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Tuesday, August 11, 2015

Mouthing off

Fifty years of fat: News coverage of trends that predate obesity prevalence

Brennan Davis & Brian Wansink
BMC Public Health, July 2015

Background: Obesity prevalence has risen in fifty years. While people generally expect media mentions of health risks like obesity prevalence to follow health risk trends, food consumption trends may precede obesity prevalence trends. Therefore, this research investigates whether media mentions of food predate obesity prevalence.

Methods: Fifty years of non-advertising articles in the New York Times (and 17 years for the London Times) are coded for the mention of less healthy (5 salty and 5 sweet snacks) and healthy (5 fruits and 5 vegetables) food items by year and then associated with annual obesity prevalence in subsequent years. Time-series generalized linear models test whether food-related mentions predate or postdate obesity prevalence in each country.

Results: United States obesity prevalence is positively associated with New York Times mentions of sweet snacks (b = 55.2, CI = 42.4 to 68.1, p = .000) and negatively associated with mentions of fruits (b = −71.28, CI −91.5 to −51.1, p = .000) and vegetables (b = −13.6, CI = −17.5 to −9.6, p = .000). Similar results are found for the United Kingdom and The London Times. Importantly, the “obesity followed mentions” models are stronger than the “obesity preceded mentions” models.

Conclusions: It may be possible to estimate a nation’s future obesity prevalence (e.g., three years from now) based on how frequently national media mention sweet snacks (positively related) and vegetables or fruits (negatively related) today. This may provide public health officials and epidemiologists with new tools to more quickly assess the effectiveness of current obesity interventions based on what is mentioned in the media today.

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Lifetime Socioeconomic Status, Historical Context, and Genetic Inheritance in Shaping Body Mass in Middle and Late Adulthood

Hexuan Liu & Guang Guo
American Sociological Review, August 2015, Pages 705-737

Abstract:
This study demonstrates that body mass in middle and late adulthood is a consequence of the complex interplay among individuals’ genes, lifetime socioeconomic experiences, and the historical context in which they live. Drawing on approximately 9,000 genetic samples from the Health and Retirement Study, we first investigate how socioeconomic status (SES) over the life course moderates the impact of 32 established obesity-related genetic variants on body mass index (BMI) in middle and late adulthood. We then consider differences across birth cohorts in the genetic influence on BMI, and cohort variations in the moderating effects of life-course SES on the genetic influence. Our analyses suggest that persistently low SES over the life course or downward mobility (e.g., high SES in childhood but low SES in adulthood) amplify the genetic influence on BMI, and persistently high SES or upward mobility (e.g., low SES in childhood but high SES in adulthood) compensate for such influence. For more recent birth cohorts, the genetic influence on BMI becomes stronger, but the moderating effects of lifetime SES on the genetic influence are weaker compared to earlier cohorts. We discuss these findings in light of social changes during the obesity epidemic in the United States.

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Childhood Obesity and Cognitive Achievement

Nicole Black, David Johnston & Anna Peeters
Health Economics, September 2015, Pages 1082–1100

Abstract:
Obese children tend to perform worse academically than normal-weight children. If poor cognitive achievement is truly a consequence of childhood obesity, this relationship has significant policy implications. Therefore, an important question is to what extent can this correlation be explained by other factors that jointly determine obesity and cognitive achievement in childhood? To answer this question, we exploit a rich longitudinal dataset of Australian children, which is linked to national assessments in math and literacy. Using a range of estimators, we find that obesity and body mass index are negatively related to cognitive achievement for boys but not girls. This effect cannot be explained by sociodemographic factors, past cognitive achievement or unobserved time-invariant characteristics and is robust to different measures of adiposity. Given the enormous importance of early human capital development for future well-being and prosperity, this negative effect for boys is concerning and warrants further investigation.

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Body weight, mental health capital, and academic achievement

Joseph Sabia & Daniel Rees
Review of Economics of the Household, September 2015, Pages 653-684

Abstract:
Although obese students are more likely to exhibit the symptoms of depression than their slimmer counterparts and often do poorly in school, it is not clear whether these associations are spurious or causal in nature. Drawing on data from the National Longitudinal Study of Adolescent Health, we use an instrumental variables (IV) approach to distinguish between these hypotheses. IV estimates suggest that body weight leads to decreased self-esteem and increased depressive symptomatology among female, but not male, respondents. In addition, we find that body weight is negatively related to female academic achievement. Finally, we explore the degree to which the relationship between body weight and female academic achievement is explained by psychological wellbeing. We find that psychological wellbeing accounts for up to 30 % of this relationship.

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Leveraging the Happy Meal Effect: Substituting Food with Modest Non-Food Incentives Decreases Portion Size Choice

Martin Reimann, Antoine Bechara & Deborah MacInnis
Journal of Experimental Psychology: Applied, forthcoming

Abstract:
Despite much effort to decrease food intake by altering portion sizes, “super-sized” meals are the preferred choice of many. This research investigated the extent to which individuals can be subtly incentivized to choose smaller portion sizes. Three randomized experiments (two in the lab and one in the field) established that individuals’ choice of full-sized food portions is reduced when they are given the opportunity to choose a half-sized version with a modest non-food incentive. This substitution effect was robust across different non-food incentives, foods, populations, and time. Experiment 1 established the effect with children, using inexpensive headphones as non-food incentives. Experiment 2 — a longitudinal study across multiple days — generalized this effect with adults, using the mere chance to win either gift cards or frequent flyer miles as non-food incentives. Experiment 3 demonstrated the effect among actual restaurant customers who had originally planned to eat a full-sized portion, using the mere chance to win small amounts of money. Our investigation broadens the psychology of food portion choice from perceptual and social factors to motivational determinants.

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Visual Illusions and Inattention: Their Association with Adiposity Among Adolescent Girls

Lance Bauer
Appetite, December 2015, Pages 310–316

Abstract:
The Delboeuf concentric circle illusion is frequently invoked as an explanation for the hypothesized association between dinner plate size and overeating. We examined its association with adiposity among 162 girls, aged 14-18 years. We also examined the association of adiposity with neural and behavioral responses during a separate visual discrimination task. The analysis showed that girls with a body mass index percentile >=85, or with greater triceps skinfold thickness, exhibited less sensitivity to the Delboeuf illusion than girls with normal adiposity. The excess adiposity group also exhibited significantly smaller electroencephalographic responses and more errors during the separate visual discrimination task. In combination, the findings from the two tasks suggest that girls with an elevated body mass are less sensitive to visual cues in their environment. The implications of these findings for weight loss education should be considered.

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Obesity, Weight Loss, and Employment Prospects: Evidence from a Randomized Trial

Arndt Reichert
Journal of Human Resources, Summer 2015, Pages 759-810

Abstract:
This study presents credible estimates for the causal effect of BMI growth on employment among the obese. By exploring random assignment of a weight-loss intervention based on monetary rewards, I provide convincing evidence that weight loss positively affects the employment prospects of obese women but not of obese men. Consistent with this, significant effects of weight loss on proxy variables for labor productivity are found only for obese women.

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Parental Work Schedules and Child Overweight or Obesity: Does Family Structure Matter?

Daniel Miller & Jina Chang
Journal of Marriage and Family, forthcoming

Abstract:
The authors used longitudinal data from the Fragile Families and Child Wellbeing Study (N = 5,482) to investigate whether maternal and paternal work schedules affect child overweight or obesity. They took the novel step of examining whether this effect is consistent for children living in different family structures. Findings from child fixed effects models suggest that the probability of child overweight or obesity was higher for children living with mothers who worked standard shifts at a primary job and nonstandard shifts at a secondary job compared to children living with mothers who worked a standard shift at a primary job only. Fathers' work schedules were not associated with child overweight or obesity. Unexpectedly, maternal standard shift work at a primary job and nonstandard shift work at a secondary job was associated with overweight or obesity only among children living with married biological parents.

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An afternoon snack of berries reduces subsequent energy intake compared to an isoenergetic confectionary snack

Lewis James, Mark Funnell & Samantha Milner
Appetite, December 2015, Pages 132–137

Abstract:
Observational studies suggest that increased fruit and vegetable consumption can contribute to weight maintenance and facilitate weight loss when substituted for other energy dense foods. Therefore, the purpose of the present study was to assess the effect of berries on acute appetite and energy intake. Twelve unrestrained pre-menopausal women (age 21 ± 2 y; BMI 26.6 ± 2.6 kg∙m-2; body fat 23 ± 3 %) completed a familiarisation trial and two randomised experimental trials. Subjects arrived in the evening (∼5pm) and consumed an isoenergetic snack (65 kcal) of mixed berries (BERRY) or confectionary sweets (CONF). Sixty min later, subjects consumed a homogenous pasta test meal until voluntary satiation, and energy intake was quantified. Subjective appetite (hunger, fullness, desire to eat and prospective food consumption) was assessed throughout trials, and for 120 min after the test meal. Energy intake was less (P<0.001) after consumption of the BERRY snack (691 ± 146 kcal) than after the CONF snack (824 ± 172 kcal); whilst water consumption was similar (P=0.925). There were no trial (P>0.095) or interaction (P>0.351) effects for any subjective appetite ratings. Time taken to eat the BERRY snack (4.05 ± 1.12 min) was greater (P<0.001) than the CONF snack (0.93 ± 0.33 min). This study demonstrates that substituting an afternoon confectionary snack with mixed berries decreased subsequent energy intake at dinner, but did not affect subjective appetite. This dietary strategy could represent a simple method for reducing daily energy intake and aiding weight management.

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A Tailored Family-Based Obesity Intervention: A Randomized Trial

Rachael Taylor et al.
Pediatrics, August 2015, Pages 281-289

Objective: To determine whether a 2-year family-based intervention using frequent contact and limited expert involvement was effective in reducing excessive weight compared with usual care.

Methods: Two hundred and six overweight and obese (BMI ≥85th percentile) children aged 4 to 8 years were randomized to usual care (UC) or tailored package (TP) sessions at university research rooms. UC families received personalized feedback and generalized advice regarding healthy lifestyles at baseline and 6 months. TP families attended a single multidisciplinary session to develop specific goals suitable for each family, then met with a mentor each month for 12 months, and every third month for another 12 months to discuss progress and provide support. Outcome measurements (anthropometry, questionnaires, dietary intake, accelerometry) were obtained at 0, 12, and 24 months.

Results: BMI at 24 months was significantly lower in TP compared with UC children (difference, 95% confidence interval: –0.34, –0.65 to –0.02), as was BMI z score (–0.12, –0.20 to –0.04) and waist circumference (–1.5, –2.5 to –0.5 cm). TP children consumed more fruit and vegetables (P = .038) and fewer noncore foods (P = .020) than UC children, and fewer noncore foods were available in the home (P = .002). TP children were also more physically active (P = .035). No differences in parental feeding practices, parenting, quality of life, child sleep, or behavior were observed.

Conclusions: Frequent, low-dose support was effective for reducing excessive weight in predominantly mild to moderately overweight children over a 2-year period. Such initiatives could feasibly be incorporated into primary care.

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Calorie Label Formats: Using Numbers or Traffic Lights to Reduce Lunch Calories

Eric VanEpps, Julie Downs & George Loewenstein
Journal of Public Policy & Marketing, forthcoming

Abstract:
In a field experiment involving online workplace lunch orders, this study examines the impact of numeric and traffic light calorie labels on calorie intake. Employees of a large corporation ordered lunches through a website of the authors' design, on which they were presented menus with numeric calorie labels, traffic light labels, or both together, and the calorie content of their lunches was compared to that of diners randomized to receive no calorie information. Each label type reduced lunch calories by about 10 percent. Nutrition knowledge was not improved by any menu format. Traffic light labels achieved meaningful reductions in calories ordered even in the absence of numeric information, and there was no apparent benefit or detriment of combining label types. These findings suggest that consumers may benefit most from help in identifying relatively healthier choices, but rely little on information about the exact caloric content of items.

By KEVIN LEWIS | 09:00:00 AM

Monday, August 10, 2015

Red lines and blue lines

Power Versus Affiliation in Political Ideology: Robust Linguistic Evidence for Distinct Motivation-Related Signatures

Adam Fetterman, Ryan Boyd & Michael Robinson
Personality and Social Psychology Bulletin, September 2015, Pages 1195-1206

Abstract:
Posited motivational differences between liberals and conservatives have historically been controversial. This motivational interface has recently been bridged, but the vast majority of studies have used self-reports of values or motivation. Instead, the present four studies investigated whether two classic social motive themes - power and affiliation - vary by political ideology in objective linguistic analysis terms. Study 1 found that posts to liberal chat rooms scored higher in standardized affiliation than power, whereas the reverse was true of posts to conservative chat rooms. Study 2 replicated this pattern in the context of materials posted to liberal versus conservative political news websites. Studies 3 and 4, finally, replicated a similar interactive (ideology by motive type) pattern in State of the State and State of the Union addresses. Differences in political ideology, these results suggest, are marked by, and likely reflective of, mind-sets favoring affiliation (liberal) or power (conservative).

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Unmasking geographic polarization and clustering: A micro-scalar analysis of partisan voting behavior

Chad Kinsella, Colleen McTague & Kevin Raleigh
Applied Geography, August 2015, Pages 404-419

Abstract:
"Geographic polarization", the spatial concentration of "like" voting behavior, is a phenomenon closely related to "partisan polarization", the intensification of diametrically ideological positions, is understudied, and is critical to the understanding of current American electoral behavior. To date, few studies have examined geographic polarization, and those that do have done so at the scales of regions, states, and counties. However, local influences operating within areas smaller than counties influence voting behavior and can produce geographic polarization. To address these scalar and methodological shortcomings, this research focuses on the smallest political units, precincts, using a case study of the Greater Cincinnati Metropolitan Area. Presidential election data from 1976 through 2008 were collected by precincts, analyzed using spatial statistics, and mapped to examine evolving geographic polarization over this 32-year period. The results measured at the precinct-scale, suggest an increased concentration of partisan behavior and emphasize a local residential spatial pattern of geographic polarization.

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Information, Inequality, and Mass Polarization: Ideology in Advanced Democracies

Torben Iversen & David Soskice
Comparative Political Studies, forthcoming

Abstract:
Growing polarization in the American Congress is closely related to rising income inequality. Yet there has been no corresponding polarization of the U.S. electorate, and across advanced democracies, mass polarization is negatively related to income inequality. To explain this puzzle, we propose a comparative political economy model of mass polarization in which the same institutional factors that generate income inequality also undermine political information. We explain why more voters then place themselves in the ideological center, hence generating a negative correlation between mass polarization and inequality. We confirm these conjectures on individual-level data for 20 democracies, and we then show that democracies cluster into two types: one with high inequality, low mass polarization, and polarized and right-shifted elites (e.g., the United States); and the other with low inequality and high mass polarization with left-shifted elites (e.g., Sweden). This division reflects long-standing differences in educational systems, the role of unions, and social networks.

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Does Media Coverage of Partisan Polarization Affect Political Attitudes?

Matthew Levendusky & Neil Malhotra
Political Communication, forthcoming

Abstract:
The past decade has witnessed an explosion of interest in the partisan polarization of the American electorate. Scholarly investigation of this topic has coincided with the media's portrayal of a polity deeply divided along partisan lines. Yet little research so far has considered the consequences of the media's coverage of political polarization. We show that media coverage of polarization increases citizens' beliefs that the electorate is polarized. Furthermore, the media's depiction of a polarized electorate causes voters to moderate their own issue positions but increases their dislike of the opposing party. These empirical patterns are consistent with our theoretical argument that polarized exemplars in journalistic coverage serve as anti-cues to media consumers. Our findings have important implications for understanding current and future trends in political polarization.

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Party Competition and Conflict in State Legislatures

Kelsey Hinchliffe & Frances Lee
State Politics & Policy Quarterly, forthcoming

Abstract:
This article examines the relationship between party competition for control of governing institutions and legislative party polarization. Although the competition/cohesion thesis dates to the 1940s, it has never before been subject to a test with data from the 50 states. Drawing upon newly available data, we take stock of the evidence. Five measures of party competition are used: (1) the number of recent shifts of party control, (2) an index of party competition for state offices, (3) the closeness of presidential elections in the state, (4) the effective number of political parties in the state, and (5) the ratio of Republicans to Democrats in the electorate. Nearly all of these measures correlate with higher levels of party polarization in both the lower and upper chambers, and none are associated with a lower level of polarization.

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Liberals Condemn Sacrilege Too: The Harmless Desecration of Cerro Torre

Jeremy Frimer, Caitlin Tell & Jonathan Haidt
Social Psychological and Personality Science, forthcoming

Abstract:
Are social conservatives the only ones who use concerns about sacred objects or practices when making moral judgments, such as when they defend the "sanctity of marriage"? Or do liberals condemn sacrilege too? A third possibility is that all talk about sanctity and sacrilege is merely post hoc justification of moral judgments based solely on the perception of harm to sentient or anthropomorphized beings. We present evidence that liberals, like conservatives, morally condemn harmless violations of their own sacred objects. In most cases of liberal sacrilege (e.g., environmental destruction), sentient beings suffer. To deconflate desecration from harm, we examined a context in which someone altered an object that was lifeless yet sacred to a group of liberals - the mountain Cerro Torre. Three studies found that liberals condemned the alteration of the mountain as a harmless desecration. Defending sacred values may bind group members into a cohesive moral community.

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The Effects of Issue Salience, Elite Influence, and Policy Content on Public Opinion

David Ciuk & Berwood Yost
Political Communication, forthcoming

Abstract:
When do citizens rely on party cues, and when do they incorporate policy-relevant information into their political attitudes? Recent research suggests that members of the public, when they possess some policy-relevant information, use that information as much as they use party cues when forming political attitudes. We aim to advance this research by specifying conditions that motivate people to use content over cues and vice versa. Specifically, we believe that increased issue salience motivates people to go beyond heuristics and engage in the systematic processing of policy-relevant information. Using data from a survey experiment that isolates the effects of policy-relevant information, party cues, and issue salience, we find that people are more likely to incorporate policy-relevant information when thinking about hydraulic fracturing (fracking), a relatively high-salience issue. When thinking about storm-water management, a relatively low-salience issue, people are more likely to rely on party cues.

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Scholarly elites orient left, irrespective of academic affiliation

Idan Solon
Intelligence, July-August 2015, Pages 119-130

Abstract:
I substantiate a parsimonious delineation between liberals and conservatives: liberals demonstrate greater consideration toward the less represented, whether the less represented constitute minority demographic segments or alternatives to orthodoxy. Highly intelligent individuals are more likely to engage in both kinds of consideration toward the less represented because of their greater tendencies to perceive an external control ideology, to empathize and to trust. I argue that, contrary to Carl (2015), the liberal prevalence in academia is not attributable to bias by discrimination or self-selection. I also review evidence that scholarly elites orient predominately toward the left, irrespective of academic affiliation, and I introduce additional evidence supporting this point. Carl (2015) argued that a U-shaped relationship between intelligence and Democratic Party affiliation was unreflective of a general relationship between intelligence and leftism due to the Democratic Party's economic centrism on a global scale. However, a similar, U-shaped relationship is obtained from data from multiple countries. Additionally, the empirical findings presented by Carl (2015) and others demonstrate a U-shaped relationship between intelligence and liberal positions across many issues and establish the turning point of the U-shaped curve relating intelligence and left-wing party (and ideological) affiliation in the United States to occur at roughly the 80th intelligence percentile. While Carl (2015) acknowledged accordance with Solon (2014) on many non-economic and economic results, Carl (2015) presented data for some economic issues in support of an apparent association between intelligence and non-left-wing positions, for which I present four explanations that are consistent with a general correlation between intelligence and prosociality.

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Reflective liberals and intuitive conservatives: A look at the Cognitive Reflection Test and ideology

Kristen Deppe et al.
Judgment and Decision Making, July 2015, Pages 314-331

Abstract:
Prior research finds that liberals and conservatives process information differently. Predispositions toward intuitive versus reflective thinking may help explain this individual level variation. There have been few direct tests of this hypothesis and the results from the handful of studies that do exist are contradictory. Here we report the results of a series of studies using the Cognitive Reflection Test (CRT) to investigate inclinations to be reflective and political orientation. We find a relationship between thinking style and political orientation and that these effects are particularly concentrated on social attitudes. We also find it harder to manipulate intuitive and reflective thinking than a number of prominent studies suggest. Priming manipulations used to induce reflection and intuition in published articles repeatedly fail in our studies. We conclude that conservatives - more specifically, social conservatives - tend to be dispositionally less reflective, social liberals tend to be dispositionally more reflective, and that the relationship between reflection and intuition and political attitudes may be more resistant to easy manipulation than existing research would suggest.

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Political Identity and Trust

Pablo Hernandez & Dylan Minor
Harvard Working Paper, July 2015

Abstract:
We explore how political identity affects trust. Using an incentivized experimental survey conducted on a representative sample of the U.S. population, we vary information about partners' partisan identity to elicit trust behavior, beliefs about trustworthiness, and actual reciprocation. By eliciting beliefs, we are able to assess whether differences in trust rates are due to stereotyping or a "taste for discrimination." By measuring actual trustworthiness, we are able to determine whether beliefs are statistically correct. We find that trust is pervasive and depends on the partisan identity of the trustee. Differential trust rates are explained by incorrect stereotypes about the other's lack of trustworthiness rather than by a "taste for discrimination." Given the importance of beliefs, we run additional treatments in which we disclose previous reciprocation rates before participants decide whether to trust. We find that beliefs are slightly more optimistic compared with the previous treatments, suggesting that incorrect stereotypes are hard to change.

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Ideology, Learning, and Policy Diffusion: Experimental Evidence

Daniel Butler et al.
American Journal of Political Science, forthcoming

Abstract:
We introduce experimental research design to the study of policy diffusion in order to better understand how political ideology affects policymakers' willingness to learn from one another's experiences. Our two experiments - embedded in national surveys of U.S. municipal officials - expose local policymakers to vignettes describing the zoning and home foreclosure policies of other cities, offering opportunities to learn more. We find that: (1) policymakers who are ideologically predisposed against the described policy are relatively unwilling to learn from others, but (2) such ideological biases can be overcome with an emphasis on the policy's success or on its adoption by co-partisans in other communities. We also find a similar partisan-based bias among traditional ideological supporters, who are less willing to learn from those in the opposing party. The experimental approach offered here provides numerous new opportunities for scholars of policy diffusion.

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The Role of Persuasion in Deliberative Opinion Change

Sean Westwood
Political Communication, forthcoming

Abstract:
How does discussion lead to opinion change during deliberation? I formulate and test hypotheses based on theories of persuasion, and examine them against other possible sources of deliberative opinion change. Through detailed analysis of a nationally representative deliberative event I create a full discussion network for each small group that deliberated by recording who said what, the argument quality for what was said, and to whom it was directed. I find that well-justified arguments made in the context of direct engagement between peers are a consistent predictor of opinion change. Individual-level persuasion, not knowledge-driven refinement or extremity, drives most opinion change. These results show that further deliberative research needs to account for persuasion when explaining deliberative opinion change.

By KEVIN LEWIS | 09:00:00 AM

Sunday, August 9, 2015

Your move

Hierarchy, Dominance, and Deliberation: Egalitarian Values Require Mental Effort

Laura Van Berkel et al.
Personality and Social Psychology Bulletin, September 2015, Pages 1207-1222

Abstract:
Hierarchy and dominance are ubiquitous. Because social hierarchy is early learned and highly rehearsed, the value of hierarchy enjoys relative ease over competing egalitarian values. In six studies, we interfere with deliberate thinking and measure endorsement of hierarchy and egalitarianism. In Study 1, bar patrons’ blood alcohol content was correlated with hierarchy preference. In Study 2, cognitive load increased the authority/hierarchy moral foundation. In Study 3, low-effort thought instructions increased hierarchy endorsement and reduced equality endorsement. In Study 4, ego depletion increased hierarchy endorsement and caused a trend toward reduced equality endorsement. In Study 5, low-effort thought instructions increased endorsement of hierarchical attitudes among those with a sense of low personal power. In Study 6, participants thinking quickly allocated more resources to high-status groups. Across five operationalizations of impaired deliberative thought, hierarchy endorsement increased and egalitarianism receded. These data suggest hierarchy may persist in part because it has a psychological advantage.

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Pupil Mimicry Correlates With Trust in In-Group Partners With Dilating Pupils

M.E. Kret, A.H. Fischer & C.K.W. De Dreu
Psychological Science, forthcoming

Abstract:
During close interactions with fellow group members, humans look into one another’s eyes, follow gaze, and quickly grasp emotion signals. The eye-catching morphology of human eyes, with unique eye whites, draws attention to the middle part, to the pupils, and their autonomic changes, which signal arousal, cognitive load, and interest (including social interest). Here, we examined whether and how these changes in a partner’s pupils are processed and how they affect the partner’s trustworthiness. Participants played incentivized trust games with virtual partners, whose pupils dilated, remained static, or constricted. Results showed that (a) participants trusted partners with dilating pupils and withheld trust from partners with constricting pupils, (b) participants’ pupils mimicked changes in their partners’ pupils, and (c) dilation mimicry predicted trust in in-group partners, whereas constriction mimicry did not. We suggest that pupil-contingent trust is in-group bounded and possibly evolved in and because of group life.

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Context Matters: The Social Effects of Anger in Cooperative, Balanced, and Competitive Negotiation Situations

Hajo Adam & Jeanne Brett
Journal of Experimental Social Psychology, November 2015, Pages 44–58

Abstract:
When does expressing anger in negotiations lead to concessions? Although research has begun to address this question, it has not yet examined the influence of the negotiation context. We propose that the effect of expressing anger depends on the competitiveness of the negotiation situation. Specifically, when the negotiation situation balances cooperative and competitive elements, expressing anger elicits larger concessions than no anger, and responses are driven by cooperation-inducing strategic inferences (e.g., a perception that the anger expresser is tough and threatening). However, when the negotiation context is predominantly cooperative or predominantly competitive, expressing anger does not elicit larger concessions than no anger, and responses are driven by cooperation-inhibiting affective reactions (e.g., reciprocal anger and a desire to retaliate against the anger expresser). Results from two computer-mediated negotiation experiments using different negotiation scenarios, different manipulations of the competitiveness of the situation, and different subject populations supported our hypotheses.

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The Benefits of Dominance Complementarity in Negotiations

Scott Wiltermuth, Larissa Tiedens & Margaret Neale
Negotiation and Conflict Management Research, August 2015, Pages 194–209

Abstract:
We investigated whether dominance complementarity can lead people to reach mutually beneficial outcomes in negotiations by increasing the likelihood that they will successfully coordinate the exchange of information. We suggest that negotiators who differ in how dominantly they behave in the negotiation exchange information effectively because they fulfill different roles in the negotiation process. Study 1 demonstrated that dominant negotiators generally assert their desires, while relatively submissive negotiators generally ask questions to find ways to satisfy their own desires without escalating conflict with the dominant negotiators. Studies 2 and 3 demonstrated that participants were best able to discover integrative agreements when one negotiator was instructed to behave dominantly and the other negotiator, submissively. Improved information exchange mediated the relationship between dominance complementarity and improved joint outcomes in Study 3.

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The awestruck effect: Followers suppress emotion expression in response to charismatic but not individually considerate leadership

Jochen Menges et al.
Leadership Quarterly, August 2015, Pages 626–640

Abstract:
This study examines how followers regulate their outward expression of emotions in the context of two types of leadership that are commonly associated with transformational leadership, namely charismatic leadership and individually considerate leadership. Based on new theorizing and a series of three studies involving experiments and field work, we show that the two types of leadership have different effects on followers' emotional expressiveness. Specifically, we find that followers under the influence of leaders' charisma tend to suppress the expression of emotions (we call this the “awestruck effect”), but followers express emotions when leaders consider them individually. Awestruck followers may suffer from expressive inhibition even as charismatic leaders stir their hearts.

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The effect of requesting money with a few coins in one hand: The foot-in-the-hand technique

Nicolas Guéguen
Social Influence, forthcoming

Abstract:
Research has shown that individuals comply more readily to a monetary request made by a solicitor if the request disrupts the refusal script or if it is perceived as a legitimate request. We tested the effect of a new technique called the foot-in-the-hand technique (FITH), whereby solicitors requested money while holding a few coins in their hand. Findings show that the presence of money increased compliance with the request (Study 1), particularly when a reason for solicitation was added (Study 2). When the requesters stated that they were close to reaching the sum necessary to buy a particular product, more compliance was obtained (Study 3). A goal-oriented explanation was used to interpret the effect of the FITH technique.

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Abstract Language Signals Power, But Also Lack of Action Orientation

Mauricio Palmeira
Journal of Experimental Social Psychology, November 2015, Pages 59–63

Abstract:
Powerful people tend to think more abstractly, and those who use abstract speech are perceived as more powerful. Given that appearing powerful may lead to actual power, those interested in achieving powerful positions may benefit from using abstract speech. In the current research, we propose that concrete speech may also have comparable benefits. Specifically, we argue that while abstract thinking is required to set big goals and make high level plans, concrete thinking is required to follow plans and achieve goals. Thus, whereas abstract speech signals the ability to think at a high level, concrete speech signals action orientation. Across four experiments, we find strong evidence for a link between concrete thinking and perceptions of action orientation. Importantly, we find that both power and action orientation are important predictors of preferences for leadership positions.

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Testing Theories about Ethnic Markers

Niels Holm Jensen et al.
Human Nature, June 2015, Pages 210-234

Abstract:
In recent years, evolutionary psychologists and anthropologists have debated whether ethnic markers have evolved to solve adaptive problems related to interpersonal coordination or to interpersonal cooperation. In the present study, we add to this debate by exploring how individuals living in a modern society utilize the accents of unfamiliar individuals to make social decisions in hypothetical economic games that measure interpersonal trust, generosity, and coordination. A total of 4603 Danish participants completed a verbal-guise study administered over the Internet. Participants listened to four speakers (two local and two nonlocal) and played a hypothetical Dictator Game, Trust Game, and Coordination Game with each of them. The results showed that participants had greater faith in coordinating successfully with local speakers than with nonlocal speakers. The coordination effect was strong for individuals living in the same city as the particular speakers and weakened as the geographical distance between the participants and the speakers grew. Conversely, the results showed that participants were not more generous toward or more trusting of local speakers compared with nonlocal speakers. Taken together, the results suggest that humans utilize ethnic markers of unfamiliar individuals to coordinate behavior rather than to cooperate.

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GO Figure: Analytic and Strategic Skills are Separable

Sascha Baghestanian & Seth Frey
Journal of Behavioral and Experimental Economics, forthcoming

Abstract:
We measure the game behavior and analytic reasoning skills of expert strategic reasoners: professional GO players. We argue for a distinction between what we call “strategic” and “analytic” reasoning skills and present separate measures to elicit strategic and analytic abilities. The paper investigates the behavior of our subject pool in many different types of one-shot games, including the Traveler’s Dilemma, Centipede, Kreps, and Matching Pennies games. We observe that increased strategic skill predicts a greater probability of Nash behavior, while greater analytic skill predicts more cooperative play, even when such behavior is inconsistent with individual rationality.

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The bonding effect of money in the workplace: Priming money weakens the negative relationship between ostracism and prosocial behavior

Aurelia Mok & David De Cremer
European Journal of Work and Organizational Psychology, forthcoming

Abstract:
The feeling of being ostracized in the workplace has been associated with the withdrawal of prosocial and helping behaviours. We propose that reminders of money would moderate (weaken) this relationship. We conducted three studies with working adult participants. Results showed that activating thoughts of money, even unrelated to compensation, reduced the negative relationship between ostracism and prosocial intentions (Studies 1 and 3) and behaviour (Study 2) in the organization. Study 3 furthermore showed that this effect occurs by reinforcing organizational identification. Our research identifies a factor that is already present in the work setting that could buffer the negative psychological and behavioural outcomes associated with ostracism: cues of money. We discuss the implications for research on money, social threats, and organizational behaviour.

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When Does Gossip Promote Generosity? Indirect Reciprocity Under the Shadow of the Future

Junhui Wu, Daniel Balliet & Paul Van Lange
Social Psychological and Personality Science, forthcoming

Abstract:
Reputation through gossip is a key mechanism promoting cooperation. The present research proposes that gossip promotes cooperation when one anticipates future interdependence with the gossip recipient (Hypothesis 1), that this effect is more pronounced for proself, compared to prosocial, individuals (Hypothesis 2), and explores the mediating role of reputational concern and expected indirect benefits in the relation between gossip and cooperation. Results from three studies supported these hypotheses, showing that people are more generous in response to gossip to their future interaction partner(s), compared with gossip to other(s) they would never meet or no gossip. Moreover, proselfs, compared with prosocials, showed a larger increase in generosity when they anticipated future interactions with the gossip recipient(s). The observed gossip-based generosity was primarily mediated by reputational concern rather than expected indirect benefits from future partners, and the mediation of reputational concern was more pronounced for proselfs than for prosocials.

By KEVIN LEWIS | 09:00:00 AM

Saturday, August 8, 2015

Outward signs

Inferences About Sexual Orientation: The Roles of Stereotypes, Faces, and The Gaydar Myth

William Cox et al.
Journal of Sex Research, forthcoming

Abstract:
In the present work, we investigated the pop cultural idea that people have a sixth sense, called “gaydar,” to detect who is gay. We propose that “gaydar” is an alternate label for using stereotypes to infer orientation (e.g., inferring that fashionable men are gay). Another account, however, argues that people possess a facial perception process that enables them to identify sexual orientation from facial structure. We report five experiments testing these accounts. Participants made gay-or-straight judgments about fictional targets that were constructed using experimentally manipulated stereotypic cues and real gay/straight people's face cues. These studies revealed that orientation is not visible from the face — purportedly “face-based” gaydar arises from a third-variable confound. People do, however, readily infer orientation from stereotypic attributes (e.g., fashion, career). Furthermore, the folk concept of gaydar serves as a legitimizing myth: Compared to a control group, people stereotyped more often when led to believe in gaydar, whereas people stereotyped less when told gaydar is an alternate label for stereotyping. Discussion focuses on the implications of the gaydar myth and why, contrary to some prior claims, stereotyping is highly unlikely to result in accurate judgments about orientation.

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Exploring patterns of explicit and implicit anti-gay attitudes in Muslims and Atheists

Joel Anderson & Yasin Koc
European Journal of Social Psychology, forthcoming

Abstract:
Research into the relationship between religion and anti-gay attitudes frequently focuses on Christianity. We explored the role of religiosity dimensions, previous contact, and factors in the dual-process motivation model as predictors of explicit and implicit anti-gay attitudes in samples of Muslims and Atheists. The explicit and implicit attitudes of Muslims were more negative than the attitudes of Atheists. Explicit attitudes were more negative towards gay men than lesbians; implicit attitudes were negative towards gay men but were unexpectedly positive towards lesbians. In regression analyses, religious fundamentalism and extrinsic religious orientations (Study 1), and contact and right-wing authoritarianism (Study 2) were strong significant predictors of explicit anti-gay attitudes. Interestingly, none of the factors of interest predicted implicit anti-gay attitudes. These findings reveal a strong link between Islam and explicit anti-gay attitudes, but suggest that the relationship between religion and implicit anti-gay attitudes may be more complex than previously thought.

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Concealable Stigma and Occupational Segregation: Toward a Theory of Gay and Lesbian Occupations

András Tilcsik, Michel Anteby & Carly Knight
Administrative Science Quarterly, September 2015, Pages 446-481

Abstract:
Numerous scholars have noted the disproportionately high number of gay and lesbian workers in certain occupations, but systematic explanations for this type of occupational segregation remain elusive. Drawing on the literatures on concealable stigma and stigma management, we develop a theoretical framework predicting that gay men and lesbians will concentrate in occupations that provide a high degree of task independence or require a high level of social perceptiveness, or both. Using several distinct measures of sexual orientation, and controlling for potential confounds, such as education, urban location, and regional and demographic differences, we find support for these predictions across two nationally representative surveys in the United States for the period 2008–2010. Gay men are more likely to be in female-majority occupations than are heterosexual men, and lesbians are more represented in male-majority occupations than are heterosexual women, but even after accounting for this tendency, common to both gay men and lesbians is a propensity to concentrate in occupations that provide task independence or require social perceptiveness, or both. This study offers a theory of occupational segregation on the basis of minority sexual orientation and holds implications for the literatures on stigma, occupations, and labor markets.

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Sexual Orientation-Based Disparities in School and Juvenile Justice Discipline: A Multiple Group Comparison of Contributing Factors

Paul Poteat, Jillian Scheer & Eddie Chong
Journal of Educational Psychology, forthcoming

Abstract:
There is little data on whether school discipline or juvenile justice sanctions are directed disproportionately toward sexual minority youth (e.g., lesbian, gay, bisexual, or questioning; LGBQ) compared with heterosexual youth and even less on factors that may relate to such disparities. We tested for sexual orientation-based disparities in school suspension and juvenile justice system involvement, and tested a model linking students’ sexual orientation to victimization, punishable infractions (substance use, truancy, weapon carriage on school property), and disciplinary actions. Using cross-sectional data from the 2012 Dane County Youth Assessment, we compared 869 LGBQ youth to 869 heterosexual youth (a comparison sample selected through propensity score matching) in Grades 9 to 12 (60.6% female; 74.7% White). LGBQ youth were more likely to report school suspension and juvenile justice system involvement than heterosexual youth. We documented minimal support for a differential behavior explanation: sexual orientation-based differences on discipline were only weakly mediated through victimization and punishable infractions. Instead, a multiple group comparison showed that the paths from infraction engagement to discipline sanctions were not invariant for LGBQ and heterosexual youth: With higher rates of infractions, the odds were greater for LGBQ youth to have experienced punitive discipline than for heterosexual youth. Our findings underscore the need for psychologists, educators, and juvenile justice professionals to give attention to discipline disparities faced by sexual minority youth.

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Does it Get Better? A Quasi-cohort Analysis of Sexual Minority Wage Gaps

Sean Waite
Social Science Research, November 2015, Pages 113–130

Abstract:
With few exceptions, it has been found that gay men earn less and lesbians earn more than their heterosexual counterparts. Most of the current literature has used single cross-sectional datasets to test possible sources of these wage differentials. This study adds to this literature by presenting a theoretical framework, grounded in gender theory, to explore: a) whether sexual minority wage gaps have attenuated over the last decade, b) whether wage gaps vary by age group, and c) if wage gaps vary with duration in the labor market. Using Canadian census and survey data, this study finds no evidence that wage gaps have attenuated for gay men and only small reductions for lesbians and heterosexual women, relative to heterosexual men. Wage gaps are larger for younger gay men than for older gay men, which may suggest a “coming out penalty”. The lesbian wage premium, vis-á-vis heterosexual women, does not appear at initial labor market entry; rather it develops with duration in the labour market.

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An Exploratory Study of Young Adults’ Attitudes Toward Parental Disclosure of LGBT Identity

Jennifer Apperson, Sarai Blincoe & Jessica Sudlow
Psychology of Sexual Orientation and Gender Diversity, forthcoming

Abstract:
This study examined young adults’ attitudes toward an LGBT parent’s coming out. Participants read a hypothetical situation and answered Likert-type questions regarding their acceptance of their mother and father if the parent disclosed a gay, lesbian, or transgender identity. Overall, participants imagined they would have positive attitudes toward the parents’ coming out, although attitudes were significantly more positive toward mothers than fathers, and toward a gay or lesbian parent than a transgender parent. Participant sex and beliefs in the biological versus environmental determinism of sexual identity predicted their attitudes.

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An early sex difference in the relation between mental rotation and object preference

Jillian Lauer et al.
Frontiers in Psychology, May 2015

Abstract:
Accumulating evidence suggests that males outperform females on mental rotation tasks as early as infancy. Sex differences in object preference have also been shown to emerge early in development and precede sex-typed play in childhood. Although research with adults and older children is suggestive of a relationship between play preferences and visuospatial abilities, including mental rotation, little is known about the developmental origins of this relationship. The present study compared mental rotation ability and object preference in 6- to 13-month-old infants. We used a novel paradigm to examine individual differences in infants’ mental rotation abilities as well as their differential preference for one of two sex-typed objects. A sex difference was found on both tasks, with boys showing an advantage in performance on the mental rotation task and exhibiting greater visual attention to the male-typed object (i.e., a toy truck) than to the female-typed object (i.e., a doll) in comparison to girls. Moreover, we found a relation between mental rotation and object preference that varied by sex. Greater visual interest in the male-typed object was related to greater mental rotation performance in boys, but not in girls. Possible explanations related to perceptual biases, prenatal androgen exposure, and experiential influences for this sex difference are discussed.

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In These Spaces: Perceived Neighborhood Quality as a Protective Factor Against Discrimination for Lesbian, Gay, and Bisexual (LGB) Adults

Alisia Tran
Psychology of Sexual Orientation and Gender Diversity, forthcoming

Abstract:
LGB adults are at elevated risk for experiences of discrimination and related psychological health concerns. Surprisingly, research on the factors that may buffer against discrimination and its deleterious psychological effects in LGB adults has been limited. The researcher examined perceived neighborhood quality as a protective factor in the association between past-year discrimination and psychological distress (i.e., depression/anxiety symptoms) for LGB adults compared with heterosexual adults. Data were drawn from LGB (n = 431; ngay = 200; nlesbian = 102; nbisexual = 129) and heterosexual (n = 7,340) samples surveyed in an urban Midwestern county. Results revealed a significant 3-way interaction (Past-year discrimination × Perceived neighborhood quality × Sexual minority status; B = −.30, SE = .07, p < .001). For LGB but not heterosexual respondents, perceived neighborhood quality emerged as a significant moderator of the association between discrimination and psychological distress (B = −.32, SE = .06, p < .001). Specifically, discrimination was not significantly related to psychological distress for LGB respondents perceiving higher neighborhood quality, thus indicating a buffering effect. By contrast, the association between discrimination and psychological distress remained significant for LGB respondents reporting lower perceived neighborhood quality and heterosexual respondents. These patterns of results held when controlling for demographic variables and when examining the gay, lesbian, and bisexual subsamples separately. Results suggest that perceived neighborhood quality may be a culturally relevant protective factor for LGB adults facing discrimination.

By KEVIN LEWIS | 09:00:00 AM

Friday, August 7, 2015

Covering the spread

Income Inequality Is Associated With Stronger Social Comparison Effects: The Effect of Relative Income on Life Satisfaction

Felix Cheung & Richard Lucas
Journal of Personality and Social Psychology, forthcoming

Abstract:
Previous research has shown that having rich neighbors is associated with reduced levels of subjective well-being, an effect that is likely due to social comparison. The current study examined the role of income inequality as a moderator of this relative income effect. Multilevel analyses were conducted on a sample of more than 1.7 million people from 2,425 counties in the United States. Results showed that higher income inequality was associated with stronger relative income effects. In other words, people were more strongly influenced by the income of their neighbors when income inequality was high.

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In the Name of the Son (and the Daughter): Intergenerational Mobility in the United States, 1850–1940

Claudia Olivetti & Daniele Paserman
American Economic Review, forthcoming

Abstract:
This paper estimates historical intergenerational elasticities between fathers and children of both sexes in the United States using a novel empirical strategy. The key insight of our approach is that the information about socioeconomic status conveyed by first names can be used to create pseudo-links across generations. We find that both father-son and father-daughter elasticities were flat during the 19th Century, increased sharply between 1900 and 1920, and declined slightly thereafter. We discuss the role of regional disparities in economic development, trends in inequality and returns to human capital, and the marriage market in explaining these patterns.

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Why Wealthier People Think People Are Wealthier, and Why It Matters: From Social Sampling to Attitudes to Redistribution

Rael Dawtry, Robbie Sutton & Chris Sibley
Psychological Science, forthcoming

Abstract:
The present studies provide evidence that social-sampling processes lead wealthier people to oppose redistribution policies. In samples of American Internet users, wealthier participants reported higher levels of wealth in their social circles (Studies 1a and 1b). This was associated, in turn, with estimates of higher mean wealth in the wider U.S. population, greater perceived fairness of the economic status quo, and opposition to redistribution policies. Furthermore, results from a large-scale, nationally representative New Zealand survey revealed that low levels of neighborhood-level socioeconomic deprivation — an objective index of wealth within participants’ social circles — mediated the relation between income and satisfaction with the economic status quo (Study 2). These findings held controlling for relevant variables, including political orientation and perceived self-interest. Social-structural inequalities appear to combine with social-sampling processes to shape the different political attitudes of wealthier and poorer people.

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European Identity and Redistributive Preferences

Joan Costa-Font & Frank Cowell
London School of Economics Working Paper, June 2015

Abstract:
How important is spatial identity in shifting preferences for redistribution? This paper takes advantage of within-country variability in the adoption of a single currency as an instrument to examine the impact of the rescaling of spatial identity in Europe. We draw upon data from the last three decades of waves of the European Values Survey and we examine the impact of joining the single currency on preferences for redistribution. Our instrumentation strategy relies on using the exogenous effect of joining a common currency, alongside a battery of robustness checks and alternative instruments. Our findings suggest that joining the euro has a boosting effect on European identity; an opposite and comparable effect is found for national pride. We find that European identity increases preferences for redistribution, and that national pride exerts an equivalent reduction in preferences for redistribution.

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Poor Little Rich Kids? The Determinants of the Intergenerational Transmission of Wealth

Sandra Black et al.
NBER Working Paper, July 2015

Abstract:
Wealth is highly correlated between parents and their children; however, little is known about the extent to which these relationships are genetic or determined by environmental factors. We use administrative data on the net wealth of a large sample of Swedish adoptees merged with similar information for their biological and adoptive parents. Comparing the relationship between the wealth of adopted and biological parents and that of the adopted child, we find that, even prior to any inheritance, there is a substantial role for environment and a much smaller role for genetics. We also examine the role played by bequests and find that, when they are taken into account, the role of adoptive parental wealth becomes much stronger. Our findings suggest that wealth transmission is not primarily because children from wealthier families are inherently more talented or more able but that, even in relatively egalitarian Sweden, wealth begets wealth.

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Sources of Increasing Differential Mortality Among the Aged by Socioeconomic Status

Barry Bosworth, Gary Burtless & Kan Zhang
Brookings Institution Working Paper, June 2015

Abstract:
This paper uses data from the Health and Retirement Study (HRS) to explore the extent and causes of widening differences in life expectancy by socioeconomic status (SES) for older persons. We construct alternative measures of SES using educational attainment and average (career) earnings in the prime working ages of 41-50. We also use information on causes of death, health status and various behavioral indicators (smoking, drinking, and obesity) that are believed to be predictors of premature death in an effort to explain the causes of the growing disparities in life expectancy between people of high and low SES. The paper finds that: -- There is strong statistical evidence in the HRS of a growing inequality of mortality risk by SES among more recent birth cohorts compared with cohorts born before 1930. -- Both educational attainment and career earnings as constructed from Social Security records are equally useful indicators of SES, although the distinction in mortality risk by education is greatest for those with and without a college degree. -- There has been a significant decline in the risk of dying from cancer or heart conditions for older Americans in the top half of the income distribution, but we find no such reduction of mortality risk in the bottom half of the distribution. -- The inclusion of the behavioral variables and health status result in substantial improvement in the predictions of mortality, but they do not identify the sources of the increase in differential mortality. The policy implications of the findings are: -- Indexing the retirement age to increases in average life expectancy to stabilize OASDI finances may have unintended distributional consequences, because most mortality gains have been concentrated among workers in the top half of the earnings distribution. -- The fact that we cannot identify the sources of the increase in differential mortality contributes to uncertainty about the distributional effects of increases in the retirement age in future years.

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Are older adults living in more equal counties healthier than older adults living in more unequal counties? A propensity score matching approach

HwaJung Choi et al.
Social Science & Medicine, September 2015, Pages 82–90

Abstract:
We assessed the potential contextual effect of income inequality on health by: 1) comparing individuals with similar socioeconomic status (SES) but who reside in counties with different levels of income inequality; and 2) examining whether the potential effect of county-level income inequality on health varies across SES groups. We used the Health and Retirement Study, a nationally representative study of Americans over the age of 50. Using propensity score matching, we selected SES-comparable individuals living in high-income inequality counties and in low-income inequality counties. We examined differences in self-rated overall health outcomes and in other specific physical/mental health outcomes between the two groups using logistic regression (n=34,994) and imposing different sample restrictions based on residential duration in the area. We then used logistic regression with interactions to assess whether, and if so how, health outcomes differed among participants of different SES groups defined by wealth, income, and education. In bivariate analyses of the unmatched full sample, adults living in high-income inequality counties have worse health outcomes for most health measures. After propensity score matching, adults in high-income inequality counties had worse self-rated health status (AOR=1.12; 95% CI 1.04-1.19) and were more likely to report diagnosed psychiatric problems (AOR=1.08; 95% CI 0.99-1.19) than their matched counterparts in low-income inequality counties. These associations were stronger with longer-term residents in the area. Adverse health outcomes associated with living in high-income inequality counties were significant particularly for individuals in the 30th or greater percentiles of income/wealth distribution and those without a college education. In summary, after using more precise matching methods to compare individuals with similar characteristics and addressing measurement error by excluding more recently arrived county residents, adults living in high-income inequality counties had worse reported overall physical and mental health than adults living in low-income inequality counties.

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What Do Computers Really Do? Computerization, Fading Pay-Setting Institutions and Rising Wage Inequality

Tali Kristal & Yinon Cohen
Research in Social Stratification and Mobility, December 2015, Pages 33–47

Abstract:
In this paper we advance the argument that the widespread assumption that computerization and institutional changes are independent explanations for the resurgence of wage inequality is inaccurate. Instead we posit for complex dynamics between computerization and fading pay-setting institutions, arguing that the latter is a mechanism by which the former operates. To test our argument that computerization increases wage inequality not only via the mechanisms specified by skill-biased Technological Change, but also indirectly through structural processes, we utilize longitudinal U.S. industrial-level data on computerization, pay-setting institutions, and wage inequality. Estimating Error Correction Models, we find a stronger longitudinal association between computerization and wage inequality in industries where labor processes were subject to both computerization and the breakup of pay-setting institutions (such as labor unions) than in industries where these institutions never had much of a presence. These findings provide some evidence that computerization operates also through the mechanism of weakening labor market institutions.

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Genetics of Educational Attainment and the Persistence of Privilege at the Turn of the 21st Century

François Nielsen & Micah Roos
Social Forces, forthcoming

Abstract:
We use structural equations methodology with data on 1,576 pairs of variously related young adult siblings (MZ twins, DZ twins, full siblings, half siblings, cousins, and nonrelated siblings) to distinguish the roles of genetic and environmental influences on educational attainment. Using quantitative genetic (ACE) models, we find that the role of genes in educational attainment is relatively weaker (23 percent of the variance) and the role of the shared family environment stronger (41 percent of the variance for twins and 30 percent of the variance for non-twin siblings) than is typically found for cognitive outcomes in young adults. The pattern of high shared environmentality, especially for twins, is not accounted for by the strong degree of assortative mating in the data (parental correlation r = .629), nor by direct effects of educational attainment of the siblings on each other. The low heritability-high environmentality pattern indicates a high level of inequality of opportunity for educational attainment in American society at the turn of the twenty-first century, perhaps linked to a greater role of family financial resources in attainment. Comparative evidence suggests that inequality of opportunity has increased in the United States over past decades, and is higher there today than in other industrial societies.

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Macro-Level Determinants of Paid Domestic Labour Prevalence: A Cross-National Analysis of Seventy-Four Countries

Merita Jokela
Social Policy and Society, July 2015, Pages 385-405

Abstract:
The growing demand for domestic workers has been linked to several global developments, such as an ageing population, income inequality, the growth of women entering labour markets, migration and changes in the provision of care. However, empirical quantitative evidence for these associations is still scarce. This study examines how macro-level factors related to care needs (female employment rates and proportion of aged population), labour markets (proportion of migrants and vulnerable employment) and economic characteristics (gross domestic product, income inequality and level of urbanisation) are associated with the prevalence of paid domestic labour across seventy-four countries. Data are derived from the statistics compiled by the International Labour Organization (ILO). Results show that a higher prevalence of paid domestic workers is particularly associated with greater income inequality, but also with a higher proportion of migrants. The association with income inequality remained unchanged after controlling for six other variables related to the demand and supply of domestic services. These findings suggest that income inequality is a crucial factor in determining the proportion of domestic workers in the labour force.

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Technical Change, Wage Inequality, and Taxes

Laurence Ales, Musab Kurnaz & Christopher Sleet
American Economic Review, forthcoming

Abstract:
This paper considers the normative implications of technical change for tax policy design. A task-to-talent assignment model of the labor market is embedded into an optimal tax problem. Technical change modifies equilibrium wage growth across talents and the substitutability of talents across tasks. The overall optimal policy response is to reduce marginal income taxes on low to middle incomes, while raising those on middle to high incomes. The reform favors those in the middle of the income distribution, reducing their average taxes while lowering transfers to those at the bottom.

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Recent Declines in Labor's Share in US Income: A Preliminary Neoclassical Account

Robert Lawrence
NBER Working Paper, June 2015

Abstract:
As shown in the 1930s by Hicks and Robinson the elasticity of substitution (σ) is a key parameter that captures whether capital and labor are gross complements or substitutes. Establishing the magnitude of σ is vital, not only for explaining changes in the distribution of income between factors but also for undertaking policy measures to influence it. Several papers have explained the recent decline in labor’s share in income by claiming that σ is greater than one and that there has been capital deepening. This paper presents evidence that refutes these claims. It shows that despite a rise in measured capital-labor ratios, labor-augmenting technical change in the US has been sufficiently rapid that effective capital-labor ratios have actually fallen in the sectors and industries that account for the largest portion of the declining labor share in income since 1980. In combination with estimates that corroborate the consensus in the literature that σ is less than 1, these declines in the effective capital ratio can account for much of the recent fall in labor’s share in US income at both the aggregate and industry level. Paradoxically, these results also suggest that increased capital formation would raise labor’s share in income.

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Continuity and Change in the American Class Structure: Workplace Ownership and Authority Relations from 1972 to 2010

Geoffrey Wodtke
Research in Social Stratification and Mobility, forthcoming

Abstract:
This study investigates changes in the American class structure — defined in terms of workplace ownership and authority relations — and trends in status group disparities in class attainment from 1972 to 2010. Although theory and prior research suggest a variety of appreciable changes in class structure and class attainment, data from the General Social Survey indicate that the sizes of different classes remained fairly stable during this time period and that status group disparities in access to ownership and authority persisted largely intact. The 1970s witnessed a decline in the proportion of workers and growth in the proportion of managers and proprietors, but these trends reversed in the 1980s. As a result, by the late 2000s, the ownership and authority structure of the U.S. economy closely resembled that of the early 1970s. Racial and gender disparities in class attainment also did not change significantly over time: blacks and women remained underrepresented (relative to whites and men) in positions of ownership and authority throughout this period. Even after controlling for an extensive set of human capital characteristics, family constraints, and structural economic factors, there is little evidence of status group integration across these key dimensions of economic power.

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Egalitarianism makes organizations stronger: Cross-national variation in institutional and psychological equality predicts talent levels and the performance of national teams

Roderick Swaab & Adam Galinsky
Organizational Behavior and Human Decision Processes, July 2015, Pages 80–92

Abstract:
The current research examined whether cross-national variation in egalitarianism predicts talent levels and organizational performance. We propose that national variation in egalitarianism predicts country-level talent because egalitarianism influences policymaking at the institutional level and everyday social interactions at the psychological level. We compared the relative impact of institutional and psychological measures of equality using the context of international performance in the most popular worldwide sport – football (soccer). Both institutional and psychological measures of equality were associated with greater national team performance. Egalitarian countries also had higher talent levels, which mediated the link between egalitarianism and performance. Furthermore, psychological equality mediated the effects of institutional equality on performance: Countries with greater institutional equality had better performing national teams because they psychologically endorsed egalitarianism. Overall, the findings support a serial mediation model: institutional equality → psychological equality → top talent levels → performance. Importantly, psychological equality at Time 1 predicted the performance of national football teams at Time 2 more than a decade later. All of these effects held when controlling for a host of country-level variables. The forces of equality appear to be a critical driver of talent levels and ultimately performance. These findings demonstrate that both institutional practices and normative systems help determine talent levels and have important implications for organizational performance.

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Information technologies and subjective well-being: Does the Internet raise material aspirations?

Steffen Lohmann
Oxford Economic Papers, July 2015, Pages 740-759

Abstract:
This article examines whether access to modern information technologies, in particular the Internet, has an impact on individual positionality — the degree to which subjective well-being is affected by concerns about relative status and material aspirations. We provide empirical evidence that positionality and Internet access are intertwined. Exploiting variation over time in a panel of European households, we find stated material aspirations to be significantly positively related to computer access in areas with advanced Internet infrastructure. Furthermore, we report cross-sectional evidence from the World Values Survey suggesting an indirect negative effect of Internet access on subjective well-being since people who regularly use the Internet as a source of information derive less satisfaction from their income. Together, the empirical findings highlight the importance of information sets for how individuals evaluate their own living conditions relative to others and suggest a vital role for informational globalization to affect positionality.

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

Eric Hanushek, Jens Ruhose & Ludger Woessmann
Stanford 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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Innovation and Top Income Inequality

Philippe Aghion et al.
NBER Working Paper, June 2015

Abstract:
In this paper we use cross-state panel data to show a positive and significant correlation between various measures of innovativeness and top income inequality in the United States over the past decades. Two distinct instrumentation strategies suggest that this correlation (partly) reflects a causality from innovativeness to top income inequality, and the effect is significant: for example, when measured by the number of patent per capita, innovativeness accounts on average across US states for around 17% of the total increase in the top 1% income share between 1975 and 2010. Yet, innovation does not appear to increase other measures of inequality which do not focus on top incomes. Next, we show that the positive effects of innovation on the top 1% income share are dampened in states with higher lobbying intensity. Finally, from cross-section regressions performed at the commuting zone (CZ) level, we find that: (i) innovativeness is positively correlated with upward social mobility; (ii) the positive correlation between innovativeness and social mobility, is driven mainly by entrant innovators and less so by incumbent innovators, and it is dampened in states with higher lobbying intensity. Overall, our findings vindicate the Schumpeterian view whereby the rise in top income shares is partly related to innovation-led growth, where innovation itself fosters social mobility at the top through creative destruction.

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Firm Market Power and the Earnings Distribution

Douglas Webber
Labour Economics, August 2015, Pages 123–134

Abstract:
Using the Longitudinal Employer Household Dynamics (LEHD) data from the United States Census Bureau, I compute firm-level measures of labor market (monopsony) power. To generate these measures, I extend the empirical strategy of Manning (2003) and estimate the labor supply elasticity facing each private non-farm firm in the US. While a link between monopsony power and earnings has traditionally been assumed, I provide the first direct evidence of the positive relationship between a firm's labor supply elasticity and the earnings of its workers. I also contrast the dynamic model strategy with the more traditional use of concentration ratios to measure a firm's labor market power. In addition, I provide several alternative measures of labor market power which account for potential threats to identification such as endogenous mobility. Finally, I construct a counterfactual earnings distribution which allows the effects of firm market power to vary across the earnings distribution. I estimate the average labor supply elasticity to the firm to be 1.08, however my findings suggest there to be significant variability in the distribution of firm market power across US firms, and that dynamic monopsony models are superior to the use of concentration ratios in evaluating a firm's labor market power. I find that a one-unit increase in the labor supply elasticity to the firm is associated with earnings gains of between 5 and 16 percent. While nontrivial, these estimates imply that firms do not fully exercise their labor market power over their workers. Furthermore, I find that the negative earnings impact of a firm's market power is strongest in the lower half of the earnings distribution, and that a one standard deviation increase in the labor supply elasticity to the firm reduces the variance of the earnings distribution by 9 percent.

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How High-Income Neighborhoods Receive More Service from Municipal Government: Evidence from City Administrative Data

James Feigenbaum & Andrew Hall
Stanford Working Paper, July 2015

Abstract:
Municipal governments oversee many of the most important political matters of daily life in the U.S., yet our understanding of municipal politics remains limited. We combine a large dataset on requests for local government services — such as snow plowing, traffic signal repairs, pothole repairs, and graffiti cleanup — in Boston, Massachusetts, 2011-2015, with fine-grained census data on localized incomes and income inequality. Employing a within-neighborhood design, we establish that, other things equal, higher-income census tracts make more requests for government services. Using data from open-ended text responses submitted by the city, we then connect these requests to the provision of services, showing how the underlying capacity of local communities for communicating requests — i.e., for participating in the process of local government — helps drive inequality in the receipt of services themselves. These results highlight how inequality in economic resources connects to inequality in the non-electoral components of participation in local government.

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The Income-Achievement Gap and Adult Outcome Inequality

Eric Reed Nielsen
Federal Reserve Working Paper, May 2015

Abstract:
This paper discusses various methods for assessing group differences in academic achievement using only the ordinal content of achievement test scores. Researchers and policymakers frequently draw conclusions about achievement differences between various populations using methods that rely on the cardinal comparability of test scores. This paper shows that such methods can lead to erroneous conclusions in an important application: measuring changes over time in the achievement gap between youth from high- and low-income households. Commonly-employed, cardinal methods suggest that this "income-achievement gap" did not change between the National Longitudinal Surveys of Youth (NLSY) 1979 and 1997 surveys. In contrast, ordinal methods show that this gap narrowed substantially for reading achievement and may have narrowed for math achievement as well. In fact, any weighting scheme that places more value on higher test scores must conclude that the reading income-achievement gap decreased between these two surveys. The situation for math achievement is more complex, but low-income students in the middle and high deciles of the low-income math achievement distribution unambiguously gained relative to their high-income peers. Furthermore, an anchoring exercise suggests that the narrowing of the income-achievement gap corresponds to an economically significant convergence in lifetime labor wealth and school completion rates for youth from high- and low-income backgrounds.

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Socioeconomic Diversity, Political Engagement, and the Density of Nonprofit Organizations in U.S. Counties

Mirae Kim
American Review of Public Administration, July 2015, Pages 402-416

Abstract:
This study examines the hypothesis that a community’s heterogeneous demands for public service, represented by a community’s income inequality and racial-ethnic diversity, together with its level of political engagement, help explain the density of nonprofits in a local area. Using data on more than 3,000 U.S. counties, empirical analyses reveal that communities with a higher level of income inequality and political engagement tend to have more nonprofits per resident than otherwise similar communities. This pattern holds for the nonprofit sector overall and for 6 of the 10 major subsectors examined. These findings suggest that nonprofit organizations may fill a gap in the delivery of public services, especially when a community has a great variety of social and economic needs. This study thus highlights the role of income inequality as a factor in explaining the density of nonprofit organizations at the local level. Implications for public policy and administration are discussed.

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Performance pay or redistribution? Cultural differences in just-world beliefs and preferences for wage inequality

Douglas Frank, Klaus Wertenbroch & William Maddux
Organizational Behavior and Human Decision Processes, September 2015, Pages 160–170

Abstract:
We identify and test a specific psychological mechanism underlying cross-national differences in preferences for performance-based versus redistributive compensation systems. We posit that individuals’ beliefs in the inherent justness and deservedness of individual outcomes (i.e., just world beliefs: JWBs) can help explain individual and culture-level variation in preferences for these compensation systems. Study 1 demonstrates a general correlation between the JWBs of a culturally diverse sample of former managers and their preferences for performance versus equal pay for an individual task. Study 2 shows that American participants exhibit stronger preferences for individual performance pay versus redistributive pay than do French participants, a difference that is mediated by cultural differences in JWBs. Study 3 holds national culture constant and replicates these effects by experimentally manipulating JWBs, demonstrating the causal nature of JWBs in determining preferences for performance-based versus redistributive compensation systems. Implications for organizational incentive systems, culture, and work motivation are discussed.

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Income Inequality, Intergenerational Mobility, and the Great Gatsby Curve: Is Education the Key?

John Jerrim & Lindsey Macmillan
Social Forces, forthcoming

Abstract:
It is widely believed that countries with greater levels of income inequality also have lower levels of intergenerational mobility. This relationship, known as the Great Gatsby Curve (GGC), has been prominently cited by high-ranking public policymakers, bestselling authors, and Nobel Prize–winning academics. Yet, relatively little cross-national work has empirically examined the mechanisms thought to underpin the GGC — particularly with regard to the role of educational attainment. This paper uses the cross-nationally comparable Programme for International Assessment of Adult Competencies (PIAAC) data set to shed new light on this issue. We find that income inequality is associated with several key components of the intergenerational transmission process — including access to higher education, the financial returns on education, and the residual effect of parental education upon labor-market earnings. Thus, consistent with theoretical models, we find that educational attainment is an important driver of the relationship between intergenerational mobility and income inequality. We hence conclude that unequal access to financial resources plays a central role in the intergenerational transmission of advantage.

By KEVIN LEWIS | 09:00:00 AM

Thursday, August 6, 2015

Side effects

Effects of a Presidential Candidate's Comments on HPV Vaccine

Rachel Zucker et al.
Journal of Health Communication, July 2015, Pages 783-789

Abstract:
During and after the 2011 Republican presidential debate, a candidate questioned the safety of HPV vaccine. The authors aimed to determine the effect of these comments on parents. A national sample of 327 parents with adolescent sons ages 11–17 years completed online surveys in fall 2010 (baseline, about 1 year before the debate) and 2011 (follow-up, about 1 month after the debate). The authors used regression models to examine the association of parents’ awareness of the candidate's comments with HPV vaccine initiation among their sons, their willingness to get sons free HPV vaccine, and their beliefs about potential harms of HPV vaccine. Overall, 17% of parents reported hearing about the Republican presidential candidate's comments about HPV vaccine. Parents aware of the comments had a larger increase between baseline and follow-up in the belief that HPV vaccine might cause short-term health problems compared with parents who were not aware. Although the candidate's comments may have increased some parents’ beliefs about the short-term harms of HPV vaccine, the comments had no effect on other beliefs, willingness to vaccinate, or behavior. Having accurate information about HPV vaccine that is readily available to the public during such controversies may diminish their effect.

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Spring Forward at Your Own Risk: Daylight Saving Time and Fatal Vehicle Crashes

Austin Smith
American Economic Journal: Applied Economics, forthcoming

Abstract:
Daylight Saving Time (DST) impacts over 1.5 billion people, yet many of its impacts on practicing populations remain uncertain. Exploiting the discrete nature of DST transitions and a 2007 policy change, I estimate the impact of DST on fatal automobile crashes. My results imply that from 2002-2011 the transition into DST caused over 30 deaths at a social cost of $275 million annually. Employing four tests to decompose the aggregate effect into an ambient light or sleep mechanism, I find that shifting ambient light only reallocates fatalities within a day, while sleep deprivation caused by the spring transition increases risk.

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Matching Platforms and HIV Incidence: An Empirical Investigation of Race, Gender, and Socio-Economic Status

Brad Greenwood & Ritu Agarwal
Management Science, forthcoming

Abstract:
Although recent work has examined the adverse implications of Internet-enabled matching platforms, limited attention has been paid to whom the negative externalities accrue. We examine how the entry of platforms for the solicitation of casual sex influences the incidence rate of HIV by race, gender, and socio-economic status. Using a census of 12 million patients subjected to a natural experiment in Florida, we find a significant increase in HIV incidence after platform implementation, with the largest effect accruing to historically at risk populations (i.e. African-Americans) despite documented lower rates of Internet utilization. Strikingly, our analysis reveals that HIV incidence increases in historically low risk populations as well (e.g. individuals of higher socio-economic status), and that men and women experience similar penalties. Identifying granular effects across subpopulations allows us to offer additional insight into the mechanisms by which matching platforms increase HIV incidence. We estimate the cumulative effect of platform entry over the five year period of the study as 1,149 additional Floridians contracting HIV at a cost of $710 million.

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Prenatal Stress and Low Birth Weight: Evidence from the Super Bowl

Brian Duncan, Hani Mansour & Daniel Rees
University of Colorado Working Paper, May 2015

Abstract:
Studies have estimated the relationship between psychological stress and birth weight by exploiting natural disasters and terrorist attacks, both of which could affect fetal health through other channels. Using data from the National Vital Statistics System for the period 1969-2004, we estimate the effect of prenatal exposure to the Super Bowl on low birth weight. Although major sporting events elicit intense emotions, they do not threaten viewers with direct physical harm or limit access to prenatal care. We find that Super Bowl exposure is associated with a small, but precisely estimated, increase in the probability of low birth weight.

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Money Transfer and Birth Weight: Evidence from the Alaska Permanent Fund Dividend

Wankyo Chung, Hyungserk Ha & Beomsoo Kim
Economic Inquiry, forthcoming

Abstract:
The positive relationship between income and health is well established. However, the direction of causality remains unclear: do economic resources influence health, or vice versa? Exploiting a new source of exogenous income variation, this study examines the impact of the Alaska Permanent Fund Dividend (APFD) on newborns' health outcomes. The results show that income has a significantly positive, but modest effect on birth weight. We find that an additional $1,000 ($2,331 in 2011 dollars) increases birth weight by 17.7 g and substantially decreases the likelihood of a low birth weight (a decrease of around 14% of the sample mean). Furthermore, the income effect is higher for less-educated mothers. Based on a gestation-weight profile in the sample, increased gestation owing to the APFD could explain a maximum of 34%–57% of the measured weight increase, although we are unable to examine all the potential mechanisms.

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Financial Incentives for Kidney Donation: A Comparative Case Study using Synthetic Controls

Firat Bilgel & Brian Galle
Journal of Health Economics, September 2015, Pages 103–117

Abstract:
Although many commentators called for increased efforts to incentivize organ donations, theorists and some evidence suggest these efforts will be ineffective. Studies examining the impact of tax incentives generally report zero/negative coefficients, but these studies incorrectly define their tax variables and rely on difference-in-differences despite likely failures of the parallel trends assumption. We identify the causal effect of tax legislation to serve as an organ donor on living kidney donation rates in the U.S states using more precise tax data and allowing for heterogeneous time-variant causal effects. Employing a synthetic control method, we find that the passage of tax incentive legislation increased living unrelated kidney donation rates by 52 percent in New York relative to a comparable synthetic New York in the absence of legislation. It is possible that New York is unique, but our methodology does not allow us to measure accurately effects in other states.

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Does Retirement Improve Health and Life Satisfaction?

Aspen Gorry, Devon Gorry & Sita Slavov
NBER Working Paper, July 2015

Abstract:
We utilize panel data from the Health and Retirement Study to investigate the impact of retirement on physical and mental health, life satisfaction, and health care utilization. Because poor health can induce retirement, we instrument for retirement using eligibility for Social Security and employer sponsored pensions and coverage by the Social Security earnings test. We find strong evidence that retirement improves both health and life satisfaction. While the impact on life satisfaction occurs within the first 4 years of retirement, many of the improvements in health show up 4 or more years later, consistent with the view that health is a stock that evolves slowly. We find little evidence that retirement influences health care utilization.

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Early-Life State-of-Residence Characteristics and Later Life Hypertension, Diabetes, and Ischemic Heart Disease

David Rehkopf et al.
American Journal of Public Health, August 2015, Pages 1689-1695

Objectives: We examined how state characteristics in early life are associated with individual chronic disease later in life.

Methods: We assessed early-life state of residence using the first 3 digits of social security numbers from blue- and white-collar workers from a US manufacturing company. Longitudinal data were available from 1997 to 2012, with 305 936 person-years of observation. Disease was assessed using medical claims. We modeled associations using pooled logistic regression with inverse probability of censoring weights.

Results: We found small but statistically significant associations between early-state-of-residence characteristics and later life hypertension, diabetes, and ischemic heart disease. The most consistent associations were with income inequality, percentage non-White, and education. These associations were similar after statistically controlling for individual socioeconomic and demographic characteristics and current state characteristics.

Conclusions: Characteristics of the state in which an individual lives early in life are associated with prevalence of chronic disease later in life, with a strength of association equivalent to genetic associations found for these same health outcomes.

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The Effect of EITC Expansion on Health: A Different Approach to Income Gradient in Health

Otto Lenhart
Emory University Working Paper, July 2015

Abstract:
This study investigates the validity of previous findings of a positive relationship between income and health. This paper differs from previous studies in three ways. First, it directly accounts for potential income endogeneity by exploiting expansions of the Earned Income Tax Credit (EITC) as exogenous income variations. Second, this study offers a more accurate identification of affected individuals by obtaining simulated EITC benefits. I find that the expansion positively impacts health, especially when allowing it to adjust for some time. Third, this study provides evidence that insurance coverage and food expenditures are potential mechanisms underlying the income gradient in health.

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Short-run Effects of Job Loss on Health Conditions, Health Insurance, and Health Care Utilization

Jessamyn Schaller & Ann Huff Stevens
Journal of Health Economics, forthcoming

Abstract:
Job loss in the United States is associated with reductions in income and long-term increases in mortality rates. This paper examines the short-run changes in health, health care access, and health care utilization after job loss that lead to these long-term effects. Using a sample with more than 10,000 individual job losses and longitudinal data on a wide variety of health-related outcomes, we show that job loss results in worse self-reported health, activity limitations, and worse mental health, but is not associated with statistically significant increases in a variety of specific chronic conditions. Among the full sample of workers, we see reductions in insurance coverage, but little evidence of reductions in health care utilization after job loss. Among the subset of displaced workers with chronic conditions and those for whom the lost job was their primary source of insurance we do see reductions in doctor's visits and prescription drug usage.

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Income Effects on Health: Evidence from Union Army Pensions

Shari Eli
Journal of Economic History, June 2015, Pages 448-478

Abstract:
To what extent do rising income levels explain the decline in adult mortality rates experienced in the United States a century ago? I explore this question by investigating the income effect of the country's first wide-scale entitlement program: the Union Army pensions. Documenting that Republican Congressional candidates boosted pensions to secure votes, I exploit exogenous increases in income stemming from patronage politics to estimate the semi-elasticity of disease onset with respect to pensions. Income effects are large for cardiovascular, gastrointestinal, and respiratory illnesses.

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Twentieth century surge of excess adult male mortality

Hiram Beltrán-Sánchez, Caleb Finch & Eileen Crimmins
Proceedings of the National Academy of Sciences, 21 July 2015, Pages 8993–8998

Abstract
Using historical data from 1,763 birth cohorts from 1800 to 1935 in 13 developed countries, we show that what is now seen as normal — a large excess of female life expectancy in adulthood — is a demographic phenomenon that emerged among people born in the late 1800s. We show that excess adult male mortality is clearly rooted in specific age groups, 50–70, and that the sex asymmetry emerged in cohorts born after 1880 when male:female mortality ratios increased by as much as 50% from a baseline of about 1.1. Heart disease is the main condition associated with increased excess male mortality for those born after 1900. We further show that smoking-attributable deaths account for about 30% of excess male mortality at ages 50–70 for cohorts born in 1900–1935. However, after accounting for smoking, substantial excess male mortality at ages 50–70 remained, particularly from cardiovascular disease. The greater male vulnerability to cardiovascular conditions emerged with the reduction in infectious mortality and changes in health-related behaviors.

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Developmental Origins of Cardiovascular Disease: Understanding High Mortality Rates in the American South

Richard Steckel & Garrett Senney
Ohio State University Working Paper, May 2015

Abstract:
Many studies by social scientists view heart disease as the outcome of current or recent conditions such as poverty, smoking and obesity. An alternative approach gaining recognition is developmental origins of health and disease, which we apply to understand high death rates of whites in the South from cardiovascular disease (CVD). In this interpretation CVD vulnerability follows from unbalanced physical development created by poor conditions in utero that underbuilds major organs such as the kidneys and the cardiovascular system relative to those needed to process lush nutrition later in life. The South underwent an economic transformation from generations of poverty to rapid economic growth in the post-WWII era, exposing many children born in the 1950s through the 1980s to unbalanced physical development. Here we use state-level data for whites on income growth, smoking, obesity and education to explain variation in CVD death rates in 2010-2011. Our proxy for unbalanced physical growth, the ratio of average household income in 1980 to that in 1950, has a large systematic influence on CVD mortality, an impact that increases dramatically with age. The income ratio combined with smoking, obesity, and education explains two thirds of the variance in CVD mortality across states. Metaphorically, persistent intergenerational poverty loads the gun and rapid income growth pulls the trigger.

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Comorbidity of intellectual disability confounds ascertainment of autism: Implications for genetic diagnosis

Andrew Polyak, Richard Kubina & Santhosh Girirajan
American Journal of Medical Genetics Part B: Neuropsychiatric Genetics, forthcoming

Abstract:
While recent studies suggest a converging role for genetic factors towards risk for nosologically distinct disorders including autism, intellectual disability (ID), and epilepsy, current estimates of autism prevalence fail to take into account the impact of comorbidity of these disorders on autism diagnosis. We aimed to assess the effect of comorbidity on the diagnosis and prevalence of autism by analyzing 11 years (2000–2010) of special education enrollment data on approximately 6.2 million children per year. We found a 331% increase in the prevalence of autism from 2000 to 2010 within special education, potentially due to a diagnostic recategorization from frequently comorbid features such as ID. The decrease in ID prevalence equaled an average of 64.2% of the increase of autism prevalence for children aged 3–18 years. The proportion of ID cases potentially undergoing recategorization to autism was higher (P = 0.007) among older children (75%) than younger children (48%). Some US states showed significant negative correlations between the prevalence of autism compared to that of ID while others did not, suggesting state-specific health policy to be a major factor in categorizing autism. Further, a high frequency of autistic features was observed when individuals with classically defined genetic syndromes were evaluated for autism using standardized instruments. Our results suggest that current ascertainment practices are based on a single facet of autism-specific clinical features and do not consider associated comorbidities that may confound diagnosis. Longitudinal studies with detailed phenotyping and deep molecular genetic analyses are necessary to completely understand the cause of this complex disorder.

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Cannabidiol, a Major Non-Psychotropic Cannabis Constituent Enhances Fracture Healing and Stimulates Lysyl Hydroxylase Activity in Osteoblasts

Natalya Kogan et al.
Journal of Bone and Mineral Research, forthcoming

Abstract:
Cannabinoid ligands regulate bone mass, but skeletal effects of cannabis (marijuana and hashish) have not been reported. Bone fractures are highly prevalent, involving prolonged immobilization and discomfort. Here we report that the major non-psychoactive cannabis constituent, cannabidiol (CBD), enhances the biomechanical properties of healing rat mid-femoral fractures. The maximal load and work-to-failure, but not the stiffness, of femurs from rats given a mixture of CBD and Δ9-tetrahydrocannabinol (THC) for 8 weeks were markedly increased by CBD. This effect is not shared by THC (the psychoactive component of cannabis), but THC potentiates the CBD stimulated work-to-failure at 6 weeks postfracture followed by attenuation of the CBD effect at 8 weeks. Using micro–computed tomography (μCT), the fracture callus size was transiently reduced by either CBD or THC 4 weeks after fracture but reached control level after 6 and 8 weeks. The callus material density was unaffected by CBD and/or THC. By contrast, CBD stimulated mRNA expression of Plod1 in primary osteoblast cultures, encoding an enzyme that catalyzes lysine hydroxylation, which is in turn involved in collagen crosslinking and stabilization. Using Fourier transform infrared (FTIR) spectroscopy we confirmed the increase in collagen crosslink ratio by CBD, which is likely to contribute to the improved biomechanical properties of the fracture callus. Taken together, these data show that CBD leads to improvement in fracture healing and demonstrate the critical mechanical role of collagen crosslinking enzymes.

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The Lifetime Economic Burden of Inaccurate HER2 Testing: Estimating the Costs of False-Positive and False-Negative HER2 Test Results in US Patients with Early-Stage Breast Cancer

Louis Garrison et al.
Value in Health, June 2015, Pages 541–546

Background: Patients with breast cancer whose tumors test positive for human epidermal growth factor receptor 2 (HER2) are treated with HER2-targeted therapies such as trastuzumab, but limitations with HER2 testing may lead to false-positive (FP) or false-negative (FN) results.

Objectives: To develop a US-level model to estimate the effect of tumor misclassification on health care costs and patient quality-adjusted life-years (QALYs).

Methods: Decision analysis was used to estimate the number of patients with early-stage breast cancer (EBC) whose HER2 status was misclassified in 2012. FP results were assumed to generate unnecessary trastuzumab costs and unnecessary cases of trastuzumab-related cardiotoxicity. FN results were assumed to save money on trastuzumab, but with a loss of QALYs and greater risk of disease recurrence and its associated costs. QALYs were valued at $100,000 under a net monetary benefit approach.

Results: Among 226,870 women diagnosed with EBC in 2012, 3.12% (n = 7,070) and 2.18% (n = 4,955) were estimated to have had FP and FN test results, respectively. Approximately 8400 QALYs (discounted, lifetime) were lost among women not receiving trastuzumab because of FN results. The estimated incremental per-patient lifetime burden of FP or FN results was $58,900 and $116,000, respectively. The implied incremental losses to society were $417 million and $575 million, respectively.

Conclusions: HER2 tests result in misclassification and nonoptimal treatment of approximately 12,025 US patients with EBC annually. The total economic societal loss of nearly $1 billion suggests that improvements in HER2 testing accuracy are needed and that further clinical and economic studies are warranted.

By KEVIN LEWIS | 09:00:00 AM

Wednesday, August 5, 2015

Bookish

Is It Where You Go or What You Study? The Relative Influence of College Selectivity and College Major on Earnings

Eric Eide, Michael Hilmer & Mark Showalter
Contemporary Economic Policy, forthcoming

Abstract:
All college students must decide where to attend college and what major to study. We estimate how earnings by college major differ at different college selectivity types. We find major-specific earnings vary markedly by college selectivity, with the strongest differences among business majors and the weakest differences among science majors. We also find that when comparing earnings of graduates from top colleges to middle or bottom ranked colleges, the distribution of students across majors can be as important as earnings differences by major in accounting for college selectivity earnings gaps.

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The Effect of Access to College Assessments on Enrollment and Attainment

Georeg Bulman
American Economic Journal: Applied Economics, forthcoming

Abstract:
This paper examines if students' college outcomes are sensitive to access to college admissions tests. I construct a data set of every test center location and district policy in the United States linked to the universe of individual testing records and a large sample of college enrollment records. I find evidence that SAT taking is responsive to the opening or closing of a testing center at a student's own or a neighboring high school and to policies that provide free in-school administration and default registration. Newly induced takers of high academic aptitude appear likely to attend and graduate from college.

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Teacher Quality and Student Inequality

Richard Mansfield
Journal of Labor Economics, July 2015, Pages 751-788

Abstract:
This paper uses 11 years of administrative data from North Carolina public high schools to examine the extent to which the allocation of teachers within and across public high schools is contributing to inequality in student test score performance. The existence of nearly 3,500 teacher transfers allows separate identification of each teacher's quality from other school-level factors. I find that teaching quality is fairly equitably distributed both within and across high schools: students among the bottom (top) decile of a student background index are taught by teachers who are, on average, at the 41st (57th) percentile of the value-added distribution.

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Uneven Playing Field? Assessing the Teacher Quality Gap Between Advantaged and Disadvantaged Students

Dan Goldhaber, Lesley Lavery & Roddy Theobald
Educational Researcher, June/July 2015, Pages 293-307

Abstract:
Policymakers aiming to close the well-documented achievement gap between advantaged and disadvantaged students have increasingly turned their attention to issues of teacher quality. A number of studies have demonstrated that teachers are inequitably distributed across student subgroups by input measures, like experience and qualifications, as well as output measures, like value-added estimates of teacher performance, but these tend to focus on either individual measures of teacher quality or particular school districts. In this study, we present a comprehensive, descriptive analysis of the inequitable distribution of both input and output measures of teacher quality across various indicators of student disadvantage across all school districts in Washington State. We demonstrate that in elementary school, middle school, and high school classrooms, virtually every measure of teacher quality we examine - experience, licensure exam scores, and value added - is inequitably distributed across every indicator of student disadvantage - free/reduced-price lunch status, underrepresented minority, and low prior academic performance. Finally, we decompose these inequities to the district, school, and classroom levels and find that patterns in teacher sorting at all three levels contribute to the overall teacher quality gaps.

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Credit Supply and the Rise in College Tuition: Evidence from the Expansion in Federal Student Aid Programs

David Lucca, Taylor Nadauld & Karen Shen
Federal Reserve Working Paper, July 2015

Abstract:
When students fund their education through loans, changes in student borrowing and tuition are interlinked. Higher tuition costs raise loan demand, but loan supply also affects equilibrium tuition costs - for example, by relaxing students' funding constraints. To resolve this simultaneity problem, we exploit detailed student-level financial data and changes in federal student aid programs to identify the impact of increased student loan funding on tuition. We find that institutions more exposed to changes in the subsidized federal loan program increased their tuition disproportionately around these policy changes, with a sizable pass-through effect on tuition of about 65 percent. We also find that Pell Grant aid and the unsubsidized federal loan program have pass-through effects on tuition, although these are economically and statistically not as strong. The subsidized loan effect on tuition is most pronounced for expensive, private institutions that are somewhat, but not among the most, selective.

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Public School Choice and Racial Sorting: An Examination of Charter Schools in Indianapolis

Marc Stein
American Journal of Education, August 2015, Pages 597-627

Abstract:
There has been a long-standing concern among education researchers and policy makers that public school choice may lead to increased racial isolation. Improving on aggregate comparisons, I examine the sorting of students into charter schools by tracking individual students from their charter school of enrollment back to the school they were enrolled in immediately prior to the switch to a charter school, allowing for a direct comparison of school racial demographics between the two sectors. I find evidence that the process of charter school choice in Indianapolis leads to higher degrees of racial isolation and less diversity within schools than is present in the underlying process of student school transfers in the public school district from which a majority of these students came.

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Revisiting Gladwell's Hockey Players: Influence of Relative Age Effects upon Earning the PhD

Kevin Kniffin & Andrew Hanks
Contemporary Economic Policy, forthcoming

Abstract:
We examine the influence of relative age effects (RAE) upon specific factors related to earning a Doctor of Philosophy (PhD): age at degree, time to degree, and salary upon completion. Drawing on the 2010 Survey of Earned Doctorates, we find no significant influence of RAE. Specifically, when controlling for discipline-specific variation, we find no influence of RAE on the age of people earning the PhD and no influence on post-graduate salary. However, we estimate a relative salary loss due to redshirting of over $138,000 in lifetime earnings for individuals who earn the PhD. To the extent that earning the PhD is considered an outstanding achievement, our findings support the view that redshirting is unnecessary and costly.

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Weak Markets, Strong Teachers: Recession at Career Start and Teacher Effectiveness

Markus Nagler, Marc Piopiunik & Martin West
NBER Working Paper, July 2015

Abstract:
How do alternative job opportunities affect teacher quality? We provide the first causal evidence on this question by exploiting business cycle conditions at career start as a source of exogenous variation in the outside options of potential teachers. Unlike prior research, we directly assess teacher quality with value-added measures of impacts on student test scores, using administrative data on 33,000 teachers in Florida public schools. Consistent with a Roy model of occupational choice, teachers entering the profession during recessions are significantly more effective in raising student test scores. Results are supported by placebo tests and not driven by differential attrition.

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Education and Lifetime Earnings in the United States

Christopher Tamborini, ChangHwan Kim & Arthur Sakamoto
Demography, forthcoming

Abstract:
Differences in lifetime earnings by educational attainment have been of great research and policy interest. Although a large literature examines earnings differences by educational attainment, research on lifetime earnings - which refers to total accumulated earnings from entry into the labor market until retirement - remains limited because of the paucity of adequate data. Using data that match respondents in the Survey of Income and Program Participation to their longitudinal tax earnings as recorded by the Social Security Administration, we estimate the 50-year work career effects of education on lifetime earnings for men and women. By overcoming the purely synthetic cohort approach, our results provide a more realistic appraisal of actual patterns of lifetime earnings. Detailed estimates are provided for gross lifetime earnings by education; net lifetime earnings after controlling for covariates associated with the probability of obtaining a bachelor's degree; and the net present 50-year lifetime value of education at age 20. In addition, we provide estimates that include individuals with zero earnings and disability. We also assess the adequacy of the purely synthetic cohort approach, which uses age differences in earnings observed in cross-sectional surveys to approximate lifetime earnings. Overall, our results confirm the persistent positive effects of higher education on earnings over different stages of the work career and over a lifetime, but also reveal notably smaller net effects on lifetime earnings compared with previously reported estimates. We discuss the implications of these and other findings.

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Academic Attitudes and Achievement in Students of Urban Public Single-Sex and Mixed-Sex High Schools

Nicole Else-Quest & Oana Peterca
American Educational Research Journal, August 2015, Pages 693-718

Abstract:
Publicly funded single-sex schooling (SSS) has proliferated in recent years and is touted as a remedy to gaps in academic attitudes and achievement, particularly for low-income students of color. Research on SSS is rife with limitations, stemming from selective admissions processes, selection effects related to socioeconomic status, a lack of ethnic diversity among students, and a neglect of boys' schools. Addressing those concerns, the current study is a quasi-experimental investigation of the academic attitudes and achievement among 11th-grade low-income students of color enrolled in nonselective, urban neighborhood public single-sex and mixed-sex high schools. Students in SSS reported significantly more negative attitudes about English/reading compared to students in mixed-sex schools (MSS), while there were no differences in math or science attitudes. Data from standardized tests indicate that SSS was associated with poorer achievement among boys in reading and math but higher achievement among girls on math, science, reading, and writing.

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Early Math Coursework and College Readiness: Evidence from Targeted Middle School Math Acceleration

Shaun Dougherty et al.
NBER Working Paper, July 2015

Abstract:
To better prepare students for college-level math and the demands of the labor market, school systems have tried to increase the rigor of students' math coursework. The failure of universal "Algebra for All" models has led recently to more targeted approaches. We study one such approach in Wake County, North Carolina, which began using prior test scores to assign middle school students to an accelerated math track culminating in eighth grade algebra. The policy has reduced the role that income and race played in course assignment. A regression discontinuity design exploiting the eligibility threshold shows that acceleration has no clear effect on test scores but lowers middle school course grades. Acceleration does, however, raise the probability of taking and passing geometry in ninth grade by over 30 percentage points, including for black and Hispanic students. Nonetheless, most students accelerated in middle school do not remain so by high school and those that do earn low grades in advanced courses. This leaky pipeline suggests that targeted math acceleration has potential to increase college readiness among disadvantaged populations but that acceleration alone is insufficient to keep most students on such a track.

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Socioeconomic inequality in access to high-status colleges: A cross-country comparison

John Jerrim, Anna Chmielewski & Phil Parker
Research in Social Stratification and Mobility, December 2015, Pages 20-32

Abstract:
This paper considers the relationship between family background, academic achievement in high school and access to high-status postsecondary institutions in three developed countries (Australia, England and the United States). We begin by estimating the unconditional association between family background and access to a high status university, before examining how this relationship changes once academic achievement in high school is controlled. Our results suggest that high achieving disadvantaged children are much less likely to enter a high-status college than their more advantaged peers, and that the magnitude of this socio-economic gradient is broadly similar across these three countries. However, we also find that socio-economic inequality in access to high-status private US colleges is much more pronounced than access to their public sector counterparts (both within the US and when compared overseas).

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Hierarchy as a theme in the US college, 1880-1920

Ethan Ris
History of Education, forthcoming

Abstract:
How did the undergraduate college rapidly position itself as the gateway to middle-class US employment between 1880 and 1920? This article attempts to explain one part of that process. Drawing on Weberian organisational theory, transnational intellectual history and case studies of three institutions, it identifies hierarchy as a defining aspect of both modern society and the modern workplace - one that must be comprehended and mastered by the successful 'white collar' worker. The author describes the turn-of-the-century transformation of the US college in the context of its increasingly hierarchical nature, as opposed to traditional explanations that focus on human capital production or the incorporation of the German research university model. Hierarchical structures in the hidden and extra-curriculum of the US college helped establish it as the pre-eminent testing ground for aspiring bureaucratic workers.

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Why Are University Endowments Large and Risky?

Thomas Gilbert & Christopher Hrdlicka
Review of Financial Studies, forthcoming

Abstract:
We build a model of universities combining their real production decisions with their choice of endowment size and asset allocation. Variation in opportunity cost, that is, the productivity of internal projects, has a first-order effect on these choices. Adding the UPMIFA-mandated 7% payout constraint, the endowment size and asset allocations match those empirically observed. This constraint has little effect on universities that do not value the output of their internal projects but harms those that do: it prevents the endowment's use as an effective buffer stock, thereby increasing the volatility of production, and it slows the growth of the most productive universities.

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Should Student Employment Be Subsidized? Conditional Counterfactuals and the Outcomes of Work-Study Participation

Judith Scott-Clayton & Veronica Minaya
Economics of Education Review, forthcoming

Abstract:
Student employment subsidies are one of the largest types of federal employment subsidies, yet little is known about their impact. We provide a framework highlighting the likelihood of heterogeneity in program effects, depending upon whether recipients are marginal or inframarginal workers. We then utilize a matching approach to estimate the effects of the Federal Work-Study program, leveraging the fact that FWS funding varies across institutions for idiosyncratic reasons. Our results suggest that about half of FWS participants would have worked even in the absence of the subsidy; for these students, FWS reduces hours worked and improves academic outcomes, but has little impact on early post-college employment. For students who would not have worked otherwise, the pattern of effects reverses. Overall, the positive effects are strongest for subgroups who are the least likely to have access to the program, suggesting there may be gains to improved targeting of funds.

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Capitalization of school quality into housing prices: Evidence from Boston Public School district walk zones

Vincent La
Economics Letters, September 2015, Pages 102-106

Abstract:
Using Boston Public School District's unique walk zone feature to better account for unobservables, I estimate a significant positive effect of school quality on house sale prices. This effect increases for homes more likely to be bought by families with children and diminishes in areas with already oversubscribed schools.

By KEVIN LEWIS | 09:00:00 AM

Tuesday, August 4, 2015

Colorful history

Happiness in modern society: Why intelligence and ethnic composition matter

Satoshi Kanazawa & Norman Li
Journal of Research in Personality, forthcoming

Abstract:
Recent developments in evolutionary psychology suggest that living among others of the same ethnicity might make individuals happier and further that such an effect of the ethnic composition on life satisfaction may be stronger among less intelligent individuals. Data from the National Longitudinal Study of Adolescent Health showed that White Americans had significantly greater life satisfaction than all other ethnic groups in the US and this was largely due to the fact that they were the majority ethnic group; minority Americans who lived in counties where they were the numerical majority had just as much life satisfaction as White Americans did. Further, the association between ethnic composition and life satisfaction was significantly stronger among less intelligent individuals. The results suggest two important factors underlying life satisfaction and highlight the utility of integrating happiness research and evolutionary psychology.

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Segregated Diversity

Joanna Marie Pinto-Coelho & Tukufu Zuberi
Sociology of Race and Ethnicity, forthcoming

Abstract:
As both older and newer immigrant gateway metropolitan areas grow more racially diverse, scholars of neighborhood change want to know whether these areas are also becoming more residentially integrated. While it is logically and mathematically plausible to assume that increasing racial diversity directly leads to increased racial residential integration, this paper argues that the empirical reality may actually be the opposite. To investigate this concept, we use statistical and cartographic methods to analyze tract-level Census data of the Washington, D.C. metropolitan area, a case study that is both representative and unique. Results indicate that increasing racial diversity in the Washington, D.C. metropolitan area between 1990 and 2010 coincided with increased racial residential segregation. We discuss the theoretical and methodological implications of these findings and make recommendations for future research.

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A Culture of Disenfranchisement: How American Slavery Continues to Affect Voting Behavior

Avidit Acharya, Matthew Blackwell & Maya Sen
Harvard Working Paper, July 2015

Abstract:
In Shelby County v. Holder (2013), the Supreme Court struck down parts of the Voting Rights Act of 1965 on the argument that intervening history had attenuated many voting inequalities between blacks and whites. But how, where, and by how much have things changed, and does history still predict voting inequalities today? We show that those parts of the American South where slavery was more prevalent in the 1860s are today areas with lower average black voter turnout, larger numbers of election lawsuits alleging race-related constitutional violations, and more racial polarization in terms of party identification. To explain these findings, we present evidence showing that disfranchisement can linger over time and that the effects of restrictions on voting rights can persist culturally. Our findings also highlight the importance of looking at localized voting patterns as opposed to those at the state level, which can obscure historical relationships.

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From Vice to Virtue: Racial Boundaries and Redemption Narratives in Late 19th-Century Appalachian Feuds

Christi Smith
Race and Justice, forthcoming

Abstract:
While historians have documented the criminalization process of Blacks during the Jim Crow and Progressive Eras, few scholars include in their analyses the contemporaneous change in attitudes toward poor Whites. This study examines boundary processes and organizational activism in decriminalizing a particularly virulent and hypervisible series of violent events, the Appalachian feuds of the late 19th century. How are criminal acts committed by Whites rendered less criminal? Not only are Whites less likely to be brought before legal adjudication for criminal behavior, even when there is detailed evidence of their crimes, criminal acts can be made legitimate using redemption narratives that depict White violence as justifiable and even, as in the case here, indicative of a deeper moral worth. The decriminalization of Whites hinges on organized efforts by empowered actors to maintain and police racial boundaries. This article draws on independently collected archival materials including organizational records and financial reports, Board of Trustee records, interorganizational and private correspondence, and 727 newspaper articles.

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The Historical Demography of Racial Segregation

Angelina Grigoryeva & Martin Ruef
American Sociological Review, August 2015, Pages 814-842

Abstract:
Standard measures of residential segregation tend to equate spatial with social proximity. This assumption has been increasingly subject to critique among demographers and ethnographers and becomes especially problematic in historical settings. In the late nineteenth-century United States, standard measures suggest a counterintuitive pattern: southern cities, with their long history of racial inequality, had less residential segregation than urban areas considered to be more racially tolerant. By using census enumeration procedures, we develop a sequence measure that captures a more subtle "backyard" pattern of segregation, where white families dominated front streets and blacks were relegated to alleys. Our analysis of complete household data from the 1880 Census documents how segregation took various forms across the postbellum United States. Whereas northern cities developed segregation via racialized neighborhoods, substituting residential inequality for the status inequality of slavery, southern cities embraced street-front segregation that reproduced the racial inequality that existed under slavery.

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How the Legacy of Slavery and Racial Composition Shape Public School Enrollment in the American South

Robert Reece & Heather O'Connell
Sociology of Race and Ethnicity, forthcoming

Abstract:
History is centrally involved in place development. Given the historical importance of antebellum slavery, it is little surprise that it profoundly shaped the social and economic future of the United States. What is perhaps more surprising is the link to local, county-level development as it relates to contemporary systems of black disadvantage. Through our focus on one aspect of school segregation in the American South, namely racial disparities in public school enrollment, we contribute to the literature on the legacy of slavery by examining how this local link persists. We use spatial data analysis techniques to assess the relationship between county historical slave concentration and the black-white ratio of public school attendance. Our data originally come from the 1860 Census, 2006-2010 American Community Survey, and National Center for Education Statistics Private School Universe Survey, 2007-2008. Notably, our historical slave concentration estimates incorporate spatially informed refinements to better represent contemporary counties than previously available data. Drawing from our regression analysis, we argue that slavery history shaped the local social structure in a way that facilitates contemporary white disinvestment from public school systems. We examine two potential explanations for this legacy of slavery - the number of private schools and racial threat - particularly their manifestation within the Deep South. Despite evidence of subregional differences rooted in history, neither pathway explains the initial slavery association. We argue that processes tied to the legacy of slavery are a foundational component of black disadvantage and that further examination of this foundation is necessary to stem the tide of recent resegregation.

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Explaining the Persistence of Health Disparities: Social Stratification and the Efficiency-Equity Trade-off in the Kidney Transplantation System

Jonathan Daw
American Journal of Sociology, May 2015, Pages 1595-1640

Abstract:
Why do health disparities persist when their previous mechanisms are eliminated? Fundamental-cause theorists argue that social position primarily improves health through two metamechanisms: better access to health information and technology. I argue that the general, cumulative, and embodied consequences of social stratification can produce another metamechanism: an efficiency-equity trade-off. A case in point is kidney transplantation, where the mechanisms previously thought to link race to outcomes - ability to pay and certain factors in the kidney allocation system - have been greatly reduced, yet large disparities persist. I show that these current disparities are rooted in factors that directly influence posttransplant success, placing efficiency and racial/ethnic equity at cross-purposes.

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Racial Residential Segregation and Risky Sexual Behavior Among Non-Hispanic Blacks, National Survey of Family Growth, 2006 - 2010

Khaleeq Lutfi et al.
Social Science & Medicine, September 2015, Pages 95-103

Abstract:
Sexually transmitted infections (STIs) including human immunodeficiency virus (HIV) have disproportionately affected the non-Hispanic black population in the United States. A person's community can affect his or her STI risk by the community's underlying prevalence of STIs, sexual networks, and social influences on individual behaviors. Racial residential segregation-the separation of racial groups in a residential context across physical environments-is a community factor that has been associated with negative health outcomes. The objective of this study was to examine if non-Hispanic blacks living in highly segregated areas were more likely to have risky sexual behavior. Demographic and sexual risk behavior data from non-Hispanic blacks aged 15 - 44 years participating in the National Survey of Family Growth were linked to Core-Based Statistical Area segregation data from the U.S. Census Bureau. Five dimensions measured racial residential segregation, each covering a different concept of spatial variation. Multilevel logistic regressions were performed to test the effect of each dimension on sexual risk behavior controlling for demographics and community poverty. Of the 3,643 participants, 588 (14.5%) reported risky sexual behavior as defined as two or more partners in the last 12 months and no consistent condom use. Multilevel analysis results show that racial residential segregation was associated with risky sexual behavior with the association being stronger for the centralization [aOR (95% CI)][2.07 (2.05 - 2.08)] and concentration [2.05 (2.03 - 2.07)] dimensions. This suggests risky sexual behavior is more strongly associated with neighborhoods with high concentrations of non-Hispanic blacks and an accumulation of non-Hispanic blacks in an urban core. Findings suggest racial residential segregation is associated with risky sexual behavior in non-Hispanic blacks 15 - 44 years of age with magnitudes varying by dimension. Incorporating additional contextual factors may lead to the development of interventions that promote healthier behaviors and lower rates of HIV and other STIs.

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Decomposing Black-White Disparities in Heart Disease Mortality in the United States, 1973-2010: An Age-Period-Cohort Analysis

Michael Kramer, Amy Valderrama & Michele Casper
American Journal of Epidemiology, forthcoming

Abstract:
Against the backdrop of late 20th century declines in heart disease mortality in the United States, race-specific rates diverged because of slower declines among blacks compared with whites. To characterize the temporal dynamics of emerging black-white racial disparities in heart disease mortality, we decomposed race-sex-specific trends in an age-period-cohort (APC) analysis of US mortality data for all diseases of the heart among adults aged ?35 years from 1973 to 2010. The black-white gap was largest among adults aged 35-59 years (rate ratios ranged from 1.2 to 2.7 for men and from 2.3 to 4.0 for women) and widened with successive birth cohorts, particularly for men. APC model estimates suggested strong independent trends across generations ("cohort effects") but only modest period changes. Among men, cohort-specific black-white racial differences emerged in the 1920-1960 birth cohorts. The apparent strength of the cohort trends raises questions about life-course inequalities in the social and health environments experienced by blacks and whites which could have affected their biomedical and behavioral risk factors for heart disease. The APC results suggest that the genesis of racial disparities is neither static nor restricted to a single time scale such as age or period, and they support the importance of equity in life-course exposures for reducing racial disparities in heart disease.

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"A General Separation of Colored and White": The WWII Riots, Military Segregation, and Racism(s) beyond the White/Nonwhite Binary

Margarita Aragon
Sociology of Race and Ethnicity, forthcoming

Abstract:
This article uses archival research to explore important differences in the discursive and institutional positioning of Mexican American and African American men during World War II. Through the focal point of the riots that erupted in Los Angeles and other major cities in the summer of 1943, I examine the ways in which black and Mexican "rioters" were imagined in official and popular discourses. Though both groups of youth were often constructed as deviant and subversive, there were also divergences in the ways in which their supposed racial difference was discursively configured. I also consider the experiences of each group in the World War II military, a subject that has received little attention in previous work on the riots. Though both groups were subject to discrimination and brutality on the home front, only African Americans were segregated in the military - a fact that profoundly influenced the 1943 riots. Examining the very different conditions under which these men served, as well as the distinct ways in which their presence within the military and on the home front was interpreted and given meaning by press, law enforcement, and military officials, helps to illuminate the uneven and complex workings of racism in America, disrupting the common conceptualization of a definitive white/nonwhite color line.

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Segregation as Splitting, Segregation as Joining: Schools, Housing, and the Many Modes of Jim Crow

Andrew Highsmith & Ansley Erickson
American Journal of Education, August 2015, Pages 563-595

Abstract:
Popular understandings of segregation often emphasize the Jim Crow South before the 1954 Brown decision and, in many instances, explain continued segregation in schooling as the result of segregated housing patterns. The case of Flint, Michigan, complicates these views, at once illustrating the depth of governmental commitment to segregation in a northern community and showing how segregated schools and neighborhoods helped construct one another. The Flint case also reveals new modes of segregationist thought. Throughout much of the twentieth century, Flint's city leaders thought of segregation as splitting, and they sought to divide their city along racial lines. But they thought of segregation as joining as well. Drawing on various strands of progressive reform and educational thought, Flint's educational, business, and philanthropic leaders believed community bonds would be stronger in segregated neighborhoods anchored by their schools. Flint's "community schools" program worked toward this end, exemplifying the paired embrace of segregation as joining and splitting, and becoming a model for educators in hundreds of cities nationwide.

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Fertility, Economic Development, and Health in the Early Twentieth-Century U.S. South

Cheryl Elman, Andrew London & Robert McGuire
Journal of Interdisciplinary History, Autumn 2015, Pages 185-223

Abstract:
Between 1880 and 1910, fertility among African-American women dropped more precipitously than among white women, although black women's sociodemographic profile generally would not have predicted that trend. According to one perspective, regional differences in the timing of voluntary fertility control accounted for discrepancies by race. According to another, poor southern maternal health disproportionately affected African-American women's fecundity, reducing their fertility. Tests based on the 1910 ipums and the 1916 U.S. Plantation Census show that, during the first three years of marriage, African-American women's probabilities of having at least one birth, compared to white women's probabilities, declined as marital durations increased. However, the probability of having at least one birth was lower for African-American and white tenant-farm women whose counties had more plantation agriculture. Findings support the influence of health-related factors, possibly linked to plantation agricultural development, on the "supply" of children.

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Race, Class, and Gender and the Impact of Racial Segregation on Black-White Income Inequality

Melvin Thomas & Richard Moye
Sociology of Race and Ethnicity, forthcoming

Abstract:
African Americans have yet to achieve parity with whites in terms of income. A growing number of studies have identified several factors that have influenced the size of the racial gap, which has been found to vary by social class status and gender as well as across space. While most research has examined these factors separately, they may interact with each other in shaping racial inequality. Using an intersectional approach with a multilevel model, this study focuses on the impact of residential segregation and social class on racial differences in earnings for men and women. Findings indicate that (1) earning differences between African Americans remain after controls for socioeconomic status, gender, and other control variables; (2) racial differences increase with rising social class status; (3) segregation increases the disparity between African American and white males; and (4) among males only, segregation worsens the disparity that increases with rising social class.

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Perceived Discrimination and Incident Cardiovascular Events: The Multi-Ethnic Study of Atherosclerosis

Susan Everson-Rose et al.
American Journal of Epidemiology, 1 August 2015, Pages 225-234

Abstract:
Perceived discrimination is positively related to cardiovascular disease (CVD) risk factors; its relationship with incident CVD is unknown. Using data from the Multi-Ethnic Study of Atherosclerosis, a population-based multiethnic cohort study of 6,508 adults aged 45-84 years who were initially free of clinical CVD, we examined lifetime discrimination (experiences of unfair treatment in 6 life domains) and everyday discrimination (frequency of day-to-day occurrences of perceived unfair treatment) in relation to incident CVD. During a median 10.1 years of follow-up (2000-2011), 604 incident events occurred. Persons reporting lifetime discrimination in ?2 domains (versus none) had increased CVD risk, after adjustment for race/ethnicity and sociodemographic factors, behaviors, and traditional CVD risk factors (hazard ratio (HR) = 1.36, 95% confidence interval (CI): 1.09, 1.70) and after control for chronic stress and depressive symptoms (HR = 1.28, 95% CI: 1.01, 1.60). Reported discrimination in 1 domain was unrelated to CVD (HR = 1.05, 95% CI: 0.86, 1.30). There were no differences by race/ethnicity, age, or sex. In contrast, everyday discrimination interacted with sex (P = 0.03). Stratified models showed increased risk only among men (for each 1-standard deviation increase in score, adjusted HR = 1.14, 95% CI: 1.03, 1.27); controlling for chronic stress and depressive symptoms slightly reduced this association (HR = 1.11, 95% CI: 0.99, 1.25). This study suggests that perceived discrimination is adversely related to CVD risk in middle-aged and older adults.

By KEVIN LEWIS | 09:00:00 AM

Monday, August 3, 2015

Price signals

The High-Frequency Trading Arms Race: Frequent Batch Auctions as a Market Design Response

Eric Budish, Peter Cramton & John Shim
Quarterly Journal of Economics, forthcoming

Abstract:
The high-frequency trading arms race is a symptom of flawed market design. Instead of the continuous limit order book market design that is currently predominant, we argue that financial exchanges should use frequent batch auctions: uniform price double auctions conducted, e.g., every tenth of a second. That is, time should be treated as discrete instead of continuous, and orders should be processed in a batch auction instead of serially. Our argument has three parts. First, we use millisecond-level direct-feed data from exchanges to document a series of stylized facts about how the continuous market works at high-frequency time horizons: (i) correlations completely break down; which (ii) leads to obvious mechanical arbitrage opportunities; and (iii) competition has not affected the size or frequency of the arbitrage opportunities, it has only raised the bar for how fast one has to be to capture them. Second, we introduce a simple theory model which is motivated by, and helps explain, the empirical facts. The key insight is that obvious mechanical arbitrage opportunities, like those observed in the data, are built into the market design – continuous-time serial-processing implies that even symmetrically observed public information creates arbitrage rents. These rents harm liquidity provision and induce a never-ending socially-wasteful arms race for speed. Last, we show that frequent batch auctions directly address the flaws of the continuous limit order book. Discrete time reduces the value of tiny speed advantages, and the auction transforms competition on speed into competition on price. Consequently, frequent batch auctions eliminate the mechanical arbitrage rents, enhance liquidity for investors, and stop the high-frequency trading arms race.

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Household Production and Asset Prices

Zhi Da, Wei Yang & Hayong Yun
Management Science, forthcoming

Abstract:
We empirically examine the asset pricing implications of the Beckerian framework of household production, where utility is derived from both market consumption and home produced goods. We propose residential electricity usage as a real-time proxy for the service flow from household capital, because electricity is used in most modern-day household production activities and it cannot be easily stored. Using U.S. residential electricity usage from 1955 to 2012, our model based on household production explains the equity premium and the cross section of expected stock returns (including those of industry portfolios) with an R2 of 71%.

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Are bad times good news for the Securities and Exchange Commission?

Tim Lohse & Christian Thomann
European Journal of Law and Economics, August 2015, Pages 33-47

Abstract:
There exists a considerable debate in the literature investigating how stock market upswings or downswings impact financial market regulation. The present paper contributes to this literature and investigates whether financial market regulation follows a regulative cycle: does regulation, and consequently investor protection, increase as a result of a stock market downturn [as argued by, e.g., Zingales (J Account Res 47(2): 391–425, 2009)] or — contrary to the regulative cycle hypothesis — as a result of an upswing [as claimed by Povel et al. (Rev Financ Stud 20(4): 1219–1254, 2007), or Hertzberg 2003] Following Jackson and Roe (J Financ Econ 93(2): 207–238, 2009), we use funding data on the world’s most important financial market regulator, the U.S. Securities and Exchange Commission (SEC), as a proxy for the politically desired degree of regulation. We apply time series analysis. Using more than 60 years of data, we show that the SEC’s funding follows a regulative cycle: A weak stock market results in increased resources for the SEC. A strong stock market results in reduced resources. Our findings underline the downside of regulation as the regulative cycle amplifies the technical procyclicality inherent in regulation.

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Why Market Returns Favor Democrats in the White House?

Michael Long
Rutgers University Working Paper, May 2015

Abstract:
This study attempts to explain why the equity market earns greater returns for bearing risk when a Democrat is President in the USA versus a Republican. We look at data from 1929 through 2012. The data show that the value weighted return minus the corresponding period’s risk free rate is 10.83% when a Democrat is President, versus a corresponding return of -1.20% under Republican Presidents. We see the two basic macroeconomic arguments that should affect market value between the two parties: differences in risk free interest rates and differences in economic growth. On average the Democrats follow a policy of low interest rates. The rate of return on short term T-bills averages 4.55% under the GOP and a 2.48% under Democrats. Further, the Democrats overall economic policies create a higher average real growth rate with a 4.8% average versus only 1.8% under Republican administrations. These together do not explain the differences in equity market returns. Using a basic OLS approach with annual value weighted market returns minus the corresponding risk free rate as the dependent variable, neither interest rates nor real economic growth are significant in explaining returns though the party in power is significant.

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Financial intermediaries in the midst of market manipulation: Did they protect the fool or help the knave?

Vladimir Atanasov et al.
Journal of Corporate Finance, forthcoming

Abstract:
We examine a fund manager's alleged manipulation of platinum and palladium futures settlement prices. Using benchmarks from parallel electronic markets, we find that the manager’s market-on-close trading causes significant settlement price artificiality. Defying predictions that competition among floor traders should limit any artificiality, the artificiality increases in the second half of the alleged manipulation period. Between 35% and 52% of the latter-period artificiality is directly attributable to noncompetitive floor prices. Inflated floor volume contributes a similar proportion to artificiality via the exchange’s trade-weighted settlement price formula. We estimate that floor counterparties reaped more than $6.0 million in excess profits.

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Hedge Fund Crowds and Mispricing

Richard Sias, H.J. Turtle & Blerina Zykaj
Management Science, forthcoming

Abstract:
Recent models and the popular press suggest that large groups of hedge funds follow similar strategies resulting in crowded equity positions that destabilize markets. Inconsistent with this assertion, we find that hedge fund equity portfolios are remarkably independent. Moreover, when hedge funds do buy and sell the same stocks, their demand shocks are, on average, positively related to subsequent raw and risk-adjusted returns. Even in periods of extreme market stress, we find no evidence that hedge fund demand shocks are inversely related to subsequent returns. Our results have important implications for the ongoing debate regarding hedge fund regulation.

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Do social factors influence investment behavior and performance? Evidence from mutual fund holdings

Arian Borgers et al.
Journal of Banking & Finance, forthcoming

Abstract:
When tastes affect investment decisions of a significant number of investors they have the potential to affect asset prices and consequently also expected returns (Fama and French, 2007). In this paper we evaluate whether tastes for socially sensitive stocks affect holdings of U.S. equity mutual funds. We start with a comparison of socially responsible investment funds to conventional funds and document on the existence of conventional funds that have “more socially responsible” holdings than SRI labeled funds. Subsequently, we analyze whether these exposures to socially sensitive stocks affect mutual fund performance. Our findings indicate that especially investments in Tobacco, Alcohol, and Gambling stocks have the potential to positively affect risk-adjusted fund returns, while exposures to the most socially responsible firms negatively affect performance. This potential is not fully exploited by the mutual funds in our sample as they hold diversified portfolios resulting in small exposure differences between funds. These small exposure differences also explain why the literature has generally found no performance differences between SRI labeled and conventional funds. Based on our main findings we advice the use of holdings based analyses when investigating the effects of social tastes on investment portfolios.

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Perceptions and Price: Evidence from CEO Presentations at IPO Roadshows

Elizabeth Blankespoor, Bradley Hendricks & Gregory Miller
Stanford Working Paper, May 2015

Abstract:
This paper examines the relation between rapidly formed basic cognitive impressions of management and firm valuation. We develop a composite measure of investor perception using 30-second content-filtered video clips of initial public offering (IPO) roadshow presentations. We show that this measure, designed to capture viewers’ impressions of a CEO’s competence, trustworthiness, and attractiveness, is positively associated with an IPO firm’s secondary market value. The result is robust to controls for traditional determinants of firm value. We also show that firms with highly perceived management are more likely to be matched to high-quality underwriters. Finally, we examine components of IPO price formation and find that our composite measure of perception is positively associated with both the price proposed for the offering and the price revision that occurs from this proposed price to the firm’s secondary market valuation. Taken together, our results provide evidence that investors’ instinctive impressions of management are incorporated into investors’ assessments of firm value.

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Institutional Trading during a Wave of Corporate Scandals: “Perfect Payday”?

Gennaro Bernile, Johan Sulaeman & Qin Wang
Journal of Corporate Finance, forthcoming

Abstract:
This paper examines the role of institutional trading during the option backdating scandal of 2006-2007. Unlike their inability to anticipate other corporate events, institutional investors as a group display negative abnormal trading imbalances (i.e., buy minus sell volumes) in anticipation of firm-specific backdating exposures. Consistent with informed trading, the underlying trades earn positive abnormal short- and long-term profits. Moreover, the negative abnormal imbalances are larger in magnitude when backdating is likely a more severe issue. Local institutions, in particular, display negative trading imbalances earlier in event-time and earn consistently higher trading profits than non-local institutions. Although we find some evidence of over-reaction following the arrival of information about the backdating scandal, these patterns are short-lived and exclusively due to the activity of non-local institutions. Overall, institutional investors behave as informed investors, particularly in local stocks, during this prolonged period of heightened uncertainty about corporate reporting and governance practices.

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Stock Ownership and Political Behavior: Evidence from Demutualizations

Markku Kaustia, Samuli Knüpfer & Sami Torstila
Management Science, forthcoming

Abstract:
A setting in which customer-owned mutual companies converted to publicly listed firms created a plausibly exogenous increase in stock ownership. We use this shock to identify the effect of ownership of publicly listed shares on political behavior. Using instrumental variable regressions, difference-in-differences analyses, and matching methods, we find the shock changed the way people vote in the affected areas, with the demutualizations being followed by a 1.7–2.7-percentage-point increase in right-of-center vote share. Analyses of demutualizations that did not involve public listing of shares suggest that explanations based on wealth, liquidity, and tax-related incentives do not drive the results, and that the ownership of publicly listed shares was instrumental in generating the increase in conservative voting.

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Thinking Outside the Borders: Investors’ Underreaction to Foreign Operations Information

Xing Huang
Review of Financial Studies, forthcoming

Abstract:
I use industry-level returns in foreign markets to examine the hypothesis that value-relevant foreign information slowly diffuses into the stock prices of U.S. multinational firms. A trading strategy that exploits foreign information generates abnormal returns of 0.8% monthly. I find that the market responds more slowly in periods with lower media coverage of foreign news and to information from more linguistically and culturally distant countries. These results suggest that both investors’ inattention and lack of understanding of foreign information slow the incorporation of new information into prices. I further separate these two mechanisms by examining market responses to earnings surprises.

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Cortisol and testosterone increase financial risk taking and may destabilize markets

Carlos Cueva et al.
Scientific Reports, July 2015

Abstract:
It is widely known that financial markets can become dangerously unstable, yet it is unclear why. Recent research has highlighted the possibility that endogenous hormones, in particular testosterone and cortisol, may critically influence traders’ financial decision making. Here we show that cortisol, a hormone that modulates the response to physical or psychological stress, predicts instability in financial markets. Specifically, we recorded salivary levels of cortisol and testosterone in people participating in an experimental asset market (N = 142) and found that individual and aggregate levels of endogenous cortisol predict subsequent risk-taking and price instability. We then administered either cortisol (single oral dose of 100 mg hydrocortisone, N = 34) or testosterone (three doses of 10 g transdermal 1% testosterone gel over 48 hours, N = 41) to young males before they played an asset trading game. We found that both cortisol and testosterone shifted investment towards riskier assets. Cortisol appears to affect risk preferences directly, whereas testosterone operates by inducing increased optimism about future price changes. Our results suggest that changes in both cortisol and testosterone could play a destabilizing role in financial markets through increased risk taking behaviour, acting via different behavioural pathways.

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Once Burned, Twice Shy: Money Market Fund Responses to a Systemic Liquidity Shock

Philip Strahan & Başak Tanyeri
Journal of Financial and Quantitative Analysis, April 2015, Pages 119-144

Abstract:
After Lehman’s collapse in 2008, investors ran from risky money market funds. In 27 funds, outflows overwhelmed cash inflows, thus forcing asset sales. These funds sold their safest and most liquid holdings. Funds were thus left with riskier and longer maturity assets. Over the subsequent quarter, however, the hard-hit funds reduced risk more than other funds. In contrast, money funds hit by idiosyncratic liquidity shocks before Lehman did not alter portfolio risk. The result suggests that moral hazard concerns with the Treasury Guarantee of investor claims did not increase risk taking. Funds that benefited most from the government bailout reduced risk.

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The Public Corporation as an Intermediary between “Main Street” and “Wall Street”

Ramesh Rao
Journal of Corporate Finance, forthcoming

Abstract:
In the perfect markets corporate finance theory (Modigliani-Miller), public corporations (firms) have no economic function. Their existence therefore cannot be justified. An unsettling implication is that the extant corporate finance theory applies to an economy in which firms are irrelevant. This research precludes this implication by identifying an economic function for firms in perfect markets. Specifically, I show that firms exist to intermediate between “Main Street” (the real sector that supplies non-financial inputs) and “Wall Street” (the financial sector that supplies cash), and that this intermediation maximizes an investment’s operating cash flows by minimizing the cost of the non-financial inputs. Key implications of this rationale for the firm include: i) an investment’s NPV depends on the firm’s cash holdings; working capital policy is thus an integral part of investment policy, ii) operating characteristics determine the firm’s minimum size (equity capitalization) and “boundaries,” and iii) cash on corporate balance sheets is a “fundamental” for stock-pricing.

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Active Managers Are Skilled

Jonathan Berk & Jules Van Binsbergen
Stanford Working Paper, June 2015

Abstract:
Active fund managers are skilled and, on average, have used their skill to generate about $3.2 million per year. Large cross-sectional differences in skill persist for as long as ten years. Investors recognize this skill and reward it by investing more capital in funds managed by better managers. These funds earn higher aggregate fees, and a strong positive correlation exists between current compensation and future performance.

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Exchange trading rules, surveillance and suspected insider trading

Michael Aitken, Douglas Cumming & Feng Zhan
Journal of Corporate Finance, forthcoming

Abstract:
We examine the impact of stock exchange trading rules and surveillance on the frequency and severity of suspected insider trading cases in 22 stock exchanges around the world over the period January 2003 through June 2011. Using new indices for market manipulation, insider trading, and broker-agency conflict based on the specific provisions of the trading rules of each stock exchange, along with surveillance to detect non-compliance with such rules, we show that more detailed exchange trading rules and surveillance over time and across markets significantly reduce the number of suspected cases, but increase the profits per suspected case.

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Wealth transfers via equity transactions

Richard Sloan & Haifeng You
Journal of Financial Economics, forthcoming

Abstract:
Previous research indicates that firms issue shares when their stock is overpriced and repurchase shares when their stock is underpriced. Such transactions transfer wealth from transacting stockholders to ongoing stockholders. We quantify the magnitude of these wealth transfers and analyze their implications. Strikingly, we find that for the average firm-year, these wealth transfers approximate 40% of net income. We also find that these wealth transfers can be predicted using a variety of firm characteristics and that future wealth transfers are an important determinant of current stock prices.

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Do Happy People Make Optimistic Investors?

Guy Kaplanski et al.
Journal of Financial and Quantitative Analysis, April 2015, Pages 145-168

Abstract:
Do happy people predict future risk and return differently from unhappy people, or do individuals rely only on economic facts? We survey investors on their subjective sentiment-creating factors, return and risk expectations, and investment plans. We find that noneconomic factors systematically affect return and risk expectations, where the return effect is more profound. Investment plans are also affected by noneconomic factors. Sports results and general feelings significantly affect predictions. Sufferers from seasonal affective disorder have lower return expectations in the autumn than in other seasons, supporting the winter blues hypothesis.

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Credit Conditions and Stock Return Predictability

Sudheer Chava, Michael Gallmeyer & Heungju Park
Journal of Monetary Economics, September 2015, Pages 117–132

Abstract:
U.S. stock return predictability is analyzed using a measure of credit standards (Standards) derived from the Federal Reserve Board's Senior Loan Officer Opinion Survey on Bank Lending Practices. Standards is a strong predictor of stock returns at a business cycle frequency, especially in the post-1990 data period. Empirically, a tightening of Standards predicts lower future stock returns. Standards performs well both in-sample and out-of-sample and is robust to a host of consistency checks. Standards captures stock return predictability at a business cycle frequency and is driven primarily by the ability of Standards to predict cash flow news.

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Career Concerns of Banking Analysts

Joanne Horton, George Serafeim & Shan Wu
Harvard Working Paper, April 2015

Abstract:
We study how career concerns influence banking analysts’ forecasts and how their forecasting behavior benefits both them and bank managers. We show that banking analysts issue early in the year relatively more optimistic and later in the year more pessimistic forecasts for banks that could be their future employers. This pattern is not observed when the same analysts forecast earnings of companies that are not likely to be their future employers. Moreover, we use the Global Settlement as an exogenous shock, which limited outside opportunities and therefore exacerbated career concerns, and show that this forecast pattern is more pronounced after the Settlement. Both analysts and bank executives benefit from this behavior. Analysts issuing more biased forecasts for potential future employers are more likely to face favorable career outcomes and bank executives appear to profit from the analysts bias since the bias is associated with higher levels of insider trading. Our results highlight the bias created by asking analysts to rate their outside opportunities in the labor market.

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Propagation of Financial Shocks: The Case of Venture Capital

Richard Townsend
Management Science, forthcoming

Abstract:
This paper investigates how venture-backed companies are affected when others sharing the same investor suffer a negative shock. In theory, companies may be helped or hurt in this scenario. To examine the topic empirically, I estimate the impact of the collapse of the technology bubble on non-information-technology (non-IT) companies that were held alongside Internet companies in venture portfolios. Using a difference-in-differences framework, I find that the end of the bubble was associated with a significantly larger decline in the probability of raising continuation financing for these non-IT companies in comparison to others. This does not appear to be driven by unobservable company characteristics such as company quality or IT relatedness; for the same portfolio company receiving capital from multiple venture firms, investors with greater Internet exposure were significantly less likely to continue to participate in follow-on rounds.

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Social interaction at work

Hans Hvide & Per Östberg
Journal of Financial Economics, forthcoming

Abstract:
Stock market investment decisions of individuals are positively correlated with those of coworkers. Sorting of unobservably similar individuals to the same workplaces is unlikely to explain this pattern, as evidenced by the investment behavior of individuals who move between plants. Purchases made under stronger coworker purchase activity are not associated with higher returns. Moreover, social interaction appears to drive the purchase of within-industry stocks. Overall, we find a strong influence of coworkers on investment choices, but not an influence that improves the quality of investment decisions.

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Access to Credit and Stock Market Participation

Serhiy Kozak & Denis Sosyura
University of Michigan Working Paper, April 2015

Abstract:
We exploit staggered removals of interstate banking restrictions to identify the causal effect of access to credit on households’ stock market participation and asset allocation. Using micro data on retail brokerage accounts and proprietary data on personal credit histories, we document two effects of the loosening of credit constraints on households’ financial decisions. First, households enter the stock market by opening new brokerage accounts. Second, households increase their asset allocation to risky assets and reduce their allocation to cash, consistent with a lower need for precautionary savings. The effects are stronger for younger and more credit constrained investors. Overall, we establish one of the first direct links between access to credit and households’ investment decisions.

By KEVIN LEWIS | 09:00:00 AM

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Personality and Geography: Introverts Prefer Mountains

Shigehiro Oishi, Thomas Talhelm & Minha Lee
Journal of Research in Personality, October 2015, Pages 55–68

Abstract:
In five studies, we tested the link between personality and geography. We found that mountain-lovers were more introverted than ocean-lovers (Study 1). People preferred the ocean over mountains when they wanted to socialize with others, but they preferred the mountains and the ocean equally when they wanted to decompress alone (Study 2). In Study 3, we replicated the introversion-extraversion differences using pictures of mountains and oceans. Furthermore, this difference was explained in part by extraverts’ perception that it would take more work to have fun in the mountains than in the ocean. Extending the first three studies to non-students, we found that residents of mountainous U.S. states were more introverted than residents of flat states (Study 4). In Study 5, we tested the link between introversion and the mountains experimentally by sending participants to a flat, open area or a secluded, wooded area. The terrain did not make people more introverted, but introverts were happier in the secluded area than in the flat/open area, which is consistent with the person-environment fit hypothesis.

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Preferences for Visible White Sclera in Adults, Children and Autism Spectrum Disorder Children: Implications of the Cooperative Eye Hypothesis

Nancy Segal, Aaron Goetz & Alberto Maldonado
Evolution and Human Behavior, forthcoming

Abstract:
Visible white sclera (i.e., the opaque white outer coat enclosing the eyeball) is a uniquely human trait. An explanation for why such coloration evolved has been put forward by the Cooperative Eye Hypothesis (Kobayashi and Hashiya, 2011; Kobayashi and Koshima, 1997, 2001; Tomasello et al., 2007), which states that visible white sclera evolved to facilitate communication via joint attention and signaling of gaze direction. Therefore, we hypothesized that viewers comprised of both typically developing children and adults would show reliable preferences for stimuli with visible white sclera. However, because autism spectrum disorder (ASD) individuals have impaired social cognition and show gaze aversion, we also hypothesized that ASD children would show no consistent preference for eyes with visible white sclera. We tested these hypotheses by obtaining participants’ preferences across six sets of stuffed animals, identical but for the manipulation of eye size, eye color, and presence of visible sclera. Both hypotheses were supported. In addition to providing evidence consistent with the Cooperative Eye Hypothesis, our results also suggest that eyes and gaze serve a central role in social cognition. Furthermore, our results from ASD children have practical applications for therapeutic practices and evidence-based interventions.

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Does Facebook Magnify or Mitigate Threats to Belonging?

Megan Knowles, Nathaniel Haycock & Iqra Shaikh
Social Psychology, forthcoming

Abstract:
Previous research has yielded mixed findings regarding the interpersonal causes and consequences of Facebook use. The current research examines the role of belonging needs in motivating Facebook use and the protective value of Facebook following exclusion. In four studies we: manipulated exclusion and observed participants’ behavioral preferences (Study 1); measured participants’ belonging needs and their Facebook use (Study 2); and manipulated exclusion, exposed participants to either their Facebook photos/pages or control photos/pages, and measured need satisfaction and aggression (Studies 3–4). We found that exclusion motivated computer-mediated communication, and belonging needs predicted Facebook use. Also, exposure to Facebook protected excluded individuals’ social needs and mitigated aggressive behavior. Altogether, these studies suggest that Facebook is a powerful tool that allows individuals to reaffirm their social bonds.

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Some “Thing” to Talk About? Differential Story Utility From Experiential and Material Purchases

Amit Kumar & Thomas Gilovich
Personality and Social Psychology Bulletin, forthcoming

Abstract:
Psychological research has shown that experiential purchases (a hike in the woods, a trip to Rome) bring more happiness than material purchases (a designer shirt, a flat-screen television). The research presented in this article investigates one cause and consequence of this difference: People talk more about their experiences than their possessions and derive more value from doing so. A series of eight studies demonstrate that taking away the ability to talk about experiences (but not material goods) would diminish the enjoyment they bring; that people believe they derive more happiness from talking about experiential purchases; that when given a choice about which of their purchases to talk about, people are more likely to talk about experiential rather than material consumption; and that people report being more inclined to talk about their experiences than their material purchases and derive more hedonic benefits as a result — both in prospect and in retrospect.

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Why Do the Lonely Stay Lonely? Chronically Lonely Adolescents’ Attributions and Emotions in Situations of Social Inclusion and Exclusion

Janne Vanhalst et al.
Journal of Personality and Social Psychology, forthcoming

Abstract:
The goal of this study was to identify mechanisms associated with chronic loneliness by examining the effect of adolescents’ accumulated history of loneliness on responses to new social situations. Specifically, this study investigated whether attributions and emotions in situations of social inclusion and exclusion differ between chronically lonely adolescents and adolescents with a different loneliness history. A total of 730 adolescents (Mage at Wave 1 = 15.43 years) participated in a 4-wave longitudinal study with annual loneliness assessments. A chronic loneliness trajectory was identified, in addition to low-stable, moderate-stable, moderate-increasing, and high-decreasing loneliness trajectories. At Wave 4, vignettes depicting social inclusion and exclusion were presented, and participants rated a set of attributions and emotions following each vignette. Compared with individuals following other trajectories, chronically lonely adolescents were characterized by hypersensitivity to social exclusion (i.e., higher levels of negative emotions) and hyposensitivity to social inclusion (i.e., lower levels of enthusiasm). Further, chronically lonely adolescents had a stronger tendency to attribute social inclusion to circumstantial factors and social exclusion to internal and stable characteristics. This maladaptive attribution style partially mediated their emotional experiences. Together, results indicate that chronically lonely individuals respond to social situations in ways that may perpetuate rather than reduce their loneliness.

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Are you feeling what I’m feeling? The role of facial mimicry in facilitating reconnection following social exclusion

Elaine Cheung, Erica Slotter & Wendi Gardner
Motivation and Emotion, August 2015, Pages 613-630

Abstract:
The present work investigated the interpersonal functions of facial mimicry after social exclusion. Specifically, we examined two distinct functions that facial mimicry may serve in promoting reconnection: facilitating the understanding of others’ emotions and/or fostering interpersonal rapport. Using a novel facial mimicry paradigm, we found that although people exhibited both greater facial mimicry (Studies 1 and 2) and superior emotion-decoding accuracy (Study 2) after exclusion, facial mimicry did not mediate the relationship between exclusion and decoding accuracy (Study 2). Instead, we found support for facial mimicry serving to promote interpersonal rapport. Specifically, in Study 3, naïve judges rated videos of target-participant pairs from Study 1 for social closeness. Findings indicated that pairs with a previously-excluded participant were rated as socially closer than pairs with a previously-included participant (Study 3). Importantly, enhanced facial mimicry was found to mediate the relationship between exclusion and rated closeness. Altogether these findings suggest that facial mimicry may promote reconnection after social exclusion by fostering rapport.

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Good Liars Are Neither ‘Dark’ Nor Self-Deceptive

Gordon Wright et al.
PLoS ONE, June 2015

Abstract:
Deception is a central component of the personality 'Dark Triad' (Machiavellianism, Psychopathy and Narcissism). However, whether individuals exhibiting high scores on Dark Triad measures have a heightened deceptive ability has received little experimental attention. The present study tested whether the ability to lie effectively, and to detect lies told by others, was related to Dark Triad, Lie Acceptability, or Self-Deceptive measures of personality using an interactive group-based deception task. At a group level, lie detection accuracy was correlated with the ability to deceive others — replicating previous work. No evidence was found to suggest that Dark Triad traits confer any advantage either to deceive others, or to detect deception in others. Participants who considered lying to be more acceptable were more skilled at lying, while self-deceptive individuals were generally less credible and less confident when lying. Results are interpreted within a framework in which repeated practice results in enhanced deceptive ability.

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Relational Mobility Increases Social (but Not Other) Risk Propensity

Liman Man Wai Li, Takeshi Hamamura & Glenn Adams
Journal of Behavioral Decision Making, forthcoming

Abstract:
In recent years, we have witnessed a resurgent focus on ecological features, especially various forms of mobility that afford social psychological processes. Extending this work, the current research examined whether relational mobility affects risk propensity. We conducted three studies using both correlational (Studies 1 and 3) and experimental (Study 2) methods. Results provide support for the hypothesis that perceptions of relational mobility are associated with risk propensity in the domain of interpersonal behaviors but not other risk domains (health, financial, etc.). Findings in Study 3 suggested that the association between relational mobility and propensity for risky interpersonal behaviors may stem from the effect of relational mobility in lowering subjective risk (but not in increasing expected benefits) of such behaviors.

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The combined effects of relationship conflict and the relational self on creativity

Eun Jin Jung & Sujin Lee
Organizational Behavior and Human Decision Processes, September 2015, Pages 44–57

Abstract:
Studies have consistently found that relationship conflict adversely affects work outcomes, prompting the conclusion that such conflict should be avoided. Challenging this established finding, we propose that relationship conflict has a positive effect on creativity when the relational self is salient. Specifically, we hypothesize that relational selves’ relationship-focused goal may be frustrated within a conflictual (vs. harmonious) relationship situation, triggering cognitive persistence that boosts their creativity by causing them to think in more depth and detail about their conflict. Data from the US (Experiment 1) and Korea (Experiment 2) supported our hypotheses. A subsequent study extended these findings to process conflict (Experiment 3). Our research highlights the overall finding that frustration of goals that are meaningful for individuals promotes their creativity through the mediation of cognitive persistence.

By KEVIN LEWIS | 09:00:00 AM


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