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Wednesday, July 23, 2014

Bad outcomes

Medical Malpractice Reform, the Supply of Physicians, and Adverse Selection

Ethan Lieber
Journal of Law and Economics, May 2014, Pages 501-527

Abstract:
Malpractice reforms tend to reduce physicians' liability for harming patients. Because these reforms are passed at the state level, the costs of harming patients vary widely by geographic location. In this paper, I test whether malpractice reforms affect where physicians choose to practice and whether physicians who relocate in response to reforms are particularly prone to commit malpractice. Because a state’s own reforms cannot separately distinguish moral hazard from adverse selection, and because those reforms are likely to have direct effects on measures of malpractice via the legal market, I focus attention on neighboring states’ reforms. I find that when a state’s neighbor passes a cap on noneconomic damages, both the physician-to-population ratio and the malpractice rate fall. This suggests that physicians who relocate in response to noneconomic damages caps are more likely to commit malpractice.

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"Sticker Shock" in Individual Insurance under Health Reform

Mark Pauly, Scott Harrington & Adam Leive
NBER Working Paper, June 2014

Abstract:
This paper provides estimates of the changes in premiums, average or expected out of pocket payments, and the sum of premiums and out of pocket payments (total expected price) for a sample of consumers who bought individual insurance in 2010 to 2012, comparing total expected prices before the Affordable Care Act with estimates of total expected prices if they were to purchase silver or bronze coverage after reform, before the effects of any premium subsidies. We provide comparisons for purchasers of self only coverage in California and in 23 states with minimal prior state premium regulation before the ACA now using federally managed exchanges. Using data from the Current Population Survey, we find that the average prices increased by 14 to 28 percent, with similar changes in California and the federal exchange states; we attribute the increase primarily to higher premiums in exchanges associated with insurer expectations of a higher risk population being enrolled. The increase in total expected price is similar for age-gender population subgroups except for a larger than average increases for older women. A welfare calculation of the change in risk premium associated with moving from coverage that prevailed before reform to bronze or silver coverage finds small changes.

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Do Doctors Practice Defensive Medicine, Revisited

Myungho Paik, Bernard Black & David Hyman
Northwestern University Working Paper, April 2014

Abstract:
Does tort reform reduce defensive medicine and thus healthcare spending? Several (though not all) prior studies find a drop in spending following the adoption of caps on non-economic or total damages (“damage caps”), principally during the 1980s. We re-examine this issue in several ways. First, we study health care spending trends in the nine states that adopted caps during the “third reform wave,” from 2002-2005. Across a variety of difference-in-difference (DiD) methods, damage caps have no significant impact on Medicare Part A (hospital) spending, but lead to 4-5% higher Medicare Part B (physician) spending. Consistent with the DiD analysis, in county fixed effects regressions over 1998-2010, Part B spending is higher in states with lower med mal claim rates. We then revisit the 1980s caps, using stronger covariates. We find no evidence of a post-adoption drop (or rise) in spending for these caps. We conclude that (i) there is no evidence that damage caps reduce overall Medicare spending, and (ii) third-wave caps induce a gradual increase in Part B spending.

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Shifting The Open Enrollment Period For ACA Marketplaces Could Increase Enrollment And Improve Plan Choices

Katherine Swartz & John Graves
Health Affairs, July 2014, Pages 1286-1293

Abstract:
The next open enrollment period for plans offered in the Affordable Care Act’s (ACA’s) insurance Marketplaces is set to occur between November 15, 2014, and February 15, 2015 — just when many lower-income people are financially stressed by demands of the holiday season. Recent research by experimental psychologists and behavioral economists strongly suggests that when people’s decision-making capacity (bandwidth) is stretched thin, either they cannot make decisions or they make poor choices. Using data from nearly a decade of US-based Internet search queries to measure population behavior, we found considerable seasonality in measures of financial stress and in when people seek out information on health insurance plans. A more opportune time for scheduling open enrollment for the ACA Marketplaces may be between February 15 and April 15 — weeks when low-income people typically receive income tax refunds and Earned Income Tax Credit payments. Such lump-sum payments could be applied to pay individuals’ share of premiums.

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The Affordable Care Act in an Economy with Federal Disability Insurance

Yue Li
NBER Working Paper, May 2014

Abstract:
This paper examines the effects of the Affordable Care Act (ACA) by considering a dynamic interaction between extending health insurance coverage and the demand for federal disability insurance. This paper extends the Bewley-Huggett-Aiyagari incomplete markets model by endogenizing health accumulation and disability decisions. The model suggests that the ACA will reduce the fraction of working-age people receiving disability benefits by 1 percentage point. In turn, the changes associated with disability decisions will help fund 47 percent of the ACA's cost. Last, compared to the ACA, an alternative plan without Medicaid expansion will reduce tax burdens and improve welfare.

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Spillover Effects of Community Uninsurance on Awareness, Treatment, and Control of Hypertension Among Insured Adults

José Escarce Sarah Edgington & Carole Roan Gresenz
Medical Care, July 2014, Pages 626-633

Objective: To assess the spillover effects of the rate of uninsurance in a community on the awareness, treatment, and control of hypertension, a chronic condition responsible for substantial morbidity and mortality in the United States, among insured adults.

Research Design: NHANES III (1988–1994) and the 1999–2010 NHANES were linked to data from the Current Population Survey, Area Resource File, and InterStudy Competitive Edge. Multivariate probit regression models used 2 alternative estimation approaches: (1) maximum likelihood estimation, and (2) 2-stage residual inclusion estimation, an instrumental variables method.

Results: A 10 percentage point increase in the community uninsurance rate reduced the probability of receiving antihypertensive medications by 4.2 percentage points among insured hypertensive adults and by 5.5 percentage points among insured hypertensive adults who were aware of their hypertension. A 10 percentage point increase in the community uninsurance rate also resulted in a 6.8 percentage point decline in the probability of blood pressure control among insured hypertensive adults who were aware of their condition.

Conclusions: Nationally, the Affordable Care Act is expected to reduce the number of uninsured by >30 million by 2016, although changes will be experienced by communities to a greater or lesser extent depending on the existing numbers and characteristics of the uninsured in the area and the ways in which health care reform is implemented. Our results suggest that reductions in the community uninsurance rate have the potential to improve quality of care and clinical outcomes among the insured.

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Nurse Unions and Patient Outcomes

Arindrajit Dube, Ethan Kaplan & Owen Thompson
University of California Working Paper, June 2014

Abstract:
We estimate the impact of nurse unions on health care quality using patient discharge data and the universe of hospital unionizations in California between 1996 and 2005. We find that hospitals with a successful union election outperform hospitals with a failed election in 12 of 13 nurse sensitive patient outcomes measures. We also find that hospitals with a unionization drive are establishments with declining quality as measured by patient outcomes. When such declines are accounted for using hospital-specific trends, we find that unionized hospitals also outperform hospitals without any union election in the same 12 of 13 outcome measures.The timing of the quality improvement is consistent with a causal impact: the largest changes occur precisely in the year of unionization. The biggest improvements are found in the incidence of metabolic derangement, pulmonary failure, and central nervous system disorders such as depression and delusion, where the estimated changes are between 15% and 60% of the mean incidence for those measures. Dynamic estimates confirm that the improvements in health care outcomes occur within the first two years following nurse unionization.

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Do Hospitals Cross-Subsidize?

Guy David et al.
Journal of Health Economics, forthcoming

Abstract:
Despite its salience as a regulatory tool to ensure the delivery of unprofitable services, cross-subsidization of services within hospital systems has been notoriously difficult to detect and quantify. We use repeated shocks to a profitable service in the market for hospital-based medical care to test for cross-subsidization of unprofitable services. Using patient-level data from general short-term hospitals in Arizona and Colorado before and after entry by cardiac specialty hospitals, we study how incumbent hospitals adjusted their provision of uncontested services. While the hospitals most exposed to entry reduced their provision of services considered to be unprofitable (psychiatric, substance-abuse, and to a lesser extent trauma care), the estimates are generally modest in magnitude and in some instances statistically indistinguishable from zero. Although entry by single-specialty hospitals may adversely affect the provision of unprofitable uncontested services, these findings warrant further evaluation of service-line cross-subsidization as a means to finance them.

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The Deterrent Effect of Tort Law: Evidence from Medical Malpractice Reform

Zenon Zabinski & Bernard Black
Northwestern University Working Paper, April 2014

Abstract:
A principal goal of tort law is to deter negligent behavior, but there is limited empirical evidence on whether it does so. We study that question for medical malpractice liability. We examine whether medical malpractice reforms affect in-hospital patient safety, using Patient Safety Indicators (PSIs) – measures of adverse events developed by the Agency for Healthcare Research and Quality – as proxies for overall safety. In Difference-in-Differences analyses of five states that adopt caps on non-economic damages during 2003-2005, we find consistent evidence that patient safety generally falls after the reforms, compared to control states.

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Medicare Part B Intensity and Volume Offset

Christopher Brunt
Health Economics, forthcoming

Abstract:
Under Medicare Part B, adjustments to the fee schedule are made under the assumption that physicians and hospitals make up for fee reductions through increased service provision called ‘volume offsetting’. While historically, researchers have found evidence of volume offsetting, more recent studies have called into question its magnitude and existence. This study is the first to propose and empirically evaluate an alternative hypothesis of offsetting, namely the alteration of billed or provided services as a means of ‘intensity offsetting’. Evaluating both forms of offsetting, it finds strong evidence of intensity offsetting and little to no evidence of volume offsetting. Simulating a 10% reduction in the Medicare fee schedule, this study estimates that across different procedures between 22% and 59% of a fee reduction will be offset through alterations in service intensity.

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Effect of Massachusetts Health Reform on Chronic Disease Outcomes

Tomasz Stryjewski et al.
Health Services Research, forthcoming

Objective: To determine whether Massachusetts Health Reform improved health outcomes in uninsured patients with hyperlipidemia, diabetes, or hypertension.

Study Design: We examined 1,463 patients with hyperlipidemia, diabetes, or hypertension who were uninsured in the 3 years before the 2006 Massachusetts Health Reform implementation. We assessed mean quarterly total cholesterol, glycosylated hemoglobin, and systolic blood pressure in the respective cohorts for five follow-up years compared with 3,448 propensity score-matched controls who remained insured for the full 8-year study period. We used person-level interrupted time series analysis to estimate changes in outcomes adjusting for sex, age, race, estimated household income, and comorbidity. We also analyzed the subgroups of uninsured patients with poorly controlled disease at baseline, no evidence of established primary care in the baseline period, and those who received insurance in the first follow-up year.

Principal Findings: In 5 years after Massachusetts Health Reform, patients who were uninsured at baseline did not experience detectable trend changes in total cholesterol (−0.39 mg/dl per quarter, 95 percent confidence interval [−1.11 to 0.33]), glycosylated hemoglobin (−0.02 percent per quarter [−0.06 to 0.03]), or systolic blood pressure (−0.06 mmHg per quarter [−0.29 to 0.18]). Analyses of uninsured patients with poorly controlled disease, no evidence of established primary care in the baseline period, and those who received insurance in the first follow-up year yielded similar findings.

Conclusions: Massachusetts Health Reform was not associated with improvements in hyperlipidemia, diabetes, or hypertension control after 5 years. Interventions beyond insurance coverage might be needed to improve the health of chronically ill uninsured persons.

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Massachusetts Health Reform and Access for Children With Special Health Care Needs

Anna Jo Smith & Alyna Chien
Pediatrics, forthcoming

Background and objectives: Children with special health care needs (CSHCN) face unique challenges in accessing affordable health care. Massachusetts implemented major health reform in 2006; little is known about the impact of this state’s health reform on uninsurance, access to care, and financial protection for privately and publicly insured CSHCN.

Methods: We used a difference-in-differences (DD) approach to compare uninsurance, access to primary and specialty care, and financial protection in Massachusetts versus other states and Washington, DC before and after Massachusetts health reform. Parent-reported data were used from the 2005–2006 and 2009–2010 National Survey of Children with Special Health Care Needs and adjusted for age, gender, race/ethnicity, non-English language at home, and functional difficulties.

Results: Postreform, living in Massachusetts was not associated with significant decreases in uninsurance or increases in access to primary care for CSHCN. For privately insured CSHCN, Massachusetts was associated with increased access to specialists (DD = 6.0%; P ≤ .001) postreform. For publicly insured CSHCN, however, there was a significant decrease in access to prescription medications (DD = –7.2%; P = .003) postreform. Living in Massachusetts postreform was not associated with significant changes in financial protection compared with privately or publicly insured CSHCN in other states.

Conclusions: Massachusetts health reform likely improved access to specialists for privately insured CSHCN but did not decrease instances of uninsurance, increase access to primary care, or improve financial protection for CSHCN in general. Comparable provisions within the Affordable Care Act may produce similarly modest outcomes for CSHCN.

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The Effect of the Affordable Care Act’s Expanded Coverage Policy on Access to Dental Care

Marko Vujicic, Cassandra Yarbrough & Kamyar Nasseh
Medical Care, August 2014, Pages 715-719

Background: The Affordable Care Act included a dependent coverage policy that extends parents’ or guardians’ health insurance to adults aged 19–25. This policy does not apply directly to private dental benefits. However, for various reasons it could still have an indirect “spillover” effect if employers voluntarily expand dental coverage in conjunction with medical coverage.

Research Design: Difference-in-differences models were used to measure the association between the dependent coverage policy and private dental benefits coverage, utilization, and financial barriers to dental care. We analyze 2008–2012 National Health Interview Survey data, comparing results in 2011 and 2012 with results from 2008 to 2010 (prereform period).

Results: Relative to the prereform period, private dental benefits coverage among adults aged 19–25 increased by 5.6 percentage points in 2011 (P<0.001) and 6.9 percentage points in 2012 (P<0.001) compared with adults aged 26–34. Dental care utilization among adults aged 19–25 increased by 2.8 percentage points in 2011 (P=0.062) and 3.3 percentage points in 2012 (P=0.038) compared with adults aged 26–34. Adults aged 19–25 experienced a 2.1 percentage point decrease in 2011 (P=0.068) and a 2.0 percentage point decrease in 2012 (P=0.087) in financial barriers to dental care compared with adults aged 26–34.

Conclusions: The dependent coverage policy was associated with an increase in private dental benefits coverage and dental care utilization, and a decrease in financial barriers to dental care among young adults aged 19–25.

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Paying on the Margin for Medical Care: Evidence from Breast Cancer Treatments

Liran Einav, Amy Finkelstein & Heidi Williams
NBER Working Paper, June 2014

Abstract:
We present a simple framework to illustrate the welfare consequences of a “top up” health insurance policy that allows patients to pay the incremental price for more expensive treatment options. We contrast it with common alternative policies that require essentially no incremental payments for more expensive treatments (as in the United States), or require patients to pay the full costs of more expensive treatments (as in the United Kingdom). We provide an empirical illustration of this welfare analysis in the context of treatment choices among breast cancer patients, where lumpectomy with radiation therapy is a more expensive treatment than mastectomy, with similar average health benefits. We use variation in distance to the nearest radiation facility to estimate the relative demand for lumpectomy and mastectomy. Extrapolating the resultant demand curve (grossly) out of sample, our estimates suggest that the “top-up” policy, which achieves the efficient treatment decision, increases total welfare by $700-2,500 per patient relative to the current US “full coverage” policy, and by $700-1,800 per patient relative to the UK “no top up” policy. While we caution against putting much weight on our specific estimates, the analysis illustrates the potential welfare gains from more efficient reimbursement policies for medical treatments. We also briefly discuss additional tradeoffs that arise from the top-up and UK-style policies, which both lead to additional (ex-ante) risk exposure.

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Health Insurance Reform: The impact of a Medicare Buy-In

Gary Hansen, Minchung Hsu & Junsang Lee
Journal of Economic Dynamics and Control, August 2014, Pages 315–329

Abstract:
The steady state general equilibrium and welfare consequences of a Medicare buy-in program, optional for those aged 55–64, is evaluated in a calibrated life-cycle economy with incomplete markets. Incomplete markets and adverse selection create a potential welfare improving role for health insurance reform. We find that adverse selection eliminates any market for a Medicare buy-in if it is offered as an unsubsidized option to individual private health insurance. The subsidy needed to bring the number of uninsured to less than 5 percent of the target population could be financed by an increase in the labor income tax rate of just 0.03 to 0.18 percent depending on how the program is implemented.

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The effect of health insurance coverage on the reported health of young adults

Eric Cardella & Briggs Depew
Economics Letters, September 2014, Pages 406–410

Abstract:
We exploit a sharp change in the likelihood that an individual is covered by health insurance when they turn 19 years of age to study how health insurance affects reported health status. We find that an individual is 6 percentage points less likely to have health insurance when they turn 19. Using a fuzzy regression discontinuity design, we find that having health coverage significantly increases the likelihood of reporting excellent health among young adults.

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The Early Effects of Medicare's Mandatory Hospital Pay-for-Performance Program

Andrew Ryan et al.
Health Services Research, forthcoming

Objective: To evaluate the impact of hospital value-based purchasing (HVBP) on clinical quality and patient experience during its initial implementation period (July 2011–March 2012).

Study Design: Acute care hospitals were exposed to HVBP by mandate while critical access hospitals and hospitals located in Maryland were not exposed. We performed a difference-in-differences analysis, comparing performance on 12 incentivized clinical process and 8 incentivized patient experience measures between hospitals exposed to the program and a matched comparison group of nonexposed hospitals. We also evaluated whether hospitals that were ultimately exposed to HVBP may have anticipated the program by improving quality in advance of its introduction.

Principal Findings: Difference-in-differences estimates indicated that hospitals that were exposed to HVBP did not show greater improvement for either the clinical process or patient experience measures during the program's first implementation period. Estimates from our preferred specification showed that HVBP was associated with a 0.51 percentage point reduction in composite quality for the clinical process measures (p > .10, 95 percent CI: −1.37, 0.34) and a 0.30 percentage point reduction in composite quality for the patient experience measures (p > .10, 95 percent CI: −0.79, 0.19). We found some evidence that hospitals improved performance on clinical process measures prior to the start of HVBP, but no evidence of this phenomenon for the patient experience measures.

Conclusions: The timing of the financial incentives in HVBP was not associated with improved quality of care. It is unclear whether improvement for the clinical process measures prior to the start of HVBP was driven by the expectation of the program or was the result of other factors.

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Electronic Medical Records and Physician Productivity: Evidence from Panel Data Analysis

Hemant Bhargava & Abhay Nath Mishra
Management Science, forthcoming

Abstract:
This paper studies the impact of an electronic medical record (EMR) system on the productivity of physicians. Physicians influence a vast majority of treatment decisions and are central to the care delivery process; thus, it is important to understand how EMRs may impact the nature of their work. Our research builds on prior literature on physician productivity, IT productivity, and task–technology fit theory. We use a unique panel data set comprising 87 physicians specializing in internal medicine, pediatrics, and family practice, located in 12 primary care clinics of an academic healthcare system in the western United States. We employ the Arellano–Bond system generalized method of moments estimation technique on our data set, which contains 3,186 physician-month productivity observations collected over 39 months. We find that productivity drops sharply immediately after technology implementation and recovers partly over the next few months. The ultimate, longer-term impact depends on physician specialty. The net impact of the EMR system is more benign on internal medicine physicians than on pediatricians and family practitioners. We postulate that the fit provided by an EMR system to the task requirements of physicians of various specialties may be key to disentangling the productivity dynamics. Our research finds that on one hand, present-day EMR systems do not produce the kind of productivity gain that could lead to substantial savings in healthcare; at the same time, EMRs do not cause a major productivity loss on a sustained basis, as many physicians fear.

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Anticipating the Impact of Insurance Expansion on Inpatient Urological Surgery

Chandy Ellimoottil et al.
Urology Practice, forthcoming

Introduction: The Affordable Care Act is expected to provide coverage for nearly 25 million previously uninsured individuals. Because the potential impact of the ACA on urological care remains unknown, we estimated the impact of insurance expansion on the use of inpatient urological surgeries using Massachusetts health care reform as a natural experiment.

Methods: We identified nonelderly patients who underwent inpatient urological surgery from 2003 through 2010 using inpatient databases from Massachusetts and 2 control states. Using July 2007 as the transition point between pre-reform and post-reform periods, we performed a difference-in-differences analysis to estimate the effect of insurance expansion on overall and procedure specific rates of inpatient urological surgery. We also performed subgroup analyses according to race, income and insurance status.

Results: We identified 1.4 million surgeries performed during the study interval. We observed no change in the overall rate of inpatient urological surgery for the Massachusetts population as a whole. However, we saw an increase in the rate of inpatient urological surgery for nonwhite and low income patients. Our difference-in-differences analysis confirmed these results (all patients 1.0%, p=0.668; nonwhite patients 9.9%, p=0.006; low income patients 6.6%, p=0.041). At a procedure level insurance expansion caused increased rates of inpatient benign prostatic hyperplasia procedures but had no effect on rates of prostatectomy, cystectomy, nephrectomy, pyeloplasty or percutaneous nephrolithotomy.

Conclusions: Insurance expansion in Massachusetts increased the overall rate of inpatient urological surgery only for nonwhite patients and low income patients. These data inform key stakeholders about the potential impact of national insurance expansion for a large segment of urological care.

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Pharmaceutical Profits and the Social Value of Innovation

David Dranove, Craig Garthwaite & Manuel Hermosilla
NBER Working Paper, June 2014

Abstract:
Prior research has shown that exogenous shocks to the demand for medical products spur additional product development. These studies do not distinguish between breakthrough products and those that largely duplicate the performance of existing products. In this paper, we use a novel data set to explore the impact of the introduction of Medicare Part D on the development of new biotechnology products. We find that the law spurred development of products targeting illnesses that affect the elderly, but most of this effect is concentrated among products aimed at diseases that already have multiple existing treatments. Moreover, we find no increase in products targeting orphan disease or those receiving either fast track or priority review status from the FDA. This suggests that marginal changes in demand may have little effect on the development of products with large welfare benefits.

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Price-Cap Regulation, Uncertainty and the Price Evolution of New Pharmaceuticals

Ali Shajarizadeh & Aidan Hollis
Health Economics, forthcoming

Abstract:
This paper examines the effect of the regulations restricting price increases on the evolution of pharmaceutical prices. A novel theoretical model shows that this policy leads firms to price new drugs with uncertain demand above the expected value initially. Price decreases after drug launch are more likely, the higher the uncertainty. We empirically test the model's predictions using data from the Canadian pharmaceutical market. The level of uncertainty is shown to play a crucial role in drug pricing strategies.

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Will Divestment from Employment-Based Health Insurance Save Employers Money? The Case of State and Local Governments

Jeremy Goldhaber-Fiebert et al.
NBER Working Paper, June 2014

Abstract:
Reforms introduced by the Affordable Care and Patient Protection Act (ACA) build new sources of coverage around employment-based health insurance. But what if firms find it cheaper to have their employees obtain insurance from these sources, even after accounting for penalties (for non-provision of insurance) and employee bonuses (to ensure the shift is cost neutral for them)? State and local governments (SLGs) have strong incentives to consider the economics of such “divestment”; many have large unfunded benefits liabilities. We investigated whether SLGs would save under two scenarios: (1) shifting all employees and under-65-retirees to alternative sources of coverage; (2) shifting only employees whose household incomes indicate they would be eligible for federally subsidized coverage and all under-65-retirees. Full divestment would cost SLGs more than they currently pay, due primarily to penalty costs. Selective divestment could save SLGs nearly $119 billion over 10 years at the expense of the federal government.

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Variations in Medicare Payments for Episodes of Spine Surgery

Andrew Schoenfeld et al.
Spine Journal, forthcoming

Purpose: To examine variation in episode payments for spine surgery in the national Medicare population. We also sought to determine root causes for observed variations in payment at high cost hospitals.

Methods: All patients in the national fee for service Medicare population undergoing surgery for three conditions (spinal stenosis, spondylolisthesis, lumbar disc herniation) between 2005-2007 were identified (n= 185,954 episodes of spine surgery). Hospitals were ranked on least to most expensive and grouped into quintiles. Results were risk- and price-adjusted using the empirical Bayes method. We then assessed the contributions of index hospitalization, physician services, readmissions and post-acute care to the overall variations in payment. This study was funded in part by a grant from the National Institutes of Aging. There are no conflicts of interest associated with this study.

Results: Episode payments for hospitals in the highest quintile were more than twice as high as those made to hospitals in the lowest quintile ($34,171 vs $15,997). After risk- and price-adjustment, total episode payments to hospitals in the highest quintile remained $9,210 (47%) higher. Procedure choice, including the use of fusion, was a major determinant of the total episode payment. After adjusting for procedure choice, however, hospitals in the highest quintile continued to be 28% more expensive than those in the lowest. Differences in the use of post-acute care accounted for most of this residual variation in payments across hospitals. Hospital episode payments varied to a similar degree after subgroup analyses for disc herniation, spinal stenosis and spondylolisthesis. Hospitals expensive for one condition were also found to be expensive for services provided for other spinal diagnoses.

Conclusions: Medicare payments for episodes of spine surgery vary widely across hospitals. As they respond to the new financial incentives inherent in healthcare reform, high cost hospitals should focus on the use of spinal fusion as well as post-acute care.

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Premium Transparency in the Medicare Advantage Market: Implications for Premiums, Benefits, and Efficiency

Karen Stockley et al.
NBER Working Paper, June 2014

Abstract:
In the Medicare Advantage (MA) market, private health insurers compete to offer plans with the most attractive premium and benefit package. Medicare provides a subsidy, based on a "benchmark payment rate", for each Medicare beneficiary a plan enrolls. We investigate how this subsidy, the primary policy lever in the market, affects the equilibrium premiums and benefits of MA plans. We exploit variation in benchmark payment rates within plans over time, coming from rebasing years where benchmark changes differed across areas in ways that were plausibly exogenous, to determine empirically how plan premiums and benefit generosity respond to changes in benchmarks. We find that premiums do not respond to changes in the benchmark payment rate on average but that insurers do pass through a portion of the benchmark increase by increasing plan benefit generosity.

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Variation in Inpatient Hospital Prices and Outpatient Service Quantities Drive Geographic Differences in Private Spending in Texas

Luisa Franzini et al.
Health Services Research, forthcoming

Objective: To measure the contribution of market-level prices, utilization, and health risk to medical spending variation among the Blue Cross Blue Shield of Texas (BCBSTX) privately insured population and the Texas Medicare population.

Study Design: We used observational data and decomposed overall and service-specific spending into health status and health status adjusted utilization and input prices and input prices adjusted for the BCBSTX and Medicare populations.

Principal Findings: Variation in overall BCBSTX spending across HRRs appeared driven by price variation, whereas utilization variation factored more prominently in Medicare. The contribution of price to spending variation differed by service category. Price drove inpatient spending variation, while utilization drove outpatient and professional spending variation in BCBSTX. The context in which negotiations occur may help explain the patterns across services.

Conclusions: The conventional wisdom that Medicare does a better job of controlling prices and private plans do a better job of controlling volume is an oversimplification. BCBSTX does a good job of controlling outpatient and professional prices, but not at controlling inpatient prices. Strategies to manage the variation in spending may need to differ substantially depending on the service and payer.

By KEVIN LEWIS | 09:00:00 AM

Tuesday, July 22, 2014

Head count

Uncovering the Origins of the Gender Gap in Political Ambition

Richard Fox & Jennifer Lawless
American Political Science Review, forthcoming

Abstract:
Based on survey responses from a national random sample of nearly 4,000 high school and college students, we uncover a dramatic gender gap in political ambition. This finding serves as striking evidence that the gap is present well before women and men enter the professions from which most candidates emerge. We then use political socialization — which we gauge through a myriad of socializing agents and early life experiences — as a lens through which to explain the individual-level differences we uncover. Our analysis reveals that parental encouragement, politicized educational and peer experiences, participation in competitive activities, and a sense of self-confidence propel young people's interest in running for office. But on each of these dimensions, women, particularly once they are in college, are at a disadvantage. By identifying when and why gender differences in interest in running for office materialize, we begin to uncover the origins of the gender gap in political ambition. Taken together, our results suggest that concerns about substantive and symbolic representation will likely persist.

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Elite male faculty in the life sciences employ fewer women

Jason Sheltzer & Joan Smith
Proceedings of the National Academy of Sciences, 15 July 2014, Pages 10107–10112

Abstract:
Women make up over one-half of all doctoral recipients in biology-related fields but are vastly underrepresented at the faculty level in the life sciences. To explore the current causes of women’s underrepresentation in biology, we collected publicly accessible data from university directories and faculty websites about the composition of biology laboratories at leading academic institutions in the United States. We found that male faculty members tended to employ fewer female graduate students and postdoctoral researchers (postdocs) than female faculty members did. Furthermore, elite male faculty — those whose research was funded by the Howard Hughes Medical Institute, who had been elected to the National Academy of Sciences, or who had won a major career award — trained significantly fewer women than other male faculty members. In contrast, elite female faculty did not exhibit a gender bias in employment patterns. New assistant professors at the institutions that we surveyed were largely comprised of postdoctoral researchers from these prominent laboratories, and correspondingly, the laboratories that produced assistant professors had an overabundance of male postdocs. Thus, one cause of the leaky pipeline in biomedical research may be the exclusion of women, or their self-selected absence, from certain high-achieving laboratories.

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Gender Effects in Venture Capital

Paul Gompers et al.
Harvard Working Paper, May 2014

Abstract:
We explore gender differences in performance in a comprehensive sample of venture capital investments in the United States. We find that female venture capitalists significantly underperform their male colleagues controlling for personal characteristics including employment and educational history as well as the characteristics of the portfolio companies in which they invest. When we examine their performance differences, we find that the difference results from a lack of contribution by the male colleagues within their firms. We explore the mechanism for this lack of contribution from male colleagues in a large sample survey of female venture capitalists and in detailed one-on-one interviews. We find support for the notion that formal feedback mechanisms and hierarchies are useful in ameliorating the female performance gap. Female venture capitalists find gender bias in informal mentoring systems as well as in the attitude of entrepreneurs.

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Stereotypes as Stumbling-Blocks: How Coping With Stereotype Threat Affects Life Outcomes for People With Physical Disabilities

Arielle Silverman & Geoffrey Cohen
Personality and Social Psychology Bulletin, forthcoming

Abstract:
Stereotype threat, the concern about being judged in light of negative stereotypes, causes underperformance in evaluative situations. However, less is known about how coping with stereotypes can aggravate underperformance over time. We propose a model in which ongoing stereotype threat experiences threaten a person’s sense of self-integrity, which in turn prompts defensive avoidance of stereotype-relevant situations, impeding growth, achievement, and well-being. We test this model in an important but understudied population: the physically disabled. In Study 1, blind adults reporting higher levels of stereotype threat reported lower self-integrity and well-being and were more likely to be unemployed and to report avoiding stereotype-threatening situations. In Study 2’s field experiment, blind students in a compensatory skill-training program made more progress if they had completed a values-affirmation, an exercise that bolsters self-integrity. The findings suggest that stereotype threat poses a chronic threat to self-integrity and undermines life outcomes for people with disabilities.

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Beyond Occupational Differences: The Importance of Cross-cutting Demographics and Dyadic Toolkits for Collaboration in a U.S. Hospital

Julia DiBenigno & Katherine Kellogg
Administrative Science Quarterly, forthcoming

Abstract:
We use data from a 12-month ethnographic study of two medical-surgical units in a U.S. hospital to examine how members from different occupations can collaborate with one another in their daily work despite differences in status, shared meanings, and expertise across occupational groups, which previous work has shown to create difficulties. In our study, nurses and patient care technicians (PCTs) on both hospital units faced these same occupational differences, served the same patient population, worked under the same management and organizational structure, and had the same pressures, goals, and organizational collaboration tools available to them. But nurses and PCTs on one unit successfully collaborated while those on the other did not. We demonstrate that a social structure characterized by cross-cutting demographics between occupational groups — in which occupational membership is uncorrelated with demographic group membership — can loosen attachment to the occupational identity and status order. This allows members of cross-occupational dyads, in our case nurses and PCTs, to draw on other shared social identities, such as shared race, age, or immigration status, in their interactions. Drawing on a shared social identity at the dyad level provided members with a “dyadic toolkit” of alternative, non-occupational expertise, shared meanings, status rules, and emotional scripts that facilitated collaboration across occupational differences and improved patient care.

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The Impact of City Contracting Set-Asides on Black Self-Employment and Employment

Aaron Chatterji, Kenneth Chay & Robert Fairlie
Journal of Labor Economics, July 2014, Pages 507-561

Abstract:
In the 1980s, many US cities initiated programs reserving a proportion of government contracts for minority-owned businesses. The staggered introduction of these set-aside programs is used to estimate their impacts on the self-employment and employment rates of African American men. Black business ownership rates increased significantly after program initiation, with the black-white gap falling 3 percentage points. The evidence that the racial gap in employment also fell is less clear as it depends on assumptions about the continuation of preexisting trends. The black gains were concentrated in industries heavily affected by set-asides, and they mostly benefited the better educated.

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Leaning In or Leaning On? Gender, Homophily, and Activism in Crowdfunding

Jason Greenberg & Ethan Mollick
University of Pennsylvania Working Paper, July 2014

Abstract:
Female founders seek and receive less startup capital than male entrepreneurs. One reason for this disparity is a lack of female representation among funders of startups, and a potential solution is to increase the proportion of women in decision-making roles. Both the problem and the solution implicitly rely on homophily – that women will support other women given a chance. However, a lack of clarity over when and how homophily influences individual choices makes it uncertain when better representation is actually advantageous. Using data from crowdfunding, we empirically examine whether higher proportions of female funders lead to higher success rates in capital-raising for women. We find that women outperform men, and are more likely to succeed at a crowdfunding campaign, all other things being equal. Surprisingly, this effect primarily holds for female founders proposing technological projects, a category that is largely dominated by male founders and funders. This finding stands in stark contrast to expectations concerning homophily. A laboratory experiment helps explain how this pattern might emerge and allows us to theorize about the types of choice homophily driving results. We find that a small proportion of female backers disproportionately support women-led projects in areas where women are historically underrepresented. This suggests an activist variant of choice homophily, and implies that mere representation of female funders without activism may not always be enough to overcome the barriers faced by female founders.

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Affirmative Action Bans and College Graduation Rates

Peter Hinrichs
Economics of Education Review, forthcoming

Abstract:
This paper estimates the effects of statewide affirmative action bans on graduation rates within colleges and on the fraction of college entrants who become graduates of selective institutions. On net, affirmative action bans lead to fewer underrepresented minorities becoming graduates of selective colleges. Although the graduation rates for underrepresented minority groups at selective institutions rise when affirmative action is banned, this may be due to the changing composition of students at these universities. Moreover, this effect is small relative to the number displaced from selective universities due to affirmative action bans.

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Segregated school effects on first grade reading gains: Using propensity score matching to disentangle effects for African-American, Latino, and European-American students

Kirsten Kainz & Yi Pan
Early Childhood Research Quarterly, Fall 2014, Pages 531–537

Abstract:
Increasing evidence from observational studies indicates that students attending minority segregated schools are at risk for constrained performance in reading. However, analyses of data gathered under observational conditions may yield biased results. Using data from the Early Childhood Longitudinal Study, 1998–1999 Kindergarten Cohort, this study used propensity score matching to address selection bias due to students’ observed socio-economic, literacy, and social-emotional background characteristics, allowing for a less biased estimate of minority segregated schooling on African-American, Latino, and European-American students’ reading gains in first grade. We found that African-American students attending segregated schools made less gain in reading across the first grade year than African-American students in non-segregated schools. There was no evidence for significant negative effects of segregation on reading gains for Latino and European-American students.

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From Motherhood Penalties to Husband Premia: The New Challenge for Gender Equality and Family Policy, Lessons from Norway

Trond Petersen, Andrew Penner & Geir Høgsnes
American Journal of Sociology, March 2014, Pages 1434-1472

Abstract:
Given the key role that processes occurring in the family play in creating gender inequality, the family is a central focus of policies aimed at creating greater gender equality. We examine how family status affects the gender wage gap using longitudinal matched employer-employee data from Norway, 1979–96, a period with extensive expansion of family policies. The motherhood penalty dropped dramatically from 1979 to 1996. Among men the premia for marriage and fatherhood remained constant. In 1979, the gender wage gap was primarily due to the motherhood penalty, but by 1996 husband premia were more important than motherhood penalties.

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Maternity Leave, Effort Allocation, and Postmotherhood Earnings

Evgenia Kogan Dechter
Journal of Human Capital, Summer 2014, Pages 97-125

Abstract:
Women with children earn less than women without children. I study this wage gap using a dynamic model of human capital accumulation with endogenous time and effort allocation between household and market activities. Selection into motherhood does not drive the gap in hourly wage. I decompose this gap into forgone human capital and changing effort at work. Human capital depreciates as a result of maternity leave and accumulates at a lower rate after childbirth because of a reduction in work hours. Effort at work does not decline after childbirth. Reduced human capital accumulation explains the entire postmotherhood loss in hourly wage.

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Young Women's Job Mobility: The Influence of Motherhood Status and Education

Jessica Looze
Journal of Marriage and Family, August 2014, Pages 693–709

Abstract:
Previous research has found that women who become mothers in their 20s face larger wage penalties compared to women who delay childbearing until their 30s. Explanations for this have focused on the consequences of employment breaks early in one's career and reduced opportunities in the workplace following the birth of a child. In this article, the author uses panel data from the National Longitudinal Survey of Youth 1979 (N = 4,566) to examine another possible explanation: differences in patterns of and wage returns to job mobility. She found that young mothers, relative to childless women, make fewer wage-enhancing voluntary job separations and often receive lower wage returns for these separations. Educational attainment exacerbates these patterns, largely to the disadvantage of women with less education.

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My Family Matters: Gender and Perceived Support for Family Commitments and Satisfaction in Academia Among Postdocs and Faculty in STEMM and Non-STEMM Fields

Amy Moors, Janet Malley & Abigail Stewart
Psychology of Women Quarterly, forthcoming

Abstract:
One reason for women’s absence in science, technology, engineering, math, and medical science (STEMM) disciplines is the perceived incompatibility of having a family and a science career. However, little is known about the climate surrounding support for balancing work and family responsibilities for STEMM and non-STEMM scholars at the postdoctoral training level. In Study 1, we examined the relationship between STEMM and non-STEMM postdocs’ perceived family-friendly climate, job satisfaction, and workplace belonging (N = 553). In Study 2, we examined the relationship between a broad range of tenure-track faculty members’ family-friendly climate, job satisfaction, and workplace belonging (N = 385). Hierarchical multiple regression results indicated that perceived institutional support for family commitments was linked with job satisfaction and sense of belonging for men and women in faculty and postdoctoral training positions in both STEMM and non-STEMM fields. In addition, for STEMM postdocs (but not for non-STEMM postdocs or faculty), gender moderated the effects of perceived support for family on job satisfaction and sense of belonging, such that women with low institutional support for family commitments were significantly less satisfied with their jobs and felt less belonging to their workplace environment than comparable men. We discuss implications of academic departmental climate and initiatives for family-friendly policies for retention of women in academia.

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Gender, Trial Employment, and Initial Salaries

Adina Sterling & Roberto Fernandez
MIT Working Paper, June 2014

Abstract:
Gender disparities in wages among professionals exist because women begin their professional careers making less than men. Prior research indicates this occurs because employers lack information about prospective employees at the hiring stage which triggers discrimination and bias in wage setting. Building on work that suggests organizational practices impact inequality, we examine if trial employment affects initial salaries by providing employers a first-hand look at candidates prior to employers making permanent hiring decisions. Using a unique data set that is well-suited for this inquiry, we find evidence that a female wage discount occurs among entry-level business professionals. However, as predicted, the female wage discount dissipates when offers are received from employers where trial employment takes place.

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Extremal Quantile Regressions for Selection Models and the Black-White Wage Gap

Xavier D'Haultfoeuille, Arnaud Maurel & Yichong Zhang
NBER Working Paper, June 2014

Abstract:
We consider the estimation of a semiparametric location-scale model subject to endogenous selection, in the absence of an instrument or a large support regressor. Identification relies on the independence between the covariates and selection, for arbitrarily large values of the outcome. In this context, we propose a simple estimator, which combines extremal quantile regressions with minimum distance. We establish the asymptotic normality of this estimator by extending previous results on extremal quantile regressions to allow for selection. Finally, we apply our method to estimate the black-white wage gap among males from the NLSY79 and NLSY97. We find that premarket factors such as AFQT and family background characteristics play a key role in explaining the level and evolution of the black-white wage gap.

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Socially gainful gender quotas

Oded Stark & Walter Hyll
Journal of Economic Behavior & Organization, September 2014, Pages 173–177

Abstract:
We study the impact of gender quotas on the acquisition of human capital. We assume that individuals’ formation of human capital is influenced by the prospect of landing high-pay top positions, and that these positions are regulated by gender-specific quotas. In the absence of quotas, women consider their chances of getting top positions to be lower than men's. The lure of top positions induces even men of relatively low ability to engage in human capital formation, whereas women of relatively high ability do not expect to get top positions and do not therefore engage in human capital formation. Gender quotas discourage men who are less efficient in forming human capital, and encourage women who are more efficient in forming human capital. We provide a condition under which the net result of the institution of gender quotas is an increase in human capital in the economy as a whole.

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You’ve Come a Short Way, Baby: Gender of Information Sources in American and Canadian Business Magazines, 1991-92 and 2011-12

Karen Grandy
Journalism & Mass Communication Quarterly, forthcoming

Abstract:
This article examines the inclusion of female sources in feature articles in American and Canadian business magazines and compares the findings from its 2011-12 sample with corresponding labor force data, and also with the results of a research study conducted twenty years earlier. While results revealed a shift in the occupations most often included as sources in the publications, women accounted for only 15.2% of sources in the 2011-12 sample and are still underrepresented in comparison with occupation data, as they were in 1991-92.

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Breaking the Glass Ceiling? The Effect of Board Quotas on Female Labor Market Outcomes in Norway

Marianne Bertrand et al.
NBER Working Paper, June 2014

Abstract:
In late 2003, Norway passed a law mandating 40 percent representation of each gender on the board of publicly limited liability companies. The primary objective of this reform was to increase the representation of women in top positions in the corporate sector and decrease gender disparity in earnings within that sector. We document that the newly (post-reform) appointed female board members were observably more qualified than their female predecessors, and that the gender gap in earnings within boards fell substantially. While the reform may have improved the representation of female employees at the very top of the earnings distribution (top 5 highest earners) within firms that were mandated to increase female participation on their board, there is no evidence that these gains at the very top trickled-down. Moreover the reform had no obvious impact on highly qualified women whose qualifications mirror those of board members but who were not appointed to boards. We observe no statistically significant change in the gender wage gaps or in female representation in top positions, although standard errors are large enough that we cannot rule economically meaningful gains. Finally, there is little evidence that the reform affected the decisions of women more generally; it was not accompanied by any change in female enrollment in business education programs, or a convergence in earnings trajectories between recent male and female graduates of such programs. While young women preparing for a career in business report being aware of the reform and expect their earnings and promotion chances to benefit from it, the reform did not affect their fertility and marital plans. Overall, in the short run the reform had very little discernible impact on women in business beyond its direct effect on the newly appointed female board members.

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Why does height matter in hiring?

Jens Agerström
Journal of Behavioral and Experimental Economics, October 2014, Pages 35–38

Abstract:
Previous research shows the existence of a height premium in the workplace with tall individuals receiving more benefits across several domains (e.g., earnings) relative to short people. The current study probes deeper into the height premium by focusing on the specific favourable traits, attributes, and abilities tall individuals are presumed to have, ultimately giving these individuals an advantage in hiring. In an experiment, we made a male job applicant taller or shorter by digitally manipulating photographs, and attached these to job applications that were evaluated by professional recruiters. We find that in the context of hiring a project leader, the height premium consists of increased perceptions of the candidate's general competence, specific job competency (including employability), and physical health, whereas warmth and physical attractiveness seem to matter less. Interestingly, physical height predicted recruiters’ hiring intentions even when statistically controlling for competence, warmth, health, and attractiveness.

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Anything women can do men can do better: An experiment examining the effects of stereotype threat on political knowledge and efficacy

Scott Pruysers & Julie Blais
Social Science Journal, forthcoming

Abstract:
Negative stereotypes have been shown to create cognitive burdens that decrease intellectual performance in a number of tasks such as math and standardized tests. Applying a multidisciplinary approach and an experimental research design, this paper examines the effect of stereotype threat on political knowledge and political efficacy. A sample of 226 undergraduate students completed an online survey on political knowledge and efficacy. Participants were randomly assigned to a stereotype threat condition or a non-threat condition. Contrary to what was hypothesized, stereotype threat does not explain the political knowledge gap between men and women; men score significantly higher than women in both conditions. However, preliminary evidence suggests the presence of stereotype lift in men's sense of political efficacy. Men's political efficacy demonstrates a moderate increase in the stereotype threat condition while women's sense of efficacy does not change (d = .53).

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Gender quotas, candidate background and the election of women: A paradox of gender quotas in open-list proportional representation systems

Maciej Górecki & Paula Kukolowicz
Electoral Studies, forthcoming

Abstract:
We study the effects of mandatory (legislated) gender quotas in Poland, a country utilising an open-list proportional representation electoral system. We use a unique data set comprising multiple characteristics of all candidates running in two consecutive elections to the lower chamber of the Polish parliament (the Sejm). The first of them (held in 2007) was the last pre-quota election and the second (held in 2011) the first post-quota one. We show that quotas have an inherently paradoxical nature: they cause a substantial increase in the number of female candidates but the increase is accompanied by a sharp decline of these candidates' success rates. This regularity holds even if we account for multiple indicators of candidate background, including previous political experience.

By KEVIN LEWIS | 09:00:00 AM

Monday, July 21, 2014

Bad apples

Doing Their Duty: An Empirical Analysis of the Unintended Effect of Tarasoff v. Regents on Homicidal Activity

Griffin Edwards
Journal of Law and Economics, May 2014, Pages 321-348

Abstract:
The seminal ruling of Tarasoff v. Board of Regents of the Universities of California enacted a duty that required mental health providers to warn potential victims of any real threat to life made by a patient. Many have theorized that this required breach of confidentiality may have adverse effects on effective psychological treatment — but the issue remains unaddressed empirically. Because of the presence of duty-to-warn laws, patients might forgo mental health treatment that would prevent violence. Using a fixed-effects model and exploiting the variation in the timing and style of duty-to-warn laws across states, I find that mandatory duty-to-warn laws cause an increase in the homicide rate of .4, or 5 percent. These results are robust to model specifications and falsification tests and help to clarify the true effect of state duty-to-warn laws.

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Decriminalizing Indoor Prostitution: Implications for Sexual Violence and Public Health

Scott Cunningham & Manisha Shah
NBER Working Paper, July 2014

Abstract:
Most governments in the world including the United States prohibit prostitution. Given these types of laws rarely change and are fairly uniform across regions, our knowledge about the impact of decriminalizing sex work is largely conjectural. We exploit the fact that a Rhode Island District Court judge unexpectedly decriminalized indoor prostitution in 2003 to provide the first causal estimates of the impact of decriminalization on the composition of the sex market, rape offenses, and sexually transmitted infection outcomes. Not surprisingly, we find that decriminalization increased the size of the indoor market. However, we also find that decriminalization caused both forcible rape offenses and gonorrhea incidence to decline for the overall population. Our synthetic control model finds 824 fewer reported rape offenses (31 percent decrease) and 1,035 fewer cases of female gonorrhea (39 percent decrease) from 2004 to 2009.

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The Way of the Gun: Estimating Firearms Trafficking across the US–Mexico Border

Topher McDougal et al.
Journal of Economic Geography, forthcoming

Abstract:
The volume of firearms sold in USA and trafficked across the US–Mexico border is notoriously difficult to estimate. We consider a unique approach using GIS-generated county-level panel data (1993–1999 and 2010–2012) of Federal Firearms Licenses to sell small arms (FFLs) to estimate the realized demand for firearms based on the distance by road from the nearest point on the US–Mexico border. We use a time-series negative binomial model paired with a post-estimation population attributable fraction (PAF) estimator. We do so to control determinants of domestic demand. We are able to estimate a total demand for trafficking, both in terms of firearms and dollar sales for the firearms industry. We find that nearly 2.2% (between 0.9% and 3.7%) of US domestic arms sales are attributable to the US–Mexico traffic in the period 2010–2012, representing 212,887 firearms (between 89,816 and 359,205) purchased annually to be trafficked.

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Investigating the Effects of Furloughing Public School Teachers on Juvenile Crime in Hawaii

Randall Akee, Timothy Halliday & Sally Kwak
Economics of Education Review, forthcoming

Abstract:
Policymakers have long been concerned about the large social costs of juvenile crime. Detecting the causes of juvenile crime is an important educational policy concern as many of these crimes happen during the school day. In the 2009-10 school year, the State of Hawaii responded to fiscal strains by furloughing all school teachers employed by the Department of Education and cancelling classes for seventeen instructional days. We examine the effects of these non-holiday school closure days to draw conclusions about the relationship between time in school and juvenile arrests in the State of Hawaii on the island of Oahu. We calculate marginal effects from a negative binomial model and find that time off from school is associated with significantly fewer juvenile assault and drug-related arrests, although there are no changes in other types of crimes, such as burglaries. The declines in arrests for assaults are the most pronounced in poorer regions of the island while the decline in drug-related arrests is larger in the relatively more prosperous regions.

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Do More Police Lead to More Crime Deterrence?

Gary Kleck & J.C. Barnes
Crime & Delinquency, August 2014, Pages 716-738

Abstract:
Does increasing police strength deter more crime? Some studies have found apparent negative effects of police manpower levels on crime rates, and the most common explanation of such findings is that greater police strength increases perceptions of arrest risk, thus reducing crime via general deterrence mechanisms. The authors directly tested this hypothesis by estimating the association between survey respondents’ perceptions of arrest risk and the level of police strength prevailing in the counties where they live. No relationship between the number of police officers per capita and perceptions of the risk of arrest was found, suggesting that increases in police manpower will not increase general deterrent effects and decreases will not reduce these effects. The authors also considered the possibility that police manpower levels influence the number of criminals incarcerated, and thus affect crime rates via the incapacitative effects of incarceration, but concluded that such an effect is unlikely. These findings point to a need to reconsider previous interpretations of findings as supportive of a deterrent effect of increased police manpower on crime rates.

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Impulsive versus premeditated aggression in the prediction of violent criminal recidivism

Marc Swogger et al.
Aggressive Behavior, forthcoming

Abstract:
Past aggression is a potent predictor of future aggression and informs the prediction of violent criminal recidivism. However, aggression is a heterogeneous construct and different types of aggression may confer different levels of risk for future violence. In this prospective study of 91 adults in a pretrial diversion program, we examined (a) premeditated versus impulsive aggression in the prediction of violent recidivism during a one-year follow-up period, and (b) whether either type of aggression would have incremental validity in the prediction of violent recidivism after taking into account frequency of past general aggression. Findings indicate that premeditated, but not impulsive, aggression predicts violent recidivism. Moreover, premeditated aggression remained a predictor of recidivism even with general aggression frequency in the model. Results provide preliminary evidence that the assessment of premeditated aggression provides relevant information for the management of violent offenders.

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Security Versus Liberty in the Context of Counterterrorism: An Experimental Approach

Blake Garcia & Nehemia Geva
Terrorism and Political Violence, forthcoming

Abstract:
A critical question in counterterrorism studies concerns the extent to which governments adequately balance the continual provision of individual rights and freedoms with the appropriate level of national security when faced with a terrorist attack. We experimentally assess this tradeoff utilizing a 2 × 2 × 2 between-groups factorial design, manipulating (a) the extent of terror-related threats, (b) the level of invasiveness of subsequent counterterrorism policies, as well as (c) the terror context: transnational and domestic. The results provide evidence that the public is more willing to accept greater reductions in civil liberties under a greater threat of terrorism only when the perceived effectiveness of those policies to prevent future acts of terrorism is high. Furthermore, we find these results to be specific to the context of a transnational terror threat. This suggests that the public will be unwilling to accept reductions in civil liberties when the source of the attack is domestic, regardless of the level of threat or how effective subsequent policies may be in preventing future attacks.

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Community Context of Crime: A Longitudinal Examination of the Effects of Local Institutions on Neighborhood Crime

James Wo
Crime & Delinquency, forthcoming

Abstract:
Although theories posit that some types of local institutions will have a crime-producing influence in neighborhoods while others will have the opposite effect, the empirical evidence is far from conclusive. Previous studies are typically limited to analyzing cross-sectional data and one type of institution. Using longitudinal data of the number of employees of various institutions within census tracts across nine U.S. cities, the present study examines the longitudinal impact of four types of institutions on violent and property crime. Negative binomial regression models suggest that alcohol outlets and banking establishments increase criminal opportunities, whereas “third places” like coffee shops and cafes induce efficacious neighborhood control and social action. Civic and social organizations have no statistical relationship with crime.

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Extending the Effects of the Carceral State: Proximal Contact, Political Participation and Race

Hannah Walker
Political Research Quarterly, forthcoming

Abstract:
Rates of contact with the criminal justice system are geographically and racially sensitive such that some groups of people experience contact at much higher rates than others. The negative effects of personal contact with the criminal justice system are well documented. Less well understood are the effects of the criminal justice system on those who have not had personal contact but who are members of groups where contact is a common occurrence. This research explores the political effects of the carceral state for the second group, and finds that proximal contact mobilizes, an effect that is most pronounced for nonwhites.

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Person–Environment Interaction in a New Secure Forensic State Psychiatric Hospital

Jon Eggert et al.
Behavioral Sciences & the Law, forthcoming

Abstract:
This study examined the person–environment interaction effects of environmental design on ward climate, safety, job satisfaction, and treatment outcomes within a new high security forensic psychiatric facility. Participants included male and female adult psychiatric inpatients and staff members at different security stages. Data were collected once before and twice after the experimental group moved into the new building. The control group remained in the same facilities. Contrary to expectations, the new building had limited effects on the measured variables.

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Examining the neighborhood effects on police performance to assault calls

Abdullah Cihan
Police Practice and Research, forthcoming

Abstract:
Using agency-generated data collected from the Houston Police Department (HPD) and the 2000 census statistics, this article examines the relationship between police performance and neighborhood disorganization through an analysis of the distribution of police response to in-progress assault calls across different Houston neighborhoods. The results of multilevel analyses suggest that concentrated disadvantage, immigrant concentration, and residential stability are significantly related to the distribution of the HPD’s response time patterns. More specifically, police responses were quicker to in-progress assault calls in disorganized neighborhoods. The implications drawn from the current study’s results on police response time patterns can be useful in improving police service levels, the police–community relationship, and patrol strategies.

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Interactionist Labeling: Formal and Informal Labeling’s Effects on Juvenile Delinquency

Daniel Ryan Kavish & Christopher Mullins
Crime & Delinquency, forthcoming

Abstract:
This article critically reviews prior labeling theory research concerning juvenile delinquency and crime, and proposes a new study using a recent data set. The labeling perspective is outlined as it was originally presented, and the theoretical elaborations that have taken place since are highlighted. Distinctions are made between formally applied criminal justice labels and the informal labels that are applied by educational institutions, significant others, and parental figures. An interactionist labeling model is presented to explain levels of juvenile delinquency among a nationally representative sample of American adolescents: the first three waves of the National Longitudinal Study of Adolescent Health (Add Health). Finally, negative binomial regression models are estimated to better explain the dynamic relationship between labels and delinquency. Consistent with labeling theory, formal labeling significantly increased future delinquency.

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Labeling Effects of First Juvenile Arrests: Secondary Deviance and Secondary Sanctioning

Akiva Liberman, David Kirk & Kideuk Kim
Criminology, forthcoming

Abstract:
A growing literature suggests that juvenile arrests perpetuate offending and increase the likelihood of future arrests. The effect on subsequent arrests is generally regarded as a product of the perpetuation of criminal offending. However, increased rearrest also may reflect differential law enforcement behavior. Using longitudinal data from the Project on Human Development in Chicago Neighborhoods (PHDCN) together with official arrest records, the current study estimates the effects of first arrests on both reoffending and rearrest. Propensity score methods were used to control differences between arrestees and nonarrestees and to minimize selection bias. Among 1,249 PHDCN youths, 58 individuals were first arrested during the study period; 43 of these arrestees were successfully matched to 126 control cases that were equivalent on a broad set of individual, family, peer, and neighborhood factors. We find that first arrests increased the likelihood of both subsequent offending and subsequent arrest, through separate processes. The effects on rearrest are substantially greater and are largely independent of the effects on reoffending, which suggests that labels trigger “secondary sanctioning” processes distinct from secondary deviance processes. Attempts to ameliorate deleterious labeling effects should include efforts to dampen their escalating punitive effects on societal responses.

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Evaluating the Effect of State Regulation of Federally Licensed Firearm Dealers on Firearm Homicide

Nathan Irvin et al.
American Journal of Public Health, August 2014, Pages 1384-1386

Abstract:
Effective federal regulation of firearm dealers has proven difficult. Consequently, many states choose to implement their own regulations. We examined the impact of state-required licensing, record keeping of sales, allowable inspections, and mandatory theft reporting on firearm homicide from 1995 to 2010. We found that lower homicide rates were associated with states that required licensing and inspections. We concluded that firearm dealer regulations might be an effective harm reduction strategy for firearm homicide.

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Legal Cynicism and Parental Appraisals of Adolescent Violence

Brian Soller, Aubrey Jackson & Christopher Browning
British Journal of Criminology, July 2014, Pages 568-591

Abstract:
Research suggests that legal cynicism — a cultural frame in which the law is viewed as illegitimate and ineffective — encourages violence to maintain personal safety when legal recourse is unreliable. But no study has tested the impact of legal cynicism on appraisals of violence. Drawing from symbolic interaction theory and cultural sociology, we tested whether neighbourhood legal cynicism alters the extent to which parents appraise their children’s violence as indicative of aggressive or impulsive temperaments using data from the Project on Human Development in Chicago Neighborhoods. We find that legal cynicism attenuates the positive association between adolescent violence and parental assessments of aggression and impulsivity. Our study advances the understanding of micro-level processes through which prevailing cultural frames in the neighbourhood shape violence appraisals.

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I Want Him Locked Up: Social Capital, African American Parenting Strategies, and the Juvenile Court

Joseph Richardson, Waldo Johnson & Christopher St. Vil
Journal of Contemporary Ethnography, August 2014, Pages 488-522

Abstract:
An impressive array of literature acknowledges the role of family members, friends, neighbors, and community institutions as rich resources of social capital which poor African American parents utilize in the collective socialization of their children. How parents access, mobilize, and deploy family and community-based social capital in resource-deprived communities for the social benefit of their children has been well documented. Yet, little is known about the challenges poor parents face raising troubled youth, particularly African American boys, when they are unable to generate social capital within their social network of family members, friends, neighbors, and community institutions to assist with raising their children. How do low-income African American parents raise troubled youth in disadvantaged communities when there are few resources of social support to draw upon? What strategies do parents use when they have exhausted and depleted their social capital? Drawing on three years of ethnographic field observations and multiple in-depth interviews with parents of pre-delinquent African American boys, this article examines how African American parents living in an impoverished African American community in New York City rely on the juvenile justice system, particularly juvenile confinement, as a parenting strategy. The findings suggest the need for alternatives to juvenile confinement and additional social support resources that can assist parents with parenting troubled youth.

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Offense Type and the Arrest Decision in Cases of Intimate Partner Violence

Alesha Durfee & Matthew Fetzer
Crime & Delinquency, forthcoming

Abstract:
Although previous research has examined arrests for intimate partner violence (IPV), most of these analyses focus exclusively on physical assault and intimidation. Research on arrests for sexual assault have examined arrests for cases of stranger and/or acquaintance sexual assault, but have not included sexual IPV. Using data from the 2010 National Incident-Based Reporting System, this analysis is the first to calculate and compare arrest rates for sexual IPV, physical IPV, and intimidation. Results indicate that after controlling for other factors, police are less likely to make an arrest in cases of sexual IPV than in cases of physical IPV or intimidation. These findings are discussed in the context of the consequences of sexual assault on IPV victims.

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The Role of Sleep in the Relation between Community Violence Exposure and Delinquency among Latino Adolescents

Sonia Rubens et al.
Journal of Community Psychology, August 2014, Pages 723–734

Abstract:
Little is known about factors that account for the link between community violence exposure (CVE) and delinquency among adolescents. Sleep is one factor that warrants attention, given the poor sleep habits found among many adolescents and its relation to CVE and delinquent behaviors. Further, given the growing rate of Latino youth in the United States, and their risk for CVE, examining factors that account for this relation among Latino youth is essential for developing culturally sensitive interventions. This study evaluated whether sleep problems accounted for the link between CVE and delinquency among a sample of 144 Latino adolescents (54% male; ages 14­–19 years). CVE and sleep problems were uniquely related to delinquency. Further, Meeker's test of indirect effects indicated that sleep problems partially accounted for the relation between CVE and delinquency. Interventions targeting sleep problems in Latino adolescents may aid in reducing delinquency among Latino adolescents, particularly for those with CVE.

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Representative Bureaucracy in Policing: Does It Increase Perceived Legitimacy?

Norma Riccucci, Gregg Van Ryzin & Cecilia Lavena
Journal of Public Administration Research and Theory, July 2014, Pages 537-551

Abstract:
Drawing on the theory of representative bureaucracy, specifically the theory of symbolic representation, we examine whether or not gender representativeness in a police department’s domestic violence unit influences how citizens judge the agency’s performance, trustworthiness, and fairness. To examine this question, we use an online survey experiment in which we vary the representation of female police officers in a hypothetical domestic violence unit as well as the agency’s performance. Results suggest that gender representation does indeed influence the perceived job performance, trustworthiness, and fairness of the agency, as does the agency’s performance. Thus, this study suggests that the symbolic representativeness of the police does causally influence how citizens view and judge a law enforcement agency, and thus in turn perhaps their willingness to cooperate in the coproduction of public safety outcomes.

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Incidence and Cost of Sexual Violence in Iowa

Jingzhen Yang et al.
American Journal of Preventive Medicine, August 2014, Pages 198–202

Purpose: To estimate the incidence and costs of sexual violence in Iowa in 2009.

Methods: Using data obtained from population surveys, six Iowa government agencies, and other sources, we estimated sexual violence incidence, costs per incident, and total costs in 2009 dollars, by age and sexual violence category, and for various cost elements. We calculated direct costs of medical care, mental health care, property damage, victim services, investigation, adjudication, and sanctioning, as well as indirect costs for lost work and quality of life. We collected data in 2010–2011 and completed analysis in 2013.

Results: In 2009, an estimated 55,340 individuals experienced sexual violence in Iowa, including 49,510 adults and 5,930 children. Nearly three of every four victims were women. The estimated total cost of sexual violence in 2009 was $4.7 billion, equating to $1,580 per resident. This estimate included $4.44 billion in indirect costs and $265 million in direct costs. In the same year, the government spent an estimated $100.6 million as a result of sexual violence in Iowa, more than half of which ($55.3 million) was spent on perpetrators and little ($0.9 million) on prevention.

Conclusions: The economic costs of sexual violence are high for individuals and society. Cost information can help identify the burden of sexual violence relative to other social problems in Iowa and prioritize funding for prevention and intervention.

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Indeterminate and Determinate Sentencing Models: A State-Specific Analysis of Their Effects on Recidivism

Yan Zhang & Lening Zhang
Crime & Delinquency, August 2014, Pages 693-715

Abstract:
This article compares the effects of indeterminate and determinate sentencing models on recidivism using a measure of parole board discretionary release and mandatory parole release under each sentencing model. Data collected from Recidivism of Prisoners Released in 1994: United States are used to conduct a state-specific comparison of the two release programs in six mixed-sentencing states. The results indicate that the effects of different sentencing models significantly vary across the six states. Whereas mandatory parole release was more likely to have a deterrent effect on recidivism in Maryland and Virginia, parole board discretionary release was more effective in New York and North Carolina. Release programs in Oregon and Texas showed no significant differences in their effects on recidivism.

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The Effects of Directed Patrol and Self-Initiated Enforcement on Firearm Violence: A Randomized Controlled Study of Hot Spot Policing

Richard Rosenfeld, Michael Deckard & Emily Blackburn
Criminology, forthcoming

Abstract:
Targeted policing has proven effective in reducing serious crime in areas where it is highly concentrated, but the enforcement mechanisms responsible for the success of so-called hot spots strategies remain poorly understood. This study evaluates the effects of a 9-month randomized controlled hot spots field experiment on firearm assaults and robberies in St. Louis, Missouri. Thirty-two firearm violence hot spots were randomly allocated to two treatment conditions and a control condition. Directed patrols were increased in both treatment conditions, whereas the experimental protocol limited other enforcement activity in one of the treatment conditions and increased it in the other. The results from difference-in-difference regression analyses indicate that the intervention substantially reduced the incidence of nondomestic firearm assaults, with no evident crime displacement to surrounding areas, to times when the intervention was not active, or to nonfirearm assaults. By contrast, we find no effects of the intervention on firearm robberies. Less definitive results suggest that the certainty of arrests and occupied vehicle checks account for the treatment effects on nondomestic firearm assaults.

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Denying humanness to victims: How gang members justify violent behavior

Emma Alleyne, Isabel Fernandes & Elizabeth Pritchard
Group Processes & Intergroup Relations, forthcoming

Abstract:
The high prevalence of violent offending amongst gang-involved youth has been established in the literature. Yet the underlying psychological mechanisms that enable youth to engage in such acts of violence remain unclear. One hundred eighty-nine young people were recruited from areas in London, UK, known for their gang activity. We found that gang members, in comparison to nongang youth, described the groups they belong to as having recognized leaders, specific rules and codes, initiation rituals, and special clothing. Gang members were also more likely than nongang youth to engage in violent behavior and endorse moral disengagement strategies (i.e., moral justification, euphemistic language, advantageous comparison, displacement of responsibility, attribution of blame, and dehumanization). Finally, we found that dehumanizing victims partially mediated the relationship between gang membership and violent behavior. These findings highlight the effects of groups at the individual level and an underlying psychological mechanism that explains, in part, how gang members engage in violence.

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Placing the Neighborhood Accessibility–Burglary Link in Social-Structural Context

Jeffrey Ward et al.
Crime & Delinquency, August 2014, Pages 739-763

Abstract:
Foundational research on the link between neighborhood accessibility and burglary has consistently shown a positive association. However, recent research has found that less accessible neighborhoods have higher burglary rates. Geographically referenced data from 401 neighborhoods in Jacksonville, Florida, are used to determine whether these inconsistencies can be explained by a conditioning effect of neighborhood social-structural context. Results from spatially lagged regression models indicate that neighborhood accessibility fails to have a direct effect on burglary rates after social-structural variables are controlled; rather, the effect of neighborhood accessibility on burglary rates is conditioned by the level of concentrated disadvantage of the neighborhood. Two potential explanations for the empirical findings are offered, and implications of the results for “designing out” crime are discussed.

By KEVIN LEWIS | 09:00:00 AM

Sunday, July 20, 2014

Friendship ring

Mistakenly Seeking Solitude

Nicholas Epley & Juliana Schroeder
Journal of Experimental Psychology: General, forthcoming

Abstract:
Connecting with others increases happiness, but strangers in close proximity routinely ignore each other. Why? Two reasons seem likely: Either solitude is a more positive experience than interacting with strangers, or people misunderstand the consequences of distant social connections. To examine the experience of connecting to strangers, we instructed commuters on trains and buses to connect with a stranger near them, to remain disconnected, or to commute as normal (Experiments 1a and 2a). In both contexts, participants reported a more positive (and no less productive) experience when they connected than when they did not. Separate participants in each context, however, expected precisely the opposite outcome, predicting a more positive experience in solitude (Experiments 1b and 2b). This mistaken preference for solitude stems partly from underestimating others’ interest in connecting (Experiments 3a and 3b), which in turn keeps people from learning the actual consequences of social interaction (Experiments 4a and 4b). The pleasure of connection seems contagious: In a laboratory waiting room, participants who were talked to had equally positive experiences as those instructed to talk (Experiment 5). Human beings are social animals. Those who misunderstand the consequences of social interactions may not, in at least some contexts, be social enough for their own well-being.

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Friendship and natural selection

Nicholas Christakis & James Fowler
Proceedings of the National Academy of Sciences, forthcoming

Abstract:
More than any other species, humans form social ties to individuals who are neither kin nor mates, and these ties tend to be with similar people. Here, we show that this similarity extends to genotypes. Across the whole genome, friends’ genotypes at the single nucleotide polymorphism level tend to be positively correlated (homophilic). In fact, the increase in similarity relative to strangers is at the level of fourth cousins. However, certain genotypes are also negatively correlated (heterophilic) in friends. And the degree of correlation in genotypes can be used to create a “friendship score” that predicts the existence of friendship ties in a hold-out sample. A focused gene-set analysis indicates that some of the overall correlation in genotypes can be explained by specific systems; for example, an olfactory gene set is homophilic and an immune system gene set is heterophilic, suggesting that these systems may play a role in the formation or maintenance of friendship ties. Friends may be a kind of “functional kin.” Finally, homophilic genotypes exhibit significantly higher measures of positive selection, suggesting that, on average, they may yield a synergistic fitness advantage that has been helping to drive recent human evolution.

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You can’t always give what you want: The challenge of providing social support to low self-esteem individuals

Denise Marigold et al.
Journal of Personality and Social Psychology, July 2014, Pages 56-80

Abstract:
It can be challenging for support providers to facilitate effective social support interactions even when they have the best intentions. In the current article, we examine some reasons for this difficulty, with a focus on support recipients’ self-esteem as a crucial variable. We predicted that recipients’ receptiveness to support would be influenced by both support strategy and recipient self-esteem and that receptiveness in turn would impact providers’ perceived caregiving efficacy and relationship quality. Study 1 (hypothetical scenarios), Study 2 (confederate interaction), and Study 3 (reports of recently received support) showed that individuals with low self-esteem (LSEs) are less receptive than are individuals with high self-esteem (HSEs) to support that positively reframes their experience but are equally receptive to support that validates their negative feelings. In Study 4, providers demonstrated some knowledge that positive reframing would be less helpful to LSEs than to HSEs but indicated equal intention to give such support. Study 5 showed that, in a real interaction, friends were indeed equally likely to offer positive reframing to both LSEs and HSEs but were less likely to offer validation to LSEs. LSEs were less accepting of such support, and in turn providers felt worse about the interaction, about themselves, and about their friendship more broadly. Study 6 confirmed that recipients’ receptivity to support directly influenced providers’ experience of a support interaction as well as their self- and relationship evaluations. The findings illustrate how well-meaning support attempts that do not match recipients’ particular preferences may be detrimental to both members of the dyad.

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The Power of Integration: Affiliation and Cohesion in a Diverse Elite Network

Benjamin Cornwell & Fedor Dokshin
Social Forces, forthcoming

Abstract:
A much-theorized but seldom-tested theory is that elites achieve cohesion via the social network they form through their affiliations with local clubs, religious institutions, civic groups, and other voluntary associations. But few scholars have considered how increasing diversity with respect to elites' gender, race, and social class may undermine such cohesion. We use primary data from interviews with 312 elites in a large Midwestern city to construct the network of affiliations local elites formed with one another. Results from bootstrapping analyses suggest that the most influential elites in the sample achieved a disproportionately high level of cohesion by virtue of the particular voluntary associations with which they affiliated. Not only were the most influential elites more connected to one another through multiple redundant associational pathways, but their affiliation networks were less segregated by gender, race, and social class than were the networks formed by less elite members of the sample. Instrumental variables regression analyses further show that the most influential elites were especially crucial to increasing cohesion and reducing segregation in the overall network. We discuss some of the mechanisms through which such integration enhances elites' cohesion and power.

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Social Rejection Increases Perspective Taking

Megan Knowles
Journal of Experimental Social Psychology, November 2014, Pages 126–132

Abstract:
Given that threatened belonging needs heighten attention to social cues and enhance their decoding, social rejection should motivate a shift in perspective from an egocentric focus to an other focus. In three studies, this hypothesis was tested by manipulating rejection using a reliving task (Study 1), Cyberball (Study 2), and gaze aversion stimuli (Study 3); manipulating cognitive load using an 8-digit recall task (Study 2); and measuring perspective taking (Studies 1-3), social memory (Study 3), and desire to escape the self (Study 3). In every study, rejected participants displayed greater perspective taking than accepted participants. Even under load, rejected participants took others’ perspectives on a task requiring social coordination. The effect could not be attributed to a desire to avoid self-awareness. Perspective taking also predicted social memory suggesting that this rejection-induced shift in perspectives is adaptive. Findings are discussed in relation to the social monitoring and empathy literatures.

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When virtual contact is all you need: Subtle reminders of Facebook preempt social-contact restoration after exclusion

Judith Knausenberger, Jens Hellmann & Gerald Echterhoff
European Journal of Social Psychology, forthcoming

Abstract:
In the Internet age, people who feel alone can use online social media to restore a sense of social connectedness. In the present experiment, participants were either excluded or included in Cyberball, a virtual ball-tossing game. Afterwards, a Facebook icon or a control icon (Flash Player) was shown on the margin of a computer screen during a filler task. In the control condition, excluded (vs. included) participants subsequently expressed greater interest in social contact. This response to exclusion was absent after the subtle exposure to the Facebook icon. The effect of icon presentation was moderated by relational Facebook use: The interest in further social contact after exclusion was particularly low in participants who reported employing Facebook to maintain relationships to a greater (vs. lower) extent. In sum, our findings suggest that Facebook can dispense with compensatory affiliation attempts after exclusion, especially in more socially minded Facebook users.

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Occupational niches and the Dark Triad traits

Peter Jonason et al.
Personality and Individual Differences, October 2014, Pages 119–123

Abstract:
Our research focused on the vocational interests correlated with the Dark Triad traits (i.e., narcissism, psychopathy, and Machiavellianism). By understanding how these traits facilitate the structuring of one’s environment, we hypothesized that psychopaths will be more interested in realistic and practical careers, narcissists will be more interested in artistic, enterprising, and social careers, and Machiavellians will be more interested in avoiding careers that involve caring for others. In two cross-sectional studies (N = 424; N = 274), we provide general support for these hypotheses. Overall, our study showed those high on the Dark Triad traits may structure their social environment through idealized career preferences. We also show that sex differences in career preferences might be a function, in part of, individual differences in the Dark Triad traits.

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Making Support Work: The Interplay between Social Support and Social Identity

Johanna Frisch et al.
Journal of Experimental Social Psychology, forthcoming

Abstract:
Previous research has found mixed results regarding the stress buffering effects of social support. In an attempt to explain these findings, we build on the social identity approach. Specifically, we hypothesize that social support is more likely to buffer stress reactions if a shared social identity between the provider and recipient of support is evoked. Using the Trier Social Stress Test (TSST), participants were confronted with either a supportive or an unsupportive committee. Beforehand, the salience of either a shared social identity between the participant and the committee or personal identity was manipulated. As predicted, a supportive TSST committee buffered the neuroendocrine stress reaction only if a shared social identity between participants and the committee was established. For self-reported strain, no such pattern was observed. This study provides the first experimental evidence for the idea that the effectiveness of social support depends on the match of underlying identities.

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Emotion attention and recognition of facial expressions among close friends and casual acquaintances

Fang Zhang & Maria Parmley
Journal of Social and Personal Relationships, forthcoming

Abstract:
The present study examined the link between emotion attention and accuracy of recognizing emotional facial expressions among close friend pairs and acquaintance pairs. Among acquaintance pairs, individuals high on emotion attention were more accurate than those low on emotion attention in reading the acquaintance’s negative expressions of sadness and anger but did not differ from the latter in reading the acquaintance’s happy expressions. Among close friend pairs, those high on emotion attention were also more accurate in reading the friend’s sad expressions and did not differ from the low emotion attention individuals in reading the friend’s happy expressions. However, they were actually less accurate in reading the friend’s angry expressions. This lower accuracy reflected a perceptual bias of systematically misperceiving the friend’s angry expressions as neutral or sad. This finding suggests a defensive mechanism in the perception of the friend’s angry expressions among individuals high on emotion attention. Overall, the findings highlight the importance of emotion attention in emotion recognition and the important role of the relationship context in this link.

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Transforming the mirror: Power fundamentally changes facial responding to emotional expressions

Evan Carr, Piotr Winkielman & Christopher Oveis
Journal of Experimental Psychology: General, June 2014, Pages 997-1003

Abstract:
Major theories propose that spontaneous responding to others’ actions involves mirroring, or direct matching. Responding to facial expressions is assumed to follow this matching principle: People smile to smiles and frown to frowns. We demonstrate here that social power fundamentally changes spontaneous facial mimicry of emotional expressions, thereby challenging the direct-matching principle. Participants induced into a high-power (HP), low-power (LP), or neutral state watched dynamic happy and angry expressions from HP and LP targets while we measured facial electromyography (fEMG) over the zygomaticus major (“smiling muscle”) and corrugator supercilii (“frowning muscle”). For smiling, LP participants smiled to all targets, regardless of their expression. In contrast, HP participants exhibited standard smile mimicry toward LP targets but did not mimic the smiles of HP targets. Instead, HP participants smiled more when those HP targets expressed anger. For frowning, all participants showed a more intense mimicry pattern to HP targets. These results demonstrate that spontaneous facial responding — detected by sensitive, physiological measures of muscle activation — dynamically adapts to contextual cues of social hierarchy.

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Using sociometers to quantify social interaction patterns

Jukka-Pekka Onnela et al.
Scientific Reports, July 2014

Abstract:
Research on human social interactions has traditionally relied on self-reports. Despite their widespread use, self-reported accounts of behaviour are prone to biases and necessarily reduce the range of behaviours, and the number of subjects, that may be studied simultaneously. The development of ever smaller sensors makes it possible to study group-level human behaviour in naturalistic settings outside research laboratories. We used such sensors, sociometers, to examine gender, talkativeness and interaction style in two different contexts. Here, we find that in the collaborative context, women were much more likely to be physically proximate to other women and were also significantly more talkative than men, especially in small groups. In contrast, there were no gender-based differences in the non-collaborative setting. Our results highlight the importance of objective measurement in the study of human behaviour, here enabling us to discern context specific, gender-based differences in interaction style.

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Parental Social Responsiveness and Risk of Autism Spectrum Disorder in Offspring

Kristen Lyall et al.
JAMA Psychiatry, forthcoming

Objective: To examine the familiality of Social Responsiveness Scale (SRS) scores of individuals with and without ASD.

Design, Setting, and Participants: We performed a nested case-control study (pilot study: July 1, 2007, through June 30, 2009; full-scale study: September 15, 2008, through September 14, 2012) within a population-based longitudinal cohort. Participants were drawn from the Nurses’ Health Study II, a cohort of 116 430 female nurses recruited in 1989. Case participants were index children with reported ASD; control participants were frequency matched by year of birth of case participants among those not reporting ASD. Of 3161 eligible participants, 2144 nurses (67.8%) returned SRS forms for a child and at least 1 parent and were included in these analyses.

Results: A total of 1649 individuals were included in these analyses, including 256 ASD case participants, 1393 control participants, 1233 mothers, and 1614 fathers. Risk of ASD was increased by 85.0% among children whose parents had concordantly elevated SRS scores (odds ratio [OR], 1.85; 95% CI, 1.08-3.16) and by 52.0% when the score of either parent was elevated (OR, 1.52; 95% CI, 1.11-2.06). Elevated scores of the father significantly increased the risk of ASD in the child (OR, 1.94; 95% CI, 1.38-2.71), but no association was seen with elevated scores of the mother. Elevated parent scores significantly increased child scores in controls, corresponding to an increase in 23 points (P < .001).

Conclusions and Relevance: These findings support the role of additive genetic influences in concentrating inherited ASD susceptibility in successive generations and the potential role of preferential mating, and suggest that typical variation in parental social functioning can produce clinically significant differences in offspring social traits.

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Association Between the Oxytocin Receptor (OXTR) Gene and Children's Social Cognition at 18 Months

Mark Wade et al.
Genes, Brain and Behavior, forthcoming

Abstract:
At 18 months, children engage in a variety of social behaviors that reflect their nascent ability to understand the intentions of other people (e.g. joint attention, empathy, cooperation, and self-recognition). Although numerous contextual factors have been shown to predict social cognition in young children, the genetic underpinnings of social-cognitive traits has been understudied in this age group. Owing to the known effects of oxytocin on adult social cognition and psychopathology, the current study hypothesized that variability in the oxytocin receptor gene (OXTR) would be associated with social cognition in children at 18 months. Participants consisted of 350 children (182 males; 168 females) who were part of an ongoing longitudinal study that aimed to assess environmental and genetic contributions to children's cognitive and socioemotional functioning. At 18 months, social cognition was measured using previously validated and developmentally-sensitive tasks assessing children's joint attention, empathy, cooperation, and self-recognition. Five potentially functional OXTR variants were genotyped: rs1042778, rs2254298, rs11131149, rs237897, and rs237899. A family-based association design was used to control for population admixture and stratification, and additional non-genomic covariates were controlled. Results showed that that variability in rs11131149 was significantly associated with social cognition (p = .009), with more copies of the major allele related to higher social cognition, and more copies of the minor (risk) allele associated with lower social cognition. A haplotype consisting of rs11131149–rs2254298 was also associated with social cognition (p = .020). Implications for normative and pathological development are discussed, and key areas for future research are proposed.

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Preliminary investigation of the influence of dopamine regulating genes on social working memory

Iroise Dumontheil et al.
Social Neuroscience, forthcoming

Abstract:
Working memory (WM) refers to mental processes that enable temporary retention and manipulation of information, including information about other people (“social working memory”). Previous studies have demonstrated that nonsocial WM is supported by dopamine neurotransmission. Here, we investigated in 131 healthy adults whether dopamine is similarly involved in social WM by testing whether social and nonsocial WM are influenced by genetic variants in three genes coding for molecules regulating the availability of dopamine in the brain: catechol-O-methyltransferase (COMT), dopamine active transporter (DAT), and monoamine-oxidase A (MAOA). An advantage for the Met allele of COMT was observed in the two standard WM tasks and in the social WM task. However, the influence of COMT on social WM performance was not accounted for by its influence on either standard WM paradigms. There was no main effect of DAT1 or MAOA, but a significant COMT x DAT1 interaction on social WM performance. This study provides novel preliminary evidence of effects of genetic variants of the dopamine neurotransmitter system on social cognition. The results further suggest that the effects observed on standard WM do not explain the genetic effects on effortful social cognition.

By KEVIN LEWIS | 09:00:00 AM

Saturday, July 19, 2014

Spur of the moment

Sweet taste liking is associated with impulsive behaviors in humans

Jessica Weafer, Anne Burkhardt & Harriet de Wit
Frontiers in Behavioral Neuroscience, June 2014

Abstract:
Evidence from both human and animal studies suggests that sensitivity to rewarding stimuli is positively associated with impulsive behaviors, including both impulsive decision making and inhibitory control. The current study examined associations between the hedonic value of a sweet taste and two forms of impulsivity (impulsive choice and impulsive action) in healthy young adults (N = 100). Participants completed a sweet taste test in which they rated their liking of various sweetness concentrations. Subjects also completed measures of impulsive choice (delay discounting), and impulsive action (go/no-go task). Subjects who discounted more steeply (i.e., greater impulsive choice) liked the high sweetness concentration solutions more. By contrast, sweet liking was not related to impulsive action. These findings indicate that impulsive choice may be associated with heightened sensitivity to the hedonic value of a rewarding stimulus, and that these constructs might share common underlying neurobiological mechanisms.

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Variation in risk seeking behaviour following large losses: A natural experiment

Lionel Page, David Savage & Benno Torgler
European Economic Review, forthcoming

Abstract:
This study explores people's risk taking behaviour after having suffered large real-world losses following a natural disaster. Using the margins of the 2011 Australian floods (Brisbane) as a natural experimental setting, we find that homeowners who were victims of the floods and face large losses in property values are 50% more likely to opt for a risky gamble - a scratch card giving a small chance of a large gain ($500,000) - than for a sure amount of comparable value ($10). This finding is consistent with prospect theory predictions regarding the adoption of a risk-seeking attitude after a loss.

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Behavioral and neural correlates of increased self-control in the absence of increased willpower

Eran Magen et al.
Proceedings of the National Academy of Sciences, 8 July 2014, Pages 9786-9791

Abstract:
People often exert willpower to choose a more valuable delayed reward over a less valuable immediate reward, but using willpower is taxing and frequently fails. In this research, we demonstrate the ability to enhance self-control (i.e., forgoing smaller immediate rewards in favor of larger delayed rewards) without exerting additional willpower. Using behavioral and neuroimaging data, we show that a reframing of rewards (i) reduced the subjective value of smaller immediate rewards relative to larger delayed rewards, (ii) increased the likelihood of choosing the larger delayed rewards when choosing between two real monetary rewards, (iii) reduced the brain reward responses to immediate rewards in the dorsal and ventral striatum, and (iv) reduced brain activity in the dorsolateral prefrontal cortex (a correlate of willpower) when participants chose the same larger later rewards across the two choice frames. We conclude that reframing can promote self-control while avoiding the need for additional willpower expenditure.

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Healthy, Wealthy, and Wise: Retirement Planning Predicts Employee Health Improvements

Timothy Gubler & Lamar Pierce
Psychological Science, forthcoming

Abstract:
Are poor physical and financial health driven by the same underlying psychological factors? We found that the decision to contribute to a 401(k) retirement plan predicted whether an individual acted to correct poor physical-health indicators revealed during an employer-sponsored health examination. Using this examination as a quasi-exogenous shock to employees' personal-health knowledge, we examined which employees were more likely to improve their health, controlling for differences in initial health, demographics, job type, and income. We found that existing retirement-contribution patterns and future health improvements were highly correlated. Employees who saved for the future by contributing to a 401(k) showed improvements in their abnormal blood-test results and health behaviors approximately 27% more often than noncontributors did. These findings are consistent with an underlying individual time-discounting trait that is both difficult to change and domain interdependent, and that predicts long-term individual behaviors in multiple dimensions.

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Predictors of early growth in academic achievement: The head-toes-knees-shoulders task

Megan McClelland et al.
Frontiers in Psychology, June 2014

Abstract:
Children's behavioral self-regulation and executive function (EF; including attentional or cognitive flexibility, working memory, and inhibitory control) are strong predictors of academic achievement. The present study examined the psychometric properties of a measure of behavioral self-regulation called the Head-Toes-Knees-Shoulders (HTKS) by assessing construct validity, including relations to EF measures, and predictive validity to academic achievement growth between prekindergarten and kindergarten. In the fall and spring of prekindergarten and kindergarten, 208 children (51% enrolled in Head Start) were assessed on the HTKS, measures of cognitive flexibility, working memory (WM), and inhibitory control, and measures of emergent literacy, mathematics, and vocabulary. For construct validity, the HTKS was significantly related to cognitive flexibility, working memory, and inhibitory control in prekindergarten and kindergarten. For predictive validity in prekindergarten, a random effects model indicated that the HTKS significantly predicted growth in mathematics, whereas a cognitive flexibility task significantly predicted growth in mathematics and vocabulary. In kindergarten, the HTKS was the only measure to significantly predict growth in all academic outcomes. An alternative conservative analytical approach, a fixed effects analysis (FEA) model, also indicated that growth in both the HTKS and measures of EF significantly predicted growth in mathematics over four time points between prekindergarten and kindergarten. Results demonstrate that the HTKS involves cognitive flexibility, working memory, and inhibitory control, and is substantively implicated in early achievement, with the strongest relations found for growth in achievement during kindergarten and associations with emergent mathematics.

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Peer Effects in Risk Aversion and Trust

Kenneth Ahern, Ran Duchin & Tyler Shumway
Review of Financial Studies, forthcoming

Abstract:
Existing evidence shows that risk aversion and trust are largely determined by environmental factors. We test whether one such factor is peer influence. Using random assignment of MBA students to peer groups and predetermined survey responses of economic attitudes, we find causal evidence of positive peer effects in risk aversion and no effects in trust. After the first year of the MBA program, the difference between an individual and her peers' average risk aversion has shrunk by 41%. Finding no peer effects in trust is consistent with recent research showing that distinct cognitive processes govern risk aversion and trust.

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Dopamine Modulates Novelty Seeking Behavior During Decision Making

Vincent Costa et al.
Behavioral Neuroscience, forthcoming

Abstract:
Novelty seeking refers to the tendency of humans and animals to explore novel and unfamiliar stimuli and environments. The idea that dopamine modulates novelty seeking is supported by evidence that novel stimuli excite dopamine neurons and activate brain regions receiving dopaminergic input. In addition, dopamine is shown to drive exploratory behavior in novel environments. It is not clear whether dopamine promotes novelty seeking when it is framed as the decision to explore novel options versus the exploitation of familiar options. To test this hypothesis, we administered systemic injections of saline or GBR-12909, a selective dopamine transporter (DAT) inhibitor, to monkeys and assessed their novelty seeking behavior during a probabilistic decision making task. The task involved pseudorandom introductions of novel choice options. This allowed monkeys the opportunity to explore novel options or to exploit familiar options that they had already sampled. We found that DAT blockade increased the monkeys' preference for novel options. A reinforcement learning (RL) model fit to the monkeys' choice data showed that increased novelty seeking after DAT blockade was driven by an increase in the initial value the monkeys assigned to novel options. However, blocking DAT did not modulate the rate at which the monkeys learned which cues were most predictive of reward or their tendency to exploit that knowledge. These data demonstrate that dopamine enhances novelty-driven value and imply that excessive novelty seeking - characteristic of impulsivity and behavioral addictions - might be caused by increases in dopamine, stemming from less reuptake.

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Impulsive Social Influence Increases Impulsive Choices on a Temporal Discounting Task in Young Adults

Jodi Gilman et al.
PLoS ONE, July 2014

Abstract:
Adolescents and young adults who affiliate with friends who engage in impulsive behavior are more likely to engage in impulsive behaviors themselves, and those who associate with prosocial (i.e. more prudent, future oriented) peers are more likely to engage in prosocial behavior. However, it is difficult to disentangle the contribution of peer influence vs. peer selection (i.e., whether individuals choose friends with similar traits) when interpreting social behaviors. In this study, we combined a novel social manipulation with a well-validated delay discounting task assessing impulsive behavior to create a social influence delay discounting task, in which participants were exposed to both impulsive (smaller, sooner or SS payment) and non-impulsive (larger, later or LL payment) choices from their peers. Young adults in this sample, n = 51, aged 18-25 had a higher rate of SS choices after exposure to impulsive peer influence than after exposure to non-impulsive peer influence. Interestingly, in highly susceptible individuals, the rate of non-impulsive choices did not increase after exposure to non-impulsive influence. There was a positive correlation between self-reported suggestibility and degree of peer influence on SS choices. These results suggest that, in young adults, SS choices appear to be influenced by the choices of same-aged peers, especially for individuals who are highly susceptible to influence.

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What makes Simon Says so difficult for young children?

Peter Marshall & Ashley Drew
Journal of Experimental Child Psychology, October 2014, Pages 112-119

Abstract:
Compared with conceptually similar response inhibition tasks, the game of Simon Says is particularly challenging for young children. However, possible reasons for this difference have not been systematically investigated. Here we tested the relative influence of two dissociable characteristics of the standard Simon Says task: receiving both inhibition and activation commands from the same experimenter and seeing the experimenter perform the movement along with the commands. A sample of 74 children (mean age = 55 months) were randomly assigned to complete one of five possible tasks. Four of the five tasks were variations of Simon Says involving combinations of one or two experimenters and the presence versus absence of the experimenter's movements. The fifth task was Bear-Dragon, a commonly used executive function task in which one experimenter employed two puppets to give action commands to children. Analyses revealed that children's performance was significantly worse on the one-person Simon Says tasks compared with the two-person tasks and the Bear-Dragon task. The presence of the experimenters' movements alongside their commands did not have a significant effect on children's performance. The requirement to respond to one person who is changing how different rules apply to similar actions appears to be an important determinant of the difficulty of Simon Says for young children. In terms of implications, inconsistency in how an adult applies rules to children's actions may be a detrimental social influence on the development of cognitive control during early childhood.

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Effects of emotion on prospection during decision-making

Darrell Worthy, Kaileigh Byrne & Sherecce Fields
Frontiers in Psychology, June 2014

Abstract:
In two experiments we examined the role of emotion, specifically worry, anxiety, and mood, on prospection during decision-making. Worry is a particularly relevant emotion to study in the context of prospection because high levels of worry may make individuals more aversive toward the uncertainty associated with the prospect of obtaining future improvements in rewards or states. Thus, high levels of worry might lead to reduced prospection during decision-making and enhance preference for immediate over delayed rewards. In Experiment 1 participants performed a two-choice dynamic decision-making task where they were required to choose between one option (the decreasing option) which provided larger immediate rewards but declines in future states, and another option (the increasing option) which provided smaller immediate rewards but improvements in future states, making it the optimal choice. High levels of worry were associated with poorer performance in the task. Additionally, fits of a sophisticated reinforcement-learning model that incorporated both reward-based and state-based information suggested that individuals reporting high levels of worry gave greater weight to the immediate rewards they would receive on each trial than to the degree to which each action would lead to improvements in their future state. In Experiment 2 we found that high levels of worry were associated with greater delay discounting using a standard delay discounting task. Combined, the results suggest that high levels of worry are associated with reduced prospection during decision-making. We attribute these results to high worriers' aversion toward the greater uncertainty associated with attempting to improve future rewards than to maximize immediate reward. These results have implications for researchers interested in the effects of emotion on cognition, and suggest that emotion strongly affects the focus on temporal outcomes during decision-making.

By KEVIN LEWIS | 09:00:00 AM

Friday, July 18, 2014

Friends, Romans, countrymen

Taxes, Lawyers, and the Decline of Witch Trials in France

Noel Johnson & Mark Koyama
Journal of Law and Economics, February 2014, Pages 77-112

Abstract:
How is rule of law established? We address this question by exploring the effect of increases in fiscal capacity on the establishment of well-enforced, formal, legal standards in a preindustrial economy. Between 1550 and 1700, there were over 2,000 witch trials in France. Prosecuting a witch required local judges to significantly deviate from formal rules of evidence. Hence, we exploit the significant variation across time and space in witch trials and fiscal capacity across French regions between 1550 and 1700 to show that increases in fiscal capacity were associated with increased adherence to the formal rule of law. As fiscal capacity increased, local judges increasingly upheld de jure rules, and the frequency of witch trials declined.

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War and democracy in ancient Greece

Nicholas Kyriazis & Xenophon Paparrigopoulos
European Journal of Law and Economics, August 2014, Pages 163-183

Abstract:
In the present paper we analyse some of the preconditions for the emergence of democracy in Ancient Greece. For democracy to emerge in Ancient Greece a combination of several enabling factors proved decisive: the development of new military tactic, the phalanx, marked by the appearance of a new type of heavy infantry warrior, the hoplite, who owned individually some property, i.e. land, sufficient to permit him to finance his weaponry and a city-state culture. We describe the emergence of this new type of warrior, link this emergence to the establishment of individual property rights and show how this brought about a military revolution, exemplified in a new tactical formation, the phalanx. We then proceed by showing how the attitudes and learning processes made necessary by this new type of warfare were transformed in the civic values and virtues that shaped democratic institutions. Our thesis can thus be briefly termed as the “military cum city-state” explanation of democracy.

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Why Did the Communists Win or Lose? A Comparative Analysis of the Revolutionary Civil Wars in Russia, Finland, Spain, and China

Pavel Osinsky & Jari Eloranta
Sociological Forum, June 2014, Pages 318–341

Abstract:
According to classic interpretations of the communist revolutions, political mobilization of peasantry was critical for the success of the revolutionary forces. This article, which reexamines the experience of civil wars in Russia, Finland, Spain, and China, argues that peasants’ contribution to the revolutions in Russia and later in China became possible under two historical conditions: breakdown of state authorities during the mass mobilization wars and existence of an unresolved agrarian problem in the countryside. Neither of these conditions alone, as the experience of other countries has shown, was sufficient for a success of the revolutionaries. The Spanish civil war of 1936–1939, for instance, was not preceded by a major international war. Because institutions of the traditional social order had not been undermined by war, Franco was able to defeat the Popular Front government, despite the peasants’ support of the revolution. In the Finnish civil war of 1918, which broke out in the wake of World War I and the Russian Revolution, state institutions did not collapse completely and the peasantry was divided in their responses to the revolution; the rural smallholders, for example, aligned with the Mannerheim's White army, not with the urban revolutionaries.

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Riches, Real Estate, and Resistance: How Land Speculation, Debt, and Trade Monopolies Led to the American Revolution

Thomas Curtis
American Journal of Economics and Sociology, July 2014, Pages 474–626

Abstract:
Why did the colonies of North America rebel against England in 1775? More than ideas of political freedom were at stake. It is unlikely that the colonists would have demanded independence if powerful land speculators, merchants, and urban artisans had not joined forces to protect their economic interests. England had levied taxes on the colonies, and the colonists had successfully overturned those measures. Taxation was a superficial problem. But in 1773, when England imposed a commercial monopoly on tea sales, and in 1774, when it cut off settlement in western lands, the colonists saw no choice but to rebel and create their own nation. George Washington, Thomas Jefferson, Patrick Henry, George Mason, Richard Henry Lee, and other wealthy Virginians who led the American Revolution stood to lose their huge investment in potential land sales if England maintained control of the colonies.

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Highway to Hitler

Nico Voigtlaender & Hans-Joachim Voth
NBER Working Paper, May 2014

Abstract:
Can infrastructure investment win “hearts and minds”? We analyze a famous case in the early stages of dictatorship – the building of the motorway network in Nazi Germany. The Autobahn was one of the most important projects of the Hitler government. It was intended to reduce unemployment, and was widely used for propaganda purposes. We examine its role in increasing support for the NS regime by analyzing new data on motorway construction and the 1934 plebiscite, which gave Hitler greater powers as head of state. Our results suggest that road building was highly effective, reducing opposition to the nascent Nazi regime.

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Economic sanctions and official ethnic discrimination in target countries, 1950–2003

Dursun Peksen
Defence and Peace Economics, forthcoming

Abstract:
Conventional studies on the consequences of sanctions tend to focus on the target society as a whole without specifying how foreign economic pressures might affect the well-being of vulnerable groups within target countries – the same groups who often disproportionately bear the burden of sanctions. This study explores the extent to which sanctions increase the likelihood of discriminatory government practices against one of the globally most vulnerable groups, ethnic groups. It is argued that sanctions contribute to the rise of official ethnic-based economic and political discrimination through contracting the economy and creating incentives for the target government to employ ethnic-based discriminatory policies. Using data on over 900 ethnic groups from 1950 to 2003, the results lend support for the theoretical claim that sanctions prompt the government to pursue ethnic-based discriminatory economic and political practices in multiethnic countries. The findings also indicate that multilateral sanctions are likely to be more harmful to the well-being of ethnic groups than sanctions levied by individual countries. Further, the negative effect of comprehensive sanctions appears to be greater than that of sanctions with moderate and limited impact on the target economy. The regime type of the target state, on the other hand, appears to have a significant role only in conditioning the hypothesized effect of sanctions on economic discrimination. Overall, this study’s focus on a vulnerable segment of the target society – ethnic groups – offers a greater understanding of the consequences of sanctions. It also provides additional insight as to how, in multiethnic countries, political elites might domestically respond to external pressures to retain power.

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Bases, Bullets and Ballots: the Effect of U.S. Military Aid on Political Conflict in Colombia

Oeindrila Dube & Suresh Naidu
NBER Working Paper, June 2014

Abstract:
Does foreign military assistance strengthen or further weaken fragile states facing internal conflict? Aid may strengthen the state by bolstering its repressive capacity vis-à-vis armed non-state actors, or weaken it if resources are diverted to these very groups. We examine how U.S. military aid affects political violence in Colombia. We exploit the allocation of U.S. military aid to Colombian military bases, and compare how aid affects municipalities with and without bases. We use an instrument based on worldwide increases in U.S. military aid (excluding Latin America). We find that U.S. military assistance leads to differential increases in attacks by paramilitaries, but has no effect on guerrilla attacks. Aid also results in more paramilitary (but not guerrilla) homicides during election years, particularly in politically competitive municipalities. The findings suggest that foreign military assistance may strengthen armed non-state actors, undermining domestic political institutions.

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Targeting autocrats: Economic sanctions and regime change

Manuel Oechslin
European Journal of Political Economy, forthcoming

Abstract:
When it comes to international economic sanctions, the most frequent goal is regime change and democratization. Yet, past experiences suggest that such sanctions are often ineffective; moreover, quite paradoxically, targeted regimes tend to respond with policies that amplify the sanctions’ harmful effects. This paper offers a political-economy model which provides an explanation for these observations. An autocratic regime lowers the supply of public goods to reduce private-sector productivity and hence the resources of potential challengers. As a result, sanctions-induced challenges become less likely, thereby buying the regime time to find exile opportunities. If these opportunities turn out to be of low quality, the regime prefers to hold out – and the sanctions fail.

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Mobilization, Repression, and Revolution: Grievances and Opportunities in Contentious Politics

Mehdi Shadmehr
Journal of Politics, July 2014, Pages 621-635

Abstract:
I develop a framework to study the interactions between dissidents and the state that reconciles political-process and grievance-based theories of protests and provides insights into interpreting the conflicting empirical studies that sometimes support one theory and sometimes the other. I show that contrary to the theoretical predictions of the literature, the relationship between the magnitude of grievances (e.g., the level of income inequality or economic hardship) and the likelihood of repression can be nonmonotone, and given some assumptions, is U-shaped. That is, as the magnitude of grievances increases from low to high, the likelihood of repression first decreases and then increases. Indeed, the data suggest a nonmonotone, U-shaped relationship between the level of repression and income inequality. I also discuss the implications for the empirical studies of repression.

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The Dictator's Inner Circle

Patrick Francois, Ilia Rainer & Francesco Trebbi
NBER Working Paper, June 2014

Abstract:
We posit the problem of an autocrat who has to allocate access to the executive positions in his inner circle and define the career profile of his own insiders. Statically, granting access to an executive post to a more experienced subordinate increases political returns to the post, but is more threatening to the leader in case of a coup. Dynamically, the leader monitors the capacity of staging a coup by his subordinates, which grows over time, and the incentives of trading a subordinate’s own position for a potential shot at the leadership, which defines the incentives of staging a palace coup for each member of the inner circle. We map these theoretical elements into structurally estimable hazard functions of terminations of cabinet ministers for a panel of postcolonial Sub-Saharan African countries. The hazard functions initially increase over time, indicating that most government insiders quickly wear out their welcome, and then drop once the minister is fully entrenched in the current regime. We argue that the survival concerns of the leader in granting access to his inner circle can cover much ground in explaining the widespread lack of competence of African governments and the vast heterogeneity of political performance between and within these regimes.

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The law of the land: Communal conflict and legal authority

Kristine Eck
Journal of Peace Research, July 2014, Pages 441-454

Abstract:
Common notions about the source of communal land conflict in Africa have long explained it as growing out of conditions of environmental scarcity. This article argues instead that the institutional structure of the legal system is central to understanding which countries are prone to experience communal land conflict. When competing customary and modern jurisdictions coexist in countries inhabited by mixed identity groups, the conflicting sources of legal authority lead to insecurity about which source of law will prevail. Because the source of law is contested, conflict parties cannot trust the legal system to predictably adjudicate disputes, which encourages the use of extrajudicial vigilante measures. Using new data on communal violence in West Africa, this argument is examined for the period 1990–2009. The results show that in countries where competing jurisdictions exist, communal land conflict is 200–350% more likely. These findings suggest that researchers should consider the role of legal institutions and processes in relation to social unrest and collective violence.

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Organizing Hypocrisy: Providing Legal Accountability for Human Rights Violations in Areas of Limited Statehood

Milli Lake
International Studies Quarterly, forthcoming

Abstract:
In recent years, courts in the Democratic Republic of Congo (DR Congo) have produced some of the most progressive judicial decisions against perpetrators of gender violence of anywhere in the world. Yet, DR Congo is often described as the archetypal collapsed state. This article uses a case study of domestic courts in Eastern DR Congo to analyze how and why complex functions of domestic governance — such as the production of frequent and high-quality judicial decisions by domestic courts — are able to persist, even flourish, in an area where the state is characterized by extreme fragility and weakness. I argue that, rather than a decoupling of law and practice as previous approaches might predict, state fragility in DR Congo has created openings for domestic and transnational actors to exert direct influence over judicial processes at multiple levels of governance. The involvement of external actors in the domestic authority structures of states has resulted in surprisingly progressive human rights outcomes in certain issue areas. However, the article also documents some of the unintended consequences of human rights developments that occur at the very peripheries of broader state-building projects.

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Do Giant Oilfield Discoveries Fuel Internal Armed Conflicts?

Yu-Hsiang Lei & Guy Michaels
Journal of Development Economics, forthcoming

Abstract:
We use new data to examine the effects of giant oilfield discoveries around the world since 1946. On average, these discoveries increase per capita oil production and oil exports by up to 50 percent. But these giant oilfield discoveries also have a dark side: they increase the incidence of internal armed conflict by about 5-8 percentage points. This increased incidence of conflict due to giant oilfield discoveries is especially high for countries that had already experienced armed conflicts or coups in the decade prior to discovery.

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The Effect of Authoritarian Regime Type on Exchange Rate Policy

David Steinberg & Krishan Malhotra
World Politics, July 2014, Pages 491-529

Abstract:
Conventional wisdom holds that autocracies are more likely than democracies to adopt interventionist and protectionist economic policies, including fixed and undervalued exchange rates. This article suggests that this view is only partially correct: nondemocracies are a heterogeneous grouping, and only some types of authoritarian regimes adopt different foreign economic policies from those of their democratic counterparts. Using the example of exchange rate policy, the authors show that foreign economic policy varies across monarchic, military, and civilian dictatorships. More specifically, they hypothesize that monarchies and military regimes are more likely than democracies and civilian dictatorships to maintain fixed exchange rate regimes because the former regimes have smaller “selectorates” than the latter. The authors also expect that monarchies and civilian dictatorships maintain more undervalued exchange rates than democracies and military regimes because the former regimes provide their leaders with greater tenure security than the latter regimes. These hypotheses are evaluated using a time-series–cross-sectional data set of a large sample of developing countries from 1973 to 2006. The statistical results accord with these predictions. These findings indicate that the ways in which democracies engage with the global economy may be less unique than many believe.

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A Replication of “Corruption and Elections: An Empirical Study for a Cross-section of Countries” (Economics and Politics, 2009)

Rajeev Goel & Ummad Mazhar
Public Finance Review, forthcoming

Abstract:
Using cross-national panel data, Krause and Méndez recently studied whether voters retract support from political candidates who they think are corrupt. Their main finding is that corruption in public office is effectively punished by voters. Given the well-known issues with adequately measuring corruption, this note examines the sensitivity of extant findings to an alternate corruption measure. We fail to find a statistically robust effect of corruption on electoral outcomes.

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Rising Food Prices, Food Price Volatility, and Social Unrest

Marc Bellemare
American Journal of Agricultural Economics, forthcoming

Abstract:
Can food prices cause social unrest? Throughout history, riots have frequently broken out, ostensibly as a consequence of high food prices. Using monthly data at the international level, this article studies the impact of food prices – food price levels as well as food price volatility – on social unrest. Because food prices and social unrest are jointly determined, data on natural disasters are used to identify the causal relationship flowing from food price levels to social unrest. Results indicate that for the period 1990–2011, food price increases have led to increases in social unrest, whereas food price volatility has not been associated with increases in social unrest. These results are robust to alternative definitions of social unrest, to using real or nominal prices, to using commodity-specific price indices instead of aggregated price indices, to alternative definitions of the instrumental variable, to alternative definitions of volatility, and to controlling for non-food-related social unrest.

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Terrorism and the Labor Force: Evidence of an Effect on Female Labor Force Participation and the Labor Gender Gap

Claude Berrebi & Jordan Ostwald
Journal of Conflict Resolution, forthcoming

Abstract:
Recent studies have identified correlational associations linking terrorism and females’ standing in the labor market. Theories have been proposed to explain these associations. Some concluded that women’s participation in the labor force could be the driver that moves terrorism; others proposed that terrorism motivates the deviations in the labor force. No study has adequately explored causality and the direction of this association. Using a panel data set of 165 countries and terrorism data from 1980 to 2007, we find that terrorist attacks decrease female labor force participation and increase the gender gap between male and female labor force participation. By exploiting variation across countries and time, we are able to identify and quantify these effects; we are also able to address endogeneity concerns by using two novel instrumental variable approaches. The results are statistically significant and robust across a multitude of model specifications.

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Anti-Americanism, Authoritarian Politics, and Attitudes about Women's Representation: Evidence from a Survey Experiment in Jordan

Sarah Sunn Bush & Amaney Jamal
International Studies Quarterly, forthcoming

Abstract:
A pillar of American foreign policy in the Middle East since September 11, 2001, has been promoting democracy, with particular emphasis on support for women's representation. Given high levels of anti-Americanism in the region, does foreign pressure for policy reform undermine this project? Evidence from a nationally representative survey experiment in Jordan shows that an American endorsement of women in politics has no average effect on popular support for women's representation. Instead, domestic patterns of support and opposition to autocrats determine citizens' receptivity to policy endorsements, with policy endorsements of foreign-supported reforms polarizing public opinion. Both foreign and domestic endorsements of women in politics depress support among Jordanians who oppose their regime significantly more than among Jordanians who support it.

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Juking the Stats? Authoritarian Information Problems in China

Jeremy Wallace
British Journal of Political Science, forthcoming

Abstract:
Economic statistics inform citizens of general conditions, while central leaders use them to evaluate local officials. Are economic data systematically manipulated? After establishing discrepancies in economic data series cross-nationally, this article examines Chinese sub-national growth data. It leverages variation in the likelihood of manipulation over two dimensions, arguing that politically sensitive data are more likely to be manipulated at politically sensitive times. Gross domestic product (GDP) releases generate headlines, while highly correlated electricity production and consumption data are relatively unnoticed. In Chinese provinces, the difference between GDP and electricity growth increases in years with leadership turnover, which is consistent with juking the stats for political reasons. The analysis points to the political role of information and the limits of non-electoral accountability mechanisms in authoritarian regimes.

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“Good Types” in Authoritarian Elections: The Selectoral Connection in Chinese Local Congresses

Melanie Manion
Comparative Political Studies, forthcoming

Abstract:
A new electoral design for subnational congress elections in China allows me to investigate the informational utility of authoritarian elections. Authoritarian regimes are notoriously bad at solving the moral hazard problem in the voter’s agency relationship with politicians. Borrowing from the literature on political selection, I theorize that authoritarian elections can nonetheless solve the adverse selection problem: Chinese voters can use their electoral power to select “good types,” with personal qualities that signal they will reliably represent local interests. I analyze original data from a survey of 4,071 Chinese local congressmen and women, including voter nominees and communist party nominees. I find that voters do in fact overcome coordination difficulties to nominate and elect “good types.” In contacting politicians about local problems after the elections, however, voters hedge their bets by contacting regime insiders too. At these very local levels, congressional representation by means of political selection co-exists with communist party nominating and veto power in the electoral process.

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Ingroup Bias in Official Behavior: A National Field Experiment in China

Greg Distelhorst & Yue Hou
Quarterly Journal of Political Science, Spring 2014, Pages 203-230

Abstract:
Do ingroup biases distort the behavior of public officials? Recent studies detect large ethnic biases in elite political behavior, but their case selection leaves open the possibility that bias obtains under relatively narrow historical and institutional conditions. We clarify these scope conditions by studying ingroup bias in the radically different political, historical, and ethnic environment of contemporary China. In a national field experiment, local officials were 33% less likely to provide assistance to citizens with ethnic Muslim names than to ethnically-unmarked peers. We find evidence consistent with the ingroup bias interpretation of this finding and detect little role for strategic incentives mediating this effect. This result demonstrates that neither legacies of institutionalized racism nor electoral politics are necessary to produce large ingroup biases in official behavior. It also suggests that ethnically motivated distortions to governance are more prevalent than previously documented.

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Civil Compliance and “Political Luddism”: Explaining Variance in Social Unrest During Crisis in Ireland and Greece

Takis Pappas & Eoin O’Malley
American Behavioral Scientist, forthcoming

Abstract:
When badly hit by the same global financial and economic crisis in the early 2000s, the Irish and the Greek societies reacted in quite different ways. Whereas Ireland remained largely acquiescent and displayed a high degree of civil compliance, Greeks took massively to the streets using violence and attacking specifically the state and the state personnel, a phenomenon we refer to as “political Luddism.” It is shown that the two countries are quite similar in terms of their economic condition, cultural background, social composition, ideological profiling, and party system dynamics, among other factors. What, then, explains the two countries’ dissimilar reactions to crisis? Through a detailed analysis of the cases, the article offers evidence that the most compelling explanation relates to the varying ability of the Greek and Irish states to continue providing basic public goods and other state-related services to their respective societies.

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Reconsidering Regime Type and Growth: Lies, Dictatorships, and Statistics

Christopher Magee & John Doces
International Studies Quarterly, forthcoming

Abstract:
Some recent papers have concluded that authoritarian regimes have faster economic growth than democracies. These supposed growth benefits of autocracies are estimated using data sets in which growth rates rely heavily on data reported by each government. Governments have incentives to exaggerate their economic growth figures, however, and authoritarian regimes may have fewer limitations than democracies on their ability to do so. This paper argues that growth data submitted to international agencies are overstated by authoritarian regimes compared to democracies. If true, it calls into question the estimated relationship between government type and economic growth found in the literature. To measure the degree to which each government's official growth statistics are overstated, the economic growth rates reported in the World Bank's World Development Indicators are compared to a new measure of economic growth based on satellite imaging of nighttime lights. This comparison reveals whether or not dictators exaggerate their true growth rates and by how much. Annual GDP growth rates are estimated to be overstated by 0.5–1.5 percentage points in the statistics that dictatorships report to the World Bank.

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Government Control of the Media

Scott Gehlbach & Konstantin Sonin
Journal of Public Economics, forthcoming

Abstract:
We present a formal model of government control of the media to illuminate variation in media freedom across countries and over time. Media bias is greater and state ownership of the media more likely when the government has a particular interest in mobilizing citizens to take actions that further some political objective but are not necessarily in citizens’ individual best interest; however, the distinction between state and private media is smaller. Large advertising markets reduce media bias in both state and private media but increase the incentive for the government to nationalize private media. Media bias in state and private media markets diverge as governments become more democratic, whereas media bias in democracies and autocracies converge as positive externalities from mobilization increase.

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Oil Curse and Institutional Changes: Which Institutions Are Most Vulnerable to the Curse and Under What Circumstances?

Luisa Blanco, Jeffrey Nugent & Kelsey O'Connor
Contemporary Economic Policy, forthcoming

Abstract:
This article extends recent analyses linking the alleged oil curse to a broader set of institutions (13 in number) than democracy, the institution that has received the most attention in the literature. It does so using panel data for over 100 countries between 1975 and 2005, wherever possible, and compares the effects obtained with several different measures of both the importance of oil and experience in the industry and of the interactions between them. Most importantly, instead of simply examining the effect of oil and experience in the industry on the contemporary levels of these various institutions, this study focuses on the effects on changes in the various institutional indicators from one decade to another. While not surprisingly our results reveal considerable sensitivity in the effects of oil resources, oil experience, and interactions across different specifications, they also suggest a number of important findings. The most robust of these are the significant negative effects of oil rents on bureaucratic quality and on socioeconomic conditions. We also find that the number of years since peak oil discovery has a positive effect on government stability, but a negative one on bureaucratic quality. When interactions are allowed for, still more negative effects on institutions are identified, at least partially re-enforcing several of the institutional links in the oil curse hypothesis.

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Can Employment Reduce Lawlessness and Rebellion? A Field Experiment with High-Risk Youth in a Fragile State

Christopher Blattman & Jeannie Annan
Columbia University Working Paper, May 2014

Abstract:
We evaluate an agricultural training and inputs program for high-risk Liberian men, mainly ex-fighters engaged in illegal resource extraction with opportunities for mercenary work. We show that economic incentives, including increased farm productivity, raised the opportunity cost of illicit work. After 14 months, treated men shifted hours of illicit resource extraction to agriculture by 20%. When a war erupted nearby, they were also less likely to engage in mercenary recruitment. Finally, exogenous variation in expected future capital transfers appears to be a further deterrent to mercenary work. We see no evidence the program affected occupational choice through peers or preferences.

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Pocketbook vs. Sociotropic Corruption Voting

Marko Klašnja, Joshua Tucker & Kevin Deegan-Krause
British Journal of Political Science, forthcoming

Abstract:
The article examines the relationship between corruption and voting behavior by defining two distinct channels: pocketbook corruption voting, i.e. how personal experiences with corruption affect voting behavior; and sociotropic corruption voting, i.e. how perceptions of corruption in society do so. Individual and aggregate data from Slovakia fail to support hypotheses that corruption is an undifferentiated valence issue, that it depends on the presence of a viable anti-corruption party, or that voters tolerate (or even prefer) corruption, and support the hypothesis that the importance of each channel depends on the salience of each source of corruption and that pocketbook corruption voting prevails unless a credible anti-corruption party shifts media coverage of corruption and activates sociotropic corruption voting. Previous studies may have underestimated the prevalence of corruption voting by not accounting for both channels.

By KEVIN LEWIS | 09:00:00 AM

Thursday, July 17, 2014

Pathological

The Growing Gap in Life Expectancy: Using the Future Elderly Model to Estimate Implications for Social Security and Medicare

Dana Goldman & Peter Orszag
American Economic Review, May 2014, Pages 230-233

Abstract:
Mortality gradients by education and income have been rising in the United States and elsewhere. However, their impact on Social Security progressivity has received relatively little attention, and the impact on Medicare has received effectively none. This paper uses the Future Elderly Model to estimate the effects of increased mortality gaps on the progressivity of Social Security and Medicare for those born between 1928 and 1990. It finds significant reductions in progressivity of both programs if current mortality trends persist and noticeable effects on total program costs. The effects are large enough to warrant more attention from both policy-makers and researchers.

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Childhood Social Disadvantage, Cardiometabolic Risk, and Chronic Disease in Adulthood

Amy Non et al.
American Journal of Epidemiology, forthcoming

Abstract:
Adverse social environments in early life are hypothesized to become biologically embedded during the first few years of life, with potentially far-reaching implications for health across the life course. Using prospective data from a subset of a US birth cohort, the Collaborative Perinatal Project, started in 1959–1966 (n = 566), we examined associations of social disadvantage assessed in childhood with cardiometabolic function and chronic disease status more than 40 years later (in 2005–2007). Social disadvantage was measured with an index that combined information on adverse socioeconomic and family stability factors experienced between birth and age 7 years. Cardiometabolic risk (CMR) was assessed by combining information from 8 CMR biomarkers; an index of chronic disease status was derived by assessing 8 chronic diseases. Poisson models were used to investigate associations between social disadvantage and CMR or chronic disease scores while adjusting for childhood covariates and potential pathway variables. A high level of social disadvantage was significantly associated with both higher CMR (incident rate ratio = 1.69, 95% confidence interval: 1.19, 2.39) and with a higher number of chronic diseases (incident rate ratio = 1.39, 95% confidence interval: 1.00, 1.92) in minimally adjusted models. Associations with CMR persisted even after accounting for childhood and adult covariates.

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Early-Life Socioeconomic Status and Mortality at Three Life Course Stages: An Increasing Within-Cohort Inequality

Tetyana Pudrovska
Journal of Health and Social Behavior, June 2014, Pages 181-195

Abstract:
Using the 1957–2011 data from 10,317 participants in the Wisconsin Longitudinal Study, I examine how socioeconomic status (SES) at age 18 affects all-cause mortality between ages 18 and 72. Integrating fundamental cause theory, gender relations theory, and a life course perspective, I evaluate the cumulative advantage (CA) and age-as-leveler processes as well as gender differences in these processes. Findings indicate that higher early-life SES at age 18 is related to lower mortality over the life course, and the effect of early-life SES is not explained by socioeconomic achievement and health behaviors in adulthood. Consistent with the CA model, early-life SES generates increasing within-cohort inequality with age, and this CA process is stronger for women than men. Results also show that unequal selection by SES obscures the CA process and creates an illusion of the age-as-leveler process. This study calls for a lifelong gendered approach to socioeconomic health disparities.

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The Effects of the Great Recession on Teenagers' Risky Health Behaviors and Time Use

Sabrina Wulff Pabilonia
U.S. Bureau of Labor Statistics Working Paper, May 2014

Abstract:
This paper uses individual-level data from both the 2003-2011 American Time Use Survey and Youth Risk Behavior Survey and state-level unemployment rates to examine the effects of the Great Recession on teenagers' activities. I present results by gender and gender by race/ethnicity. Over the period, I find changes in sexual activity for males associated with changes in time spent with parents; but results vary significantly by race. In addition, Hispanic males gained weight during the recession, due perhaps to a decrease in time spent playing sports. Hispanic females, on the other hand, made greater educational investments while spending less time working. All females significantly decreased TV viewing during the Great Recession. However, there were signs that female teenagers were stressed as they slept less and were more likely to smoke regularly.

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Hurricane Katrina: Behavioral Health and Health Insurance in Non-Impacted Vulnerable Counties

Michael Pesko
Cornell Working Paper, May 2014

Abstract:
I find causal evidence that Hurricane Katrina increased stress, smoking, binge drinking, and health insurance coverage in the non-impacted storm surge region. In this region, Hurricane Katrina increased health insurance coverage by 440,000 young adults, the number of smokers by 930,000, and the number of binge drinkers by 510,000. Results are robust to varying the location and time of Hurricane Katrina, varying the pre-Hurricane Katrina time window, and excluding counties within 400 miles of New Orleans. Findings suggest that disasters are integral to the formation of risk perceptions and affect the demand for behavioral health and health insurance.

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Cumulative Childhood Adversity, Educational Attainment, and Active Life Expectancy Among U.S. Adults

Jennifer Karas Montez & Mark Hayward
Demography, April 2014, Pages 413-435

Abstract:
Studies of the early-life origins of adult physical functioning and mortality have found that childhood health and socioeconomic context are important predictors, often irrespective of adult experiences. However, these studies have generally assessed functioning and mortality as distinct processes and used cross-sectional prevalence estimates that neglect the interplay of disability incidence, recovery, and mortality. Here, we examine whether early-life disadvantages both shorten lives and increase the number and fraction of years lived with functional impairment. We also examine the degree to which educational attainment mediates and moderates the health consequences of early-life disadvantages. Using the 1998–2008 Health and Retirement Study, we examine these questions for non-Hispanic whites and blacks aged 50–100 years using multistate life tables. Within levels of educational attainment, adults from disadvantaged childhoods lived fewer total and active years, and spent a greater portion of life impaired compared with adults from advantaged childhoods. Higher levels of education did not ameliorate the health consequences of disadvantaged childhoods. However, because education had a larger impact on health than did childhood socioeconomic context, adults from disadvantaged childhoods who achieved high education levels often had total and active life expectancies that were similar to or better than those of adults from advantaged childhoods who achieved low education levels.

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Can Education Rescue Genetic Liability for Cognitive Decline?

Justin Cook & Jason Fletcher
Social Science & Medicine, forthcoming

Abstract:
Although there is a vast literature linking education and later health outcomes, the mechanisms underlying these associations are relatively unknown. In the spirit of some medical literature that leverages developmental abnormalities to understand mechanisms of normative functioning, we explore the ability of higher educational attainments to “rescue” biological/genetic liabilities in brain function through inheritance of a variant of the APOE gene shown to lead to cognitive decline, dementia, and Alzheimer’s disease in old age. Deploying a between-sibling design that allows quasi-experimental variation in genotype and educational attainment within a standard gene-environment interaction framework, we show evidence that the genetic effects of the “risky” APOE variant on old-age cognitive decline are absent in individuals who complete college (vs. high school graduates). Auxiliary analyses suggest that the likely mechanisms of education are most consistent through changing brain processes (i.e. “how we think”) and potentially building cognitive reserves, rather than alleviating old age cognitive decline through the channels of higher socioeconomic status and resources over the life course.

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Individual Joblessness, Contextual Unemployment, and Mortality Risk

José Tapia Granados et al.
American Journal of Epidemiology, forthcoming

Abstract:
Longitudinal studies at the level of individuals find that employees who lose their jobs are at increased risk of death. However, analyses of aggregate data find that as unemployment rates increase during recessions, population mortality actually declines. We addressed this paradox by using data from the US Department of Labor and annual survey data (1979–1997) from a nationally representative longitudinal study of individuals — the Panel Study of Income Dynamics. Using proportional hazards (Cox) regression, we analyzed how the hazard of death depended on 1) individual joblessness and 2) state unemployment rates, as indicators of contextual economic conditions. We found that 1) compared with the employed, for the unemployed the hazard of death was increased by an amount equivalent to 10 extra years of age, and 2) each percentage-point increase in the state unemployment rate reduced the mortality hazard in all individuals by an amount equivalent to a reduction of 1 year of age. Our results provide evidence that 1) joblessness strongly and significantly raises the risk of death among those suffering it, and 2) periods of higher unemployment rates, that is, recessions, are associated with a moderate but significant reduction in the risk of death among the entire population.

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What the future held: Childhood psychosocial adversity is associated with health deterioration through adulthood in a cohort of British women

Daniel Nettle
Evolution and Human Behavior, forthcoming

Abstract:
Childhood psychosocial adversity is associated with accelerated onset of reproductive effort in women. Adaptive explanations for this phenomenon are built on the assumption that greater childhood psychosocial adversity is statistically associated with having a shorter period of healthy adult life during which reproduction will be possible. However, this critical assumption is never actually tested using individual-level longitudinal data. In this study, I revisit a large, longitudinally-studied cohort of British women. In an earlier paper, we showed that a simple index of psychosocial adversity in the first seven years of life predicted age at first pregnancy in a dose-dependent manner. Here, I show that the same index of adversity also predicts accelerated deterioration of health across the potentially reproductive period, and increased levels of the inflammatory biomarker c-reactive protein at age 44-46. These associations are robust to controlling for adult socioeconomic position, and do not appear to be solely a consequence of accelerated reproductive schedule. I argue that childhood psychosocial adversity may cause latent somatic damage that will, in adulthood, accelerate age-related physical decline. This provides a compelling adaptive rationale for the accelerated reproductive schedules observed in women who experience childhood psychosocial adversity.

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The Welfare Value of FDA's Mercury-in-Fish Advisory: Dynamic Reanalysis

Christoph Rheinberger & James Hammitt
Journal of Health Economics, September 2014, Pages 113–122

Abstract:
Assessing the welfare impact of consumer health advisories is a thorny task. Recently, Shimshack and Ward (2010) studied how U.S. households responded to FDA's 2001 mercury-in-fish advisory. They found that the average at-risk household reduced fish consumption by 21%, resulting in a 17%-reduction in mercury exposure at the cost of a 21%-reduction in cardioprotective omega-3 fatty acids. Based on a static assessment of the health costs and benefits Shimshack and Ward concluded that the advisory policy resulted in an overall consumer welfare loss. In this note, we propose a dynamic assessment that links the long-term cardiovascular health effects of the advisory to life-cycle consumption. We find that under reasonable assumptions the welfare loss might be much larger than suggested. Our analysis highlights the importance of accounting for dynamic effects when evaluating persistent changes in exposure to environmental health risks.

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Voting for stem cells: How local conditions tempered moral opposition to Proposition 71

Nick Dragojlovic
Science and Public Policy, June 2014, Pages 359-369

Abstract:
A major theme in the debate on Proposition 71, the 2004 California ballot initiative in which voters approved US$3 billion in state funding for stem cell research, was the tension between values-based opposition to the use of embryos in medical research and a focus on the potential health benefits of stem cell therapies. Using a dataset that combines individual-level voting intention data from three Field Poll pre-election surveys and county-level data, the present study finds that moral opposition to Proposition 71 decreased as the local prevalence of chronic diseases and the proportion of elderly residents in respondents’ counties increased. The paper argues that this finding reflects an increase in the salience of the possible benefits of stem cell research that was driven by local conditions, and concludes with a discussion of the implications of this dynamic for the democratic governance of regenerative medicine in the context of an aging society.

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Effects of early-life exposure to allergens and bacteria on recurrent wheeze and atopy in urban children

Susan Lynch et al.
Journal of Allergy and Clinical Immunology, forthcoming

Objective: We sought to examine environmental factors associated with recurrent wheezing in inner-city environments.

Methods: The Urban Environment and Childhood Asthma study examined a birth cohort at high risk for asthma (n = 560) in Baltimore, Boston, New York, and St Louis. Environmental assessments included allergen exposure and, in a nested case-control study of 104 children, the bacterial content of house dust collected in the first year of life. Associations were determined among environmental factors, aeroallergen sensitization, and recurrent wheezing at age 3 years.

Results: Cumulative allergen exposure over the first 3 years was associated with allergic sensitization, and sensitization at age 3 years was related to recurrent wheeze. In contrast, first-year exposure to cockroach, mouse, and cat allergens was negatively associated with recurrent wheeze (odds ratio, 0.60, 0.65, and 0.75, respectively; P ≤ .01). Differences in house dust bacterial content in the first year, especially reduced exposure to specific Firmicutes and Bacteriodetes, was associated with atopy and atopic wheeze. Exposure to high levels of both allergens and this subset of bacteria in the first year of life was most common among children without atopy or wheeze.

Conclusions: In inner-city environments children with the highest exposure to specific allergens and bacteria during their first year were least likely to have recurrent wheeze and allergic sensitization. These findings suggest that concomitant exposure to high levels of certain allergens and bacteria in early life might be beneficial and suggest new preventive strategies for wheezing and allergic diseases.

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Public Bicycle Share Programs and Head Injuries

Janessa Graves et al.
American Journal of Public Health, August 2014, Pages e106-e111

Objectives: We evaluated the effect of North American public bicycle share programs (PBSPs), which typically do not offer helmets with rentals, on the occurrence of bicycle-related head injuries.

Methods: We analyzed trauma center data for bicycle-related injuries from 5 cities with PBSPs and 5 comparison cities. We used logistic regression models to compare the odds that admission for a bicycle-related injury would involve a head injury 24 months before PBSP implementation and 12 months afterward.

Results: In PBSP cities, the proportion of head injuries among bicycle-related injuries increased from 42.3% before PBSP implementation to 50.1% after (P < .01). This proportion in comparison cities remained similar before (38.2%) and after (35.9%) implementation (P = .23). Odds ratios for head injury were 1.30 (95% confidence interval = 1.13, 1.67) in PBSP cities and 0.94 (95% confidence interval = 0.79, 1.11) in control cities (adjusted for age and city) when we compared the period after implementation to the period before.

Conclusions: Results suggest that steps should be taken to make helmets available with PBSPs. Helmet availability should be incorporated into PBSP planning and funding, not considered an afterthought following implementation.

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Does More Education Lead to Better Health Habits? Evidence from the School Reforms in Australia

Jinhu Li & Nattavudh Powdthavee
Social Science & Medicine, forthcoming

Abstract:
The current study provides new empirical evidence on the causal effect of education on health-related behaviors by exploiting historical changes in the compulsory schooling laws in Australia. Since World War II, Australian states increased the minimum school leaving age from 14 to 15 in different years. Using differences in the laws regarding minimum school leaving age across different cohorts and across different states as a source of exogenous variation in education, we show that more education improves people’s diets and their tendency to engage in more regular exercise and drinking moderately, but not necessarily their tendency to avoid smoking and to engage in more preventive health checks. The improvements in health behaviors are also reflected in the estimated positive effect of education on some health outcomes. Our results are robust to alternative measures of education and different estimation methods.

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The impact of changes in county public health expenditures on general health in the population

Timothy Brown, Maria Martinez-Gutierrez & Bahar Navab
Health Economics, Policy and Law, July 2014, Pages 251-269

Abstract:
We estimate the effect of changes in the per capita expenditures of county departments of public health on county-level general health status. Using panel data on 40 counties in California (2001–2009), dynamic panel estimation techniques are combined with the Lewbel instrumental variable technique to estimate an aggregate demand for health function that measures the causal cumulative impact that per capita public health expenditures have on county-level general health status. We find that a $10 long-term increase in per capita public health expenditures would increase the percentage of the population reporting good, very good or excellent health by 0.065 percentage points. Each year expenditures were increased would result in ∼24,000 individuals moving from the ‘poor or fair health’ category to the ‘good, very good or excellent health’ category across these 40 counties. In terms of the overall impact of county public health departments on general health status, at current funding levels, each annual expenditure cycle results in over 207,000 individuals being in the ‘good, very good or excellent’ categories of health status rather than the ‘poor or fair’ categories.

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The Impact of Family Planning Funding Cuts on Preventive Care

Yao Lu & David Jason Gershkoff Slusky 
Princeton Working Paper, May 2014

Abstract:
Many women rely on family planning and women’s health organizations as their only recent source of care, including preventive care. Recently, several states have cut public funding for women’s health organizations that are associated with abortion services. This paper is the first to quantify the impact of these funding cuts and resulting clinic closures on the incidence of preventive care, focusing on Texas and Wisconsin during the 2007-2012 period. Using quarterly data on health center street addresses from a national network of women’s health centers and confidential respondent ZIP codes from the Behavioral Risk Factor Surveillance System (BRFSS), we calculate changes in distance to the nearest clinic over time. From a within-ZIP-code analysis, we conclude that an increase of 100 miles to the nearest clinic would result in a decrease in the annual utilization rate of a clinical breast exam by 6 percentage points (pp), a mammogram by 2 pp, and a Pap test by 9 pp. These estimates are generally larger for low-education women: 14 pp, 6 pp, and 8 pp respectively. Future analysis will incorporate 2014 survey data to cover a more recent round of cuts.

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Medical Dramas and Viewer Perception of Health: Testing Cultivation Effects

Jae Eun Chung
Human Communication Research, July 2014, Pages 333–349

Abstract:
By using a national representative sample (N = 11,555), the current study tested cultivation theory and aimed at understanding the relationship between medical drama watching and viewer perception and beliefs related to health. Findings suggest that heavy viewers of medical dramas tend to underestimate the gravity of chronic illnesses such as cancer and cardiovascular disease and undermine the importance of tackling these issues. Heavier viewers of medical dramas, compared to lighter viewers, also tend to take a more fatalistic perspective about cancer. Theoretical implications for cultivation theory and practical implications for health policy makers and drama producers are discussed.

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Impact of Texting Laws on Motor Vehicular Fatalities in the United States

Alva Ferdinand et al.
American Journal of Public Health, August 2014, Pages 1370-1377

Abstract:
Using a panel study design, we examined the effects of different types of texting bans on motor vehicular fatalities. We used the Fatality Analysis Reporting System and a difference-in-differences approach to examine the incidence of fatal crashes in 2000 through 2010 in 48 US states with and without texting bans. Age cohorts were constructed to examine the impact of these bans on age-specific traffic fatalities. Primarily enforced laws banning all drivers from texting were significantly associated with a 3% reduction in traffic fatalities in all age groups, and those banning only young drivers from texting had the greatest impact on reducing deaths among those aged 15 to 21 years. Secondarily enforced restrictions were not associated with traffic fatality reductions in any of our analyses.

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Association Between Cardiorespiratory Fitness and Accelerometer-Derived Physical Activity and Sedentary Time in the General Population

Jacquelyn Kulinski et al.
Mayo Clinic Proceedings, forthcoming

Objective: To determine the association between cardiorespiratory fitness and sedentary behavior, independent of exercise activity.

Patients and Methods: We included 2223 participants (aged 12-49 years; 1053 females [47%]) without known heart disease who had both cardiovascular fitness testing and at least 1 day of accelerometer data from the National Health and Nutrition Examination Survey 2003-2004. From accelerometer data, we quantified bouts of exercise as mean minutes per day for each participant. Sedentary time was defined as less than 100 counts per minute in mean minutes per day. Cardiorespiratory fitness was derived from a submaximal exercise treadmill test. Multivariable-adjusted linear regression analyses were performed with fitness as the dependent variable. Models were stratified by sex, adjusted for age, body mass index, and wear time, and included sedentary and exercise time.

Results: An additional hour of daily exercise activity time was associated with a 0.88 (0.37-1.39; P<.001) metabolic equivalent of task (MET) higher fitness for men and a 1.37 (0.43-2.31; P=.004) MET higher fitness for women. An additional hour of sedentary time was associated with a −0.12 (−0.02 to −0.22; P=.03) and a −0.24 (−0.10 to −0.38; P<.001) MET difference in fitness for men and women, respectively.

Conclusion: After adjustment for exercise activity, sedentary behavior appears to have an inverse association with fitness. These findings suggest that the risk related to sedentary behavior might be mediated, in part, through lower fitness levels.

By KEVIN LEWIS | 09:00:00 AM

Wednesday, July 16, 2014

Brought home

Does Economic Globalization Influence the US Policy Mood?: A Study of US Public Sentiment, 1956–2011

Erica Owen & Dennis Quinn
British Journal of Political Science, forthcoming

Abstract:
Does increasing economic globalization influence aggregate policy mood toward the role and size of government in the United States? Drawing on insights from international political economy scholarship, this article suggests that the impact of trade on aggregate preferences will depend on citizens’ exposure to trade. It hypothesizes that employees of import-competing, export-oriented and multinational firms will adopt a ‘compensatory’ model in which higher levels of imports (exports) lead to a liberal (conservative) shift in policy preferences for more (less) government. It distinguishes between intrafirm and non-intrafirm trade flows. It measures policy mood using Stimson's ‘Mood’, and estimates Error Correction and Instrumental Variable models. Trade flows strongly influence Mood in a manner consistent with hypotheses drawn from international political economy and heterogeneous firms (or ‘new new’) trade theory.

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Policymakers’ Horizon and Trade Reforms: The Protectionist Effect of Elections

Paola Conconi, Giovanni Facchini & Maurizio Zanardi
Journal of International Economics, forthcoming

Abstract:
This paper shows that electoral incentives deter politicians from supporting trade liberalization. We focus on all major trade liberalization bills introduced since the early 1970s in the U.S. Congress, in which House and Senate members serve respectively two- and six-year terms and one third of senators face elections every two years. We show that senators are more likely to support trade liberalization than House representatives. However, this result does not hold for the last generation of senators, who face elections at the same time as House members, suggesting that inter-cameral differences are driven by term length. Considering senators alone, we find that the last generation is less likely to support trade liberalization than the previous two. This result is pervasive and holds both when comparing the behavior of different senators voting on the same bill and that of individual senators voting on different bills. The protectionist effect of election proximity disappears for senators who are retiring or hold safe seats.

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Does Product Market Competition Foster Corporate Social Responsibility? Evidence From Trade Liberalization

Caroline Flammer
Strategic Management Journal, forthcoming

Abstract:
This study examines whether product market competition affects corporate social responsibility (CSR). To obtain exogenous variation in product market competition, I exploit a quasi-natural experiment provided by large import tariff reductions that occurred between 1992 and 2005 in the U.S. manufacturing sector. Using a difference-in-differences methodology, I find that domestic companies respond to tariff reductions by increasing their engagement in CSR. This finding supports the view of ʻCSR as a competitive strategyʼ that allows companies to differentiate themselves from their foreign rivals. Overall, my results highlight that trade liberalization is an important factor that shapes CSR practices.

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Trading Effects of the FIFA World Cup

Veysel Avsar & Umut Unal
Kyklos, August 2014, Pages 315–329

Abstract:
This study analyzes the trading effects of FIFA World Cup in two dimensions. First, we show that participating in the World Cup significantly increases exports from the participant countries to the host countries, relative to a control group of non-participants. Second, we demonstrate that trade is reasonably higher for host-participant pairs compared to other country pairs. We also provide dynamic estimates for both cases and offer plausible arguments and important channels for our findings.

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Democratization and Foreign Direct Investment Liberalization, 1970–2000

Sonal Pandya
International Studies Quarterly, forthcoming

Abstract:
Despite the central role of foreign direct investment (FDI) in global economic integration, we lack explanations for why countries restrict FDI inflows. This article analyzes the sources of FDI liberalization using a comprehensive new data set of national foreign ownership restrictions spanning over 90 countries for the period 1970–2000. Analyses of this data show that democratization contributes to greater FDI openness. Democratization elevates the political influence of labor, the primary beneficiary of unrestricted FDI inflows. Democracies restrict six percent fewer of their manufacturing and service industries as compared to nondemocracies. This finding is robust to several controls for alternate explanations including economic crises, coercion, and diffusion; alternate measures of both democracy and foreign ownership restrictions; and a variety of model specifications. This article elucidates the political economy foundations of the contemporary world economy.

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The Coevolution of Trade Agreement Networks and Democracy

Mark Manger & Mark Pickup
Journal of Conflict Resolution, forthcoming

Abstract:
The proliferation of preferential trade agreements (PTAs) and the wave of democratization are among the most significant developments in international relations during the past three decades. The correlation between these is well noted. The causal link between these phenomena, however, remains unclear. On one hand, democracies have been found to be more likely to join PTAs. On the other hand, trade agreements should foster democratization because they undermine the ability of governments to distribute rents to maintain an autocratic regime. If PTAs and democracy coevolve through a selection and a contagion effect, then conventional statistical techniques can produce wholly misleading results. This article presents a new approach based on recent advancements in longitudinal network analysis. Our findings confirm that historically, democratization indeed made states more likely to sign PTAs, but that trade agreements also encourage the democratization of a country, in particular if the PTA partners are themselves democracies.

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Effects of China and India on Manufactured Exports of the G7 Economies

Khuong Vu
Contemporary Economic Policy, forthcoming

Abstract:
This article analyzes the effects of China and India on manufactured exports of the G7 economies. The following three findings stand out. First, the rivalry effect of China is robustly significant in all investigated markets, including the world and the G7 countries collectively and individually, while the rivalry effect of India is significant in the French, Italian, Japanese, and world markets but insignificant in other markets. Second, the rivalry effect of China in the world market is substantial in 13 of 22 manufacturing industries, and most pronounced for textiles, telecom equipment, fabricated metal products, computing machinery, and furniture, while this effect of India is significant only in one industry (basic metals). Third, Germany is the only G7 economy that appears not to be affected by China's rivalry effect. Germany has also been more successful than other G7 economies in penetrating the Chinese market.

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From Beijing to Bentonville: Do Multinational Retailers Link Markets?

Keith Head, Ran Jing & Deborah Swenson
Journal of Development Economics, September 2014, Pages 79–92

Abstract:
Four of the world’s five largest retailers — Walmart, Carrefour, Tesco, and Metro — entered China after 1995, following new policies that allowed foreign retailers to participate more fully in the Chinese retail market. As each retailer added both stores and global procurement centers, they created unique footprints that caused Chinese cities to be differentially exposed to the activities of these global retailers. We exploit these differences to identify the effect of multinational retailer presence on city-country exports of retail goods. We find robust evidence that increased exposure to multinational retailers was followed by rising exports. Since the export expansions are not limited to the connections formed by the retailers’ bilateral networks, our evidence suggests that the growing presence of global retailers operated, at least in part, by enhancing the general export capabilities of the affected cities.

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Trade and Cities

Cem Karayalcin & Hakan Yilmazkuday
World Bank Economic Review, forthcoming

Abstract:
Many developing countries display remarkably high degrees of urban concentration that are incommensurate with their levels of urbanization. The cost of excessively high levels of urban concentration can be very high in terms of overpopulation, congestion, and productivity growth. One strand of the theoretical literature suggests that such high levels of concentration may be the result of restrictive trade policies that trigger forces of agglomeration. Another strand of the literature, however, points out that trade liberalization itself may exacerbate urban concentration by favoring the further growth of those large urban centers that have better access to international markets. The empirical basis for judging this question has been weak so far; in the existing literature, trade policies are poorly measured (or are not measured, as when trade volumes are used spuriously). Here, we use new disaggregated tariff measures to empirically test the hypothesis. We also employ a treatment-and-control analysis of pre- versus post-liberalization performance of the cities in liberalizing and non-liberalizing countries. We find evidence that (controlling for the largest cities that have ports and, thus, have better access to external markets) liberalizing trade leads to a reduction in urban concentration.

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Trust, Trustworthiness, and Information Sharing in Supply Chains Bridging China and the United States

Özalp Özer, Yanchong Zheng & Yufei Ren
Management Science, forthcoming

Abstract:
Whether and how trust and trustworthiness differ between a collectivist society, e.g., China, and an individualistic one, e.g., the United States, generates much ongoing scientific debate and bears significant practical values for managing cross-country transactions. We experimentally investigate how supply chain members' countries of origin — China versus the United States — affect trust, trustworthiness, and strategic information sharing behavior in a cross-country supply chain. We consider a two-tier supply chain in which the upstream supplier solicits demand forecast information from the retailer to plan production; but the retailer has an incentive to manipulate her forecast to ensure abundant supply. The levels of trust and trustworthiness in the supply chain and supplier's capability to determine the optimal production quantity affect the efficacy of forecast sharing and the resulting profits. We develop an experimental design to disentangle these three aspects and to allow for real-time interactions between geographically distant and culturally heterogeneous participants. We observe that, when there is no prospect for long-term interactions, our Chinese participants consistently exhibit lower spontaneous trust and trustworthiness than their U.S. counterparts do. We quantify the differences in trust and trustworthiness between the two countries, and the resulting impact on supply chain efficiency. We also show that Chinese individuals exhibit higher spontaneous trust toward U.S. partners than Chinese ones, primarily because they perceive that individuals from the United States are more trusting and trustworthy in general. This positive perception toward U.S. people is indeed consistent with the U.S. participants' behavior in forecast sharing. In addition, we quantify that a Chinese supply chain enjoys a larger efficiency gain from repeated interactions than a U.S. one does, as the prospect of building a long-term relationship successfully sustains trust and trustworthiness by Chinese partners. We advocate that companies can reinforce the positive perception of westerners held by the Chinese population and commit to long-term relationships to encourage trust by Chinese partners. Finally, we also observe that both populations exhibit similar pull-to-center bias when solving a decision problem under uncertainty (i.e., the newsvendor problem).

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Geographic Barriers to Commodity Price Integration: Evidence from US Cities and Swedish Towns, 1732–1860

Mario Crucini & Gregor Smith
NBER Working Paper, June 2014

Abstract:
We study the role of distance and time in statistically explaining price dispersion for 14 commodities from 1732 to 1860. The prices are reported for US cities and Swedish market towns, so we can compare international and intranational dispersion. Distance and commodity-specific fixed effects explain a large share — roughly 60% — of the variability in a panel of more than 230,000 relative prices over these 128 years. There was a negative "ocean effect": international dispersion was less than would be predicted using distance, narrowing the effective ocean by more than 3000 km. The absolute effect of distance declined over time beginning in the 18th century. This process of convergence was broad- based, across commodities and locations (both national and international). But there was a major interruption in convergence in the late 18th and early 19th centuries, at the time of the Napoleonic Wars, stopping the process by two or three decades on average.

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Fashions and Fads in Finance: The Political Foundations of Sovereign Wealth Fund Creation

Jeffrey Chwieroth
International Studies Quarterly, forthcoming

Abstract:
What accounts for the spread of Sovereign Wealth Funds (SWFs)? Despite the increasing importance of SWFs in the global economy, we lack persuasive systematic answers to that question. Most analysts take for granted that economic imperatives drive the creation of SWFs; governments create them as effective solutions to the challenges generated by reserve accumulation and commodity-export specialization. In this article, I argue that the evidence fails to support this theory. Instead, the spread of SWFs best resembles the diffusion of a fashion or fad. SWFs became fashionable as an appropriate approach for reserve- and resource-rich countries seeking to manage policy uncertainty related to these economic characteristics. As other countries developed the same characteristics, they followed the lead of their peers and also created SWFs. I provide, with the use of a new data set, the first cross-national political-economy statistical analysis of SWF creation. The results suggest peer group emulation has, indeed, been crucial in shaping the decision of many countries to create SWFs — especially in fuel-exporting countries.

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Entrepreneurship Policy and Globalization

Pehr-Johan Norbäck, Lars Persson & Robin Douhan
Journal of Development Economics, September 2014, Pages 22–38

Abstract:
What explains the world-wide trend of pro-entrepreneurial policies? We study entrepreneurial policy in the form of entry costs in a lobbying model taking into account the conflict of interest between entrepreneurs and incumbents. It is shown that international market integration leads to more pro-entrepreneurial policies, since it is then (i) more difficult to protect domestic incumbents and (ii) pro-entrepreneurial policies make foreign entrepreneurs less aggressive. Using the World Bank Doing Business database, we find evidence that international openness is negatively correlated with the barriers to entry for new entrepreneurs, as predicted by the theory.

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The Price Impact of Joining a Currency Union: Evidence from Latvia

Alberto Cavallo, Brent Neiman & Roberto Rigobon
NBER Working Paper, June 2014

Abstract:
Does membership in a currency union matter for prices and for a country's real exchange rate? The answer to this question is critical for thinking about the implications of joining (or exiting) a common currency area. This paper is the first to use high-frequency good-level data to demonstrate that the answer is yes, at least for an important subset of consumption goods. We consider the case of Latvia, which recently dropped its pegged exchange rate and joined the euro zone. We analyze the prices of thousands of differentiated goods sold by Zara, the world's largest clothing retailer. Price dispersion between Latvia and euro zone countries collapsed swiftly following entry to the euro. The percentage of goods with nearly identical prices in Latvia and Germany increased from 6 percent to 89 percent. The median size of price differentials declined from 7 percent to zero.

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Is Globalization Reducing Absolute Poverty?

Andreas Bergh & Therese Nilsson
World Development, October 2014, Pages 42–61

Abstract:
Using data from 114 countries (1983–2007), we examine the relationship between globalization and World Bank absolute poverty estimates. We find a significant negative correlation between globalization and poverty, robust to several econometric specifications, including a fixed-effect panel — a “long run” first difference — and a pooled OLS-regression. Introducing two instruments for globalization we also show that results are robust to correction for potential endogeneity. We motivate and test the instruments in several ways. In particular information flows and more liberal trade restrictions robustly correlate with lower absolute poverty.

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Calculation of embodied energy in Sino-USA trade: 1997–2011

Ranran Yang et al.
Energy Policy, September 2014, Pages 110–119

Abstract:
In order to find efficient trade measures to reduce China׳s energy consumption and to provide theoretical support for the climate talks between China and America, we investigate the impact of Sino-USA trade on energy consumption from the perspective of embodied energy. An Environmental Input–Output Life Cycle Assessment (EIO-LCA) model was established to calculate the total energy consumption coefficient, the direct consumption coefficient and the complete consumption coefficient of the sectors of the national economies of China and America. After taking into consideration the data of every sector of the national economy in Sino-USA trade, energy embodied in the import and export trade between China and America was calculated to verify the real energy flows in Sino-USA trade. The research results suggest the following: China is the net exporter of embodied energy in Sino-USA trade, and coal, crude oil and natural gas are the major components. In 1997–2011, the net exports of China׳s embodied energy totaled 1523,082,200 t of standard coal, the amount of China׳s energy consumption increased by 895,527,900 t of standard coal, and America׳s energy consumption decreased by 11,871,200 t of standard coal as a result of Sino-USA trade. On this basis, corresponding policies and recommendations are proposed.

By KEVIN LEWIS | 09:00:00 AM

Tuesday, July 15, 2014

Decision tree

When Multiple Creators Are Worse Than One: The Bias Toward Single Authors in the Evaluation of Art

Rosanna Smith & George Newman
Psychology of Aesthetics, Creativity, and the Arts, forthcoming

Abstract:
The present studies investigate whether people perceive the same work of art to be of lower quality if they learn that it was a collaborative work (resulting from the efforts of multiple artists) versus the work of a single artist. Study 1 finds that indeed, as the number of authors increases, the perceived quality of an artwork decreases. Study 2 finds that this effect occurs because people tend to assess quality in terms of the effort put forth by each author, rather than the total amount of effort required to create the work. Study 3 further demonstrates that this bias toward single authors appears to be driven by people’s beliefs, rather than by any inherent differences between individual versus collaborative work. These results broaden our understanding of how perceptions of effort drive evaluative judgments, and are consistent with a more general notion that art is not evaluated as a static entity, but rather as an endpoint in a “creative performance.”

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Rank-Based Groupings and Decision Making: A Regression Discontinuity Analysis of the NFL Draft Rounds and Rookie Compensation

Quinn Keefer
Journal of Sports Economics, forthcoming

Abstract:
Rank-based groupings are uninformative signals of quality when the exact rank is known; therefore, they should be ignored in decision making. However, evidence is presented that rank-based groupings are used to determine the compensation of rookie players in the National Football League (NFL). The NFL draft, which largely determines rookie compensation, provides two signals of player quality, selection number, and round. However, the rounds are simply groupings based on selection number; thus, the rounds should not affect subsequent decisions. Sharp regression discontinuity design (RDD) estimates of discontinuities in rookie compensation at the round cutoffs are shown to be very large and robust. The first to second round discontinuity is −US$240,000 to −US$250,000, or 36% of the average salary of the first selection in the second round. The second to third round discontinuity is −US$60,000 to −US$70,000, or 17% of the average salary of the first selection in the third round. The results show rookie compensation, which comprises a large share of career earnings, is subject to heuristic thinking.

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The Bottom Dollar Effect: The Influence of Spending to Zero on Pain of Payment and Satisfaction

Robin Soster, Andrew Gershoff & William Bearden
Journal of Consumer Research, forthcoming

Abstract:
Spending that exhausts a budget is shown to decrease satisfaction with purchased products relative to spending when resources remain in the budget. Six studies, including those in which participants earn and spend real resources and evaluate real products, explore this bottom dollar effect. This research contributes to prior mental accounting research regarding how costs influence decision making (e.g., bundling, coupling, sunk costs) and to the satisfaction literature. Supporting the role of pain of payment in this process, we show that the bottom dollar effect increases as effort required to earn budgetary resources increases, decreases in the presence of windfall gains, and decreases when there is less time between budget exhaustion and replenishment. Mediation analyses further demonstrate the role of payment pain in the bottom dollar effect. Implications are discussed in the context of behavioral research, marketing promotions management, and public policy.

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Exploring Solomon’s Paradox: Self-Distancing Eliminates the Self-Other Asymmetry in Wise Reasoning About Close Relationships in Younger and Older Adults

Igor Grossmann & Ethan Kross
Psychological Science, forthcoming

Abstract:
Are people wiser when reflecting on other people’s problems compared with their own? If so, does self-distancing eliminate this asymmetry in wise reasoning? In three experiments (N = 693), participants displayed wiser reasoning (i.e., recognizing the limits of their knowledge and the importance of compromise and future change, considering other people’s perspectives) about another person’s problems compared with their own. Across Studies 2 and 3, instructing individuals to self-distance (rather than self-immerse) eliminated this asymmetry. Study 3 demonstrated that each of these effects was comparable for younger (20–40 years) and older (60–80 years) adults. Thus, contrary to the adage “with age comes wisdom,” our findings suggest that there are no age differences in wise reasoning about personal conflicts, and that the effects of self-distancing generalize across age cohorts. These findings highlight the role that self-distancing plays in allowing people to overcome a pervasive asymmetry that characterizes wise reasoning.

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Get Up, Stand Up: The Effects of a Non-Sedentary Workspace on Information Elaboration and Group Performance

Andrew Knight & Markus Baer
Social Psychological and Personality Science, forthcoming

Abstract:
Non-sedentary work configurations, which encourage standing rather than sitting in the course of work, are becoming increasingly prevalent in organizations. In this article, we build and test theory about how non-sedentary arrangements influence interpersonal processes in groups performing knowledge work — tasks that require groups to combine information to develop creative ideas and solve problems. We propose that a non-sedentary workspace increases group arousal, while at the same time decreasing group idea territoriality, both of which result in better information elaboration and, indirectly, better group performance. The results of an experimental study of 54 groups engaged in a creative task provide support for this dual pathway model and underscore the important role of the physical space in which a group works as a contextual input to group processes and outcomes.

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When Consequence Size Predicts Belief in Conspiracy Theories: The Moderating Role of Perspective Taking

Jan-Willem van Prooijen & Eric van Dijk
Journal of Experimental Social Psychology, November 2014, Pages 63–73

Abstract:
People believe in conspiracy theories more strongly following consequential as opposed to inconsequential events. We expected this effect to be most pronounced among people who take the perspective of the group that is directly affected by the event. Five studies support our line of reasoning. Studies 1 and 4 reveal that participants endorsed stronger conspiracy beliefs when reading about an event with big consequences (i.e., an opposition leader of an African country died in a car crash) than when reading about an event with small consequences (the opposition leader survived the car crash), but only among participants who took the perspective of the citizens of the African country. Similar findings emerged using an individual difference measure of perspective-taking abilities, and with different operationalizations of conspiracy beliefs (Studies 2 and 3). Study 5 revealed that the effects of perspective-taking are mediated by participants’ own sense-making motivation. It is concluded that perspective taking promotes conspiracy beliefs when confronted with events that are harmful to another group.

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Learning Through Noticing: Theory and Experimental Evidence in Farming

Rema Hanna, Sendhil Mullainathan & Joshua Schwartzstein
Quarterly Journal of Economics, forthcoming

Abstract:
We consider a model of technological learning under which people “learn through noticing”: they choose which input dimensions to attend to and subsequently learn about from available data. Using this model, we show how people with a great deal of experience may persistently be off the production frontier because they fail to notice important features of the data that they possess. We also develop predictions on when these learning failures are likely to occur, as well as on the types of interventions that can help people learn. We test the model's predictions in a field experiment with seaweed farmers. The survey data reveal that these farmers do not attend to pod size, a particular input dimension. Experimental trials suggest that farmers are particularly far from optimizing this dimension. Furthermore, consistent with the model, we find that simply having access to the experimental data does not induce learning. Instead, behavioral changes occur only after the farmers are presented with summaries that highlight previously unattended-to relationships in the data.

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Metacognition of multitasking: How well do we predict the costs of divided attention?

Jason Finley, Aaron Benjamin & Jason McCarley
Journal of Experimental Psychology: Applied, June 2014, Pages 158-165

Abstract:
Risky multitasking, such as texting while driving, may occur because people misestimate the costs of divided attention. In two experiments, participants performed a computerized visual-manual tracking task in which they attempted to keep a mouse cursor within a small target that moved erratically around a circular track. They then separately performed an auditory n-back task. After practicing both tasks separately, participants received feedback on their single-task tracking performance and predicted their dual-task tracking performance before finally performing the 2 tasks simultaneously. Most participants correctly predicted reductions in tracking performance under dual-task conditions, with a majority overestimating the costs of dual-tasking. However, the between-subjects correlation between predicted and actual performance decrements was near 0. This combination of results suggests that people do anticipate costs of multitasking, but have little metacognitive insight on the extent to which they are personally vulnerable to the risks of divided attention, relative to other people.

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Seeing the Math in the Story: On How Abstraction Promotes Performance on Mathematical Word Problems

Dan Schley & Kentaro Fujita
Social Psychological and Personality Science, forthcoming

Abstract:
The negative social, health, financial, and other life outcomes associated with mathematical proficiency deficits highlight the need to understand the underlying cognitive operations entailed in solving math problems. We focus specifically on mathematical word problems and propose that abstraction can enhance performance by helping people see beyond the incidental details described in word problems and to recognize instead the underlying mathematical relationships. Three studies manipulated abstraction as a procedural mind-set (i.e., inducing abstraction in one task and observing its “carry-over” effect in subsequent unrelated tasks) and observed performance on both numeric and word problems. Participants in the abstract, relative to concrete, mind-set condition were more successful in translating word problems into their analogous numeric forms, resulting in improved performance. We discuss implications of these findings for understanding individual and group differences in mathematics proficiencies, which may stem from both chronic and situational factors, and for the development of novel interventions.

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How the Consideration of Positive Emotions Influences Persuasion: The Differential Effect of Pride Versus Joy

Noam Karsh & Tal Eyal
Journal of Behavioral Decision Making, forthcoming

Abstract:
Although pride and joy are both positive emotions, we expected their consideration to affect persuasion differently because of the different perspectives (near vs. distant) and level of abstractness they involve, with pride being more abstract than joy. Therefore, we predicted that when the attitude object is construed at a high level rather than a low level, the consideration of pride is likely to promote more persuasion than the consideration of joy. In three studies, we found that the consideration of pride, when featured in the persuasion message (Studies 1a and 1b) or incidentally (Study 2), increased persuasion more than did the consideration of joy, when the persuasion object was temporally distant compared with temporally near (Studies 1a and 1b) or construed as a high-level category compared with a more concrete individual (Study 2). These findings advance our understanding of the ways in which specific emotions may affect persuasion, beyond valence.

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Context effects produced by question orders reveal quantum nature of human judgments

Zheng Wang et al.
Proceedings of the National Academy of Sciences, 1 July 2014, Pages 9431–9436

Abstract:
The hypothesis that human reasoning obeys the laws of quantum rather than classical probability has been used in recent years to explain a variety of seemingly “irrational” judgment and decision-making findings. This article provides independent evidence for this hypothesis based on an a priori prediction, called the quantum question (QQ) equality, concerning the effect of asking attitude questions successively in different orders. We empirically evaluated the predicted QQ equality using 70 national representative surveys and two laboratory experiments that manipulated question orders. Each national study contained 651–3,006 participants. The results provided strong support for the predicted QQ equality. These findings suggest that quantum probability theory, initially invented to explain noncommutativity of measurements in physics, provides a simple account for a surprising regularity regarding measurement order effects in social and behavioral science.

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Arguments, More Than Confidence, Explain the Good Performance of Reasoning Groups

Emmanuel Trouche, Emmanuel Sander & Hugo Mercier
Journal of Experimental Psychology: General, forthcoming

Abstract:
In many intellective tasks groups consistently outperform individuals. One factor is that the individual(s) with the best answer is able to convince the other group members using sound argumentation. Another factor is that the most confident group member imposes her answer whether it is right or wrong. In Experiments 1 and 2, individual participants were given arguments against their answer in intellective tasks. Demonstrating sound argumentative competence, many participants changed their minds to adopt the correct answer, even though the arguments had no confidence markers, and barely any participants changed their minds to adopt an incorrect answer. Confidence could not explain who changed their mind, as the least confident participants were as likely to change their minds as the most confident. In Experiments 3 (adults) and 4 (10-year-olds), participants solved intellective tasks individually and then in groups, before solving transfer problems individually. Demonstrating again sound argumentative competence, participants adopted the correct answer when it was present in the group, and many succeeded in transferring this understanding to novel problems. Moreover, the group member with the right answer nearly always managed to convince the group even when she was not the most confident. These results show that argument quality can overcome confidence among the factors influencing the discussion of intellective tasks. Explanations for apparent exceptions are discussed.

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Profiting from Machine Learning in the NBA Draft

Philip Maymin
NYU Working Paper, May 2014

Abstract:
I project historical NCAA college basketball performance to subsequent NBA performance for prospects using modern machine learning techniques without snooping bias. I find that the projections would have helped improve the drafting decisions of virtually every team: over the past ten years, teams forfeited an average of about $90,000,000 in lost productivity that could have been theirs had they followed the recommendations of the model. I provide team-by-team breakdowns of who should have been drafted instead, as well as team summaries of lost profit, and draft order comparison. Far from being just another input in making decisions, when used properly, advanced draft analytics can effectively be an additional revenue source in a team’s business model.

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Wisdom or Madness? Comparing Crowds with Expert Evaluation in Funding the Arts

Ethan Mollick & Ramana Nanda
Harvard Working Paper, May 2014

Abstract:
In fields as diverse as technology entrepreneurship and the arts, crowds of interested stakeholders are increasingly responsible for deciding which innovations to fund, a privilege that was previously reserved for a few experts, such as venture capitalists and grant‐making bodies. Little is known about the degree to which the crowd differs from experts in judging which ideas to fund, and, indeed, whether the crowd is even rational in making funding decisions. Drawing on a panel of national experts and comprehensive data from the largest crowdfunding site, we examine funding decisions for proposed theater projects, a category where expert and crowd preferences might be expected to differ greatly. We instead find substantial agreement between the funding decisions of crowds and experts. Where crowds and experts disagree, it is far more likely to be a case where the crowd is willing to fund projects that experts may not. Examining the outcomes of these projects, we find no quantitative or qualitative differences between projects funded by the crowd alone, and those that were selected by both the crowd and experts. Our findings suggest that the democratization of entry that is facilitated by the crowdfunding has the potential to lower the incidence of “false negatives,” by allowing projects the option to receive multiple evaluations and reach out to receptive communities that may not otherwise be represented by experts.

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The Effects of Counterfactual Attacks on Social Judgments

Patrizia Catellani & Mauro Bertolotti
Social Psychology, forthcoming

Abstract:
Two experiments were conducted to compare the effects of different styles of verbal criticism (factual vs. counterfactual) on the perceptions of target, source, and quality of the attack. Counterfactual attacks resulted in more negative overall judgment of the target and ratings of the target’s morality than either factual attacks or no attack. Counterfactual attacks were also rated more positively than factual attacks, and the source of the counterfactual attack was rated as being less biased against the target. Regression analyses confirmed that the observed effect on overall judgment was mediated by the perceived bias of the source. The greater effectiveness of counterfactual attacks was moderated by awareness of prior hostility of the source of the attack toward the target.

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Reading Fictional Stories and Winning Delayed Prizes: The Surprising Emotional Impact of Distant Events

Jane Ebert & Tom Meyvis
Journal of Consumer Research, forthcoming

Abstract:
Hedonic experiences that involve real, immediate events (such as reading about a recent, real-life tragic event) naturally evoke strong affective reactions. When these events are instead fictional or removed in time, they should be perceived as more psychologically distant and evoke weaker affective reactions. The current research shows that, while consumers’ intuitions are in line with this prediction, their actual emotional experiences are surprisingly insensitive to the distancing information. For instance, readers of a sad story overestimated how much their emotional reaction would be reduced by knowing that it described a fictional event. Similarly, game participants overestimated how much their excitement about winning a prize would be dampened by knowing that the prize would only be available later. We propose that actual readers and prize winners were too absorbed by the hedonic experience to incorporate the distancing information, resulting in surprisingly strong affective reactions to fictional stories and delayed prizes.

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Predicting the Winner of Tied National Football League Games: Do the Details Matter?

Jared Quenzel & Paul Shea
Journal of Sports Economics, forthcoming

Abstract:
We construct a data set of all 429 tied at the half regular season National Football League (NFL) games between 1994 and 2012. We then examine whether or not the path taken to reach the tie (e.g., rushing yards, turnovers, etc.) has any ability to predict the eventual winner. Our main finding is that only the point spread is significantly predictive, although there is weak evidence to suggest that allowing more sacks reduces the chances of winning. Surprisingly, we find that the team receiving the first possession of the second half does not enjoy a statistically significant advantage. Teams should thus simply try to maximize their first half lead without expecting that first half strategies such as “establishing the run” will pay dividends in the second half.

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How emotions affect logical reasoning: Evidence from experiments with mood-manipulated participants, spider phobics, and people with exam anxiety

Nadine Jung et al.
Frontiers in Psychology, June 2014

Abstract:
Recent experimental studies show that emotions can have a significant effect on the way we think, decide, and solve problems. This paper presents a series of four experiments on how emotions affect logical reasoning. In two experiments different groups of participants first had to pass a manipulated intelligence test. Their emotional state was altered by giving them feedback, that they performed excellent, poor or on average. Then they completed a set of logical inference problems (with if p, then q statements) either in a Wason selection task paradigm or problems from the logical propositional calculus. Problem content also had either a positive, negative or neutral emotional value. Results showed a clear effect of emotions on reasoning performance. Participants in negative mood performed worse than participants in positive mood, but both groups were outperformed by the neutral mood reasoners. Problem content also had an effect on reasoning performance. In a second set of experiments, participants with exam or spider phobia solved logical problems with contents that were related to their anxiety disorder (spiders or exams). Spider phobic participants' performance was lowered by the spider-content, while exam anxious participants were not affected by the exam-related problem content. Overall, unlike some previous studies, no evidence was found that performance is improved when emotion and content are congruent. These results have consequences for cognitive reasoning research and also for cognitively oriented psychotherapy and the treatment of disorders like depression and anxiety.

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Two Reasons to Make Aggregated Probability Forecasts More Extreme

Jonathan Baron et al.
Decision Analysis, June 2014, Pages 133-145

Abstract:
When aggregating the probability estimates of many individuals to form a consensus probability estimate of an uncertain future event, it is common to combine them using a simple weighted average. Such aggregated probabilities correspond more closely to the real world if they are transformed by pushing them closer to 0 or 1. We explain the need for such transformations in terms of two distorting factors: The first factor is the compression of the probability scale at the two ends, so that random error tends to push the average probability toward 0.5. This effect does not occur for the median forecast, or, arguably, for the mean of the log odds of individual forecasts. The second factor — which affects mean, median, and mean of log odds — is the result of forecasters taking into account their individual ignorance of the total body of information available. Individual confidence in the direction of a probability judgment (high/low) thus fails to take into account the wisdom of crowds that results from combining different evidence available to different judges. We show that the same transformation function can approximately eliminate both distorting effects with different parameters for the mean and the median. And we show how, in principle, use of the median can help distinguish the two effects.

By KEVIN LEWIS | 09:00:00 AM

Monday, July 14, 2014

What's in your wallet

Moochers and Makers in the Voting Booth: Who Benefits from Federal Spending and How Did They Vote in the 2012 Presidential Election?

Dean Lacy
Public Opinion Quarterly, June 2014, Pages 255-275

Abstract:
The 2012 election campaign popularized the notion that people who benefit from federal spending vote for Democrats, while people who pay the preponderance of taxes vote Republican. A survey conducted during the election included questions to test this hypothesis and to assess the accuracy of voters’ perceptions of federal spending. Voters’ perceptions of their benefit from federal spending are determined by family income, age, employment status, and number of children, as well as by party identification and race. Voters aged 65 and older who believe they are net beneficiaries of federal spending are more likely to be Democrats and vote for Barack Obama than seniors who believe they are net contributors to the federal government. However, the 77.5 percent of voters under age 65 who believe they are net beneficiaries of federal spending are as likely to vote for Romney as for Obama and as likely to be Republicans as Democrats. Voters who live in states that receive more in federal funds than they pay in federal taxes are less likely to vote for Obama or to be Democrats. For most of the electorate, dependence on federal spending is unrelated to vote choice.

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Educational Assortative Mating and Household Income Inequality

Lasse Eika, Magne Mogstad & Basit Zafar
NBER Working Paper, June 2014

Abstract:
We investigate the pattern of educational assortative mating, its evolution over time, and its impact on household income inequality. To these ends, we use rich data from the U.S. and Norway over the period 1980-2007. We find evidence of positive assortative mating at all levels of education in both countries. However, the time trends vary by the level of education: Among college graduates, assortative mating has been declining over time, whereas low educated are increasingly sorting into internally homogenous marriages. When looking within the group of college educated, we find strong but declining assortative mating by academic major. These findings motivate and guide a decomposition analysis, where we quantify the contribution of various factors to the distribution of household income. We find that educational assortative mating accounts for a non-negligible part of the cross-sectional inequality in household income. However, changes in assortative mating over time barely move the time trends in household income inequality. This is because the decline in assortative mating among the highly educated is offset by an increase in assortative mating among the low educated. By comparison, increases in the returns to education over time generate a considerable rise in household income inequality, but these price effects are partly mitigated by increases in college attendance and completion rates among women.

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Does National Income Inequality Affect Individuals’ Quality of Life in Europe? Inequality, Happiness, Finances, and Health

Krzysztof Zagorski et al.
Social Indicators Research, July 2014, Pages 1089-1110

Abstract:
This paper analyses the effect of income inequality on Europeans’ quality of life, specifically on their overall well-being (happiness, life satisfaction), on their financial quality of life (satisfaction with standard of living, affordability of goods and services, subjective poverty), and on their health (self-rated health, satisfaction with health). The simple bivariate correlations of inequality with overall well-being, financial quality of life, and health are negative. But this is misleading because of the confounding effect of a key omitted variable, national economic development (GDP per capita): Unequal societies are on average much poorer (r = 0.46) and so disadvantaged because of that. We analyse the multi-level European Quality of Life survey conducted in 2003 including national-level data on inequality (Gini coefficient) and economic development (GDP) and individual-level data on overall well-being, financial quality of life, and health. The individual cases are from representative samples of 28 European countries. Our variance-components multi-level models controlling for known individual-level predictors show that national per capita GDP increases subjective well-being, financial quality of life, and health. Net of that, the national level of inequality, as measured by the Gini coefficient, has no statistically significant effect, suggesting that income inequality does not reduce well-being, financial quality of life, or health in advanced societies. These result all imply that directing policies and resources towards inequality reduction is unlikely to benefit the general public in advanced societies.

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How Did Distributional Preferences Change During the Great Recession?

Raymond Fisman, Pamela Jakiela & Shachar Kariv
NBER Working Paper, May 2014

Abstract:
We compare behavior in experiments measuring distributional preferences during the “Great Recession” to behavior in identical experiments conducted during the preceding economic boom. Subjects are drawn from a diverse pool of students whose socioeconomic composition is largely held constant by the university, mitigating concerns about differential selection across macroeconomic conditions. Subjects exposed to the recession are more selfish and more willing to sacrifice equality to enhance efficiency. Reproducing recessionary conditions inside the laboratory by confronting subjects with losses has the same impact on distributional preferences, bolstering the interpretation that economic circumstances, rather than other factors, are driving our results.

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Educational Segregation, Tea Party Organizations, and Battles over Distributive Justice

Rory McVeigh et al.
American Sociological Review, forthcoming

Abstract:
Competing visions of who is deserving of rewards and privileges, and different understandings of the fairness of reward allocation processes, are at the heart of political conflict. Indeed, social movement scholars generally agree that a key component of most, if not all, social movements is a shared belief that existing conditions are unfair and subject to change (Gamson 1992; McAdam 1982; Snow et al. 1986; Turner and Killian 1987). In this article we consider the role that residential segregation by education level plays in shaping perceptions of distributive justice and, in turn, providing a context conducive to conservative political mobilization. We apply these ideas in an analysis of Tea Party activism and show that educational segregation is a strong predictor of the number of Tea Party organizations in U.S. counties. In a complementary analysis, we find that individuals with a bachelor’s degree are more likely than people who do not have any college education to support the Tea Party; this relationship is strongest in counties with higher levels of educational segregation.

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Income Inequality, Social Mobility, and the Decision to Drop Out of High School

Melissa Kearney & Phillip Levine
NBER Working Paper, June 2014

Abstract:
This paper considers the role that high levels of income inequality and low rates of social mobility play in driving the educational attainment of youth in low-income households in the United States. Using high school degree status from five individual-level surveys, our analysis reveals that low-socioeconomic status (SES) students, and particularly boys, who grow up in locations with greater levels of lower-tail income inequality and lower levels of social mobility are relatively more likely to drop out of high school, conditional on other individual characteristics and contextual factors. The data indicate that this relationship does not reflect alternative characteristics of the place, such as poverty concentration, residential segregation, or public school financing. We propose that the results are consistent with a class of explanations that emphasize a role for perceptions of one’s own identity, position in society, or chances of success. In the end, our empirical results indicate that high levels of lower-tail income inequality and low levels of social mobility hinder educational advancement for disadvantaged youth.

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Social class and academic achievement in college: The interplay of rejection sensitivity and entity beliefs

Michelle Rheinschmidt & Rodolfo Mendoza-Denton
Journal of Personality and Social Psychology, July 2014, Pages 101-121

Abstract:
Undergraduates, especially those from lower income backgrounds, may perceive their social class background as different or disadvantaged relative to that of peers and worry about negative social treatment. We hypothesized that concerns about discrimination based on one’s social class (i.e., class-based rejection sensitivity or RS-class) would be damaging to undergraduates’ achievement outcomes particularly among entity theorists, who perceive their personal characteristics as fixed. We reasoned that a perceived capacity for personal growth and change, characteristic of incremental theorists, would make the pursuit of a college degree and upward mobility seem more worthwhile and attainable. We found evidence across 3 studies that dispositionally held and experimentally primed entity (vs. incremental) beliefs predicted college academic performance as a function of RS-class. Studies 1a and 1b documented that high levels of both entity beliefs and RS-class predicted lower self-reported and official grades, respectively, among undergraduates from socioeconomically diverse backgrounds. In Study 2, high entity beliefs and RS-class at matriculation predicted decreased year-end official grades among lower class Latino students. Study 3 established the causal relationship of entity (vs. incremental) beliefs on academic test performance as a function of RS-class. We observed worse test performance with higher RS-class levels following an entity (vs. incremental) prime, an effect driven by lower income students. Findings from a 4th study suggest that entity theorists with RS-class concerns tend to believe less in upward mobility and, following academic setbacks, are prone to personal attributions of failure, as well as hopelessness. Implications for education and intervention are discussed.

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The Distributional Preferences of Americans

Raymond Fisman, Pamela Jakiela & Shachar Kariv
NBER Working Paper, May 2014

Abstract:
We measure the distributional preferences of a large, diverse sample of Americans by embedding modified dictator games that vary the relative price of redistribution in the American Life Panel. Subjects' choices are generally consistent with maximizing a (social) utility function. We decompose distributional preferences into two distinct components - fair-mindedness (tradeoffs between oneself and others) and equality-efficiency tradeoffs - by estimating constant elasticity of substitution utility functions at the individual level. Approximately equal numbers of Americans have equality-focused and efficiency-focused distributional preferences. After controlling for individual characteristics, our experimental measures of equality-efficiency tradeoffs predict the political decisions of our subjects.

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Union Strength, Neoliberalism, and Inequality: Contingent Political Analyses of U.S. Income Differences since 1950

David Jacobs & Lindsey Myers
American Sociological Review, forthcoming

Abstract:
Do historically contingent political accounts help explain the growth in family income inequality in the United States? We use time-series regressions based on 60 years to detect such relationships by assessing interactive associations between the neoliberal departure coincident with Ronald Reagan’s election and the acceleration in inequality that began soon after Reagan took office. We find evidence for this and for a second contingent relationship: stronger unions could successfully resist policies that enhanced economic inequality only before Reagan’s presidency and before the neoliberal anti-union administrations from both parties that followed Reagan. Politically inspired reductions in union membership, and labor’s diminished political opportunities during and after Reagan’s presidency, meant unions no longer could slow the growth in U.S. inequality. Coefficients on these two historically contingent interactions remain significant after many additional determinants are held constant. These findings indicate that political determinants should not be neglected when researchers investigate the determinants of U.S. inequality.

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Benefits Conditional on Work and the Nordic Model

Ann-Sofie Kolm & Mirco Tonin
Journal of Public Economics, forthcoming

Abstract:
Welfare benefits in the Nordic countries are often tied to employment. We argue that this is one of the factors behind the success of the Nordic model, where a comprehensive welfare state is associated with high employment. In a general equilibrium setting, the underlining mechanism works through wage moderation and job creation. The benefits make it more important to hold a job, thus lower wages will be accepted, and more jobs created. Moreover, we show that the incentive to acquire higher education improves, further boosting employment in the long run. These positive effects help counteracting the negative impact of taxation. Through numerical simulations, we show how this mechanism can contribute to explain the better labor market performance and more equitable income distribution of Nordic countries compared to Continental European ones.

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The Scandinavian model — An interpretation

Erling Barth, Karl Moene & Fredrik Willumsen
Journal of Public Economics, September 2014, Pages 60–72

Abstract:
The small open economies in Scandinavia have for long periods had high work effort, small wage differentials, high productivity, and a generous welfare state. To understand how this might be an economic and political equilibrium we combine models of collective wage bargaining, creative job destruction, and welfare spending. The two-tier system of wage bargaining provides microeconomic efficiency and wage compression. Combined with a vintage approach to the process of creative destruction we show how wage compression fuels investments, enhances average productivity and increases the mean wage by allocating more of the work force to the most modern activities. Finally, we show how the political support of welfare spending is fueled by both a higher mean wage and a lower wage dispersion.

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Early childhood education expenditures and the intergenerational persistence of income

William Blankenau & Xiaoyan Youderian
Review of Economic Dynamics, forthcoming

Abstract:
We consider the extent to which cross-country differences in the intergenerational persistence of income can be explained by differences in government spending on early childhood education. We build a life-cycle model where human capital is accumulated in early, middle and late childhood. Both families and the government can increase the human capital of young agents by investing in education at each stage of childhood. Ability in each dynasty and wages per unit of human capital are stochastic. Different realizations of these values and the resultant education spending histories generate a stochastic steady-state distribution of income. Government spending can reduce persistence by weakening the link between parental income and education spending for a child. Our results show that doubling early childhood spending in the U.S. to match levels in Norway and Denmark eliminates less than 8.5 percent of the gap in intergenerational income persistence. Increased government education spending in later childhood has almost no effect on persistence. Early childhood expenditures can have a larger effect when allocated to low income families.

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Democracy, Redistribution, and Political Participation: Evidence From Sweden 1919–1938

Björn Tyrefors Hinnerich & Per Pettersson-Lidbom
Econometrica, May 2014, Pages 961–993

Abstract:
In this paper, we compare how two different types of political regimes — direct versus representative democracy — redistribute income toward the relatively poor segments of society after the introduction of universal and equal suffrage. Swedish local governments are used as a testing ground since this setting offers a number of attractive features for a credible impact evaluation. Most importantly, we exploit the existence of a population threshold, which partly determined a local government's choice of democracy to implement a regression-discontinuity design. The results indicate that direct democracies spend 40–60 percent less on public welfare. Our interpretation is that direct democracy may be more prone to elite capture than representative democracy since the elite's potential to exercise de facto power is likely to be greater in direct democracy after democratization.

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Life Satisfaction Across Nations: The Effects of Women’s Political Status and Public Priorities

Richard York & Shannon Elizabeth Bell
Social Science Research, November 2014, Pages 48–61

Abstract:
Feminist scholars suggest that improving the quality of life of individuals living in nations around the world may be more readily achieved by increasing women’s political power and by reorienting public-policy priorities, rather than focusing primarily on economic growth. These considerations raise the question of which characteristics of societies are associated with the quality of life of the people in those societies. Here, we address this issue empirically by statistically analyzing cross-national data. We assess the effects of gender equality in the political sphere, as well as a variety of other factors, on the subjective well-being of nations, as indicated by average self-reported levels of life satisfaction. We find that people report the highest levels of life satisfaction in nations where women have greater political representation, where military spending is low, and where health care spending is high, controlling for a variety of other factors. GDP per capita, urbanization, and natural resource exploitation are not clearly associated with life satisfaction. These findings suggest that nations may be able to improve the subjective quality of life of people without increasing material wealth or natural resource consumption by increasing gender equality in politics and changing public spending priorities.

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The “Business Climate” and Economic Inequality

David Neumark & Jennifer Muz
NBER Working Paper, June 2014

Abstract:
“Business climate indexes” characterize state economic policies, and are often used to try to influence economic policy debate. However, they are also useful in research as summaries of a large number of state policies that cannot be studied simultaneously. Prior research found that business climate indexes focused on productivity and quality of life do not predict economic growth, while indexes emphasizing taxes and costs of doing business indicate that low-tax, low-cost states have faster growth of employment, wages, and output. In this paper, we study the relationship between these two categories of business climate indexes and the promotion of equality or inequality. We do not find that the productivity/quality-of-life indexes predict more equitable outcomes, although some of the policies underlying them suggest they might. We do find, however, that the same tax-and-cost related indexes that are associated with higher economic growth are also associated with increases in inequality.

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The Financial Crisis of 1929 Reexamined: The Role of Soaring Inequality

Jon Wisman
Review of Political Economy, forthcoming

Abstract:
The financial crisis of 1929 that triggered the Great Depression has been endlessly studied. Still there is little consensus regarding what caused it. This article claims that wage stagnation and exploding inequality fueled three dynamics that set the stage for a financial crisis. First, consumption was constrained by the smaller share of total income accruing to workers, thereby restricting investment opportunities in the real economy. Flush with greater income and wealth, the elite flooded financial markets with credit, helping keep interest rates low and encouraging the creation of new credit instruments, some of which recycled the rich's surplus assets as debt to those less well off. Second, greater inequality pressured households to find ways to consume more in order to maintain their relative social status, resulting in reduced household saving, greater household debt, and possibly longer work hours. Third, as the rich took larger shares of income and wealth, they gained relatively more command over everything, including ideology. Reducing taxes on the rich, favoring business over labor, and failing to regulate newly evolving credit instruments flowed out of this ideology.

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Who Is (More) Rational?

Syngjoo Choi et al.
American Economic Review, June 2014, Pages 1518-1550

Abstract:
Revealed preference theory offers a criterion for decision-making quality: if decisions are high quality then there exists a utility function the choices maximize. We conduct a large-scale experiment to test for consistency with utility maximization. Consistency scores vary markedly within and across socioeconomic groups. In particular, consistency is strongly related to wealth: a standard deviation increase in consistency is associated with 15-19 percent more household wealth. This association is quantitatively robust to conditioning on correlates of unobserved constraints, preferences, and beliefs. Consistency with utility maximization under laboratory conditions thus captures decision-making ability that applies across domains and influences important real-world outcomes.

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Inequality of Income and Consumption in the U.S.: Measuring the Trends in Inequality from 1984 to 2011 for the Same Individuals

Jonathan Fisher, David Johnson & Timothy Smeeding
Review of Income and Wealth, forthcoming

Abstract:
This paper examines the distribution of income and consumption in the U.S. using one dataset that obtains measures of both income and consumption from the same set of individuals. We develop a set of inequality measures that show the increase in inequality during the past 27 years using the 1984–2011 Consumer Expenditure Survey. We find that the trends in income and consumption inequality are similar between 1984 and 2006, and diverge during and after the Great Recession. For the entire 27-year period we find that consumption inequality increases almost as much as does income inequality.

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Trust, Welfare States and Income Equality: Sorting out the Causality

Andreas Bergh & Christian Bjørnskov
European Journal of Political Economy, September 2014, Pages 183–199

Abstract:
The cross-country correlation between social trust and income equality is well documented, but few studies examine the direction of causality. We show theoretically that by facilitating cooperation, trust may lead to more equal outcomes, while the feedback from inequality to trust is ambiguous. Using a structural equations model estimated on a large country sample, we find that trust has a positive effect on both market and net income equality. Larger welfare states lead to higher net equality but neither net income equality nor welfare state size seem to have a causal effect on trust. We conclude that while trust facilitates welfare state policies that may reduce net inequality, this decrease in inequality does not increase trust.

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On the Relationship between Innovation and Wage Inequality: New Evidence from Canadian Cities

Sébastien Breau, Dieter Kogler & Kenyon Bolton
Economic Geography, forthcoming

Abstract:
In this article, we examine the link between innovation and earnings inequality across Canadian cities over the 1996–2006 period. We do so using a novel data set that combines information from the Canadian long-form census and the United States Patent and Trademark Office. The analysis reveals that there is a positive relationship between innovation and inequality: cities with higher levels of innovation have more unequal distributions of earnings. Other factors influencing differences in inequality include city size, manufacturing and government employment, the percentage of visible minority in an urban population, and educational inequality. These results are robust to the use of different measures of inequality, innovation, alternative specifications, and instrumental variables estimations. Questions are thus raised about how the benefits of innovation are distributed in society and the long-term sustainability of such trends.

By KEVIN LEWIS | 09:00:00 AM


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