement among the poor. Using admission lotteries, we show that attending a SEED school increases achievement by 0.211 standard deviation in reading and 0.229 standard deviation in math per year. However, subgroup analyses show that the effects may be driven by female students.

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Advancing Academic Achievement Through Career Relevance in the Middle Grades: A Longitudinal Evaluation of CareerStart

Michael Woolley et al.
American Educational Research Journal, December 2013, Pages 1309-1335

Abstract:
Research and theory suggest that students learn more effectively when they perceive course content as relevant to their futures. The current research assessed the impact of CareerStart, a middle grades instructional strategy designed to advance the occupational relevance of what students are being taught in the core subjects — math, science, language arts, and social studies. CareerStart was introduced randomly in 7 of 14 middle schools in a diverse district with 3,295 students followed for 3 years. The analyses examined impact on end-of-grade test scores on math and reading exams. Findings confirm a significant treatment effect for math performance but no effect for reading performance.

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From Birth to School: Early Childhood Initiatives and Third-Grade Outcomes in North Carolina

Helen Ladd, Clara Muschkin & Kenneth Dodge
Journal of Policy Analysis and Management, Winter 2014, Pages 162–187

Abstract:
This study examines the community-wide effects of two statewide early childhood policy initiatives in North Carolina. One initiative provides funding to improve the quality of child care services at the county level for all children between the ages of 0 to 5, and the other provides funding for preschool slots for disadvantaged four-year-olds. Differences across counties in the timing of the rollout and in the magnitude of the state financial investments per child provide the variation in programs needed to estimate their effects on schooling outcomes in third grade. We find robust positive effects of each program on third-grade test scores in both reading and math. These effects can best be explained by a combination of direct benefits for participants and spillover benefits for others. Our preferred models suggest that the combined average effects on test scores of investments in both programs at 2009 funding levels are equivalent to two to four months of instruction in grade 3.

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A Regression Discontinuity Analysis of Graduation Standards and Their Impact on Students’ Academic Trajectories

Tom Ahn
Economics of Education Review, forthcoming

Abstract:
In 2006, North Carolina put in place high school exit standards requiring students to pass a series of high-stakes exams across several years. I use a regression discontinuity (RD) approach to analyze whether passing or failing one of these exams (Algebra I) impacts a student's decision between choosing a more rigorous college-preparatory math curriculum and an easier ‘career’ track math curriculum. I find a 5 percentage point gap in the probability of selecting the rigorous curriculum between 9th grade students who just passed and those who just failed the exam. RD results across two years (one year in which the graduation standards were not in place) suggests that the discontinuity arose due to fewer students opting into the college track as a result of the exam results.

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The Labor-Market Returns to Community College Degrees, Diplomas, and Certificates

Christopher Jepsen, Kenneth Troske & Paul Coomes
Journal of Labor Economics, January 2014, Pages 95-121

Abstract:
This article provides one of the first rigorous estimations of the labor-market returns to community college certificates and diplomas, as well as estimations of the returns to the more commonly studied associate’s degrees. Using administrative data from Kentucky, we estimate panel-data models that control for differences among students in precollege earnings and educational aspirations. Associate’s degrees and diplomas have quarterly earnings returns of nearly $2,400 for women and $1,500 for men, compared with much smaller returns for certificates. There is substantial heterogeneity in returns across fields of study. Degrees, diplomas, and — for women — certificates correspond with higher levels of employment.

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Effect of Retention in First Grade on Parents’ Educational Expectations and Children’s Academic Outcomes

Jan Hughes, Oi-Man Kwok & Myung Hee Im
American Educational Research Journal, December 2013, Pages 1336-1359

Abstract:
The effect of retention in first grade (Year 1) on parents’ educational expectations was tested in a sample of 530 ethnically diverse and academically at risk children. Participants attended one of three school districts in Texas. Of the 530 children, 118 were retained in first grade. Retention had a negative effect on parent expectations in Year 2, which was maintained in Year 3. Year 2 parent expectations partially mediated the effect of retention in first grade on Year 3 reading and math achievement and child academic self-efficacy. All effects controlled for Year 1 measures of the outcome. Results were similar across gender, economic adversity, and ethnicity. Implications for minimizing the negative effect of retention on parents’ expectations are suggested.

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Centralized Governance and Student Outcomes: Excellence, Equity, and Academic Achievement in the U.S. States

Paul Manna
Policy Studies Journal, November 2013, Pages 683–706

Abstract:
Are states with more centralized approaches to education governance more likely to have higher student achievement and lower achievement gaps between poor and nonpoor students? This article addresses that question by theorizing about the effects of political, administrative, and fiscal centralization on student outcomes. It tests competing hypotheses about the degree to which centralization across these three dimensions is associated with the promotion of academic excellence (higher achievement) and equity (narrower achievement gaps). The results demonstrate the virtue of studying academic performance through the lens of governance and more distal system-level variables rather than, as has been common in the literature, more narrow policy-oriented measures. The findings show that strong relationships exist between student outcomes and the degree of political centralization and administrative centralization in a state, yet there are no apparent associations with fiscal centralization. The results also illustrate that governing arrangements are not consistently related to the advancement of excellence and equity. In terms of administrative centralization, specifically, apparent trade-offs may exist.

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The effect of abolishing university tuition costs: Evidence from Ireland

Kevin Denny
Labour Economics, forthcoming

Abstract:
University tuition fees for undergraduates were abolished in Ireland in 1996. This paper examines the effect of this reform on the socio-economic gradient to determine whether the reform was successful in achieving its objective of promoting educational equality that is improving the chances of low socio-economic status (SES) students progressing to university. It finds that the reform clearly did not have that effect. The results are consistent with recent findings for the UK which show that the socio-economic gradient in second level attainment largely explain the socio-economic gradient in higher education participation.

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Better Luck Next Time: Learning Through Retaking

Verónica Frisancho et al.
NBER Working Paper, November 2013

Abstract:
In this paper we provide some evidence that repeat taking of competitive exams may reduce the impact of background disadvantages on educational outcomes. Using administrative data on the university entrance exam in Turkey we estimate cumulative learning between the first and the nth attempt while controlling for selection into retaking in terms of observed and unobserved characteristics. We find large learning gains measured in terms of improvements in the exam scores, especially among less advantaged students.

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Working (and studying) day and night: Heterogeneous effects of working on the academic performance of full-time and part-time students

Rajeev Darolia
Economics of Education Review, February 2014, Pages 38–50

Abstract:
A growing number of students are working while in college and to a greater extent. Using nationally representative data from the 1997 National Longitudinal Survey of Youth, I analyze the effect of working on grades and credit completion for undergraduate students in the United States. Strategies to identify the causal relationship between working and academic performance include student-level fixed effects to control for permanent, unobserved characteristics that may affect both work and study intensity, and system GMM models to account for potentially endogenous relationships between working and academic performance that vary over time. I examine the consequences of working for heterogeneous subgroups, with a particular focus on differences between full-time and part-time students. I find no evidence that students’ grades are harmed by marginal work hours, but that full-time students complete fewer credits per term when increasing work.

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Returns to MBA Quality: Pecuniary and Non-Pecuniary Returns to Peers, Faculty, and Institution Quality

Wayne Grove & Andrew Hussey
Labour Economics, forthcoming

Abstract:
A large literature has focused on estimating the returns to schooling and has typically done so by incorporating institutional heterogeneity in quality along merely one dimension (such as average SAT scores). Using longitudinal survey data of registrants for the GMAT exam and school level information from other sources, we create, in the context of graduate management education, multiple indices of school quality, and estimate the effect of these quality measures on multiple indicators of career success. In particular, we create quality measures of MBA programs based on: (1) institutional and curricular factors, (2) characteristics of the student body, and (3) characteristics of the faculty. We create aggregate quality indices by combining individual proxies using factor analysis. We also extend the literature by considering the effects of quality on both earnings and non-monetary outcomes, namely attainment of managerial goals relative to initial individual expectations, self-assessed skill gains, and various measures of job satisfaction. We include several unique individual control variables, and further control for unobserved heterogeneity through the use of instrumental variables and individual fixed effects. Results indicate that the quality of peers matters most for earnings, especially for OLS estimates. When individual fixed effects are included, estimates of quality premiums diminish somewhat, emphasizing the importance of controlling for selection into programs of varying quality. School quality is also an important predictor of several non-pecuniary outcomes.

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The Missing Link: Estimating the Impact of Incentives on Teacher Effort and Instructional Effectiveness Using Teacher Accountability Legislation Data

Tom Ahn
Journal of Human Capital, Fall 2013, Pages 230-273

Abstract:
Teacher effort, a critical component of education production, has been understudied in the literature because of measurement difficulties. I use a principal-agent model, North Carolina data, and the state’s accountability system that awards cash for school-level academic growth to distill effort from teacher absence and capture its effect. I find low effort at low and high probabilities of bonus receipt, high effort when the bonus outcome is in doubt, and free-ridership. Teachers respond to incentives, and effort affects achievement. Policy simulations with individual-level incentives eliminate free-rider effects but reduce effort by pushing teachers into the tails of the probability of bonus receipt distribution.

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The impact of teachers’ expectations on students’ educational opportunities in the life course: An empirical test of a subjective expected utility explanation

Dominik Becker
Rationality and Society, November 2013, Pages 422-469

Abstract:
The objective of this paper is to integrate the idea of Pygmalion or self-fulfilling prophecy research into the subjective expected utility framework of inequality in educational opportunities. The theoretical section develops a formal model about the impact of teachers’ expectations on students’ educational transitions in sense of a self-fulfilling prophecy. In the empirical section, I test this model to predict both students’ educational success (in terms of high school graduations) and their university transitions. Analyses control for selection bias and unobserved heterogeneity by means of a bivariate probit model. I find that even net of both students’ performance and motivation, teachers’ expectations show significant effects on students’ educational success (Abitur), but not on their university transitions. This finding is stable against several robustness checks.

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Value-added models and the measurement of teacher productivity

Tim Sass, Anastasia Semykina & Douglas Harris
Economics of Education Review, February 2014, Pages 9–23

Abstract:
Research on teacher productivity, as well as recently developed accountability systems for teachers, relies on “value-added” models to estimate the impact of teachers on student performance. We consider six value-added models that encompass most commonly estimated specifications. We test many of the central assumptions required to derive each of the value-added models from an underlying structural cumulative achievement model and reject nearly all of them. While some of the six popular models produce similar estimates, other specifications yield estimates of teacher productivity and other key parameters that are considerably different.

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The Co-Twin Methodology and Returns to Schooling - Testing a Critical Assumption

Örjan Sandewall, David Cesarini & Magnus Johannesson
Labour Economics, January 2014, Pages 1–10

Abstract:
Twins-based estimates of the return to schooling have featured prominently in the economics of education literature. Their unbiasedness hinges critically on the assumption that within-pair variation in schooling is explained by factors unrelated to wage earning ability. This paper develops a framework for testing this assumption and shows, in a large sample of monozygotic twins, that the twins-based estimated return to schooling falls if adolescent IQ test scores are included in the wage equation. Using birth weight as an alternative proxy for ability yields qualitatively similar results. Our results thus cast doubt on the validity of twins-based estimates.

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Strategic Involuntary Teacher Transfers and Teacher Performance: Examining Equity and Efficiency

Jason Grissom, Susanna Loeb & Nathaniel Nakashima
Journal of Policy Analysis and Management, Winter 2014, Pages 112–140

Abstract:
Despite claims that school districts need flexibility in teacher assignment to allocate teachers more equitably across schools and improve district performance, the power to involuntarily transfer teachers across schools remains hotly contested. Little research has examined involuntary teacher transfer policies or their effects on schools, teachers, or students. This article uses administrative data from Miami-Dade County Public Schools to investigate the implementation and effects of the district's involuntary transfer policy, including which schools transferred and received teachers, which teachers were transferred, what kinds of teachers replaced them in their former schools, and how their performance — as measured by their work absences and value-added in math and reading — compared before and after the transfer. We find that, under the policy, principals in the lowest performing schools identified relatively low-performing teachers for transfer who, based on observable characteristics, would have been unlikely to leave on their own. Consistent with an equity improvement, we find that involuntarily transferred teachers were systematically moved to higher performing schools and generally were outperformed by the teachers who replaced them. Efficiency impacts are mixed; although transferred teachers had nearly two fewer absences per year in their new positions, transferred teachers continued to have low value-added in their new schools.

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Retained Students and Classmates’ Absences in Urban Schools

Michael Gottfried
American Educational Research Journal, December 2013, Pages 1392-1423

Abstract:
Research in grade retention has predominantly focused on the effect of this practice on the retained student. This study contributes to the limited body of research examining the effect of retained classmates on the outcomes of other students in the same classroom. Using a longitudinal data set of all elementary school students in a large urban school district, this study evaluates how the percentage of retained classmates affects other students’ absence patterns, both unexcused and excused. Focusing on absences as an outcome is key, as they signal educational disengagement and highly correlate with schooling and lifelong success. Based on quasi-experimental methods, the results indicate that a greater percentage of retained classmates increases other students’ absences. The effect is only present on unexcused absences, not excused absences, hence signaling an increase in disengagement in other students. Individual- and classroom-level moderating effects are evaluated, and policy implications for classroom assignment are discussed.

http://onlinelibrary.wiley.com/doi/10.1111/ecin.12040/abstract

By KEVIN LEWIS | 09:00:00 AM

Tuesday, December 10, 2013

Girls rule, boys drool

The Chastain Effect: Using Title IX to Measure the Causal Effect of Participating in High School Sports on Adult Women's Social Lives

Phoebe Clarke & Ian Ayres
Journal of Socio-Economics, forthcoming

Abstract:
Many studies have sought to estimate the effects of participating in sports on ex-athletes’ adult lives. This paper contributes to the existing literature in two ways. First, it adopts an instrumental-variables method pioneered by Betsey Stevenson (2010) in which variation in rates of boys’ athletic participation across states before the passage of Title IX is used to instrument for changes in girls’ athletic participation following its passage, thereby avoiding selection bias and allowing for causal estimates. Second, it looks at the effect of participating in sports not on economic, but on social outcomes. In particular, we find that a ten percentage-point increase in state-level female sports participation generates a five to six percentage-point rise in the rate of female secularism, a five percentage-point increase in the proportion of women who are mothers, and a six percentage-point rise in the proportion of mothers who, at the time that they are interviewed, are single mothers. While our results appear to paint a picture of independence from potentially patriarchal institutions (church and marriage), further research is necessary to understand whether our results can be attributed to a single story such as this one or whether they are the products of multiple causal mechanisms.

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Do Female Politicians Empower Women to Vote or Run for Office? A Regression Discontinuity Approach

David Broockman
Electoral Studies, forthcoming

Abstract:
Persistent gender gaps in political officeholding and mass political participation jeopardize women’s equal representation in government. This paper brings new evidence to the longstanding hypotheses that the presence of additional female candidates and officeholders helps address these gaps by empowering other women to vote or run for office themselves. With a regression discontinuity approach and data on 3,813 US state legislative elections where a woman opposed a man, I find that the election of additional women in competitive US state legislative elections has no discernible causal effects on other women’s political participation at the mass or elite levels. These estimates are precise enough to rule out even substantively small effects. These estimates stand in stark contrast to a number of similar findings from India, suggesting that although electing the first women in a society can have these empowering effects, remaining barriers to women’s inclusion in American democracy go beyond what further increases in female officeholding can themselves erode.

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Age at Menarche and Choice of College Major: Implications for STEM Majors

Anna Brenner-Shuman & Warren Waren
Bulletin of Science, Technology & Society, February-April 2013, Pages 28-34

Abstract:
Even though boys and girls in childhood perform similarly in math and spatial thinking, after puberty fewer young women pursue majors that emphasize abilities such as science, technology, engineering, and math (STEM) in college. If postpubertal feminization contributes to a lower likelihood of choosing STEM majors, then young women who enter puberty early should be the least likely to pursue those majors later in their education. In this study, we investigate the association between age at menarche and the choice of STEM major. We surveyed 150 undergraduate women from a variety of majors in a large, public university and created logistic regression models to estimate their likelihood of choosing a STEM major. We found that early-maturing girls are less likely to enter STEM majors. We posit that the earlier a young woman enters puberty, the earlier and more extensively she is affected by the “leaky pipeline.”

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Creating, Closing, and Reversing the Gender Gap in Test Performance: How Selection Policies Trigger Social Identity Threat or Safety Among Women and Men

Frédérique Autin, Nyla Branscombe & Jean-Claude Croizet
Psychology of Women Quarterly, forthcoming

Abstract:
We investigate how selection policies — the rules defining access to a valued position — can act as situational cues signaling social identity threat or safety among women and men. College students took a logic test ostensibly determining their assignment to a position of leader or subordinate for a subsequent task. Study 1 showed that when only the test score determined the selection, women experienced more identity threat and performed worse than men. When the policy allowed the selection of women at a lower level of performance than men to promote diversity, men’s performance decreased compared to the merit condition, falling to the level of women’s performance and thus closing the gender gap. Study 2 replicated these findings and established that the meaning derived from selection practices affects candidates’ performance. A third policy that also preferentially selected women, but to correct for unequal treatment based on gender, leads to a reversed gender gap (i.e., women outperformed men). These findings suggest that structural features of test settings including selection practices can constrain individuals’ potential access to opportunities.

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The Ironic Costs of Performing Well: Grades Differentially Predict Male and Female Dropout From Engineering

Nicole Kronberger & Ilona Horwath
Basic and Applied Social Psychology, November/December 2013, Pages 534-546

Abstract:
Stereotype threat may not only affect academic performance and persistence but also the relationship between the two variables. An analysis of the trajectories of 2,397 individuals who began majors in engineering shows a gender gap in graduation rates for those with high and average GPAs. Survey data (N = 455) furthermore highlight that good grades, while reducing academic self-doubt, ironically accentuate female students' social discomfort, and that after dropout, women are more likely than men to show signs of disidentification. For a minority that is met with negative competence expectations, good intellectual performance is no guarantee for persistence.

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Sex bias in evaluating nontraditional job applicants: Reactions to women and men's interrupted college attendance

May Ling Halim & Madeline Heilman
Journal of Applied Social Psychology, November 2013, Pages 2330–2340

Abstract:
Two studies indicated that being a nontraditional job applicant due to voluntary interruption of college attendance had detrimental consequences for employment evaluation. These negative reactions were more severe for women than for men. Women with interrupted attendance received the most negative responses (Studies 1 and 2). Choosing to interrupt college attendance increased perceived instability and also positively affected perceived flexibility, and these characterizations were related to evaluative outcomes (Study 2). Moreover, both instability and flexibility characterizations contributed to the gender-discrepant consequences of interrupted college attendance. Female applicants were rated more negatively on flexibility characterizations than were male applicants. Furthermore, although there were no gender differences in ratings of instability, instability ratings were found to negatively impact evaluations of female applicants, but not male applicants.

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Pathways to Science and Engineering Bachelor Degrees for Men and Women

Joscha Legewie & Thomas DiPrete
Sociological Science, forthcoming

Abstract:
Despite the striking reversal of the gender gap in educational attainment and the near gender parity in math performance, women pursue science and engineering (S/E) degrees at much lower rates than their male peers do. Current efforts to increase the number of women in these fields and close the gender gap focus on different life-course periods but lack a clear understanding of the importance of these periods and how orientations towards S/E fields develop over time. In this paper, we examine the gendered pathways to a S/E bachelor degree from middle school to high school and college based on a representative sample from the 1973-1974 birth cohort. Using a counterfactual decomposition analysis, we determine the relative importance of these different life-course periods and thereby inform the direction of future research and policy. Our findings confirm previous research that highlights the importance of early encouragement for gender differences in S/E degrees. But our findings also attest to the crucial role of the high school years as a decisive period for the gender gap while challenging the focus on college in research and policy. Indeed, if female high school seniors had the same orientation towards and preparation for S/E fields as their male peers, the gender gap in S/E degrees would be closed by as much as 82%.

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Teachers’ Perceptions of Students’ Mathematics Proficiency May Exacerbate Early Gender Gaps in Achievement

Joseph Robinson-Cimpian et al.
Developmental Psychology, forthcoming

Abstract:
A recent wave of research suggests that teachers overrate the performance of girls relative to boys and hold more positive attitudes toward girls’ mathematics abilities. However, these prior estimates of teachers’ supposed female bias are potentially misleading because these estimates (and teachers themselves) confound achievement with teachers’ perceptions of behavior and effort. Using data from the Early Childhood Longitudinal Study, Kindergarten Class of 1998–1999 (ECLS-K), Study 1 demonstrates that teachers actually rate boys’ mathematics proficiency higher than that of girls when conditioning on both teachers’ ratings of behavior and approaches to learning as well as past and current test scores. In other words, on average girls are only perceived to be as mathematically competent as similarly achieving boys when the girls are also seen as working harder, behaving better, and being more eager to learn. Study 2 uses mediation analysis with an instrumental-variables approach, as well as a matching strategy, to explore the extent to which this conditional underrating of girls may explain the widening gender gap in mathematics in early elementary school. We find robust evidence suggesting that underrating girls’ mathematics proficiency accounts for a substantial portion of the development of the mathematics achievement gap between similarly performing and behaving boys and girls in the early grades.

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Gender peer effects in university: Evidence from a randomized experiment

Hessel Oosterbeek & Reyn van Ewijk
Economics of Education Review, February 2014, Pages 51–63

Abstract:
Recent studies for primary and secondary education find positive effects of the share of females in the classroom on achievement of males and females. This study examines whether these results can be extrapolated to higher education. We conduct an experiment in which the shares of females in workgroups for first year students in economics and business are manipulated and students are randomly assigned to these groups. Males tend to postpone, but not abandon, their dropout decision when surrounded by more females and perform worse on courses with high math content. There is also a modest reduction in absenteeism early in the year. Overall, however, we find no substantial gender peer effects on achievement. This in spite of the fact that according to students’ perceptions, both their own, and their peers’ behavior are influenced by the share of females.

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Is School Feminine? Implicit Gender Stereotyping of School as a Predictor of Academic Achievement

Anke Heyder & Ursula Kessels
Sex Roles, December 2013, Pages 605-617

Abstract:
One cause proposed for boys’ relatively lower academic achievement is a “feminisation” of schools that might result in a lack of fit between boys’ self-concept and academic engagement. Research so far has investigated math-male and language-female stereotypes, but no school-female stereotypes. Our study tested for implicit gender stereotyping of school and its impact on boys’ achievement in N = 122 ninth-graders from a large city in Western Germany using the Go/No-go Association Task (GNAT). Gender role self-concept and grades in math (representing an academic domain stereotyped as male) and German (domain stereotyped as female) were assessed using written questionnaires. It was found that, overall, students associated school more strongly with female than with male, and that this association of school with female was related to boys’ academic achievement. The more strongly boys associated school with female and the more they ascribed negative masculine traits to themselves, the lower their grades in German were. Boys’ academic achievement in math was unrelated to the extent to which they perceived school as feminine and themselves as masculine. Girls’ grades in both German and math were unrelated to their gender stereotyping of school. These findings emphasize the importance of fit between a student’s gender, gender role self-concept and gender stereotyping of school for academic achievement. Strategies to improve this fit are discussed.

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From Bench to Board: Gender Differences in University Scientists' Participation in Corporate Scientific Advisory Boards

Waverly Ding, Fiona Murray & Toby Stuart
Academy of Management Journal, October 2013, Pages 1443-1464

Abstract:
This article examines the gender difference in the likelihood that male and female academic scientists will join corporate scientific advisory boards (SABs). We assess (i) demand-side theories that relate the gap in scientists' rate of joining SABs to the opportunity structure of SAB invitations, and (ii) supply-side explanations that attribute that gap to scientists' preferences for work of this type. We statistically examine the demand- and supply-side perspectives in a national sample of 6,000 life scientists whose careers span more than 30 years. Holding constant professional achievement, network ties, employer characteristics, and research foci, male scientists are almost twice as likely as females to serve on the SABs of biotechnology companies. We do not find evidence in our data supporting a choice-based explanation for the gender gap. Instead, demand-side theoretical perspectives focusing on gender-stereotyped perceptions and the unequal opportunities embedded in social networks appear to explain some of the gap.

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Appointments, Pay and Performance in UK boardrooms by Gender

Ian Gregory-Smith, Brian Main & Charles O'Reilly
Economic Journal, forthcoming

Abstract:
This paper uses UK data to examine issues regarding the scarcity of women in boardroom positions. The paper examines appointments, pay and any associated productivity effects deriving from increased diversity. Evidence of gender-bias in the appointment of women as non-executive directors is found together with mixed evidence of discrimination in wages or fees paid. However, the paper finds no support for the argument that gender diverse boards enhance corporate performance. Proposals in favour of greater board diversity may be best structured around the moral value of diversity, rather than with reference to an expectation of improved company performance.

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Gender-Heterogeneous Working Groups Produce Higher Quality Science

Lesley Campbell et al.
PLoS ONE, October 2013

Abstract:
Here we present the first empirical evidence to support the hypothesis that a gender-heterogeneous problem-solving team generally produced journal articles perceived to be higher quality by peers than a team comprised of highly-performing individuals of the same gender. Although women were historically underrepresented as principal investigators of working groups, their frequency as PIs at the National Center for Ecological Analysis and Synthesis is now comparable to the national frequencies in biology and they are now equally qualified, in terms of their impact on the accumulation of ecological knowledge (as measured by the h-index). While women continue to be underrepresented as working group participants, peer-reviewed publications with gender-heterogeneous authorship teams received 34% more citations than publications produced by gender-uniform authorship teams. This suggests that peers citing these publications perceive publications that also happen to have gender-heterogeneous authorship teams as higher quality than publications with gender uniform authorship teams. Promoting diversity not only promotes representation and fairness but may lead to higher quality science.

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Strategy Training Eliminates Sex Differences in Spatial Problem Solving in a STEM Domain

Mike Stieff et al.
Journal of Educational Psychology, forthcoming

Abstract:
Poor spatial ability can limit success in science, technology, engineering, and mathematics (STEM) disciplines. Many initiatives aim to increase STEM achievement and degree attainment through selective recruitment of high-spatial students or targeted training to improve spatial ability. The current study examines an alternative approach to increasing achievement that includes problem-solving strategy training. In this study, we examined how training in multiple problem-solving strategies affects science achievement and its relations to sex and spatial ability. We compared 3 interventions that trained either mental imagery strategies, analytic problem-solving strategies, or their combination in the context of a college chemistry course. As predicted, students adopted more analytic strategies after analytic training, and women used significantly more analytic strategies than men after instruction. Training in the combined use of mental imagery and analytic strategies eliminated sex differences in achievement, but training in a single type of strategy resulted in a male achievement advantage. Our work demonstrates that achievement is dependent not only on spatial ability but also on strategy choice, and that strategy training offers a viable route to improving the performance of female students.

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Hierarchical Structure and Gender Dissimilarity in American Legal Labor Markets

Ronit Dinovitzer & John Hagan
Social Forces, forthcoming

Abstract:
Research on inequality in the legal profession underemphasizes the macro-level factors that structure legal work. This paper introduces two measures that characterize local legal labor markets. The index of gender dissimilarity is the proportion of women required to move into the private law firm sector from the public sector to create gender balance. The index of hierarchical market structure is defined by a concentration of elite law graduates, highly leveraged law firms, lucrative billings, and corporate clients. Women's salaries increase more rapidly than men's in these markets, yet men continue to out-earn women. Furthermore, HLM models indicate that in labor markets with greater gender dissimilarity, women's wages are significantly depressed. We explain this in terms of mechanisms of opportunity hoarding and exploitation (Tilly 1998).

By KEVIN LEWIS | 09:00:00 AM

Monday, December 9, 2013

Copay

Dispelling An Urban Legend: Frequent Emergency Department Users Have Substantial Burden Of Disease

John Billings & Maria Raven
Health Affairs, December 2013, Pages 2099-2108

Abstract:
Urban legend has often characterized frequent emergency department (ED) patients as mentally ill substance users who are a costly drain on the health care system and who contribute to ED overcrowding because of unnecessary visits for conditions that could be treated more efficiently elsewhere. This study of Medicaid ED users in New York City shows that behavioral health conditions are responsible for a small share of ED visits by frequent users, and that ED use accounts for a small portion of these patients' total Medicaid costs. Frequent ED users have a substantial burden of disease, and they have high rates of primary and specialty care use. They also have linkages to outpatient care that are comparable to those of other ED patients. It is possible to use predictive modeling to identify who will become a repeat ED user and thus to help target interventions. However, policy makers should view reducing frequent ED use as only one element of more-comprehensive intervention strategies for frequent health system users.

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Health Insurance Coverage Predicts Lower Childbearing Among Near-Poor Adolescents

Jacqueline Miller, Deborah Graefe & Gordon De Jong
Journal of Adolescent Health, December 2013, Pages 749-755

Purpose: The impact of health insurance on adolescent childbearing takes on increased salience in the context of the ongoing United States health care debate. Health insurance coverage is important for accessing health care services, including reproductive health services, yet prior research has not examined the association between insurance coverage and childbearing. Consequently, the role of insurance in the prevention of adolescent childbearing has been unclear.

Methods: Using three panels (2001, 2004, and 2008) of the nationally representative Survey of Income and Program Participation data, hierarchical multilevel logistic regression models test the association between pre-pregnancy health insurance coverage and childbearing for a sample of 7,263 unmarried adolescent women (aged 16-19 years), controlling for known correlates of adolescent childbearing. Analyses examine variations in the association based on family income.

Results: The odds of reporting childbearing were almost twice as great for adolescents who were uninsured compared with those who were insured before a pregnancy occurred. Interaction models demonstrate this effect for near-poor adolescents (who are less likely to have health insurance coverage) compared with poor and more advantaged adolescents.

Conclusions: The findings of the current nationally representative study suggest that health insurance coverage is associated with a lower probability of childbearing for near-poor adolescents. Future research should examine potential mechanisms through which insurance coverage influences adolescent childbearing.

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The Effect of Health Insurance on Near-Elderly Health and Mortality

Bernard Black et al.
Northwestern University Working Paper, October 2013

Abstract:
We use the best available longitudinal dataset, the Health and Retirement Survey, and a battery of causal inference methods to provide both central estimates and bounds on the effect of health insurance on health and mortality among the near elderly (initial age 50-61) over an 18-year period. Those uninsured in 1992 consume fewer healthcare services, but are not less healthy and, in our central estimates, do not die sooner than their insured counterparts. We discuss why a zero average effect of uninsurance on mortality and health is plausible, some selection effects that might explain our full results, and methodological concerns with prior studies.

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The Effects of Price Transparency Regulation on Prices in the Healthcare Industry

Hans Bonde Christensen, Eric Floyd & Mark Maffett
University of Chicago Working Paper, October 2013

Abstract:
Policymakers have enacted price transparency regulations in over thirty states during the past decade as an attempt to control rising healthcare costs. This paper provides empirical evidence on the effects of these regulations. Using micro data on actual healthcare purchases, and exploiting both between- and within-state variation to address endogeneity concerns, we find that price transparency regulations reduce the price charged for common, uncomplicated, elective procedures by an average of approximately 7%. Further evidence indicates that the reduction in charge prices is concentrated where competition among providers is most intense and that this reduction is attributable to a decline in the prices charged by the highest priced providers. Among insured patients, reductions in payments are concentrated among the most price sensitive patients, as captured by patients' coinsurance. We also find that insured patients that change providers are more likely to switch to a lower cost provider subsequent to regulation. Overall, our evidence indicates that price transparency regulation leads to a reduction in healthcare prices for patients with incentives to consider costs.

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Competitive bidding in Medicare Advantage: Effect of benchmark changes on plan bids

Zirui Song, Mary Beth Landrum & Michael Chernew
Journal of Health Economics, December 2013, Pages 1301-1312

Abstract:
Bidding has been proposed to replace or complement the administered prices that Medicare pays to hospitals and health plans. In 2006, the Medicare Advantage program implemented a competitive bidding system to determine plan payments. In perfectly competitive models, plans bid their costs and thus bids are insensitive to the benchmark. Under many other models of competition, bids respond to changes in the benchmark. We conceptualize the bidding system and use an instrumental variable approach to study the effect of benchmark changes on bids. We use 2006-2010 plan payment data from the Centers for Medicare and Medicaid Services, published county benchmarks, actual realized fee-for-service costs, and Medicare Advantage enrollment. We find that a $1 increase in the benchmark leads to about a $0.53 increase in bids, suggesting that plans in the Medicare Advantage market have meaningful market power.

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Giving EMS Flexibility In Transporting Low-Acuity Patients Could Generate Substantial Medicare Savings

Abby Alpert et al.
Health Affairs, December 2013, Pages 2142-2148

Abstract:
Some Medicare beneficiaries who place 911 calls to request an ambulance might safely be cared for in settings other than the emergency department (ED) at lower cost. Using 2005-09 Medicare claims data and a validated algorithm, we estimated that 12.9-16.2 percent of Medicare-covered 911 emergency medical services (EMS) transports involved conditions that were probably nonemergent or primary care treatable. Among beneficiaries not admitted to the hospital, about 34.5 percent had a low-acuity diagnosis that might have been managed outside the ED. Annual Medicare EMS and ED payments for these patients were approximately $1 billion per year. If Medicare had the flexibility to reimburse EMS for managing selected 911 calls in ways other than transport to an ED, we estimate that the federal government could save $283-$560 million or more per year, while improving the continuity of patient care. If private insurance companies followed suit, overall societal savings could be twice as large.

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Health Information Exchange, System Size and Information Silos

Amalia Miller & Catherine Tucker
Journal of Health Economics, January 2014, Pages 28-42

Abstract:
There are many technology platforms that bring benefits only when users share data. In healthcare, this is a key policy issue, because of the potential cost savings and quality improvements from 'big data' in the form of sharing electronic patient data across medical providers. Indeed, one criterion used for federal subsidies for healthcare information technology is whether the software has the capability to share data. We find empirically that larger hospital systems are more likely to exchange electronic patient information internally, but are less likely to exchange patient information externally with other hospitals. This pattern is driven by instances where there may be a commercial cost to sharing data with other hospitals. Our results suggest that the common strategy of using 'marquee' large users to kick-start a platform technology has an important drawback of potentially creating information silos. This suggests that federal subsidies for health data technologies based on 'meaningful use' criteria, that are based simply on the capability to share data rather than actual sharing of data, may be misplaced.

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Use of Intensive Care Services and Associated Hospital Mortality After Massachusetts Healthcare Reform

Sarah Lyon et al.
Critical Care Medicine, forthcoming

Objective: To use the natural experiment of health insurance reform in Massachusetts to study the impact of increased insurance coverage on ICU utilization and mortality.

Setting: Massachusetts and four states (New York, Washington, Nebraska, and North Carolina) that did not enact reform.

Patients: All nonpregnant nonelderly adults (age 18-64 yr) admitted to nonfederal acute care hospitals in one of the five states of interest were eligible, excluding patients who were not residents of a respective state at the time of admission.

Measurements: We used a difference-in-differences approach to compare trends in ICU admissions and outcomes of in-hospital mortality and discharge destination for ICU patients.

Main Result: Healthcare reform in Massachusetts was associated with a decrease in ICU patients without insurance from 9.3% to 5.1%. There were no significant changes in adjusted ICU admission rates, mortality, or discharge destination. In a sensitivity analysis excluding a state that enacted Medicaid reform prior to the study period, our difference-in-differences analysis demonstrated a significant increase in mortality of 0.38% per year (95% CI, 0.12-0.64%) in Massachusetts, attributable to a greater per-year decrease in mortality postreform in comparison states (-0.37%; 95% CI, -0.52% to -0.21%) compared with Massachusetts (0.01%; 95% CI, -0.20% to 0.11%).

Conclusion: Massachusetts healthcare reform increased the number of ICU patients with insurance but was not associated with significant changes in ICU use or discharge destination among ICU patients. Reform was also not associated with changed in-hospital mortality for ICU patients; however, this association was dependent on the comparison states chosen in the analysis.

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Physicians' Perceptions of Autonomy across Practice Types: Is Autonomy in Solo Practice a Myth?

Katherine Lin
Social Science & Medicine, January 2014, Pages 21-29

Abstract:
Physicians in the United States are now less likely to practice in smaller, more traditional, solo practices, and more likely to practice in larger group practices. Though older theory predicts conflict between bureaucracy and professional autonomy, studies have shown that professions in general, and physicians in particular, have adapted to organizational constraints. However, much work remains in clarifying the nature of this relationship and how exactly physicians have adapted to various organizational settings. To this end, the present study examines physicians' autonomy experiences in different decision types between organization sizes. Specifically, I ask: In what kinds of decisions do doctors perceive autonomous control? How does this vary by organizational size? Using stacked "spell" data constructed from the Community Tracking Study (CTS) Physician Survey (1996-2005) (n=16,519) I examine how physicians' perceptions of autonomy vary between solo/two physician practices, small group practices with three to ten physicians, and large practices with ten or more physicians, in two kinds of decisions: logistic-based and knowledge-based decisions. Capitalizing on the longitudinal nature of the data I estimate how changes in practice size are associated with perceptions of autonomy, accounting for previous reports of autonomy. I also test whether managed care involvement, practice ownership, and salaried employment help explain part of this relationship. I find that while physicians practicing in larger group practices reported lower levels of autonomy in logistic-based decisions, physicians in solo/two physician practices reported lower levels of autonomy in knowledge-based decisions. Managed care involvement and ownership explain some, but not all, of the associations. These findings suggest that professional adaptation to various organizational settings can lead to varying levels of perceived autonomy across different kinds of decisions.

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Pharmaceutical advertising and Medicare Part D

Darius Lakdawalla, Neeraj Sood & Qian Gu
Journal of Health Economics, December 2013, Pages 1356-1367

Abstract:
We explore how and to what extent prescription drug insurance expansions affect incentives for pharmaceutical advertising. When insurance expansions make markets more profitable, firms respond by boosting advertising. Theory suggests this effect will be magnified in the least competitive drug classes, where firms internalize a larger share of the benefits from advertising. Empirically, we find that the implementation of Part D coincides with a 14-19% increase in total advertising expenditures. This effect is indeed concentrated in the least competitive drug classes. The additional advertising raised utilization among non-elderly patients outside the Part D program by about 3.6%. This is roughly half of the direct utilization effect of Part D on elderly beneficiaries. The results suggest the presence of considerable spillover effects from publicly subsidized prescription drug insurance on the utilization and welfare of consumers outside the program.

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The Impact of Insurance Status on the Outcomes after Aneurysmal Subarachnoid Hemorrhage

Pui Man Rosalind Lai et al.
PLoS ONE, October 2013

Abstract:
Investigation into the association of insurance status with the outcomes of patients undergoing neurosurgical intervention has been limited: this is the first nationwide study to analyze the impact of primary payer on the outcomes of patients with aneurysmal subarachnoid hemorrhage who underwent endovascular coiling or microsurgical clipping. The Nationwide Inpatient Sample (2001-2010) was utilized to identify patients; those with both an ICD-9 diagnosis codes for subarachnoid hemorrhage and a procedure code for aneurysm repair (either via an endovascular or surgical approach) were included. Hierarchical multivariate regression analyses were utilized to evaluate the impact of primary payer on in-hospital mortality, hospital discharge disposition, and length of hospital stay with hospital as the random effects variable. Models were adjusted for patient age, sex, race, comorbidities, socioeconomic status, hospital region, location (urban versus rural), and teaching status, procedural volume, year of admission, and the proportion of patients who underwent ventriculostomy. Subsequent models were also adjusted for time to aneurysm repair and time to ventriculostomy; subgroup analyses evaluated for those who underwent endovascular and surgical procedures separately. 15,557 hospitalizations were included. In the initial model, the adjusted odds of in-hospital mortality were higher for Medicare (OR 1.23, p<0.001), Medicaid (OR 1.23, p<0.001), and uninsured patients (OR 1.49, p<0.001) compared to those with private insurance. After also adjusting for timing of intervention, Medicaid and uninsured patients had a reduced odds of non-routine discharge (OR 0.75, p<0.001 and OR 0.42, p<0.001) despite longer hospital stays (by 8.35 days, p<0.001 and 2.45 days, p = 0.005). Variations in outcomes by primary payer-including in-hospital post-procedural mortality-were more pronounced for patients of all insurance types who underwent microsurgical clipping. The observed differences by primary payer are likely multifactorial, attributable to varied socioeconomic factors and the complexities of the American healthcare delivery system.

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Effects of Physician-Directed Pharmaceutical Promotion on Prescription Behaviors: Longitudinal Evidence

Anusua Datta & Dhaval Dave
NBER Working Paper, November 2013

Abstract:
Spending on prescription drugs (Rx) represents one of the fastest growing components of U.S. healthcare spending, and has coincided with an expansion of pharmaceutical promotional spending. Most (83%) of Rx promotion is directed at physicians in the form of visits by pharmaceutical representatives (known as detailing) and drug samples provided to physicians' offices. Such promotion has come under increased public scrutiny, with critics contending that physician-directed promotion may play a role in raising healthcare costs and may unduly affect physicians' prescribing habits towards more expensive, and possibly less cost-effective, drugs. In this study, we bring longitudinal evidence to bear upon the question of how detailing impacts physicians' prescribing behaviors. Specifically, we examine prescriptions and promotion for a particular drug class based on a nationally-representative sample of 150,000 physicians spanning 24 months. The use of longitudinal physician-level data allows us to tackle some of the empirical concerns in the extant literature, virtually all of which has relied on aggregate national data. We estimate fixed-effects specifications that bypass stable unobserved physician-specific heterogeneity and address potential targeting bias. In addition, we also assess differential effects at both the extensive and intensive margins of prescribing behaviors, and differential effects across physician- and market-level characteristics, questions which have not been explored in prior work. The estimates suggest that detailing has a significant and positive effect on the number of new scripts written for the detailed drug, with an elasticity magnitude of 0.06. This effect is substantially smaller than those in the literature based on aggregate information, suggesting that most of the observed relationship between physician-directed promotion and drug sales is driven by selection bias. Qualitatively consistent with the literature, we find that detailing impacts selective brand-specific demand but does not have any substantial effects on class-level demand. Results also indicate that most of the detailing response may operate at the extensive margin; detailing affects the probability of prescribing the drug more than it affects the number of prescriptions conditional on any prescribing. We draw some implications from these estimates with respect to effects on healthcare costs and public health.

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Are Physicians' Prescribing Decisions Sensitive to Drug Prices? Evidence from a Free-Antibiotics Program

Shanjun Li & Ramanan Laxminarayan
Health Economics, forthcoming

Abstract:
This paper investigates whether patient-level factors, in particular cost considerations, affect the physicians' prescribing decisions. In the context of a natural experiment, we examine the effect of the first US commercial free-antibiotics program on retail antibiotic sales. We find an overall increase in antibiotic prescriptions under the program and substitutions to covered antibiotics from not-covered antibiotics. The shift away from not-covered antibiotics, particularly from those without covered equivalents, indicates a change in the physicians' prescribing decisions. We locate stronger program effects in low-income areas. Our findings, robust to a variety of specifications, are in contrast with previous literature.

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The effect of entry regulation in the health care sector: The case of home health

Daniel Polsky et al.
Journal of Public Economics, forthcoming

Abstract:
The consequences of government regulation in the post-acute care sector are not well understood. We examine the effect of entry regulation on quality of care in home health care by analyzing the universe of hospital discharges during 2006 for publicly insured beneficiaries (about 4.5 million) and subsequent home health admissions to determine whether there is a significant difference in home health utilization, hospital readmission rates, and health care expenditures in states with and without Certificate of Need laws (CON) regulating entry. We identify these effects by looking across regulated and nonregulated states within Hospital Referral Regions, which characterize well-defined health care markets and frequently cross state boundaries. We find that CON states use home health less frequently, but system-wide rehospitalization rates, overall Medicare expenditures, and home health practice patterns are similar. Removing CON for home health would have negligible system-wide effects on health care costs and quality.

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Health Care Utilization Patterns of Homeless Individuals in Boston: Preparing for Medicaid Expansion Under the Affordable Care Act

Monica Bharel et al.
American Journal of Public Health, December 2013, Pages S311-S317

Objectives: We studied 6494 Boston Health Care for the Homeless Program (BHCHP) patients to understand the disease burden and health care utilization patterns for a group of insured homeless individuals.

Methods: We studied merged BHCHP data and MassHealth eligibility, claims, and encounter data from 2010. MassHealth claims and encounter data provided a comprehensive history of health care utilization and expenditures, as well as associated diagnoses, in both general medical and behavioral health services sectors and across a broad range of health care settings.

Results: The burden of disease was high, with the majority of patients experiencing mental illness, substance use disorders, and a number of medical diseases. Hospitalization and emergency room use were frequent and total expenditures were 3.8 times the rate of an average Medicaid recipient.

Conclusions: The Affordable Care Act provides a framework for reforming the health care system to improve the coordination of care and outcomes for vulnerable populations. However, improved health care coverage alone may not be enough. Health care must be integrated with other resources to address the complex challenges presented by inadequate housing, hunger, and unsafe environments.

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Who funds their health savings account and why?

Song Chen, Anthony Lo Sasso & Aneesh Nandam
International Journal of Health Care Finance and Economics, December 2013, Pages 219-232

Abstract:
Health savings account (HSA) enrollment has increased markedly in the last several years, but little is known about the factors affecting account funding decisions. We use a unique data set containing from a bank that exclusively services HSA funds linked to health status, benefit design, plan coverage, and enrollee characteristics from a very large national health insurance company to examine the factors associated with HSA contribution. We found that even small employer contributions had an apparently large effect on the decision to open an account: the account-opening rate was 50 % higher when employers contributed to the account. Conditional on opening an HSA, employee contributions were negatively associated with the amount of employer contribution, contributions rose with age, income, education, and health care need.

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Mortality among High Risk Patients with Acute Myocardial Infarction Admitted to U.S. Teaching-Intensive Hospitals in July: A Retrospective Observational Study

Anupam Jena, Eric Sun & John Romley
Circulation, forthcoming

Background: Studies of whether inpatient mortality in U.S. teaching hospitals rises in July as a result of organizational disruption and relative inexperience of new physicians ('July effect') find small and mixed results, perhaps because study populations primarily include low-risk inpatients whose mortality outcomes are unlikely to exhibit a July effect.

Methods and Results: Using the U.S. Nationwide Inpatient sample, we estimated difference-in-difference models of mortality, percutaneous coronary intervention (PCI) rates, and bleeding complication rates, for high and low risk patients with acute myocardial infarction (AMI) admitted to 98 teaching-intensive and 1353 non-teaching-intensive hospitals during May and July 2002 to 2008. Among patients in the top quartile of predicted AMI mortality (high risk), adjusted mortality was lower in May than July in teaching-intensive hospitals (18.8% in May, 22.7% in July, p<0.01), but similar in non-teaching-intensive hospitals (22.5% in May, 22.8% in July, p=0.70). Among patients in the lowest three quartiles of predicted AMI mortality (low risk), adjusted mortality was similar in May and July in both teaching-intensive hospitals (2.1% in May, 1.9% in July, p=0.45) and non-teaching-intensive hospitals (2.7% in May, 2.8% in July, p=0.21). Differences in PCI and bleeding complication rates could not explain the observed July mortality effect among high risk patients.

Conclusions: High risk AMI patients experience similar mortality in teaching- and non-teaching-intensive hospitals in July, but lower mortality in teaching-intensive hospitals in May. Low risk patients experience no such "July effect" in teaching-intensive hospitals.

By KEVIN LEWIS | 09:00:00 AM


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