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Thursday, July 2, 2015

Blitzed

Exposure to female fertility pheromones influences men’s drinking

Robin Tan & Mark Goldman
Experimental and Clinical Psychopharmacology, June 2015, Pages 139-146

Abstract:
Research has shown that humans consciously use alcohol to encourage sexual activity. In the current study, we investigated whether decision making about alcohol use and sex can be cued outside of awareness by recently revealed sexual signaling mechanisms. Specifically, we examined if males exposed without their knowledge to pheromones emitted by fertile females would increase their alcohol consumption, presumably via neurobehavioral information pathways that link alcohol to sex and mating. We found that men who smelled a T-shirt worn by a fertile female drank significantly more (nonalcoholic) beer, and exhibited significantly greater approach behavior toward female cues, than those who smelled a T-shirt worn by a nonfertile female. These findings reveal previously unknown influences on human alcohol consumption, augment the research base for pheromone cuing of sexual behavior in humans, and raise the possibility that other, as yet unknown, pathways of behavioral influence may be operating hidden from view.

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Parent Involvement, Sibling Companionship, and Adolescent Substance Use: A Longitudinal, Genetically Informed Design

Diana Samek et al.
Journal of Family Psychology, forthcoming

Abstract:
A large literature shows that parent and sibling relationship factors are associated with an increased likelihood of adolescent substance use. Less is known about the etiology of these associations. Using a genetically informed sibling design, we examined the prospective associations between parent involvement, sibling companionship, and adolescent substance use at 2 points in mid- and late-adolescence. Adolescents were adopted (n = 568) or the biological offspring of both parents (n = 412). Cross-lagged panel results showed that higher levels of parent involvement in early adolescence were associated with lower levels of substance use later in adolescence. Results did not significantly differ across adoption status, suggesting this association cannot be due to passive gene-environment correlation. Adolescent substance use at Time 1 was not significantly associated with parent involvement at Time 2, suggesting this association does not appear to be solely due to evocative (i.e., “child-driven”) effects either. Together, results support a protective influence of parent involvement on subsequent adolescent substance use that is environmental in nature. The cross-paths between sibling companionship and adolescent substance use were significant and negative in direction (i.e., protective) for sisters, but positive for brothers (in line with a social contagion hypothesis). These effects were consistent across genetically related and unrelated pairs, and thus appear to be environmentally mediated. For mixed gender siblings, results were consistent with environmentally driven, protective influence hypothesis for genetically unrelated pairs, but in line with a genetically influenced, social contagion hypothesis for genetically related pairs. Implications are discussed.

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Medical marijuana laws and adolescent marijuana use in the USA from 1991 to 2014: Results from annual, repeated cross-sectional surveys

Deborah Hasin et al.
Lancet Psychiatry, July 2015, Pages 601–608

Background: Adolescent use of marijuana is associated with adverse later effects, so the identification of factors underlying adolescent use is of substantial public health importance. The relationship between US state laws that permit marijuana for medical purposes and adolescent marijuana use has been controversial. Such laws could convey a message about marijuana acceptability that increases its use soon after passage, even if implementation is delayed or the law narrowly restricts its use. We used 24 years of national data from the USA to examine the relationship between state medical marijuana laws and adolescent use of marijuana.

Methods: Using a multistage, random-sampling design with replacement, the Monitoring the Future study conducts annual national surveys of 8th, 10th, and 12th-grade students (modal ages 13–14, 15–16, and 17–18 years, respectively), in around 400 schools per year. Students complete self-administered questionnaires that include questions on marijuana use. We analysed data from 1 098 270 adolescents surveyed between 1991 and 2014. The primary outcome of this analysis was any marijuana use in the previous 30 days. We used multilevel regression modelling with adolescents nested within states to examine two questions. The first was whether marijuana use was higher overall in states that ever passed a medical marijuana law up to 2014. The second was whether the risk of marijuana use changed after passage of medical marijuana laws. Control covariates included individual, school, and state-level characteristics.

Findings: Marijuana use was more prevalent in states that passed a medical marijuana law any time up to 2014 than in other states (adjusted prevalence 15.87% vs 13.27%; adjusted odds ratio [OR] 1.27, 95% CI 1.07–1.51; p=0.0057). However, the risk of marijuana use in states before passing medical marijuana laws did not differ significantly from the risk after medical marijuana laws were passed (adjusted prevalence 16.25% vs 15.45%; adjusted OR 0.92, 95% CI 0.82–1.04; p=0.185). Results were generally robust across sensitivity analyses, including redefining marijuana use as any use in the previous year or frequency of use, and reanalysing medical marijuana laws for delayed effects or for variation in provisions for dispensaries.

Interpretation: Our findings, consistent with previous evidence, suggest that passage of state medical marijuana laws does not increase adolescent use of marijuana. However, overall, adolescent use is higher in states that ever passed such a law than in other states. State-level risk factors other than medical marijuana laws could contribute to both marijuana use and the passage of medical marijuana laws, and such factors warrant investigation.

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The Effect of Medical Marijuana Laws on Juvenile Marijuana Use

Lisa Stolzenberg, Stewart D’Alessio & Dustin Dariano
International Journal of Drug Policy, forthcoming

Background: A number of states in the United States legally allow the use of marijuana as a medical therapy to treat an illness or to alleviate symptoms. Concern persists as to whether these types of laws are increasing juvenile recreational marijuana use. It is also plausible that medical marijuana laws engender an escalation of illicit non-marijuana drug use among juveniles because marijuana is frequently considered to be a gateway drug.

Methods: This study uses longitudinal data drawn from the National Survey on Drug Use and Health for the 50 U.S. states and a cross-sectional pooled-time series research design to investigate the effect of medical marijuana laws on juvenile marijuana use and on juvenile non-marijuana illicit drug use. Our study period encompasses five measurement periods calibrated in two-year intervals (2002-03 to 2010-11). This research design is advantageous in that it affords us the ability not only to assess the effect of the implementation of medical marijuana laws on juvenile drug use, but also to consider other state-specific factors that may explain variation in drug use that cannot be accounted for using a single time series.

Results: Findings show that medical marijuana laws amplify recreational juvenile marijuana use. Other salient predictors of juvenile marijuana use at the state-level of analysis include perceived availability of marijuana, percent of juveniles skipping school, severity of perceived punishment for marijuana possession, alcohol consumption, percent of respondents with a father residing in household, and percent of families in the state receiving public assistance. There is little empirical evidence to support the view that medical marijuana laws affect juveniles’ use of illicit non-marijuana drugs.

Conclusion: Based on our findings, it seems reasonable to speculate that medical marijuana laws amplify juveniles’ use of marijuana by allaying the social stigma associated with recreational marijuana use and by placating the fear that marijuana use could potentially result in a negative health outcome.

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Cigarette Taxes and Youth Smoking: Updated Estimates Using YRBS Data

Benjamin Hansen, Joseph Sabia & Daniel Rees
NBER Working Paper, June 2015

Abstract:
Using data from the state and national Youth Risk Behavior Surveys for the period 1991-2005, Carpenter and Cook (2008) found a strong, negative relationship between cigarette taxes and youth smoking. We revisit this relationship using four additional waves of YRBS data (2007, 2009, 2011, and 2013). Our results suggest that youths have become much less responsive to cigarette taxes since 2005. In fact, we find little evidence of a negative relationship between cigarette taxes and youth smoking when we restrict our attention to the period 2007-2013.

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Alcohol-related cues potentiate alcohol impairment of behavioral control in drinkers

Jessica Weafer & Mark Fillmore
Psychology of Addictive Behaviors, June 2015, Pages 290-299

Abstract:
The acute impairing effects of alcohol on inhibitory control are well-established, and these disinhibiting effects are thought to play a role in its abuse potential. Alcohol impairment of inhibitory control is typically assessed in the context of arbitrary cues, yet drinking environments are comprised of an array of alcohol-related cues that are thought to influence drinking behavior. Recent evidence suggests that alcohol-related stimuli reduce behavioral control in sober drinkers, suggesting that alcohol impairment of inhibitory control might be potentiated in the context of alcohol cues. The current study tested this hypothesis by examining performance on the attentional-bias behavioral activation (ABBA) task that measures the degree to which alcohol-related stimuli can reduce inhibition of inappropriate responses in a between-subjects design. Social drinkers (N = 40) performed the task in a sober condition, and then again following placebo (0.0 g/kg) and a moderate dose of alcohol (0.65 g/kg) in counterbalanced order. Inhibitory failures were greater following alcohol images compared to neutral images in sober drinkers, replicating previous findings with the ABBA task. Moreover, alcohol-related cues exacerbated alcohol impairment of inhibitory control as evidenced by more pronounced alcohol-induced disinhibition following alcohol cues compared to neutral cues. Finally, regression analyses showed that greater alcohol-induced disinhibition following alcohol cues predicted greater self-reported alcohol consumption. These findings have important implications regarding factors contributing to binge or “loss of control” drinking. That is, the additive effect of disrupted control mechanisms via both alcohol cues and the pharmacological effects of the drug could compromise an individual’s control over ongoing alcohol consumption.

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Historical variation in young adult binge drinking trajectories and its link to historical variation in social roles and minimum legal drinking age

Justin Jager, Katherine Keyes & John Schulenberg
Developmental Psychology, July 2015, Pages 962-974

Abstract:
This study examines historical variation in age 18 to 26 binge drinking trajectories, focusing on differences in both levels of use and rates of change (growth) across cohorts of young adults over 3 decades. As part of the national Monitoring the Future Study, over 64,000 youths from the high school classes of 1976 to 2004 were surveyed at biennial intervals between ages 18 and 26. We found that, relative to past cohorts, recent cohorts both enter the 18 to 26 age band engaging in lower levels and exit the 18 to 26 age band engaging in higher levels of binge drinking. The reason for this reversal is that, relative to past cohorts, binge drinking among recent cohorts accelerates more quickly across ages 18 to 22 and decelerates more slowly across ages 22 to 26. Moreover, we found that historical increases in minimum legal drinking age account for a portion of the historical decline in age 18 level, whereas historical variation in social role acquisition (e.g., marriage, parenthood, and employment) accounts for a portion of the historical acceleration in age 18 to 22 growth. We also found that historical variation in the age 18 to 22 and age 22 to 26 growth rates was strongly and positively connected, suggesting common mechanism(s) underlie historical variation of both growth rates. Findings were generally consistent across gender and indicate that historical time is an important source of individual differences in young adult binge drinking trajectories. Beyond binge drinking, historical time may also inform the developmental course of other young adult risk behaviors, highlighting the interplay of epidemiology and etiology.

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Adolescent Socioeconomic and School-Based Social Status, Smoking, and Drinking

Helen Sweeting & Kate Hunt
Journal of Adolescent Health, July 2015, Pages 37–45

Purpose: Relationships between subjective social status (SSS) and health-risk behaviors have received less attention than those between SSS and health. Inconsistent associations between school-based SSS and smoking or drinking might be because it is a single measure reflecting several status dimensions. We investigated how adolescent smoking and drinking are associated with “objective” socioeconomic status (SES), subjective SES, and three dimensions of school-based SSS.

Methods: Scottish 13–15 years-olds (N = 2,503) completed questionnaires in school-based surveys, providing information on: “objective” SES (residential deprivation, family affluence); subjective SES (MacArthur Scale youth version); and three school-based SSS dimensions (“SSS-peer”, “SSS-scholastic” and “SSS-sports”). We examined associations between each status measure and smoking (ever and weekly) and drinking (ever and usually five or more drinks) and investigated variations according to gender and age.

Results: Smoking and heavier drinking were positively associated with residential deprivation; associations with family affluence and subjective SES were weak or nonexistent. Both substances were related to each school-based SSS measure, and these associations were equally strong or stronger than those with deprivation. Although SSS-peer was positively associated with both smoking and (especially heavier) drinking, SSS-scholastic and SSS-sports were negatively associated with both substances. There were no gender differences in the associations and few according to age.

Conclusions: Subjective school-based status has stronger associations with adolescent smoking and drinking than “objective” or subjective SES. However, different dimensions of school-based status relate to adolescent smoking and drinking in opposing directions, meaning one measure based on several dimensions might show inconsistent relationships with adolescent substance use.

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The impacts of marijuana dispensary density and neighborhood ecology on marijuana abuse and dependence

Christina Mair et al.
Drug and Alcohol Dependence, forthcoming

Background: As an increasing number of states liberalize cannabis use and develop laws and local policies, it is essential to better understand the impacts of neighborhood ecology and marijuana dispensary density on marijuana use, abuse, and dependence. We investigated associations between marijuana abuse/dependence hospitalizations and community demographic and environmental conditions from 2001-2012 in California, as well as cross-sectional associations between local and adjacent marijuana dispensary densities and marijuana hospitalizations.

Methods: We analyzed panel population data relating hospitalizations coded for marijuana abuse or dependence and assigned to residential ZIP codes in California from 2001 through 2012 (20,219 space-time units) to ZIP code demographic and ecological characteristics. Bayesian space-time misalignment models were used to account for spatial variations in geographic unit definitions over time, while also accounting for spatial autocorrelation using conditional autoregressive priors. We also analyzed cross-sectional associations between marijuana abuse/dependence and the density of dispensaries in local and spatially adjacent ZIP codes in 2012.

Results: An additional one dispensary per square mile in a ZIP code was cross-sectionally associated with a 6.8% increase in the number of marijuana hospitalizations (95% credible interval 1.033, 1.105) with a marijuana abuse/dependence code. Other local characteristics, such as the median household income and age and racial/ethnic distributions, were associated with marijuana hospitalizations in cross-sectional and panel analyses.

Conclusions: Prevention and intervention programs for marijuana abuse and dependence may be particularly essential in areas of concentrated disadvantage. Policy makers may want to consider regulations that limit the density of dispensaries.

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Losing jobs and lighting up: Employment experiences and smoking in the Great Recession

Shelley Golden & Krista Perreira
Social Science & Medicine, August 2015, Pages 110–118

Abstract:
The Great Recession produced the highest rates of unemployment observed in decades, in part due to particularly high rates of people losing work involuntarily. The impact of these job losses on health is unknown, due to the length of time required for most disease development, concerns about reverse causation, and limited data that covers this time period. We examine associations between job loss, employment status and smoking, the leading preventable cause of death, among 13,571 individuals participating in the 2001–2011 waves of the U.S.-based Panel Study of Income Dynamics. Results indicate that recent involuntary job loss is associated with an average 1.1 percentage point increase in smoking probability. This risk is strongest when people have returned to work, and appears reversed when they leave the labor market altogether. Although some job loss is associated with changes in household income and psychological distress levels, we find no evidence that these changes explain smoking behavior modifications. Smoking prevention programs and policies targeted at displaced workers or the newly employed may alleviate some negative health effects produced by joblessness during the Great Recession.

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Military Service and Alcohol Use in the United States

Jay Teachman, Carter Anderson & Lucky Tedrow
Armed Forces & Society, July 2015, Pages 460-476

Abstract:
It is well known that enlistees and veterans in the United States are more likely to use alcohol than civilians. However, most of this research is potentially biased in that it often does not employ control variables (other than age) and is based on cross-sectional data. Much of this research also fails to consider the relationship between military service and alcohol use among women. Using longitudinal data taken from the 1997 National Longitudinal Study of Youth, we investigate the relationship between military service and alcohol consumption employing a fixed-effects approach. We find that military service appears to encourage young men to consume alcohol. It is also the case that the effect of military service is not limited to the time that men spend in the military given that male veterans are also more likely to consume alcohol than are comparable nonveterans. We find, however, that women who serve, both enlistees and veterans, are less likely to drink than their civilian counterparts.

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A participant walks into a bar…: Subjective intoxication buffers ostracism’s negative effects

Andrew Hales, Kipling Williams & Christopher Eckhardt
Social Psychology, Summer 2015, Pages 157-166

Abstract:
Alcohol is commonly used to cope with social pain, but its effectiveness remains unknown. Existing theories offer diverging predictions. Pain overlap theory predicts that because alcohol numbs physical pain it should also numb people to the negative effects of ostracism. Alcohol myopia predicts that because alcohol intensifies salient emotions it should enhance the negative effects of ostracism. We conducted a field experiment in a bar, exposing individuals to ostracism or inclusion using Cyberball on an iPad. Subjective intoxication, but not blood alcohol concentration, was associated with less distress for participants who were ostracized, and more distress in participants who were included. We conclude that alcohol reduces both the pain of ostracism and the pleasure of inclusion.

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A Single Dose of Kudzu Extract Reduces Alcohol Consumption in a Binge Drinking Paradigm

David Penetar et al.
Drug and Alcohol Dependence, forthcoming

Background: Overconsumption of alcohol has significant negative effects on an individual's health and contributes to an enormous economic impact on society as a whole. Pharmacotherapies to curb excessive drinking are important for treating alcohol use disorders.

Methods: Twenty (20) men participated in a placebo-controlled, double-blind, between subjects design experiment (n = 10/group) that tested the effects of kudzu extract (Alkontrol-Herbal™) for its ability to alter alcohol consumption in a natural settings laboratory. A single dose of kudzu extract (2 grams total with an active isoflavone content of 520 mg) or placebo was administered 2.5 hours before the onset of a 90 minute afternoon drinking session during which participants had the opportunity to drink up to 6 beers ad libitum; water and juice were always available as alternative beverages.

Results: During the baseline session, the placebo-randomized group consumed 2.7 ± 0.78 beers before treatment and increased consumption to 3.4 ± 1.1 beers after treatment. The kudzu group significantly reduced consumption from 3.0 ± 1.7 at baseline to 1.9 ± 1.3 beers after treatment. The placebo-treated group opened 33 beers during baseline conditions and 38 following treatment whereas the kudzu-treated group opened 32 beers during baseline conditions and only 21 following treatment. Additionally, kudzu-treated participants drank slower.

Conclusion: This is the first demonstration that a single dose of kudzu extract quickly reduces alcohol consumption in a binge drinking paradigm. These data add to the mounting clinical evidence that kudzu extract may be a safe and effective adjunctive pharmacotherapy for alcohol abuse and dependence.

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Gateway to Curiosity: Medical Marijuana Ads and Intention and Use During Middle School

Elizabeth D’Amico, Jeremy Miles & Joan Tucker
Psychology of Addictive Behaviors, forthcoming

Abstract:
Over the past several years, medical marijuana has received increased attention in the media, and marijuana use has increased across the United States. Studies suggest that as marijuana has become more accessible and adults have become more tolerant regarding marijuana use, adolescents perceive marijuana as more beneficial and are more likely to use if they are living in an environment that is more tolerant of marijuana use. One factor that may influence adolescents’ perceptions about marijuana and marijuana use is their exposure to advertising of this product. We surveyed sixth- to eighth-grade youth in 2010 and 2011 in 16 middle schools in Southern California (n = 8,214; 50% male; 52% Hispanic; mean age = 13 years) and assessed exposure to advertising for medical marijuana, marijuana intentions, and marijuana use. Cross-lagged regressions showed a reciprocal association of advertising exposure with marijuana use and intentions during middle school. Greater initial medical marijuana advertising exposure was significantly associated with a higher probability of marijuana use and stronger intentions to use 1 year later, and initial marijuana use and stronger intentions to use were associated with greater medical marijuana advertising exposure 1 year later. Prevention programs need to better explain medical marijuana to youth, providing information on the context for proper medical use of this drug and the potential harms from use during this developmental period. Furthermore, as this is a new frontier, it is important to consider regulating medical marijuana advertisements, as is currently done for alcohol and tobacco products.

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Special-Interest Spillovers and Tobacco Taxation

Adam Hoffer
Contemporary Economic Policy, forthcoming

Abstract:
This study explores the effects tobacco special interest has had on cigarette tax rates. Using a spatial econometric model to control for tax competition and the endogeneity present in state tax rates, this study finds that tobacco special interest has played a significant role in influencing state cigarette tax rates. Pounds of tobacco grown in a state and tobacco industry campaign contributions are associated with lower cigarette tax rates. The empirical results show that the magnitude of the special-interest effect can be two to five times as large when the spatial spillover effects are included.

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Adolescent Substance Use: The Role of Demographic Marginalization and Socioemotional Distress

Aprile Benner & Yijie Wang
Developmental Psychology, forthcoming

Abstract:
We investigated the links between racial/ethnic marginalization (i.e., having few same-race/ethnic peers at school) and adolescents’ socioemotional distress and subsequent initiation of substance use (alcohol and marijuana) and substance use levels. Data from 7,731 adolescents (52% female; 55% White, 21% African American, 16% Latino, 8% Asian American) were drawn from the National Longitudinal Study of Adolescent to Adult Health. In our path analysis model, we found that adolescents who were racially/ethnically marginalized at school (i.e., who had less than 15% same-ethnicity peers) reported poorer school attachment, which was linked to more depressive symptoms. More depressive symptoms were associated with higher levels of subsequent marijuana and alcohol use. These relationships showed some variation by students’ gender, race/ethnicity, and age. Findings suggest that the influence of school demographics extends beyond the academic domain into the health and well-being of young people.

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Gender Differences in the Associations Among Marijuana Use, Cigarette Use, and Symptoms of Depression During Adolescence and Young Adulthood

Natania Crane, Scott Langenecker & Robin Mermelstein
Addictive Behaviors, October 2015, Pages 33–39

Introduction: As prevalence of marijuana use increases, it is important that we better understand how factors like gender, cigarette use, and depression are related to marijuana use during adolescence and young adulthood. We examined longitudinal relationships among these variables in adolescents moving into young adulthood who were studied longitudinally for six years.

Methods: 1,263 individuals were included in the study. Participants were oversampled for ever-smoking a cigarette at baseline, when they were 15–16 years old. Frequency of cigarette smoking and marijuana use, as well as depression symptoms were assessed at baseline, 6, 15-, 24-, 60- and 72-months.

Results: Cigarette use frequency and depression symptoms were associated with frequency of marijuana use (p-values < .001), particularly in adolescence, but there were important gender differences in these relationships. Specifically, symptoms of depression were related to marijuana use frequency among males (p < .001), but not females (p = .62). In addition, frequency of marijuana use was associated with increased cigarette use frequency, especially among males who had higher symptoms of depression (p < .001). However, this effect was not seen among females. Exploratory analyses suggested relationships between frequency of use and depression are specific to marijuana, not cigarettes.

Conclusions: Marijuana use is strongly related to depression symptoms and cigarette use frequency in males, indicating that in males these detrimental factors converge, whereas in females they do not. Gender differences in the factors related to marijuana use may mean that there are different risks for and consequences from use and have implications for prevention and intervention efforts.

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A Multi-level Analysis of the Impact of Neighborhood Structural and Social Factors on Adolescent Substance Use

Abigail Fagan, Emily Wright & Gillian Pinchevsky
Drug and Alcohol Dependence, forthcoming

Background: This paper examined the effects of neighborhood structural (i.e., economic disadvantage, immigrant concentration, residential stability) and social (e.g., collective efficacy, social network interactions, intolerance of drug use, legal cynicism) factors on the likelihood of any adolescent tobacco, alcohol, and marijuana use.

Methods: Analyses drew upon information from the Project on Human Development in Chicago Neighborhoods (PHDCN). Data were obtained from a survey of adult residents of 79 Chicago neighborhoods, two waves of interviews with 1,657 to 1,664 care-givers and youth aged 8 to 16 years, and information from the 1990 U.S. Census Bureau. Hierarchical Bernoulli regression models estimated the impact of neighborhood factors on substance use controlling for individual-level demographic characteristics and psycho-social risk factors.

Results: Few neighborhood factors had statistically significant direct effects on adolescent tobacco, alcohol or marijuana use, although youth living in neighborhoods with greater levels of immigrant concentration were less likely to report any drinking.

Conclusion: Additional theorizing and more empirical research are needed to better understand the ways in which contextual influences affect adolescent substance use and delinquency.

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Incidence and Salience of Alcohol Taxes: Do Consumers Overreact?

Andrew Hanson & Ryan Sullivan
Public Finance Review, forthcoming

Abstract:
We use a unique, geocoded micro data set of retail prices to estimate the incidence of alcohol taxation. We estimate the pass-through of alcohol taxation employing both standard ordinary least squares (OLS) and a regression discontinuity design (RDD), using the abrupt change in excise tax occurring at state borders for identification. Our results show that sales and excise taxes on alcohol have different effects on final consumer price. Our estimates suggest that while 40 percent to 50 percent of sales taxes are passed on to consumers, excise taxes have a negative pass-through rate. Negative rates of pass-through on the excise portion of the alcohol tax are likely the result of consumers overreacting to the tax compared to how they would react to a general price increase, or that the alcohol tax is quite salient for consumers. This effect is particularly strong in areas near state borders when using the RDD estimation strategy.

By KEVIN LEWIS | 09:00:00 AM

Wednesday, July 1, 2015

Green-eyed monster

Compensation and Community Corrosion: Perceived Inequalities, Social Comparisons, and Competition Following the Deepwater Horizon Oil Spill

Brian Mayer, Katrina Running & Kelly Bergstrand
Sociological Forum, June 2015, Pages 369–390

Abstract:
After disasters, victim compensation programs are typically associated with individual healing and community rebuilding. But postdisaster compensation systems also have the potential to introduce confusion and competition, further fraying the social fabric of communities affected by trauma. To assess the perceived effects of disaster compensation processes on community social relations, as well as the mechanisms that underlie such effects, we turn to the case of the Deepwater Horizon oil spill, after which BP implemented one of the largest compensation systems in U.S. history. Using data from interviews of residents of four Gulf Coast communities, we examine the extent to which this claims process hindered efforts to recover from this disaster. Our data suggest that while BP money helped some residents in the Gulf during a difficult economic time, many interviewees perceived uncertainty, randomness, and unevenness in the compensation process, which led to negative social comparisons and competition among community members. Because of this animosity, we argue that BP's compensation system was a disruptive mechanism that contributed to community corrosion and introduced another source of psychological stress into already-traumatized areas.

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Are the Non-monetary Costs of Energy Efficiency Investments Large? Understanding Low Take-Up of a Free Energy Efficiency Program

Meredith Fowlie, Michael Greenstone & Catherine Wolfram
American Economic Review, May 2015, Pages 201-204

Abstract:
We document very low take-up of an energy efficiency program that is widely believed to be privately beneficial. Program participants receive a substantial home "weatherization" retrofit; all installation and equipment costs are covered by the program. Less than 1 percent of presumptively eligible households take up the program in the control group. This rate increased only modestly after we took extraordinary efforts to inform households — via multiple channels — about the sizable benefits and zero monetary costs. These findings are consistent with high non-monetary costs associated with program participation and/or energy efficiency investments.

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Do Energy Efficiency Investments Deliver? Evidence from the Weatherization Assistance Program

Meredith Fowlie, Michael Greenstone & Catherine Wolfram
University of Chicago Working Paper, June 2015

Abstract:
Conventional wisdom suggests that energy efficiency (EE) policies are beneficial because they induce investments that pay for themselves and lead to emissions reductions. However, this belief is primarily based on projections from engineering models. This paper reports on the results of an experimental evaluation of the nation’s largest residential EE program conducted on a sample of more than 30,000 households. The findings suggest that the upfront investment costs are about twice the actual energy savings. Further, the model-projected savings are roughly 2.5 times the actual savings. While this might be attributed to the “rebound” effect – when demand for energy end uses increases as a result of greater efficiency – the paper fails to find evidence of significantly higher indoor temperatures at weatherized homes. Even when accounting for the broader societal benefits of energy efficiency investments, the costs still substantially outweigh the benefits; the average rate of return is approximately -9.5% annually.

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Environmental Benefits from Driving Electric Vehicles?

Stephen Holland et al.
NBER Working Paper, June 2015

Abstract:
Electric vehicles offer the promise of reduced environmental externalities relative to their gasoline counterparts. We combine a theoretical discrete-choice model of new vehicle purchases, an econometric analysis of the marginal emissions from electricity, and the AP2 air pollution model to estimate the environmental benefit of electric vehicles. First, we find considerable variation in the environmental benefit, implying a range of second-best electric vehicle purchase subsidies from $3025 in California to -$4773 in North Dakota, with a mean of -$742. Second, over ninety percent of local environmental externalities from driving an electric vehicle in one state are exported to others, implying that electric vehicles may be subsidized locally, even though they may lead to negative environmental benefits overall. Third, geographically differentiated subsidies can reduce deadweight loss, but only modestly. Fourth, the current federal purchase subsidy of $7500 has greater deadweight loss than a no-subsidy policy.

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Green spaces and cognitive development in primary schoolchildren

Payam Dadvand et al.
Proceedings of the National Academy of Sciences, 30 June 2015, Pages 7937–7942

Abstract:
Exposure to green space has been associated with better physical and mental health. Although this exposure could also influence cognitive development in children, available epidemiological evidence on such an impact is scarce. This study aimed to assess the association between exposure to green space and measures of cognitive development in primary schoolchildren. This study was based on 2,593 schoolchildren in the second to fourth grades (7–10 y) of 36 primary schools in Barcelona, Spain (2012–2013). Cognitive development was assessed as 12-mo change in developmental trajectory of working memory, superior working memory, and inattentiveness by using four repeated (every 3 mo) computerized cognitive tests for each outcome. We assessed exposure to green space by characterizing outdoor surrounding greenness at home and school and during commuting by using high-resolution (5 m × 5 m) satellite data on greenness (normalized difference vegetation index). Multilevel modeling was used to estimate the associations between green spaces and cognitive development. We observed an enhanced 12-mo progress in working memory and superior working memory and a greater 12-mo reduction in inattentiveness associated with greenness within and surrounding school boundaries and with total surrounding greenness index (including greenness surrounding home, commuting route, and school). Adding a traffic-related air pollutant (elemental carbon) to models explained 20–65% of our estimated associations between school greenness and 12-mo cognitive development. Our study showed a beneficial association between exposure to green space and cognitive development among schoolchildren that was partly mediated by reduction in exposure to air pollution.

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Environmental Science in the Media: Effects of Opposing Viewpoints on Risk and Uncertainty Perceptions

Katherine Kortenkamp & Bianca Basten
Science Communication, June 2015, Pages 287-313

Abstract:
Media reports of environmental science often give equal weight to opposing viewpoints, which can make the science seem more controversial than it actually is. The current study extended the research in this area by examining whether discrediting one expert viewpoint would minimize false perceptions of controversy. Participants (N = 247) read articles about environmental risks containing one viewpoint, two balanced viewpoints, or two viewpoints with one discredited. Results showed that a discredited opposing viewpoint often influenced risk and uncertainty perceptions in similar ways to a balanced opposing viewpoint, implying that this tactic may not necessarily minimize false perceptions of controversy.

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Fruit and vegetable intake and their pesticide residues in relation to semen quality among men from a fertility clinic

Y.H. Chiu et al.
Human Reproduction, June 2015, Pages 1342-1351

Study question: Is consumption of fruits and vegetables with high levels of pesticide residues associated with lower semen quality?

Study design, size, duration: Men enrolled in the Environment and Reproductive Health (EARTH) Study, an ongoing prospective cohort at an academic medical fertility center. Male partners (n = 155) in subfertile couples provided 338 semen samples during 2007–2012.

Participants/materials, setting, methods: Semen samples were collected over an 18-month period following diet assessment. Sperm concentration and motility were evaluated by computer-aided semen analysis (CASA). Fruits and vegetables were categorized as containing high or low-to-moderate pesticide residues based on data from the annual United States Department of Agriculture Pesticide Data Program. Linear mixed models were used to analyze the association of fruit and vegetable intake with sperm parameters accounting for within-person correlations across repeat samples while adjusting for potential confounders.

Main results and the role of chance: Total fruit and vegetable intake was unrelated to semen quality parameters. High pesticide residue fruit and vegetable intake, however, was associated with poorer semen quality. On average, men in highest quartile of high pesticide residue fruit and vegetable intake (≥1.5 servings/day) had 49% (95% confidence interval (CI): 31%, 63%) lower total sperm count and 32% (95% CI: 7%, 58%) lower percentage of morphologically normal sperm than men in the lowest quartile of intake (<0.5 servings/day) (P, trend = 0.003 and 0.02, respectively). Low-to-moderate pesticide residue fruit and vegetable intake was associated with a higher percentage of morphologically normal sperm (P, trend = 0.04).

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Fine particulate matter and the risk of autism spectrum disorder

Evelyn Talbott et al.
Environmental Research, July 2015, Pages 414–420

Abstract:
The causes of autism spectrum disorder (ASD) are not well known. Recent investigations have suggested that air pollution, including PM2.5, may play a role in the onset of this condition. The objective of the present work was to investigate the association between prenatal and early childhood exposure to fine particulate matter (PM2.5) and risk for childhood ASD. A population-based case-control study was conducted in children born between January 1, 2005 and December 31, 2009 in six counties in Southwestern Pennsylvania. ASD cases were recruited from specialty autism clinics, local pediatric practices, and school-based special needs services. ASD cases were children who scored 15 or above on the Social Communication Questionnaire (SCQ) and had written documentation of an ASD diagnosis. Controls were children without ASD recruited from a random sample of births from the Pennsylvania state birth registry and frequency matched to cases on birth year, gender, and race. A total of 217 cases and 226 controls were interviewed. A land use regression (LUR) model was used to create person- and time-specific PM2.5 estimates for individual (pre-pregnancy, trimesters one through three, pregnancy, years one and two of life) and cumulative (starting from pre-pregnancy) key developmental time periods. Logistic regression was used to investigate the association between estimated exposure to PM2.5 during key developmental time periods and risk of ASD, adjusting for mother's age, education, race, and smoking. Adjusted odds ratios (AOR) were elevated for specific pregnancy and postnatal intervals (pre-pregnancy, pregnancy, and year one), and postnatal year two was significant, (AOR=1.45, 95% CI=1.01–2.08). We also examined the effect of cumulative pregnancy periods; noting that starting with pre-pregnancy through pregnancy, the adjusted odds ratios are in the 1.46–1.51 range and significant for pre-pregnancy through year 2 (OR=1.51, 95% CI=1.01–2.26). Our data indicate that both prenatal and postnatal exposures to PM2.5 are associated with increased risk of ASD. Future research should include multiple pollutant models and the elucidation of the biological mechanism for PM2.5 and ASD.

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Low-Concentration PM2.5 and Mortality: Estimating Acute and Chronic Effects in a Population-Based Study

Liuhua Shi et al.
Environmental Health Perspectives, forthcoming

Background: Both short- and long-term exposures to fine particulate matter (PM2.5) are associated with mortality. However, whether the associations exist below the new EPA standards (12 μg/m3 of annual average PM2.5, 35 μg/m3 daily) is unclear. In addition, it is not clear whether results of previous time series studies (fit in larger cities) and cohort studies (fit in convenience samples) are generalizable to the general population.

Methods: High resolution (1 × 1 km) daily PM2.5 predictions, derived from satellite aerosol optical depth retrievals, were employed. Poisson regressions were applied to the Medicare population (age>=65) in New England to simultaneously estimate the acute and chronic effects, with mutual adjustment for short- and long-term exposure, as well as area-based confounders. Models were also restricted to annual concentrations below 10 µg/m3 or daily concentrations below 30 µg/m3.

Results: PM2.5 was associated with increased mortality. In the cohort, 2.14% (95% CI: 1.38, 2.89%) and 7.52% (95% CI: 1.95, 13.40%) increases were estimated for each 10 µg/m3 increase in short- (2 day) and long-term (1 year) exposures, respectively. The associations still held for analyses restricted to low-concentration PM2.5 exposures. The corresponding estimates were 2.14% (95% CI: 1.34, 2.95%) and 9.28% (95% CI: 0.76, 18.52%). Penalized spline models of long-term exposure indicated a higher slope for mortality in association with exposures above versus below 6 µg/m3. In contrast, the association between short-term exposure and mortality appeared to be linear across the entire exposure distribution.

Conclusions: Using a mutually adjusted model, we estimated significant acute and chronic effects of PM2.5 exposures below current EPA standards. These findings suggest that improving air quality below current standards may benefit public health.

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Impact of Natural Gas Extraction on PAH Levels in Ambient Air

Blair Paulik et al.
Environmental Science & Technology, 21 April 2015, Pages 5203–5210

Abstract:
Natural gas extraction, often referred to as “fracking,” has increased rapidly in the U.S. in recent years. To address potential health impacts, passive air samplers were deployed in a rural community heavily affected by the natural gas boom. Samplers were analyzed for 62 polycyclic aromatic hydrocarbons (PAHs). Results were grouped based on distance from each sampler to the nearest active well. PAH levels were highest when samplers were closest to active wells. Additionally, PAH levels closest to natural gas activity were an order of magnitude higher than levels previously reported in rural areas. Sourcing ratios indicate that PAHs were predominantly petrogenic, suggesting that elevated PAH levels were influenced by direct releases from the earth. Quantitative human health risk assessment estimated the excess lifetime cancer risks associated with exposure to the measured PAHs. Closest to active wells, the risk estimated for maximum residential exposure was 2.9 in 10 000, which is above the U.S. EPA’s acceptable risk level. Overall, risk estimates decreased 30% when comparing results from samplers closest to active wells to those farthest. This work suggests that natural gas extraction may be contributing significantly to PAHs in air, at levels that are relevant to human health.

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High-rate injection is associated with the increase in U.S. mid-continent seismicity

Matthew Weingarten et al.
Science, 19 June 2015, Pages 1336-1340

Abstract:
An unprecedented increase in earthquakes in the U.S. mid-continent began in 2009. Many of these earthquakes have been documented as induced by wastewater injection. We examine the relationship between wastewater injection and U.S. mid-continent seismicity using a newly assembled injection well database for the central and eastern United States. We find that the entire increase in earthquake rate is associated with fluid injection wells. High-rate injection wells (>300,000 barrels per month) are much more likely to be associated with earthquakes than lower-rate wells. At the scale of our study, a well’s cumulative injected volume, monthly wellhead pressure, depth, and proximity to crystalline basement do not strongly correlate with earthquake association. Managing injection rates may be a useful tool to minimize the likelihood of induced earthquakes.

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Cooperation is in our nature: Nature exposure may promote cooperative and environmentally sustainable behavior

John Zelenski, Raelyne Dopko & Colin Capaldi
Journal of Environmental Psychology, June 2015, Pages 24–31

Abstract:
Theory and correlational research suggest that connecting with nature may facilitate prosocial and environmentally sustainable behaviors. In three studies we test causal direction with experimental manipulations of nature exposure and laboratory analogs of cooperative and sustainable behavior. Participants who watched a nature video harvested more cooperatively and sustainably in a fishing-themed commons dilemma, compared to participants who watched an architectural video (Study 1 and 2) or geometric shapes with an audio podcast about writing (Study 2). The effects were not due to mood, and this was corroborated in Study 3 where pleasantness and nature content were manipulated independently in a 2 × 2 design. Participants exposed to nature videos responded more cooperatively on a measure of social value orientation and indicated greater willingness to engage in environmentally sustainable behaviors. Collectively, results suggest that exposure to nature may increase cooperation, and, when considering environmental problems as social dilemmas, sustainable intentions and behavior.

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Can Price Volatility Enhance Market Power? The Case of Renewable Technologies in Competitive Electricity Markets

Irena Milstein & Asher Tishler
Resource and Energy Economics, August 2015, Pages 70–90

Abstract:
This paper develops a two-stage model with endogenous capacity and operations to assess the practicality of photovoltaic technology (PV) in competitive electricity markets. Applying our model to stylized data of California's electricity market we demonstrate that electricity price spikes are higher and more frequent the higher the PV capacity. Consequently, the average electricity price rises when construction costs of PV capacity decline due, for example, to technology improvements, bestowing market power and excessive profits on producers employing fossil-using technologies. We also show that an increase in the number of PV-using firms and higher CO2 tax reduce consumer surplus.

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Vehicle Miles (Not) Traveled: Why Fuel Economy Requirements Don't Increase Household Driving

Jeremy West et al.
NBER Working Paper, May 2015

Abstract:
A major concern with addressing the negative externalities of gasoline consumption by regulating fuel economy, rather than increasing fuel taxes, is that households respond by driving more. This paper exploits a discrete threshold in the eligibility for Cash for Clunkers to show that fuel economy restrictions lead households to purchase vehicles that have lower cost-per-mile, but are also smaller and lower-performance. Whereas the former effect can increase driving, the latter effect can reduce it. Results indicate these households do not drive more, suggesting that behavioral responses do not necessarily undermine the effectiveness of fuel economy restrictions at reducing gasoline consumption.

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Worldwide Acreage and Yield Response to International Price Change and Volatility: A Dynamic Panel Data Analysis for Wheat, Rice, Corn, and Soybeans

Mekbib Haile, Matthias Kalkuhl & Joachim von Braun
American Journal of Agricultural Economics, forthcoming

Abstract:
This article estimates a worldwide aggregate supply response for key agricultural commodities — wheat, rice, corn, and soybeans — by employing a newly-developed multi-country, crop-calendar-specific, seasonally disaggregated model with price changes and price volatility applied accordingly. The findings reveal that, although higher output prices serve as an incentive to improve global crop supply as expected, output price volatility acts as a disincentive. Depending on the crop, the results show that own-price supply elasticities range from about 0.05 to 0.40. Output price volatility, however, has negative correlations with crop supply, implying that farmers shift land, other inputs, and yield-improving investments to crops with less volatile prices. Simulating the impact of price dynamics since 2006, we find that price risk has reduced the production response of wheat in particular — and to a lesser extent, rice — thus dampening price incentive effects. The simulation analysis shows that the increase in own-crop price volatility from 2006–2010 dampened yield by about 1–2% for the crops under consideration.

By KEVIN LEWIS | 09:00:00 AM

Tuesday, June 30, 2015

Appetizing

Neighborhood fast food availability and fast food consumption

Nathalie Oexle et al.
Appetite, September 2015, Pages 227–232

Abstract:
Recent nutritional and public health research has focused on how the availability of various types of food in a person's immediate area or neighborhood influences his or her food choices and eating habits. It has been theorized that people living in areas with a wealth of unhealthy fast-food options may show higher levels of fast-food consumption, a factor that often coincides with being overweight or obese. However, measuring food availability in a particular area is difficult to achieve consistently: there may be differences in the strict physical locations of food options as compared to how individuals perceive their personal food availability, and various studies may use either one or both of these measures. The aim of this study was to evaluate the association between weekly fast-food consumption and both a person's perceived availability of fast-food and an objective measure of fast-food presence — Geographic Information Systems (GIS) — within that person's neighborhood. A randomly selected population-based sample of eight counties in South Carolina was used to conduct a cross-sectional telephone survey assessing self-report fast-food consumption and perceived availability of fast food. GIS was used to determine the actual number of fast-food outlets within each participant's neighborhood. Using multinomial logistic regression analyses, we found that neither perceived availability nor GIS-based presence of fast-food was significantly associated with weekly fast-food consumption. Our findings indicate that availability might not be the dominant factor influencing fast-food consumption. We recommend using subjective availability measures and considering individual characteristics that could influence both perceived availability of fast food and its impact on fast-food consumption. If replicated, our findings suggest that interventions aimed at reducing fast-food consumption by limiting neighborhood fast-food availability might not be completely effective.

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Do 'Cheeseburger Bills' Work? Effects of Tort Reform for Fast Food

Christopher Carpenter & Sebastian Tello-Trillo
NBER Working Paper, May 2015

Abstract:
After highly publicized lawsuits against McDonald’s in 2002, 26 states adopted Commonsense Consumption Acts (CCAs) – aka ‘Cheeseburger Bills’ – that greatly limit fast food companies’ liability for weight-related harms. We provide the first evidence of the effects of CCAs using plausibly exogenous variation in the timing of CCA adoption across states. In two-way fixed effects models, we find that CCAs significantly increased stated attempts to lose weight and consumption of fruits and vegetables among heavy individuals. We also find that CCAs significantly increased employment in fast food. Finally, we find that CCAs significantly increased the number of company-owned McDonald’s restaurants and decreased the number of franchise-owned McDonald’s restaurants in a state. Overall our results provide novel evidence supporting a key prediction of tort reform – that it should induce individuals to take more care – and show that industry-specific tort reforms can have meaningful effects on market outcomes.

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Behavioral and Environmental Modification of the Genetic Influence on Body Mass Index: A Twin Study

Erin Horn et al.
Behavior Genetics, July 2015, Pages 409-426

Abstract:
Body mass index (BMI) has a strong genetic basis, with a heritability around 0.75, but is also influenced by numerous behavioral and environmental factors. Aspects of the built environment (e.g., environmental walkability) are hypothesized to influence obesity by directly affecting BMI, by facilitating or inhibiting behaviors such as physical activity that are related to BMI, or by suppressing genetic tendencies toward higher BMI. The present study investigated relative influences of physical activity and walkability on variance in BMI using 5079 same-sex adult twin pairs (70 % monozygotic, 65 % female). High activity and walkability levels independently suppressed genetic variance in BMI. Estimating their effects simultaneously, however, suggested that the walkability effect was mediated by activity. The suppressive effect of activity on variance in BMI was present even with a tendency for low-BMI individuals to select into environments that require higher activity levels. Overall, our results point to community- or macro-level interventions that facilitate individual-level behaviors as a plausible approach to addressing the obesity epidemic among US adults.

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Vertical Transmission of Overweight: Evidence from English Adoptees

Joan Costa-Font, Mireia Jofre-Bonet & Julian Le Grand
London School of Economics Working Paper, May 2015

Abstract:
We examine the vertical transmission of overweight drawing upon a sample of English children, both adopted and non-adopted, and their families. Our results suggest strong evidence of an intergenerational association of overweight among adoptees, indicating transmission through cultural factors. We find that, when both adoptive parents are overweight, the likelihood of an adopted child being overweight is between 10% and 20% higher than when they are not. We also find that the cultural transmission of overweight is not aggravated by having a full-time working mother, so do not confirm the existence of a female labour market participation penalty on child overweight among adoptees. Overall, our findings, despite subject to data limitations, are robust to a battery of robustness checks, specification and sample selection corrections.

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Higher weight status of only and last-born children. Maternal feeding and child eating behaviors as underlying processes among 4–8 year olds

Rana Mosli et al.
Appetite, September 2015, Pages 167–172

Abstract:
Birth order has been associated with childhood obesity. The objective of this cross-sectional study was to examine maternal feeding and child eating behaviors as underlying processes for increased weight status of only children and youngest siblings. Participants included 274 low-income 4–8 year old children and their mothers. The dyads completed a videotaped laboratory mealtime observation. Mothers completed the Caregiver's Feeding Styles Questionnaire and the Children's Eating Behavior Questionnaire. Child weight and height were measured using standardized procedures. Path analysis was used to examine associations of birth order, maternal feeding behaviors, child eating behavior, and child overweight/obese status. The association between only child status and greater likelihood of overweight/obesity was fully mediated by higher maternal Verbal Discouragement to eat and lower maternal Praise (all p values < 0.05). The association between youngest sibling status and greater likelihood of overweight/obesity was partially mediated by lower maternal Praise and lower child Food Fussiness (all p values < 0.05). Results provide support for our hypothesis that maternal control and support and child food acceptance are underlying pathways for the association between birth order and weight status. Future findings can help inform family-based programs by guiding family counseling and tailoring of recommendations for family mealtime interactions.

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School-Based Body Mass Index Screening and Parental Notification in Late Adolescence: Evidence From Arkansas's Act 1220

Kevin Gee
Journal of Adolescent Health, forthcoming

Purpose: In 2003, Arkansas enacted Act 1220, one of the first comprehensive legislative initiatives aimed at addressing childhood obesity. One important provision of Act 1220 mandated that all children attending public schools be screened for their body mass index (BMI) and the information sent home to their parents. Since then, eight other states have adopted similar school-based BMI screening and notification policies. Despite their widespread adoption and implementation, there is a dearth of empirical studies evaluating such policies, particularly for adolescents. The aim of this study was to evaluate whether adolescents, who had been previously screened in early adolescence, experienced changes in their health outcomes if they continued to receive screening and reporting throughout late adolescence (11th and 12th grades).

Methods: Secondary data from the Centers for Disease Control's Youth Risk Behavior Survey were analyzed using the method of difference-in-differences. Changes in outcomes between 10th and 12th grade were compared between a group of students who received screenings throughout 11th and 12th grades versus a later comparison group who were exempt from screening and reporting requirements in 11th and 12th grades.

Results: BMI screening and parental notification during late adolescence, given prior screening and notification in early adolescence, was not significantly related to BMI-for-age z-scores, the probability of being in a lower weight classification or exercise and dietary intake behaviors.

Conclusions: Exposing 11th and 12th graders to BMI screening and reporting, given that they had been exposed in prior grades, was not associated with adolescents' health outcomes.

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Reduced facial emotion recognition in overweight and obese children

Anne Koch & Olga Pollatos
Journal of Psychosomatic Research, forthcoming

Objective: Emotional problems often co-occur in overweight or obese children. However, questions of whether emotion recognition deficits are present and how they are reflected have only been sparsely investigated to date.

Methods: Therefore, the present study included 33 overweight and obese as well as 33 normal weight elementary school children between six and ten years that were matched for sex, age and socioeconomic status. Participants were shown different emotional faces of a well-validated set of stimuli on a computer screen, which they categorized and then rated on an emotional intensity level. Key measures were categorization performance along with reaction times and emotional intelligence as well as emotional eating questionnaire ratings.

Results: Overweight children exhibited lower categorization accuracy as well as longer reaction times as compared to normal weight children, while no differences in intensity ratings occurred. Reaction time to neutral facial expressions was negatively related to intrapersonal and interpersonal emotional intelligence and emotional eating correlated negatively with accuracy for recognizing sad expressions.

Conclusion: Facial emotion decoding difficulties seem to be of importance in overweight and obese children and deserve further consideration in terms of their exact impact on social functioning as well as on the maintenance of elevated body weight during child development.

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Change in Neighborhood Socioeconomic Status and Weight Gain: Dallas Heart Study

Tiffany Powell-Wiley et al.
American Journal of Preventive Medicine, July 2015, Pages 72–79

Introduction: Despite a proposed connection between neighborhood environment and obesity, few longitudinal studies have examined the relationship between change in neighborhood socioeconomic deprivation, as defined by moving between neighborhoods, and change in body weight. The purpose of this study is to examine the longitudinal relationship between moving to more socioeconomically deprived neighborhoods and weight gain as a cardiovascular risk factor.

Methods: Weight (kilograms) was measured in the Dallas Heart Study (DHS), a multiethnic cohort aged 18–65 years, at baseline (2000–2002) and 7-year follow-up (2007–2009, N=1,835). Data were analyzed in 2013–2014. Geocoded addresses were linked to Dallas County, TX, census block groups. A block group-level neighborhood deprivation index (NDI) was created. Multilevel difference-in-difference models with random effects and a Heckman correction factor (HCF) determined weight change relative to NDI change.

Results: Forty-nine percent of the DHS population moved (263 to higher NDI, 586 to lower NDI, 47 within same NDI), with blacks more likely to move than whites or Hispanics (p<0.01), but similar baseline BMI and waist circumference were observed in movers versus non-movers (p>0.05). Adjusting for HCF, sex, race, and time-varying covariates, those who moved to areas of higher NDI gained more weight compared to those remaining in the same or moving to a lower NDI (0.64 kg per 1-unit NDI increase, 95% CI=0.09, 1.19). Impact of NDI change on weight gain increased with time (p=0.03).

Conclusions: Moving to more–socioeconomically deprived neighborhoods was associated with weight gain among DHS participants.

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Physical activity and food consumption: The moderating role of individual dieting tendency

Chiu-Chi Angela Chang & Ying-Ching Lin
Journal of Health Psychology, May 2015, Pages 490-499

Abstract:
Applying theory on justification and self-control, this research examines the impact of physical activity on dieters’ and nondieters’ food consumption patterns. The results from two studies demonstrate that dieters, but not nondieters, consume more food after exercising as compared to situations in which no exercise is involved. In addition, dieters consume more food when they anticipate engaging in physical activity as compared to when they have completed their exercising. When physical activity is framed as fun (vs work), dieters decrease the amount of food they consume after exercising. Estimation of calories burned through exercise underlies this result.

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The Effect of Fitness Branding on Restrained Eaters’ Food Consumption and Post-Consumption Physical Activity

Joerg Koenigstorfer & Hans Baumgartner
Journal of Marketing Research, forthcoming

Abstract:
Individuals who want to control their body weight often aim to regulate both energy intake (by reducing food consumption) and energy expenditure (by increasing physical activity), thus addressing both sides of the energy balance equation. Marketers have developed fitness-branded food that may lead restrained eaters (i.e., consumers who are chronically concerned about their body weight) to believe that they can achieve these two goals at the same time by consuming the food. The purpose of this research is to investigate the effects of fitness branding in food marketing (i.e., the integration of fitness into the branding of food) on consumption and physical activity in restrained (vs. unrestrained) eaters. The authors show that fitness branding increases consumption volumes for restrained eaters unless the food is viewed as dietary forbidden. Restrained eaters are also less physically active after consuming fitness-branded food, and food consumption volumes mediate this effect in restrained eaters. Fitness branding may therefore have undesirable effects on the weight control behaviors of restrained eaters because it discourages physical activity despite an increase in consumption, which is contrary to the principle of energy balance.

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Cost Effectiveness of a Sugar-Sweetened Beverage Excise Tax in the U.S.

Michael Long et al.
American Journal of Preventive Medicine, July 2015, Pages 112–123

Introduction: Reducing sugar-sweetened beverage consumption through taxation is a promising public health response to the obesity epidemic in the U.S. This study quantifies the expected health and economic benefits of a national sugar-sweetened beverage excise tax of $0.01/ounce over 10 years.

Methods: A cohort model was used to simulate the impact of the tax on BMI. Assuming ongoing implementation and effect maintenance, quality-adjusted life-years gained and disability-adjusted life-years and healthcare costs averted were estimated over the 2015–2025 period for the 2015 U.S. population. Costs and health gains were discounted at 3% annually. Data were analyzed in 2014.

Results: Implementing the tax nationally would cost $51 million in the first year. The tax would reduce sugar-sweetened beverage consumption by 20% and mean BMI by 0.16 (95% uncertainty interval [UI]=0.06, 0.37) units among youth and 0.08 (95% UI=0.03, 0.20) units among adults in the second year for a cost of $3.16 (95% UI=$1.24, $8.14) per BMI unit reduced. From 2015 to 2025, the policy would avert 101,000 disability-adjusted life-years (95% UI=34,800, 249,000); gain 871,000 quality-adjusted life-years (95% UI=342,000, 2,030,000); and result in $23.6 billion (95% UI=$9.33 billion, $54.9 billion) in healthcare cost savings. The tax would generate $12.5 billion in annual revenue (95% UI=$8.92, billion, $14.1 billion).

Conclusions: The proposed tax could substantially reduce BMI and healthcare expenditures and increase healthy life expectancy. Concerns regarding the potentially regressive tax may be addressed by reduced obesity disparities and progressive earmarking of tax revenue for health promotion.

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Motivating Healthy Diet Behaviors: The Self-as-Doer Identity

Amanda Brouwer & Katie Mosack
Self and Identity, forthcoming

Abstract:
We investigated whether the experimental manipulation of a self-as-doer identity predicted improved healthy food consumption immediately and one month post-intervention. Women (N = 124), 18–53 years old (M = 22.1, SD = 5.8) were randomly assigned to one of three conditions (i.e., control, education, or education and self-as-doer activity) and recorded their diets over six weeks. Repeated measures ANCOVAs were performed to determine if the self-as-doer intervention created change in healthy food consumption. Self-as-doer participants ate more healthy foods one month post-intervention than did other participants. Self-as-doer participants maintained overall healthy eating behaviors while education and control participants decreased these behaviors over the six-week period. Findings demonstrate initial evidence of an intervention effect on healthy food consumption and we discuss ways to advance research on the self-as-doer identity construct.

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Social Norms Shift Behavioral and Neural Responses to Foods

Erik Nook & Jamil Zaki
Journal of Cognitive Neuroscience, July 2015, Pages 1412-1426

Abstract:
Obesity contributes to 2.8 million deaths annually, making interventions to promote healthy eating critical. Although preliminary research suggests that social norms influence eating behavior, the underlying psychological and neural mechanisms of such conformity remain unexplored. We used fMRI to investigate whether group norms shift individuals' preferences for foods at both behavioral and neural levels. Hungry participants rated how much they wanted to eat a series of healthy and unhealthy foods and, after each trial, saw ratings that ostensibly represented their peers' preferences. This feedback was manipulated such that peers appeared to prefer each food more than, less than, or as much as participants themselves. After a delay, participants rerated each food. Participants' second ratings shifted to resemble group norms. Initial consensus, as compared to disagreement, with peers produced activity in the nucleus accumbens, a region associated with reward prediction errors. Furthermore, the strength of this activity predicted the extent to which participants' ratings conformed to peer ratings, suggesting that the value associated with consensus drives social influence. Ventromedial prefrontal cortex (vMPFC), a region associated with value computation, initially responded more strongly to unhealthy, as compared to healthy, foods. However, this effect was “overwritten” by group norms. After individuals learned their peers' preferences, vMPFC responses tracked the popularity, but not the healthfulness, of foods. Furthermore, changes in vMPFC activity tracked social influence over behavioral ratings. These data provide evidence that group norms can shift food preferences, supporting the use of norms-based interventions to promote healthy eating.

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Genotype status of the dopamine-related catechol-O-methyltransferase (COMT) gene corresponds with desirability of “unhealthy” foods

Deanna Wallace et al.
Appetite, September 2015, Pages 74–80

Abstract:
The role of dopamine is extensively documented in weight regulation and food intake in both animal models and humans. Yet the role of dopamine has not been well studied in individual differences for food desirability. Genotype status of the dopamine-related catechol-O-methyltransferase (COMT) gene has been shown to influence dopamine levels, with greater COMT enzymatic activity in val/val individuals corresponding to greater degradation of dopamine. Decreased dopamine has been associated with poorer cognitive control and diminished goal-directed behavior in various behavioral paradigms. Additionally, dopaminergic-rich regions such as the frontal cortex and dorsal striatum have been shown to be important for supporting food-related decision-making. However, the role of dopamine, as assessed by COMT genotype status, in food desirability has not been fully explored. Therefore, we utilized an individual's COMT genotype status (n = 61) and investigated food desirability based on self-rated “healthy” and “unhealthy” food perceptions. Here we found val/val individuals (n = 19) have greater desirability for self-rated “unhealthy” food items, but not self-rated “healthy” food items, as compared to val/met (n = 24) and met/met (n = 18) individuals (p < 0.005). Utilizing an objective health measure for the food items, we also found val/val and val/met individuals have greater desirability for objectively defined “unhealthy” food items, as compared to met/met individuals (p < 0.01). This work further substantiates the role of dopamine in food-related behaviors and more specifically in relationship to food desirability for “unhealthy” food items.

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Immigrant Neighborhood Concentration, Acculturation and Obesity Among Young Adults

Hiromi Ishizawa & Antwan Jones
Journal of Urban Affairs, forthcoming

Abstract:
Researchers repeatedly find that immigrants are healthier than their native-born counterparts. Among immigrant children, however, findings are mixed. Moreover, the effect of neighborhood context on obesity has not been fully examined. Using the National Longitudinal Study of Adult Health, this study investigates the linkages between acculturation, neighborhood characteristics, and obesity among young adults, including the potential for residing in an immigrant neighborhood, to mediate the adverse effects of low neighborhood socioeconomic conditions on obesity. Consistent with the unhealthy assimilation model, an immigrant health advantage is found for first generation Asians. Conversely, a greater likelihood of being obese is found for second and third and higher generation Hispanics relative to third and higher generation Whites. Further, a high concentration of immigrants and linguistically isolated households appear to work as a buffer against health risks that relate to obesity, particularly in poor neighborhoods.

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Evolution of nutritional quality in the US: Evidence from the ready-to-eat cereal industry

Emily Wang, Christian Rojas & Christoph Bauner
Economics Letters, August 2015, Pages 105–108

Abstract:
We construct historical nutrition quality indices for the ready-to-eat cereal industry and find that: 1) there exists a discrepancy between the nutrition quality of available products and that of the actual intake, 2) nutrition quality declined between 1988 and 2001 but has been increasing since then (although levels are still lower than in 1988), and 3) the decline in nutritional quality intake cannot be attributed to pricier or a limited availability of healthier options.

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Differential effects of fructose versus glucose on brain and appetitive responses to food cues and decisions for food rewards

Shan Luo et al.
Proceedings of the National Academy of Sciences, 19 May 2015, Pages 6509–6514

Abstract:
Prior studies suggest that fructose compared with glucose may be a weaker suppressor of appetite, and neuroimaging research shows that food cues trigger greater brain reward responses in a fasted relative to a fed state. We sought to determine the effects of ingesting fructose versus glucose on brain, hormone, and appetitive responses to food cues and food-approach behavior. Twenty-four healthy volunteers underwent two functional magnetic resonance imaging (fMRI) sessions with ingestion of either fructose or glucose in a double-blinded, random-order cross-over design. fMRI was performed while participants viewed images of high-calorie foods and nonfood items using a block design. After each block, participants rated hunger and desire for food. Participants also performed a decision task in which they chose between immediate food rewards and delayed monetary bonuses. Hormones were measured at baseline and 30 and 60 min after drink ingestion. Ingestion of fructose relative to glucose resulted in smaller increases in plasma insulin levels and greater brain reactivity to food cues in the visual cortex (in whole-brain analysis) and left orbital frontal cortex (in region-of-interest analysis). Parallel to the neuroimaging findings, fructose versus glucose led to greater hunger and desire for food and a greater willingness to give up long-term monetary rewards to obtain immediate high-calorie foods. These findings suggest that ingestion of fructose relative to glucose results in greater activation of brain regions involved in attention and reward processing and may promote feeding behavior.

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Individual Differences in Reward and Somatosensory-Motor Brain Regions Correlate with Adiposity in Adolescents

Kristina Rapuano et al.
Cerebral Cortex, forthcoming

Abstract:
The prevalence of adolescent obesity has increased dramatically over the past 3 decades, and research has documented that the number of television shows viewed during childhood is associated with greater risk for obesity. In particular, considerable evidence suggests that exposure to food marketing promotes eating habits that contribute to obesity. The present study examines neural responses to dynamic food commercials in overweight and healthy-weight adolescents using functional magnetic resonance imaging (fMRI). Compared with non-food commercials, food commercials more strongly engaged regions involved in attention and saliency detection (occipital lobe, precuneus, superior temporal gyri, and right insula) and in processing rewards [left and right nucleus accumbens (NAcc) and left orbitofrontal cortex (OFC)]. Activity in the left OFC and right insula further correlated with subjects' percent body fat at the time of the scan. Interestingly, this reward-related activity to food commercials was accompanied by the additional recruitment of mouth-specific somatosensory-motor cortices — a finding that suggests the intriguing possibility that higher-adiposity adolescents mentally simulate eating behaviors and offers a potential neural mechanism for the formation and reinforcement of unhealthy eating habits that may hamper an individual's ability lose weight later in life.

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Manipulations of attention during eating and their effects on later snack intake

Suzanne Higgs
Appetite, September 2015, Pages 287–294

Abstract:
Manipulation of attention during eating has been reported to affect later consumption via changes in meal memory. The aim of the present studies was to examine the robustness of these effects and investigate moderating factors. Across three studies, attention to eating was manipulated via distraction (via a computer game or TV watching) or focusing of attention to eating, and effects on subsequent snack consumption and meal memory were assessed. The participants were predominantly lean, young women students and the designs were between-subjects. Distraction increased later snack intake and this effect was larger when participants were more motivated to engage with the distracter and were offset when the distractor included food-related cues. Attention to eating reduced later snacking and this effect was larger when participants imagined eating from their own perspective than when they imagined eating from a third person perspective. Meal memory was impaired after distraction but focusing on eating did not affect later meal memory, possibly explained by ceiling effects for the memory measure. The pattern of results suggests that attention manipulations during eating have robust effects on later eating and the effect sizes are medium to large. The data are consistent with previous reports and add to the literature by suggesting that type of attention manipulation is important in determining effects on later eating. The results further suggest that attentive eating may be a useful target in interventions to help with appetite control.

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LA sprouts randomized controlled nutrition and gardening program reduces obesity and metabolic risk in Latino youth

Nicole Gatto et al.
Obesity, June 2015, Pages 1244–1251

Objective: To assess the effects of a 12-week gardening, nutrition, and cooking intervention (“LA Sprouts”) on dietary intake, obesity parameters, and metabolic disease risk among low-income, primarily Hispanic/Latino youth in Los Angeles.

Methods: The randomized controlled trial involved four elementary schools [two schools randomized to intervention (172 third–through fifth-grade students); two schools randomized to control (147 third–through fifth-grade students)]. Classes were taught in 90-minute sessions once a week to each grade level for 12 weeks. Data collected at pre- and postintervention included dietary intake via food frequency questionnaire (FFQ), anthropometric measures [BMI, waist circumference (WC)], body fat, and fasting blood samples.

Results: LA Sprouts participants had significantly greater reductions in BMI z-scores (0.1-vs. 0.04-point decrease, respectively; P = 0.01) and WC (−1.2 cm vs. no change; P < 0.001). Fewer LA Sprouts participants had the metabolic syndrome (MetSyn) after the intervention than before, while the number of controls with MetSyn increased. LA Sprouts participants had improvements in dietary fiber intake (+3.5% vs. −15.5%; P = 0.04) and less decreases in vegetable intake (−3.6% vs. −26.4%; P = 0.04). Change in fruit intake before and after the intervention did not significantly differ between LA Sprouts and control subjects.

Conclusions: LA Sprouts was effective in reducing obesity and metabolic risk.

By KEVIN LEWIS | 09:00:00 AM

Monday, June 29, 2015

Top dog

Poor performance and the value of corporate honesty

Don Chance, James Cicon & Stephen Ferris
Journal of Corporate Finance, August 2015, Pages 1-18

Abstract:
We examine a sample of companies that make announcements attributing blame for recent poor performance to either themselves or an external factor. We find that both groups of companies exhibit poor company-specific performance prior to the announcement, indicating that companies blaming external factors are not being truthful. Following the announcement, companies that blame themselves begin to perform better while those that blame others continue their weak performance. We find no differences in the financial and governance characteristics of these companies. Companies that blame themselves, however, provide more detailed information about the source of the problem, while those that blame others offer only vague generalizations. Our results suggest that managerial honesty and forthrightness have value to shareholders since they imply that the company is more likely to make the corrections necessary to achieve stronger future performance.

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The Long-Term Effects of Hedge Fund Activism

Lucian Bebchuk, Alon Brav & Wei Jiang
NBER Working Paper, June 2015

Abstract:
We test the empirical validity of a claim that has been playing a central role in debates on corporate governance - the claim that interventions by activist hedge funds have a negative effect on the long-term shareholder value and corporate performance. We subject this claim to a comprehensive empirical investigation, examining a long five-year window following activist interventions, and we find that the claim is not supported by the data. We find no evidence that activist interventions, including the investment-limiting and adversarial interventions that are most resisted and criticized, are followed by short-term gains in performance that come at the expense of long-term performance. We also find no evidence that the initial positive stock-price spike accompanying activist interventions tends to be followed by negative abnormal returns in the long term; to the contrary, the evidence is consistent with the initial spike reflecting correctly the intervention's long-term consequences. Similarly, we find no evidence for pump-and-dump patterns in which the exit of an activist is followed by abnormal long-term negative returns. Our findings have significant implications for ongoing policy debates.

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Restraining Overconfident CEOs through Improved Governance: Evidence from the Sarbanes-Oxley Act

Suman Banerjee, Mark Humphery-Jenner & Vikram Nanda
Review of Financial Studies, forthcoming

Abstract:
The literature posits that some CEO overconfidence benefits shareholders, though high levels may not. We argue that adequate controls and independent viewpoints provided by an independent board mitigates the costs of CEO overconfidence. We use the concurrent passage of the Sarbanes-Oxley Act and changes to the NYSE/NASDAQ listing rules (collectively, SOX) as natural experiments, to examine whether board independence improves decision making by overconfident CEOs. The results are strongly supportive: after SOX, overconfident CEOs reduce investment and risk exposure, increase dividends, improve postacquisition performance, and have better operating performance and market value. Importantly, these changes are absent for overconfident-CEO firms that were compliant prior to SOX.

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Which Spoken Language Markers Identify Deception in High-Stakes Settings? Evidence From Earnings Conference Calls

Judee Burgoon et al.
Journal of Language and Social Psychology, forthcoming

Abstract:
Quarterly conference calls where corporate executives discuss earnings that are later found to be misreported offer an excellent test bed for determining if automated linguistic and vocalic analysis tools can identify potentially fraudulent utterances in prepared versus unscripted remarks. Earnings conference calls from one company that restated their financial reports and were accused of making misleading statements were annotated as restatement-relevant (or not) and as prepared (presentation) or unprepared (Q&A) responses. We submitted more than 1,000 utterances to automated analysis to identify distinct linguistic and vocalic features that characterize various types of utterances. Restatement-related utterances differed significantly on many vocal and linguistic dimensions. These results support the value of language and vocal features in identifying potentially fraudulent utterances and suggest important interplay between utterances that are unscripted responses rather than rehearsed statements.

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Directors' and officers' liability insurance and the cost of equity

Zhihong Chen, Oliver Zhen Li & Hong Zou
Journal of Accounting and Economics, forthcoming

Abstract:
We examine whether directors' and officers' (D&O) liability insurance affects a firm's cost of equity. We find a positive association between D&O insurance and the cost of equity. Information quality and risk-taking appear to be two underlying channels through which D&O insurance affects the cost of equity. Further tests suggest that this positive association is not due to optimal risk-taking, as evidenced by a negative market reaction to an increase in D&O insurance coverage, a lack of improvement in firms' cash flow and a low valuation associated with D&O insurance. Overall, our evidence is consistent with the notion that D&O insurance weakens the disciplining effect of shareholder litigation, leading to an increase in the cost of equity.

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Directors' and officers' legal liability insurance and audit pricing

Hyeesoo (Sally) Chung, Stephen Hillegeist & Jinyoung Wynn
Journal of Accounting and Public Policy, forthcoming

Abstract:
Directors' and officers' (D&O) legal liability insurance is commonly provided to corporate executives and directors. Prior literature suggests managers are more willing to engage in opportunistic behaviors when their personal assets are more protected from litigation risk. Therefore, information about D&O policy details is potentially useful in assessing potential managerial opportunism. However, many countries, including the U.S., do not require firms to disclose this information. We provide evidence on whether mandatory D&O disclosures are likely to provide information about managerial opportunism that is incremental to that provided by other sources of information using a sample of Canadian firms, who are required to make D&O disclosures. We examine the association between excess D&O coverage limits and audit fees since auditors have extensive private information about the likelihood of managerial opportunism and strong incentives to incorporate this information into their audit fees. We find a positive association between excess D&O coverage limits and audit fees after controlling for numerous other audit fee determinants, including other proxies for managerial opportunism such as discretionary accruals and corporate governance variables. Additional analyses suggest auditors are more sensitive to potential managerial opportunism when managers are more likely to act on their opportunistic incentives. We also find a positive association between excess D&O coverage limits and the likelihood of future shareholder litigation. Our findings suggest that D&O insurance disclosures convey incremental information to shareholders and other capital market participants. As such, they suggest a beneficial role for mandatory D&O disclosures.

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Do Director Elections Matter?

Vyacheslav Fos, Kai Li & Margarita Tsoutsoura
University of Chicago Working Paper, May 2015

Abstract:
Using a hand-collected sample of more than 30,000 directors nominated for election over the period 2001-2010, we construct a novel measure of director proximity to elections - Closeness-to-election. We find that the closer a director is to her next election, the higher is CEO turnover-performance sensitivity. Each year closer to director elections is associated with a 23% increase in CEO turnover-performance sensitivity. Three tests support a causal interpretation of the results. First, when we require directors to have a minimum tenure of three years, there is no material change in the results, suggesting that the timing of when directors join their boards is unlikely to drive the results. Second, we find similar results when we use director Closeness-to-election on other boards as a measure of proximity to elections. Third, when we restrict the analysis to firms with unitary boards, there is no material change in the results, suggesting that director self-selection into firms with staggered boards does not drive the results. Cross-sectional tests suggest that, when other governance mechanisms are in place, CEO turnover-performance sensitivity is affected to a lesser extent by Closeness-to-election. We conclude that director elections have important implications for corporate governance.

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Auditor Conservatism, Incentive Compensation, and the Quality of Financial Reporting

Ravi Singh & Ian Larkin
Journal of Law, Economics, and Organization, forthcoming

Abstract:
This paper examines how performance-based compensation for managers influences their reporting behavior and the resulting stance auditors take when deciding whether to certify a manager's report. The paper makes endogenous the stance auditors take: with a more conservative stance, auditors are less likely to certify an inflated report, but are more likely to refuse to certify an accurate one. The auditor's tradeoff between these two error types, and the resulting interplay with the level of performance-based pay for managers, play a critical role in determining the level of managerial misreporting, investor welfare, and a number of other key variables. The paper finds that (1) strengthening the link between pay and reported performance can result in a weaker link between pay and actual performance and, consequently, lower managerial effort; (2) conservatism among auditors improves performance measurement; and (3) raising penalties on managers for overstating earnings can reduce audit quality and harm investors, while raising penalties on auditors for certifying overstated results does not harm investors.

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Saving face? When emotion displays during public apologies mitigate damage to organizational performance

Leanne ten Brinke & Gabrielle Adams
Organizational Behavior and Human Decision Processes, September 2015, Pages 1-12

Abstract:
In the wake of corporate transgressions and scandals, how do apologizers' expressed emotions affect investors' perceptions of the organization in question? We analyzed the market effects of normative versus deviant facial affect expressed during apologies for corporate wrongdoing. Archival data revealed that the expression of deviant affect was associated with decreased investor confidence in the form of negative stock market returns; adverse financial effects persisted up to three months post-apology. Moreover, this effect was exacerbated when a company representative with greater responsibility within the organization delivered the apology. Experimental data further revealed that third parties interpreted deviant affect (smiling) as a signal of insincerity, which reduced their confidence in these representatives' organizations. Ultimately, we find that subtle emotion expressions are detected by stakeholders, signal insincerity, and have important consequences for organizations. We suggest that organizations must carefully consider the nonverbal behavior of apologetic representatives in the wake of transgressions.

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Ready, AIM, acquire: Impression offsetting and acquisitions

Scott Graffin, Jerayr Haleblian & Jason Kiley
Academy of Management Journal, forthcoming

Abstract:
Drawing on expectancy violation theory, we explore the effects of anticipatory impression management in the context of acquisitions. We introduce impression offsetting, an anticipatory impression management technique organizational leaders employ when they expect a focal event will negatively violate the expectations of external stakeholders. Accordingly, in these situations, organizational leaders will announce the focal event contemporaneously with positive, but unrelated information. We predict impression offsetting will generally occur in the context of acquisitions, but also more frequently for specific acquiring firms and acquisitions that are more likely to lead to an expectancy violation. We also posit that offsetting will effectively inhibit observers' perceptions of events as negative expectancy violations by positively influencing shareholder reactions to acquisition announcements. Consistent with our hypotheses, in a sample of publicly traded acquisition targets, we find evidence for impression offsetting, in which characteristics of both acquirers and their announced acquisitions predict its frequency of use. We also find evidence that impression offsetting is efficacious; on average, it reduces the negative market reaction to acquisition announcements by over 40 percent, which translates into approximately $246 million in market capitalization.

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The effect of institutional ownership on firm transparency and information production

Audra Boone & Joshua White
Journal of Financial Economics, forthcoming

Abstract:
We examine the effects of institutional ownership on firms' information and trading environments using the annual Russell 1000/2000 index reconstitution. Characteristics of firms near the index cutoffs are similar, except that firms in the top of the Russell 2000 have discontinuously higher proportional institutional ownership than firms in the bottom of the Russell 1000 primarily due to indexing and benchmarking strategies. We find that higher institutional ownership is associated with greater management disclosure, analyst following, and liquidity, resulting in lower information asymmetry. Overall, indexing institutions' predilection for lower information asymmetries facilitates information production, which enhances monitoring and decreases trading costs.

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CEO Side-Payments in M&A Deals

Brian Broughman
Indiana University Working Paper, March 2015

Abstract:
In addition to golden parachutes, CEOs often negotiate for personal side-payments in connection with the sale of their firm. Side-payments differ from golden parachutes in that they are negotiated ex post in connection with a specific acquisition proposal, whereas golden parachutes are part of the executive's employment agreement negotiated when she is hired. While side-payments may benefit shareholders by countering managerial resistance to an efficient sale, they can also be used to redistribute merger proceeds to management. The current article highlights an overlooked distinction between pre-merger golden parachutes and merger side-payments. Similar to a legislative rider attached to a popular bill, management can bundle a side-payment with an acquisition that is desired by target shareholders. Thus, even if shareholders would not have approved the side-payment for purposes of ex ante incentives, it may receive shareholder support as part of a take-it-or-leave-it merger vote. Because side-payments are bundled into a merger transaction, voting rights cannot adequately protect shareholders against rent extraction. My analysis helps explain empirical results which show that target CEOs sometimes bargain away shareholder returns in exchange for personal side-payments. I conclude with legal reforms to help unbundle side-payments from the broader merger vote.

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Active Firms and Active Shareholders: Corporate Political Activity and Shareholder Proposals

Geeyoung Min & Hye Young You
University of Virginia Working Paper, April 2015

Abstract:
Corporate political activity has become one of shareholders' top concerns. We examine whether firms targeted by shareholder proposals show different campaign contributions and lobbying activities compared to non-targeted firms. We also ask whether different sponsors of shareholder proposals target different firms depending on the firms' partisan orientation. Using data on S&P 500 companies during the period between 2007 and 2013, we find that firms that spend more on campaign contributions and lobbying are more likely to be targeted by shareholder proposals. After controlling for firms' financial performance, governance characteristics and ownership structure, we also find that public pension funds and labor unions sponsors are more likely to target Republican-leaning firms, measured by the firms' campaign contributions. This finding suggests that increasing corporate political activity can intensify a tension between management and public pension fund and labor union shareholders and lead to more activism by these shareholders.

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The determinants of effective corporate lobbying

Richard Borghesi & Kiyoung Chang
Journal of Economics and Finance, July 2015, Pages 606-624

Abstract:
In this paper we study whether capital markets view lobbying activities to be value enhancing by examining the effects of lobbying on excess returns and stock return volatility. We undertake our analysis cautious that there are significant differences between the characteristics of lobbying and non-lobbying firms. Specifically, firm size, free cash flows, and R&D intensity are critically important factors that may drive results of our and other lobbying research. We show that once properly accounting for the effects of firm size, a managerial agency problem in lobbying is apparent. Initially we find that shareholders experience either no discernible or else negative excess returns in response to firm lobbing efforts. Results are even stronger when corrections are made for endogeneity issues. Further, evidence presented suggests that lobbying firms have higher volatility of stock returns, and we show that volatility is greater for firms that lobby more intensely. However, for R&D-intensive firms, and for those firms with low agency problems, lobbying does contribute to the long-term benefit of shareholders. Overall, results suggest that lobbying leads to positive excess returns when agency problems are low and R&D is high, and leads to negative excess returns otherwise.

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The Power of Shareholder Votes: Evidence from Director Elections

Reena Aggarwal, Sandeep Dahiya & Nagpurnanand Prabhala
University of Maryland Working Paper, May 2015

Abstract:
In the U.S., votes in director elections are advisory but are often used by shareholders to express dissent. We examine whether these non-binding votes have consequences for directors and report affirmative evidence. Directors facing dissent are more likely to depart boards, especially if they are not lead directors or chairs of important committees. Directors facing dissent who do not leave are moved to less prominent positions in boards. These effects are more pronounced in firms with greater ownership by institutional investors who pose exit threats. Finally, we find evidence that directors facing dissent face reduced opportunities in the market for directors, consistent with the Fama and Jensen (1983) view of the disciplining role of the market for directors. We show that contrary to popular belief, shareholder votes have power and result in negative consequences for directors. We also find that the effects of dissent votes go beyond those of proxy advisor recommendations.

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Social learning and corporate peer effects

Markku Kaustia & Ville Rantala
Journal of Financial Economics, forthcoming

Abstract:
We find that firms are more likely to split their stock if their peer firms have recently done so. The effect is comparable to an increase of 40-50% in the share price. Splitting probability is also increasing in the announcement returns of peer splits. These results are consistent with social learning from peers' actions and outcomes. The unique features of the setting and various further tests render alternative explanations unlikely. We find no clear benefit in following successful peer splitters. Firms are sometimes suspected to succumb to imitation, and the effect we show could be a case in point.

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Does the Firm Information Environment Influence Financing Decisions? A Test Using Disclosure Regulation

Susan Albring et al.
Management Science, forthcoming

Abstract:
Extant theory claims a firm's information environment impacts the choice between debt and equity financing. However, empirical evidence supporting this contention is limited. We evaluate this relation within the context of Regulation Fair Disclosure (Reg FD), which prohibited the use of selective disclosure. We find that firms with high proprietary costs of public disclosure are more likely to resort to debt financing following the passage of Reg FD. This relation is not sensitive to whether a firm has relied on selective disclosure in the pre-Reg FD regime. We also evaluate changes in firm disclosure policy and find that firms that adopted an expansive public disclosure policy are more likely to turn to equity financing. Overall, our evidence is consistent with the pecking order theory: firms with deteriorated firm information environments increase their use of less information-sensitive debt, whereas firms with improved information environments favor the use of equity financing.

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Insider sales and the effectiveness of clawback adoptions in mitigating fraud risk

Simon Yu Kit Fung et al.
Journal of Accounting and Public Policy, forthcoming

Abstract:
In recent years, firms (and lawmakers) have sought to mitigate the dysfunctional effects of incentive-based executive compensation by adopting clawbacks. However, extant clawbacks (whether firm-initiated or as mandated by the 2010 Dodd-Frank Act) do not go far enough in that they seem to allow executives to retain trading profits linked to sales of their own companies' shares at a time of inflated earnings (Fried and Shilon, 2011). In this paper, we examine the moderating effect of insider sales on the relation between firm-initiated clawback-adoptions and fraud risk. Our results indicate that clawback-adopting firms experience a decrease in fraud risk following adoption relative to non-adopters during the same time period. However, this decrease in fraud risk for the clawback-adopting firms is materially weakened in the presence of insider trading. At this time (July 2014), the SEC is still working on rules for implementing clawbacks (one of nearly half of the rules yet to be completed under Dodd-Frank). Our findings suggest that clawback rules (as and when issued by the SEC) need to address insider sales for clawbacks to be fully effective in mitigating the risk of fraudulent financial reporting.

By KEVIN LEWIS | 09:00:00 AM

Sunday, June 28, 2015

Playing well with others

Do Reputation Systems Undermine Trust? Divergent Effects of Enforcement Type on Generalized Trust and Trustworthiness

Ko Kuwabara
American Journal of Sociology, March 2015, Pages 1390-1428

Abstract:
Research shows that enforcing cooperation using contracts or tangible sanctions can backfire, undermining people’s intrinsic motivation to cooperate: when the enforcement is removed, people are less trusting or trustworthy than when there is no enforcement to begin with. The author examines whether reputation systems have similar consequences for generalized trust and trustworthiness. Using a web-based experiment simulating online market transactions (studies 1 and 2), he shows that reputation systems can reinforce generalized trust and trustworthiness, unlike contractual enforcement or relational enforcement based on repeated interactions. In a survey experiment (study 3), he finds that recalling their eBay feedback scores made participants more trusting and trustworthy. These results are predicated on the diffuse nature of reputational enforcement to reinforce perceptions of trust and trustworthiness. These results have implications for understanding how different forms of governance affect generalized trust and trustworthiness.

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Do people like working with computers more than human beings?

Marek Posard & Gordon Rinderknecht
Computers in Human Behavior, October 2015, Pages 232–238

Abstract:
This paper incorporates the concept of mindlessness from research on human–computer interactions with social exchange theory from sociology. We find that participants behaved no differently toward human or computerized partners during a repeated standard trust game. Despite exhibiting similar behaviors with these partners, participants believed that computers were more likely to share their interests during this game than humans. These participants also reported higher levels of commitment with computerized partners than human partners. Our results suggest that asking about social constructs (i.e. commitment) will break mindlessness in human–computer interactions. These results also highlight a disconnect between individual behaviors and their perceptions during human–computer interactions. We conclude that telling participants their partners are computers may actually improve their perceptions of interactions after they occur.

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The Effect of the “Evoking Freedom” Technique on an Unusual and Disturbing Request

Nicolas Guéguen et al.
Psychological Reports, June 2015, Pages 936-940

Abstract:
The “evoking freedom” technique consists in soliciting someone to comply with a request by simply saying that she is free to accept or to refuse the request. However, previous studies used low cost requests. The present study examined the magnitude of this technique associated with a more disturbing and costly request. Sixty men and 60 women aged approximately 20–25 years walking in the street were asked by a male confederate to hold a closed transparent box containing a live trap-door spider while he went into the post office to pick up a package. In the evoking freedom condition, the confederate added in his request that the participant was “free to accept or to refuse.” More compliance occurred in the “evoking freedom” condition (53.3%) than in the control condition (36.7%). These results confirm the robustness and the magnitude of the evoking freedom technique on compliance and show that this technique remained effective even when the request was psychologically costly to perform and was associated with fear.

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Letting Down the Team? Social Effects of Team Incentives

Philip Babcock et al.
Journal of the European Economic Association, forthcoming

Abstract:
This paper estimates social effects of incentivizing people in teams. In three field experiments featuring exogenous team formation and opportunities for repeated social interactions, we find large team effects that operate through social channels. In particular, assignment to a team treatment increases productivity by 9–17% relative to an individual incentive treatment, even though the individual incentive yields a higher private return. Further, we find that in a choice treatment individuals overwhelmingly prefer the individual incentive to the team incentive, despite the latter being more effective. These results are most consistent with the team effects operating through guilt or social pressure as opposed to pure altruism.

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Selfish third parties act as peacemakers by transforming conflicts and promoting cooperation

Nir Halevy & Eliran Halali
Proceedings of the National Academy of Sciences, 2 June 2015, Pages 6937–6942

Abstract:
The tremendous costs of conflict have made humans resourceful not only at warfare but also at peacemaking. Although third parties have acted as peacemakers since the dawn of history, little is known about voluntary, informal third-party intervention in conflict. Here we introduce the Peacemaker Game, a novel experimental paradigm, to model and study the interdependence between disputants and third parties in conflict. In the game, two disputants choose whether to cooperate or compete and a third party chooses whether or not to intervene in the conflict. Intervention introduces side payments that transform the game disputants are playing; it also introduces risk for the third party by making it vulnerable to disputants’ choices. Six experiments revealed three robust effects: (i) The mere possibility of third-party intervention significantly increases cooperation in interpersonal and intergroup conflicts; (ii) reducing the risk to third parties dramatically increases intervention rates, to everyone’s benefit; and (iii) disputants’ cooperation rates are consistently higher than third parties’ intervention rates. These findings explain why, how, and when self-interested third parties facilitate peaceful conflict resolution.

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Can Social Preferences Explain Gender Differences in Economic Behavior?

Linda Kamas & Anne Preston
Journal of Economic Behavior & Organization, forthcoming

Abstract:
This study examines whether gender differences in some economic behaviors are due to differences in social preferences as measured by dictator allocation decisions. We find that, compared to men, women are significantly more likely to be inequity averters and significantly less likely to be social surplus maximizers. These differences in social preferences explain to a large extent why women send less than men in trust games. Inequity averters can ensure equal payoffs if nothing is returned by sending one-fourth of the endowment while surplus maximizers can increase total payoffs by a factor of three for each dollar sent. Social preferences also help explain the size of gifts in dictator games and choice of compensation method for simple tasks, however, after controlling for social preference type, gender is still influential in these decisions. Women give significantly more to charity than men even after accounting for our measure of social preferences. Women prefer egalitarian payment systems both because they are inequity averters and because low self-confidence may lead them to believe they will earn more with equal sharing.

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Generalizing Trust: The Benign Force of Emancipation

Christian Welzel & Jan Delhey
Journal of Cross-Cultural Psychology, forthcoming

Abstract:
Trust in people is general insofar as it extends to out-groups, that is, unfamiliar and dissimilar others. But whether trust in out-groups can emerge independently from in-group trust is controversial, and conclusive evidence has been unavailable. This article fills this gap, analyzing which conditions create out-group trust independent from in-group trust. Using data from 76 countries around the world, we establish three insights. First, while a high level of in-group trust is the rule, out-group trust varies greatly across countries. Second, out-group trust emerges independent from in-group trust when human empowerment emancipates people from in-group control. Third, other conditions championed as trust-crediting forces do not confound the effect of human empowerment. In conclusion, trust generalizes to out-groups as a result of human empowerment’s emancipatory impulse.

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Cheap Talk, Round Numbers, and the Economics of Negotiation

Matthew Backus, Tom Blake & Steven Tadelis
NBER Working Paper, June 2015

Abstract:
Can sellers credibly signal their private information to reduce frictions in negotiations? Guided by a simple cheap-talk model, we posit that impatient sellers use round numbers to signal their willingness to cut prices in order to sell faster, and test its implications using millions of online bargaining interactions. Items listed at multiples of $100 receive offers that are 5% - 8% lower but that arrive 6 - 11 days sooner than listings at neighboring "precise" values, and are 3% - 5% more likely to sell. Similar patterns in real estate transactions suggest that round-number signaling plays a broader role in negotiations.

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Is Trust Rigid or Malleable? A Laboratory Experiment

Pamela Paxton & Jennifer Glanville
Social Psychology Quarterly, June 2015, Pages 194-204

Abstract:
An important debate within the trust literature is whether trust is modified by social experiences or resistant to change despite changing social circumstances. We address this debate by designing and implementing an experiment that exposes participants to a high or low trust environment and compares their change in generalized trust. We find that the experimental condition influences change in generalized trust, particularly for participants whose prior level of trust was mismatched with their experimental condition. The implications of these results for theories on the sources of trust are discussed.

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Building trust: Heart rate synchrony and arousal during joint action increased by public goods game

Panagiotis Mitkidis et al.
Physiology & Behavior, October 2015, Pages 101–106

Abstract:
The physiological processes underlying trust are subject of intense interest in the behavioral sciences. However, very little is known about how trust modulates the affective link between individuals. We show here that trust has an effect on heart rate arousal and synchrony, a result consistent with research on joint action and experimental economics. We engaged participants in a series of joint action tasks which, for one group of participants, was interleaved with a PGG, and measured their heart synchrony and arousal. We found that the introduction of the economic game shifted participants' attention to the dynamics of the interaction. This was followed by increased arousal and synchrony of heart rate profiles. Also, the degree of heart rate synchrony was predictive of participants' expectations regarding their partners in the economic game. We conclude that the above changes in physiology and behavior are shaped by the valuation of other people's social behavior, and ultimately indicate trust building process.

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Sustained cooperation by running away from bad behavior

Charles Efferson et al.
Evolution and Human Behavior, forthcoming

Abstract:
For cooperation to evolve, some mechanism must limit the rate at which cooperators are exposed to defectors. Only then can the advantages of mutual cooperation outweigh the costs of being exploited. Although researchers widely agree on this, they disagree intensely about which evolutionary mechanisms can explain the extraordinary cooperation exhibited by humans. Much of the controversy follows from disagreements about the informational regularity that allows cooperators to avoid defectors. Reliable information can allow cooperative individuals to avoid exploitation, but which mechanisms can sustain such a situation is a matter of considerable dispute. We conducted a behavioral experiment to see if cooperators could avoid defectors when provided with limited amounts of explicit information. We gave each participant the simple option to move away from her current neighborhood at any time. Participants were not identifiable as individuals, and they could not track each other’s tendency to behave more or less cooperatively. More broadly, a participant had no information about the behavior she was likely to encounter if she moved, and so information about the risk of exploitation was extremely limited. Nonetheless, our results show that simply providing the option to move allowed cooperation to persist for a long period of time. Our results further show that movement, even though it involved considerable uncertainty, allowed would-be cooperators to assort positively and eliminate on average any individual payoff disadvantage associated with cooperation. This suggests that choosing to move, even under limited information, can completely reorganize the mix of selective forces relevant for the evolution of cooperation.

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Cynical Beliefs About Human Nature and Income: Longitudinal and Cross-Cultural Analyses

Olga Stavrova & Daniel Ehlebracht
Journal of Personality and Social Psychology, forthcoming

Abstract:
Based on the existing literature on worldview beliefs, cynical hostility, and Machiavellian cynicism, we suggest that holding cynical beliefs about human nature can be detrimental for individuals’ income. Cynical individuals are more likely to avoid cooperation and trust or to overinvest in monitoring, control, and other means of protection from potential exploitation. As a result, they are more likely to forgo valuable opportunities for cooperation and consequently less likely to reap the benefits of joint efforts and mutual help compared with their less cynical counterparts. Studies 1 and 2, using nationally representative longitudinal surveys of the American population, show that individuals who endorsed cynical beliefs about human nature at baseline earned comparatively lower incomes 9 (Study 1) and 2 (Study 2) years later. In Study 3, applying a multilevel model of change to a nationally representative panel study of the German population, we show that cynical beliefs at baseline undermined an income increase in the course of the following 9 years. In Study 4, the negative effect of cynical beliefs on income proved to be independent of individual differences in the Big Five personality dimensions. Study 5 provided the first tentative evidence of the hypothesized mechanism underlying this effect. Using survey data from 41 countries, it revealed that the negative effect of cynical beliefs on income is alleviated in sociocultural contexts with low levels of prosocial behavior, high homicide rates and high overall societal cynicism levels. Holding cynical beliefs about others has negative economic outcomes unless such beliefs hold true.

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Communicating With Distant Others: The Functional Use of Abstraction

Priyanka Joshi et al.
Social Psychological and Personality Science, forthcoming

Abstract:
We introduce the construct of relational scope to refer to the degree to which an individual engages in communication with a more or less distant audience, with a contractive relational scope indicating a near audience and an expansive relational scope indicating a distant audience. Drawing on construal level theory, we argue that speakers use abstract messages strategically when faced with an expansive relational scope in order to be widely relevant and relatable. We show that speakers communicate more abstractly with distant others than near others (Studies 1–3) and experience greater fit when message framing matches audience distance (Study 4). We also demonstrate that framing messages abstractly prompts broader relational scope, with speakers more likely to direct concrete (abstract) messages to near (distal) audiences (Study 5). Finally, we show that when procedural information is critical to communication, communication with distant (vs. proximal) others will increasingly emphasize procedures over end states (Study 6).

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How to dissolve fixed-pie bias in negotiation? Social antecedents and the mediating effect of mental-model adjustment

Wu Liu, Leigh Anne Liu & Jian-Dong Zhang
Journal of Organizational Behavior, forthcoming

Abstract:
Fixed-pie bias, defined as the erroneous belief that the other negotiation party's interest is directly opposite to one's own, has been a consistent hurdle that negotiators must overcome in their efforts to achieve optimal negotiation outcomes. In this study, we explore the underlying cognitive mechanism and the social antecedents of fixed-pie bias reduction in negotiation. Using data from a negotiation simulation with 256 participants, we found that mental-model adjustments made by negotiators could effectively decrease fixed-pie bias. More interestingly, we also found that negotiators were less likely to reduce fixed-pie bias when negotiating with an in-group member than with an out-group member but only under a high accountability condition. Finally, we found that mental-model adjustment mediated the effects of the aforementioned social antecedents (in-groupness and accountability) on reduced fixed-pie bias. We discuss the theoretical and practical implications of these findings.

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“Self-promotion”: How regulatory focus affects the pursuit of self-interest at the expense of the group

Maarten Zaal et al.
European Journal of Social Psychology, forthcoming

Abstract:
Self-interested behavior may have positive consequences for individual group-members, but also negatively affects the outcomes of the group when group-level and individual-level interests are misaligned. In two studies, we examined such self-interested, group-undermining behavior from the perspective of regulatory focus theory. We predicted that when individual and group interests are out of alignment, individuals under promotion focus would be more likely than individuals under prevention focus to pursue individual success at the expense of their group. Two studies provided support for this prediction. Promotion oriented individuals were more willing to act in their self-interest (at the expense of their group) than individuals under prevention focus when self-interested goals were not compatible with cooperation. No effect of regulatory focus on group loyalty was found when cooperation formed the only viable route to individual success. We discuss how these findings extend our understanding of the role of regulatory focus in social situations and of the practice of ensuring loyalty in contexts where individual and group goals are misaligned while cooperation is an important part of group success.

By KEVIN LEWIS | 09:00:00 AM

Saturday, June 27, 2015

I feel for you

Turbulent Times, Rocky Relationships: Relational Consequences of Experiencing Physical Instability

Amanda Forest et al.
Psychological Science, forthcoming

Abstract:
What influences how people feel about and behave toward their romantic partners? Extending beyond features of the partners, relationship experiences, and social context, the current research examines whether benign, relationship-irrelevant factors — such as one’s somatic experiences — can influence relationship perceptions and interpersonal behavior. Drawing on the embodiment literature, we propose that experiencing physical instability can undermine perceptions of relationship stability. Participants who experienced physical instability by sitting at a wobbly workstation rather than a stable workstation (Study 1), standing on one foot rather than two (Study 2), or sitting on an inflatable seat cushion rather than a rigid one (Study 3) perceived their romantic relationships to be less likely to last. Results were consistent with risk-regulation theory: Perceptions of relational instability were associated with reporting lower relationship quality (Studies 1–3) and expressing less affection toward the partner (Studies 2 and 3). These findings indicate that benign physical experiences can influence perceptions of relationship stability, exerting downstream effects on consequential relationship processes.

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The role of nature and nurture in conceptual metaphors: The case of gustatory priming

Michael Gilead et al.
Social Psychology, Summer 2015, Pages 167-173

Abstract:
It is unclear whether embodied-cognition effects are caused by the activation of cultural-linguistic metaphors, or whether these metaphors stem from preverbal mechanisms that directly affect both language and behavior. Therefore, we conducted a study wherein 62 Israeli participants ate sweet or spicy snacks and performed a social judgment task. Preverbal mechanisms assign positive hedonic value to sweetness and negative value to spiciness. However, in Israeli culture, “sweetness” is used as a metaphor for inauthenticity, whereas “spiciness” stands for intellectual competence. In accordance with the predictions of a culturally-mediated variant of conceptual-metaphor theory, the results showed that priming participants with spicy (vs. sweet) tastes increased judgments of intellectual competence, decreased judgments of inauthenticity, and increased overall evaluation of a social target.

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Word-order and causal inference: The temporal attribution bias

Maria Laura Bettinsoli et al.
Journal of Experimental Social Psychology, September 2015, Pages 144–149

Abstract:
Languages differ with respect to the standard order in which subject (S), object (O), and verb (V) are arranged. Two studies, using a translation paradigm and conducted in Italian and in English, tested whether the order in which S, O, and V are mentioned in active sentences will impact the causal interpretation of the described event. We hypothesized and found that participants attribute an event more to a specific cause when the relevant element occurs in the first rather than in a later (2nd or 3rd) position. Findings are discussed with respect to within-language and cross-language variations of word order.

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The Fox and the Grapes — How Physical Constraints Affect Value Based Decision Making

Jörg Gross, Eva Woelbert & Martin Strobel
PLoS ONE, June 2015

Abstract:
One fundamental question in decision making research is how humans compute the values that guide their decisions. Recent studies showed that people assign higher value to goods that are closer to them, even when physical proximity should be irrelevant for the decision from a normative perspective. This phenomenon, however, seems reasonable from an evolutionary perspective. Most foraging decisions of animals involve the trade-off between the value that can be obtained and the associated effort of obtaining. Anticipated effort for physically obtaining a good could therefore affect the subjective value of this good. In this experiment, we test this hypothesis by letting participants state their subjective value for snack food while the effort that would be incurred when reaching for it was manipulated. Even though reaching was not required in the experiment, we find that willingness to pay was significantly lower when subjects wore heavy wristbands on their arms. Thus, when reaching was more difficult, items were perceived as less valuable. Importantly, this was only the case when items were physically in front of the participants but not when items were presented as text on a computer screen. Our results suggest automatic interactions of motor and valuation processes which are unexplored to this date and may account for irrational decisions that occur when reward is particularly easy to reach.

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Predicting and Improving Recognition Memory Using Multiple Electrophysiological Signals in Real Time

Keisuke Fukuda & Geoffrey Woodman
Psychological Science, forthcoming

Abstract:
Although people are capable of storing a virtually infinite amount of information in memory, their ability to encode new information is far from perfect. The quality of encoding varies from moment to moment and renders some memories more accessible than others. Here, we were able to forecast the likelihood that a given item will be later recognized by monitoring two dissociable fluctuations of the electroencephalogram during encoding. Next, we identified individual items that were poorly encoded, using our electrophysiological measures in real time, and we successfully improved the efficacy of learning by having participants restudy these items. Thus, our memory forecasts using multiple electrophysiological signals demonstrate the feasibility and the effectiveness of using real-time monitoring of the moment-to-moment fluctuations of the quality of memory encoding to improve learning.

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Drivers of Cultural Success: The Case of Sensory Metaphors

Ezgi Akpinar & Jonah Berger
Journal of Personality and Social Psychology, July 2015, Pages 20-34

Abstract:
Why do some cultural items catch on and become more popular than others? Language is one of the basic foundations of culture. But what leads some phrases to become more culturally successful? There are multiple ways to convey the same thing and phrases with similar meanings often act as substitutes, competing for usage. A not so friendly person, for example, can be described as unfriendly or cold. We study how the senses shape cultural success, suggesting that compared with their semantic equivalents (e.g., unfriendly person), phrases which relate to senses in metaphoric ways (e.g., cold person) should be more culturally successful. Data from 5 million books over 200 years support this prediction: Sensory metaphors are used more frequently over time than are their semantic equivalents. Experimental evidence demonstrates that sensory metaphors are more memorable because they relate more to the senses and have more associative cues. These findings shed light on how senses shape language and the psychological foundations of culture more broadly.

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What’s in a Name? Sound Symbolism and Gender in First Names

David Sidhu & Penny Pexman
PLoS ONE, May 2015

Abstract:
Although the arbitrariness of language has been considered one of its defining features, studies have demonstrated that certain phonemes tend to be associated with certain kinds of meaning. A well-known example is the Bouba/Kiki effect, in which nonwords like bouba are associated with round shapes while nonwords like kiki are associated with sharp shapes. These sound symbolic associations have thus far been limited to nonwords. Here we tested whether or not the Bouba/Kiki effect extends to existing lexical stimuli; in particular, real first names. We found that the roundness/sharpness of the phonemes in first names impacted whether the names were associated with round or sharp shapes in the form of character silhouettes (Experiments 1a and 1b). We also observed an association between femaleness and round shapes, and maleness and sharp shapes. We next investigated whether this association would extend to the features of language and found the proportion of round-sounding phonemes was related to name gender (Analysis of Category Norms). Finally, we investigated whether sound symbolic associations for first names would be observed for other abstract properties; in particular, personality traits (Experiment 2). We found that adjectives previously judged to be either descriptive of a figuratively ‘round’ or a ‘sharp’ personality were associated with names containing either round- or sharp-sounding phonemes, respectively. These results demonstrate that sound symbolic associations extend to existing lexical stimuli, providing a new example of non-arbitrary mappings between form and meaning.

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Speakers of different languages process the visual world differently

Sarah Chabal & Viorica Marian
Journal of Experimental Psychology: General, June 2015, Pages 539-550

Abstract:
Language and vision are highly interactive. Here we show that people activate language when they perceive the visual world, and that this language information impacts how speakers of different languages focus their attention. For example, when searching for an item (e.g., clock) in the same visual display, English and Spanish speakers look at different objects. Whereas English speakers searching for the clock also look at a cloud, Spanish speakers searching for the clock also look at a gift, because the Spanish names for gift (regalo) and clock (reloj) overlap phonologically. These different looking patterns emerge despite an absence of direct language input, showing that linguistic information is automatically activated by visual scene processing. We conclude that the varying linguistic information available to speakers of different languages affects visual perception, leading to differences in how the visual world is processed.

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Mere exposure affects perceived descriptive norms: Implications for personal preferences and trust

Letty Kwan, Suhui Yap & Chi-yue Chiu
Organizational Behavior and Human Decision Processes, July 2015, Pages 48–58

Abstract:
One type of perceived descriptive norm is representations of how widely known or familiar particular entities (including artifacts, people, groups, ideas and practices, etc.) are in one’s society. These perceptions are implicated in important interpersonal, organizational and cultural processes. The authors hypothesize that these familiarity perceptions are formed in part through mere exposure — things frequently seen are assumed to be widely known. Two experimental studies provided support for this hypothesis and showed that incidental exposure to stimulus objects alters their assumed familiarity to others, without conscious processing. Furthermore, this mere exposure effect affected personal preference only when there was a strong motivation for social connectedness. In contrast, when there was a strong motivation for personal distinctiveness, the mere exposure effect on assumed familiarity to others did not affect personal preference.

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A Human Tendency to Anthropomorphize Is Enhanced by Oxytocin

Dirk Scheele
European Neuropsychopharmacology, forthcoming

Abstract:
In the course of human evolution, the brain has evolved into a highly sensitive detector of social signals. As a consequence of this socially driven adaptation, humans display a tendency to anthropomorphize, that is they attribute social meaning to non-social agents. The evolutionarily highly conserved hypothalamic peptide oxytocin (OXT) has been identified as a key factor attaching salience to socially relevant cues, but whether it contributes to spontaneous anthropomorphism is still elusive. In the present study involving 60 healthy female participants, we measured salivary OXT concentrations and explored the effect of a single intranasal dose of synthetic OXT (24 IU) or placebo (PLC) on anthropomorphic tendencies during participants’ verbal descriptions of short video clips depicting socially and non-socially moving geometric shapes. Our results show that endogenous OXT concentrations at baseline were positively correlated with the attribution of animacy to social stimuli. While intranasal OXT had no modulatory effect on arousal ratings and did not make the participants more talkative, the treatment boosted anthropomorphic descriptions specifically for social stimuli. In conclusion, we here provide first evidence indicating that spontaneous anthropomorphism in women is facilitated by oxytocin, thereby enabling a context-specific upregulation of the propensity to anthropomorphize environmental cues.

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Inferences of Others' Competence Reduces Anticipation of Pain When under Threat

Ellen Tedeschi et al.
Journal of Cognitive Neuroscience, forthcoming

Abstract:
On a daily basis, we place our lives into the hands of strangers. From dentists to pilots, we make inferences about their competence to perform their jobs and consequently to keep us from harm. Here we explore whether the perceived competence of others can alter one's anticipation of pain. In two studies, participants (Receivers) believed their chances of experiencing an aversive stimulus were directly dependent on the performance of another person (Players). We predicted that perceiving the Players as highly competent would reduce Receivers' anxiety when anticipating the possible stimulus. Results confirmed that high competence ratings consistently corresponded with lower reported anxiety, and complementary fMRI data showed that increased competence perception was further expressed as decreased activity in the bilateral posterior insula, a region localized to actual pain stimulation. These studies suggest that inferences of competence act as predictors of protection and reduce the expectation of negative outcomes.

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The Mind in the Object — Psychological Valuation of Materialized Human Expression

Robert Kreuzbauer, Dan King & Shankha Basu
Journal of Experimental Psychology: General, forthcoming

Abstract:
Symbolic material objects such as art or certain artifacts (e.g., fine pottery, jewelry) share one common element: The combination of generating an expression, and the materialization of this expression in the object. This explains why people place a much greater value on handmade over machine-made objects, and originals over duplicates. We show that this mechanism occurs when a material object’s symbolic property is salient and when the creator (artist or craftsman) is perceived to have agency control over the 1-to-1 materialized expression in the object. Coactivation of these 2 factors causes the object to be perceived as having high value because it is seen as the embodied representation of the creator’s unique personal expression. In 6 experiments, subjects rated objects in various object categories, which varied on the type of object property (symbolic, functional, aesthetic), the production procedure (handmade, machine-made, analog, digital) and the origin of the symbolic information (person or software). The studies showed that the proposed mechanism applies to symbolic, but not to functional or aesthetic material objects. Furthermore, they show that this specific form of symbolic object valuation could not be explained by various other related psychological theories (e.g., uniqueness, scarcity, physical touching, creative performance). Our research provides a universal framework that identifies a core mechanism for explaining judgments of value for one of our most uniquely human symbolic object categories.

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The impact of eye movements on a verbal creativity task

Jessica Fleck & David Braun
Journal of Cognitive Psychology, forthcoming

Abstract:
Bilateral eye movements (EMs) have been shown to induce cognitive enhancements for episodic memory, attention, and divergent thinking. Increased interhemispheric interaction has been suggested as a possible mechanism behind the EM effect, but other theories, including an increase in attentional control following EMs have also been proposed. The present research explored whether the bilateral EM effect could be extended to a creativity task that draws heavily on convergent thinking. Participants were randomly assigned to one of four EM conditions (bilateral, centre control, right-centre, or left-centre) and were presented with compound remote associate problems. After 7 s, participants were asked to make a solution/non-solution judgement to a target word presented in the left or right visual field. Bilateral and right-centre EM conditions exhibited enhanced performance on the task, with the bilateral condition demonstrating the best performance for solution targets and the right-centre condition presenting the best performance for non-solution targets. The implications of these findings are discussed in light of the neural components of creativity and theories surrounding the effects of EMs on cognition.

By KEVIN LEWIS | 09:00:00 AM

Friday, June 26, 2015

Now hiring

Why Do Cities Matter? Local Growth and Aggregate Growth

Chang-Tai Hsieh & Enrico Moretti
NBER Working Paper, May 2015

Abstract:
We study how growth of cities determines the growth of nations. Using a spatial equilibrium model and data on 220 US metropolitan areas from 1964 to 2009, we first estimate the contribution of each U.S. city to national GDP growth. We show that the contribution of a city to aggregate growth can differ significantly from what one might naively infer from the growth of the city’s GDP. Despite some of the strongest rate of local growth, New York, San Francisco and San Jose were only responsible for a small fraction of U.S. growth in this period. By contrast, almost half of aggregate US growth was driven by growth of cities in the South. We then provide a normative analysis of potential growth. We show that the dispersion of the conditional average nominal wage across US cities doubled, indicating that worker productivity is increasingly different across cities. We calculate that this increased wage dispersion lowered aggregate U.S. GDP by 13.5%. Most of the loss was likely caused by increased constraints to housing supply in high productivity cities like New York, San Francisco and San Jose. Lowering regulatory constraints in these cities to the level of the median city would expand their work force and increase U.S. GDP by 9.5%. We conclude that the aggregate gains in output and welfare from spatial reallocation of labor are likely to be substantial in the U.S., and that a major impediment to a more efficient spatial allocation of labor are housing supply constraints. These constraints limit the number of US workers who have access to the most productive of American cities. In general equilibrium, this lowers income and welfare of all US workers.

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The Passthrough of Labor Costs to Price Inflation

Ekaterina Peneva & Jeremy Rudd
Federal Reserve Working Paper, May 2015

Abstract:
We use a time-varying parameter/stochastic volatility VAR framework to assess how the passthrough of labor costs to price inflation has evolved over time in U.S. data. We find little evidence that changes in labor costs have had a material effect on price inflation in recent years, even for compensation measures where some degree of passthrough to prices still appears to be present. Our results cast doubt on explanations of recent inflation behavior that appeal to such mechanisms as downward nominal wage rigidity or a differential contribution of long-term and short-term unemployed workers to wage and price pressures.

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Offshoring Domestic Jobs

Hartmut Egger, Udo Kreickemeier & Jens Wrona
Journal of International Economics, forthcoming

Abstract:
We develop a two-country general equilibrium model, in which heterogeneous firms offshore routine tasks to a low-wage host country. In the presence of fixed costs for offshoring the most productive firms self-select into offshoring, which leads to a reallocation of domestic labor towards less productive uses if offshoring costs are high. As a consequence domestic welfare may fall. The reallocation effect is reversed and domestic welfare rises if offshoring costs are low. The aggregate income distribution, comprising wages and entrepreneurial incomes, becomes more unequal with offshoring.

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Coal Mining, Economic Development, and the Natural Resources Curse

Michael Betz et al.
Energy Economics, July 2015, Pages 105-116

Abstract:
Coal mining has a long legacy of providing needed jobs in isolated communities but it is also associated with places that suffer from high poverty and weaker long-term economic growth. Yet, the industry has greatly changed in recent decades. Regulations, first on air quality, have altered the geography of coal mining, pushing it west from Appalachia. Likewise, technological change has reduced labor demand and has led to relatively new mining practices, such as invasive mountain-top approaches. Thus, the economic footprint of coal mining has greatly changed in an era when the industry appears to be on the decline. This study investigates whether these changes along with coal’s “boom/bust” cycles have affected economic prosperity in coal country. We separately examine the Appalachian region from the rest of the U.S. due to Appalachia’s unique history and different mining practices. Our study takes a new look at the industry by assessing the winners and losers of coal development around a range of economic indicators and addressing whether the natural resources curse applies to contemporary American coal communities. The results suggest that modern coal mining has rather nuanced effects that differ between Appalachia and the rest of the U.S. We do not find strong evidence of a resources curse, except that coal mining has a consistent inverse association with measures linked to population growth and entrepreneurship, and thereby future economic growth.

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Place-Based Programs and the Geographic Dispersion of Employment

Matthew Freedman
Regional Science and Urban Economics, July 2015, Pages 1-19

Abstract:
Government efforts to improve local economic conditions by encouraging private investment in targeted communities could affect the broader geographic distribution of employment in a region, especially to the extent that subsidized businesses face few constraints on whom they hire. This paper examines the labor market impacts of investment subsidized by the U.S. federal government’s New Markets Tax Credit (NMTC) program, which provides tax incentives to promote business investment in low-income neighborhoods. To identify the program’s effects, I exploit a discontinuity in the rule determining the eligibility of census tracts for NMTC-subsidized investment. Using rich administrative data on workers’ residence and workplace locations, I find evidence that many of the new jobs created in areas that receive subsidized investment do not go to residents of targeted neighborhoods. The results suggest that the local economic benefits of place-based programs may be diluted when subsidized businesses have scope to hire from broader regional labor markets.

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Recent U.S. Labor Force Dynamics: Reversible or Not?

Ravi Balakrishnan et al.
IMF Working Paper, April 2015

Abstract:
The U.S. labor force participation rate (LFPR) fell dramatically following the Great Recession and has yet to start recovering. A key question is how much of the post-2007 decline is reversible, something which is central to the policy debate. The key finding of this paper is that while around ¼-⅓ of the post-2007 decline is reversible, the LFPR will continue to decline given population aging. This paper’s measure of the “employment gap” also suggests that labor market slack remains and will only decline gradually, pointing to a still important role for stimulative macro-economic policies to help reach full employment. In addition, given the continued downward pressure on the LFPR, labor supply measures will be an essential component of the strategy to boost potential growth. Finally, stimulative macroeconomic and labor supply policies should also help reduce the scope for further hysteresis effects to develop (e.g., loss of skills, discouragement).

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The Effect of Extended Unemployment Insurance Benefits: Evidence from the 2012-2013 Phase-Out

Henry Farber, Jesse Rothstein & Robert Valletta
American Economic Review, May 2015, Pages 171-176

Abstract:
Unemployment Insurance benefit durations were extended during the Great Recession, reaching 99 weeks for most recipients. The extensions were rolled back and eventually terminated by the end of 2013. Using matched CPS data from 2008-2014, we estimate the effect of extended benefits on unemployment exits separately during the earlier period of benefit expansion and the later period of rollback. In both periods, we find little or no effect on job-finding but a reduction in labor force exits due to benefit availability. We estimate that the rollbacks reduced the labor force participation rate by about 0.1 percentage point in early 2014.

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Untangling Trade and Technology: Evidence from Local Labour Markets

David Autor, David Dorn & Gordon Hanson
Economic Journal, May 2015, Pages 621-646

Abstract:
We juxtapose the effects of trade and technology on employment in US local labour markets between 1980 and 2007. Labour markets whose initial industry composition exposes them to rising Chinese import competition experience significant falls in employment, particularly in manufacturing and among non-college workers. Labour markets susceptible to computerisation due to specialisation in routine task-intensive activities instead experience occupational polarisation within manufacturing and non-manufacturing but do not experience a net employment decline. Trade impacts rise in the 2000s as imports accelerate, while the effect of technology appears to shift from automation of production activities in manufacturing towards computerisation of information-processing tasks in non-manufacturing.

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Human Capital Quality and Aggregate Income Differences: Development Accounting for U.S. States

Eric Hanushek, Jens Ruhose & Ludger Woessmann
NBER Working Paper, June 2015

Abstract:
Although many U.S. state policies presume that human capital is important for state economic development, there is little research linking better education to state incomes. In a complement to international studies of income differences, we investigate the extent to which quality-adjusted measures of human capital can explain within-country income differences. We develop detailed measures of state human capital based on school attainment from census micro data and on cognitive skills from state- and country-of-origin achievement tests. Partitioning current state workforces into state locals, interstate migrants, and immigrants, we adjust achievement scores for selective migration. We use the new human capital measures in development accounting analyses calibrated with standard production parameters. We find that differences in human capital account for 20-35 percent of the current variation in per-capita GDP among states, with roughly even contributions by school attainment and cognitive skills. Similar results emerge from growth accounting analyses.

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Opening the Black Box of the Matching Function: The Power of Words

Ioana Elena Marinescu & Ronald Wolthoff
University of Chicago Working Paper, May 2015

Abstract:
How do employers attract the right workers? How important are posted wages vs. other job characteristics? Using data from the leading job board CareerBuilder.com, we show that most vacancies do not post wages, and, for those that do, job titles explain more than 90% of the wage variance. Job titles also explain more than 80% of the across-vacancies variance in the education and experience of applicants. Finally, failing to control for job titles leads to a spurious negative elasticity of labor supply. Thus, our results uncover the previously undocumented power of words in the job matching process.

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House Prices, Home Equity Borrowing, and Entrepreneurship

Stefano Corradin & Alexander Popov
Review of Financial Studies, forthcoming

Abstract:
This paper shows that housing wealth helps alleviate credit constraints for potential entrepreneurs by enabling home owners to extract equity from their property and invest it in their business. Using a large U.S. individual-level survey dataset for the 1996-2006 period, we find that a 10% increase in home equity raises the share of individuals who transition into self-employment each year from 1% to 1.07%. Our results persist when we use proxies for aggregate housing demand shocks and for the topological elasticity of housing supply to generate variation in home equity that is orthogonal to entrepreneurial choice.

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The Impact of Disability Benefits on Labor Supply: Evidence from the VA's Disability Compensation Program

David Autor et al.
NBER Working Paper, May 2015

Abstract:
Combining administrative data from the U.S. Army, Department of Veterans Affairs (VA) and the U.S. Social Security Administration, we analyze the effect of the VA’s Disability Compensation (DC) program on veterans’ labor force participation and earnings. The largely unstudied Disability Compensation program currently provides income and health insurance to almost four million veterans of military service who suffer service-connected disabilities. We study a unique policy change, the 2001 Agent Orange decision, which expanded DC eligibility for Vietnam veterans who had served in-theatre to a broader set of conditions such as type 2 diabetes. Exploiting the fact that the Agent Orange policy excluded Vietnam era veterans who did not serve in-theatre, we assess the causal effects of DC eligibility by contrasting the outcomes of these two Vietnam-era veteran groups. The Agent Orange policy catalyzed a sharp increase in DC enrollment among veterans who served in-theatre, raising the share receiving benefits by five percentage points over five years. Disability ratings and payments rose rapidly among those newly enrolled, with average annual non-taxed federal transfer payments increasing to $17K within five years. We estimate that benefits receipt reduced labor force participation by 18 percentage points among veterans enrolled due to the policy, though measured income net of transfer benefits rose on average. Consistent with the relatively advanced age and diminished health of Vietnam era veterans in this period, we estimate labor force participation elasticities that are somewhat higher than among the general population.

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Bounds on Treatment Effects in the Presence of Sample Selection and Noncompliance: The Wage Effects of Job Corps

Xuan Chen & Carlos Flores
Journal of Business & Economic Statistics, forthcoming

Abstract:
Randomized and natural experiments are commonly used in economics and other social science fields to estimate the effect of programs and interventions. Even when employing experimental data, assessing the impact of a treatment is often complicated by the presence of sample selection (outcomes are only observed for a selected group) and noncompliance (some treatment group individuals do not receive the treatment while some control individuals do). We address both of these identification problems simultaneously and derive nonparametric bounds for average treatment effects within a principal stratification framework. We employ these bounds to empirically assess the wage effects of Job Corps (JC), the most comprehensive and largest federally-funded job training program for disadvantaged youth in the United States. Our results strongly suggest positive average effects of JC on wages for individuals who comply with their treatment assignment and would be employed whether or not they enrolled in JC (the “always-employed compliers”). Under relatively weak monotonicity and mean dominance assumptions, we find that this average effect is between 5.7 and 13.9 percent four years after randomization, and between 7.7 and 17.5 percent for Non-Hispanics. Our results are consistent with larger effects of JC on wages than those found without adjusting for noncompliance.

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Can helping the sick hurt the able? Incentives, information and disruption in a disability-related welfare reform

Nitika Bagaria, Barbara Petrongolo & John Van Reenen
NBER Working Paper, May 2015

Abstract:
Disability rolls have escalated in developed nations over the last 40 years. The UK, however, stands out because the numbers on these benefits stopped rising when a welfare reform was introduced that integrated disability benefits with unemployment insurance (UI). This policy reform improved job information and sharpened bureaucratic incentives to find jobs for the disabled (relative to those on UI). We exploit the fact that policy was rolled-out quasi-randomly across geographical areas. In the long-run the policy improved the outflows from disability benefits by 6% and had an (insignificant) 1% increase in unemployment outflows. This is consistent with a model where information helps both groups, but bureaucrats were given incentives to shift effort towards helping the disabled find jobs and away from helping the unemployed. Interestingly, in the short-run the policy had a negative impact for both groups, suggesting important disruption effects. We estimate that it takes about six years for the estimated benefits of the reform to exceed its costs, which is beyond the time horizon of most policy-makers.

By KEVIN LEWIS | 09:00:00 AM

Thursday, June 25, 2015

Baby boomers

Unpacking the “Black Box” of Race–Ethnic Variation in Fertility

Karen Benjamin Guzzo et al.
Race and Social Problems, June 2015, Pages 135-149

Abstract:
Race–ethnic differences in a range of childbearing behaviors are long standing and well documented, and these differences are attenuated, but not eliminated, when accounting for socioeconomic disparities. The residual differences are often attributed to vague and untested variation across race–ethnic groups in knowledge, attitudes, psychological attributes, normative beliefs, and social context. We use the longitudinal Toledo Adolescent Relationship Study (TARS), which contains a rich set of such factors measured in early adolescence, to assess whether they contribute to race–ethnic differences in having a birth among men and women ages 17–24 (n = 1,042). Specifically, we test whether individual attitudes, religiosity, and academic behaviors; knowledge and behaviors regarding sex and dating; peer normative context; and parental communication about sex account for variation in the risk of an early birth. We find that socioeconomic factors attenuate but do not reduce differences between black, Hispanic, and white respondents. Including adolescent academic performance and early entry into sex reduces the black–white difference in the odds of early fertility to non-significance; however, beyond socioeconomic status, none of the broad range of factors further attenuate Hispanic–white differences, which remain large and statistically significant.

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Can't Afford a Baby? Debt and Young Americans

Michael Nau, Rachel Dwyer & Randy Hodson
Research in Social Stratification and Mobility, forthcoming

Abstract:
This article explores the role of personal debt in the transition to parenthood. We analyze data from the National Longitudinal Study of Youth-1997 cohort and find that for the generation coming of age in the 2000s, student loans delay fertility for women, particularly at very high levels of debt. Home mortgages and credit card debt, in contrast, appear to be precursors to parenthood. These results indicate that different forms of debt have different implications for early adulthood transitions: whereas consumer loans or home mortgages immediately increase access to consumption goods, there is often a significant delay between the accrual and realization of benefits for student loans. The double-edged nature of debt as both barrier and facilitator to life transitions highlights the importance of looking at debt both as a monetary issue and also as a carrier of social meanings.

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Black-White Differences in Attitudes Related to Pregnancy Among Young Women

Jennifer Barber, Jennifer Eckerman Yarger & Heather Gatny
Demography, June 2015, Pages 751-786

Abstract:
In this article, we use newly available data from the Relationship Dynamics and Social Life (RDSL) study to compare a wide range of attitudes related to pregnancy for 961 black and white young women. We also investigate the extent to which race differences are mediated by, or net of, family background, childhood socioeconomic status (SES), adolescent experiences related to pregnancy, and current SES. Compared with white women, black women generally have less positive attitudes toward young nonmarital sex, contraception, and childbearing, and have less desire for sex in the upcoming year. This is largely because black women are more religious than white women and partly because they are more socioeconomically disadvantaged in young adulthood. However, in spite of these less positive attitudes, black women are more likely to expect sex without contraception in the next year and to expect more positive consequences if they were to become pregnant, relative to white women. This is largely because, relative to white women, black women had higher rates of sex without contraception in adolescence and partly because they are more likely to have grown up with a single parent. It is unclear whether attitudes toward contraception and pregnancy preceded or are a consequence of adolescent sex without contraception. Some race differences remain unexplained; net of all potential mediators in our models, black women have less desire for sex in the upcoming year, but they are less willing to refuse to have sex with a partner if they think it would make him angry and they expect more positive personal consequences of a pregnancy, relative to white women. In spite of these differences, black women’s desires to achieve and to prevent pregnancy are very similar to white women’s desires.

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Offline Effects of Online Connecting: The Impact of Broadband Diffusion on Teen Fertility Decisions

Melanie Guldi & Chris Herbst
Arizona State University Working Paper, May 2015

Abstract:
Broadband (high-speed) internet access expanded rapidly from 1999 to 2007. This expansion is associated with higher economic growth and labor market activity. In this paper, we examine whether the rollout also affected the social connections teens make. Specifically, we look at the relationship between increased broadband access and teen fertility. We hypothesize that increasing access to high-speed internet can influence fertility decisions by changing the size of the market as well as increasing the information available to participants in the market. We seek to understand both the overall effect of broadband internet on teen fertility as well as the mechanisms underlying this effect. Our results suggest that increased broadband access explains at least thirteen percent of the decline in the teen birth rate between 1999 and 2007. Although we focus on social markets, this work contributes more broadly to an understanding of how new technology interacts with existing markets.

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Ancestry Matters: Patrilineage Growth and Extinction

Xi Song, Cameron Campbell & James Lee
American Sociological Review, June 2015, Pages 574-602

Abstract:
Patrilineality, the organization of kinship, inheritance, and other key social processes based on patrilineal male descent, has been a salient feature of social organization in China and many other societies for centuries. Because patrilineage continuity or growth was the central focus of reproductive strategies in such societies, we introduce the number of patrilineal male descendants generations later as a stratification outcome. By reconstructing and analyzing 20,000 patrilineages in two prospective, multi-generational population databases from eighteenth- and nineteenth-century China, we show that patrilineages founded by high-status males had higher growth rates for the next 150 years. The elevated growth rate of these patrilineages was due more to their having a lower probability of extinction at each point in time than to surviving patrilineal male descendants having larger numbers of sons on average. As a result, male descendants of high-status males account for a disproportionately large share of the male population in later generations. In China and elsewhere, patrilineal kin network characteristics influence individuals’ life chances; effects of a male founder’s characteristics on patrilineage size many generations later thus represent an indirect channel of status transmission that has not been considered previously.

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The Effects of Cash Transfer Fertility Incentives and Parental Leave Benefits on Fertility and Labor Supply: Evidence from Two Natural Experiments

Xiaoling Lim Ang
Journal of Family and Economic Issues, June 2015, Pages 263-288

Abstract:
This paper examined the labor supply and fertility effects of fertility incentives by making use of two major policy changes that occurred in Canada over the past 25 years: the Quebec Parental Insurance Program which provided generous parental leave benefits, and the series of cash-transfer fertility incentives introduced in Quebec in the 1980s. The empirical work for these projects was conducted using confidential versions of the Canadian Census and the Labour Force Surveys on-site at Statistics Canada. I found that while increases in the generosity of parental leave benefits substantially increased the birth rate and induced increases in labor supply among women of childbearing age, cash-transfer fertility incentives only slightly increased birth rates and decreased female labor supply. The net government cost of each additional birth due to an increase in the generosity of parental leave programs was $15,828 in 2008 Canadian dollars, whereas the net government cost of an additional birth due to cash-transfer fertility incentives was $223,625 in 2008 Canadian dollars. Therefore, paid parental leave is a low-cost way to increase fertility whereas the price per additional birth due to cash-transfer fertility incentives is quite high.

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Pubertal Development and Sexual Intercourse Among Adolescent Girls: An Examination of Direct, Mediated, and Spurious Pathways

Jukka Savolainen et al.
Youth & Society, July 2015, Pages 520-538

Abstract:
There are strong reasons to assume that early onset of puberty accelerates coital debut among adolescent girls. Although many studies support this assumption, evidence regarding the putative causal processes is limited and inconclusive. In this research, longitudinal data from the 1986 Northern Finland Birth Cohort Study (N = 2,596) were used to address three theoretical explanations: (a) a direct effect premised on biological processes, (b) a mediated path based on social psychological processes, and (c) a spurious effect derived from the evolutionary theory of socialization. In support of the social psychological pathway, the negative association between age at menarche and coital status at age 15 was almost fully mediated by differential social exposure — an empirical construct measuring involvement in high-risk social contexts.

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How Many More Missing Women? Excess Female Mortality and Prenatal Sex Selection, 1970–2050

John Bongaarts & Christophe Guilmoto
Population and Development Review, June 2015, Pages 241–269

Abstract:
Sex-based discrimination has resulted in severe demographic imbalances between males and females, culminating in a large number of “missing women” in several countries around the world. We provide new estimates and projections of the number of missing females and of the roles played by prenatal and postnatal factors in this imbalance. We estimate time series of the number of missing females, the number of excess female deaths, and the number of missing female births for the world and selected countries. Estimates are provided for 1970–2010 and projections are made from 2010 to 2050. We show that the estimates of these different indicators are consistent with one another and account for the dynamics of the population of missing females over time. We conclude that the number of missing females has steadily risen in the past decades, reaching 126 million in 2010, and the number is expected to peak at 150 million in 2035. Excess mortality was the dominant cause of missing females in the past, and this is expected to remain the case in future decades in spite of the recent rise of prenatal sex selection. The annual number of newly missing females reached 3.4 million in 2010 and is expected to remain above 3 million every year until 2050.

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State Abortion Context and U.S. Women's Contraceptive Choices, 1995–2010

Josephine Jacobs & Maria Stanfors
Perspectives on Sexual and Reproductive Health, June 2015, Pages 71–82

Context: The number of women in the United States exposed to restrictive abortion policies has increased substantially over the past decade. It is not well understood whether and how women adjust their contraceptive behavior when faced with restrictive abortion contexts.

Methods: Data from 14,523 women aged 15–44 were drawn from the 1995 and 2010 cycles of the National Survey of Family Growth. A difference-in-differences approach was employed to examine the relationship between state-level changes in women's access to abortion and their contraceptive choices. Multinomial logistic regression analysis was used to determine the relative risk of using highly effective or less effective methods rather than no method for women exposed to varying levels of restrictive abortion contexts.

Results: Women who lived in a state where abortion access was low were more likely than women living in a state with greater access to use highly effective contraceptives rather than no method (relative risk ratio, 1.4). Similarly, women in states characterized by high abortion hostility (i.e., states with four or more types of restrictive policies in place) were more likely to use highly effective methods than were women in states with less hostility (1.3). The transition to a more restrictive abortion context was not associated with women's contraceptive behavior, perhaps because states that introduced restrictive abortion legislation between 1995 and 2010 already had significant limitations in place.

Conclusions: To prevent unwanted pregnancies, it is important to ensure access to highly effective contraceptive methods when access to abortions is limited.

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The Labor Supply Effects of Delayed First Birth

Jane Leber Herr
American Economic Review, May 2015, Pages 630-637

Abstract:
In this paper I compare the relationship between first-birth timing and post-birth labor supply for high school and college graduate mothers. Given that pre-birth wages are increasing in fertility delay, the rising opportunity cost of time would suggest that among both groups, later mothers work more. Yet I only find this pattern for high school graduates. For college graduates, I instead find that there is a strong U-shaped pattern between hours worked within motherhood, and the career timing of first birth.

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Does natural selection favour taller stature among the tallest people on earth?

Gert Stulp et al.
Proceedings of the Royal Society: Biological Sciences, 7 May 2015

Abstract:
The Dutch are the tallest people on earth. Over the last 200 years, they have grown 20 cm in height: a rapid rate of increase that points to environmental causes. This secular trend in height is echoed across all Western populations, but came to an end, or at least levelled off, much earlier than in The Netherlands. One possibility, then, is that natural selection acted congruently with these environmentally induced changes to further promote tall stature among the people of the lowlands. Using data from the LifeLines study, which follows a large sample of the population of the north of The Netherlands (n = 94 516), we examined how height was related to measures of reproductive success (as a proxy for fitness). Across three decades (1935–1967), height was consistently related to reproductive output (number of children born and number of surviving children), favouring taller men and average height women. This was despite a later age at first birth for taller individuals. Furthermore, even in this low-mortality population, taller women experienced higher child survival, which contributed positively to their increased reproductive success. Thus, natural selection in addition to good environmental conditions may help explain why the Dutch are so tall.

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How Much Can Expanding Access to Long-Acting Reversible Contraceptives Reduce Teen Birth Rates?

Jason Lindo & Analisa Packham
NBER Working Paper, June 2015

Abstract:
Despite a near-continuous decline over the past 20 years, the teen birth rate in the United States continues to be higher than that of other developed countries. Given that over three- quarters of teen births are unintended at conception and that over a third of unplanned births are to women using contraception, many have advocated for promoting the use of long-acting reversible contraceptives (LARCs), which are more effective at preventing pregnancy than more commonly used contraceptives. In order to speak to the degree to which increasing access to LARCs can reduce teen birth rates, this paper analyzes the first large-scale policy intervention to promote and improve access to LARCs in the United States: Colorado’s Family Planning Initiative. We estimate its effects using a difference-in-differences approach, comparing the changes in teen birth rates in Colorado counties with Title X clinics (which received funding) to the changes observed in other US counties with Title X clinics. The results of this analysis indicate that the $23 million program reduced the teen birth rate by approximately 5% in the four years following its implementation, providing support for the notion that increasing access to LARCs is a mechanism through which policy can reduce teenage childbearing.

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Repeat Abortions in New York City, 2010

Amita Toprani
Journal of Urban Health, June 2015, Pages 593-603

Abstract:
This study aims to describe factors associated with the number of past abortions obtained by New York City (NYC) abortion patients in 2010. We calculated rates of first and repeat abortion by age, race/ethnicity, and neighborhood-level poverty and the mean number of self-reported past abortions by age, race/ethnicity, neighborhood-level poverty, number of living children, education, payment method, marital status, and nativity. We used negative binomial regression to predict number of past abortions by patient characteristics. Of the 76,614 abortions reported for NYC residents in 2010, 57 % were repeat abortions. Repeat abortions comprised >50 % of total abortions among the majority of sociodemographic groups we examined. Overall, mean number of past abortions was 1.3. Mean number of past abortions was higher for women aged 30–34 years (1.77), women with ≥5 children (2.50), and black non-Hispanic women (1.52). After multivariable regression, age, race/ethnicity, and number of children were the strongest predictors of number of past abortions. This analysis demonstrates that, although socioeconomic disparities exist, all abortion patients are at high risk for repeat unintended pregnancy and abortion.

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The Relationship Between Academic Achievement And Nonmarital Teenage Childbearing: Evidence from the Panel Study of Income Dynamics

Cary Lou & Adam Thomas
Perspectives on Sexual and Reproductive Health, June 2015, Pages 91–98

Context: Females who do well in school are less likely than those who do poorly to experience a nonmarital teenage birth. However, little is known about which dimensions of academic achievement are the most strongly related to teenage childbearing, or about whether the relationship between achievement and childbearing varies according to the presence of other behavioral problems.

Methods: Individual-level and family-level data from the Panel Study of Income Dynamics, combined with information on contextual state-level economic and policy measures, were used to study nonmarital childbearing between the ages of 16 and 19 among 701 females who turned 16 between 2000 and 2007. Multivariate logistic regression analyses examined the relationship between the probability of nonmarital teenage childbearing and age-standardized scores on academic assessments of letter-word identification, passage comprehension and applied problem-solving ability.

Results: Scores on the passage comprehension and applied problem-solving subtests were strongly associated with the probability of experiencing a nonmarital teenage birth among respondents who had relatively few behavioral problems. For this group, an increase of one standard deviation in the score on either assessment was associated with a reduction of about 50% in the risk of experiencing a nonmarital teenage birth. However, no evidence was found of an equivalent relationship among respondents with more pronounced behavioral problems or for the letter-word identification assessment.

Conclusions: Future research should continue to explore the possibility that improvements in academic achievement may help to reduce the rate of nonmarital teenage childbearing.

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Fitness Consequences of Advanced Ancestral Age over Three Generations in Humans

Adam Hayward, Virpi Lummaa & Georgii Bazykin
PLoS ONE, June 2015

Abstract:
A rapid rise in age at parenthood in contemporary societies has increased interest in reports of higher prevalence of de novo mutations and health problems in individuals with older fathers, but the fitness consequences of such age effects over several generations remain untested. Here, we use extensive pedigree data on seven pre-industrial Finnish populations to show how the ages of ancestors for up to three generations are associated with fitness traits. Individuals whose fathers, grandfathers and great-grandfathers fathered their lineage on average under age 30 were ~13% more likely to survive to adulthood than those whose ancestors fathered their lineage at over 40 years. In addition, females had a lower probability of marriage if their male ancestors were older. These findings are consistent with an increase of the number of accumulated de novo mutations with male age, suggesting that deleterious mutations acquired from recent ancestors may be a substantial burden to fitness in humans. However, possible non-mutational explanations for the observed associations are also discussed.

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Selection criteria in the search for a sperm donor: Behavioural traits versus physical appearance

Stephen Whyte & Benno Torgler
Journal of Bioeconomics, July 2015, Pages 151-171

Abstract:
Despite extensive literature on female mate choice, empirical evidence on women’s mating preferences in the search for a sperm donor is scarce, even though this search, by isolating a male’s genetic impact on offspring from other factors like paternal investment, offers a naturally ”controlled” research setting. In this paper, we work to fill this void by examining the rapidly growing online sperm donor market, which is raising new challenges by offering women novel ways to seek out donor sperm. We not only identify individual factors that influence women’s mating preferences but find strong support for the proposition that behavioural traits (inner values) are more important in these choices than physical appearance (exterior values). We also report evidence that physical factors matter more than resources or other external cues of material success, perhaps because the relevance of good character in donor selection is part of a female psychological adaptation throughout evolutionary history. The lack of evidence on a preference for material resources, on the other hand, may indicate the ability of peer socialization and better access to resources to rapidly shape the female decision process. Overall, the paper makes useful contributions to both the literature on human behaviour and that on decision-making in extreme and highly important situations.

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Woman's body symmetry and oxidative stress in the first trimester of pregnancy

Agnieszka Żelaźniewicz, Judyta Nowak & Bogusław Pawłowski
American Journal of Human Biology, forthcoming

Objectives: High level of oxidative stress (OS) during the first weeks of pregnancy is related to many serious pregnancy complications. Previous studies showed that body fluctuating asymmetry (FA) is related to OS level in men, suggesting that FA is a marker of oxidative balance in an individual. The aim of this study was to analyze if body FA was related to the level of biomarkers of OS in the first trimester of pregnancy.

Methods: The sample included 34 women in the first trimester of pregnancy, not smoking, and not exposed to toxins in their work environment. The composite FA and levels of two biomarkers of OS, 8-iso-ProstaglandinF2α (an indicator of oxidative damage to lipids) and 8-OH-dG (an indicator of oxidative damage to DNA) were measured. Factors that may affect the level of OS (vitamin supplementation, age, smoking, alcohol drinking, physical activity, and health condition) were controlled.

Results: The levels of OS markers in the first trimester of pregnancy correlated positively with women's FA (r = 0.52, P = 0.002 for 8-OH-dG; r = 0.50; P = 0.003 for 8-iso-PGF2α level) and positively with body height (r = 0.37, P = 0.03 for 8-OH-dG level).

Conclusion: The level of OS is likely to be a substantial and important fitness trait, and FA may convey information on the level of OS in women. The result confirms that FA is an indicator of biological condition, as suggested by an evolutionary approach to morphological human traits perceived as attractive.

By KEVIN LEWIS | 09:00:00 AM

Wednesday, June 24, 2015

On a budget

Explaining Systematic Bias and Nontransparency in U.S. Social Security Administration Forecasts

Konstantin Kashin, Gary King & Samir Soneji
Political Analysis, forthcoming

Abstract:
The accuracy of U.S. Social Security Administration (SSA) demographic and financial forecasts is crucial for the solvency of its Trust Funds, other government programs, industry decision-making, and the evidence base of many scholarly articles. Because SSA makes public insufficient replication information and uses antiquated statistical forecasting methods, no external group has ever been able to produce fully independent forecasts or evaluations of policy proposals to change the system. Yet, no systematic evaluation of SSA forecasts has ever been published by SSA or anyone else - until a companion paper to this one. We show that SSA's forecasting errors were approximately unbiased until about 2000, but then began to grow quickly, with increasingly overconfident uncertainty intervals. Moreover, the errors are largely in the same direction, making the Trust Funds look healthier than they are. We extend and then explain these findings with evidence from a large number of interviews with participants at every level of the forecasting and policy processes. We show that SSA's forecasting procedures meet all the conditions the modern social-psychology and statistical literatures demonstrate make bias likely. When those conditions mixed with potent new political forces trying to change Social Security, SSA's actuaries hunkered down, trying hard to insulate their forecasts from strong political pressures. Unfortunately, this led the actuaries into not incorporating the fact that retirees began living longer lives and drawing benefits longer than predicted. We show that fewer than 10% of their scorings of major policy proposals were statistically different from random noise as estimated from their policy forecasting error. We also show that the solution to this problem involves SSA or Congress implementing in government two of the central projects of political science over the last quarter century: (1) transparency in data and methods and (2) replacing with formal statistical models large numbers of ad hoc qualitative decisions too complex for unaided humans to make optimally.

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The Paradoxical Impact of Corporate Inversions on US Tax Revenue

Rita Nevada Gunn & Thomas Lys
Northwestern University Working Paper, April 2015

Abstract:
Do corporate inversions cost the US Treasury billions of dollars in tax revenue, justifying legislative responses and even strong-arming corporations from moving their tax domicile abroad? We show that corporate inversions not only do not appear to reduce, but, paradoxically, are even likely to increase tax collections by the US Treasury.

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The Effect of State Taxes on the Geographical Location of Top Earners: Evidence from Star Scientists

Enrico Moretti & Daniel Wilson
NBER Working Paper, April 2015

Abstract:
Using data on the universe of U.S. patents filed between 1976 and 2010, we quantify how sensitive is migration by star scientists to changes in personal and business tax differentials across states. We uncover large, stable, and precisely estimated effects of personal and corporate taxes on star scientists' migration patterns. The long run elasticity of mobility relative to taxes is 1.6 for personal income taxes, 2.3 for state corporate income tax and -2.6 for the investment tax credit. The effect on mobility is small in the short run, and tends to grow over time. We find no evidence of pre-trends: Changes in mobility follow changes in taxes and do not precede them. Consistent with their high income, star scientists migratory flows are sensitive to changes in the 99th percentile marginal tax rate, but are insensitive to changes in taxes for the median income. As expected, the effect of corporate income taxes is concentrated among private sector inventors: no effect is found on academic and government researchers. Moreover, corporate taxes only matter in states where the wage bill enters the state's formula for apportioning multi-state income. No effect is found in states that apportion income based only on sales (in which case labor's location has little or no effect on the tax bill). We also find no evidence that changes in state taxes are correlated with changes in the fortunes of local firms in the innovation sector in the years leading up to the tax change. Overall, we conclude that state taxes have significant effect of the geographical location of star scientists and possibly other highly skilled workers. While there are many other factors that drive where innovative individuals and innovative companies decide to locate, there are enough firms and workers on the margin that relative taxes matter.

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The Welfare Effects of Temporary Tax Cuts and Subsidies: Theory, Estimation, and Applications

Mark Phillips
Economic Inquiry, forthcoming

Abstract:
This article presents a tractable and intuitive theory on the welfare effects of temporary tax cuts and subsidies, fiscal policies that I generically term "holidays." The Kaldor-Hicks efficiency effects are theoretically ambiguous, with competing pro- and anti-efficiency effects on newly incentivized versus time-shifted purchases. To rectify this ambiguity I derive expressions for the welfare effects that are consistent with constant elasticity assumptions and depend only upon readily and reliably observed information. To demonstrate the framework's broad applicability, I analyze two different policies: the 2009 Cash for Clunkers program and states' sales tax holidays. I estimate that both policies generated substantial deadweight loss.

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The Macroeconomic Effects of Public Investment: Evidence from Advanced Economies

Abdul Abiad, Davide Furceri & Petia Topalova
IMF Working Paper, May 2015

Abstract:
This paper provides new evidence of the macroeconomic effects of public investment in advanced economies. Using public investment forecast errors to identify the causal effect of government investment in a sample of 17 OECD economies since 1985 and model simulations, the paper finds that increased public investment raises output, both in the short term and in the long term, crowds in private investment, and reduces unemployment. Several factors shape the macroeconomic effects of public investment. When there is economic slack and monetary accommodation, demand effects are stronger, and the public-debt-to-GDP ratio may actually decline. Public investment is also more effective in boosting output in countries with higher public investment efficiency and when it is financed by issuing debt.

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The Consequences of an Unknown Debt Target

Alexander Richter & Nathaniel Throckmorton
European Economic Review, forthcoming

Abstract:
Several proposals to reduce U.S. debt reveal large differences in their targets. We examine how an unknown debt target affects economic activity using a real business cycle model in which Bayesian households learn about a state-dependent debt target in an endogenous tax rule. Recent papers use stochastic volatility shocks to study fiscal uncertainty. In our setup, the fiscal rule is time-varying due to unknown changes in the debt target. Households infer the current debt target from a noisy tax rule and jointly estimate the transition probabilities. Three key findings emerge from our analysis: (1) Limited information about the debt target amplifies the effect of tax shocks through changes in expected tax rates; (2) The welfare losses are an order of magnitude larger when both the debt target state and transition matrix are unknown than when only the debt target state is unknown to households; (3) An unknown debt target likely reduced the stimulative effect of the ARRA and uncertainty about the sunset provision in the Bush tax cuts may have slowed the recovery and led to welfare losses.

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Identifying the Elasticity of Taxable Income

Sarah Burns & James Ziliak
Economic Journal, forthcoming

Abstract:
We use matched panels from the Current Population Survey along with a grouping instrumental variables estimator to provide new estimates of the elasticity of taxable income. Our identification strategy exploits the fact that federal and state tax reforms over the past three decades have differentially affected cohorts across states and over time. We find that the elasticity is in the range of 0.4-0.55. The implication of our new estimates for tax policy is that the revenue-maximizing tax rate is nearly 30 percentage points lower than that obtained when we use the typical identification strategy in the literature.

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At a Loss: The Real and Reporting Elasticity of Taxable Income

Elena Patel, Nathan Seegert & Matthew Grady Smith
U.S. Department of Treasury Working Paper, May 2015

Abstract:
We provide evidence that the corporate tax distorts firms' behavior, leading them to report 8 percent less taxable income, such that the elasticity of corporate taxable income is 0.51. We find that this distortion is due to reporting responses, such as profit shifting, rather than real economic activity, such as capital investment. We exploit a particular feature of the U.S. corporate tax system that allows us to use a control group to estimate these firm responses. Relative to methods without a control group, this method corrects for a downward bias, produces estimates with less variance, and decreases the sensitivity to tuning parameters. Finally, we provide practical guidelines for the bias and variance tradeoff when estimating behavioral responses using bunching from discontinuities.

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The Crucible of Debt and Welfare Spending: Evidence from State-level Welfare Expenditures in the United States

Eloy Fisher
Review of Political Economy, Spring 2015, Pages 201-217

Abstract:
This paper argues that financial pressures affect state public welfare expenditures, controlling for economic effects, financial constraints faced by state administrations and general economic conditions. It develops a series of panel models for 17 states with the largest muni markets (representing 71 per cent of all state-level public welfare spending in the US or $326 billion) from 1998 to 2010. As economic conditions worsen, government revenues decline. Coupled with marginal increases in social spending, state governments face higher debt and binding budget constraints. As investors realize the situation, muni bond prices drop, yields increase and higher finance costs compel state governments to decrease expenditures. These cuts are generally focused on public welfare expenditures. Between 1998 and 2010, one percentage point increases in short (1y), medium (5y) and longer (10y) bonds yields are associated with 0.01 per cent, 0.03 per cent and 0.04 per cent decreases in public welfare expenditures relative to gross state output.

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Public Opinion, Policy Tools, and the Status Quo: Evidence from a Survey Experiment

Jake Haselswerdt & Brandon Bartels
Political Research Quarterly, forthcoming

Abstract:
The method in which a government policy is delivered - for example, as a tax break rather than a direct payment - could potentially have significant implications for how the public views that policy. This is an especially important consideration given the importance of indirect policy approaches like tax breaks to modern American governance. We employ a series of survey experiments to test whether citizens react more favorably to tax breaks than to equivalent spending programs. We find that citizens prefer tax breaks, particularly when they are the established means of intervention. When direct intervention is the status quo, or when any government involvement on the issue is unfamiliar, the preference is reduced. We also find an interactive effect for ideology, with conservatives strongly preferring tax breaks to direct intervention, though the effect is still present among liberals. This study establishes the importance of delivery mechanism to citizens' policy preferences and suggests that the policy status quo structures citizens' perceptions of policy proposals.

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Shaming Tax Delinquents: Theory and Evidence from a Field Experiment in the United States

Ricardo Perez-Truglia & Ugo Troiano
NBER Working Paper, June 2015

Abstract:
We study shaming as a policy to improve tax debt collection. First, we show that when the tax agency focuses on private welfare and revenues, the optimal policy may involve a mix of financial and shaming penalties. Second, we present evidence from a field experiment with 34,344 tax delinquents who owed half a billion dollars in three U.S. states. We find that increasing the salience of financial and shaming penalties reduces tax delinquency. We also provide suggestive evidence that the effectiveness of these penalties depends on the garnishability of the debtor's income as in the model.

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Directed giving enhances voluntary giving to government

Sherry Xin Li et al.
Economics Letters, August 2015, Pages 51-54

Abstract:
Giving to private charities is commonplace, and the chance to direct one's gift is a standard fundraising strategy. But voluntary donations to government organizations are less widely known, and the impact of the opportunity to direct a gift is unexplored. We investigate the effect of directed giving on voluntary contributions to government organizations using a "real donation" lab experiment. We compare giving to the US federal general revenue fund with directed giving to particular government organizations. Directed giving more than doubles both the likelihood of giving and the size of contributions, indicating that individuals are responsive to the opportunity to direct their gifts in the government context. Our results suggest that the revenue-raising potential of directed voluntary gifts to government may be underutilized.

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The Effect of Fiscal Decentralization on the Financial Condition of Municipal Government

Samuel Stone
International Journal of Public Administration, Spring 2015, Pages 453-460

Abstract:
This study examines the effect of fiscal decentralization between states and their local governments on the financial condition of municipal governments. There are strong theoretical arguments on both sides of the federalism debate about the benefits for and against decentralization. Most of the research in this area investigates economic and social welfare consequences of fiscal decentralization. There is limited research, however, on the effects of fiscal decentralization on the financial health of local governments. Using data from the nation's 150 largest cities, this study finds that intrastate fiscal decentralization results in weaker financial condition for municipalities in those states.

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Political Bonds: Political Hazards and the Choice of Municipal Financial Instruments

Abhay Aneja, Marian Moszoro & Pablo Spiller
NBER Working Paper, May 2015

Abstract:
We study the link between the choice of rule-based public contracts and political hazards using the municipal bond market. While general obligation bonds are serviced from all municipal revenue streams and offer elected officials financial flexibility, revenue bonds limit the discretion that political agents have in repaying debt as well as the use of revenues from the projects financed by the debt. We predict that public officials choose revenue bonds when elections are very contested to signal trustworthiness and transparency in contracting to the voter. We test this hypothesis on municipal finance data that includes 6,500 bond issuances nationwide as well as election data on over 400 cities over 20 years. We provide evidence that in politically contested cities, mayors are more likely to issue revenue bonds. The correlation is economically significant: a close victory margin of winning candidates and more partisan swings increases the probability of debt being issued as a revenue bond by 3-15% and the probability of issuing bonds through competitive bids by 7%. We test a few additional hypotheses that strengthen the argument that the choice of revenue bonds is a political risk adaptation of public agents so as to signal commitment and lower the likelihood of successful political challenges of misuse of funds.

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Does a Common Set of Accounting Standards Affect Tax-Motivated Income Shifting for Multinational Firms?

Lisa De Simone
Journal of Accounting & Economics, forthcoming

Abstract:
I test whether adoption of IFRS by individual affiliates of multinational entities (MNEs) for unconsolidated financial reporting facilitates tax-motivated income shifting. MNEs often justify transfer prices to tax authorities by benchmarking intercompany profit allocations against a range of book profit rates reported by economically comparable, independent firms that use similar accounting standards. Additional qualifying benchmark firms resulting from IFRS adoption could allow managers to support more tax-advantaged transfer prices. Using a database of European unconsolidated financial and ownership information over 2003 to 2012, I first document an increase in the arm's length range of book profits reported by potential IFRS benchmark firms following affiliate adoption of IFRS. I then estimate a statistically and economically significant 11.3 percent tax-motivated change in reported book pre-tax profits following affiliate IFRS adoption, relative to pre-adoption and non-adopter affiliate-years.

By KEVIN LEWIS | 09:00:00 AM

Tuesday, June 23, 2015

Out of the darkness

Nazi indoctrination and anti-Semitic beliefs in Germany

Nico Voigtländer & Hans-Joachim Voth
Proceedings of the National Academy of Sciences, forthcoming

Abstract:
Attempts at modifying public opinions, attitudes, and beliefs range from advertising and schooling to “brainwashing.” Their effectiveness is highly controversial. In this paper, we use survey data on anti-Semitic beliefs and attitudes in a representative sample of Germans surveyed in 1996 and 2006 to show that Nazi indoctrination – with its singular focus on fostering racial hatred – was highly effective. Between 1933 and 1945, young Germans were exposed to anti-Semitic ideology in schools, in the (extracurricular) Hitler Youth, and through radio, print, and film. As a result, Germans who grew up under the Nazi regime are much more anti-Semitic than those born before or after that period: the share of committed anti-Semites, who answer a host of questions about attitudes toward Jews in an extreme fashion, is 2–3 times higher than in the population as a whole. Results also hold for average beliefs, and not just the share of extremists; average views of Jews are much more negative among those born in the 1920s and 1930s. Nazi indoctrination was most effective where it could tap into preexisting prejudices; those born in districts that supported anti-Semitic parties before 1914 show the greatest increases in anti-Jewish attitudes. These findings demonstrate the extent to which beliefs can be modified through policy intervention. We also identify parameters amplifying the effectiveness of such measures, such as preexisting prejudices.

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Us and Them: Black-White Relations in the Wake of Hispanic Population Growth

Maria Abascal
American Sociological Review, forthcoming

Abstract:
How will Hispanic population growth affect black-white relations in the United States? Research on intergroup relations operates within a two-group paradigm, furnishing few insights into multi-group contexts. This study is based on an original experiment that combines behavioral game and survey methods to evaluate the impact of perceived Hispanic growth on attitudes and behavior. Results reveal opposite reactions among blacks and whites. Whites in the baseline condition contribute comparable amounts to black and white recipients in a dictator game, whereas whites who first read about Hispanic growth contribute more to white recipients than to black ones. By contrast, blacks in the baseline condition contribute more to black recipients than to white ones, whereas blacks who first read about Hispanic growth contribute comparable amounts to black and white recipients. Patterns of identification mirror patterns of contributions: whites exposed to Hispanic growth identify relatively more strongly with their racial group than with their national group, whereas blacks exposed to Hispanic growth identify relatively more strongly with their national group than with their racial group. Together, these results suggest that people respond to the growth of a third group by prioritizing the most privileged identity to which they can plausibly lay claim and which also excludes the growing group.

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Fair Housing Enforcement in the South and Non-South

Charles Bullock, Eric Wilk & Charles Lamb
Social Science Quarterly, forthcoming

Objective: We compare outcomes in racial discrimination fair housing complaints processed by southern state and local civil rights agencies to those handled by state and local agencies outside the South and the federal agency, HUD (Department of Housing and Urban Development).

Methods: Based on data obtained directly from HUD, we rely on a fixed effects logistic regression model with cluster-correlated standard errors.

Results: First, southern local agencies are significantly more likely to provide outcomes favorable to complainants in racial discrimination fair housing cases than are local agencies outside the South. Second, state and local agencies in the Deep South provide favorable outcomes to the same extent as their nonsouthern counterparts. Third, southern local agencies are more likely to provide favorable outcomes than is HUD, whereas southern state agencies provide favorable outcomes at roughly the same rate as HUD. Variations within the South partially explain these findings.

Conclusion: We find evidence of progressive changes in southern fair housing enforcement, although those changes occur in an uneven fashion depending on the state or locality.

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Are People Willing to Pay for Less Segregation? Evidence from U.S. Internal Migration

Junfu Zhang & Liang Zheng
Regional Science and Urban Economics, July 2015, Pages 97–112

Abstract:
It is difficult to determine whether racial housing segregation is socially desirable, because segregation has some effects that are hard to measure. To overcome this challenge, we estimate a migration choice model to measure the willingness to pay for reduced segregation. The key idea underlying our empirical approach is that if segregation is undesirable, migrants should be willing to give up some earnings to avoid living in segregated cities. Using decennial census data from 1980 to 2000, we provide evidence that segregation is an urban disamenity. It is shown that both black and white migrants prefer to live in less segregated cities. For example, for a one percentage point reduction in the dissimilarity index, the estimated marginal willingness to pay of blacks is $436 (in 1999 dollars) in 2000. Among whites, this marginal willingness to pay is $301.

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Cause-of-Death Disparities in the African Diaspora: Exploring Differences Among Shared-Heritage Populations

Ian Hambleton et al.
American Journal of Public Health, July 2015, Pages S491-S498

Objectives: We investigated changes in life expectancy (LE) and cause-specific mortality over time, directly comparing African-descent populations in the United States and the Caribbean.

Methods: We compared LE at birth and cause-specific mortality in 6 disease groups between Caribbean countries with a majority (> 90%) African-descent population and US African Americans.

Results: The LE improvement among African Americans exceeded that of Afro-Caribbeans so that the LE gap, which favored the Caribbean population by 1.5 years in 1990, had been reversed by 2009. This relative improvement among African Americans was mainly the result of the improving mortality experience of African American men. Between 2000 and 2009, Caribbean mortality rates in 5 of the 6 disease groups increased relative to those of African Americans. By 2009, mortality from cerebrovascular diseases, cancers, and diabetes was higher in Afro-Caribbeans relative to African Americans, with a diabetes mortality rate twice that of African Americans and 4 times that of White Americans.

Conclusions: The Caribbean community made important mortality reductions between 2000 and 2009, but this progress fell short of African American health improvements in the same period, especially among men.

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Emergent Ghettos: Black Neighborhoods in New York and Chicago, 1880–1940

John Logan, Weiwei Zhang & Miao David Chunyu
American Journal of Sociology, January 2015, Pages 1055-1094

Abstract:
This article studies in detail the settlement patterns of blacks in the urban North from before the Great Migration and through 1940, focusing on the cases of New York and Chicago. It relies on new and rarely used data sources, including census geocoded microdata from the 1880 census (allowing segregation patterns and processes to be studied at any geographic scale) and census data for 1900–1940 aggregated to enumeration districts. It is shown that blacks were unusually highly isolated in 1880 given their small share of the total population and that segregation reached high levels in both cities earlier than previously reported. Regarding sources of racial separation, neither higher class standing nor northern birth had much effect on whether blacks lived within or outside black neighborhoods in 1880 or 1940, and it is concluded that the processes that created large black ghettos were already in place several decades before 1940.

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Estimating Slavery Reparations: Present Value Comparisons of Historical Multigenerational Reparations Policies

Thomas Craemer
Social Science Quarterly, June 2015, Pages 639–655

Objective: I investigate two problems regarding multigenerational reparations: legal obstacles caused by the passage of time and economic difficulties in obtaining realistic present value estimates.

Methods: To investigate legal precedents, I trace the French spoliation claims, which were paid over a period of 123 years, and Haiti's independence debt, which was paid over 156 years. To investigate present value estimation, I compare existing slavery reparations estimates based on slave prices as expected future income to alternative estimates based on the number of unremunerated work hours multiplied with historical free labor market wages.

Results: I estimate the present value of U.S. slave labor in 2009 dollars to range from $5.9 to $14.2 trillion. Historical precedents suggest that political rather than narrowly legal processes will determine any ultimate claims.

Conclusions: Neither problems nor solutions associated with multigenerational reparations are new. New is the estimation method and the resulting upward correction of reparations estimates.

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The “Dream of Black Metropolis” in the Early Twentieth-Century United States: Racial Segregation, Regional Location, and Black Population Size

Robert Boyd
Sociological Spectrum, May/June 2015, Pages 271-285

Abstract:
The present study uses Census data on occupations to examine the opportunity structures of Black Metropolises in the early twentieth century. The Black Metropolises with the highest odds of blacks’ employment in medicine, retailing, and social work were those with the highest black-white segregation levels, implying that a racially segregated Black Metropolis promoted blacks’ employment in occupations serving black clientele. In addition, the odds of blacks’ employment in many occupations were approximately equal in northern and southern Black Metropolises, casting doubt on the argument that the North was the more favorable region. Finally, when New York (Harlem) and Chicago (Bronzeville) are omitted, the odds of blacks’ employment in most occupations are unrelated to black population size, indicating that, outside the two largest Black Metropolises, additional numbers of blacks were of little consequence for the pursuit of the Dream of Black Metropolis.

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Parental Wealth and the Black–White Mobility Gap in the U.S.

Liana Fox
Review of Income and Wealth, forthcoming

Abstract:
Utilizing longitudinal data from the Panel Study of Income Dynamics (PSID), this paper examines the relationship between parental wealth and intergenerational income mobility for black and white families. I find that total parental wealth is positively associated with upward mobility for low-income white families, but is not associated with reduced likelihood of downward mobility for white families from the top half of the income distribution. Conversely, I find that total parental wealth does not have the same positive association for low-income black families, while home ownership may have negative associations with the likelihood of upward mobility for these families. However, for black families from the top half of the income distribution, home equity is associated with a decreased likelihood of downward mobility, suggesting a heterogeneous relationship between home ownership and mobility for black families.

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Infectious diseases, contamination rumors and ethnic violence: Regimental mutinies in the Bengal Native Army in 1857 India

Sunasir Dutta & Hayagreeva Rao
Organizational Behavior and Human Decision Processes, July 2015, Pages 36–47

Abstract:
The current paper connects anxiety about disease contamination to that about cultural contamination and the exclusionary behavior toward ethnic outgroups that it incites. We suggest that when individuals are exposed to disease fears, an epistemic groundwork is laid for construing outgroups as sources of contamination. We begin with a pilot experiment showing that contagious disease anxiety primes opposition to legalization of illegal aliens. We then analyze historical data about the diffusion of rumor-based ethnic violence, showing that Indian regiments of the East India Company were more likely to mutiny against their British officers if they had been exposed some months earlier to a cholera discourse. (These mutinies were proximally caused by acceptance of a rumor that the Company administration had violated a cultural taboo.) We discuss implications for studying the cognitive antecedents of the diffusion of beliefs and practices in organizations and in cultures.

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Race-Ethnicity, Poverty, Urban Stressors, and Telomere Length in a Detroit Community-based Sample

Arline Geronimus et al.
Journal of Health and Social Behavior, June 2015, Pages 199-224

Abstract:
Residents of distressed urban areas suffer early aging-related disease and excess mortality. Using a community-based participatory research approach in a collaboration between social researchers and cellular biologists, we collected a unique data set of 239 black, white, or Mexican adults from a stratified, multistage probability sample of three Detroit neighborhoods. We drew venous blood and measured telomere length (TL), an indicator of stress-mediated biological aging, linking respondents’ TL to their community survey responses. We regressed TL on socioeconomic, psychosocial, neighborhood, and behavioral stressors, hypothesizing and finding an interaction between poverty and racial-ethnic group. Poor whites had shorter TL than nonpoor whites; poor and nonpoor blacks had equivalent TL; and poor Mexicans had longer TL than nonpoor Mexicans. Findings suggest unobserved heterogeneity bias is an important threat to the validity of estimates of TL differences by race-ethnicity. They point to health impacts of social identity as contingent, the products of structurally rooted biopsychosocial processes.

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A Research Note on Trends in Black Hypersegregation

Douglas Massey & Jonathan Tannen
Demography, June 2015, Pages 1025-1034

Abstract:
In this note, we use a consistently defined set of metropolitan areas to study patterns and trends in black hypersegregation from 1970 to 2010. Over this 40-year period, 52 metropolitan areas were characterized by hypersegregation at one point or another, although not all at the same time. Over the period, the number of hypersegregated metropolitan areas declined by about one-half, but the degree of segregation within those areas characterized by hypersegregation changed very little. As of 2010, roughly one-third of all black metropolitan residents lived in a hypersegregated area.

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Exploring the Role of Ethnic Identity in Family Functioning among Low-Income Parents

Eliana Hurwich-Reiss et al.
Journal of Community Psychology, July 2015, Pages 545–559

Abstract:
The majority of research on ethnic identity (EI) has highlighted its role in mitigating risks associated with racial discrimination; however, discrimination is only one of many stressors that ethnic minority individuals face. The current study examined the relationships between EI, emotional distress, and the parent–child relationship among ethnically diverse, low-income parents. Results indicated significant associations between EI and emotional distress, and EI and the parent–child relationship for African American parents, but not for their Latino or European American counterparts. Furthermore, when examined separately by gender, stronger EI buffered the impact of economic hardship on emotional distress for African American fathers. The current study provides preliminary evidence that EI plays an important role in the lives of ethnically diverse parents who are facing economic hardship. Methods for embracing and fostering EI may be valuable to incorporate into therapeutic services and strength-based intervention programming, especially when serving low-income African American individuals.

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Linked Fate and Outgroup Perceptions: Blacks, Latinos, and the U.S. Criminal Justice System

Jon Hurwitz, Mark Peffley & Jeffery Mondak
Political Research Quarterly, forthcoming

Abstract:
Studies focusing on black–Latino intergroup perceptions in zero-sum environments (e.g., jobs) have found little perceived outgroup discrimination or a tendency for each group to perceive the injustices faced by the other group. In contrast, we examine the non-zero-sum criminal justice domain. Although we find some asymmetry — that is, blacks are somewhat more likely to see discrimination toward Latinos than vice-versa, we mainly find both groups acknowledge the discrimination faced by the other disadvantaged group, especially those who feel closely linked to the fate of their own group. Under such circumstances, blacks and Latinos recognize a common sense of deprivation and discrimination and are likely to regard the other group as facing comparable victimization, potentially seeing the other group as a coalition partner for remediating mutual concerns.

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Community Attraction and Avoidance in Chicago: What’s Race Got to Do with It?

Michael Bader & Maria Krysan
ANNALS of the American Academy of Political and Social Science, July 2015, Pages 261-281

Abstract:
We argue that the relative persistence of racial segregation is due, at least in part, to the process of residential search and the perceptions upon which those searches are based — a critical but often-ignored component of the residential sorting process. We examine where Chicago-area residents would “seriously consider” and “never consider” living, finding that community attraction and avoidance are highly racialized. Race most clearly shapes the residential perceptions and preferences of whites, and matters the least to blacks. Latinos would seriously consider moving to numerous neighborhoods, but controls for demographics and distance from the respondents’ home make Latino preferences much like those of whites. Critically, the geography of existing segregation begets further segregation: distance from current community significantly affects perceptions of the communities into which respondents might move. While neighborhood perception may cause persistent segregation, it may also offer hope for integration with appropriate policy interventions.

By KEVIN LEWIS | 09:00:00 AM


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