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Wednesday, May 21, 2014

From top to bottom

Mirror, mirror on the wall, who's the fairest of them all? Thinking that one is attractive increases the tendency to support inequality

Peter Belmi & Margaret Neale
Organizational Behavior and Human Decision Processes, July 2014, Pages 133-149

Abstract:
Five studies tested the hypothesis that self-perceived attractiveness shapes people's perceptions of their social class (subjective SES), which, in turn, shape how people respond to inequality and social hierarchies. Study 1 found that self-perceived attractiveness was associated with support for group-based dominance and belief in legitimizing ideologies, and that these relationships were mediated by subjective social class. Subsequent experiments showed that higher self-perceived attractiveness increased subjective SES, which in turn, increased SDO (Study 2 and Study 5); promoted stronger beliefs in dispositional causes of inequality (Study 3); and reduced donations to a movement advocating for social equality (Study 4). By contrast, lower self-perceived attractiveness decreased subjective SES, which in turn, led to a greater tendency to reject social hierarchies and to construe inequality in terms of contextual causes. These effects emerged even after controlling for power, status, and self-esteem, and were not simply driven by inducing people to see themselves positively on desirable traits (Study 4 and Study 5).

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A Sense of Powerlessness Fosters System Justification: Implications for the Legitimation of Authority, Hierarchy, and Government

Jojanneke van der Toorn et al.
Political Psychology, forthcoming

Abstract:
In an attempt to explain the stability of hierarchy, we focus on the perspective of the powerless and how a subjective sense of dependence leads them to imbue the system and its authorities with legitimacy. In Study 1, we found in a nationally representative sample of U.S. employees that financial dependence on one's job was positively associated with the perceived legitimacy of one's supervisor. In Study 2, we observed that a general sense of powerlessness was positively correlated with the perceived legitimacy of the economic system. In Studies 3 and 4, priming experimental participants with feelings of powerlessness increased their justification of the social system, even when they were presented with system-challenging explanations for race, class, and gender disparities. In Study 5, we demonstrated that the experience of powerlessness increased legitimation of governmental authorities (relative to baseline conditions). The processes we identify are likely to perpetuate inequality insofar as the powerless justify rather than strive to change the hierarchical structures that disadvantage them.

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The Political Economy of Ownership: Housing Markets and the Welfare State

Ben Ansell
American Political Science Review, forthcoming

Abstract:
The major economic story of the last decade has been the surge and collapse of house prices worldwide. Yet political economists have had little to say about how this critical phenomenon affects citizens' welfare and their demands from government. This article develops a novel theoretical argument linking housing prices to social policy preferences and policy outcomes. I argue that homeowners experiencing house price appreciation will become less supportive of redistribution and social insurance policies since increased house prices both increase individuals' permanent income and the value of housing as self-supplied insurance against income loss. Political parties of the right will, responding to these preferences, cut social spending substantially during housing booms. I test these propositions using both microdata on social preferences from panel surveys in the USA, the UK, and a cross-country survey of 29 countries, and macrodata of national social spending for 18 countries between 1975 and 2001.

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Does Radical Partisan Politics Affect National Income Distributions? Congressional Polarization and Income Inequality in the United States, 1913-2008

Roy Kwon
Social Science Quarterly, forthcoming

Objective: Recent research indicates that political polarization in Congress and income inequality share a closely linked positive association. But virtually no studies examine the direction of influence between these variables as it is assumed that income inequality causes political polarization. The major purpose of this investigation is to examine the temporal causal ordering of these variables.

Methods: This study constructs a time series national-level data set with information for the years 1913 to 2008. Vector autoregression and granger causality tests are utilized to explore the temporal causal ordering of congressional polarization and the income share of the top 0.1, 1.0, 5.0, and 10.0 percent of earners in the United States. Autoregressive conditional heteroskedasticity regressions are also employed to assess the strength of the association between congressional polarization and top incomes net of relevant control variables.

Results: The findings indicate that the past values of congressional polarization are better predictors of top income shares than vice versa. The results also demonstrate that polarization in the House of Representatives produces a more consistent and robust connection with top incomes than polarization in the Senate. Lastly, congressional polarization only produces robust associations with the income share of the top 0.1 and 1.0 percent of earners but not for the top 5.0 and 10.0 percent.

Conclusion: While the Senate possesses more powerful negative agenda control procedures to stifle the legislative processes vis-à-vis the House, it is polarization in the latter that returns the more robust associations with income inequality.

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Social class differences produce social group preferences

Suzanne Horwitz, Kristin Shutts & Kristina Olson
Developmental Science, forthcoming

Abstract:
Some social groups are higher in socioeconomic status than others and the former tend to be favored over the latter. The present research investigated whether observing group differences in wealth alone can directly cause children to prefer wealthier groups. In Experiment 1, 4-5-year-old children developed a preference for a wealthy novel group over a less wealthy group. In Experiment 2, children did not develop preferences when groups differed by another kind of positive/negative attribute (i.e. living in brightly colored houses vs. drab houses), suggesting that wealth is a particularly meaningful group distinction. Lastly, in Experiment 3, the effect of favoring novel wealthy groups was moderated by group membership: Children assigned to a wealthy group showed ingroup favoritism, but those assigned to a less wealthy group did not. These experiments shed light on why children tend to be biased in favor of social groups that are higher in socioeconomic status.

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The Decline of the U.S. Labor Share

Michael Elsby, Bart Hobijn & Ayşegül Şahin
Brookings Papers on Economic Activity, Fall 2013, Pages 1-63

Abstract:
Over the past quarter century, labor's share of income in the United States has trended downward, reaching its lowest level in the postwar period after the Great Recession. A detailed examination of the magnitude, determinants, and implications of this decline delivers five conclusions. First, about a third of the decline in the published labor share appears to be an artifact of statistical procedures used to impute the labor income of the self-employed that underlies the headline measure. Second, movements in labor's share are not solely a feature of recent U.S. history: The relative stability of the aggregate labor share prior to the 1980s in fact veiled substantial, though offsetting, movements in labor shares within industries. By contrast, the recent decline has been dominated by the trade and manufacturing sectors. Third, U.S. data provide limited support for neoclassical explanations based on the substitution of capital for (unskilled) labor to exploit technical change embodied in new capital goods. Fourth, prima facie evidence for institutional explanations based on the decline in unionization is inconclusive. Finally, our analysis identifies offshoring of the labor-intensive component of the U.S. supply chain as a leading potential explanation of the decline in the U.S. labor share over the past 25 years.

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Crowding Out Culture: Scandinavians and Americans Agree on Social Welfare in the Face of Deservingness Cues

Lene Aarøe & Michael Bang Petersen
Journal of Politics, forthcoming

Abstract:
A robust finding in the welfare state literature is that public support for the welfare state differs widely across countries. Yet recent research on the psychology of welfare support suggests that people everywhere form welfare opinions using psychological predispositions designed to regulate interpersonal help giving using cues regarding recipient effort. We argue that this implies that cross-national differences in welfare support emerge from mutable differences in stereotypes about recipient efforts rather than deep differences in psychological predispositions. Using free-association tasks and experiments embedded in large-scale, nationally representative surveys collected in the United States and Denmark, we test this argument by investigating the stability of opinion differences when faced with the presence and absence of cues about the deservingness of specific welfare recipients. Despite decades of exposure to different cultures and welfare institutions, two sentences of information can make welfare support across the U.S. and Scandinavian samples substantially and statistically indistinguishable.

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Economic Background and Educational Attainment: The Role of Gene-Environment Interactions

Owen Thompson
Journal of Human Resources, Spring 2014, Pages 263-294

Abstract:
On average, children from less economically privileged households have lower levels of educational attainment than their higher-income peers, and this association has important implications for intergenerational mobility and equality of opportunity. This paper shows that the income-education association varies greatly across groups of children with different versions of a specific gene, monoamine-oxidase A (MAOA), which impacts neurotransmitter activity. For children with one MAOA variant, increases in household income have the expected positive association with education. For children with another variant, who comprise over half of the population, this relationship is much weaker. These results hold when the interactive effects are identified using genetic variation between full biological siblings, which genetic principles assert is as good as randomly assigned.

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Personality and the Reproduction of Social Class

Michael Shanahan et al.
Social Forces, forthcoming

Abstract:
A burgeoning literature in psychology and economics examines how personality characteristics predict indicators of attained status. We build on this research by suggesting that connections between personality and attained status are also socially contingent: Valued personality characteristics are stronger predictors of attainments at lower levels of parent education (the resource substitution hypothesis), but such characteristics are less likely among the children of less educated parents (the structural amplification hypothesis). We examine these possibilities by drawing on the Mini-IPIP (a standardized instrument assessing personality), the National Longitudinal Study of Adolescent Health, and a statistical framework to test for moderated mediation. Results reveal that (1) personality characteristics have notable associations with educational attainment, hourly wages, and self-direction at work; (2) personality often has stronger associations with status attainments at lower levels of parent education; and (3) personality is a weak mediator of associations between parent education and attained status. That is, the children of less educated parents may benefit more from valued personality characteristics, but they are slightly less likely to possess such characteristics. These results are discussed in terms of new avenues for research into diverse forms of capital and status attainment.

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Globalization and Top Income Shares

Lin Ma
U.S. Census Bureau Working Paper, February 2014

Abstract:
How does globalization affect the income gaps between the rich and the poor? This paper presents a new piece of empirical evidence showing that access to the global market, either through exporting or through multinational production, is associated with a higher executive-to-worker pay ratio within the firm. It then builds a model with heterogeneous firms, occupational choice, and executive compensation to model analytically and assess quantitatively the impact of globalization on the income gaps between the rich and the poor. The key mechanism is that the "gains from trade" are not distributed evenly within the same firm. The compensation of an executive is positively linked to the size of the firm, while the wage paid to the workers is determined in a country-wide labor market. Any extra profit earned in the foreign markets benefits the executives more than the average worker. Counterfactual exercises suggest that this new channel is quantitatively important for the observed surge in top income shares in the data. Using the changes in the volume of trade and multinational firm sales, the model can explain around 33 percent of the surge in top income shares over the past two decades in the United States.

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Trends in Earnings Differentials across College Majors and the Changing Task Composition of Jobs

Joseph Altonji, Lisa Kahn & Jamin Speer
American Economic Review, May 2014, Pages 387-393

Abstract:
We show that, among college graduates, earnings differentials across field of study have increased substantially since the early 1990s. We study the degree to which this increase can be accounted for by changes in the labor market return to skills associated with a major. To do so, we define major-specific measures of the relative importance of abstract, routine, and manual tasks on the job, by linking majors to the occupations they typically lead to. Changes in the relationship between earnings and these measures can account for about two-thirds of the rise in inequality.

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Bringing Productivity Back In: Rising Inequality and Economic Rents in the U.S. Manufacturing Sector, 1971 to 2001

Arthur Sakamoto & ChangHwan Kim
Sociological Quarterly, Spring 2014, Pages 282-314

Abstract:
Using data on earnings and productivity for U.S. manufacturing industries from 1971 to 2001, we investigate economic rents and rising income inequalities. The results suggest that rents are most significant for managers, professionals, middle-aged workers, and older workers. Conversely, negative rents are evident for women, Hispanics, single men, and blue-collar workers. The underpayment of Hispanics appears to have increased while African Americans have gone from being underpaid to being overpaid. Workers with a college degree have become overpaid (i.e., "credentialism") while "gift-exchange" efficiency wages have declined. The marginal productivity of labor input has increased but is increasingly underpaid.

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Taxation and the Allocation of Talent

Benjamin Lockwood, Charles Nathanson & Glen Weyl
University of Chicago Working Paper, April 2014

Abstract:
Income taxation affects the allocation of talent by blunting the material incentives to enter high-paying professions. If, as the literature suggests, the ratio of social to private product is lower in high-paying professions (e.g., finance and law) than in low-paying professions (e.g., teaching and scientific research), progressive taxation is justified even absent a redistributive motive. Optimal taxes are highly sensitive to the size of externalities, which are currently poorly measured. Under our baseline calibration drawn from the literature, the Reagan tax reforms account for a fifth of the increase in pre-tax top income shares and reduce output.

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The Draft and the Intergenerational Transmission of Human Capital

Moiz Bhai
University of Illinois Working Paper, March 2014

Abstract:
Understanding the transmission of success from generation to the next remains a salient issue for public policy. The peacetime draft in the United States provides a large scale natural experiment to explore the impacts of an intensive policy intervention. Draftees incurred large wage penalties during and beyond their initial period of military service. Economists have consequently characterized the draft as a tax. Using an instrumental variables research design with data from the Wisconsin Longitudinal Study, the present study investigates the intergenerational human capital spillovers of the draft. I find the intergenerational costs of the draft for children of men that were drafted during peacetime to be two-thirds of a year less of schooling than children of men that were not drafted. Further analysis of the effects by the gender of children reveals considerably stronger impacts on boys than girls. In contrast, children of men from the whole military sample show a negligible impact of paternal military service on their educational attainment.

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Living Among the Affluent: Boon or Bane?

Louis Tay, Mike Morrison & Ed Diener
Psychological Science, forthcoming

Abstract:
This study examined whether national income can have effects on happiness, or subjective well-being (SWB), over and above those of personal income. To assess the incremental effects of national income on SWB, we conducted cross-sectional multilevel analysis on data from 838,151 individuals in 158 nations. Although greater personal income was consistently related to higher SWB, we found that national income was a boon to life satisfaction but a bane to daily feelings of well-being; individuals in richer nations experienced more worry and anger on average. We also found moderating effects: The income-SWB relationship was stronger at higher levels of national income. This result might be explained by cultural norms, as money is valued more in richer nations. The SWB of more residentially mobile individuals was less affected by national income. Overall, our results suggest that the wealth of the nation one resides in has consequences for one's happiness.

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The Wage Premium Puzzle and the Quality of Human Capital

Milton Marquis, Bharat Trehan & Wuttipan Tantivong
International Review of Economics & Finance, September 2014, Pages 100-110

Abstract:
The wage premium for high-skilled workers in the United States, measured as the ratio of the 90th-to-10th percentiles from the wage distribution, increased by 20 percent from the 1970s to the late 1980s. A large literature has emerged to explain this phenomenon. A leading explanation is that skill-biased technological change (SBTC) increased the demand for skilled labor relative to unskilled labor. In a calibrated vintage capital model with heterogenous labor, this paper examines whether SBTC is likely to have been a major factor in driving up the wage premium. Our results suggest that the contribution of SBTC is very small, accounting for about 1/20th of the observed increase. By contrast, a gradual and very modest shift in the distribution of human capital across workers can easily account for the large observed increase in wage inequality.

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Is Universal Child Care Leveling the Playing Field?

Tarjei Havnes & Magne Mogstad
Journal of Public Economics, forthcoming

Abstract:
We assess the case for universal child care programs in the context of a Norwegian reform which led to a large-scale expansion of subsidized child care. We use non-linear difference-in-differences methods to estimate the quantile treatment effects of the reform. We find that the effects of the child care expansion were positive in the lower and middle part of the earnings distribution of exposed children as adults, and negative in the uppermost part. We complement this analysis with local linear regressions of the child care effects by family income. We find that most of the gains in earnings associated with the universal child care program relate to children of low income parents, whereas upper-class children actually experience a loss in earnings. In line with the differential effects by family income, we estimate that the universal child care program substantially increased intergenerational income mobility. To interpret the estimated heterogeneity in child care effects, we examine the mediating role of educational attainment and cognitive test scores, and show that our estimates are consistent with a simple model where parents make a tradeoff between current family consumption and investment in children. Taken together, our findings could have important implications for the policy debate over universal child care programs, suggesting that the benefits of providing subsidized child care to middle and upper-class children are unlikely to exceed the costs. Our study also points to the importance of universal child care programs in explaining differences in earnings inequality and income mobility across countries and over time.

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A Comparison of Upward and Downward Intergenerational Mobility in Canada, Sweden and the United States

Miles Corak, Matthew Lindquist & Bhashkar Mazumder
Labour Economics, forthcoming

Abstract:
We use new estimators of directional rank mobility developed by Bhattacharya and Mazumder (2011) to compare rates of upward and downward intergenerational mobility across three countries: Canada, Sweden and the United States. These measures overcome some of the limitations of traditional measures of intergenerational mobility such as the intergenerational elasticity, which are not well suited for analyzing directional movements or for examining differences in mobility across the income distribution. Data for each country include highly comparable, administrative data sources containing sufficiently long time spans of earnings. Our most basic measures of directional mobility, which simply compare whether sons moved up or down in the earnings distribution relative to their fathers, do not differ much across the countries. However, we do find that there are clear differences in the extent of the movement. We find larger cross-country differences in downward mobility from the top of the distribution than upward mobility from the bottom. Canada has the most downward mobility while the U.S. has the least, with Sweden in the middle. We find some differences in upward mobility but these are somewhat smaller in magnitude. An important caveat is that our analysis may be sensitive to the concept of income we use and broader measures such as family income could lead to different conclusions. Also, small differences in rank mobility translate into rather large differences in absolute mobility measured in dollars, due to large differences in income inequality across countries.

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Income inequality in today's China

Yu Xie & Xiang Zhou
Proceedings of the National Academy of Sciences, 13 May 2014, Pages 6928-6933

Abstract:
Using multiple data sources, we establish that China's income inequality since 2005 has reached very high levels, with the Gini coefficient in the range of 0.53-0.55. Analyzing comparable survey data collected in 2010 in China and the United States, we examine social determinants that help explain China's high income inequality. Our results indicate that a substantial part of China's high income inequality is due to regional disparities and the rural-urban gap. The contributions of these two structural forces are particularly strong in China, but they play a negligible role in generating the overall income inequality in the United States, where individual-level and family-level income determinants, such as family structure and race/ethnicity, play a much larger role.

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The Great Compression of the French Wage Structure, 1969-2008

Gregory Verdugo
Labour Economics, June 2014, Pages 131-144

Abstract:
Wage inequality decreased continuously in France from 1969 to 2008. In contrast to the US and the UK, this period was also characterised by a substantial increase in the educational attainment of the labour force. This paper investigates whether differences in the timing of educational expansion over the last forty years can explain the divergent evolution of upper tail wage inequality in France relative to other countries. Using a model with imperfect substitution between experience groups, the estimates suggest that the rapid increase in the supply of educated workers during the 1970s and 1990s produced a substantial decline in the skill premium within cohorts. As a result, between a third and half of the decline in wage inequality at the top of the distribution in France during this period is explained by the increase in the educational attainment of the labour force.

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Using vehicle value as a proxy for income: A case study on Atlanta's I-85 HOT lane

Sara Khoeini & Randall Guensler
Research in Transportation Economics, forthcoming

Abstract:
In the two previous decades, high-occupancy toll (HOT) lanes have been used to provide shorter and reliable travel option utilizing congestion pricing. To investigate the disproportionate distribution of the HOT lane benefits among demographic groups, previous studies have conducted surveys from a small portion of the travelers. Considering the high cost and time-intensiveness of surveys, this study proposes the application of vehicle value as a proxy for income on the Atlanta I-85 HOT corridor. More than 300,000 license-plate records were collected across all the lanes during peak periods of spring and summer 2012. The State vehicle registration database was employed to obtain vehicle characteristics from license-plate observations, which were then processed to estimate vehicle value. The results show that there is 23% difference between average vehicle value across HOT lane and general purpose lanes. To support the proposed methodology, the research team used targeted market income data which demonstrates notably similar trends of differences across the lanes. This study once again rejects the concept of "Lexus Lane" by illustrating that significant amount of low-income users are using the HOT lane; however, very high income travelers are using HOT lane twice as frequent as low-income travelers.

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Jumping off of the Great Gatsby curve: How institutions facilitate entrepreneurship and intergenerational mobility

Christopher Boudreaux
Journal of Institutional Economics, June 2014, Pages 231-255

Abstract:
Income inequality is often attributed to declines in income mobility following the Great Gatsby curve, but this relationship is of secondary importance in determining the factors of income mobility if one considers that changing rules is more important than changing outcomes under defined rules. Rather, improvements in institutional quality are hypothesized to increase income mobility by allowing entrepreneurs the freedom to pursue their dreams. This paper is the first to empirically analyze the institutional determinants behind entrepreneurship, and their effect on income mobility. The findings from a cross-country analysis suggest that secure property rights and less corruption are associated with less income persistence, leading to higher income mobility, independent of the Great Gatsby effect. This suggests that reducing corruption and protection of property rights increase income mobility through the channels of entrepreneurship.

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Why Inequality Makes Europeans Less Happy: The Role of Distrust, Status Anxiety, and Perceived Conflict

Jan Delhey & Georgi Dragolov
European Sociological Review, April 2014, Pages 151-165

Abstract:
Are more equal societies 'better' societies? This article addresses the question as to whether and why income inequality lowers the degree of Europeans' subjective well-being. While in broad international comparisons typically no clear-cut link between income inequality and (un)happiness exists, we can demonstrate that Europeans are somewhat less happy in more unequal places. We further discuss and empirically test three explanations as to why Europeans are inequality-averse, namely (dis)trust, status anxiety, and perceived conflicts. Each of these three potential mediators is hypothesized to be shaped by the extent of a nation's income inequality, and in turn to result in lower subjective well-being. A multilevel mediation analysis with data from the European Quality of Life Survey 2007 for 30 countries reveals that distrust and status anxiety are important mediators of inequality aversion, whereas perceived conflict is not. We can further show that trust is the crucial mediator among affluent societies, whereas status anxiety is crucial among the less affluent societies. The results are discussed with reference to the Spirit Level theory developed by Richard Wilkinson and Kate Pickett.

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Field experiments of success-breeds-success dynamics

Arnout van de Rijt et al.
Proceedings of the National Academy of Sciences, 13 May 2014, Pages 6934-6939

Abstract:
Seemingly similar individuals often experience drastically different success trajectories, with some repeatedly failing and others consistently succeeding. One explanation is preexisting variability along unobserved fitness dimensions that is revealed gradually through differential achievement. Alternatively, positive feedback operating on arbitrary initial advantages may increasingly set apart winners from losers, producing runaway inequality. To identify social feedback in human reward systems, we conducted randomized experiments by intervening in live social environments across the domains of funding, status, endorsement, and reputation. In each system we consistently found that early success bestowed upon arbitrarily selected recipients produced significant improvements in subsequent rates of success compared with the control group of nonrecipients. However, success exhibited decreasing marginal returns, with larger initial advantages failing to produce much further differentiation. These findings suggest a lesser degree of vulnerability of reward systems to incidental or fabricated advantages and a more modest role for cumulative advantage in the explanation of social inequality than previously thought.

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Preschoolers Reduce Inequality While Favoring Individuals With More

Vivian Li, Brian Spitzer & Kristina Olson
Child Development, May/June 2014, Pages 1123-1133

Abstract:
Inequalities are everywhere, yet little is known about how children respond to people affected by inequalities. This article explores two responses - minimizing inequalities and favoring those who are advantaged by them. In Studies 1a (N = 37) and 1b (N = 38), 4- and 5-year-olds allocated a resource to a disadvantaged recipient, but judged advantaged recipients more positively. In Studies (N = 38) and (N = 74), a delay occurred between seeing the inequality and allocating resources, or stating a preference, during which time participants forgot who was initially more advantaged. Children then favored advantaged recipients on the preference and resource allocation measures, suggesting an implicit "affective tagging" mechanism drives the tendency to favor the advantaged. In contrast, reducing inequalities through resource allocation appears to require explicit reasoning.

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Badly off or better off than them? The impact of relative deprivation and relative gratification on intergroup discrimination

Silvia Moscatelli et al.
Journal of Personality and Social Psychology, forthcoming

Abstract:
This research examines for the 1st time the effects of relative deprivation and relative gratification, based on social comparison, on implicit and overt forms of discrimination toward the outgroup in a minimal group setting. Study 1 showed that compared to a control condition, relative deprivation and relative gratification enhanced implicit discrimination - measured through variations of linguistic abstraction in intergroup descriptions. Whereas both relative deprivation and relative gratification produced linguistic ingroup favoritism, linguistic productions of relatively deprived groups also conveyed outgroup derogation. Study 2 showed that relatively deprived and relatively gratified groups were overtly discriminatory in intergroup allocations of negative outcomes. The effects of relative deprivation were mediated by perceived intergroup rivalry and, in part, by perceived common fate. Perceived common fate partly accounted for the effects of relative gratification. Study 3 focused on mediators of relative gratification. First, members of relatively gratified (vs. control) groups worried about losing the ingroup advantage, which together worked as sequential mediators of discrimination. Second, relatively gratified groups reported higher existential guilt, which, in turn, was related to expectations of discrimination by the relatively deprived outgroup, and these sequentially mediated the effects of relative gratification. Overall, these studies highlight that both relative deprivation and relative gratification enhance intergroup discrimination and contribute to the understanding of the underlying processes.

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Numerosity effects in income inequality perceptions: Why relative increases in income seem bad

Christophe Lembregts & Mario Pandelaere
Journal of Economic Psychology, forthcoming

Abstract:
Most research on income inequality implicitly assumes that a fixed percentage increase in income across all income levels does not alter income inequality. In contrast with this assumption, we show that relative increases in income lead to increased perceptions of inequality, even when buying power is held constant. In a second experiment, we extended these findings using a fictitious currency, thereby eliminating effects of using a familiar currency. In study 3, we demonstrate that feelings of envy and fairness are affected by a fixed percentage income increase.

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Inequality in democracies: Testing the classic democratic theory of redistribution

Brandon Pecoraro
Economics Letters, June 2014, Pages 398-401

Abstract:
The classic democratic theory of redistribution claims that an increase in the mean-to-median (MM) income ratio causes a majority coalition in the electorate to collectively demand more redistribution. The functional dependence of redistribution on the MM income ratio is tested in parametric and nonparametric regression frameworks using an OECD panel dataset. While the parametric regression model is found to be misspecified rendering subsequent inference invalid, the robust nonparametric regression model fails to uncover evidence that the MM income ratio is relevant for predicting redistribution.

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U.S. Pensions in the 2000s: The Lost Decade?

Edward Wolff
Review of Income and Wealth, forthcoming

Abstract:
The last three decades saw a sharp decline in traditional defined benefit (DB) pensions and a corresponding rise in defined contribution (DC) plans. Using the Survey of Consumer Finances from 1983 to 2010, I find that after robust gains in the 1980s and 1990s, pension wealth experienced a marked slowdown in growth from 2001 to 2007 and then fell in absolute terms from 2007 to 2010. Median augmented wealth (the sum of net worth, pensions, and Social Security wealth) advanced slower than median net worth from 1983 to 2007 and its inequality rose more, as DB wealth fell off. However, from 2007 to 2010, the opposite occurred. While median wealth plummeted by 41 percent and inequality spiked by 0.032 Gini points, median augmented wealth fell by only 21 percent and its Gini coefficient rose by only 0.009 points. The differences are due to the moderating influence of Social Security wealth.

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Money in the Bank: Feeling Powerful Increases Saving

Emily Garbinsky, Anne-Kathrin Klesse & Jennifer Aaker
Journal of Consumer Research, forthcoming

Abstract:
Across five studies, this research reveals that feeling powerful increases saving. This effect is driven by the desire to maintain one's current state. When the purpose of saving is no longer to accumulate money, but to spend it on a status-related product, the basic effect is reversed and those who feel powerless save more. Further, if money can no longer aid in maintaining one's current state, because power is already secure or because power is maintained by accumulating an alternative resource (e.g., knowledge), the effect of feeling powerful on saving disappears. These findings are discussed in light of their implications for research on power and saving.

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What Catches the Envious Eye? Attentional Biases Within Malicious and Benign Envy

Jan Crusius & Jens Lange
Journal of Experimental Social Psychology, forthcoming

Abstract:
We investigated how early attention allocation is biased in envy. Recent research has shown that people experience envy in two distinct forms: malicious envy, which is associated with the motivation to harm the position of a superior other, and benign envy, which is associated with the motivation to improve oneself by moving upward. Based on a functional account of the two forms of envy, we predicted that within malicious envy the cognitive system is geared more strongly toward the other person than toward the superior fortune of the other. In contrast, only within benign envy the cognitive system should be geared toward opportunities to level oneself up. We investigated these hypotheses with dot probe tasks. In line with our reasoning, Experiments 1 (N = 84) and 2 (N = 78) demonstrate that within malicious envy, attention is biased more toward the envied person than toward the envy object, whereas in benign envy, this difference does not occur. Experiment 3 (N = 104) provides evidence that within benign envy, but not in malicious envy, attention is biased toward means to improve one's own outcome. The results suggest that within benign and malicious envy, early cognitive processing is tuned toward different stimuli and thus highlight the utility of functional and process-oriented approaches to studying envy.

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Living the high life: Social status influences real estate decision making

Sarah Tower-Richardi et al.
Journal of Applied Social Psychology, forthcoming

Abstract:
Social status is associated with the vertical spatial dimension, with people conceptualizing higher social status with higher vertical positions. Two experiments tested whether this association influences relatively real-world decisions about others by asking participants to act as real estate agents, aiding in the relocation of clients who explicitly or implicitly varied in social status. Across experiments, higher status clients were placed into higher elevation housing options. This influence of social status persisted when strategy-aware participants were removed from analysis, and was not influenced by individual differences in social dominance or locus of control. Abstract concepts of social status are understood through associations with vertical space, and these mapping of abstract concepts to concrete percepts prove influential in guiding daily decisions.

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Switching Regression Estimates of the Intergenerational Persistence of Consumption

Sheng Guo
Economic Inquiry, forthcoming

Abstract:
The influential economic theory of intergenerational transfers predicts a negative connection between credit constraints and intergenerational mobility of consumption. Existing work has used bequest receipt to signal a parent's access to credit markets when investing in his children's human capital. However, measurement error in bequest receipt generates misclassification error and, in turn, attenuation bias. Employing switching regressions with imperfect sample separation to deal with this error, we show that the intergenerational persistence of consumption in the United States for credit constrained families is much higher than that for unconstrained families, contrary to what the theory implies. This means that children from constrained families are more likely to have consumption levels similar to those of their parents than children from unconstrained families. Our results are robust to the choice of bequest variables and other predictive variables in the switching equation.

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Instability and Concentration in the Distribution of Wealth

Ricardo Fernholz & Robert Fernholz
Journal of Economic Dynamics and Control, forthcoming

Abstract:
We consider a setup in which infinitely-lived households face idiosyncratic investment risk and show that in this case the equilibrium distribution of wealth becomes increasingly right-skewed over time until wealth concentrates entirely at the top. The households in our setup are identical in terms of their patience and their abilities, and we assume that there are no redistributive mechanisms - neither explicit in the form of government tax or fiscal policies, nor implicit in the form of limited intergenerational transfers. Our results demonstrate that the presence of such redistributive mechanisms alone ensures the stability of the distribution of wealth over time.

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Molecular genetic contributions to socioeconomic status and intelligence

Riccardo Marioni et al.
Intelligence, May-June 2014, Pages 26-32

Abstract:
Education, socioeconomic status, and intelligence are commonly used as predictors of health outcomes, social environment, and mortality. Education and socioeconomic status are typically viewed as environmental variables although both correlate with intelligence, which has a substantial genetic basis. Using data from 6815 unrelated subjects from the Generation Scotland study, we examined the genetic contributions to these variables and their genetic correlations. Subjects underwent genome-wide testing for common single nucleotide polymorphisms (SNPs). DNA-derived heritability estimates and genetic correlations were calculated using the 'Genome-wide Complex Trait Analyses' (GCTA) procedures. 21% of the variation in education, 18% of the variation in socioeconomic status, and 29% of the variation in general cognitive ability was explained by variation in common SNPs (SEs ~ 5%). The SNP-based genetic correlations of education and socioeconomic status with general intelligence were 0.95 (SE 0.13) and 0.26 (0.16), respectively. There are genetic contributions to intelligence and education with near-complete overlap between common additive SNP effects on these traits (genetic correlation ~ 1). Genetic influences on socioeconomic status are also associated with the genetic foundations of intelligence. The results are also compatible with substantial environmental contributions to socioeconomic status.

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Voters, dictators, and peons: Expressive voting and pivotality

Emir Kamenica & Louisa Egan Brad
Public Choice, April 2014, Pages 159-176

Abstract:
Why do the poor vote against redistribution? We examine one explanation experimentally, namely that individuals gain direct expressive utility from voting in accordance with their ideology and understand that they are unlikely to be pivotal; hence, their expressive utility, even if arbitrarily small, determines their voting behavior. In contrast with a basic prediction of this model, we find that the probability of being pivotal does not affect the impact of monetary interest on whether a subject votes for redistribution.

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Evidence for Two Facets of Pride in Consumption: Findings From Luxury Brands

Brent McFerran, Karl Aquino & Jessica Tracy
Journal of Consumer Psychology, forthcoming

Abstract:
This paper documents the multifaceted nature of pride in consumer behavior. Drawing on recent psychological research on pride, we provide evidence for two separate facets of pride in consumption. In a series of studies, we propose a model wherein luxury brand consumption and pride are systematically interrelated. Whereas authentic (but not hubristic) pride leads to a heightened desire for luxury brands, hubristic (but not authentic) pride is the outcome of these purchases, and is the form of pride signaled to observers by these purchases. Further, we show that these effects are generally exacerbated for those low in narcissism. These findings shed new light on why consumers purchase luxury brands, highlighting a paradox: these purchases are sought out of heightened feelings of accomplishment (and not arrogance), but they instead signal arrogance to others (rather than accomplishment).

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Low-status aversion: The effect of self-threat on willingness to buy and sell

Caitlin Pan et al.
Journal of Applied Social Psychology, forthcoming

Abstract:
Consumption decisions are inherently rooted in both what to consume and what to forgo. Although prior research has focused on consumption, we instead examine what compels consumers to steer clear of particular goods. In two studies, we demonstrated that individuals experiencing self-threat avoid low-status goods to prevent further damage to their self-worth. Individuals facing self-threat showed a decreased willingness to buy (Study 1), and a correspondingly greater willingness to sell (Study 2) low-status goods, as compared with nonthreatened individuals. Notably, these effects emerged even when such behaviors were associated with economic costs (Study 2). Together, these results highlight how the motive to preserve the self can affect market exchanges, thereby painting a more complete portrait of the relationship between consumption, status, and the self.

By KEVIN LEWIS | 09:00:00 AM

Tuesday, May 20, 2014

Manage it

Hierarchy, leadership, and construal fit

Yair Berson & Nir Halevy
Journal of Experimental Psychology: Applied, forthcoming

Abstract:
Three studies tested the hypothesis, derived from construal-level theory, that hierarchical distance between leaders and followers moderates the effectiveness of leader behaviors such that abstract behaviors produce more positive outcomes when enacted across large hierarchical distances, whereas concrete behaviors produce more positive outcomes when enacted across small hierarchical distances. In Study 1 (N = 2,206 employees of a telecommunication organization), job satisfaction was higher when direct supervisors provided employees with concrete feedback and hierarchically distant leaders shared with them their abstract vision rather than vice versa. Study 2 orthogonally crossed hierarchical distances with communication type, operationalized as articulating abstract values versus sharing a detailed story exemplifying the same values; construal misfit mediated the interactive effects of hierarchical distance and communication type on organizational commitment and social bonding. Study 3 similarly manipulated hierarchical distances and communication type, operationalized as concrete versus abstract calls for action in the context of a severe professional crisis. Group commitment and participation in collective action were higher when a hierarchically proximate leader communicated a concrete call for action and a hierarchically distant leader communicated an abstract call for action rather than vice versa. These findings highlight construal fit’s positive consequences for individuals and organizations.

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Selfish Play Increases during High-Stakes NBA Games and Is Rewarded with More Lucrative Contracts

Eric Luis Uhlmann & Christopher Barnes
PLoS ONE, April 2014

Abstract:
High-stakes team competitions can present a social dilemma in which participants must choose between concentrating on their personal performance and assisting teammates as a means of achieving group objectives. We find that despite the seemingly strong group incentive to win the NBA title, cooperative play actually diminishes during playoff games, negatively affecting team performance. Thus team cooperation decreases in the very high stakes contexts in which it is most important to perform well together. Highlighting the mixed incentives that underlie selfish play, personal scoring is rewarded with more lucrative future contracts, whereas assisting teammates to score is associated with reduced pay due to lost opportunities for personal scoring. A combination of misaligned incentives and psychological biases in performance evaluation bring out the “I” in “team” when cooperation is most critical.

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Workforce Reductions at Women-Owned Businesses in the United States

David Matsa & Amalia Miller
Industrial and Labor Relations Review, Spring 2014

Abstract:
The authors find that privately held firms owned by women were less likely than those owned by men to downsize their workforces during the Great Recession. Year-to-year employment reductions were as much as 29% smaller at women-owned firms, even after controlling for industry, size, and profitability. Using data that allow the authors to control for additional detailed firm and owner characteristics, they also find that women-owned firms operated with greater labor intensity after the previous recession and were less likely to hire temporary or leased workers. These patterns extend previous findings associating female business leadership with increased labor hoarding.

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Happiness and Productivity

Andrew Oswald, Eugenio Proto & Daniel Sgroi
Journal of Labor Economics, forthcoming

Abstract:
Some firms say they care about the well-being and ‘happiness’ of their employees. But are such claims hype, or scientific good sense? We provide evidence, for a classic piece-rate setting, that happiness makes people more productive. In three different styles of experiment, randomly selected individuals are made happier. The treated individuals have approximately 12% greater productivity. A fourth experiment studies major real-world shocks (bereavement and family illness). Lower happiness is systematically associated with lower productivity. These different forms of evidence, with complementary strengths and weaknesses, are consistent with the existence of a causal link between human well-being and human performance.

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The Risk Preferences of U.S. Executives

Steffen Brenner
Management Science, forthcoming

Abstract:
In this paper, I elicit risk attitudes of U.S. executives by calibrating a subjective option valuation model for option exercising data (1996 to 2008), yielding approximately 65,000 values of relative risk aversion (RRA) for almost 7,000 executives. The observed behavior is generally consistent with moderate risk aversion and a median (mean) RRA close to one (three). Values are validated for chief executive officers (CEOs) by testing theory-based predictions on the influence of individual characteristics on risk preferences such as gender, marital status, religiosity, and intelligence. Senior managers such as CEOs, presidents, and chairpersons of the boards of directors are significantly less risk averse than non-senior executives. RRA heterogeneity is strongly correlated with sector membership and firm-level variables such as size, performance, and capital structure. Alternative factors influencing option exercises are tested for their influence on RRA values.

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Hollywood Deals: Soft Contracts for Hard Markets

Jonathan Barnett
Duke Law Journal, forthcoming

Abstract:
Hollywood film studios, talent and other deal participants regularly commit to, and undertake production of, high-stakes film projects on the basis of unsigned “deal memos,” informal communications or draft agreements whose legal enforceability is uncertain. These “soft contracts” constitute a hybrid instrument that addresses a challenging transactional environment where neither formal contract nor reputation effects adequately protect parties against the holdup risk and project risk inherent to a film project. Parties negotiate the degree of contractual formality, which correlates with legal enforceability, as a proxy for allocating these risks at a transaction-cost savings relative to a fully formalized and specified instrument. Uncertainly enforceable contracts embed an implicit termination option that provides some protection against project risk while maintaining a threat of legal liability that provides some protection against holdup risk. Historical evidence suggests that soft contracts substitute for the vertically integrated structures that allocated these risks in the “studio system” era.

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I Used To Work At Goldman Sachs! How Firms Benefit From Organizational Status In The Market For Human Capital

Matthew Bidwell et al.
Strategic Management Journal, forthcoming

Abstract:
How does employer status benefit firms in the market for general human capital? On the one hand, high status employers are better able to attract workers, who value the signal of ability that employment at those firms provides. On the other hand, that same signal can help workers bid up wages and capture the value of employers’ status. Exploring this tension, we argue that high status firms are able to hire higher ability workers than other firms, and do not need to pay them the full value of their ability early in the career, but must raise wages more rapidly than other firms as those workers accrue experience. We test our arguments using unique survey data on careers in investment banking.

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Why Stars Matter

Ajay Agrawal, John McHale & Alexander Oettl
NBER Working Paper, March 2014

Abstract:
The growing peer effects literature pays particular attention to the role of stars. We decompose the causal effect of hiring a star in terms of the productivity impact on: 1) co-located incumbents and 2) new recruits. Using longitudinal university department-level data we report that hiring a star does not increase overall incumbent productivity, although this aggregate effect hides offsetting effects on related (positive) versus unrelated (negative) colleagues. However, the primary impact comes from an increase in the average quality of subsequent recruits. This is most pronounced at mid-ranked institutions, suggesting implications for the socially optimal spatial organization of talent.

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Born Lucky? A Study of the Birthdates and Ages of Paradigm-Shifting Entrepreneurs

Julian Lange et al.
Babson College Working Paper, March 2014

Abstract:
We studied the age of entrepreneurs at the time when they started companies that made significant contributions to the birth and growth of the micro/personal computer industry; we also looked at their birthdates. The main reason for our study was to test Gladwell’s widely disseminated assertion that paradigm changers in that industry were born between 1953 and 1955 and were 25 years old or younger when they started their ventures. In contrast to Gladwell’s sample of just three companies, Apple, Microsoft, and Sun Microsystems, and the seven entrepreneurs who founded them, our data set comprised 74 companies and 89 entrepreneurs. Unlike Gladwells’s seven entrepreneurs, all of whom were born between 1953 and 1955, our 89 entrepreneurs — including the Gladwell seven — were born between 1917 and 1965 and their average age when they started their ventures was 34.

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At the Helm, Kirk or Spock? Why Even Wholly Rational Actors May Favor and Respond to Charismatic Leaders

Benjamin Hermalin
University of California Working Paper, April 2014

Abstract:
When a leader makes a purely emotional appeal, rational followers realize she is hiding bad news. Despite such pessimism and even though not directly influenced by emotional appeals, rational followers' efforts are nonetheless greater when an emotional appeal is made by a more rather than less charismatic leader. Further, they tend to prefer more charismatic leaders. Although organizations can do better with more charismatic leaders, charisma is a two-edged sword: more charismatic leaders will tend to substitute charm for real action, to the organization's detriment. This helps explain the literature's "mixed report card" on charisma.

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Does It Pay to Be Moral? How Indicators of Morality and Competence Enhance Organizational and Work Team Attractiveness

Anne-Marie van Prooijen & Naomi Ellemers British
Journal of Management, forthcoming

Abstract:
Based on a social identity analysis, the authors argue that people are attracted to teams and organizations with positive features. Such features can refer to the competence and achievements of the organization, or to its moral values and ethical conduct. However, in work contexts, ethics and achievements do not necessarily go together. The paper reports three studies that examine the relative and combined impact of perceived competence vs morality of a team or organization on its attractiveness to individuals. Study 1 (n = 44) reveals that students prefer to seek employment in a moral rather than a competent organization, when forced to choose between these organizational features on a bipolar scale. Study 2 (n = 100) replicates these findings in a design where the competence and morality of a fictitious organization were manipulated orthogonally. Study 3 (n = 89) examines responses to experimental task teams that systematically differed from each other in their competence and morality. Results of all three studies converge to demonstrate that the perceived morality of the team or organization has a greater impact on its attractiveness to individuals than its perceived competence. The authors discuss the theoretical and practical implications of these findings.

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Explaining Changes in Organizational Form: The Case of Professional Baseball

Andrew Hanssen, James Meehan & Thomas Miceli
Journal of Sports Economics, forthcoming

Abstract:
In this article, we investigate changes over time in the organization of the relationship between Major League Baseball and minor league baseball teams. We develop a model in which a minor league team serves two functions: talent development and local entertainment. The model predicts different modes of organizing the relationship between majors and minors based on the value of these parameters. We then develop a discursive history. Consistent with the model’s predictions, we find that when the value of minor league baseball’s training function was low but the value of its entertainment function was high, major and minor league franchises operated independently, engaging in arms’-length transactions. However, as the training function became more important and the local entertainment function less important, formal agreements ceded control of minor league functions to major league franchises. Finally, as the value of local entertainment rose once again in the late 20th century, the two roles were split, with control of local functions accruing to local ownership and training functions to major league teams. This analysis helps shed light on factors that influence the boundaries of the firm.

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Awards at work

Susanne Neckermann, Reto Cueni & Bruno Frey
Labour Economics, forthcoming

Abstract:
Social incentives like employee awards are widespread in the corporate sector and may be important instruments for solving agency problems. To date, we have little understanding of their effect on behavior. Unique panel data from the call center of a Fortune 500 financial services provider allow us to estimate the impact of awards on performance. Winning an award for voluntary work behaviors significantly increases subsequent core call center performance. The effect is short-lived, mainly driven by underperforming agents, and is reflected mostly in dimensions of the job that are hard to observe. We discuss various theories that could explain the effect.

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Uncovering unknown unknowns: Towards a Baconian approach to management decision-making

Alberto Feduzi & Jochen Runde
Organizational Behavior and Human Decision Processes, forthcoming

Abstract:
Bayesian decision theory and inference have left a deep and indelible mark on the literature on management decision-making. There is however an important issue that the machinery of classical Bayesianism is ill equipped to deal with, that of “unknown unknowns” or, in the cases in which they are actualised, what are sometimes called “Black Swans”. This issue is closely related to the problems of constructing an appropriate state space under conditions of deficient foresight about what the future might hold, and our aim is to develop a theory and some of the practicalities of state space elaboration that addresses these problems. Building on ideas originally put forward by Bacon (1620), we show how our approach can be used to build and explore the state space, how it may reduce the extent to which organisations are blindsided by Black Swans, and how it ameliorates various well-known cognitive biases.

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Not too much, not too little: The influence of constraints on creative problem solving

Kelsey Medeiros, Paul Partlow & Michael Mumford
Psychology of Aesthetics, Creativity, and the Arts, May 2014, Pages 198-210

Abstract:
Although, traditionally, constraints are held to inhibit creative thinking, more recent research indicates that constraints can, at times, prove beneficial. Constraints, however, come in many forms. In the present study, 318 undergraduates were asked to develop advertising campaigns for a new product, a high-energy root beer, where campaigns were evaluated for quality, originality, and elegance. Prior to starting work on these campaigns different constraints were, or were not imposed, with constraints being established based on fundamentals in marketing, themes in marketing, environmental information, and task objectives. It was found that task objective constraints resulted in better creative problem solving when participants were motivated. However, imposition of multiple constraints led to poorer creative problem solving. Thus the number and nature of the constraints imposed on creative problems must be balanced. The implications of these observations for understanding creative problem solving are discussed.

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The Productivity of Working Hours

John Pencavel
Stanford Working Paper, April 2014

Abstract:
Observations on munition workers, most of them women, are organized to examine the relationship between their output and their working hours. The relationship is nonlinear: below an hours threshold, output is proportional to hours; above a threshold, output rises at a decreasing rate as hours increase. Implications of these results for the estimation of labor supply functions are taken up. The findings also link up with current research on the effects of long working hours on accidents and injuries.

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The tortoise versus the hare: Progress and business viability differences between conventional and leisure-based founders

Phillip Kim, Kyle Longest & Stephen Lippmann
Journal of Business Venturing, forthcoming

Abstract:
Social science researchers have long pursued answers to the puzzle of why some people achieve certain milestones more quickly than others and whether rate of progress matters for long-run outcomes. This “tortoise versus hare” puzzle raises the question of whether speed is a valid indicator of viability in an undertaking: Are those with slower rates of progress any less off in terms of long-run achievement when compared to their faster counterparts? We investigate this “tortoise and hare” puzzle in the context of business formation, an activity pursued by millions in the United States. Our analysis of a nationally representative survey of U.S. business founders revealed that leisure-based founders were slower to make progress initially, but after a certain time threshold, their progress was no different than other conventional types of founders. More importantly, leisure-based founders showed more favorable initial economic and non-economic outcomes, as these founders were more likely to consistently report early sales and profitability and were more committed to investing time into their ventures. Our study findings have both theoretical and practical implications for the evaluation of venture performance, when the rate of progress is considered to be a leading indicator of new business viability.

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The Effects of Opportunities and Founder Experience on New Firm Performance

John Dencker & Marc Gruber
Strategic Management Journal, forthcoming

Abstract:
Much prior research in entrepreneurship has focused on the role of the founder's knowledge in affecting new firm performance. Yet, little is known about how and why the entrepreneurial opportunity itself shapes outcomes in this arena. We begin filling in this critical gap in the literature by examining how the riskiness of the opportunity not only affects start-up performance, but also conditions the relevance of the founder's distinct knowledge endowments. Analyses of a sample of 451 new firms shows that the riskier the opportunity, the greater the performance of the start-up, above and beyond founder characteristics. Moreover, the value of founder knowledge is relative to the type of opportunity exploited: high-risk opportunities favor founders with managerial experience, whereas low-risk opportunities favor founders with industry experience.

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The Pric(z)e of Hard Work. Different Incentive Effects of Non-Monetary and Monetary Prizes

Andrea Hammermann & Alwine Mohnen
Journal of Economic Psychology, August 2014, Pages 1–15

Abstract:
Do non-monetary or monetary prizes induce the highest work performances in competitions? We conducted a real-effort lab experiment to test for differences in the effect of both incentives on work productivity. Our main findings are that the performances of subjects in pursuit of a monetary prize exceed those of subjects in pursuit of non-monetary incentives. However, the work quality and the retrospective feeling of having had fun at work, which is associated with the received prizes, decrease in combination with greater effort. Furthermore, a competition with monetary prizes appears to label winners and losers. If non-monetary prizes are used, losers are, to a certain extent, more able to adjust their feeling of satisfaction by changing the subjectively perceived prizes.

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The Effects of Corporate Spin-offs on Productivity

Thomas Chemmanur, Karthik Krishnan & Debarshi Nandy
Journal of Corporate Finance, August 2014, Pages 72–98

Abstract:
Using a unique sample of plant level data from the Longitudinal Research Database of the U.S. Census Bureau, which enables us to correctly identify the parent and spun-off entities prior to spin-offs, we establish that efficiency improves following spin-offs. A spin-off refers to the separation of the management of some assets of a firm into a separate entity (which we term as the spun-off entity or subsidiary). We investigate the underlying mechanisms and the real effects of spin-offs after correcting for potential endogenous selection using treatment effect estimators and propensity score matching in our analysis. We identify how (the precise channel and mechanism), where (parent or subsidiary), and when (the dynamic pattern) efficiency improvements arise following spin-offs. We show that spin-offs increase total factor productivity (TFP) and that such productivity improvements are long-lived. This post spin-off productivity improvement can be attributed to cost savings but not to higher sales. Further, such improvements arise primarily in plants remaining with the parent. However, contrary to speculation in the previous literature, we show that plants that are spun-off do not underperform parent plants prior to the spin-off. We identify acquisitions following spin-offs and find that while productivity improvements occur immediately after the spin-off in non-acquired plants, they start only after being taken over by another firm in acquired plants. Finally, we show that unrelated spun-off entities show greater improvements in productivity compared to related spun-off entities.

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When Does the Devil Make Work? An Empirical Study of the Impact of Workload on Worker Productivity

Tom Fangyun Tan & Serguei Netessine
Management Science, forthcoming

Abstract:
We analyze a large, detailed operational data set from a restaurant chain to shed new light on how workload (defined as the number of tables or diners that a server simultaneously handles) affects servers' performance (measured as sales and meal duration). We use an exogenous shock — the implementation of labor scheduling software — and time-lagged instrumental variables to disentangle the endogeneity between demand and supply in this setting. We show that servers strive to maximize sales and speed efforts simultaneously, depending on the relative values of sales and speed. As a result, we find that, when the overall workload is small, servers expend more and more sales efforts with the increase in workload at a cost of slower service speed. However, above a certain workload threshold, servers start to reduce their sales efforts and work more promptly with the further rise in workload. In the focal restaurant chain, we find that this saturation point is currently not reached and, counterintuitively, the chain can reduce the staffing level and achieve both significantly higher sales (an estimated 3% increase) and lower labor costs (an estimated 17% decrease).

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Pay Harmony: Peer Comparison and Executive Compensation

Claudine Madras Gartenberg & Julie Wulf
Harvard Working Paper, March 2014

Abstract:
This study suggests that peer comparison affects both wage setting and productivity within firms. We report three changes in division manager compensation following a 1991-1992 controversy over executive pay. We argue that this controversy increased wage comparisons within firms, particularly those with geographically-dispersed managers – managers with the greatest information frictions. Following the controversy, pay in dispersed firms co-moves more and is less sensitive to individual performance. Relatedly, pay disparity between managers located in different states decreases relative to that of co-located managers. Finally, division productivity falls in dispersed firms, particularly among managers at the low end of the wage distribution.

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Does Ethical Leadership Matter in Government? Effects on Organizational Commitment, Absenteeism, and Willingness to Report Ethical Problems

Shahidul Hassan, Bradley Wright & Gary Yukl
Public Administration Review, May/June 2014, Pages 333–343

Abstract:
Recent ethical scandals involving managers in government organizations have highlighted the need for more research on ethical leadership in public sector organizations. To assess the consequences of ethical leadership, 161 managers in a large state government agency and 415 of their direct reports were surveyed, and personnel records were obtained to measure absenteeism. Results indicate that after controlling for the effects of employee characteristics, perceptions of procedural fairness, and supportive leader behavior, ethical leadership reduced absenteeism and had a positive influence on organizational commitment and willingness to report ethical problems. Implications of the findings and suggestions for future research are presented.

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Getting to Know Each Other: The Role of Toeholds in Acquisitions

Paul Povel & Giorgo Sertsios
Journal of Corporate Finance, June 2014, Pages 201–224

Abstract:
We analyze the role of toeholds (non-controlling but significant equity stakes) as a source of information for a bidder. A toehold provides an opportunity to interact with the target and its management and in the process get a better sense of the possible synergies from a merger or takeover. A bidder considering taking over a target will take a toehold beforehand if the informational benefits are large. Our model makes the following predictions: (i) a toehold is more beneficial if a target is opaque, i.e., if it is generally harder to value potential synergies with the target; (ii) a toehold is incrementally more beneficial if a bidder initially finds it harder than others to assess the value of potential synergies; (iii) that incremental benefit is less important, however, if the target is opaque; (iv) the benefits from having a toehold are smaller if the number of potential rival bidders is higher. We test these predictions using a large sample of majority acquisitions of private and public companies for which we have information regarding whether the acquirer had a toehold in the target company prior to the majority acquisition. We find evidence consistent with our hypotheses, and thus with the idea that potential acquirers of a target use toeholds to improve their information about possible synergies with the target.

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Sorting Effects of Performance Pay

Maris Goldmanis & Korok Ray
Management Science, forthcoming

Abstract:
Compensation not only provides incentives to an existing manager but also affects the type of manager attracted to the firm. This paper examines the dual incentive and sorting effects of performance pay in a simple contracting model of endogenous participation. Unless the manager is highly risk averse, sorting dampens optimal pay-performance sensitivity (PPS) because PPS beyond a nominal amount transfers unnecessary (information) rent to the manager. This helps explain why empirical estimates of PPS are much lower than predictions from models of moral hazard alone. The model also predicts that sorting under asymmetric information causes the firm to turn away more candidates than would be efficient; PPS increases in the cost of hiring the manager and in the manager's outside option, but decreases in output risk, information risk, and managerial risk aversion; and the firm becomes more selective in hiring as either the manager's outside option, the cost of hiring, risk aversion, output risk, or information risk increases.

By KEVIN LEWIS | 09:00:00 AM

Monday, May 19, 2014

Command and control

Flight cancellation as a reaction to the tarmac delay rule: An unintended consequence of enhanced passenger protection

Hideki Fukui & Koki Nagata
Economics of Transportation, forthcoming

Abstract:
We examine the effects of the US DOT׳s tarmac delay rule (effective April 29, 2010) on flight cancellations and gate departure delays, using carrier-level panel data for the period between May 2008 and April 2012. Our results suggest the DOT׳s investigations of tarmac delay incidents triggered risk-averse behavior by investigated carriers, which increased flight cancellations and gate departure delays to avoid violating the rule. Carriers׳ preemptive flight cancellations are estimated to have affected about 308,900 passengers in 2011 alone. The results also suggest that these side effects persist for at least two years after the investigations, having larger adverse effects on passengers booked on the highest and lowest frequency routes. The costs and benefits of the rule need reevaluation.

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A fine is a more effective financial deterrent when framed retributively and extracted publicly

Tim Kurz, William Thomas & Miguel Fonseca
Journal of Experimental Social Psychology, forthcoming

Abstract:
Introducing monetary fines to decrease an undesired behavior can sometimes have the counterintuitive effect of increasing the prevalence of the behavior being targeted. Such findings raise important social psychological questions in relation to both the way in which financial penalties are framed and the social contexts in which they are administered. In a field experiment (Study 1), we informed participants who had signed up for an experiment that they would be fined if they arrived late. This fine was presented as either compensatory or retributive in nature and as being administered either privately or publicly. We then observed participants’ subsequent arrival time. In accordance with our hypotheses, participants’ punctuality was only improved (relative to a no-fine control) in response to retributive rather than compensatory fines and when told that fines would be administered publicly rather than privately. In Study 2 we used a scenario method to demonstrate that the greater efficacy of retributively framed fines can be attributed to their presence being less likely to undermine the perceived immorality of transgression than is the case for compensatory fines. We propose a material promotion-moral prevention (MPMP) theory to account for our findings and consider its practical implications for the use of financial disincentives to encourage cooperative behavior through public policy in domains such as climate change.

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Coasean Keep-Away: Voluntary Transaction Costs

Jordan Barry, John William Hatfield & Scott Duke Kominers
Harvard Working Paper, March 2014

Abstract:
The Coase Theorem predicts that, if there are no transaction costs, parties will always contract their way to an efficient outcome. Thus, no matter which legal rules society chooses, "Coasean bargains" will lead to efficient results. There are always some transaction costs. However, transaction costs are often thought to be low when there are no structural impediments to negotiation, such as large numbers of parties or barriers to communication. When these obstacles are not present, it is commonly assumed that the parties will achieve an efficient result through Coasean bargaining. We show that this assumption is incorrect. In particular, we demonstrate that transaction costs can be high, even when there are no structural impediments to bargaining, because the parties themselves may intentionally create transaction costs. Intuitively, an individual may prefer the Coasean bargain that is struck when certain parties are excluded from negotiations. Accordingly, that individual will wish to create transaction costs that keep those parties — potentially including herself — away from the negotiating table. We show that there are many contexts in which the parties will choose to create these "voluntary transaction costs," including environmental litigation, multilateral treaty negotiations, and creditor-debtor relationships. Because of the prevalence of voluntary transaction costs, Coasean logic applies to a significantly smaller class of cases than has previously been recognized. This renders law very important: Legal rules provide the starting point for the parties' negotiation; we find that when the parties’ starting point is closer to the efficient result, they are more likely to achieve an efficient outcome through Coasean bargaining. This insight favors reasonable use rules and other legal rules that attempt to assign entitlements in an efficient manner. We also find that liability remedies are more likely to encourage efficient outcomes than injunctive remedies are.

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Do U.S. Regulators Listen to the Public?: Testing the Regulatory Process with the RegRank Algorithm

Andrei Kirilenko, Shawn Mankad & George Michailidis
University of Maryland Working Paper, January 2014

Abstract:
According to the U.S. Constitution, the government cannot harm a single individual without "the due process of the law.'' Things are different, however, if a government action affects multiple individuals. The U.S. Supreme Court ruled that the government can issue a regulation that can greatly harm many businesses and individuals "without giving them a chance to be heard.'' A federal statute called the Administrative Procedure Act mandates that federal regulatory agencies give the public a chance to comment on proposed regulations before they become final. We propose a new analytical tool called RegRank that can be used to measure and test whether government regulatory agencies actually adjust final rules in response to comments received from the public. We use RegRank to analyze the text of public rulemaking documents of the Commodity Futures Trading Commission (CFTC) - a federal regulatory agency in charge of implementing parts of the Dodd-Frank Wall Street Reform and Consumer Protection Act. We then test whether the regulatory agency adjusts final rules in the direction of sentiment expressed in public comments. We find strong evidence that it does.

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The Impacts of an Antitrust Investigation: A Case Study in Agriculture

Kalyn Coatney & Jesse Tack
Review of Industrial Organization, June 2014, Pages 423-441

Abstract:
We analyze the impacts of an antitrust investigation on the purchasing practices of a buying collaboration and its common bidding agent. Using a repeated cross section of prices across procurement auctions that were and were not subjected to the investigation, we find that auction prices in the targeted auctions: (i) significantly increased as soon as the targets were made aware they were under investigation; (ii) remained higher as long as the investigation was open; and (iii) systematically declined to the same low pre-knowledge state after the closure of the investigation without prosecution. Finally, the counterfactual impact on auction prices by the removal of the common bidding agent and the demise of the buying collaboration at a later date was on par with the impacts of the investigation.

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Market Power, Efficiencies, and Entry Evidence from an Airline Merger

Kai Hüschelrath & Kathrin Müller
Managerial and Decision Economics, forthcoming

Abstract:
We investigate the competitive effects of the merger between Delta Air Lines and Northwest Airlines (2009) in the domestic US airline industry. Applying fixed-effects regression models, we find that the transaction led to short-term price increases of about 11% on overlapping routes and about 10% on routes that experienced a merger-induced switch of the operating carrier. Over a longer period, however, our estimation results are consistent with the hypothesis that both merger efficiencies and postmerger entry by competitors initiated a downward trend in price, leaving consumers with a small net price increase of about 3% on the affected routes.

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Toward an efficiency rationale for the public provision of private goods

Hanming Fang & Peter Norman
Economic Theory, June 2014, Pages 375-408

Abstract:
Public provision of a private goods is justified on efficiency grounds in a model with no redistributive preferences. A government’s involvement in the provision of a private good generates information about preferences that facilitates more efficient revenue extraction for the provision of public goods. Public provision of the private good improves economic efficiency under a condition that is always fulfilled under independence and satisfied for an open set of joint distributions. The efficiency gains require that consumers cannot arbitrage the publicly provided private good, so our analysis applies to private goods where it is easy to keep track of the ultimate user, such as schooling and health care, but not to easily tradable consumer goods.

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Pro-competitive effect, division of labor, and firm productivity

Keita Kamei
Economics Letters, forthcoming

Abstract:
This study constructs a general oligopolistic equilibrium model in which Smith’s (1776) famous theory of the division of labor under vertical specialization is embedded. We demonstrate that a pro-competitive government policy weakens the division of labor and hence reduces firm productivity, total output, and aggregate welfare. In addition, the policy promotes an increase in workers’ welfare and a decrease in firm owners’ welfare.

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Clusters of economic freedom

Toby Huskinson & Robert Lawson
Applied Economics Letters, forthcoming

Abstract:
This article uses K-means clustering to group countries using the information from the five areas of the Economic Freedom of the World (EFW) index. The resulting clusters of countries are similar but not identical to quartile groupings found using the overall EFW index. Simple comparisons of socio-economic outcomes along the one-dimensional EFW index yield different results compared with the multidimensional-based country clusters. In particular, social democratic market economies appear to outperform liberal market economies using these simple comparisons.

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Strategic rationale for responding to extra-jurisdictional regulation: Evidence from firm adoption of renewable power in the US

Adam Fremeth & Myles Shaver
Strategic Management Journal, May 2014, Pages 629–651

Abstract:
It is well documented that firms respond to regulations in their home jurisdictions. We present hypotheses that firms also respond to regulations in jurisdictions where they do not operate. We examine renewable-power provision in the U.S. electric utility sector between 2001 and 2006, and find that firms adopt more renewable-power generation when their peers (i.e., firms in the same regulatory jurisdiction) face greater renewable-power standards in other jurisdictions. The underlying mechanism is that forward-looking firms assess when extrajurisdictional regulations foreshadow regulatory changes where they operate. Our analyses support this mechanism versus plausible alternatives. We demonstrate firms acting strategically to respond to extrajurisdictional regulations and show that the central conduit motivating this response is the extrajurisdictional footprint of firms operating in the same jurisdiction as a focal firm.

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Randomized Safety Inspections and Risk Exposure on the Job: Quasi-Experimental Estimates of the Value of a Statistical Life

Jonathan Lee & Laura Taylor
U.S. Census Bureau Working Paper, January 2014

Abstract:
Compensating wages for workplace fatality and accident risks are used to infer the value of a statistical life (VSL), which in turn is used to assess the benefits of human health and safety regulations. The estimation of these wage differentials, however, has been plagued by measurement error and omitted variables. This paper employs the first quasi-experimental design within a labor market setting to overcome such limitations in the extant literature. Specifically, randomly assigned, exogenous federal safety inspections are used to instrument for plant-level risks and combined with confidential U.S. Census data on manufacturing employment to estimate the VSL using a difference-in-differences framework. The VSL is estimated to be between $2 and $4 million ($2011), suggesting prior studies may substantially overstate the value workers place on safety, and therefore, the benefits of health and safety regulations.

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Urban Land-Use Regulation: Are Homevoters Overtaking the Growth Machine?

Vicki Been, Josiah Madar & Simon McDonnell
Journal of Empirical Legal Studies, June 2014, Pages 227–265

Abstract:
The leading theory about urban land-use regulation argues that city zoning officials are full partners in the business and real estate elite's “growth machine.” Suburban land-use officials, in contrast, are thought to cater to the interests of the majority of their electorate — “homevoters.” A unique database regarding over 200,000 lots that the New York City Planning Commission considered for rezoning between 2002 and 2009 allows us to test various hypotheses suggested by these competing theories of land-use regulation. Our analysis reveals that homevoters are more powerful in urban politics than scholars, policymakers, and judges have assumed.

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Land Use Regulations and the Value of Land and Housing: An Intra-Metropolitan Analysis

Nils Kok, Paavo Monkkonen & John Quigley
Journal of Urban Economics, May 2014, Pages 136–148

Abstract:
Inferences about the determinants of land prices in urban areas are typically based on housing transactions, which combine payments for land and long-lived improvements. In contrast, we investigate directly the determinants of urban land prices within a metropolitan area – the San Francisco Bay Area. Our analysis focuses on the relationship between the regulation of urban development within different jurisdictions and land prices, while considering other factors that shape the value of land, such as topography and access to jobs. We find that cities that require a greater number of independent reviews to obtain a building permit or a zoning change have higher land prices, ceteris paribus. Finally, we relate the variation in land prices to the prices paid for housing in the region and show that local land use regulations are closely linked to the value of houses sold. This is in part because regulations are so pervasive, and also because land values represent such a large fraction of house values in the San Francisco Bay Area.

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Does Anyone Read the Fine Print? Consumer Attention to Standard-Form Contracts

Yannis Bakos, Florencia Marotta-Wurgler & David Trossen
Journal of Legal Studies, January 2014, Pages 1-35

Abstract:
A cornerstone of the law and economics approach to standard-form contracts is the informed-minority hypothesis: in competitive markets, a minority of term-conscious buyers is sufficient to discipline sellers from using unfavorable boilerplate terms. This argument is often invoked to limit intervention or regulate consumer transactions, but there has been little empirical investigation of its validity. We track the Internet browsing behavior of 48,154 monthly visitors to the Web sites of 90 online software companies to study the extent to which potential buyers access the end-user license agreement. We find that only one or two of every 1,000 retail software shoppers access the license agreement and that most of those who do access it read no more than a small portion. Since the cost of comparison shopping online is so low, the limiting factor in becoming informed thus seems not to be the cost of accessing license terms but reading and comprehending them.

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Unintended Consequences of Products Liability: Evidence from the Pharmaceutical Market

Eric Helland et al.
NBER Working Paper, March 2014

Abstract:
In a complex economy, production is vertical and crosses jurisdictional lines. Goods are often produced by an upstream national or global firm and improved or distributed by local firms downstream. In this context, heightened products liability may have unintended consequences on product sales and consumer safety. Conventional wisdom holds that an increase in tort liability on the upstream firm will cause that firm to (weakly) increase investment in safety or disclosure. However, this may fail in the real-world, where upstream firms operate in many jurisdictions, so that the actions of a single jurisdiction may not be significant enough to influence upstream firm behavior. Even worse, if liability is shared between upstream and downstream firms, higher upstream liability may mechanically decrease liability of the downstream distributor and encourage more reckless behavior by the downstream firm. In this manner, higher upstream liability may perversely increase the sales of a risky good. We demonstrate this phenomenon in the context of the pharmaceutical market. We show that higher products liability on upstream pharmaceutical manufacturers reduces the liability faced by downstream doctors, who respond by prescribing more drugs than before.

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Employer Accommodation and Labor Supply of Disabled Workers

Matthew Hill, Nicole Maestas & Kathleen Mullen
RAND Working Paper, March 2014

Abstract:
The authors use longitudinal data from the Health and Retirement Study to examine what factors influence employer accommodation of newly disabled workers and how effective such accommodations are in retaining workers and discouraging disability insurance applications. They find that only a quarter of newly disabled older workers are accommodated by their employers in some way following onset of a disability. Importantly, they find that few employer characteristics explain which workers are accommodated; rather, employee characteristics, particularly the presence of certain personality traits correlated with assertiveness and open communication, are highly predictive of accommodation. This suggests that policies targeting employer incentives may not be particularly effective at increasing accommodation rates since employers may not even be aware of their employees’ need for accommodation. They also find that if employer accommodation rates can be increased, disabled workers would be significantly more likely to delay labor force exit, at least for two years. However, they do not find significant effects on the disability insurance claiming margin.

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How Are Homeowners Associations Capitalized into Property Values?

Rachel Meltzer & Ron Cheung
Regional Science and Urban Economics, May 2014, Pages 93–102

Abstract:
Private homeowners associations (HOAs) levy binding fees and provide local services to members. Both should be capitalized into the value of member properties, but the net effect is ambiguous. We construct the most comprehensive, longitudinal database to date on HOAs for Florida and estimate the impact of HOAs on property values. We find properties in HOAs sell at a premium just under five percent. The premium is strongest immediately following HOA formation and declines over time, suggesting quick capitalization of HOA benefits. Properties in larger HOAs sell for less, and this is particularly true for properties in the biggest HOAs. Finally, properties located immediately outside of an HOA sell at a premium relative to other non-HOA properties, and this premium marginally decreases (increases) in the size (frequency) of neighboring HOAs.

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Property Institutions and Business Investment on American Indian Reservations

Randall Akee & Miriam Jorgensen
Regional Science and Urban Economics, May 2014, Pages 116–125

Abstract:
We test the hypothesis that property institutions are responsible for the persistent low levels of business and economic development on American Indian reservations. American Indian lands are held in trust by the US Federal government and may not be used as collateral. We exploit the uniform and equal distribution of land between the Agua Caliente tribe and non-Indians in Palm Springs, CA in our analysis. Due to the General Allotment Act of 1887, the land was divided in a checkerboard pattern with even-numbered parcels provided to Agua Caliente government or individual tribal members and odd-numbered parcels (held in fee-simple status) were sold to non-Indians. Because of this, we overcome the usual land quality selection problem between the two types of property institutions. We find that holding local amenities and other characteristics of the parcel constant, there is no difference in the level of business investment on trust and fee simple properties. These results indicate that the inability to use American Indian land as collateral does not drive the low levels of observed business investment; other mechanisms and institutions may be the culprit.

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Do Responsible Contractor Policies Increase Construction Bid Costs?

Jeffrey Waddoups & David May
Industrial Relations, April 2014, Pages 273–294

Abstract:
Beginning in 2000, some school districts in Ohio required contractors to incorporate health insurance coverage, among other items, into their bids. Such responsible contractor policies (RCPs) are controversial because they may raise costs. This study sheds empirical light on the controversy. We estimate construction bid costs using data on elementary school projects bid in Ohio from 1997 to 2008, some of which were covered by an RCP and others of which were not. The results indicate that once we account for variation in geographic location of schools, RCPs exert no statistically discernible impact on construction bid costs.

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When Does Regulation Distort Costs? Lessons from Fuel Procurement in U.S. Electricity Generation

Steve Cicala
NBER Working Paper, May 2014

Abstract:
This paper evaluates changes in fuel procurement practices by coal- and gas-fired power plants in the United States following state-level legislation that ended cost-of-service regulation of electricity generation. I find that deregulated plants substantially reduce the price paid for coal (but not gas), and tend to employ less capital-intensive sulfur abatement techniques relative to matched plants that were not subject to any regulatory change. Deregulation also led to a shift toward more productive coal mines. I show how these results lend support to theories of asymmetric information, capital bias, and regulatory capture as important sources of regulatory distortion.

By KEVIN LEWIS | 09:00:00 AM

Sunday, May 18, 2014

Doing unto others

Kantian optimization: A microfoundation for cooperative behavior

John Roemer
Journal of Public Economics, forthcoming

Abstract:
Although evidence accrues in biology, anthropology and experimental economics that homo sapiens is a cooperative species, the reigning assumption in economic theory is that individuals optimize in an autarkic manner (as in Nash and Walrasian equilibrium). I here postulate a cooperative kind of optimizing behavior, called Kantian. It is shown that in simple economic models, when there are negative externalities (such as congestion effects from use of a commonly owned resource) or positive externalities (such as a social ethos reflected in individuals’ preferences), Kantian equilibria dominate Nash-Walras equilibria in terms of efficiency. While economists schooled in Nash equilibrium may view the Kantian behavior as utopian, there is some -- perhaps much -- evidence that it exists. If cultures evolve through group selection, the hypothesis that Kantian behavior is more prevalent than we may think is supported by the efficiency results here demonstrated.

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Why didn’t slaves revolt more often during the Middle Passage?

Andrew Marcum & David Skarbek
Rationality and Society, May 2014, Pages 236-262

Abstract:
Given the substantial suffering of enslavement, why didn’t more slaves revolt during the Middle Passage of the Atlantic slave trade? We argue that the collective action problem was an important impediment to revolt. Revolts nearly always resulted in slave casualties, and crews tortured and killed conspirators. Overthrowing the crew benefited all of the slaves, so each slave had an incentive to free ride on others’ efforts to secure freedom. Using a rational choice framework, we argue that slaves could more effectively overcome the collective action problem when there were fewer slaves aboard, when there were fewer male slaves, and when the slaves were more homogenous. Data on slave voyages from 1750 to 1775 and archival and historical documents support these claims.

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Oracles

Peter Leeson
Rationality and Society, May 2014, Pages 141-169

Abstract:
This article uses rational choice theory to analyze oracles: media for divining answers to questions about the unknown. I develop a simple theory of oracles with rational agents. My theory explains oracles as institutional solutions to “low-grade” interpersonal conflicts — petty grievances and frustrations resulting from perceptions or feelings of personal offense — that government is unable to resolve. Oracles secure correlated equilibrium in situations where, without them, individuals would be stuck in a suboptimal world of simple mixed-strategy equilibrium. By randomizing strategies about how to behave in situations of low-grade conflict and coordinating individuals’ choices across that randomization, oracles resolve low-grade conflict efficiently. To investigate my theory I consider a society of persons who rely exclusively on oracles to decide how to behave in situations of low-grade conflict: the Azande of Africa. Using the equivalent of a “Magic 8 Ball” to resolve such conflict improves Zande welfare.

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The Effects of Extra-Somatic Weapons on the Evolution of Human Cooperation towards Non-Kin

Tim Phillips, Jiawei Li & Graham Kendall
PLoS ONE, May 2014

Abstract:
Human cooperation and altruism towards non-kin is a major evolutionary puzzle, as is ‘strong reciprocity’ where no present or future rewards accrue to the co-operator/altruist. Here, we test the hypothesis that the development of extra-somatic weapons could have influenced the evolution of human cooperative behaviour, thus providing a new explanation for these two puzzles. Widespread weapons use could have made disputes within hominin groups far more lethal and also equalized power between individuals. In such a cultural niche non-cooperators might well have become involved in such lethal disputes at a higher frequency than cooperators, thereby increasing the relative fitness of genes associated with cooperative behaviour. We employ two versions of the evolutionary Iterated Prisoner's Dilemma (IPD) model – one where weapons use is simulated and one where it is not. We then measured the performance of 25 IPD strategies to evaluate the effects of weapons use on them. We found that cooperative strategies performed significantly better, and non-cooperative strategies significantly worse, under simulated weapons use. Importantly, the performance of an ‘Always Cooperate’ IPD strategy, equivalent to that of ‘strong reciprocity’, improved significantly more than that of all other cooperative strategies. We conclude that the development of extra-somatic weapons throws new light on the evolution of human altruistic and cooperative behaviour, and particularly ‘strong reciprocity’. The notion that distinctively human altruism and cooperation could have been an adaptive trait in a past environment that is no longer evident in the modern world provides a novel addition to theory that seeks to account for this major evolutionary puzzle.

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Decision accuracy in complex environments is often maximized by small group sizes

Albert Kao & Iain Couzin
Proceedings of the Royal Society: Biological Sciences, 7 June 2014

Abstract:
Individuals in groups, whether composed of humans or other animal species, often make important decisions collectively, including avoiding predators, selecting a direction in which to migrate and electing political leaders. Theoretical and empirical work suggests that collective decisions can be more accurate than individual decisions, a phenomenon known as the ‘wisdom of crowds’. In these previous studies, it has been assumed that individuals make independent estimates based on a single environmental cue. In the real world, however, most cues exhibit some spatial and temporal correlation, and consequently, the sensory information that near neighbours detect will also be, to some degree, correlated. Furthermore, it may be rare for an environment to contain only a single informative cue, with multiple cues being the norm. We demonstrate, using two simple models, that taking this natural complexity into account considerably alters the relationship between group size and decision-making accuracy. In only a minority of environments do we observe the typical wisdom of crowds phenomenon (whereby collective accuracy increases monotonically with group size). When the wisdom of crowds is not observed, we find that a finite, and often small, group size maximizes decision accuracy. We reveal that, counterintuitively, it is the noise inherent in these small groups that enhances their accuracy, allowing individuals in such groups to avoid the detrimental effects of correlated information while exploiting the benefits of collective decision-making. Our results demonstrate that the conventional view of the wisdom of crowds may not be informative in complex and realistic environments, and that being in small groups can maximize decision accuracy across many contexts.

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Interdependent self-construals mitigate the fear of death and augment the willingness to become a martyr

Edward Orehek et al.
Journal of Personality and Social Psychology, forthcoming

Abstract:
Humans are motivated by a quest for significance that is threatened by the inevitability of death. However, individuals with interdependent self-construals, self-representations that reflect embeddedness with and connection to others, are able to extend themselves through time and space through their linkage to a larger social group. The present set of 5 experiments tested the hypotheses that individuals primed with an interdependent self-construal would fear death less and would be more willing to face harm for the sake of the group than individuals with an independent self-construal, that is, self-representations that reflect autonomy and independence from others (“I have self-control”). The results show that interdependent self-construals, compared to independent self-construals, attenuate death anxiety, reduce the avoidance of death, increase the approach to death-related stimuli, induce a greater willingness to become a martyr, and induce a greater willingness to sacrifice the self for other members of important groups.

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Does Intuition Cause Cooperation?

Peter Verkoeijen & Samantha Bouwmeester
PLoS ONE, May 2014

Abstract:
Recently, researchers claimed that people are intuitively inclined to cooperate with reflection causing them to behave selfishly. Empirical support for this claim came from experiments using a 4-player public goods game with a marginal return of 0.5 showing that people contributed more money to a common project when they had to decide quickly (i.e., a decision based on intuition) than when they were instructed to reflect and decide slowly. This intuitive-cooperation effect is of high scientific and practical importance because it argues against a central assumption of traditional economic and evolutionary models. The first experiment of present study was set up to examine the generality of the intuitive-cooperation effect and to further validate the experimental task producing the effect. In Experiment 1, we investigated Amazon Mechanical Turk (AMT) workers' contributions to a 4-player public goods game with a marginal return of 0.5 while we manipulated the knowledge about the other players' contribution to the public goods game (contribution known vs. contribution unknown), the identity of the other players (humans vs. computers randomly generating contributions) and the time constraint (time pressure/intuition vs. forced delay/reflection). However, the results of Experiment 1 failed to reveal an intuitive-cooperation effect. Furthermore, four subsequent direct replications attempts with AMT workers (Experiments 2a, 2b, 2c and Experiment 3, which was conducted with naïve/inexperienced participants) also failed to demonstrate intuitive-cooperation effects. Taken together, the results of the present study could not corroborate the idea that people are intuitively cooperative, hence suggesting that the theoretical relationship between intuition and cooperation should be further scrutinized.

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How Options Disappear: Causality and Emergence in Grassroots Activist Groups

Kathleen Blee
American Journal of Sociology, November 2013, Pages 655-681

Abstract:
This study advances recent theorizing on causality and emergence by analyzing how new activist groups create a collective sense of plausible tactics. A comparative ethnographic approach is used to observe shifts in the discussions of four fledgling activist groups. In each group, implicit discursive rules, often set off by minor comments and events, authorize some options and silence others. Although such rules emerge without deliberation or explicit decision making, they shape the group’s sense of possibility into the future. This study contributes both a new understanding of the role of contingency in collective activism and a method for using ethnographic observation to locate subtle causal mechanisms in social life.

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Do Overconfident Workers Cooperate Less? The Relationship Between Overconfidence and Cooperation in Team Production

Vanessa Mertins & Wolfgang Hoffeld
Managerial and Decision Economics, forthcoming

Abstract:
The tendency to underestimate others' relative performance compared with one's own is widespread among individuals in all work environments. We examine the relationship between, and the driving forces behind, individual overconfidence and voluntary cooperation in team production. Our experimental data suggest an indirect and gender-specific link: overconfident men hold more optimistic beliefs about coworkers' cooperativeness than men who lack confidence and are accordingly significantly more cooperative, whereas overconfidence, beliefs, and cooperativeness are not correlated in women.

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Fast to Forgive, Slow to Retaliate: Intuitive Responses in the Ultimatum Game Depend on the Degree of Unfairness

Eamonn Ferguson et al.
PLoS ONE, May 2014

Abstract:
Evolutionary accounts have difficulty explaining why people cooperate with anonymous strangers they will never meet. Recently models, focusing on emotional processing, have been proposed as a potential explanation, with attention focusing on a dual systems approach based on system 1 (fast, intuitive, automatic, effortless, and emotional) and system 2 (slow, reflective, effortful, proactive and unemotional). Evidence shows that when cooperation is salient, people are fast (system 1) to cooperate, but with longer delays (system 2) they show greed. This is interpreted within the framework of the social heuristic hypothesis (SHH), whereby people overgeneralize potentially advantageous intuitively learnt and internalization social norms to ‘atypical’ situations. We extend this to explore intuitive reactions to unfairness by integrating the SHH with the ‘fast to forgive, slow to anger’ (FFSA) heuristic. This suggests that it is advantageous to be prosocial when facing uncertainty. We propose that whether or not someone intuitively shows prosociality (cooperation) or retaliation is moderated by the degree (certainty) of unfairness. People should intuitively cooperate when facing mild levels of unfairness (fast to forgive) but when given longer to decide about another's mild level of unfairness should retaliate (slow to anger). However, when facing severe levels of unfairness, the intuitive response is always retaliation. We test this using a series of one-shot ultimatum games and manipulate level of offer unfairness (50:50 60:40, 70:30, 80:20, 90:10) and enforced time delays prior to responding (1s, 2s, 8s, 15s). We also measure decision times to make responses after the time delays. The results show that when facing mildly unfair offers (60:40) people are fast (intuitive) to cooperate but with longer delays reject these mildly unfair offers: ‘fast to forgive, and slow to retaliate’. However, for severely unfair offers (90:10) the intuitive and fast response is to always reject.

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Trust at zero acquaintance: More a matter of respect than expectation of reward

David Dunning et al.
Journal of Personality and Social Psychology, forthcoming

Abstract:
Trust is essential for a secure and flourishing social life, but many economic and philosophical approaches argue that rational people should never extend it, in particular to strangers they will never encounter again. Emerging data on the trust game, a laboratory economic exchange, suggests that people trust strangers excessively (i.e., far more than their tolerance for risk and cynical views of their peers should allow). What produces this puzzling “excess” of trust? We argue that people trust due to a norm mandating that they show respect for the other person’s character, presuming the other person has sufficient integrity and goodwill even if they do not believe it privately. Six studies provided converging evidence that decisions to trust follow the logic of norms. Trusting others is what people think they should do, and the emotions associated with fulfilling a social duty or responsibility (e.g., guilt, anxiety) account for at least a significant proportion of the excessive trust observed. Regarding the specific norm in play, trust rates collapse when respect for the other person’s character is eliminated as an issue.

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Elevation and mentoring: An experimental assessment of causal relations

Andrew Thomson et al.
Journal of Positive Psychology, forthcoming

Abstract:
Mentoring is a prosocial behavior in which an experienced person guides someone with less experience. Elevation refers to the responses elicited when a person witnesses others upholding the highest standards of moral virtue. Three experimental studies bring these two domains together. For all three studies, participants were randomly assigned to either read a story of someone exhibiting moral excellence or to a control condition. Participants in the elevation condition reported feeling more elevated, more positive attitudes toward mentoring, less negative attitudes toward mentoring, greater intentions to become a mentor (Study 1); an increased proclivity to gather information about becoming a mentor (Study 2a); and, an increased tendency to engage in mentoring directly via submitting advice to students (Study 2b). In their totality, the current studies link another prosocial outcome with elevation and demonstrate a condition under which individuals are more likely to be motivated to become a mentor.

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Psychological “gel” to bind individuals’ goal pursuit: Gratitude facilitates goal contagion

Lile Jia, Eddie Tong & Li Neng Lee
Emotion, forthcoming

Abstract:
Past research demonstrates that gratitude affects individuals’ self-regulation of behavior primarily through engendering a prosocial tendency. Based on theories proposing that gratitude plays an unique role in fostering communal relationship (e.g., Algoe, 2012), we propose that gratitude can have an incidental effect in facilitating goal contagion: automatically inferring and adopting the goal implied by a social other’s behavior. This hypothesis is supported in 3 studies. In Study 1, after being exposed to the behaviors of a social target that implied either a cooperative or a competitive goal, individuals adopted the respective goal and behaved accordingly in a Resource Dilemma Task. This occurred, however, only when they were feeling gratitude and not when they were feeling joy or a neutral mood. In Study 2, after being exposed to a social target’s behavior that implied the goal to make money, people feeling gratitude, as compared to those feeling pride or a neutral mood, strove for a future opportunity to earn money. Study 3 further demonstrated that individuals’ goal striving behavior was mediated by a heightened level of goal activation. Finally, it was found that gratitude facilitated goal contagion only when the social target was a member of participants’ own social group. Through this mechanism, gratitude, thus, seems to bind one’s self-regulation with those of social others. Theoretical and practical implications of this new perspective are discussed.

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Ego depletion decreases trust in economic decision making

Sarah Ainsworth et al.
Journal of Experimental Social Psychology, September 2014, Pages 40–49

Abstract:
Three experiments tested the effects of ego depletion on economic decision making. Participants completed a task either requiring self-control or not. Then participants learned about the trust game, in which senders are given an initial allocation of $10 to split between themselves and another person, the receiver. The receiver receives triple the amount given and can send any, all, or none of the tripled money back to the sender. Participants were assigned the role of the sender and decided how to split the initial allocation. Giving less money, and therefore not trusting the receiver, is the safe, less risky response. Participants who had exerted self-control and were depleted gave the receiver less money than those in the non-depletion condition (Experiment 1). This effect was replicated and moderated in two additional experiments. Depletion again led to lower amounts given (less trust), but primarily among participants who were told they would never meet the receiver (Experiment 2) or who were given no information about how similar they were to the receiver (Experiment 3). Amounts given did not differ for depleted and non-depleted participants who either expected to meet the receiver (Experiment 2) or were led to believe that they were very similar to the receiver (Experiment 3). Decreased trust among depleted participants was strongest among neurotics. These results imply that self-control facilitates behavioral trust, especially when no other cues signal decreased social risk in trusting, such as if an actual or possible relationship with the receiver were suggested.

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Serotonin and Social Norms: Tryptophan Depletion Impairs Social Comparison and Leads to Resource Depletion in a Multiplayer Harvesting Game

Amy Bilderbeck et al.
Psychological Science, forthcoming

Abstract:
How do people sustain resources for the benefit of individuals and communities and avoid the tragedy of the commons, in which shared resources become exhausted? In the present study, we examined the role of serotonin activity and social norms in the management of depletable resources. Healthy adults, alongside social partners, completed a multiplayer resource-dilemma game in which they repeatedly harvested from a partially replenishable monetary resource. Dietary tryptophan depletion, leading to reduced serotonin activity, was associated with aggressive harvesting strategies and disrupted use of the social norms given by distributions of other players’ harvests. Tryptophan-depleted participants more frequently exhausted the resource completely and also accumulated fewer rewards than participants who were not tryptophan depleted. Our findings show that rank-based social comparisons are crucial to the management of depletable resources, and that serotonin mediates responses to social norms.

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When can a photo increase credit?: The impact of lender and borrower profiles on online peer-to-peer loans

Laura Gonzalez & Yuliya Komarova Loureiro
Journal of Behavioral and Experimental Finance, forthcoming

Abstract:
This paper examines the effects of lender and borrower personal characteristics (perceived attractiveness, age and gender) on online peer-to-peer lending decisions. The extant research in finance, marketing, and psychology provides substantial support for the “beauty premium” effect, where ceteris paribus, more (as opposed to less) attractive individuals are favored (e.g., Ravina 2012). Our results qualify these findings, suggesting that (1) when perceived age is a clear signal of competence (college-age signals low competence, while middle age signals significant competence), attractiveness has no effect on loan success; (2) when lender and borrower are of the same gender, attractiveness may actually hurt one’s chances to secure a loan (we observe “beauty is beastly” effect), and (3) loan success is sensitive to the relative age and attractiveness of lenders and borrowers.

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Who’s bringing the donuts: The role of affective patterns in group decision making

Kyle Emich
Organizational Behavior and Human Decision Processes, July 2014, Pages 122–132

Abstract:
Two studies examined how intragroup affective patterns influence groups’ pervasive tendency to ignore the unique expertise of their members. Using a hidden profile task, Study 1 provided evidence that groups with at least one member experiencing positive affect shared more unique information than groups composed entirely of members experiencing neutral affect. This occurred because group members experiencing positive affect were more likely to initiate unique information sharing, as well as information seeking. Study 2 built upon this base by showing that confidence mediates the relationship between positive affect and the initiation of unique information sharing. Additionally, Study 2 investigated the role of negative affect in group decision making and how negative and positive affect concurrently influence decision making when groups are composed of members experiencing each. The results are discussed in terms of the role affect plays in influencing group behavior and the resultant importance of investigating specific affective patterns.

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Natural and Strategic Generosity as Signals of Trustworthiness

Diego Gambetta & Wojtek Przepiorka
PLoS ONE, May 2014

Abstract:
We exploit the fact that generosity and trustworthiness are highly correlated and the former can thus be a sign of the latter. Subjects decide between a generous and a mean split in a dictator game. Some of them are informed from the start that afterwards they will participate in a trust game and that their choice in the dictator game may matter; others are not informed in advance. In the trust game, before trusters decide whether or not to trust, some trustees can reveal (or conceal) only their true choice in the dictator game, while others can say to trusters, truthfully or otherwise, what they chose. We find that a generous choice made naturally by uninformed trustees and reliably revealed is more effective in persuading trusters to trust than a generous choice that could be strategic or a lie. Moreover, we find that, when they can, mean subjects lie and go on to be untrustworthy.

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Homophily and the Speed of Social Mobilization: The Effect of Acquired and Ascribed Traits

Jeff Alstott, Stuart Madnick & Chander Velu
PLoS ONE, April 2014

Abstract:
Large-scale mobilization of individuals across social networks is becoming increasingly prevalent in society. However, little is known about what affects the speed of social mobilization. Here we use a framed field experiment to identify and measure properties of individuals and their relationships that predict mobilization speed. We ran a global social mobilization contest and recorded personal traits of the participants and those they recruited. We studied the effects of ascribed traits (gender, age) and acquired traits (geography, and information source) on the speed of mobilization. We found that homophily, a preference for interacting with other individuals with similar traits, had a mixed role in social mobilization. Homophily was present for acquired traits, in which mobilization speed was faster when the recuiter and recruit had the same trait compared to different traits. In contrast, we did not find support for homophily for the ascribed traits. Instead, those traits had other, non-homophily effects: Females mobilized other females faster than males mobilized other males. Younger recruiters mobilized others faster, and older recruits mobilized slower. Recruits also mobilized faster when they first heard about the contest directly from the contest organization, and decreased in speed when hearing from less personal source types (e.g. family vs. media). These findings show that social mobilization includes dynamics that are unlike other, more passive forms of social activity propagation. These findings suggest relevant factors for engineering social mobilization tasks for increased speed.

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Sanctions as honest signals – The evolution of pool punishment by public sanctioning institutions

Sarah Schoenmakers et al.
Journal of Theoretical Biology, 7 September 2014, Pages 36–46

Abstract:
In many species, mutual cooperation is stabilized by forms of policing and peer punishment: if cheaters are punished, there is a strong selective pressure to cooperate. Most human societies have complemented, and sometimes even replaced, such peer punishment mechanisms with pool punishment, where punishment is outsourced to central institutions such as the police. Even before free-riding occurs, such institutions require investments, which could serve as costly signals. Here, we show with a game theoretical model that this signaling effect in turn can be crucial for the evolution of punishment institutions: In the absence of such signals, pool punishment is only stable with second-order punishment and can only evolve when individuals have the freedom not to take part in any interaction. With such signals, individuals can opportunistically adjust their behavior, which promotes the evolution of stable pool punishment even in situations where no one can stand aside. Thus, the human propensity to react opportunistically to credible punishment threats is often sufficient to establish stable punishment institutions and to maintain high levels of cooperation.

By KEVIN LEWIS | 09:00:00 AM

Saturday, May 17, 2014

Past is prologue

Pluvials, droughts, the Mongol Empire, and modern Mongolia

Neil Pederson et al.
Proceedings of the National Academy of Sciences, 25 March 2014, Pages 4375-4379

Abstract:
Although many studies have associated the demise of complex societies with deteriorating climate, few have investigated the connection between an ameliorating environment, surplus resources, energy, and the rise of empires. The 13th-century Mongol Empire was the largest contiguous land empire in world history. Although drought has been proposed as one factor that spurred these conquests, no high-resolution moisture data are available during the rapid development of the Mongol Empire. Here we present a 1,112-y tree-ring reconstruction of warm-season water balance derived from Siberian pine (Pinus sibirica) trees in central Mongolia. Our reconstruction accounts for 56% of the variability in the regional water balance and is significantly correlated with steppe productivity across central Mongolia. In combination with a gridded temperature reconstruction, our results indicate that the regional climate during the conquests of Chinggis Khan's (Genghis Khan's) 13th-century Mongol Empire was warm and persistently wet. This period, characterized by 15 consecutive years of above-average moisture in central Mongolia and coinciding with the rise of Chinggis Khan, is unprecedented over the last 1,112 y. We propose that these climate conditions promoted high grassland productivity and favored the formation of Mongol political and military power. Tree-ring and meteorological data also suggest that the early 21st-century drought in central Mongolia was the hottest drought in the last 1,112 y, consistent with projections of warming over Inner Asia. Future warming may overwhelm increases in precipitation leading to similar heat droughts, with potentially severe consequences for modern Mongolia.

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Eusociality in History

Laura Betzig
Human Nature, March 2014, Pages 80-99

Abstract:
For more than 100,000 years, H. sapiens lived as foragers, in small family groups with low reproductive variance. A minority of men were able to father children by two or three women; and a majority of men and women were able to breed. But after the origin of farming around 10,000 years ago, reproductive variance increased. In civilizations which began in Mesopotamia, Egypt, India, and China, and then moved on to Greece and Rome, kings collected thousands of women, whose children were supported and guarded by thousands of eunuchs. Just a few hundred years ago, that trend reversed. Obligate sterility ended, and reproductive variance declined. For H. sapiens, as for other organisms, eusociality seems to be an effect of ecological constraints. Civilizations rose up in lake and river valleys, hemmed in by mountains and deserts. Egalitarianism became an option after empty habitats opened up.

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Genomic and cranial phenotype data support multiple modern human dispersals from Africa and a southern route into Asia

Hugo Reyes-Centeno et al.
Proceedings of the National Academy of Sciences, forthcoming

Abstract:
Despite broad consensus on Africa as the main place of origin for anatomically modern humans, their dispersal pattern out of the continent continues to be intensely debated. In extant human populations, the observation of decreasing genetic and phenotypic diversity at increasing distances from sub-Saharan Africa has been interpreted as evidence for a single dispersal, accompanied by a series of founder effects. In such a scenario, modern human genetic and phenotypic variation was primarily generated through successive population bottlenecks and drift during a rapid worldwide expansion out of Africa in the Late Pleistocene. However, recent genetic studies, as well as accumulating archaeological and paleoanthropological evidence, challenge this parsimonious model. They suggest instead a "southern route" dispersal into Asia as early as the late Middle Pleistocene, followed by a separate dispersal into northern Eurasia. Here we test these competing out-of-Africa scenarios by modeling hypothetical geographical migration routes and assessing their correlation with neutral population differentiation, as measured by genetic polymorphisms and cranial shape variables of modern human populations from Africa and Asia. We show that both lines of evidence support a multiple-dispersals model in which Australo-Melanesian populations are relatively isolated descendants of an early dispersal, whereas other Asian populations are descended from, or highly admixed with, members of a subsequent migration event.

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Neandertal Demise: An Archaeological Analysis of the Modern Human Superiority Complex

Paola Villa & Wil Roebroeks
PLoS ONE, April 2014

Abstract:
Neandertals are the best-studied of all extinct hominins, with a rich fossil record sampling hundreds of individuals, roughly dating from between 350,000 and 40,000 years ago. Their distinct fossil remains have been retrieved from Portugal in the west to the Altai area in central Asia in the east and from below the waters of the North Sea in the north to a series of caves in Israel in the south. Having thrived in Eurasia for more than 300,000 years, Neandertals vanished from the record around 40,000 years ago, when modern humans entered Europe. Modern humans are usually seen as superior in a wide range of domains, including weaponry and subsistence strategies, which would have led to the demise of Neandertals. This systematic review of the archaeological records of Neandertals and their modern human contemporaries finds no support for such interpretations, as the Neandertal archaeological record is not different enough to explain the demise in terms of inferiority in archaeologically visible domains. Instead, current genetic data suggest that complex processes of interbreeding and assimilation may have been responsible for the disappearance of the specific Neandertal morphology from the fossil record.

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Late Pleistocene Human Skeleton and mtDNA Link Paleoamericans and Modern Native Americans

James Chatters et al.
Science, 16 May 2014, Pages 750-754

Abstract:
Because of differences in craniofacial morphology and dentition between the earliest American skeletons and modern Native Americans, separate origins have been postulated for them, despite genetic evidence to the contrary. We describe a near-complete human skeleton with an intact cranium and preserved DNA found with extinct fauna in a submerged cave on Mexico's Yucatan Peninsula. This skeleton dates to between 13,000 and 12,000 calendar years ago and has Paleoamerican craniofacial characteristics and a Beringian-derived mitochondrial DNA (mtDNA) haplogroup (D1). Thus, the differences between Paleoamericans and Native Americans probably resulted from in situ evolution rather than separate ancestry.

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Marrying kin in small-scale societies

Robert Walker & Drew Bailey
American Journal of Human Biology, May/June 2014, Pages 384-388

Objectives: Marriages among kin have the dual effect of both increasing average group relatedness as well as reducing the total number of kin by eliminating more genealogically and geographically distant individuals from kinship networks. Marriage decisions therefore face a tradeoff between density of kin, or formation of intensive kinship systems, and the diversity of kin, or extensive kinship systems. This article tests the hypothesis that extensive kinship systems best characterize hunter-gatherer societies, whereas more intensive forms of subsistence, like horticultural, agricultural, and pastoral economies, are more likely to have intensive kinship systems.

Methods: Here, we investigate the wide range of variation in prevalence of kin marriages across a sample of 46 small-scale societies, split evenly between hunter-gatherers and agropastoralists (including horticulturalists), using genealogies that range in depth from 4 to 16 generations. Regression methods examine how subsistence and polygyny relate to spousal relatedness and inbreeding across societies.

Results: On average, hunter-gatherers show limited numbers of kin marriages and low levels of inbreeding, whereas some agropastoralists are characterized by much higher levels of both, especially in societies where polygynous marriages are more common.

Conclusion: Intensive kinship systems emerge in some intensive economies. This pattern may have favored a kin-selected increase in more large-scale cooperation and inequality occurring relatively recently in human history after the advent of domesticated plants and animals.

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Micro-Biomechanics of the Kebara 2 Hyoid and Its Implications for Speech in Neanderthals

Ruggero D'Anastasio et al.
PLoS ONE, December 2013

Abstract:
The description of a Neanderthal hyoid from Kebara Cave (Israel) in 1989 fuelled scientific debate on the evolution of speech and complex language. Gross anatomy of the Kebara 2 hyoid differs little from that of modern humans. However, whether Homo neanderthalensis could use speech or complex language remains controversial. Similarity in overall shape does not necessarily demonstrate that the Kebara 2 hyoid was used in the same way as that of Homo sapiens. The mechanical performance of whole bones is partly controlled by internal trabecular geometries, regulated by bone-remodelling in response to the forces applied. Here we show that the Neanderthal and modern human hyoids also present very similar internal architectures and micro-biomechanical behaviours. Our study incorporates detailed analysis of histology, meticulous reconstruction of musculature, and computational biomechanical analysis with models incorporating internal micro-geometry. Because internal architecture reflects the loadings to which a bone is routinely subjected, our findings are consistent with a capacity for speech in the Neanderthals.

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The Cradle of Thought: Growth, Learning, Play and Attachment in Neanderthal Children

Penny Spikins et al.
Oxford Journal of Archaeology, May 2014, Pages 111-134

Abstract:
Childhood is a core stage in development, essential in the acquisition of social, practical and cultural skills. However, this area receives limited attention in archaeological debate, especially in early prehistory. We here consider Neanderthal childhood, exploring the experience of Neanderthal children using biological, cultural and social evidence. We conclude that Neanderthal childhood experience was subtly different from that of their modern human counterparts, orientated around a greater focus on social relationships within their group. Neanderthal children, as reflected in the burial record, may have played a particularly significant role in their society, especially in the domain of symbolic expression. A consideration of childhood informs broader debates surrounding the subtle differences between Neanderthals and modern humans.

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Linguistic Phylogenies Support Back-Migration from Beringia to Asia

Mark Sicoli & Gary Holton
PLoS ONE, March 2014

Abstract:
Recent arguments connecting Na-Dene languages of North America with Yeniseian languages of Siberia have been used to assert proof for the origin of Native Americans in central or western Asia. We apply phylogenetic methods to test support for this hypothesis against an alternative hypothesis that Yeniseian represents a back-migration to Asia from a Beringian ancestral population. We coded a linguistic dataset of typological features and used neighbor-joining network algorithms and Bayesian model comparison based on Bayes factors to test the fit between the data and the linguistic phylogenies modeling two dispersal hypotheses. Our results support that a Dene-Yeniseian connection more likely represents radiation out of Beringia with back-migration into central Asia than a migration from central or western Asia to North America.

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Early agriculture and crop transmission among Bronze Age mobile pastoralists of Central Eurasia

Robert Spengler et al.
Proceedings of the Royal Society: Biological Sciences, 22 May 2014

Abstract:
Archaeological research in Central Eurasia is exposing unprecedented scales of trans-regional interaction and technology transfer between East Asia and southwest Asia deep into the prehistoric past. This article presents a new archaeobotanical analysis from pastoralist campsites in the mountain and desert regions of Central Eurasia that documents the oldest known evidence for domesticated grains and farming among seasonally mobile herders. Carbonized grains from the sites of Tasbas and Begash illustrate the first transmission of southwest Asian and East Asian domesticated grains into the mountains of Inner Asia in the early third millennium BC. By the middle second millennium BC, seasonal camps in the mountains and deserts illustrate that Eurasian herders incorporated the cultivation of millet, wheat, barley and legumes into their subsistence strategy. These findings push back the chronology for domesticated plant use among Central Eurasian pastoralists by approximately 2000 years. Given the geography, chronology and seed morphology of these data, we argue that mobile pastoralists were key agents in the spread of crop repertoires and the transformation of agricultural economies across Asia from the third to the second millennium BC.

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A forager-herder trade-off, from broad-spectrum hunting to sheep management at Aşıklı Höyük, Turkey

Mary Stiner et al.
Proceedings of the National Academy of Sciences, forthcoming

Abstract:
Aşıklı Höyük is the earliest known preceramic Neolithic mound site in Central Anatolia. The oldest Levels, 4 and 5, spanning 8,200 to approximately 9,000 cal B.C., associate with round-house architecture and arguably represent the birth of the Pre-Pottery Neolithic in the region. Results from upper Level 4, reported here, indicate a broad meat diet that consisted of diverse wild ungulate and small animal species. The meat diet shifted gradually over just a few centuries to an exceptional emphasis on caprines (mainly sheep). Age-sex distributions of the caprines in upper Level 4 indicate selective manipulation by humans by or before 8,200 cal B.C. Primary dung accumulations between the structures demonstrate that ruminants were held captive inside the settlement at this time. Taken together, the zooarchaeological and geoarchaeological evidence demonstrate an emergent process of caprine management that was highly experimental in nature and oriented to quick returns. Stabling was one of the early mechanisms of caprine population isolation, a precondition to domestication.

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Reconstructing the DNA Methylation Maps of the Neandertal and the Denisovan

David Gokhman et al.
Science, 2 May 2014, Pages 523-527

Abstract:
Ancient DNA sequencing has recently provided high-coverage archaic human genomes. However, the evolution of epigenetic regulation along the human lineage remains largely unexplored. We reconstructed the full DNA methylation maps of the Neandertal and the Denisovan by harnessing the natural degradation processes of methylated and unmethylated cytosines. Comparing these ancient methylation maps to those of present-day humans, we identified ~2000 differentially methylated regions (DMRs). Particularly, we found substantial methylation changes in the HOXD cluster that may explain anatomical differences between archaic and present-day humans. Additionally, we found that DMRs are significantly more likely to be associated with diseases. This study provides insight into the epigenetic landscape of our closest evolutionary relatives and opens a window to explore the epigenomes of extinct species.

By KEVIN LEWIS | 09:00:00 AM

Friday, May 16, 2014

Cum laude

Estimating the Effects of College Characteristics over the Career Using Administrative Earnings Data

Stacy Dale & Alan Krueger
Journal of Human Resources, Spring 2014, Pages 323-358

Abstract:
We estimate the labor market effect of attending a highly selective college, using the College and Beyond Survey linked to Social Security Administration data. We extend earlier work by estimating effects for students that entered college in 1976 over a longer time horizon (from 1983 through 2007) and for a more recent cohort (1989). For both cohorts, the effects of college characteristics on earnings are sizeable (and similar in magnitude) in standard regression models. In selection-adjusted models, these effects generally fall to close to zero; however, these effects remain large for certain subgroups, such as for black and Hispanic students.

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Scaling the Digital Divide: Home Computer Technology and Student Achievement

Jacob Vigdor, Helen Ladd & Anderika Martinez
Economic Inquiry, July 2014, Pages 1103–1119

Abstract:
Does differential access to computer technology at home compound the educational disparities between rich and poor? Would a program of government provision of computers to early secondary school students reduce these disparities? We use administrative data on North Carolina public school students to corroborate earlier surveys that document broad racial and socioeconomic gaps in home computer access and use. Using within-student variation in home computer access, and across-ZIP code variation in the timing of the introduction of high-speed Internet service, we also demonstrate that the introduction of home computer technology is associated with modest, but statistically significant and persistent negative impacts on student math and reading test scores. Further evidence suggests that providing universal access to home computers and high-speed Internet access would broaden, rather than narrow, math and reading achievement gaps.

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A Major Choice: An Examination of Higher Education and Ability-Adjusted Income

Katharina Ley Best & Jussi Keppo
University of Michigan Working Paper, January 2014

Abstract:
We compare annual post-college income across student groups defined by ability levels, school quality, and major using individual-level data from the NLSY 1997. We condition on student ability (quality of the top school admitted to), and study major and school choice together. Elite institution attendance increases post-college income by almost $8,000. Some of this increase is driven by longer working hours. Major choice has a bigger impact on income than school choice. Students majoring in engineering, computer-related fields, and business earn more than humanities and arts majors even after adjusting for ability and hours worked ($23,000 more for top students).

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Scholarly Culture and Academic Performance in 42 Nations

M.D.R. Evans, Jonathan Kelley & Joanna Sikora
Social Forces, June 2014, Pages 1573-1605

Abstract:
Exposure to books and high culture provides important academic advantages. But the reasons for this are hotly disputed. Elite closure theory posits that culture merely signals children's elite status to gatekeepers who then grant them unjust advantages. But other theories suggest that scholarly culture provides cognitive skills that improve academic performance, which schools justly reward. We attempt to adjudicate between these theories using data on academic performance from 42 national samples with 200,144 cases from OECD's PISA. We find that a key aspect of scholarly culture, the number of books in the family home, exerts a strong influence on academic performance in ways consistent with the cognitive skill hypothesis, regardless of the nation's ideology, political history, or level of development.

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The Effect of School Finance Reforms on the Distribution of Spending, Academic Achievement, and Adult Outcomes

Kirabo Jackson, Rucker Johnson & Claudia Persico
NBER Working Paper, May 2014

Abstract:
The school finance reforms (SFRs) that began in the early 1970s and accelerated in the 1980s caused some of the most dramatic changes in the structure of K–12 education spending in U.S. history. We analyze the effects of these reforms on the level and distribution of school district spending, as well as their effects on subsequent educational and economic outcomes. In Part One, using a newly compiled database of school finance reforms and a recently available long panel of annual school district data on per-pupil spending that spans 1967–2010, we present an event-study analysis of the effects of different types of school finance reforms on per-pupil spending in low- and high-income school districts. We find that SFRs have been instrumental in equalizing school spending between low- and high-income districts and many reforms do so by increasing spending for poor districts. While all reforms reduce spending inequality, there are important differences by reform type: adequacy-based court-ordered reforms increase overall school spending, while equity-based court-ordered reforms reduce the variance of spending with little effect on overall levels; reforms that entail high tax prices (the amount of taxes a district must raise to increase spending by one dollar) reduce long-run spending for all districts, and those that entail low tax prices lead to increased spending growth, particularly for low-income districts. In Part Two, we link the spending and reform data to detailed, nationally-representative data on children born between 1955 and 1985 and followed through 2011 (the Panel Study of Income Dynamics) to study the effect of the reform-induced changes in school spending on long-run adult outcomes. These birth cohorts straddle the period in which most of the major school finance reform litigation accelerated, and thus the cohorts were differentially exposed, depending on place and year of birth. We use the timing of the passage of court-mandated reforms as an exogenous shifter of school spending across cohorts within the same district. Event-study and instrumental variable models reveal that a 20 percent increase in per-pupil spending each year for all 12 years of public school for children from poor families leads to about 0.9 more completed years of education, 25 percent higher earnings, and a 20 percentage-point reduction in the annual incidence of adult poverty; we find no effects for children from non-poor families. The magnitudes of these effects are sufficiently large to eliminate between two-thirds and all of the gaps in these adult outcomes between those raised in poor families and those raised in non-poor families. We present several pieces of evidence to support a causal interpretation of the estimates.

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The Impact of Student Loan Debt on Small Business Formation

Brent Ambrose, Larry Cordell & Shuwei Ma
Pennsylvania State University Working Paper, March 2014

Abstract:
Small businesses are the backbone of the US economy and account for approximately half of the private-sector economy and 99% of all businesses. To start a small business, individuals need access to capital. Given the importance of an entrepreneur’s personal debt capacity in financing a start-up business, student loan debt, which cannot be discharged via bankruptcy, can have lasting effects later in life and may impact the ability of future small business owners to raise capital. This study examines the impact of growth in student debt on net small business formation. We find a significant and economically meaningful negative correlation between changes in student loan debt and net business formation for the smallest group of small businesses, those employing 1-4 employees. This is important since these small businesses depend the most heavily on personal debt to finance new business formation. Based on our model, a one standard deviation increase in student debt reduces 1-4 employee businesses by 25 percent on average between 2000 and 2010. The effect on larger firm formation is not significant, which we interpret to mean that these firms have greater access to outside finance.

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Sweden’s School Choice Reform and Equality of Opportunity

Karin Edmark, Markus Frölich & Verena Wondratschek
Labour Economics, forthcoming

Abstract:
This study analyses whether the Swedish school choice reform, enacted in 1992, had differential effects for students from different socio-economic backgrounds. We use detailed geographical data on students’ and schools’ locations to construct measures of the degree of potential choice. This allows us to study the effects of choice opportunities among public schools, whereas previous studies have focused on newly opened private schools. Our results indicate that students from a socio-economically disadvantaged or immigrant background did not benefit less from more school choice than those from more advantaged backgrounds. If anything, students from low-income families benefited slightly more than those from higher-income families. However, the differences between groups of students are very small, as are the overall effects of the reform.

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The Inconsistent Curriculum: Cultural Tool Kits and Student Interpretations of Ambiguous Expectations

Jessica McCrory Calarco
Social Psychology Quarterly, forthcoming

Abstract:
This paper argues that inequalities can be more clearly understood by combining tool kit theories of culture that stress convergence between institutional expectations and individual behavior with symbolic interactionism, which emphasizes the interpretive and situational nature of behavior. I base these arguments on an ethnographic analysis of student responses to ambiguous expectations around help-seeking. Teachers’ shifting expectations created interpretive moments, to which middle-class and working-class students responded differently. Through a logic of entitlement, middle-class students saw ambiguities as opportunities for reward and tried to seek assistance. Through a logic of appeasement, working-class students saw ambiguities as opportunities for reprimand and sought to placate teachers by avoiding requests. Teacher responses to student behavior varied across situations but helped to perpetuate inequalities. Such findings suggest that the activation of tool kit resources and the stratified profits that result are more interpretive and situational than scholars typically acknowledge.

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Why Do Charter Schools Fail? An Analysis of Charter School Survival in New Jersey

Julia Schwenkenberg & James Vanderhoff
Contemporary Economic Policy, forthcoming

Abstract:
Charter school competition can only work as a policy to improve public education if schools that do not contribute to this goal are allowed to fail. We estimate survival regressions to assess the effects of various factors on the probability of school failure. We find that students' test scores are the most important determinant of survival: a one standard deviation increase reduces the probability of failure by 76%. Higher expenditures per student and a longer wait list result in smaller, but significant, reductions. Enrollment, average performance in the host district, and student demographics do not significantly affect school survival.

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National High School Graduation Rate: Are Recent Birth Cohorts Taking More Time to Graduate?

Myungkook Joo & Jeounghee Kim
Education and Urban Society, forthcoming

Abstract:
Debates about the national high school graduation rate have heated up as various national high school graduation estimates based on the Common Core of Data (CCD) and the Current Population Survey (CPS) do not coincide with one another partially due to different assumptions about graduation age. This study found that (a) while graduation rate by age 18 declined, the rate by age 24 remained relatively constant, creating larger differences between the CCD- and CPS-based rates and that (b) males and minorities particularly take more time to obtain a high school degree among the recent birth cohorts.

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Third-grade retention and reading achievement in Texas: A nine year panel study

Jon Lorence
Social Science Research, forthcoming

Abstract:
The academic performance of over 38,000 Texas students who failed the state’s 1994 reading test was examined through their sophomore year in high school. Propensity score matching resulted in strata with retained and promoted students of comparable observed characteristics. Reading scores were analyzed using a two-level hierarchical linear model. Same grade comparisons show that third graders failing the state-mandated reading test who repeated the grade consistently outperformed in later grades the socially promoted children who also failed the third grade test. Additional analyses indicate that alternative explanations for the findings such as omitted variables, regression to the mean, differential panel attrition and cohort effects are not supported. The results are consistent with findings from other recent studies which suggest that grade retention in third grade may help increase student achievement.

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Far transfer to language and math of a short software-based gaming intervention

Andrea Paula Goldin et al.
Proceedings of the National Academy of Sciences, 29 April 2014, Pages 6443-6448

Abstract:
Executive functions (EF) in children can be trained, but it remains unknown whether training-related benefits elicit far transfer to real-life situations. Here, we investigate whether a set of computerized games might yield near and far transfer on an experimental and an active control group of low-SES otherwise typically developing 6-y-olds in a 3-mo pretest–training–posttest design that was ecologically deployed (at school). The intervention elicits transfer to some (but not all) facets of executive function. These changes cascade to real-world measures of school performance. The intervention equalizes academic outcomes across children who regularly attend school and those who do not because of social and familiar circumstances.

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The Pen Is Mightier Than the Keyboard: Advantages of Longhand Over Laptop Note Taking

Pam Mueller & Daniel Oppenheimer
Psychological Science, forthcoming

Abstract:
Taking notes on laptops rather than in longhand is increasingly common. Many researchers have suggested that laptop note taking is less effective than longhand note taking for learning. Prior studies have primarily focused on students’ capacity for multitasking and distraction when using laptops. The present research suggests that even when laptops are used solely to take notes, they may still be impairing learning because their use results in shallower processing. In three studies, we found that students who took notes on laptops performed worse on conceptual questions than students who took notes longhand. We show that whereas taking more notes can be beneficial, laptop note takers’ tendency to transcribe lectures verbatim rather than processing information and reframing it in their own words is detrimental to learning.

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Retrieval (Sometimes) Enhances Learning: Performance Pressure Reduces the Benefits of Retrieval Practice

Scott Hinze & David Rapp
Applied Cognitive Psychology, forthcoming

Abstract:
Academic testing has received substantial support as a useful educational activity with robust retention benefits, given that tests can promote retrieval practice. However, testing can also instantiate performance-related pressure and anxiety that may misappropriate the resources responsible for producing learning benefits. The current project examined the effects of performance pressure on retrieval practice. In two experiments, we instantiated performance pressure with either high-stakes or low-stakes quizzes, and assessed memory and comprehension of content on both quizzes and final tests. Quiz performance was equivalent under high-stakes and low-stakes conditions, demonstrating that learners adapted to high-pressure quizzes. However, final test performance was better after low-stakes versus high-stakes quizzes, and only low-stakes quizzes led to a performance advantage over a rereading control group. Participants additionally exhibited some sensitivity to the difficulty of retrieving under pressure. These data highlight the benefits of retrieval practice but indicate that they can be disrupted under pressure-driven conditions.

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The Relationship of Physical Fitness, Self-Beliefs, and Social Support to the Academic Performance of Middle School Boys and Girls

Sudhish Srikanth et al.
Journal of Early Adolescence, forthcoming

Abstract:
We examined the influence of physical and psychosocial variables on math and reading achievement test scores. Between 1 and 5 months prior to taking annual standardized reading and math tests, a sample of (N = 1,211) sixth through eight graders (53.7% girls; 57.2% White) self-reported levels of physical activity, academic self-beliefs, general self-esteem, and social support and participated in objective testing to obtain measures of body composition (body mass index [BMI]) and cardiorespiratory fitness. Socioeconomic status (SES) and state-based reading and math achievement test scores were provided by the school district. Regression analyses revealed that SES, academic self-beliefs, and cardiorespiratory fitness were the consistent predictors of the students’ performance in reading and math; perceived social support from family and friends and higher levels of self-esteem were related to higher reading scores for the boys only. Our findings support schools re-examining policies that have limited students’ involvement in physical education classes.

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An International Comparison of Achievement Inequality in Within- and Between-School Tracking Systems

Anna Chmielewski
American Journal of Education, May 2014, Pages 293-324

Abstract:
Secondary school tracking is organized in some countries on a course-by-course basis within schools and in other countries as explicit academic and vocational streaming, often in separate school buildings. This article is the first to compare these two forms of tracking, using student-level tracking data across the United States and 19 other developed countries. Results indicate that course-by-course tracking is less segregated by socioeconomic status (SES) than is academic/vocational streaming. Yet both forms of tracking have comparable achievement gaps between tracks. Among students in the same track, SES disparities in achievement are larger in course-by-course tracking than in academic/vocational streaming.

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Promise Scholarship Programs as Place-Making Policy: Evidence from School Enrollment and Housing Prices

Michael LeGower & Randall Walsh
NBER Working Paper, April 2014

Abstract:
Following the example of the Kalamazoo Promise initiated in 2005, place-based "Promise'' scholarship programs have proliferated over the past 8 years. These programs guarantee money towards the costs of attendance at selected colleges and universities provided that a student has resided and attended school within a particular public school district continuously for at least the four years prior to graduation. While some early programs have been studied in isolation, the impact of such programs in general is not well understood. In addition, although there is substantial and controversial variation from the original program's design, there is no direct evidence on how outcomes vary along with these design choices. We use a difference-in-difference approach to compare the evolution of both school enrollments and residential real estate prices around the announcement of these programs within the affected Promise zone and in the surrounding area. Taken together, our estimates suggest that these scholarships have important distributional effects that bear further examination. In particular, while estimates indicate that public school enrollments increase in Promise zones relative to their surrounding areas following Promise announcements, schools associated with merit-based programs experience increases in white enrollment and decreases in non-white enrollment. Furthermore, housing price effects are larger in neighborhoods with high quality schools and in the upper half of the housing price distribution, suggesting higher valuation by high-income households. These patterns lead us to conclude that such scholarships are primarily affecting the behavior of households living above the median income for whom they present the greatest value and that merit-based versions disproportionately impact white households.

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Class-size effects in secondary school

Karl Fritjof Krassel & Eskil Heinesen
Education Economics, forthcoming

Abstract:
We analyze class-size effects on academic achievement in secondary school in Denmark exploiting an institutional setting where pupils cannot predict class size prior to enrollment, and where post-enrollment responses aimed at affecting realized class size are unlikely. We identify class-size effects combining a regression discontinuity design with control for lagged achievement and school fixed effects. Using administrative registry data, we find statistically significant negative effects of class size on academic achievement.

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Cross-National Educational Inequalities and Opportunities to Learn: Conflicting Views of Instructional Time

Daniel Long
Educational Policy, May 2014, Pages 351-392

Abstract:
Educational reformers use international evidence to argue that increasing the number of days in school and the length of the school day will improve academic achievement. However, the international data used to support these claims (1999 Third International Math and Science Survey and 2000 Program for International Student Assessment) show no correlation between time in school and achievement. In this article, the author re-examines the effects of instructional time using improved measures of instructional time, a more extensive data set (2006 Program for International Student Assessment), and a more nuanced multilevel model. The author finds mixed evidence of a positive effect of subject-specific instructional time on achievement, controlling for socioeconomic status, school characteristics, and country-level traits. The author finds no effect of the length of the school year on academic achievement and that sample selection and the specific uses of time in school have a strong influence on conclusions about the effectiveness of instructional time.

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Universal factors of student achievement in high-performing Eastern and Western countries

Jihyun Lee
Journal of Educational Psychology, May 2014, Pages 364-374

Abstract:
This study investigates whether a common set of student attitudes and behavioral tendencies can account for academic achievement across different, especially high-performing, countries via analysis of the PISA 2009 international data set. The 13 countries examined are 5 of the top-performing Eastern countries/systems, namely Shanghai China, South Korea, Hong Kong China, Singapore, and Japan; 5 top-performing Western countries, including Finland, Canada, New Zealand, Australia, and the Netherlands; and the 3 “superpower” countries of Germany, the United Kingdom, and the United States. Ten extensively studied achievement-related attitudinal and behavioral variables — including attitudes toward school, enjoyment, learning strategies, reading habits, and reading strategies — were investigated. Overall, when comparing the East and West across the 10 variables, there were small to medium effect sizes, with Cohen’s d ranging from 0.04 to 0.47, which resulted in salient differences between the 2 regions. More important, there were striking similarities across all 13 countries in their “best” predictor of reading achievement — either enjoyment of reading or utilization of reading strategies to efficiently summarize the text. Enjoyment of reading in particular was a strong predictor at both individual and country levels. This study concludes that what motivates human learning is invariant across countries with vastly different educational, cultural, and language systems.

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Are Performance Management Practices Associated With Better Outcomes? Empirical Evidence From New York Public Schools

Rusi Sun & Gregg Van Ryzin
American Review of Public Administration, May 2014, Pages 324-338

Abstract:
Performance management is widely assumed to be an effective strategy for improving outcomes in the public sector. However, few attempts have been made to empirically test this assumption. Using data on New York City public schools, we examine the relationship between performance management practices by school leaders and educational outcomes, as measured by standardized test scores. The empirical results show that schools that do a better job at performance management indeed have better outcomes in terms of both the level and gain in standardized test scores, even when controlling for student, staffing, and school characteristics. Thus, our findings provide some rare empirical support for the key assumption behind the performance management movement in public administration.

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Trading the Television for a Textbook?: High School Exit Exams and Student Behavior

Timothy Diette & Sara Helms
B.E. Journal of Economic Analysis & Policy, forthcoming

Abstract:
Approximately half of the states in the United States have some form of high school exit exam. One purpose of the exit exams is to create a clear bar which students must pass in order to graduate. Effective exit exams may encourage marginal students to spend additional time on schooling in order to pass the exam. This study exploits state-level variations in timing of implementation to understand how students have responded to the state exit exams. This study uses the American Time Use Survey (ATUS). The ATUS captures, in detail, how individuals spend their day. We find that exit exams are associated with an increase in the amount of time that students spend on educational activities by almost 20 minutes per day in the months in which exams are typically given. The increase comes mainly from an increase in time spent in school and not time spent outside of school on education-related activities. The additional time for education appears to be a trade-off with time spent watching television, which shows a significant drop in exam months for students facing exams.

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Higher education structure and education outcomes: Evidence from the USA

Cory Koedel
Education Economics, May/June 2014, Pages 237-256

Abstract:
This paper documents substantial differences across states in their higher education (HE) structures and highlights several empirical relationships between these structures and individuals’ HE outcomes. Not surprisingly, individuals who are exposed to more-fractionalized HE structures are more likely to attend small public universities and less likely to attend large public universities. Exposure to more-fractionalized structures is also associated with increased degree attainment and increased exits from the in-state public-university system (to private and out-of-state public universities). These findings highlight potentially important tradeoffs related to state policy on HE structure.

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Montessori public school pre-k programs and the school readiness of low-income black and Latino children

Arya Ansari & Adam Winsler
Journal of Educational Psychology, forthcoming

Abstract:
Within the United States, there are a variety of early education models and curricula aimed at promoting young children’s pre-academic, social, and behavioral skills. This study, using data from the Miami School Readiness Project (Winsler et al., 2008, 2012), examined the school readiness gains of low-income Latino (n = 7,045) and Black (n = 6,700) children enrolled in 2 different types of Title-1 public school pre-K programs: those in programs using the Montessori curriculum and those in more conventional programs using the High/Scope curriculum with a literacy supplement. Parents and teachers reported on children’s socio-emotional and behavioral skills with the Devereux Early Childhood Assessment (Lebuffe & Naglieri, 1999), whereas children’s pre-academic skills (cognitive, motor, and language) were assessed directly with the Learning Accomplishment Profile–Diagnostic (Nehring, Nehring, Bruni, & Randolph, 1992) at the beginning and end of their 4-year-old pre-K year. All children, regardless of curriculum, demonstrated gains across pre-academic, socio-emotional, and behavioral skills throughout the pre-K year; however, all children did not benefit equally from Montessori programs. Latino children in Montessori programs began the year at most risk in pre-academic and behavioral skills, yet exhibited the greatest gains across these domains and ended the year scoring above national averages. Conversely, Black children exhibited healthy gains in Montessori, but they demonstrated slightly greater gains when attending more conventional pre-K programs. Findings have implications for tailoring early childhood education programs for Latino and Black children from low-income communities.

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Does education pay for youth formerly in foster care? Comparison of employment outcomes with a national sample

Nathanael Okpych & Mark Courtney
Children and Youth Services Review, forthcoming

Abstract:
Each year tens of millions of federal dollars are invested to promote secondary and postsecondary educational attainment among older youth in foster care. Despite the presumption that this is a sound investment, as indicated by copious research from studies of the general U.S. population, research examining the payoff among youth transitioning to adulthood from state care has been sparse. In the present study, we analyze the relationship between educational attainment and employment outcomes among youth exiting care. Drawing on data from a large, multi-state study of youth transitioning from foster care, findings indicate that increased education, and particularly degree completion, is associated with greater earnings and lower employment rates. Compared to young adults matched on educational attainment from a nationally representative study, youth formerly in foster care earn about half and the employment rate is 20 points lower. However, increased levels of education have larger benefits for youth who exited care than youth from the general population, and at higher levels of attainment the two groups have similar employment rates and earnings gaps become less pronounced. Among youth formerly in care, results from regression analyses indicate that, compared to individuals with no high school credential, a GED or certificate of completion predicts no benefits in earnings or likelihood of being employed; a diploma predicts an earnings benefit; and some college, a two-year degree, and a four-year degree or greater predict large benefits in earnings and likelihood of employment. We conclude by briefly discussing implications for policy, practice, and future research.

By KEVIN LEWIS | 09:00:00 AM

Thursday, May 15, 2014

The greater good

Worth Keeping but Not Exceeding: Asymmetric Consequences of Breaking Versus Exceeding Promises

Ayelet Gneezy & Nicholas Epley
Social Psychological and Personality Science, forthcoming

Abstract:
Promises are social contracts that can be broken, kept, or exceeded. Breaking one’s promise is evaluated more negatively than keeping one’s promise. Does expending more effort to exceed a promise lead to equivalently more positive evaluations? Although linear in their outcomes, we expected an asymmetry in evaluations of broken, kept, and exceeded promises. Whereas breaking one’s promise is obviously negative compared to keeping a promise, we predicted that exceeding one’s promise would not be evaluated more positively than merely keeping a promise. Three sets of experiments involving hypothetical, recalled, and actual promises support these predictions. A final experiment suggests this asymmetry comes from overvaluing kept promises rather than undervaluing exceeded promises. We suggest this pattern may reflect a general tendency in social systems to discourage selfishness and reward cooperation. Breaking one’s promise is costly, but exceeding it does not appear worth the effort.

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Your Morals Depend on Language

Albert Costa et al.
PLoS ONE, April 2014

Abstract:
Should you sacrifice one man to save five? Whatever your answer, it should not depend on whether you were asked the question in your native language or a foreign tongue so long as you understood the problem. And yet here we report evidence that people using a foreign language make substantially more utilitarian decisions when faced with such moral dilemmas. We argue that this stems from the reduced emotional response elicited by the foreign language, consequently reducing the impact of intuitive emotional concerns. In general, we suggest that the increased psychological distance of using a foreign language induces utilitarianism. This shows that moral judgments can be heavily affected by an orthogonal property to moral principles, and importantly, one that is relevant to hundreds of millions of individuals on a daily basis.

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When enemies go viral (or not) — a real-time experiment during the “Stop Kony” campaign

Daniel Sullivan, Mark Landau & Aaron Kay
Psychology of Popular Media Culture, forthcoming

Abstract:
In March–April 2012, using 2 online videos, nonprofit organization Invisible Children initiated a “Stop Kony” campaign to turn Ugandan warlord Joseph Kony into an international enemy. Although the first video was the fastest viral video of all time, interest in the campaign eventually faded away. Might individual-level psychological processes help explain why the campaign was initially successful, and ultimately failed? To test this possibility, we used a combination of experimental manipulations and real-time data tracking responses to the “Stop Kony” videos as they appeared. Integrating and advancing beyond prior theory on enemyship and idea contagion, our findings suggest that when a complex adverse situation is reduced to the actions of a clear enemy, this inspires moral outrage against the enemy. However, if the complexity of the situation becomes clearer, the enemy inspires less moral outrage and determination to act.

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The Myth of Harmless Wrongs in Moral Cognition: Automatic Dyadic Completion From Sin to Suffering

Kurt Gray, Chelsea Schein & Adrian Ward
Journal of Experimental Psychology: General, forthcoming

Abstract:
When something is wrong, someone is harmed. This hypothesis derives from the theory of dyadic morality, which suggests a moral cognitive template of wrongdoing agent and suffering patient (i.e., victim). This dyadic template means that victimless wrongs (e.g., masturbation) are psychologically incomplete, compelling the mind to perceive victims even when they are objectively absent. Five studies reveal that dyadic completion occurs automatically and implicitly: Ostensibly harmless wrongs are perceived to have victims (Study 1), activate concepts of harm (Studies 2 and 3), and increase perceptions of suffering (Studies 4 and 5). These results suggest that perceiving harm in immorality is intuitive and does not require effortful rationalization. This interpretation argues against both standard interpretations of moral dumbfounding and domain-specific theories of morality that assume the psychological existence of harmless wrongs. Dyadic completion also suggests that moral dilemmas in which wrongness (deontology) and harm (utilitarianism) conflict are unrepresentative of typical moral cognition.

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Trait physical disgust is related to moral judgments outside of the purity domain

Hanah Chapman & Adam Anderson
Emotion, April 2014, Pages 341-348

Abstract:
Although there is an emerging consensus that disgust plays a role in human morality, it remains unclear whether this role is limited to transgressions that contain elements of physical disgust (e.g., gory murders, sexual crimes), or whether disgust is also involved in “pure” forms of morality. To address this issue, we examined the relationship between individual differences in the tendency to experience disgust toward physical stimuli (i.e., trait physical disgust) and reactions to pure moral transgressions. Across two studies, individuals higher in trait physical disgust judged moral transgressions to be more wrong than did their low-disgust counterparts, and were also more likely to moralize violations of social convention. Controlling for gender, trait anxiety, trait anger, and social conservatism did not eliminate trait disgust effects. These results suggest that disgust’s role in morality is not limited to issues of purity or bodily norms, and that disgust may play a role in setting the boundaries of the moral domain.

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Making Mountains of Morality From Molehills of Virtue: Threat Causes People to Overestimate Their Moral Credentials

Daniel Effron
Personality and Social Psychology Bulletin, forthcoming

Abstract:
Seven studies demonstrate that threats to moral identity can increase how definitively people think they have previously proven their morality. When White participants were made to worry that their future behavior could seem racist, they overestimated how much a prior decision of theirs would convince an observer of their non-prejudiced character (Studies 1a-3). Ironically, such overestimation made participants appear more prejudiced to observers (Study 4). Studies 5 to 6 demonstrated a similar effect of threat in the domain of charitable giving — an effect driven by individuals for whom maintaining a moral identity is particularly important. Threatened participants only enhanced their beliefs that they had proven their morality when there was at least some supporting evidence, but these beliefs were insensitive to whether the evidence was weak or strong (Study 2). Discussion considers the role of motivated reasoning, and implications for ethical decision making and moral licensing.

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When Size Justifies: Intergroup Attitudes and Subjective Size Judgments of "Sacred Space"

Scott Leith & Anne Wilson
Journal of Experimental Social Psychology, forthcoming

Abstract:
Four studies demonstrate that people’s representations of an area’s size are subjective and shaped by context and relevant attitudes. Americans expressing greater anti-Muslim sentiment desired a Muslim or Arab structure to be further away from Ground Zero, and in turn enlarge the subjective size of Ground Zero. This spontaneous expansion of area occurs relative to those expressing less anti-Muslim sentiment (Studies 1-4), to people considering an desired ingroup structure (Study 2), and to those considering neutral outgroup (Studies 3-4) and ingroup (Study 4) structures. People subjectively enlarged Ground Zero by expanding the "inclusion criteria" for their definition of the space. Attitudes and desires concerning an encroaching structure can cause people to perceive a symbolically meaningful space as larger, allowing them to justify their opposition: if an unwanted structure must be outside a “sacred” ingroup space, enlarging the subjective size of the protected space justifies opposition to the encroachment.

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Follow the liar: The effects of adult lies on children's honesty

Chelsea Hays & Leslie Carver
Developmental Science, forthcoming

Abstract:
Recent research shows that most adults admit they lie to children. We also know that children learn through modeling and imitation. To date there are no published studies that examine whether lying to children has an effect on children's honesty. We aimed to bridge the gap in this literature by examining the effects of adults' lies on elementary and preschool-aged children's behavior using a modified temptation resistance paradigm, in which children are tempted to peek at a toy they have been told not to look at, and later given a chance to either admit peeking, or try to conceal their transgression by lying. Prior to being tested, half of the children were told a lie and half were not. We then measured both cheating (peeking) and lie-telling behaviors. We hypothesized that lying to a child would increase the likelihood that they would both peek at the toy and lie about having done so. Results showed that school-age children were more likely to peek if they had been lied to, and were also more likely to lie about peeking. In contrast with the school-age children, there was no difference in peeking or lying for preschoolers who were and were not lied to. These results have important implications for parenting and educational settings.

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Oxytocin promotes group-serving dishonesty

Shaul Shalvi & Carsten De Dreu
Proceedings of the National Academy of Sciences, 15 April 2014, Pages 5503-5507

Abstract:
To protect and promote the well-being of others, humans may bend the truth and behave unethically. Here we link such tendencies to oxytocin, a neuropeptide known to promote affiliation and cooperation with others. Using a simple coin-toss prediction task in which participants could dishonestly report their performance levels to benefit their group’s outcome, we tested the prediction that oxytocin increases group-serving dishonesty. A double-blind, placebo-controlled experiment allowing individuals to lie privately and anonymously to benefit themselves and fellow group members showed that healthy males (n = 60) receiving intranasal oxytocin, rather than placebo, lied more to benefit their group, and did so faster, yet did not necessarily do so because they expected reciprocal dishonesty from fellow group members. Treatment effects emerged when lying had financial consequences and money could be gained; when losses were at stake, individuals in placebo and oxytocin conditions lied to similar degrees. In a control condition (n = 60) in which dishonesty only benefited participants themselves, but not fellow group members, oxytocin did not influence lying. Together, these findings fit a functional perspective on morality revealing dishonesty to be plastic and rooted in evolved neurobiological circuitries, and align with work showing that oxytocin shifts the decision-maker’s focus from self to group interests. These findings highlight the role of bonding and cooperation in shaping dishonesty, providing insight into when and why collaboration turns into corruption.

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Being “in Control” May Make You Lose Control: The Role of Self-Regulation in Unethical Leadership Behavior

Anne Joosten et al.
Journal of Business Ethics, April 2014, Pages 1-14

Abstract:
In the present article, we argue that the constant pressure that leaders face may limit the willpower required to behave according to ethical norms and standards and may therefore lead to unethical behavior. Drawing upon the ego depletion and moral self-regulation literatures, we examined whether self-regulatory depletion that is contingent upon the moral identity of leaders may promote unethical leadership behavior. A laboratory experiment and a multisource field study revealed that regulatory resource depletion promotes unethical leader behaviors among leaders who are low in moral identity. No such effect was found among leaders with a high moral identity. This study extends our knowledge on why organizational leaders do not always conform to organizational goals. Specifically, we argue that the hectic and fragmented workdays of leaders may increase the likelihood that they violate ethical norms. This highlights the necessity to carefully schedule tasks that may have ethical implications. Similarly, organizations should be aware that overloading their managers with work may increase the likelihood of their leaders transgressing ethical norms.

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Ego depletion and its paradoxical effects on ethical decision making

Kai Chi Yam, Xiao-Ping Chen & Scott Reynolds
Organizational Behavior and Human Decision Processes, July 2014, Pages 204–214

Abstract:
Whereas previous research has shown that ego depletion can lead to an increase in unethical behavior, we suggest that this effect hinges on the social consensus of the unethical behavior. Drawing from theories on social consensus and dual-process decision-making, we hypothesize and confirm that ego depletion is associated with increased unethical behavior of comparatively low social consensus. We then find that, as hypothesized, ego depletion is associated with decreased unethical behavior of high social consensus (Studies 1 and 2). Results further suggest that, controlling for state self-control resources, depleted participants are less likely to engage in unethical behavior of high social consensus as a result of increased subjective fatigue (Study 3). Taken together, our findings challenge a widely-held assumption about the negative effects of ego depletion on ethical decision making.

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Experimentally distinguishing elevation from gratitude: Oh, the morality

Jason Siegel, Andrew Thomson & Mario Navarro
Journal of Positive Psychology, forthcoming

Abstract:
Elevation has garnered empirical support as the emotional response to witnessing moral beauty. The current studies investigated elevation’s construct validity by experimentally testing whether feelings of elevation are distinct from gratitude, another moral and ‘other-praising’ emotion. Study 1 demonstrated that feelings of elevation are distinct from gratitude, serenity (i.e. a secondary comparison condition), and boredom (i.e. a control condition). Study 2 added a behavioral outcome measure in the form of monetary donations to a moral charity. The third study expanded on Study 2 by randomly assigning participants to an elevation or gratitude mood induction and then randomly assigning them to have the opportunity to donate to either a moral or an amoral charity. Together, these studies support Haidt’s conceptualization of elevation, clarify Algoe and Haidt’s qualitative assessment of the emotional differences between elevation and gratitude, and reveal that elevation results in different behavioral responses than gratitude.

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An Affirmed Self and a Better Apology: The Effect of Self-Affirmation on Transgressors Responses to Victims

Karina Schumann
Journal of Experimental Social Psychology, forthcoming

Abstract:
Comprehensive apologies are powerful tools that transgressors can use to promote reconciliation with the people they have hurt. However, because many apology elements require transgressors to admit fault, express shameful emotions and promise change, transgressors often avoid these threatening elements and instead choose to use more perfunctory apologies or even defensive strategies, such as justifications or attempts to blame the person they hurt. In two studies, I aimed to increase apology comprehensiveness and reduce defensiveness using self-affirmation. I predicted that self-affirmation would help transgressors maintain their self-integrity, consequently allowing them to offer more comprehensive apologies and bypass defensive strategies. Participants received a values affirmation, recalled an unresolved conflict, and indicated what they would say to the person they had hurt. As predicted, affirmed participants offered more comprehensive apologies and used fewer defensive strategies than control participants. These studies thus identify a simple method for promoting responses that facilitate conflict resolution and demonstrate the successful application of self-affirmation to the domain of interpersonal conflict.

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Self-Interest Bias in Moral Judgments of Others’ Actions

Konrad Bocian & Bogdan Wojciszke
Personality and Social Psychology Bulletin, forthcoming

Abstract:
The automatic and affective nature of moral judgments leads to the expectation that these judgments are biased by an observer’s own interests. Although the idea of self-interest bias is old, it has never been directly tested with respect to the moral judgments of other individuals’ behaviors. The participants of three experiments observed other individuals’ counternormative behavior (breaking a rule or cheating for gain), which was judged as immoral. However, this judgment became much more lenient when the observers gained from the observed behavior. All three studies showed that the influence of self-interest on moral judgments was completely mediated by the observer’s increased liking for the perpetrator of the immoral acts but not by changes in mood. When the participants were induced to dislike the perpetrator (in a moderation-of-process design), the self-interest bias disappeared. Implications for the intuitionist approach to moral judgment are discussed.

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Forgiving You Is Hard, but Forgetting Seems Easy: Can Forgiveness Facilitate Forgetting?

Saima Noreen, Raynette Bierman & Malcolm MacLeod
Psychological Science, forthcoming

Abstract:
Forgiveness is considered to play a key role in the maintenance of social relationships, the avoidance of unnecessary conflict, and the ability to move forward with one’s life. But why is it that some people find it easier to forgive and forget than others? In the current study, we explored the supposed relationship between forgiveness and forgetting. In an initial session, 30 participants imagined that they were the victim in a series of hypothetical incidents and indicated whether or not they would forgive the transgressor. Following a standard think/no-think procedure, in which participants were trained to think or not to think about some of these incidents, more forgetting was observed for incidents that had been forgiven following no-think instructions compared with either think or baseline instructions. In contrast, no such forgetting effects emerged for incidents that had not previously been forgiven. These findings have implications for goal-directed forgetting and the relationship between forgiveness and memory.

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Teaching moral reasoning through gesture

Leanne Beaudoin-Ryan & Susan Goldin-Meadow
Developmental Science, forthcoming

Abstract:
Stem-cell research. Euthanasia. Personhood. Marriage equality. School shootings. Gun control. Death penalty. Ethical dilemmas regularly spark fierce debate about the underlying moral fabric of societies. How do we prepare today's children to be fully informed and thoughtful citizens, capable of moral and ethical decisions? Current approaches to moral education are controversial, requiring adults to serve as either direct (‘top-down’) or indirect (‘bottom-up’) conduits of information about morality. A common thread weaving throughout these two educational initiatives is the ability to take multiple perspectives – increases in perspective taking ability have been found to precede advances in moral reasoning. We propose gesture as a behavior uniquely situated to augment perspective taking ability. Requiring gesture during spatial tasks has been shown to catalyze the production of more sophisticated problem-solving strategies, allowing children to profit from instruction. Our data demonstrate that requiring gesture during moral reasoning tasks has similar effects, resulting in increased perspective taking ability subsequent to instruction.

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The moral pop-out effect: Enhanced perceptual awareness of morally relevant stimuli

Ana Gantman & Jay Van Bavel
Cognition, July 2014, Pages 22–29

Abstract:
People perceive religious and moral iconography in ambiguous objects, ranging from grilled cheese to bird feces. In the current research, we examined whether moral concerns can shape awareness of perceptually ambiguous stimuli. In three experiments, we presented masked moral and non-moral words around the threshold for conscious awareness as part of a lexical decision task. Participants correctly identified moral words more frequently than non-moral words — a phenomenon we term the moral pop-out effect. The moral pop-out effect was only evident when stimuli were presented at durations that made them perceptually ambiguous, but not when the stimuli were presented too quickly to perceive or slowly enough to easily perceive. The moral pop-out effect was not moderated by exposure to harm and cannot be explained by differences in arousal, valence, or extremity. Although most models of moral psychology assume the initial perception of moral stimuli, our research suggests that moral beliefs and values may shape perceptual awareness.

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Justifying Atrocities: The Effect of Moral-Disengagement Strategies on Socially Shared Retrieval-Induced Forgetting

Alin Coman et al.
Psychological Science, forthcoming

Abstract:
A burgeoning literature has established that exposure to atrocities committed by in-group members triggers moral-disengagement strategies. There is little research, however, on how such moral disengagement affects the degree to which conversations shape people’s memories of the atrocities and subsequent justifications for those atrocities. We built on the finding that a speaker’s selective recounting of past events can result in retrieval-induced forgetting of related, unretrieved memories for both the speaker and the listener. In the present study, we investigated whether American participants listening to the selective remembering of atrocities committed by American soldiers (in-group condition) or Afghan soldiers (out-group condition) resulted in the retrieval-induced forgetting of unmentioned justifications. Consistent with a motivated-recall account, results showed that the way people’s memories are shaped by selective discussions of atrocities depends on group-membership status.

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Birth order and conservatism: A multilevel test of Sulloway’s “Born to rebel” thesis

Daniela Barni et al.
Personality and Individual Differences, August 2014, Pages 58–63

Abstract:
We analysed differences in conservative values between firstborn and secondborn siblings, in the context of Sulloway’s (1996) idea that firstborns favour the status quo more than secondborns do. Using multilevel analysis to predict siblings’ conservatism, we tested two hypotheses from Sulloway’s theory: (a) firstborns are more conservative than are secondborns; and (b) firstborns internalize their parents’ conservative values stronger than secondborns do, independent from the degree of their parents’ conservatism. Ninety-six Italian families (composed of both parents, the firstborn and the secondborn, total N = 384) filled out the Portrait Values Questionnaire (Schwartz et al., 2001). Results supported Sulloway’s first, but not his second prediction: Birth order fostered children’s conservatism directly, but not in interaction with parents’ conservatism. Implications of the results for the children’s socialization and their possible developments are discussed.

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Tipping the scales: Conciliatory behavior and the morality of self-forgiveness

Thomas Carpenter, Robert Carlisle & Jo-Ann Tsang
Journal of Positive Psychology, forthcoming

Abstract:
Two studies examined whether conciliatory behavior aids self-forgiveness and whether it does so in part by making it seem more morally appropriate. Participants in Study 1 (n = 269) completed an offense-recall procedure; participants in Study 2 (n = 208) imagined a social transgression under conciliatory behavior (yes, no) and receipt of forgiveness (no, ambiguous, yes) conditions. Conciliatory behavior predicted (Study 1) and caused (Study 2) elevated self-forgiveness and increased perceptions of the moral appropriateness of self-forgiveness. Perceived morality consistently mediated the effect of conciliatory behavior on self-forgiveness. Received forgiveness and guilt were considered as additional mechanisms, but received mixed support. Results suggest that conciliatory behavior may influence self-forgiveness in part by satisfying moral prerequisites for self-forgiveness.

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Get the Message: Punishment Is Satisfying If the Transgressor Responds to Its Communicative Intent

Friederike Funk, Victoria McGeer & Mario Gollwitzer
Personality and Social Psychology Bulletin, forthcoming

Abstract:
Results from three studies demonstrate that victims’ justice-related satisfaction with punishment is influenced by the kind of feedback they receive from offenders after punishment. In contrast to previous studies that found a discrepancy between anticipated and experienced satisfaction from punishment (Carlsmith, Wilson, & Gilbert, 2008), participants were able to accurately predict their satisfaction when made aware of the presence or absence of offender feedback acknowledging the victim’s intent to punish. Results also indicate that victims were most satisfied when offender feedback not only acknowledged the victim’s intent to punish but also indicated a positive moral change in the offender’s attitude toward wrongdoing. These findings indicate that punishment per se is neither satisfying nor dissatisfying but that it is crucial to take its communicative functions and its effects on the offender into account. Implications for psychological and philosophical theories on punishment motives as well as implications for justice procedures are discussed.

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Ethics, welfare, and capital markets

George Kanatas & Christodoulos Stefanadis
Games and Economic Behavior, forthcoming

Abstract:
We examine implications of a society's cultural emphasis on moral sentiments. Entrepreneurs and investors interact in a game that entails both adverse selection and moral hazard; entrepreneurs may attempt to breach their contracts and expropriate investors. An agent is born into a particular culture but chooses whether to develop a moral conscience and thereby subject himself to moral sentiments. In equilibrium, societies that place less emphasis on guilt exhibit a lower risk of expropriation in contracts, a greater net price of capital, a larger size of firms, increased capital inflows and greater social welfare. The results of a greater emphasis on pride are in the same direction.

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Aiming for the stomach and hitting the heart: Dissociable triggers and sources for disgust reactions

Amitai Shenhav & Wendy Berry Mendes
Emotion, April 2014, Pages 301-309

Abstract:
Disgust reactions can be elicited using stimuli that engender orogastric rejection (e.g., pus and vomit; core disgust stimuli) but also using images of bloody injuries or medical procedures (e.g., surgeries; blood [body] boundary violation [B-BV] disgust stimuli). These two types of disgust reaction are presumed to be connected by a common evolutionary function of avoiding either food- or blood-borne contaminants. However, reactions to bloody injuries are typically conflated with reactions to the potential pain being experienced by the victim. This may explain why the two forms of “disgust”, although similarly communicated (through self-report and facial expressions), evince different patterns of physiological reactivity. Therefore, we tested whether the communicative similarities and physiological dissimilarities would hold when markers of potential contamination in the latter category are removed, leaving only painful injuries that lack blood or explicit body-envelope violations. Participants viewed films that depicted imagery associated with (a) core disgust, (b) painful injuries, or (c) neutral scenes while we measured facial, cardiovascular, and gastric reactivity. Whereas communicative measures (self-report and facial muscles) suggested that participants experienced increased disgust for core disgust and painful injuries, peripheral physiology dissociated the two: core disgust decreased normal gastric activity and painful-injury disgust decelerated heart rate and increased heart rate variability. These findings suggest that expressions of disgust toward bodily injuries may reflect a fundamentally different affective response than those evoked by core disgust and that this (cardiovascularly mediated) response may in fact be more closely tied to pain perceptions (or empathy) rather than contaminant-laden stimuli.

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Sex, Attractiveness, and Third-Party Punishment in Fairness Consideration

Jia Li & Xiaolin Zhou
PLoS ONE, April 2014

Abstract:
Social evaluation of others is often influenced by the physical attractiveness of the person being judged, leading to either a beauty premium or penalty depending on the circumstances. Here we asked Chinese participants to act as an interest-free third party in a dictator game and to evaluate the fairness level of monetary allocation by attractive and less attractive proposers of the same or opposite sex. We also instructed participants to express their willingness to punish the proposers by using a visual analogue scale. Results confirmed that the reasonableness evaluation was mainly affected by the reasonableness of offers. However, participants' intention to punish the proposers was affected by the level of reasonableness in the asset distribution and by both the sex and attractiveness of the proposers. Overall, male proposers were punished more severely than female proposers. Moreover, the same-sex proposers were punished more severely than opposite-sex proposers when they were physically attractive; this pattern was reversed when the proposers were less physically attractive. These results demonstrate social responses following an individual's unfair asset distribution can be affected by both social norms and the personal characteristics of the individual.

By KEVIN LEWIS | 09:00:00 AM

Wednesday, May 14, 2014

Protection racket

America and Trade Liberalization: The Limits of Institutional Reform

Judith Goldstein & Robert Gulotty
International Organization, May 2014, Pages 263-295

Abstract:
Among scholars, delegation of power to the US president in 1934 is widely believed to have been a necessary requisite for tariff reductions in ensuing years. According to conventional wisdom, delegation to the president sheltered Congress from constituent pressure thereby facilitating the opening of the US economy and the emergence of the United States as a world power. This article suggests a revision to our understanding of just how that occurred. Through a close study of the US tariff schedule between 1928 and 1964, focusing on highly protected products, we examine which products were subject to liberalization and at what time. After 1934, delegation led to a change in trade policy, not because Congress gave up their constitutional prerogative in this domain but because presidents were able to target the potential economic dislocation that derives from import competition to avoid the creation of a congressional majority willing to halt the trade agreements program.

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Assembling Fordizm: The Production of Automobiles, Americans, and Bolsheviks in Detroit and Early Soviet Russia

David Greenstein
Comparative Studies in Society and History, April 2014, Pages 259-289

Abstract:
The expansion of the Ford Motor Company into Soviet Russia has been understood as part of a unidirectional spread of American economic power and cultural forms abroad following the First World War. This essay looks beyond the automobiles and manufacturing methods sent from Ford facilities in Detroit to the emerging Soviet automobile industry to examine multidirectional migrations of workers between Russia and the United States that underlay but sometimes collided with Ford's system. Workers, managers, engineers, and cultural, technical, and disciplinary knowledge moved back and forth between factories in Soviet Russia and the United States. Efforts to define, track, and shape workers in both countries as Americans, Russians, or Bolsheviks were integral to the construction of the products and methods that Ford sold. But many workers fell in between and contested these classifications and they often defied company attempts to create an efficient and homogeneous American workforce. In Russia, too, more than Soviet and American automobiles were produced: people and ideas were created that crossed and blurred boundaries between “American” and “Soviet.” There, “Fordizm” became a popular watchword among Soviet commentators and workers as a near-synonym for industrialization, mass production, and efficiency. Many saw it as a potentially valuable component of a new socialist world. These multidirectional movements, recorded in Ford Motor Company archives and related documents, suggest that rather than separate and alternative projects, Ford's burgeoning system to transform manufacturing and workers' lives in Detroit was linked to the Soviet revolutionary project to recreate life and work.

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An Empirical Analysis of Trade-Related Redistribution and the Political Viability of Free Trade

James Lake & Daniel Millimet
Southern Methodist University Working Paper, March 2014

Abstract:
Even if free trade creates net welfare gains for a country as a whole, the associated distributional implications can undermine the political viability of free trade. We show that trade-related redistribution increases the political viability of free trade in the US. We do so by assessing the causal effect of expected redistribution associated with the US Trade Adjustment Assistance program on US Congressional voting behavior on eleven Free Trade Agreements (FTAs) between 2003 and 2011. We find that a one standard deviation increase in redistribution leads to more than a 3% point increase in the probability of voting in favor of an FTA for the median representative. In addition, a one standard deviation decrease in redistribution across the entire US would have precluded passage of two of the eleven FTAs in our sample.

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Wedges and Widgets: Liberalism, Libertarianism, and the Trade Attitudes of the American Mass Public and Elites

Brian Rathbun
Foreign Policy Analysis, forthcoming

Abstract:
What are the ideological sources of free trade attitudes? Free trade plays a crucial role in classical liberal theory as a way of increasing the prospects of peace between states. Are liberal individuals more supportive of free trade? The literature on foreign policy beliefs largely neglects the question of trade, and those exceptions that find support for the liberal hypothesis generally rely on faulty conceptualization. Using surveys of the American mass public and American elites, this article finds that the combination of views that marks classical liberalism does not in fact predict support for free trade at either the mass or the elite level. Support for free trade at the mass level has libertarian, not liberal, foundations, predicted by a combination of social and economic libertarianism. At the mass level, the combination of cosmopolitanism and dovishness that constitutes foreign policy liberalism has no effect on trade attitudes. At the elite level, cosmopolitanism is actually generally negatively associated with support for free trade. Free trade is a wedge issue that creates strange alliances at the elite level between cosmopolitans and isolationists generally hostile to one another on foreign policy and at the mass level between social and economic libertarians typically antagonistic to each other's domestic agenda.

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Strategic Sourcing and Wage Bargaining

Nicholas Sly & Anson Soderbery
Journal of Development Economics, forthcoming

Abstract:
We examine how multinational firms strategically source production to mitigate the consequences of wage bargaining with workers. When wage bargaining pressure differs across countries, firms allocate production of goods with high markups toward countries with relatively competitive labor markets, limiting the rents available to workers with strong bargaining power. We use product-level data from the universe of automotive production facilities in North America at a monthly frequency between 1988 and 2009 to structurally estimate variable price elasticities of demand for different vehicles. From the theory we derive an empirical strategy that allows us to distinguish the impact of wage bargaining pressure from other sourcing motives. We find robust evidence that multinational firms strategically source their products across countries in response to differences in wage bargaining pressure.

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Slicing Up Global Value Chains

Marcel Timmer et al.
Journal of Economic Perspectives, Spring 2014, Pages 99-118

Abstract:
In this paper, we "slice up the global value chain" using a decomposition technique that has recently become feasible due to the development of the World Input-Output Database. We trace the value added by all labor and capital that is directly and indirectly needed for the production of final manufacturing goods. The production systems of these goods are highly prone to international fragmentation as many stages can be undertaken in any country with little variation in quality. We seek to establish a series of facts concerning the global fragmentation of production that can serve as a starting point for future analysis. We describe four major trends. First, international fragmentation, as measured by the foreign value-added content of production, has rapidly increased since the early 1990s. Second, in most global value chains there is a strong shift towards value being added by capital and high-skilled labor, and away from less-skilled labor. Third, within global value chains, advanced nations increasingly specialize in activities carried out by high-skilled workers. Fourth, emerging economies surprisingly specialize in capital-intensive activities.

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Globalization and Domestic Trade Policy Preferences: Foreign Frames and Mass Support for Agriculture Subsidies

Nathan Jensen & Mi Jeong Shin
International Interactions, forthcoming

Abstract:
Reforming agriculture trade policy is key to breaking the deadlock in multilateral trade negotiations. While existing studies have focused on institution and interest group barriers to agriculture trade reform in developed countries, most have failed to recognize the broad support for agriculture protection amongst developed countries. In this paper we examine one of the drivers of this support: the ability of politicians to frame their own agriculture policies as less generous relative to those of other countries. Drawing on existing literature on heuristics we argue that voters are malleable to politicians’ comparative framing of agriculture policies. Using an original survey experiment in the United States, we find that framing US agriculture as less generous than other countries generates an additional 12% of respondents supporting increased farm payments to US farmers. These results speak to the difficulty in reforming agriculture, and more broadly about the lack of public support for unilateral trade liberalization.

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Preferences for International Redistribution: The Divide over the Eurozone Bailouts

Michael Bechtel, Jens Hainmueller & Yotam Margalit
American Journal of Political Science, forthcoming

Abstract:
Why do voters agree to bear the costs of bailing out other countries? Despite the prominence of public opinion in the ongoing debate over the eurozone bailouts, voters' preferences on the topic are poorly understood. We conduct the first systematic analysis of this issue using observational and experimental survey data from Germany, the country shouldering the largest share of the EU's financial rescue fund. Testing a range of theoretical explanations, we find that individuals' own economic standing has limited explanatory power in accounting for their position on the bailouts. In contrast, social dispositions such as altruism and cosmopolitanism robustly correlate with support for the bailouts. The results indicate that the divide in public opinion over the bailouts does not reflect distributive lines separating domestic winners and losers. Instead, the bailout debate is better understood as a foreign policy issue that pits economic nationalist sentiments versus greater cosmopolitan affinity and other-regarding concerns.

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Outward Foreign Direct Investment, Interindustry Networks, and U.S. Trade Politics

Hak-Seon Lee
International Trade Journal, Spring 2014, Pages 140-168

Abstract:
This article investigates how outward foreign direct investment by U.S. multinational corporations influences industry lobbying for trade protection in the United States, focusing on interindustry structure of goods sales networks between upstream and downstream sectors and also on the multinationals’ input procurement patterns. If foreign affiliates of U.S. multinationals switch input sources from U.S. to host-country suppliers, U.S. suppliers should receive a negative demand shock, ceteris paribus. An empirical test finds that those U.S. upstream sectors that are highly dependent upon U.S. multinationals for goods sales tend to lobby more as the multinationals’ overseas production and sales increase.

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Tariffs, Social Status, and Gender in India

S. Anukriti & Todd Kumler
Boston College Working Paper, February 2014

Abstract:
This paper shows that trade policy can have significant intergenerational distributional effects across gender and social strata. We compare women and births in rural Indian districts more or less exposed to tariff cuts. For low socioeconomic status women, tariff cuts increase the likelihood of a female birth and these daughters are less likely to die during infancy and childhood. On the contrary, high-status women are less likely to give birth to girls and their daughters have higher mortality rates when more exposed to tariff declines. Consistent with the fertility-sex ratio trade-off in high son preference societies, fertility increases for low-status women and decreases for high-status women. An exploration of the mechanisms suggests that the labor market returns for low-status women (relative to men) and high-status men (relative to women) have increased in response to trade liberalization. Thus, altered expectations about future returns from daughters relative to sons seem to have caused families to change the sex-composition of and health investments in their children.

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Does foreign aid really attract foreign investors? New evidence from panel cointegration

Julian Donaubauer
Applied Economics Letters, forthcoming

Abstract:
This article examines whether foreign aid contributes to attracting foreign direct investment (FDI) in aid receiving countries. Using both homogeneous and heterogeneous panel cointegration techniques, I find that the effect of foreign aid on FDI is negative. This is in contrast to previous studies that usually found a positive association between aid and FDI.

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The Influences of Foreign Direct Investments, Intrafirm Trading, and Currency Undervaluation on U.S. Firm Trade Disputes

Bradford Jensen, Dennis Quinn & Stephen Weymouth
U.S. Census Bureau Working Paper, January 2014

Abstract:
We use the case of a puzzling decline in U.S. firm antidumping (AD) filings to explore how firm-level economic heterogeneity within U.S. industries influences political and regulatory responses to changes in the global economy. Firms exhibit heterogeneity both within and across industries regarding foreign direct investment. We propose that firms making vertical, or resource-seeking, investments abroad will be less likely to file AD petitions. Hence, we argue, the increasing vertical FDI of U.S. firms (particularly in countries with undervalued currencies) makes trade disputes far less likely. We use firm level data to examine the universe of U.S. manufacturing firms and find that AD filers generally conduct no intrafirm trade with filed-against countries. Among U.S. MNCs, the number of AD filings is negatively associated with increases in the level of intrafirm trade for large firms. In the context of currency undervaluation, we confirm the existing finding that undervaluation is associated with more AD filings. We also find, however, that high levels of related-party imports from countries with undervalued currencies significantly decrease the numbers of AD filings. Our study highlights the centrality of global production networks in understanding political mobilization over international economic policy.

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Detection and Impact of Industrial Subsidies: The Case of World Shipbuilding

Myrto Kalouptsidi
NBER Working Paper, May 2014

Abstract:
This paper provides a model-based empirical strategy to, (i) detect the presence and magnitude of government subsidies and (ii) quantify their impact on production reallocation across countries, industry prices, costs and consumer surplus. I construct and estimate an industry model that allows for dynamic agents in both demand and supply and apply my strategy to world shipbuilding, a classic target of industrial policy. I find strong evidence consistent with China having intervened and reducing shipyard costs by 15-20%, corresponding to 5 billion US dollars between 2006 and 2012. Standard detection methods employed in subsidy disputes yield less than a third of this magnitude. The subsidies led to substantial reallocation of ship production across the world, with Japan in particular losing significant market share. They also misaligned costs and production, while leading to minor surplus gains for shippers. Finally, I find that production subsidies had a stronger impact than capital subsidies.

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Barriers to Labor Mobility and International Trade: The Case of China

Kai Xu
China Economic Review, June 2014, Pages 107–125

Abstract:
This paper quantitatively evaluates the potential impacts of removing China’s Hukou system on the world economy. By denying migrant workers the right to health benefits and housing, China’s Household Registration (Hukou) system presents a significant distortion to the Chinese labor market that discourages the reallocation of its labor from agriculture to non-agriculture. I find that the elimination of Hukou could increase China’s real income per capita by about 4.7%. Moreover, although for most countries the impact of removing Hukou is modest (less than 1% changes in real income per capita), substantial changes in real income could take place for China’s small neighboring economies. For example, the decreases in real GDP per capita are 2.7%, 3.2%, and 4.1% for Bangladesh, Sri Lanka, and Vietnam, while Thailand stands to enjoy a 3.8% increase in its income.

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Nationalism and Economic Exchange: Evidence from Shocks to Sino-Japanese Relations

Raymond Fisman, Yasushi Hamao & Yongxiang Wang
Review of Financial Studies, forthcoming

Abstract:
We study the impact of nationalism and interstate frictions on international economic relations by analyzing market reaction to adverse shocks to Sino-Japanese relations in 2005 and 2010. Japanese companies with high China exposure suffer relative declines during each event window; a symmetric effect is observed for Chinese companies with high Japanese exposure. The effect on Japanese companies is more pronounced for those operating in industries dominated by Chinese state-owned enterprises, whereas firms with high Chinese employment experience lower declines. These results emphasize the role of countries' economic and political institutions in mediating the impact of interstate frictions on firm-level outcomes.

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Patent examination outcomes and the national treatment principle

Elizabeth Webster, Paul Jensen & Alfons Palangkaraya
RAND Journal of Economics, Summer 2014, Pages 449–469

Abstract:
One of the principles enshrined in all international patent treaties is that equal treatment should be provided to inventors regardless of their nationality. Little is known about whether this “national treatment” principle is upheld in practice. We analyze whether patent examination outcomes at the European and Japanese patent offices vary systematically by inventor nationality and technology area, using a matched sample of 47,947 patent applications. We find that domestic inventors have a higher likelihood of obtaining a patent grant than foreign inventors and that the positive domestic inventor effect is stronger in areas of technological specialization in the domestic economy.

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Economic development and the impact of the EU–US Transatlantic Open Skies Air Transport Agreement

Kenneth Button, Rui Neiva & Junyang Yuan
Applied Economics Letters, Summer 2014, Pages 767-770

Abstract:
This article examines the economic impacts on the United States east coast regions of the EU–US Open Skies Agreement that liberalized air service over the North Atlantic. It considers the link between air travel volumes before and after the Agreement and the economies of the main metropolitan areas. It finds, using a number of model specifications, that the economic impacts of air traffic increased after the enactment of the Agreement.

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Geography and intra-national home bias: U.S. domestic trade in 1949 and 2007

Nicholas Crafts & Alexander Klein
Journal of Economic Geography, forthcoming

Abstract:
This article examines home bias in U.S. domestic trade in 1949 and 2007. We use a unique data set of 1949 carload waybill statistics produced by the Interstate Commerce Commission, and 2007 Commodity Flow Survey data. The results show that home bias was considerably smaller in 1949 than in 2007 and that home bias in 1949 was even negative for several commodities. We argue that the difference between the geographical distribution of the manufacturing activities in 1949 and that of 2007 is an important factor explaining the differences in the magnitudes of home-bias estimates in those years.

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The Growing Dependence of Britain on Trade during the Industrial Revolution

Gregory Clark, Kevin Hjortshøj O'Rourke & Alan Taylor
NBER Working Paper, February 2014

Abstract:
Many previous studies of the role of trade during the British Industrial Revolution have found little or no role for trade in explaining British living standards or growth rates. We construct a three-region model of the world in which Britain trades with North America and the rest of the world, and calibrate the model to data from the 1760s and 1850s. We find that while trade had only a small impact on British welfare in the 1760s, it had a very large impact in the 1850s. This contrast is robust to a large range of parameter perturbations. Biased technological change and population growth were key in explaining Britain’s growing dependence on trade during the Industrial Revolution.

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Trade Liberalization and Culture

Steven Suranovic & Robert Winthrop
Global Economy Journal, forthcoming

Abstract:
This paper addresses the effect of international trade on cultural outcomes from both economic and anthropological perspectives. Definitions of culture are informed by anthropology and then incorporated into a standard economic trade models in two distinct ways. In the “cultural affinity from work” model, workers receive a non-pecuniary cultural benefit from work in a particular industry. In the “cultural externality” model, consumers of a product receive utility from other consumer’s consumption of a domestic good. We show that resistance to change due to cultural concerns can reduce the national benefits from trade liberalization. Complete movements to free trade will have a positive national welfare impact in the cultural affinity case, whereas it may lower national welfare in the cultural externality case. We also show that a loss of cultural benefits is more likely to occur when culture is an externality.

By KEVIN LEWIS | 09:00:00 AM

Tuesday, May 13, 2014

No free lunch

Longitudinal Associations Between Poverty and Obesity From Birth Through Adolescence

Hedwig Lee et al.
American Journal of Public Health, May 2014, Pages e70-e76

Objectives: We examined the relationship between timing of poverty and risk of first-incidence obesity from ages 3 to 15.5 years.

Methods: We used the National Institute of Child Health and Human Development Study of Early Child Care and Youth Development (1991–2007) to study 1150 children with repeated measures of income, weight, and height from birth to 15.5 years in 10 US cities. Our dependent variable was the first incidence of obesity (body mass index ≥ 95th percentile). We measured poverty (income-to-needs ratio < 2) prior to age 2 years and a lagged, time-varying measure of poverty between ages 2 and 12 years. We estimated discrete-time hazard models of the relative risk of first transition to obesity.

Results: Poverty prior to age 2 years was associated with risk of obesity by age 15.5 years in fully adjusted models. These associations did not vary by gender.

Conclusions: Our findings suggest that there are enduring associations between early life poverty and adolescent obesity. This stage in the life course may serve as a critical period for both poverty and obesity prevention.

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Weight Labeling and Obesity: A Longitudinal Study of Girls Aged 10 to 19 Years

Jeffrey Hunger & Janet Tomiyama
JAMA Pediatrics, forthcoming

"The National Heart, Lung, and Blood Institute Growth and Health Study followed up girls who self-identified as black (n = 1213) or white (n = 1166) from age 10 years until age 19 years...Adjusting for baseline BMI, household income, parental education, race, and age at menarche, being labeled 'too fat' at age 10 years remained a significant predictor of obesity at age 19 years (odds ratio = 1.66). The odds ratio was 1.62 when family members were the source of labeling and 1.40 when nonfamily members were the source. These effects were not modulated by race."

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The Changing Face of Obesity: Exposure to and Acceptance of Obesity

Eric Robinson & Paul Christiansen
Obesity, May 2014, Pages 1380–1386

Objective: Adiposity has started to become the norm in many western countries. The current studies tested the hypothesis that exposure to heavier body weights will increase the acceptance of obesity, which could further propagate rises in body weight.

Methods: Across three experiments we examined the effect that exposing participants to photographs of either obese or healthy weight males had on later judgments about an obese male. We also tested how obesity exposure impacted upon visual preferences and how accepting participants were of obesity, to examine the mechanisms by which exposure to obesity increases acceptance of heavier body weights.

Results: In Experiment 1, obesity exposure resulted in an obese male being judged more positively, than after exposure to healthy weights. Experiment 2 replicated the effect that obesity exposure had on acceptability and demonstrated this effect was mediated by obesity exposure increasing how much participants liked the way an obese person looked. In Experiment 3, exposure to obesity resulted in participants being more likely to believe that an obese person did not need to lose weight.

Conclusions: Findings across these three studies were consistent and suggest that exposure to adiposity results in an increased acceptance of obesity, by altering visual preferences towards heavier body weights.

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Macronutrients and Obesity: Revisiting the Calories in, Calories out Framework

Daniel Riera-Crichton & Nathan Tefft
Economics & Human Biology, forthcoming

Abstract:
Recent clinical research has studied weight responses to varying diet composition, but the contribution of changes in macronutrient intake and physical activity to rising population weight remains controversial. Research on the economics of obesity typically assumes a “calories in, calories out” framework, but a weight production model separating caloric intake into carbohydrates, fat, and protein, has not been explored in an economic framework. To estimate the contributions of changes in macronutrient intake and physical activity to changes in population weight, we conducted dynamic time series and structural VAR analyses of U.S. data between 1974 and 2006 and a panel analysis of 164 countries between 2001 and 2010. Findings from all analyses suggest that increases in carbohydrates are most strongly and positively associated with increases in obesity prevalence even when controlling for changes in total caloric intake and occupation-related physical activity. Our structural VAR results suggest that, on the margin, a 1% increase in carbohydrates intake yields a 1.01 point increase in obesity prevalence over 5 years while an equal percent increase in fat intake decreases obesity prevalence by 0.24 points.

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The Role of Poverty Status and Obesity on School Attendance in the United States

Sandra Echeverría et al.
Journal of Adolescent Health, forthcoming

Purpose: Several studies have shown that obesity influences school performance. Little is known about the joint effect of poverty and obesity associated with school attendance.

Methods: Data are from the National Survey of Children's Health (N = 93,151), a nationally representative sample of U.S. youth aged 10–17 years. Our dependent variable was ≥11 days of school days missed per year. Body mass index was classified as normal, overweight, and obese using age- and sex-specific criteria. Federal poverty level (FPL) was classified as <200%, 200%–399%, and ≥400% (high income). Covariates included gender, age, child's race or ethnicity, maternal physical and mental health, child's health, family composition, and household tobacco use. Logistic regression models and prevalence ratios were estimated, accounting for the complex survey design.

Results: The odds of missing ≥11 days of school among overweight youth was 1.5 times that of normal-weight youth (95% confidence interval (CI) = 1.22–1.85) and 1.7 (95% CI = 1.35–2.13) times among obese youth in fully adjusted models. In joint effects models, the probability of missing school was significantly greater for obese youth in both the <200% FPL group (prevalence ratio = 1.78, CI = 1.36–2.34) and the ≥400% FPL group (prevalence ratio = 2.88, CI = 1.91–4.35), when compared with their normal-weight, higher income peers. Predicted probabilities revealed sharper gradients for higher income youth.

Conclusions: Obesity influences school absenteeism across all income categories. Nonetheless, there may be distinct reasons for missing school for lower and higher income youth, and the long-term consequences of school absences may also differ for these populations.

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Secular Trends in Fast-Food Restaurant Use Among Adolescents and Maternal Caregivers From 1999 to 2010

Nicole Larson et al.
American Journal of Public Health, May 2014, Pages e62-e69

Objectives: We examined trends from 1999 to 2010 in adolescents’ self-reported fast-food restaurant use alongside maternal reports of fast-food consumption and purchasing from restaurants for family meals.

Methods: Middle- and high-school student participants from Minneapolis–St Paul, Minnesota, represented diverse ethnic/racial and socioeconomic backgrounds. Adolescents completed classroom-administered surveys and maternal caregivers responded by phone or mail.

Results: The overall prevalence of frequent fast-food consumption, defined as 3 or more times per week, decreased from 1999 to 2010 among adolescents (1999: 25%; 2010: 19%; P < .001) and maternal caregivers (1999: 17%; 2010: 11%; P < .001), but sociodemographic disparities were apparent. For example, the prevalence of frequent fast-food consumption remained highest and did not significantly decrease among Black or Native American youths. The overall prevalence of frequent fast-food purchases for family meals did not significantly decrease; large decreases were observed only among Hispanic families (1999: 18%; 2010: 6%; P < .001).

Conclusions: In light of previous findings linking frequent fast-food consumption to greater weight gain and poor nutrition, the observed decreases in consumption are encouraging and interventions are needed to address observed disparities.

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Support for laws to prohibit weight discrimination in the United States: Public attitudes from 2011 to 2013

Young Suh et al.
Obesity, forthcoming

Objective: Public attitudes about three proposed laws prohibiting weight discrimination in the US, from 2011 to 2013 were examined.

Methods: An online survey using a diverse national sample of US adults to assess their level of support for three specific laws against weight discrimination was conducted. Data collection occurred between June and July in 2011 (n = 1,098), 2012 (n = 1,202), and 2013 (n = 1,202).

Results: Between 2011 and 2013, support for laws prohibiting weight discrimination remained consistent, and in some cases became increasingly supportive, primarily in 2012-2013. At least 75% of participants consistently favored laws prohibiting weight discrimination in the workplace. Individuals became increasingly supportive of extending disability protections for individuals with obesity (62% in 2011 to 69% in 2013) and adding body weight as a protected class in Civil Rights statutes (70% in 2011 to 76% in 2013). Analyses highlight specific predictors of support (gender, race, education, and political affiliation).

Conclusions: There is strong, consistent support for policies prohibiting weight discrimination. These findings have important implications for developing specific antidiscrimination legislation to protect Americans with obesity and improve their quality of life.

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Chronic Stress Increases Vulnerability to Diet-Related Abdominal Fat, Oxidative Stress, and Metabolic Risk

Kirstin Aschbacher et al.
Psychoneuroendocrinology, August 2014, Pages 14–22

Background: In preclinical studies, the combination of chronic stress and a high sugar/fat diet is a more potent driver of visceral adiposity than diet alone, a process mediated by peripheral Neuropeptide Y (NPY).

Methods: In a human model of chronic stress, we investigated whether the synergistic combination of highly palatable foods (HPF; high sugar/fat) and stress was associated with elevated metabolic risk. Using a case-control design, we compared 33 post-menopausal caregivers (the chronic stress group) to 28 age-matched low-stress control women on reported HPF consumption (modified Block Food Frequency Questionnaire), waistline circumference, truncal fat ultrasound, and insulin sensitivity using a three-hour oral glucose tolerance test. A fasting blood draw was assayed for plasma NPY and oxidative stress markers (8-hydroxyguanosine and F2-Isoprostanes).

Results: Among chronically stressed women only, greater HPF consumption was associated with greater abdominal adiposity, oxidative stress, and insulin resistance at baseline (all p's ≤.01). Furthermore, plasma NPY was significantly elevated in chronically stressed women (p<.01), and the association of HPF with abdominal adiposity was stronger among women with high versus low NPY. There were no significant predictions of change over one-year, likely due to high stability (little change) in the primary outcomes over this period.

Discussion: Chronic stress is associated with enhanced vulnerability to diet-related metabolic risk (abdominal adiposity, insulin resistance, and oxidative stress). Stress-induced peripheral NPY may play a mechanistic role.

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The Relationship Among Body Mass, Wealth, and Inequality Across the BMI Distribution: Evidence From Nineteenth-Century Prison Records

Scott Alan Carson & Paul Hodges
Mathematical Population Studies, Spring 2014, Pages 78-94

Abstract:
Nineteenth-century U.S. Black and White body mass indexes (BMIs) were distributed symmetrically; neither wasting nor obesity was common. BMI values were also greater for Blacks than for Whites. During industrialization in the nineteenth century in the United States, there was a negative relationship between BMIs and average state-level wealth and an inverse relationship between BMI and wealth inequality. After controlling for wealth and inequality, rural agricultural farmers had greater BMI values than their urban counterparts in other occupations.

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An 8-month exercise intervention alters frontotemporal white matter integrity in overweight children

David Schaeffer et al.
Psychophysiology, forthcoming

Abstract:
In childhood, excess adiposity and low fitness are linked to poor academic performance, lower cognitive function, and differences in brain structure. Identifying ways to mitigate obesity-related alterations is of current clinical importance. This study examined the effects of an 8-month exercise intervention on the uncinate fasciculus, a white matter fiber tract connecting frontal and temporal lobes. Participants consisted of 18 unfit, overweight 8- to 11-year-old children (94% Black) who were randomly assigned to either an aerobic exercise (n = 10) or a sedentary control group (n = 8). Before and after the intervention, all subjects participated in a diffusion tensor MRI scan. Tractography was conducted to isolate the uncinate fasciculus. The exercise group showed improved white matter integrity as compared to the control group. These findings are consistent with an emerging literature suggesting beneficial effects of exercise on white matter integrity.

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Eyes in the Aisles: Why Is Cap’N Crunch Looking Down at My Child?

Aner Tal, Aviva Musicus & Brian Wansink
Environment and Behavior, April 2014

Abstract:
To what extent do cereal spokes-characters make eye contact with children versus adults, and does their eye contact influence choice? The shelf placement and eye positioning of 86 cereal spokes-characters were evaluated in ten grocery stores in the Eastern United States. In Study 1, we calculated the average height of cereal boxes on the shelf for adult- versus children-oriented cereals (48 versus 23-in.) and the inflection angle of spokes-characters’ gaze (0.4 versus -9.6 degrees). We found that cereal characters on children- (adult-) oriented cereals make incidental eye contact at children’s (adults’) eye level. In Study 2, we showed that eye contact with cereal spokes-characters increased feelings of trust and connection to the brand, as well as choice of the brand over competitors. Currently, many of the cereals targeted towards children are of the heavily sugared, less healthy variety. One potential application of this finding would be to use eye contact with spokes-characters to promote healthy choices and healthier food consumption.

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Sugar-sweetened beverages and prevalence of the metabolically abnormal phenotype in the Framingham Heart Study

Angela Green et al.
Obesity, May 2014, Pages E157–E163

Objective: The purpose of this study was to examine the relationship between usual sugar-sweetened beverage (SSB) consumption and prevalence of abnormal metabolic health across body mass index (BMI) categories.

Methods: The metabolic health of 6,842 non-diabetic adults was classified using cross-sectional data from the Framingham Heart Study Offspring (1998-2001) and Third Generation (2002-2005) cohorts. Adults were classified as normal weight, overweight or obese and, within these categories, metabolic health was defined based on five criteria—hypertension, elevated fasting glucose, elevated triglycerides, low HDL cholesterol, and insulin resistance. Individuals without metabolic abnormalities were considered metabolically healthy. Logistic regression was used to examine the associations between categories of SSB consumption and risk of metabolic health after stratification by BMI.

Results: Comparing the highest category of SSB consumers (median of 7 SSB per week) to the lowest category (non-consumers), odds ratios (95% confidence intervals) for metabolically abnormal phenotypes, compared to the metabolically normal, were 1.9 (1.1-3.4) among the obese, 2.0 (1.4-2.9) among the overweight, and 1.9 (1.4-2.6) among the normal weight individuals.

Conclusions: In this cross-sectional analysis, it is observed that, irrespective of weight status, consumers of SSB were more likely to display metabolic abnormalities compared to non-consumers in a dose-dependent manner.

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What Role Do Local Grocery Stores Play in Urban Food Environments? A Case Study of Hartford-Connecticut

Katie Martin et al.
PLoS ONE, April 2014

Introduction: Research on urban food environments emphasizes limited access to healthy food, with fewer large supermarkets and higher food prices. Many residents of Hartford, Connecticut, which is often considered a food desert, buy most of their food from small and medium-sized grocery stores. We examined the food environment in greater Hartford, comparing stores in Hartford to those in the surrounding suburbs, and by store size (small, medium, and large).

Methods: We surveyed all small (over 1,000 ft2), medium, and large-sized supermarkets within a 2-mile radius of Hartford (36 total stores). We measured the distance to stores, availability, price and quality of a market basket of 25 items, and rated each store on internal and external appearance. Geographic Information System (GIS) was used for mapping distance to the stores and variation of food availability, quality, and appearance.

Results: Contrary to common literature, no significant differences were found in food availability and price between Hartford and suburban stores. However, produce quality, internal, and external store appearance were significantly lower in Hartford compared to suburban stores (all p<0.05). Medium-sized stores had significantly lower prices than small or large supermarkets (p<0.05). Large stores had better scores for internal (p<0.05), external, and produce quality (p<0.01). Most Hartford residents live within 0.5 to 1 mile distance to a grocery store.

Discussion: Classifying urban areas with few large supermarkets as ‘food deserts’ may overlook the availability of healthy foods and low prices that exist within small and medium-sized groceries common in inner cities. Improving produce quality and store appearance can potentially impact the food purchasing decisions of low-income residents in Hartford.

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Life Cycle Development of Obesity and Its Determinants in Six European Countries

Sandra Cavaco, Tor Eriksson & Ali Skalli
Economics & Human Biology, forthcoming

Abstract:
This paper empirically examines the effect of parents’ and individuals’ own socioeconomic status on overweight and obesity, and investigates how this effect changes over the life cycle. The impact of individuals’ health behaviours on their obesity status later in life is also studied. We use data from Denmark, Finland, France, Greece, the Netherlands and the U.K. in which 4,595 individuals aged 50 to 65 are surveyed and where individuals’ height and weight at different ages (25, 35, 45 and current age) are available. We perform “repeated cross-sections” analyses as well as dynamic probit analyses of the individuals’ obesity histories. We contribute to the literature by examining the role of a variety of obesity determinants over the whole life cycle, not only over a certain portion of individuals’ lives. Key findings are: (i) parents’ socioeconomic status predicts obesity in early adulthood whereas the individual's own socioeconomic status as adult is more important in explaining obesity at later stages of the life cycle, (ii) changes in obesity status are associated with changes in health behaviours, (iii) obesity in late adulthood is strongly and positively correlated with overweight and obesity in younger ages, and (iv) cross-country differences in obesity and overweight largely remain after controlling for parental and childhood factors and individuals’ health behaviours.

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Only minor additional metabolic health benefits of high as opposed to moderate dose physical exercise in young, moderately overweight men

M.H. Reichkendler et al.
Obesity, May 2014, Pages 1220–1232

Objective: The dose–response effects of exercise training on insulin sensitivity, metabolic risk, and quality of life were examined.

Methods: Sixty-one healthy, sedentary (VO2max: 35 ± 5 ml/kg/min), moderately overweight (BMI: 27.9 ± 1.8), young (age: 29 ± 6 years) men were randomized to sedentary living (sedentary control group; n = 18), moderate (moderate dose training group [MOD]: 300 kcal/day, n = 21), or high (high dose training group [HIGH]: 600 kcal/day, n = 22) dose physical exercise for 11 weeks.

Results: The return rate for post-intervention testing was 82-94% across groups. Weekly exercise amounted to 2,004 ± 24 and 3,774 ± 68 kcal, respectively, in MOD and HIGH. Cardiorespiratory fitness increased (P < 0.001) 18 ± 3% in MOD and 17 ± 3% in HIGH, and fat percentage decreased (P < 0.001) similarly in both exercise groups (MOD: 32 ± 1 to 29 ± 1%; HIGH: 30 ± 1 to 27 ± 1%). Peripheral insulin sensitivity increased (P < 0.01) (MOD: 28 ± 7%; HIGH: 36 ± 8%) and the homeostasis model assessment of insulin resistance decreased (P < 0.05) (MOD: -17 ± 7%; HIGH: -18 ± 10%). The number of subjects meeting the criteria of the metabolic syndrome decreased by 78% in MOD (P < 0.01) and by 80% in HIGH (P < 0.05). General health assessed by questionnaire increased similarly in MOD (P < 0.05) and HIGH (P < 0.01).

Conclusions: Only minor additional health benefits were found when exercising ∼3,800 as opposed to ∼2,000 kcal/week in young moderately overweight men. This finding may have important public health implications.

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Adolescent obesity, educational attainment and adult earnings

John Amis, Andrew Hussey & Albert Okunade
Applied Economics Letters, forthcoming

Abstract:
We estimate the effects of being obese during adolescence on the likelihood of high school graduation, post-secondary educational attainment and labour market earnings as an adult (over 13 years later). We use longitudinal data from the National Longitudinal Survey of Adolescent Health (Add Health), conducted by the Carolina Population Center of the University of North Carolina at Chapel Hill. This is a nationally representative sample of students in grades 7 through 12 for the 1994–1995 first wave survey. Three subsequent waves of follow-up interviews occurred in 1996, 2001–2002 and finally in 2007–2008, when the sample was aged 25–31. Probit and linear regression models with a large set of controls (to minimize any bias that may result from omitting factors related to both adolescent obesity and adult outcomes) are fitted to carry out analyses separately by gender or racial groups. Pathological body weights are most notably present among males, blacks and Hispanics, suggesting possibility that diverging obesity effects may be found across race and gender groups. Unlike some prior research, we find no significant effects of adolescent obesity on high school graduation, but for some demographic groups, negative effects are found on college graduation and future income. Policy implications are discussed.

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Meal skipping linked to increased visceral adipose tissue and triglycerides in overweight minority youth

Benjamin House et al.
Obesity, May 2014, Pages E77–E84

Objective: To investigate the impact of eating frequency on dietary intake, physical activity (PA), metabolic, and adiposity measures in minority youth.

Methods: This analysis included 185 overweight (≥85th BMI percentile) Hispanic and African-American youth (8-18 years) with the following cross-sectional measures: height, weight, BMI, dietary intake, body composition, metabolic parameters, PA, visceral adipose tissue (VAT), and subcutaneous adipose tissue. Each eating occasion (EO) was defined as ≥50 calories and ≥15 minutes from any previous EO. Participants were dichotomized based on EOs per 24-h into meal skippers <3 EO (MS; n = 27) or normal/frequent eaters ≥3 EO (NFE; n = 158). ANCOVAs were used to assess dietary intakes, metabolic outcomes, adiposity, and PA between eating frequency groups.

Results: MS compared to NFE consumed 24% fewer calories per 24-h (P ≤ 0.01), 21% more calories per EO (P ≤ 0.01), ate 40% less often (P ≤ 0.01), had 18% higher triglycerides (P = 0.03), and 26% more VAT (P = 0.03), with no differences in PA.

Conclusions: Although meal skipping was associated with decreased energy intake, it was linked to increased calories per EO and higher triglycerides and VAT, which are strong indicators of deleterious metabolic profiles. These findings elucidate that meal skipping may be associated with increased VAT and related metabolic diseases in high-risk minority youth.

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Evidence that a Very Brief Psychological Intervention Boosts Weight Loss in a Weight Loss Program

Christopher Armitage et al.
Behavior Therapy, forthcoming

Abstract:
Reducing morbidity and mortality associated with being overweight is a crucial public health goal. The aim of the present research was to test the efficacy of a very brief psychological intervention (a volitional help sheet) that could be used as an adjunct to standard weight loss programs to support increased weight loss in an overweight sample. Seventy-two overweight participants currently participating in a weight loss program were randomly allocated to either an intervention (volitional help sheet) condition or a control (distracter task) condition. The main outcome measure was weight at one-month follow-up. Participants in both conditions lost significant amounts of weight, but those in the intervention condition lost significantly more than those in the control condition (d = 0.66). The findings support the efficacy of the volitional help sheet to promote additional weight loss in an overweight sample engaged in a weight loss program. The volitional help sheet therefore represents a very brief, low-cost, intervention that could be used to supplement ongoing weight-loss programs.

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Using the Oaxaca–Blinder decomposition as an empirical tool to analyze racial disparities in obesity

Bisakha Sen
Obesity, forthcoming

Objective: Racial disparities in obesity in the US are often assumed to reflect racial disparities in socio-economic status, diet and physical-activity. We present an econometric method that helps examine this by “decomposing” the racial gap in body-mass index (BMI) into how much can be explained by racial differences in “standard” predictors of BMI, and how much remains unexplained.

Methods: The Oaxaca–Blinder decomposition is widely used in other fields, but remains under-utilized in the obesity literature. We provide algebraic and graphical illustrations of the decomposition, and further illustrate it with an example using data for white and black respondents in Mississippi and Alabama. BMI is the outcome of interest. Predictor variables include income, education, age, marital status, children, mental health indicators, diet and exercise.

Results: The mean predicted gap in BMI between white and black men is small, statistically insignificant, and can be attributed to racial differences in the predictor variables. The mean predicted gap for women is larger, statistically significant, and <10% of it can be explained by differences in predictor variables. Implications of the findings are discussed.

Conclusion: Wider application of this method is advocated in the obesity literature, to better understand racial disparities in obesity.

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Gamification of Dietary Decision-Making in an Elementary-School Cafeteria

Brooke Jones et al.
PLoS ONE, April 2014

Abstract:
Despite the known health benefits of doing so, most US children do not consume enough fruits and vegetables (FV). School-based interventions can be effective in increasing FV consumption, but the most effective of these require that schools allocate their time, effort, and financial resources to implementing the program: expenditures that schools may be reluctant to provide in climates of academic accountability and economic austerity. The present demonstration project used a behaviorally based gamification approach to develop an intervention designed to increase FV consumption while minimizing material and labor costs to the school. During the intervention, the school (N = 180 students in grades K-8) played a cooperative game in which school-level goals were met by consuming higher-than-normal amounts of either fruit or vegetables (alternating-treatments experimental design). School-level consumption was quantified using a weight-based waste measure in the cafeteria. Over a period of 13 school days, fruit consumption increased by 66% and vegetable consumption by 44% above baseline levels. Use of an alternating-treatment time-series design with differential levels of FV consumption on days when fruit or vegetable was targeted for improvement supported the role of the intervention in these overall consumption increases. In post-intervention surveys, teachers rated the intervention as practical in the classroom and enjoyed by their students. Parent surveys revealed that children were more willing to try new FV at home and increased their consumption of FV following the intervention. These findings suggest that a behaviorally based gamification approach may prove practically useful in addressing concerns about poor dietary decision-making by children in schools.

By KEVIN LEWIS | 09:00:00 AM

Monday, May 12, 2014

Blue shield

How Does Retiree Health Insurance Influence Public Sector Employee Saving?

Robert Clark & Olivia Mitchell
Journal of Health Economics, forthcoming

Abstract:
Economic theory predicts that employer-provided retiree health insurance (RHI) benefits have a crowd-out effect on household wealth accumulation, not dissimilar to the effects reported elsewhere for employer pensions, Social Security, and Medicare. Nevertheless, we are unaware of any similar research on the impacts of retiree health insurance per se. Accordingly, the present paper utilizes a unique data file on respondents to the Health and Retirement Study, to explore how employer-provided retiree health insurance may influence net household wealth among public sector employees, where retiree healthcare benefits are still quite prevalent. Key findings include the following: - Most full-time public sector employees anticipate having employer-provided health insurance coverage in retirement, unlike most private sector workers; - Public sector employees covered by RHI had substantially less wealth than similar private sector employees without RHI. In our data, Federal workers had about $82,000 (18%) less net wealth than private sector employees lacking RHI; state/local workers with RHI accumulated about $69,000 (or 15%) less net wealth than their uninsured private sector counterparts. - After controlling on socioeconomic status and differences in pension coverage, net household wealth for Federal employees was $116,000 less than workers without RHI and the result is statistically significant; the state/local difference was not.

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Changes in Mortality After Massachusetts Health Care Reform: A Quasi-experimental Study

Benjamin Sommers, Sharon Long & Katherine Baicker
Annals of Internal Medicine, 6 May 2014, Pages 585-593

Objective: To determine whether the Massachusetts reform was associated with changes in all-cause mortality and mortality from causes amenable to health care.

Setting: Changes in mortality rates for adults in Massachusetts counties from 2001 to 2005 (prereform) and 2007 to 2010 (postreform) were compared with changes in a propensity score–defined control group of counties in other states.

Measurements: Annual county-level all-cause mortality in age-, sex-, and race-specific cells (n = 146 825) from the Centers for Disease Control and Prevention's Compressed Mortality File. Secondary outcomes were deaths from causes amenable to health care, insurance coverage, access to care, and self-reported health.

Results: Reform in Massachusetts was associated with a significant decrease in all-cause mortality compared with the control group (−2.9%; P = 0.003, or an absolute decrease of 8.2 deaths per 100 000 adults). Deaths from causes amenable to health care also significantly decreased (−4.5%; P < 0.001). Changes were larger in counties with lower household incomes and higher prereform uninsured rates. Secondary analyses showed significant gains in coverage, access to care, and self-reported health. The number needed to treat was approximately 830 adults gaining health insurance to prevent 1 death per year.

Conclusion: Health reform in Massachusetts was associated with significant reductions in all-cause mortality and deaths from causes amenable to health care.

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Dangerous Liquidity and the Demand for Health Care: Evidence from the 2008 Stimulus Payments

Tal Gross & Jeremy Tobacman
Journal of Human Resources, Spring 2014, Pages 424-445

Abstract:
Household finances can affect health and health care through several channels. To explore these channels, we exploit the randomized timing of the arrival of the 2008 Economic Stimulus Payments. We find that the payments raised the probability of an adult emergency department visit over the following 23 weeks by an average of 1.1 percent. This effect is difficult to reconcile with the Permanent Income Hypothesis. We observe little impact on avoidable hospitalizations or emergency visits for nonurgent conditions and no difference in effects as a function of health insurance coverage. By contrast, we show that the increase is driven by visits for urgent medical conditions, like drug- and alcohol-related visits. Complementary evidence suggests that consumers are not simply substituting from outpatient doctor visits to hospital care. The results thus suggest that liquidity constraints may not constitute a direct barrier to care, but rather that liquidity can increase health care utilization indirectly by increasing the need for care.

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Do More Health Insurance Options Lead to Higher Wages? Evidence from States Extending Dependent Coverage

Marcus Dillender
Journal of Health Economics, July 2014, Pages 84–97

Abstract:
Little is known about how health insurance affects labor market decisions for young adults. This is despite the fact that expanding coverage for people in their early twenties is an important component of the Affordable Care Act. This paper studies how having an outside source of health insurance affects wages by using variation in health insurance access that comes from states extending dependent coverage to young adults. Using American Community Survey and Census data, I find evidence that extending health insurance to young adults raises their wages. The increases in wages can be explained by increases in human capital and the increased flexibility in the labor market that comes from people no longer having to rely on their own employers for health insurance. The estimates from this paper suggest the Affordable Care Act will lead to wage increases for young adults.

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Health Care in a Multipayer System: The Effects of Health Care Service Demand among Adults under 65 on Utilization and Outcomes in Medicare

Sherry Glied
NBER Working Paper, April 2014

Abstract:
Doctors and hospitals in the United States serve patients covered by many types of insurance. This overlap in the supply of health care services means that changes in the prices paid or the volume of services demanded by one group of patients may affect other patient groups. This paper examines how marginal shifts in the demand for services among the adult population under 65 (specifically, factors that affect the uninsurance rate) affect use in the Medicare population. I provide a simple theoretical framework for understanding how changes in the demand for care among adults under 65 may affect Medicare spending. I then examine how two demand factors – recent coverage eligibility changes for parents and the firm size composition of employment – affect insurance coverage among adults under 65 and how these factors affect per beneficiary Medicare spending. Factors that contribute to reductions in uninsurance rates are associated with contemporaneous decreases in per beneficiary Medicare spending, particularly in high variation Medicare services. Reductions in the demand for medical services among adults below age 65 are not associated with reductions in the total quantity of physician services supplied. The increased Medicare utilization that accompanies lower demand among those under 65 has few, if any, benefits for Medicare patients.

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Insurance Cancellations In Context: Stability Of Coverage In The Nongroup Market Prior To Health Reform

Benjamin Sommers
Health Affairs, May 2014, Pages 887-894

Abstract:
Recent cancellations of nongroup health insurance plans generated much policy debate and raised concerns that the Affordable Care Act (ACA) may increase the number of uninsured Americans in the short term. This article provides evidence on the stability of nongroup coverage using US census data for the period 2008–11, before ACA provisions took effect. The principal findings are threefold. First, this market was characterized by high turnover: Only 42 percent of people with nongroup coverage at the outset of the study period retained that coverage after twelve months. Second, 80 percent of people experiencing coverage changes acquired other insurance within a year, most commonly from an employer. Third, turnover varied across groups, with stable coverage more common for whites and self-employed people than for other groups. Turnover was particularly high among adults ages 19–35, with only 21 percent of young adults retaining continuous nongroup coverage for two years. Given estimates from 2012 that 10.8 million people were covered in this market, these results suggest that 6.2 million people leave nongroup coverage annually. This suggests that the nongroup market was characterized by frequent disruptions in coverage before the ACA and that the effects of the recent cancellations are not necessarily out of the norm. These results can serve as a useful pre-ACA baseline with which to evaluate the law’s long-term impact on the stability of nongroup coverage.

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Moral Hazard and Adverse Selection in Private Health Insurance

David Powell & Dana Goldman
RAND Working Paper, December 2013

Abstract:
Moral hazard and adverse selection create inefficiencies in private health insurance markets. The authors use claims data from a large firm to study the independent roles of both moral hazard and adverse selection. Previous studies have attempted to estimate moral hazard in private health insurance by assuming that individuals respond only to the spot price, end-of-year price, average price, or a related metric. There is little economic justification for such assumptions and, in fact, economic intuition suggests that the nonlinear budget constraints generated by health insurance plans make these assumptions especially poor. They study the differential impact of the health insurance plans offered by the firm on the entire distribution of medical expenditures without parameterizing the plans by a specific metric. They use a new instrumental variable quantile estimation technique introduced in Powell (2013b) that provides the quantile treatment effects for each plan, while conditioning on a set of covariates for identification purposes. This technique allows us to map the resulting estimated medical expenditure distributions to the nonlinear budget sets generated by each plan. Their method also allows them to separate moral hazard from adverse selection and estimate their relative importance. They estimate that 77% of the additional medical spending observed in the most generous plan in their data relative to the least generous is due to adverse selection. The remainder can be attributed to moral hazard. A policy which resulted in each person enrolling in the least generous plan would cause the annual premium of that plan to rise by over $1,500.

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The US healthcare workforce and the labor market effect on healthcare spending and health outcomes

Lawrence Pellegrini, Rosa Rodriguez-Monguio & Jing Qian
International Journal of Health Care Finance and Economics, June 2014, Pages 127-141

Abstract:
The healthcare sector was one of the few sectors of the US economy that created new positions in spite of the recent economic downturn. Economic contractions are associated with worsening morbidity and mortality, declining private health insurance coverage, and budgetary pressure on public health programs. This study examines the causes of healthcare employment growth and workforce composition in the US and evaluates the labor market’s impact on healthcare spending and health outcomes. Data are collected for 50 states and the District of Columbia from 1999–2009. Labor market and healthcare workforce data are obtained from the Bureau of Labor Statistics. Mortality and health status data are collected from the Centers for Disease Control and Prevention’s Vital Statistics program and Behavioral Risk Factor Surveillance System. Healthcare spending data are derived from the Centers for Medicare and Medicaid Services. Dynamic panel data regression models, with instrumental variables, are used to examine the effect of the labor market on healthcare spending, morbidity, and mortality. Regression analysis is also performed to model the effects of healthcare spending on the healthcare workforce composition. All statistical tests are based on a two-sided α significance of p< .05. Analyses are performed with STATA and SAS. The labor force participation rate shows a more robust effect on healthcare spending, morbidity, and mortality than the unemployment rate. Study results also show that declining labor force participation negatively impacts overall health status ( p< .01), and mortality for males ( p< .05) and females ( p< .001), aged 16–64. Further, the Medicaid and Medicare spending share increases as labor force participation declines ( p< .001); whereas, the private healthcare spending share decreases ( p< .001). Public and private healthcare spending also has a differing effect on healthcare occupational employment per 100,000 people. Private healthcare spending positively impacts primary care physician employment ( p< .001); whereas, Medicare spending drives up employment of physician assistants, registered nurses, and personal care attendants ( p< .001). Medicaid and Medicare spending has a negative effect on surgeon employment ( p< .05); the effect of private healthcare spending is positive but not statistically significant. Labor force participation, as opposed to unemployment, is a better proxy for measuring the effect of the economic environment on healthcare spending and health outcomes. Further, during economic contractions, Medicaid and Medicare’s share of overall healthcare spending increases with meaningful effects on the configuration of state healthcare workforces and subsequently, provision of care for populations at-risk for worsening morbidity and mortality.

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Financial Health Economics

Ralph Koijen, Tomas Philipson & Harald Uhlig
NBER Working Paper, April 2014

Abstract:
We provide a theoretical and empirical analysis of the link between financial and real health care markets. We document a “medical innovation premium” of 4-6% annually for equity of medical firms and analyze the implications it has for the growth of the health care sector. We interpret the premium as compensating investors for government-induced profit risk. We provide supportive evidence for this hypothesis through company filings and abnormal return patterns surrounding threats of government intervention. We quantify the implications of the premium for growth in real health care spending by calibrating our model to match historical trends. Policies that had removed government risk would have lead to more than a doubling of medical R&D and would have increased the current share of health care spending by 4% of GDP, with a predicted long run share of 38%.

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Medical Care Spending and Labor Market Outcomes: Evidence from Workers' Compensation Reforms

David Powell & Seth Seabury
RAND Working Paper, December 2013

Abstract:
There is considerable controversy over whether much of the spending on health care in the United States delivers enough value to justify the cost. This paper contributes to this literature by studying the causal relationship between medical care spending and labor outcomes, exploiting a policy which directly impacted medical spending for reasons unrelated to health and using a unique data set which includes medical spending and labor earnings. The focus on labor outcomes is motivated by its potential usefulness as a measure of health, the importance of understanding the relationship between health and labor productivity, and the policy interest in improving labor outcomes for the population that it studies - injured workers. It exploits the 2003-2004 California workers’ compensation reforms which reduced medical care spending for injured workers with a disproportionate effect on workers suffering lower back injuries. It links administrative data on workers’ compensation claims to earnings and test the effect of the reforms on labor force outcomes for workers who experienced the biggest drop in medical care costs. Adjusting for the severity of injury and selection into workers’ compensation, it finds that workers with low back injuries experienced a 7.3% greater decline in medical care after the reforms, and that this led to an 8.3% drop in post-injury earnings relative to other injured workers. These results suggest jointly that medical care spending can impact health and that health affects labor outcomes.

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Decomposing Growth In Spending Finds Annual Cost Of Treatment Contributed Most To Spending Growth, 1980–2006

Martha Starr, Laura Dominiak & Ana Aizcorbe
Health Affairs, May 2014, Pages 823-831

Abstract:
Researchers have disagreed about factors driving up health care spending since the 1980s. One camp, led by Kenneth Thorpe, identifies rising numbers of people being treated for chronic diseases as a major factor. Charles Roehrig and David Rousseau reach the opposite conclusion: that three-quarters of growth in average spending reflects the rising costs of treating given diseases. We reexamined sources of spending growth using data from four nationally representative surveys. We found that rising costs of treatment accounted for 70 percent of growth in real average health care spending from 1980 to 2006. The contribution of shares of the population treated for given diseases increased in 1997–2006, but even then it accounted for only one-third of spending growth. We highlight the fact that Thorpe’s inclusion of population growth as part of disease prevalence explains the appreciable difference in results. An important policy implication is that programs to better manage chronic diseases may only modestly reduce average spending growth.

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Did Budget Cuts in Medicaid Disproportionate Share Hospital Payment Affect Hospital Quality of Care?

Hui-Min Hsieh et al.
Medical Care, May 2014, Pages 415-421

Background: Medicaid Disproportionate Share Hospital (DSH) payments are one of the major sources of financial support for hospitals providing care to low-income patients. However, Medicaid DSH payments will be redirected from hospitals to subsidize individual health insurance purchase through US national health reform.

Objectives: The purpose of this study is to examine the association between Medicaid DSH payment reductions and nursing-sensitive and birth-related quality of care among Medicaid/uninsured and privately insured patients.

Methods: Economic theory of hospital behavior was used as a conceptual framework, and longitudinal data for California hospitals from 1996 to 2003 were examined. Hospital-fixed effects regression models were estimated. The unit of analysis is at the hospital level, examining 2 aggregated measures based on the payer category of discharged patients (ie, Medicaid/uninsured and privately insured).

Principal Findings: The overall study findings provide at best weak evidence of an association between net Medicaid DSH payments and hospital quality of care for either Medicaid/uninsured or the privately insured patients. The magnitudes of the effects are small and only a few have significant DSH effects.

Conclusions: Although this study does not find evidence suggesting that reducing Medicaid DSH payments had a strong negative impact on hospital quality of care for Medicaid/uninsured or privately insured patients, the results are not necessarily predictive of the impact national health care reform will have. Research is necessary to monitor hospital quality of care as this reform is implemented.

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How Do Providers Respond to Public Health Insurance Expansions? Evidence from Adult Medicaid Dental Benefits

Thomas Buchmueller, Sarah Miller & Marko Vujicic
NBER Working Paper, April 2014

Abstract:
A large and growing number of adults are covered by public insurance, and the Affordable Care Act is predicted to dramatically increase public coverage over the next several years. This study evaluates how such large increases in public coverage affect provider behavior and patient wait times by analyzing a common type of primary care: dental services. We find that when states add dental benefit to adult Medicaid coverage, dentists' participation in Medicaid increases and dentists see more publicly insured patients without decreasing the number of visits provided to privately insured patients. Dentists increase the total number of visits they supply each week while only modestly increasing the amount of time they spend working. They achieve this primarily by making greater use of dental hygienists. As a result, dentists' income increases. Wait times increase modestly, with the largest increases in wait times observed in states with restrictive scope of practice laws governing dental hygienists. These changes are most pronounced among dentists who practice in poor areas where Medicaid coverage is greatest.

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Emergency Department Profits Are Likely To Continue As The Affordable Care Act Expands Coverage

Michael Wilson & David Cutler
Health Affairs, May 2014, Pages 792-799

Abstract:
To better understand the financial viability of hospital emergency departments (EDs), we created national estimates of the cost to hospitals of providing ED care and the associated hospital revenue using hospital financial reports and patient claims data from 2009. We then estimated the effect the Affordable Care Act (ACA) will have on the future profitability of providing ED care. We estimated that hospital revenue from ED care exceeded costs for that care by $6.1 billion in 2009, representing a profit margin of 7.8 percent (net revenue expressed as a percentage of total revenue). However, this is primarily because hospitals make enough profit on the privately insured ($17 billion) to cover underpayment from all other payer groups, such as Medicare, Medicaid, and unreimbursed care. Assuming current payer reimbursement rates, ACA reforms could result in an additional 4.4-percentage-point increase in profit margins for hospital-based EDs compared to what could be the case without the reforms.

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Source of Health Insurance Coverage and Employment Survival Among Newly Disabled Workers: Evidence from the Health and Retirement Study

Matthew Hill, Nicole Maestas & Kathleen Mullen
RAND Working Paper, December 2013

Abstract:
The onset of a work-limiting disability sets in motion a sequence of events that for a growing number of workers ends in early retirement from the labor force, SSDI application and, ultimately, long-term program participation. Exactly how this sequence of events plays out is not well understood. While there exist large bodies of literature that address the effects of health insurance coverage on a wide range of outcomes, few papers have sought to examine how source of health insurance coverage generally and employer sponsored health insurance (ESHI) specifically affect the employment trajectory following onset of disability. The authors use the nationally representative, longitudinal data from the Health and Retirement Study (HRS) to observe individuals before and after they experience a self-reported work limiting disability. To estimate the effect of ESHI on labor supply and disability claiming, they compare individuals covered by ESHI with no other employer-sponsored option (i.e., spousal coverage) with individuals covered by ESHI but whose spouses are offered coverage from their own employer. They find evidence of an “employment lock” effect of ESHI only among the 20 percent of individuals whose disabilities do not impact their immediate physical capacity but are associated with high medical costs. They do not find any evidence of differential disability insurance application rates between those with ESHI and the comparison group. With the passage of the Affordable Care Act, there is concern that disability insurance applications may swell because the incentive to remain employed will diminish for disabled workers reliant on ESHI. Their results suggest that the availability of non-employment-based health insurance may cause disabled workers with high cost/low severity conditions to leave the workforce but it will not necessarily lead to increased disability insurance application among individuals with ESHI.

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Adding Employer Contributions to Health Insurance to Social Security's Earnings and Tax Base

Karen Smith & Eric Toder
Urban Institute Working Paper, April 2014

Abstract:
The inclusion of employer-sponsored health insurance (ESI) in taxable income would increase income and payroll tax receipts, but would also increase Old Age, Survivors, and Disability Insurance (OASDI) benefits by adding ESI to the OASDI earnings base. This study uses the Urban Institute’s DYNASIM model to estimate the effects of including ESI premiums in taxable earnings on the level and distribution by age and income groups of income tax burdens, payroll tax burdens, and OASDI benefits. We find that the increased present value of OASDI benefits from including ESI in the wage base in 2014 offsets about 22 percent of increased income and payroll taxes, 57 percent of increased payroll taxes, and 72 percent of increased OASDI taxes. The overall distributions of taxes and benefits by income group follow the same pattern, with both taxes and benefits increasing as a share of income between the bottom and middle quintiles and then declining as a share of income for higher income taxpayers. But households in the bottom income quintiles receive a net benefit from including ESI in the tax base because their increase in OASDI benefits exceeds their increase in income and payroll taxes. Over a lifetime perspective, all earnings groups experience net tax increases, but workers in the middle of the earnings distribution experience the largest net tax increases as a share of lifetime earnings. Higher benefits offset a larger share of tax increases for lower than for higher income groups.

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Socioeconomic Status And Readmissions: Evidence From An Urban Teaching Hospital

Jianhui Hu, Meredith Gonsahn & David Nerenz
Health Affairs, May 2014, Pages 778-785

Abstract:
The Centers for Medicare and Medicaid Services (CMS) Hospital Readmissions Reduction Program has focused attention on ways to reduce thirty-day readmissions and on factors affecting readmission risk. Using inpatient data from an urban teaching hospital, we examined how elements of individual characteristics and neighborhood socioeconomic status influenced the likelihood of readmission under a single fixed organizational and staffing structure. Patients living in high-poverty neighborhoods were 24 percent more likely than others to be readmitted, after demographic characteristics and clinical conditions were adjusted for. Married patients were at significantly reduced risk of readmission, which suggests that they had more social support than unmarried patients. These and previous findings that document socioeconomic disparities in readmission raise the question of whether CMS’s readmission measures and associated financial penalties should be adjusted for the effects of factors beyond hospital influence at the individual or neighborhood level, such as poverty and lack of social support.

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Community Factors and Hospital Readmission Rates

Jeph Herrin et al.
Health Services Research, forthcoming

Objective: To examine the relationship between community factors and hospital readmission rates.

Data Sources/Study Setting: We examined all hospitals with publicly reported 30-day readmission rates for patients discharged during July 1, 2007, to June 30, 2010, with acute myocardial infarction (AMI), heart failure (HF), or pneumonia (PN). We linked these to publicly available county data from the Area Resource File, the Census, Nursing Home Compare, and the Neilsen PopFacts datasets.

Study Design: We used hierarchical linear models to assess the effect of county demographic, access to care, and nursing home quality characteristics on the pooled 30-day risk-standardized readmission rate.

Principal Findings: The study sample included 4,073 hospitals. Fifty-eight percent of national variation in hospital readmission rates was explained by the county in which the hospital was located. In multivariable analysis, a number of county characteristics were found to be independently associated with higher readmission rates, the strongest associations being for measures of access to care. These county characteristics explained almost half of the total variation across counties.

Conclusions: Community factors, as measured by county characteristics, explain a substantial amount of variation in hospital readmission rates.

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Malpractice Laws and Incentives to Shield Assets: Evidence from Nursing Homes

James Brickley, Susan Lu & Gerard Wedig
University of Rochester Working Paper, March 2014

Abstract:
Previous empirical studies of the incentive effects of medical malpractice liability have largely ignored the incentives of providers to restructure to protect assets. This study uses a large panel database to provide evidence on asset-shielding responses to the enactment of pro-plaintiff tort laws in the nursing home industry. The evidence suggests two important asset-shielding responses. First, large chains sold many homes in the affected states to smaller, more judgment-proof owners (with fewer assets, little or no insurance coverage and protective legal structures). Second, chains became relatively less likely to brand their homes with names that linked them directly to the central corporation or sister units (we provide legal and informational explanations for why branding units is likely to increase expected tort liability). In addition to extending the empirical literature on malpractice, the paper provides evidence on the horizontal ownership of service establishments, branding and the choice of business names.

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The Spillover Effects of Health IT Investments on Regional Heath Care Costs

Hilal Atasoy, Pei-Yu Chen & Kartik Ganju
Temple University Working Paper, April 2014

Abstract:
Health IT investments are often presumed to ameliorate the societal challenge of significant and accelerating health care costs. However, mixed results based on hospital level analyses have been found. We argue that the effects of health IT investments go beyond hospital level due to patient mobility and information sharing. We provide empirical evidence that, although EMR adoption is found to increase the operational costs for the adopting hospitals, it has significant spillover effects by reducing the health care costs of the other hospitals in the same region. These regional externalities are stronger especially in the long term. We further analyze whether the spillover effects differ by EMR technology type (basic vs. advanced EMR) and by distributional characteristics of EMR in the region. Results reveal that not all hospitals need to have the same advanced level of EMR to achieve an optimal reduction in regional health care costs. Additionally, higher software integration among adopting hospitals further decreases regional health care costs. Overall, our results provide support to the role of EMR investments in reducing societal health care costs. Previous research based on hospital level analyses may have underestimated the societal impact of EMR adoption as externalities can lead to benefits to be realized at other hospitals in the region. Estimates, based on our results, suggest that EMR investments can lead to net reduction in national health care cost by about $47 billion dollars over 4 years. Policy makers should take into account the spillover effects, software integration and distribution of EMRs while formulating policies on subsidizing EMR investments.

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Eliminating Medication Copayments Reduces Disparities In Cardiovascular Care

Niteesh Choudhry et al.
Health Affairs, May 2014, Pages 863-870

Abstract:
Substantial racial and ethnic disparities in cardiovascular care persist in the United States. For example, African Americans and Hispanics with cardiovascular disease are 10–40 percent less likely than whites to receive secondary prevention therapies, such as aspirin and beta-blockers. Lowering copayments for these therapies improves outcomes among all patients who have had a myocardial infarction, but the impact of lower copayments on health disparities is unknown. Using self-reported race and ethnicity for participants in the Post-Myocardial Infarction Free Rx Event and Economic Evaluation (MI FREEE) trial, we found that rates of medication adherence were significantly lower and rates of adverse clinical outcomes were significantly higher for nonwhite patients than for white patients. Providing full drug coverage increased medication adherence in both groups. Among nonwhite patients, it also reduced the rates of major vascular events or revascularization by 35 percent and reduced total health care spending by 70 percent. Providing full coverage had no effect on clinical outcomes and costs for white patients. We conclude that lowering copayments for medications after myocardial infarctions may reduce racial and ethnic disparities for cardiovascular disease.

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Information technology and agency in physicians' prescribing decisions

Andrew Epstein & Jonathan Ketcham
RAND Journal of Economics, Summer 2014, Pages 422–448

Abstract:
Patients rely on physicians to act as their agents when prescribing medications, yet the efforts of pharmaceutical manufacturers and prescription drug insurers may alter this agency relationship. We evaluate how formularies, and the use of information technology (IT) that provides physicians with formulary information, influence prescribing. We combine data from a randomized experiment of physicians with secondary data to eliminate bias due to patient, physician, drug, and insurance characteristics. We find that when given formulary IT, physicians' prescribing decisions are influenced by formularies far more than by pharmaceutical firms' detailing and sampling. Without IT, however, formularies' effects are much smaller.

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Searching for Answers to Clinical Questions Using Google Versus Evidence-Based Summary Resources: A Randomized Controlled Crossover Study

Sarang Kim et al.
Academic Medicine, forthcoming

Purpose: To compare the speed and accuracy of answering clinical questions using Google versus summary resources.

Method: In 2011 and 2012, 48 internal medicine interns from two classes at Rutgers University Robert Wood Johnson Medical School, who had been trained to use three evidence-based summary resources, performed four-minute computer searches to answer 10 clinical questions. Half were randomized to initiate searches for answers to questions 1 to 5 using Google; the other half initiated searches using a summary resource. They then crossed over and used the other resource for questions 6 to 10. They documented the time spent searching and the resource where the answer was found. Time to correct response and percentage of correct responses were compared between groups using t test and general estimating equations.

Results: Of 480 questions administered, interns found answers for 393 (82%). Interns initiating searches in Google used a wider variety of resources than those starting with summary resources. No significant difference was found in mean time to correct response (138.5 seconds for Google versus 136.1 seconds for summary resource; P = .72). Mean correct response rate was 58.4% for Google versus 61.5% for summary resource (mean difference -3.1%; 95% CI -10.3% to 4.2%; P = .40).

Conclusions: The authors found no significant differences in speed or accuracy between searches initiated using Google versus summary resources. Although summary resources are considered to provide the highest quality of evidence, improvements to allow for better speed and accuracy are needed.

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Structuring Incentives within Accountable Care Organizations

Brigham Frandsen & James Rebitzer
Journal of Law, Economics, and Organization, forthcoming

Abstract:
Accountable Care Organizations (ACOs) are new organizations created by the Affordable Care Act to encourage more efficient, integrated care delivery. To promote efficiency, ACOs sign contracts under which they keep a fraction of the savings from keeping costs below target provided they also maintain quality levels. To promote integration and facilitate measurement, ACOs are required to have at least 5000 enrollees and so must coordinate across many providers. We calibrate a model of optimal ACO incentives using proprietary performance measures from a large insurer. Our key finding is that free-riding is a severe problem and causes optimal incentive payments to exceed cost savings unless ACOs simultaneously achieve extremely large efficiency gains. This implies that successful ACOs will likely rely on motivational strategies that amplify the effects of under-powered incentives. These motivational strategies raise important questions about the limits of ACOs as a policy for promoting more efficient, integrated care.

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Vertical Integration: Hospital Ownership Of Physician Practices Is Associated With Higher Prices And Spending

Laurence Baker, Kate Bundorf & Daniel Kessler
Health Affairs, May 2014, Pages 756-763

Abstract:
We examined the consequences of contractual or ownership relationships between hospitals and physician practices, often described as vertical integration. Such integration can reduce health spending and increase the quality of care by improving communication across care settings, but it can also increase providers’ market power and facilitate the payment of what are effectively kickbacks for inappropriate referrals. We investigated the impact of vertical integration on hospital prices, volumes (admissions), and spending for privately insured patients. Using hospital claims from Truven Analytics MarketScan for the nonelderly privately insured in the period 2001–07, we constructed county-level indices of prices, volumes, and spending and adjusted them for enrollees’ age and sex. We measured hospital-physician integration using information from the American Hospital Association on the types of relationships hospitals have with physicians. We found that an increase in the market share of hospitals with the tightest vertically integrated relationship with physicians — ownership of physician practices — was associated with higher hospital prices and spending. We found that an increase in contractual integration reduced the frequency of hospital admissions, but this effect was relatively small. Taken together, our results provide a mixed, although somewhat negative, picture of vertical integration from the perspective of the privately insured.

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Preventability of 30-Day Readmissions for Heart Failure Patients Before and After a Quality Improvement Initiative

Jason Ryan et al.
American Journal of Medical Quality, May/June 2014, Pages 220-226

Abstract:
The objective of this study was to estimate the frequency of heart failure (HF) readmissions that can be prevented through a quality improvement (QI) program. All HF patients at the University of Connecticut Health Center who had a readmission within 30 days of discharge in the year before (2008) and the year after (2011) a QI program were studied. Through chart review, the percentage of patients who had preventable readmissions in each year was estimated. Prior to the QI initiative, chart reviewers identified that 20% to 30% of readmissions were preventable. The decrease in readmissions after the QI program was similar at 28%. Fewer readmissions after the QI initiative were deemed preventable compared with before. In conclusion, this study found a percentage of preventable readmissions similar to the actual 28% reduction in readmissions after a QI program was launched. Preventable readmissions were less common after the QI program was in place.

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A Randomized, Controlled Pragmatic Trial of Telephonic Medication Therapy Management to Reduce Hospitalization in Home Health Patients

Alan Zillich et al.
Health Services Research, forthcoming

Objective: To evaluate the effectiveness of a telephonic medication therapy management (MTM) service on reducing hospitalizations among home health patients.

Setting: Forty randomly selected, geographically diverse home health care centers in the United States.

Design: Two-stage, randomized, controlled trial with 60-day follow-up. All Medicare-insured home health care patients were eligible to participate. Twenty-eight consecutive patients within each care center were recruited and randomized to usual care or MTM intervention. The MTM intervention consisted of the following: (1) initial phone call by a pharmacy technician to verify active medications; (2) pharmacist-provided medication regimen review by telephone; and (3) follow-up pharmacist phone calls at day seven and as needed for 30 days. The primary outcome was 60-day all-cause hospitalization.

Data Collection: Data were collected from in-home nursing assessments using the OASIS-C. Multivariate logistic regression modeled the effect of the MTM intervention on the probability of hospitalization while adjusting for patients’ baseline risk of hospitalization, number of medications taken daily, and other OASIS-C data elements.

Principal Findings: A total of 895 patients (intervention n = 415, control n = 480) were block-randomized to the intervention or usual care. There was no significant difference in the 60-day probability of hospitalization between the MTM intervention and control groups (Adjusted OR: 1.26, 95 percent CI: 0.89–1.77, p = .19). For patients within the lowest baseline risk quartile (n = 232), the intervention group was three times more likely to remain out of the hospital at 60 days (Adjusted OR: 3.79, 95 percent CI: 1.35–10.57, p = .01) compared to the usual care group.

Conclusions: This MTM intervention may not be effective for all home health patients; however, for those patients with the lowest-risk profile, the MTM intervention prevented patients from being hospitalized at 60 days.

By KEVIN LEWIS | 09:00:00 AM


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