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Wednesday, August 20, 2014

Value at risk

Quantifying the semantics of search behavior before stock market moves

Chester Curme et al.
Proceedings of the National Academy of Sciences, 12 August 2014, Pages 11600-11605

Abstract:
Technology is becoming deeply interwoven into the fabric of society. The Internet has become a central source of information for many people when making day-to-day decisions. Here, we present a method to mine the vast data Internet users create when searching for information online, to identify topics of interest before stock market moves. In an analysis of historic data from 2004 until 2012, we draw on records from the search engine Google and online encyclopedia Wikipedia as well as judgments from the service Amazon Mechanical Turk. We find evidence of links between Internet searches relating to politics or business and subsequent stock market moves. In particular, we find that an increase in search volume for these topics tends to precede stock market falls. We suggest that extensions of these analyses could offer insight into large-scale information flow before a range of real-world events.

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Private Equity and Industry Performance

Shai Bernstein et al.
Stanford Working Paper, June 2014

Abstract:
The growth of the private equity industry has spurred concerns about its potential impact on the economy. This analysis looks across nations and industries to assess the impact of private equity on industry performance. We find that industries where private equity funds have invested in the past five years have grown more quickly in terms of productivity and employment, and these industries appear to be less exposed to aggregate shocks. Robustness tests suggest that the results are not driven by reverse causality. These patterns are not driven solely by common law nations such as the United Kingdom and United States, but also hold in Continental Europe.

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Public Enforcement of Securities Market Rules: Resource-based evidence from the Securities Exchange Commission

Tim Lohse, Razvan Pascalau & Christian Thomann
Journal of Economic Behavior & Organization, October 2014, Pages 197-212

Abstract:
We empirically investigate whether increases in the U.S. Securities and Exchange Commission's (SEC) budget have an effect on firms' compliance behavior with securities market rules. Our study uses a dataset on the SEC's resources and its enforcement actions over a period beginning shortly after the Second World War and ending in 2010. We find that increases in the SEC's resources both improve compliance and lead to an increased activity level of the SEC. The higher level of compliance is reflected by a decrease in the numbers of enforcement cases. The increased activity level is reflected by a surge in the number of investigations conducted by the SEC.

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Did going public impair Moody's credit ratings?

Simi Kedia, Shivaram Rajgopal & Xing Zhou
Journal of Financial Economics, forthcoming

Abstract:
We investigate a prominent allegation in congressional hearings that Moody's loosened its rating standards to chase revenue after it went public in 2000. Consistent with this allegation, Moody's ratings for both corporate bonds and structured finance products are significantly more favorable to issuers, relative to S&P's, after Moody's IPO. Moreover, Moody's ratings are more favorable for clients subject to greater conflict of interest. There is little evidence that Moody's higher ratings, post-IPO, are more informative, measured as expected default frequencies (EDFs) or as the probability of default. Our findings inform the debate on whether financial gatekeepers should be publicly traded.

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Capitalizing on Capitol Hill: Informed Trading by Hedge Fund Managers

Meng Gao & Jiekun Huang
University of Illinois Working Paper, July 2014

Abstract:
This paper examines the hypothesis that hedge fund managers gain an informational advantage in securities trading through their connections with lobbyists. Using datasets on the long-equity holdings and lobbyist connections of hedge funds from 1998 to 2012, we show that hedge funds outperform by 63 to 87 basis points per month on their political holdings when they are connected to lobbyists. Furthermore, the political outperformance of connected funds decreased significantly after the STOCK Act was signed into law. Our study provides evidence on the transmission of private political information in the financial markets and on the value of such information to financial market participants.

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Irrational exuberance and neural crash warning signals during endogenous experimental market bubbles

Alec Smith et al.
Proceedings of the National Academy of Sciences, 22 July 2014, Pages 10503-10508

Abstract:
Groups of humans routinely misassign value to complex future events, especially in settings involving the exchange of resources. If properly structured, experimental markets can act as excellent probes of human group-level valuation mechanisms during pathological overvaluations - price bubbles. The connection between the behavioral and neural underpinnings of such phenomena has been absent, in part due to a lack of enabling technology. We used a multisubject functional MRI paradigm to measure neural activity in human subjects participating in experimental asset markets in which endogenous price bubbles formed and crashed. Although many ideas exist about how and why such bubbles may form and how to identify them, our experiment provided a window on the connection between neural responses and behavioral acts (buying and selling) that created the bubbles. We show that aggregate neural activity in the nucleus accumbens (NAcc) tracks the price bubble and that NAcc activity aggregated within a market predicts future price changes and crashes. Furthermore, the lowest-earning subjects express a stronger tendency to buy as a function of measured NAcc activity. Conversely, we report a signal in the anterior insular cortex in the highest earners that precedes the impending price peak, is associated with a higher propensity to sell in high earners, and that may represent a neural early warning signal in these subjects. Such markets could be a model system to understand neural and behavior mechanisms in other settings where emergent group-level activity exhibits mistaken belief or valuation.

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Does the Tail Wag the Dog?: The Effect of Credit Default Swaps on Credit Risk

Marti Subrahmanyam, Dragon Yongjun Tang & Sarah Qian Wang
Review of Financial Studies, forthcoming

Abstract:
We use credit default swaps (CDS) trading data to demonstrate that the credit risk of reference firms, reflected in rating downgrades and bankruptcies, increases significantly upon the inception of CDS trading, a finding that is robust after controlling for the endogeneity of CDS trading. Additionally, distressed firms are more likely to file for bankruptcy if they are linked to CDS trading. Furthermore, firms with more "no restructuring" contracts than other types of CDS contracts (i.e., contracts that include restructuring) are more adversely affected by CDS trading, and the number of creditors increases after CDS trading begins, exacerbating creditor coordination failure in the resolution of financial distress.

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Access to management and the informativeness of analyst research

Clifton Green et al.
Journal of Financial Economics, forthcoming

Abstract:
We examine whether access to management at broker-hosted investor conferences leads to more informative research by analysts. We find analyst recommendation changes have larger immediate price impacts when the analyst's firm has a conference-hosting relation with the company. The effect increases with hosting frequency and is strongest in the days following the conference. Conference-hosting brokers also issue more informative, accurate, and timely earnings forecasts than non-hosts. Our findings suggest that access to management remains an important source of analysts' informational advantage in the post-Regulation Fair Disclosure world.

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The behavioral basis of sell-side analysts' herding

Robert Durand, Manapon Limkriangkrai & Lucia Fung
Journal of Contemporary Accounting & Economics, forthcoming

Abstract:
Sell-side analysts move away from the prevailing consensus as their confidence increases. As their confidence falls, they herd towards the prevailing consensus. Confidence and the associated propensity to move away from the herd, increases as firms become more difficult to analyze. This behavior is consistent with such analysts having lower meta-cognitive skills.

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Money Doctors

Nicola Gennaioli, Andrei Shleifer & Robert Vishny
Journal of Finance, forthcoming

Abstract:
We present a new model of investors delegating portfolio management to professionals based on trust. Trust in the manager reduces an investor's perception of the riskiness of a given investment, and allows managers to charge fees. Money managers compete for investor funds by setting fees, but because of trust fees do not fall to costs. In equilibrium, fees are higher for assets with higher expected return, managers on average underperform the market net of fees, but investors nevertheless prefer to hire managers to investing on their own. When investors hold biased expectations, trust causes managers to pander to investor beliefs.

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Private Equity Premium Puzzle Revisited

Katya Kartashova
American Economic Review, forthcoming

Abstract:
This paper revisits the results of Moskowitz and Vissing-Jorgensen (2002) on returns to entrepreneurial investments in the United States. Following the authors' methodology and new data from the Survey of Consumer Finances (SCF), I find that the "private equity premium puzzle" does not survive the period of high public equity returns in the 1990s. The difference between private and public equity returns is positive and large period-by-period between 1999 and 2007. Whereas in the economy-wide downturn of the Great Recession, public and private equities performances are substantially closer. I validate these results in the aggregate data going back to 1960s.

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Does the Disposition Effect Matter in Corporate Takeovers? Evidence from Institutional Investors of Target Companies

Pengfei Ye
Journal of Financial and Quantitative Analysis, February 2014, Pages 221-248

Abstract:
This paper examines whether one of the most important participants in the takeover market, the institutional investors of target companies, suffers from the disposition effect and, if so, how this selling bias influences the takeover outcomes. I report robust evidence that target institutional investors are reluctant to realize losses. This bias further allows their sunk cost to affect both the takeover price and the deal success. My results are explained by neither the undervalued targets nor the 52-week-high price effect. They are most pronounced among targets whose investors have a strong propensity to hold on to loser stocks.

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Understanding Mechanisms Underlying Peer Effects: Evidence From a Field Experiment on Financial Decisions

Leonardo Bursztyn et al.
Econometrica, July 2014, Pages 1273-1301

Abstract:
Using a high-stakes field experiment conducted with a financial brokerage, we implement a novel design to separately identify two channels of social influence in financial decisions, both widely studied theoretically. When someone purchases an asset, his peers may also want to purchase it, both because they learn from his choice ("social learning") and because his possession of the asset directly affects others' utility of owning the same asset ("social utility"). We randomize whether one member of a peer pair who chose to purchase an asset has that choice implemented, thus randomizing his ability to possess the asset. Then, we randomize whether the second member of the pair: (i) receives no information about the first member, or (ii) is informed of the first member's desire to purchase the asset and the result of the randomization that determined possession. This allows us to estimate the effects of learning plus possession, and learning alone, relative to a (no information) control group. We find that both social learning and social utility channels have statistically and economically significant effects on investment decisions. Evidence from a follow-up survey reveals that social learning effects are greatest when the first (second) investor is financially sophisticated (financially unsophisticated); investors report updating their beliefs about asset quality after learning about their peer's revealed preference; and, they report motivations consistent with "keeping up with the Joneses" when learning about their peer's possession of the asset. These results can help shed light on the mechanisms underlying herding behavior in financial markets and peer effects in consumption and investment decisions.

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The financial performance of aircraft manufacturers during World War II: The vicissitudes of war

Stephen Ciccone & Fred Kaen
Defence and Peace Economics, forthcoming

Abstract:
Controversy has long surrounded the role and profitability of US defense contractors. From a financial perspective the question becomes whether defense contractors earn greater profits and investor returns than other companies during military conflicts. We explore this question by examining the accounting profitability and investor returns of US aircraft manufacturers before, during, and after World War II and compare them to a sample of non-defense firms. We also examine the reactions of aircraft stock prices to important political and military events of the time. We find that (1) aircraft stocks exhibited positive abnormal returns around events associated with defense buildups and outbreaks of hostile action and negative returns around events signaling an end to hostilities, (2) the company's accounting returns improved during the war but these higher accounting returns did not translate into higher stock returns for the shareholders, and (3) investors could have earned higher stock returns had they switched out of aircraft stocks after Pearl Harbor and reinvested the proceeds in the overall market.

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Disagreement and asset prices

Bruce Carlin, Francis Longstaff & Kyle Matoba
Journal of Financial Economics, forthcoming

Abstract:
How do differences of opinion affect asset prices? Do investors earn a risk premium when disagreement arises in the market? Despite their fundamental importance, these questions are among the most controversial issues in finance. In this paper, we use a novel data set that allows us to directly measure the level of disagreement among Wall Street mortgage dealers about prepayment speeds. We examine how disagreement evolves over time and study its effects on expected returns, return volatility, and trading volume in the mortgage-backed security market. We find that increased disagreement is associated with higher expected returns, higher return volatility, and larger trading volume. These results imply that there is a positive risk premium for disagreement in asset prices. We also show that volatility in and of itself does not lead to higher trading volume. Instead, only when disagreement arises in the market is higher uncertainty associated with more trading. Finally, we are able to distinguish empirically between two competing hypotheses regarding how information in markets gets incorporated into asset prices. We find that sophisticated investors appear to update their beliefs through a rational expectations mechanism when disagreement arises.

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High-yield versus investment-grade bonds: Less risk and greater returns?

Hsi Li, Joseph McCarthy & Coleen Pantalone
Applied Financial Economics, Fall 2014, Pages 1303-1312

Abstract:
Using Bank of America/Merrill Lynch bond yield indexes, we compare the returns on investment-grade bonds to the returns on high-yield bonds over the period from January 1997 through mid-August 2011, a period marked by the collapse of the technology sector in early 2000 and the financial crisis in 2008. We compare return and risk measures under the assumption of a normal distribution with those obtained under the assumption of a stable distribution. When a normal distribution is assumed, we see a higher expected return associated with a lower SD on the high-yield bond returns relative to investment-grade bond returns. However, we also find that the returns on both high-yield bonds and investment-grade bonds exhibit stable (fat-tailed) distributions, with the fat tail more pronounced for the high-yield bond series. These results suggest that the assumption of a distribution that allows for fat tails and skewness is important for identifying the risk and return characteristics of these bond series.

By KEVIN LEWIS | 09:00:00 AM

Tuesday, August 19, 2014

Seeing a difference

Racial Disparities in Incarceration Increase Acceptance of Punitive Policies

Rebecca Hetey & Jennifer Eberhardt
Psychological Science, forthcoming

Abstract:
During the past few decades, punitive crime policies have led to explosive growth in the United States prison population. Such policies have contributed to unprecedented incarceration rates for Blacks in particular. In this article, we consider an unexamined relationship between racial disparities and policy reform. Rather than treating racial disparities as an outcome to be measured, we exposed people to real and extreme racial disparities and observed how this drove their support for harsh criminal-justice policies. In two experiments, we manipulated the racial composition of prisons: When the penal institution was represented as "more Black," people were more concerned about crime and expressed greater acceptance of punitive policies than when the penal institution was represented as "less Black." Exposure to extreme racial disparities, then, can lead people to support the very policies that produce those disparities, thus perpetuating a vicious cycle.

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Hispanic Respondent Intelligence Level and Skin Tone: Interviewer Perceptions From the American National Election Study

Lance Hannon
Hispanic Journal of Behavioral Sciences, August 2014, Pages 265-283

Abstract:
Using the 2012 American National Election Study, the present article explored the relationship between interviewers' assessment of respondent skin tone and their perception of respondent intelligence (n = 459). Results from logistic regression analyses indicated that Hispanic respondents with the lightest skin were several times more likely to be seen as having high intelligence compared with those with the darkest skin. Importantly, this relationship was independent of respondent self-identified race, educational attainment, vocabulary test score, and several other respondent and interviewer characteristics. Implications for the growing body of research on colorism are discussed.

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Racial Attitudes and Visual Cues in Political Judgments: Support for Obama During the 2008 Presidential Election

Tessa West et al.
Cultural Diversity and Ethnic Minority Psychology, forthcoming

Abstract:
The present longitudinal study examined the complex role of race - including racial attitudes and visual representations of race - in White Americans' responses to Obama during the 2008 U.S. presidential election. Consistent with prior research, participants who perceived Obama as darker skinned were less likely to vote for him and generally evaluated Obama less positively. It is important to note, however, that these effects were stronger among Whites with more egalitarian expressed racial attitudes. Moreover, this pattern occurred over and above effects of political orientation and remained stable over a 2-month period, including pre- and postelection. Implications of these findings for understanding the complex and persistent influence of race in politics are considered.

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Americans Fill Out President Obama's Census Form: What is His Race?

Jack Citrin, Morris Levy & Robert Van Houweling
Social Science Quarterly, forthcoming

Objective: We use nationally representative survey experiments to assess public opinion about how President Obama should have identified himself racially on the 2010 Census.

Methods: Respondents were randomly assigned to three conditions -a control, a treatment that described the president's biracial ancestry, and a treatment that combined the biracial ancestry information with a statement that Obama had in fact classified himself as black only. All respondents were then asked how they felt Obama should have filled out his Census form.

Results: A clear majority of Americans in all experimental conditions said that Obama should have identified himself as both black and white.

Conclusion: There appears to be suggesting robust acceptance of official multiracial identification despite the cultural and legal legacy of the "one drop of blood" rule in official U.S. race categorization. A subsequent survey experiment found that a convenience sample of Americans support multiracial identification for mixed-race individuals generally and not only for the president.

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The Rules of Implicit Evaluation by Race, Religion, and Age

Jordan Axt, Charles Ebersole & Brian Nosek
Psychological Science, forthcoming

Abstract:
The social world is stratified. Social hierarchies are known but often disavowed as anachronisms or unjust. Nonetheless, hierarchies may persist in social memory. In three studies (total N > 200,000), we found evidence of social hierarchies in implicit evaluation by race, religion, and age. Participants implicitly evaluated their own racial group most positively and the remaining racial groups in accordance with the following hierarchy: Whites > Asians > Blacks > Hispanics. Similarly, participants implicitly evaluated their own religion most positively and the remaining religions in accordance with the following hierarchy: Christianity > Judaism > Hinduism or Buddhism > Islam. In a final study, participants of all ages implicitly evaluated age groups following this rule: children > young adults > middle-age adults > older adults. These results suggest that the rules of social evaluation are pervasively embedded in culture and mind.

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Brothers and Sisters in Arms: Intergroup Cooperation in a Violent Shooter Game Can Reduce Intergroup Bias

Paul Adachi et al.
Psychology of Violence, forthcoming

Objective: Video games increasingly have become multiplayer, and thus online video game players have the unique opportunity to cooperate with players from all over the world, including those who belong to different social groups. Consistent with research showing that intergroup cooperation leads to reductions in intergroup bias, playing a video game cooperatively with a member of a different social group (i.e., an outgroup member) may reduce bias. The goal of the current study, therefore, was to test whether playing a violent video game cooperatively with an outgroup member reduces intergroup bias toward that partner's group.

Method: In our investigation, Canadians (n = 138) played a violent video game cooperatively with an outgroup (American) or ingroup member against alien (i.e., zombie-like) enemies.

Results: Cooperating with an outgroup member in a violent context for only 12 minutes generated large reductions in outgroup prejudice.

Conclusions: Our findings highlight the potential for even violent video games to serve as prejudice interventions.

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Selective Attention to In- and Out-Group Members Systematically Influences Intergroup Bias

Torsten Martiny-Huenger, Peter Gollwitzer & Gabriele Oettingen
Social Psychological and Personality Science, forthcoming

Abstract:
We analyzed whether attending to versus ignoring in- and out-group members systematically influences intergroup bias. In two studies (N = 187), we manipulated attention by asking participants to count the appearance of in-group (or out-group) members in the presence of out-group (or in-group) distractors. Prior to and during the counting task, we assessed intergroup bias by having participants rate the group members on a liking scale. The results show that the change in intergroup bias from baseline to experimental ratings depended on the attention focus. Whereas counting in-group members (while ignoring the out-group) increased intergroup bias, counting out-group members (while ignoring the in-group) decreased intergroup bias. Thus, we provide evidence that consequences of goal-directed interactions with in- and out-group stimuli (i.e., exposure and selection) systematically influence intergroup bias. We propose that in future research these processes should be considered in addition to social-motivational factors in the analysis of intergroup bias.

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Direct-to-Consumer Racial Admixture Tests and Beliefs About Essential Racial Differences

Jo Phelan et al.
Social Psychology Quarterly, forthcoming

Abstract:
Although at first relatively disinterested in race, modern genomic research has increasingly turned attention to racial variations. We examine a prominent example of this focus - direct-to-consumer racial admixture tests - and ask how information about the methods and results of these tests in news media may affect beliefs in racial differences. The reification hypothesis proposes that by emphasizing a genetic basis for race, thereby reifying race as a biological reality, the tests increase beliefs that whites and blacks are essentially different. The challenge hypothesis suggests that by describing differences between racial groups as continua rather than sharp demarcations, the results produced by admixture tests break down racial categories and reduce beliefs in racial differences. A nationally representative survey experiment (N = 526) provided clear support for the reification hypothesis. The results suggest that an unintended consequence of the genomic revolution may be to reinvigorate age-old beliefs in essential racial differences.

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Are Americans Really in Favor of Interracial Marriage? A Closer Look at When They Are Asked About Black-White Marriage for Their Relatives

Yanyi Djamba & Sitawa Kimuna
Journal of Black Studies, September 2014, Pages 528-544

Abstract:
This study transcends general opinion reports and uses data from the General Social Survey (GSS) to examine responses on attitudinal questions about how Black and White Americans actually feel about their close relative marrying outside their own race. The results show that more than half (54%) of Black Americans are in favor of their close relative marrying a White person compared with nearly one-in-four (26%) White Americans who said they were in favor of their close relative marrying a Black person. Such results suggest that questions about how individuals feel when close relatives engage into Black-White marriage provide better measures of attitude toward racial exogamy. Logistic regression models are analyzed to determine how socio-demographic factors influence Black and White Americans' views on interracial marriage of their close relatives.

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The greatest magic of Harry Potter: Reducing prejudice

Loris Vezzali et al.
Journal of Applied Social Psychology, forthcoming

Abstract:
Recent research shows that extended contact via story reading is a powerful strategy to improve out-group attitudes. We conducted three studies to test whether extended contact through reading the popular best-selling books of Harry Potter improves attitudes toward stigmatized groups (immigrants, homosexuals, refugees). Results from one experimental intervention with elementary school children and from two cross-sectional studies with high school and university students (in Italy and United Kingdom) supported our main hypothesis. Identification with the main character (i.e., Harry Potter) and disidentification from the negative character (i.e., Voldemort) moderated the effect. Perspective taking emerged as the process allowing attitude improvement. Theoretical and practical implications of the findings are discussed in the context of extended intergroup contact and social cognitive theory.

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Perceptions of Parents' Ethnic Identities and the Personal Ethnic-Identity and Racial Attitudes of Biracial Adults

Cesalie Stepney, Diana Sanchez & Phillip Handy
Cultural Diversity and Ethnic Minority Psychology, forthcoming

Abstract:
The present study examined the relationship of perceived parental closeness and parental ethnic identity on personal ethnic identity and colorblindness beliefs in 275 part-White biracial Americans (M age = 23.88). Respondents completed online measures of their personal ethnic identity (minority, White, and multiracial), perceived parental ethnic identity, parental closeness, and attitudes about the state of race relations and the need for social action in the United States. Using path modeling, results show that part-White biracial individuals perceive their ethnic identity to be strongly linked to their parental racial identities, especially when they had closer parental relationships. Moreover, stronger minority identity was linked to less colorblind attitudes, and greater White identity was linked to greater colorblind attitudes suggesting that patterns of identity may influence how biracial individuals view race-relations and the need for social action. Implications for biracial well-being and their understanding of prejudice and discrimination are discussed.

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The Impact of Childhood Experience on Amygdala Response to Perceptually Familiar Black and White Faces

Jasmin Cloutier, Tianyi Li & Joshua Correll
Journal of Cognitive Neuroscience, September 2014, Pages 1992-2004

Abstract:
Given the well-documented involvement of the amygdala in race perception, the current study aimed to investigate how interracial contact during childhood shapes amygdala response to racial outgroup members in adulthood. Of particular interest was the impact of childhood experience on amygdala response to familiar, compared with novel, Black faces. Controlling for a number of well-established individual difference measures related to interracial attitudes, the results reveal that perceivers with greater childhood exposure to racial outgroup members display greater relative reduction in amygdala response to familiar Black faces. The implications of such findings are discussed in the context of previous investigations into the neural substrates of race perception and in consideration of potential mechanisms by which childhood experience may shape race perception.

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Essentializing Ethnicity: Identification Constraint Reduces Diversity Interest

Tiane Lee, Leigh Wilton & Virginia Kwan
Journal of Experimental Social Psychology, November 2014, Pages 194-200

Abstract:
The present research investigates the effects of a subtle essentialist cue: restricting individuals to identify with only one ethnicity. Although this constraint is mundane and commonly used in everyday life, it sends a message of essentialized group differences. Three studies illustrate the harmful impact of this essentialist cue on diversity. Studies 1a and 1b show that it decreases Asian-Americans' desire to participate in ethnicity-related activities. Study 2 reveals that it reduces essentialist European-Americans' desire for friendship with a minority target. Study 3 illustrates the mechanism through which an essentialist cue reduces intergroup contact, with perceivers' chronic beliefs moderating this effect. Together, these findings demonstrate the powerful impact of the seemingly small act of how we ask people to identify with an ethnic group.

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Exploring implicit ingroup and outgroup bias toward Hispanics

David March & Reiko Graham
Group Processes & Intergroup Relations, forthcoming

Abstract:
Racial and ethnic biases often manifest without awareness. The underlying causes of these attitudes are not fully understood. While outgroup bias is well studied, ingroup bias has received far less attention. We examined ingroup biases among Hispanic women and outgroup biases toward Hispanics among White (Caucasian non-Hispanic) females using the startle eyeblink paradigm, the Implicit Association Test (IAT), and an explicit self-report measure. Hispanic and White male faces were used as exemplars during both the startle task and the IAT. A similar pattern of results were observed for indirect measures: both groups displayed startle and IAT responses indicative of negative attitudes toward Hispanic male faces relative to White male faces, although less so for Hispanic participants. Combined groups correlational analyses revealed a significant positive relationship between startle eyeblink amplitude and subtle subscale bias scores. However, no relationships were found between any measures when groups were examined separately. The comparable pattern of startle and IAT results suggests that in spite of the likelihood that these measures index different aspects of attitudes and tap into different processes, inter and intragroup biases are manifested similarly. The finding of negative ingroup biases among Hispanic females is consistent with system justification theory, which posits that members of devalued groups internalize negative stereotypes about their ingroup. This study extends startle eyeblink research of intergroup racial biases, while also expanding this line of research to intragroup biases. In doing so, these results add to our knowledge of the mechanisms underlying the persistent nature of stereotypes.

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A Happy Face Advantage With Male Caucasian Faces: It Depends on the Company You Keep

Ottmar Lipp, Belinda Craig & Mylyn Dat
Social Psychological and Personality Science, forthcoming

Abstract:
Happy faces are categorized faster as "happy" than angry faces as "angry," the happy face advantage. Here, we show across three experiments that the size of the happy face advantage for male Caucasian faces varies as a function of the other faces they are presented with. A happy face advantage was present if the male Caucasian faces were presented among male African American faces, but absent if the same faces were presented among female faces, Caucasian or African American. The modulation of the happy face advantage for male Caucasian faces was observed even if the female Caucasian/male African American faces had neutral expressions. This difference in the happy face advantage for a constant set of faces as a function of the other faces presented indicates that it does not reflect on a stimulus-dependent bottom-up process but on the evaluation of the expressive faces within a specific context.

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The Spontaneous Formation of Stereotypes via Cumulative Cultural Evolution

Douglas Martin et al.
Psychological Science, forthcoming

Abstract:
All people share knowledge of cultural stereotypes of social groups - but what are the origins of these stereotypes? We examined whether stereotypes form spontaneously as information is repeatedly passed from person to person. As information about novel social targets was passed down a chain of individuals, what initially began as a set of random associations evolved into a system that was simplified and categorically structured. Over time, novel stereotypes emerged that not only were increasingly learnable but also allowed generalizations to be made about previously unseen social targets. By illuminating how cognitive and social factors influence how stereotypes form and change, these findings show how stereotypes might naturally evolve or be manipulated.

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The Inherence Heuristic as a Source of Essentialist Thought

Erika Salomon & Andrei Cimpian
Personality and Social Psychology Bulletin, forthcoming

Abstract:
Humans are essentialists: They believe hidden "essences" underlie membership in natural and social kinds. Although essentialism has well-established implications for important societal issues (e.g., discrimination), little is known about its origins. According to a recent proposal, essentialism emerges from a broader inherence heuristic - an intuitive tendency to explain patterns in terms of the inherent properties of their constituents (e.g., we have orange juice for breakfast [pattern] because citrus aromas [inherent feature] wake us up). We tested two predictions of this proposal - that reliance on the inherence heuristic predicts endorsement of essentialist beliefs, even when adjusting for potentially confounding variables (Studies 1 and 2), and that reducing reliance on the inherence heuristic produces a downstream reduction in essentialist thought (Studies 3 and 4). The results were consistent with these predictions and thus provided evidence for a new theoretical perspective on the cognitive underpinnings of psychological essentialism.

By KEVIN LEWIS | 09:15:00 AM

Monday, August 18, 2014

Pay as you go

The Tax Gradient: Spatial Aspects of Fiscal Competition

David Agrawal
American Economic Review, forthcoming

Abstract:
State borders create a discontinuous tax treatment of retail sales. In a Nash game, local tax rates will be higher on the low-state-tax side of a border. Local taxes will decrease from the nearest high-tax border and increase from the low-tax border. Using driving time from state borders and all local sales tax rates, local tax rates on the low-tax side of the border are 1.25 percentage points higher, reducing the differential in state tax rates by over three-quarters. A ten minute increase in driving time from the nearest high-tax state lowers a border town's local tax rate by 6%.

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Taxes and Financial Constraints: Evidence from Linguistic Cues

Kelvin Law & Lillian Mills
University of Texas Working Paper, June 2014

Abstract:
Using a new measure of financial constraints based on firms' qualitative disclosure, we find financially constrained firms — firms that use more negative words in their annual reports — pursue more aggressive tax planning strategies: (1) have higher current and future unrecognized tax benefits, (2) have lower short- and long-run current and future effective tax rates, and (3) use more tax havens for their material operations. We exploit the unexpected closure of local banks as exogenous liquidity shocks to show that firms' external financial constraints affect their tax avoidance strategies. Using confidential IRS tax audit data, we also show that financially constrained firms subsequently have higher IRS tax audit adjustments. Overall, the linguistic cues in firms' qualitative disclosure provide incremental information beyond traditional accounting variables or commonly used effective tax rates to reveal and predict tax aggressiveness, both contemporaneously and in the future.

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A Model of the Consumption Response to Fiscal Stimulus Payments

Greg Kaplan & Giovanni Violante
Econometrica, July 2014, Pages 1199–1239

Abstract:
A wide body of empirical evidence finds that approximately 25 percent of fiscal stimulus payments (e.g., tax rebates) are spent on nondurable household consumption in the quarter that they are received. To interpret this fact, we develop a structural economic model where households can hold two assets: a low-return liquid asset (e.g., cash, checking account) and a high-return illiquid asset that carries a transaction cost (e.g., housing, retirement account). The optimal life-cycle pattern of portfolio choice implies that many households in the model are “wealthy hand-to-mouth”: they hold little or no liquid wealth despite owning sizable quantities of illiquid assets. Therefore, they display large propensities to consume out of additional transitory income, and small propensities to consume out of news about future income. We document the existence of such households in data from the Survey of Consumer Finances. A version of the model parameterized to the 2001 tax rebate episode yields consumption responses to fiscal stimulus payments that are in line with the evidence, and an order of magnitude larger than in the standard “one-asset” framework. The model's nonlinearities with respect to the rebate size and the prevailing aggregate economic conditions have implications for policy design.

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Cognitive Biases in Government Procurement – An Experimental Study

Omer Dekel & Amos Schurr
Review of Law & Economics, July 2014, Pages 169–200

Abstract:
Competitive bidding (CB) is the dominant governmental contracting mechanism by which hundreds of billions of dollars are allocated annually. We claim that when bid evaluators assess the qualitative components of competing bids while being exposed to the bid prices, a systematic bias occurs that gives an unjust advantage to the lower bidder. We term this the Lower-Bid Bias. It is then shown that this bias can be neutralized by splitting the evaluation process into two stages, whereby bid price is revealed only after the evaluation process has culminated (two-stage CB). This is demonstrated through the findings of a survey and three controlled experiments, the first to be conducted with procurement officials. We also explain why this bias is undesirable and suggest a mandatory rule, requiring two-stage CB for any competitive public procurement based on evaluation criteria other than price. Further applications of the experiments’ findings are also discussed.

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U.S. State Fiscal Policy and Natural Resources

Alexander James
American Economic Journal: Economic Policy, forthcoming

Abstract:
An analytical framework predicts that, in response to an exogenous increase in resource-based government revenue, a benevolent government will partially substitute away from taxing income, increase spending and save. Forty-two years of U.S.-state level data are consistent with this theory. A baseline fixed effects model predicts that a 1% point increase in resource revenue results in a .20% point decrease in non-resource revenue, a .50% point increase in spending and a .30% point increase in savings. These results are generally robust to alternative model specifications and the instrumentation of resource-based government revenue.

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Taxes and Fiscal Sociology

Isaac William Martin & Monica Prasad
Annual Review of Sociology, 2014, Pages 331-345

Abstract:
This article reviews recent research in fiscal sociology. We specifically examine contributions to the study of taxation that illuminate core issues in the sociology of contemporary capitalism, including the causes of poverty and inequality in rich countries and of inequality between rich and poor countries. Research on developed countries suggests that tax policy changes are important for explaining rising income inequality, tax policies may structure durable inequalities of race and gender, and earnings-conditional tax subsidies may alleviate poverty more effectively and with less stigma than means-tested social spending. Scholars also find the most generous welfare states rely the most heavily on regressive taxes, although there is disagreement over how this association arises. Comparative research on developing countries shows consumption taxes are more conducive to growth than taxes on income, tax-financed spending benefits growth if it is spent on productive investments, and taxation strengthened democracy and state building in medieval and early modern Europe. However, there is disagreement as to whether taxation contributes to state building in contemporary developing countries and whether foreign aid undermines democracy by undermining taxation. These questions are the focus of considerable current research.

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Political Parties, Supply-Side Strategies, and Firms: The Political Micro-Economy of Partisan Politics

Isa Camyar
Journal of Politics, July 2014, Pages 725-739

Abstract:
This research examines the economic impact of partisan politics at a level that has been neglected in prior research: the firm level. Specifically, I investigate the impact of partisan supply-side policies on firm performance and firm heterogeneity in experience of this impact. I claim that parties’ supply-side strategies (the interventionist strategy of left-wing parties and the market-oriented strategy of right-wing parties) have conflicting implications for the productivity and cost of economic factors at the disposal of firms. My empirics employ firm-level data from 21 advanced industrial democracies for the period extending from 1989 to 2008. The results are counterintuitive and, in some ways, even provocative. I find that (1) firms perform better under left-oriented governments compared to right-oriented governments, suggesting that the interventionist strategy of left-wing parties helps firms better than the market-oriented strategy of right-wing parties; and (2) there is considerable firm heterogeneity in exposure to partisan supply-side strategies.

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Government size, composition of public expenditure, and economic development

Susana Martins & Francisco José Veiga
International Tax and Public Finance, August 2014, Pages 578-597

Abstract:
This paper analyzes the effects of government size and of the composition of public expenditure on economic development. Using the system-GMM estimator for linear dynamic panel data models, on a sample covering up to 156 countries and 5-year periods from 1980 to 2010, we find that government size as a percentage of GDP has a quadratic (inverted U-shaped) effect on the growth rate of the Human Development Index (HDI). This effect is especially pronounced in developed and high-income countries. We also find that the composition of public expenditure affects development, with the share of five subcomponents exhibiting nonlinear relationships with HDI growth.

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The Impact of Subnational Fiscal Policies on Economic Growth: A Dynamic Analysis Approach

Arwiphawee Srithongrung & Kenneth Kriz
Journal of Policy Analysis and Management, forthcoming

Abstract:
Much previous research has analyzed the effect of state and local taxes and expenditures on economic growth, but usually in a static manner. In this paper, we use panel vector autoregression (PVAR) to examine the effects of taxes and expenditures on state income growth. This methodology allows us to treat all variables in the model as endogenously determined. Our approach allows us to address the endogeneity problem inherent in fiscal policy research as well as to obtain results for both the short term and intermediate term (up to six years). Consistent with prevailing wisdom, taxes are shown to have a negative effect on economic growth, but the effect only is present in the short run. Public capital spending has a positive effect on growth in both the short and intermediate terms. Operational expenditures exhibit positive effects on growth over the entire analysis period.

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Who Benefits from State Corporate Tax Cuts? A Local Labor Markets Approach with Heterogeneous Firms

Juan Carlos Suárez Serrato & Owen Zidar
NBER Working Paper, July 2014

Abstract:
This paper estimates the incidence of state corporate taxes on workers, landowners, and firm owners in a spatial equilibrium model in which corporate taxes affect the location choices of both firms and workers. Heterogeneous, location-specific productivities and preferences determine the mobility of firms and workers, respectively. Owners of monopolistically competitive firms receive economic profits and may bear the incidence of corporate taxes as heterogeneous productivity can make them inframarginal in their location choices. We derive a simple expression for equilibrium incidence as a function of a few estimable parameters. Using variation in state corporate tax rates and apportionment rules, we estimate the reduced-form effects of tax changes on firm and worker location decisions, wages, and rental costs. We then use minimum distance methods to recover the parameters that determine equilibrium incidence as a function of these reduced-form effects. In contrast to previous assumptions of infinitely mobile firms and perfectly immobile workers, we find that firms are only approximately twice as mobile as workers over a ten-year period. This fact, along with equilibrium impacts on the housing market, implies that firm owners bear roughly 40% of the incidence, while workers and land owners bear 35% and 25%, respectively. Finally, we derive revenue-maximizing state corporate tax rates and discuss interactions with other local taxes and apportionment formulae.

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Taxes on the Internet: Deterrence Effects of Public Disclosure

Erlend Bø, Joel Slemrod & Thor Thoresen
American Economic Journal: Economic Policy, forthcoming

Abstract:
Although Norway has a long tradition of public disclosure of tax filings, starting in 2001 anyone with Internet access could obtain individual information on income and income taxes paid. We examine the effect on income reporting of this change in the degree of public disclosure, making use of the fact that prior to 2001 in some municipalities tax information was distributed widely through locally produced paper catalogs. We find an approximately 3 percent higher average increase in reported income among business owners living in areas where the switch to Internet disclosure represented a large change in access.

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State Tax Differentials, Cross-Border Commuting, and Commuting Times in Multi-State Metropolitan Areas

David Agrawal & William Hoyt
University of Georgia Working Paper, June 2014

Abstract:
We examine the effects of differences in income tax rates on commuting times within multi-state MSAs. Our theoretical model introduces a border into a model of an urban area and shows that differences in average tax rates distort commute times and interstate commutes. Empirically examining multi-state MSAs allows us to exploit tax policy discontinuities while holding fixed other characteristics. We identify large effects on commuting times for affluent households and homeowners in MSAs in which taxes are based on the state of residence. We discuss how the model and empirical design can be used to study other policy differences.

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House Price Gains and U.S. Household Spending from 2002 to 2006

Atif Mian & Amir Sufi
NBER Working Paper, May 2014

Abstract:
We examine the effect of rising U.S. house prices on borrowing and spending from 2002 to 2006. There is strong heterogeneity in the marginal propensity to borrow and spend. Households in low income zip codes aggressively liquefy home equity when house prices rise, and they increase spending substantially. In contrast, for the same rise in house prices, households living in high income zip codes are unresponsive, both in their borrowing and spending behavior. The entire effect of housing wealth on spending is through borrowing, and, under certain assumptions, this spending represents 0.8% of GDP in 2004 and 1.3% of GDP in 2005 and 2006. Households that borrow and spend out of housing gains between 2002 and 2006 experience significantly lower income and spending growth after 2006.

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Quasi-Experimental Evidence on the Connection Between Property Taxes and Residential Capital Investment

Byron Lutz
American Economic Journal: Economic Policy, forthcoming

Abstract:
Do low property taxes attract new home construction? This question is answered using a large shock to property tax burdens caused by an unusual school finance reform in the state of New Hampshire. The estimates suggest that, in most of the state, communities with a reduced tax burden experience a substantial increase in residential construction. In the area of the state near the region's primary urban center (Boston), however, the shock clears through a price adjustment — i.e. by capitalizing into property values. The differing responses are attributed to differing housing supply elasticities.

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The effects of economic freedom, regulatory quality and taxation on the level of per capita real income: A preliminary analysis for OECD nations and non-G8 OECD nations

Richard Cebula & J.R. Clark
Applied Economics, Fall 2014, Pages 3836-3848

Abstract:
This study of the impact of economic freedom, regulatory quality and the relative burden of taxation on the level of per capita real income/GDP among OECD nations over the period 2003 to 2007 adopts a modified version of the overall economic freedom index computed by the Heritage Foundation (2013), one with the fiscal freedom and business freedom indices removed. This study then provides panel least squares fixed-effects estimates for five linear specifications/models. Each nation during this time frame can be regarded either as a nation per se or as a de facto ‘economic region’ within the OECD. The analysis first focuses upon all of the OECD nations and then, as a robustness test, subsequently focuses only on non-G8 OECD member nations. The estimations in this study all provide strong empirical support for the three central hypotheses proffered here, namely: (1) the higher the overall degree of economic freedom, the higher the per capita real income (GDP) level; (2) the higher the level of regulatory quality, the higher the level of per capita real income (GDP) and (3) the higher the overall tax burden, expressed as a per cent of GDP, the lower is the level of per capita real income (GDP).

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Tax Avoidance and Business Location in a State Border Model

Shawn Rohlin, Stuart Rosenthal & Amanda Ross
Journal of Urban Economics, forthcoming

Abstract:
Previous studies have struggled to demonstrate that higher taxes deter business activity. We revisit this issue by estimating the effect of changes over time in cross-border differences in state tax conditions on the tendency for new establishments to favor one side of a state border over the other. Identification is enhanced by taking account of previously overlooked reciprocal agreements that require workers to pay income tax to their state of residence as opposed to their state of employment. When reciprocal agreements are in force, higher personal income tax rates lure companies from across the border, while corporate income tax and sales tax rates have the opposite effect. Where reciprocal agreements are not in place, the results are largely reversed. These patterns are amplified in heavily developed locations, and differ in anticipated ways by industry and corporate/non-corporate status of the establishment. Overall, results strengthen the view that state-level tax policies do affect the location decisions of entrepreneurs and new business activity, but not in a way that lends itself to a one-size-fits-all summary.

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Traffic Congestion’s Economic Impacts: Evidence from US Metropolitan Regions

Matthias Sweet
Urban Studies, August 2014, Pages 2088-2110

Abstract:
Traffic congestion alleviation has long been a common core transport policy objective, but it remains unclear under which conditions this universal byproduct of urban life also impedes the economy. Using panel data for 88 US metropolitan statistical areas, this study estimates congestion’s drag on employment growth (1993 to 2008) and productivity growth per worker (2001 to 2007). Using instrumental variables, results suggest that congestion slows job growth above thresholds of approximately 4.5 minutes of delay per one-way auto commute and 11,000 average daily traffic (ADT) per lane on average across the regional freeway network. While higher ADT per freeway lane appears to slow productivity growth, there is no evidence of congestion-induced travel delay impeding productivity growth. Results suggest that the strict policy focus on travel time savings may be misplaced and, instead, better outlooks for managing congestion’s economic drag lie in prioritising the economically most important trips (perhaps through road pricing) or in providing alternative travel capacity to enable access despite congestion.

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Complex Tax Incentives

Johannes Abeler & Simon Jäger
American Economic Journal: Economic Policy, forthcoming

Abstract:
How does tax complexity affect people’s reaction to tax changes? To answer this question, we conduct an experiment in which subjects work for a piece rate and face taxes. One treatment features a simple, the other a complex tax system. The payoff-maximizing output level and the incentives around this optimum are, however, identical across treatments. We introduce the same sequence of additional taxes in both treatments. Subjects in the complex treatment underreact to new taxes; some ignore new taxes entirely. The underreaction is stronger for subjects with lower cognitive ability. Contrary to predictions from models of rational inattention, subjects are equally likely to ignore large or small incentive changes.

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Discontinuity of Output Convergence within the United States: Why Has the Course Changed?

Chi-Young Choi & Xiaojun Wang
Economic Inquiry, forthcoming

Abstract:
Has the progress of output convergence changed within the United States? This article examines the output convergence among U.S. states for the last five decades by making several improvements over the extant literature. By applying a battery of convergence tests designed to capture nonlinear transitional dynamics to real output per worker data (i.e., nominal values deflated by state-level price), we find that output convergence has not been a feature of the continental United States since the 1970s. Instead, output convergence has proceeded among four subgroups within which constituent states have certain characteristics in common. Our regression analysis suggests that state-level characteristics related to technology and human capital play a crucial role in accounting for the formation and composition of convergence clubs, in agreement with the recent theoretical models of growth and development (e.g., Aghion et al. 2009; Gennaioli et al. 2013b). The level of technology, proxied by patents, turns out to be a consistently significant determinant even after controlling for endogeneity, suggesting that frictions in the diffusion of technology and human capital may have led to clustering of states with different levels of productivity. Our results therefore cast doubt on the common view that diffusion of knowledge and technology across state borders is frictionless.

By KEVIN LEWIS | 09:00:00 AM

Sunday, August 17, 2014

Making a difference

The evaluability bias in charitable giving: Saving administration costs or saving lives?

Lucius Caviola et al.
Judgment and Decision Making, July 2014, Pages 303–315

Abstract:
We describe the “evaluability bias”: the tendency to weight the importance of an attribute in proportion to its ease of evaluation. We propose that the evaluability bias influences decision making in the context of charitable giving: people tend to have a strong preference for charities with low overhead ratios (lower administrative expenses) but not for charities with high cost-effectiveness (greater number of saved lives per dollar), because the former attribute is easier to evaluate than the latter. In line with this hypothesis, we report the results of four studies showing that, when presented with a single charity, people are willing to donate more to a charity with low overhead ratio, regardless of cost-effectiveness. However, when people are presented with two charities simultaneously — thereby enabling comparative evaluation — they base their donation behavior on cost-effectiveness (Study 1). This suggests that people primarily value cost-effectiveness but manifest the evaluability bias in cases where they find it difficult to evaluate. However, people seem also to value a low overhead ratio for its own sake (Study 2). The evaluability bias effect applies to charities of different domains (Study 3). We also show that overhead ratio is easier to evaluate when its presentation format is a ratio, suggesting an inherent reference point that allows meaningful interpretation (Study 4).

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Conscience Accounting: Emotion Dynamics and Social Behavior

Uri Gneezy, Alex Imas & Kristóf Madarász
Management Science, forthcoming

Abstract:
This paper presents theory and experiments where people's prosocial attitudes fluctuate over time following the violation of an internalized norm. We report the results of two experiments in which people who first made an immoral choice were then more likely to donate to charity than those who did not. In addition, those who knew that a donation opportunity would follow the potentially immoral choice behaved more unethically than those who did not know. We interpret this increase in charitable behavior as being driven by a temporal increase in guilt induced by past immoral actions. We term such behavior conscience accounting and discuss its importance in charitable giving and in the identification of social norms in choice behavior through time inconsistency.

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Giving Against the Odds: When Tempting Alternatives Increase Willingness to Donate

Jennifer Savary, Kelly Goldsmith & Ravi Dhar
Journal of Marketing Research, forthcoming

Abstract:
The authors examine how a reference to an unrelated product in the choice context impacts consumers' likelihood of donating to charity. Building on research on self-signaling, the authors predict that consumers are more likely to give when the donation appeal references a hedonic product, as compared to when a utilitarian product is referenced or when no comparison is provided. They posit that this occurs because referencing a hedonic product during a charitable appeal changes the self-attributions, or self-signaling utility, associated with the choice to donate. A series of hypothetical and real choice experiments demonstrate the predicted effect, and show that the increase in donation rates occurs because the self-attributions signaled by a choice not to donate are more negative in the context of a hedonic reference product. Finally, consistent with these experimental findings, a field experiment shows that referencing a hedonic product during a charitable appeal increases real donation rates in a non-laboratory setting. The authors discuss theoretical implications for both consumer decision making and the self-signaling motives behind prosocial choice.

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Signaling Virtue: Charitable Behavior Under Consumer Elective Pricing

Minah Jung
University of California Working Paper, June 2014

Abstract:
Four field experiments examined the quantitative and qualitative forces influencing behaviors under consumer elective pricing called “shared social responsibility” (SSR, Gneezy, Gneezy, Nelson, & Brown, 2010). Under SSR consumers can pay what they want and a percentage of their payment goes to support a charitable cause. Customers in our experiments were sensitive to the presence of charitable giving, paying more when a portion of their payment went to charity (Studies 1-4), but were largely insensitive to what portion of their payment went to charity (Studies 1 and 2). To test possible explanations we examined how consumers’ qualitative concerns to signal a positive image influenced their decisions and found that neither self-selection into paying (Studies 3 and 4) nor social pressure (Study 4) explained higher payments under SSR.

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Priming Effects on Commitment to Help and on Real Helping Behavior

Costanza Scaffidi Abbate et al.
Basic and Applied Social Psychology, July/August 2014, Pages 347-355

Abstract:
Years of research on bystander apathy have demonstrated that the physical presence of others can reduce the tendency to help individuals needing assistance. Recent research on the implicit bystander effect has suggested that simply imagining the presence of others can lead to less helping behavior on a subsequent unrelated task. The present study was designed to contribute to previous findings on the implicit bystander effect by demonstrating these effects on commitment to help and on real helping behavior, rather than simply on intentions to help. Studies 1a and 1b demonstrate that merely priming participants with the construct of being in a group at Time 1 created significantly less commitment to future helping on a subsequent task at Time 2. Study 2 aimed to extend this effect to behavioral measures and verified that participants exposed to a group prime helped less than those who were exposed to a single-person prime. The implications of these findings for the literature on the bystander effect are discussed.

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The power of one: The relative influence of helpful and selfish models

Jerry Burger et al.
Social Influence, forthcoming

Abstract:
We compared the extent to which people imitate models who exhibit either helpful or selfish behavior. In Study 1, female shoppers witnessed an individual either help or not help a woman who dropped her books. Women who saw the helpful model were more likely to assist a confederate who dropped a dollar, whereas those who saw the unhelpful model assisted at a rate no different than the control condition. In Study 2, undergraduate women saw a confederate take either one or five pieces of candy after being instructed to take only one. Participants who witnessed the unselfish behavior took fewer pieces for themselves than control condition participants, whereas those who saw the selfish behavior did not differ from the control condition.

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Individual resource contributions to voluntary organizations in the United States: A comparison between social movements and other organizations

Nicolás Somma
Acta Sociologica, August 2014, Pages 237-251

Abstract:
Although social movement organizations (SMOs) are often depicted as mobilizing intensive resources from their individual members, we lack a systematic assessment of this issue. Based on the notion of ‘modern social movements’ I argue that SMOs mobilize fewer human and monetary resources from their members than other voluntary organizations do. A regression model using a survey representative of American adults shows that, when compared to other organization members, SMO members generally contribute significantly lower amounts of money and time. They are also less likely to attend, plan or chair meetings, and give speeches on behalf of the organization. The only exception to this pattern is that SMO members are more likely to write letters for the organization than other members do.

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I’m Moral, but I Won’t Help You: The Distinct Roles of Empathy and Justice in Donations

Saerom Lee, Karen Page Winterich & William Ross
Journal of Consumer Research, forthcoming

Abstract:
Donating to charitable causes is generally perceived as a moral, prosocial behavior, but this may not always be the case. Although moral identity tends to have a positive effect on prosocial behavior, moral identity does not unconditionally enhance charitable giving. Four studies demonstrate that moral identity decreases donations when recipients are responsible for their plight. Mediation analysis reveals that empathy and justice underlie these effects such that moral identity increases donations for recipients with low plight responsibility through increased empathy, but moral identity decreases donations to recipients with high plight responsibility due to perceptions of justice. Importantly, donations to recipients who are responsible for their plight can be enhanced when donors’ immorality is made salient, evoking empathy for recipients, particularly among donors with high moral identity. This research makes theoretical contributions in addition to providing implications for nonprofit organizations whose recipients may be perceived as responsible for their plight.

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What Policies Increase Prosocial Behavior? An Experiment with Referees at the Journal of Public Economics

Raj Chetty, Emmanuel Saez & Laszlo Sandor
Journal of Economic Perspectives, Summer 2014, Pages 169-188

Abstract:
We evaluate policies to increase prosocial behavior using a field experiment with 1,500 referees at the Journal of Public Economics. We randomly assign referees to four groups: a control group with a six week deadline to submit a referee report, a group with a four week deadline, a cash incentive group rewarded with $100 for meeting the four week deadline, and a social incentive group in which referees were told that their turnaround times would be publicly posted. We obtain four sets of results. First, shorter deadlines reduce the time referees take to submit reports substantially. Second, cash incentives significantly improve speed, especially in the week before the deadline. Cash payments do not crowd out intrinsic motivation: after the cash treatment ends, referees who received cash incentives are no slower than those in the four-week deadline group. Third, social incentives have smaller but significant effects on review times and are especially effective among tenured professors, who are less sensitive to deadlines and cash incentives. Fourth, all the treatments have little or no effect on agreement rates, quality of reports, or review times at other journals. We conclude that small changes in journals’ policies could substantially expedite peer review at little cost. More generally, price incentives, nudges, and social pressure are effective and complementary methods of increasing prosocial behavior.

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The early origins of human charity: Developmental changes in preschoolers’ sharing with poor and wealthy individuals

Markus Paulus
Frontiers in Psychology, June 2014

Abstract:
Recent studies have provided evidence that young children already engage in sharing behavior. The underlying social-cognitive mechanisms, however, are still under debate. In particular, it is unclear whether or not young children’s sharing is motivated by an appreciation of others’ wealth. Manipulating the material needs of recipients in a sharing task (Experiment 1) and a resource allocation task (Experiment 2), we show that 5- but not 3-year-old children share more with poor than wealthy individuals. The 3-year-old children even showed a tendency to behave less selfishly towards the rich, yet not the poor recipient. This suggests that very early instances of sharing behavior are not motivated by a consideration of others’ material needs. Moreover, the results show that 5-year-old children were rather inclined to give more to the poor individual than distributing the resources equally, demonstrating that their wish to support the poor overruled the otherwise very prominent inclination to share resources equally. This indicates that charity has strong developmental roots in preschool children.

By KEVIN LEWIS | 09:00:00 AM

Saturday, August 16, 2014

Ladies' night

Female Economic Dependence and the Morality of Promiscuity

Michael Price, Nicholas Pound & Isabel Scott
Archives of Sexual Behavior, forthcoming

Abstract:
In environments in which female economic dependence on a male mate is higher, male parental investment is more essential. In such environments, therefore, both sexes should value paternity certainty more and thus object more to promiscuity (because promiscuity undermines paternity certainty). We tested this theory of anti-promiscuity morality in two studies (N = 656 and N = 4,626) using U.S. samples. In both, we examined whether opposition to promiscuity was higher among people who perceived greater female economic dependence in their social network. In Study 2, we also tested whether economic indicators of female economic dependence (e.g., female income, welfare availability) predicted anti-promiscuity morality at the state level. Results from both studies supported the proposed theory. At the individual level, perceived female economic dependence explained significant variance in anti-promiscuity morality, even after controlling for variance explained by age, sex, religiosity, political conservatism, and the anti-promiscuity views of geographical neighbors. At the state level, median female income was strongly negatively related to anti-promiscuity morality and this relationship was fully mediated by perceived female economic dependence. These results were consistent with the view that anti-promiscuity beliefs may function to promote paternity certainty in circumstances where male parental investment is particularly important.

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Hooking Up and Psychological Well-Being in College Students: Short-Term Prospective Links Across Different Hookup Definitions

Zhana Vrangalova
Journal of Sex Research, forthcoming

Abstract:
Hooking up (sex outside committed, romantic relationships) is feared to result from or lead to compromised psychological well-being among undergraduates, yet longitudinal evidence is scarce and inconclusive, and different hookup definitions complicate cross-study comparisons. This study examined short-term longitudinal associations with four well-being indicators (depression, anxiety, life satisfaction, and self-esteem) across several definitions of hookups based on relationship length (one time, longer casual, and any) and physical intimacy level (kissing, genital touching, oral sex, and intercourse). A university-wide sample of 666 Northeastern U.S. freshmen and juniors (63% female, 68% White) completed online surveys at the beginning and end of one academic semester. Linear and logistic regressions explored whether hookups over the semester were linked to later well-being, and whether initial well-being was linked to later hookups. Across all 96 regressions, statistically significant associations between well-being and hookups were infrequent (23%), predominantly confined to anxiety and life satisfaction, equally likely in the direction of higher (13%) as lower (10%) well-being, and affected by both casual relationship length and intimacy level. When gender differences emerged (11%), hookups were associated with higher well-being for women and lower well-being for men. This complex set of results points to the importance of researchers' choices in hookup definitions.

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Evidence to Suggest that Women's Sexual Behavior is Influenced by Hip Width Rather than Waist-to-Hip Ratio

Victoria Simpson, Gayle Brewer & Colin Hendrie
Archives of Sexual Behavior, forthcoming

Abstract:
Waist-to-hip ratio (WHR) is an important ornament display that signals women's health and fertility. Its significance derives from human development as a bipedal species. This required fundamental changes to hip morphology/musculature to accommodate the demands of both reproduction and locomotion. The result has been an obstetric dilemma whereby women's hips are only just wide enough to allow the passage of an infant. Childbirth therefore poses a significant hip width related threat to maternal mortality/risk of gynecological injury. It was predicted that this would have a significant influence on women's sexual behavior. To investigate this, hip width and WHR were measured in 148 women (M age = 20.93 + 0.17 years) and sexual histories were recorded via questionnaire. Data revealed that hip width per se was correlated with total number of sexual partners, total number of one night stands, percentage of sexual partners that were one night stands, number of sexual partners within the context of a relationship per year sexually active, and number of one night stands per year sexually active. By contrast, WHR was not correlated with any of these measures. Further analysis indicated that women who predominantly engaged in one night stand behavior had wider hips than those who did not. WHR was again without effect in this context. Women's hip morphology has a direct impact on their risk of potentially fatal childbirth related injury. It is concluded that when they have control over this, women's sexual behavior reflects this risk and is therefore at least in part influenced by hip width.

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The self-regulation effect of fertility status on inbreeding aversion: When fertile, disgust increases more in response to descriptions of one's own than of others' inbreeding

Jan Antfolk et al.
Evolutionary Psychology, Summer 2014, Pages 621-631

Abstract:
The ovulatory shift modulates emotions related to female sexuality. Because fertility status only affects the individual's own opportunity cost, the adaptive value of this shift is expected to stem from self-regulation. To test this assumption we asked women to contemplate various inbreeding descriptions: 1) they themselves having sex with male relatives; 2) their sister having sex with their common male relatives; and 3) an unrelated woman having sex with her male relatives (in 1, but not 2 and 3, negative fitness consequences are affected by the participant's fertility). We dichotomized the dependent variable disgust (ceiling vs. non-ceiling) and analyzed the interaction between fertility status and description type. The ovulatory shift was stronger in descriptions where they themselves were described as engaging in inbreeding. A smaller increase was also found in reactions to others engaging in inbreeding. We explain the latter effect as due to self-reflection.

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Changes in salivary estradiol predict changes in women's preferences for vocal masculinity

Katarzyna Pisanski et al.
Hormones and Behavior, August 2014, Pages 493-497

Abstract:
Although many studies have reported that women's preferences for masculine physical characteristics in men change systematically during the menstrual cycle, the hormonal mechanisms underpinning these changes are currently poorly understood. Previous studies investigating the relationships between measured hormone levels and women's masculinity preferences tested only judgments of men's facial attractiveness. Results of these studies suggested that preferences for masculine characteristics in men's faces were related to either women's estradiol or testosterone levels. To investigate the hormonal correlates of within-woman variation in masculinity preferences further, here we measured 62 women's salivary estradiol, progesterone, and testosterone levels and their preferences for masculine characteristics in men's voices in five weekly test sessions. Multilevel modeling of these data showed that changes in salivary estradiol were the best predictor of changes in women's preferences for vocal masculinity. These results complement other recent research implicating estradiol in women's mate preferences, attention to courtship signals, sexual motivation, and sexual strategies, and are the first to link women's voice preferences directly to measured hormone levels.

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Red and Romantic Rivalry: Viewing Another Woman in Red Increases Perceptions of Sexual Receptivity, Derogation, and Intentions to Mate-Guard

Adam Pazda, Pavol Prokop & Andrew Elliot
Personality and Social Psychology Bulletin, forthcoming

Abstract:
Research has shown that men perceive women wearing red, relative to other colors, as more attractive and more sexually receptive; women's perceptions of other women wearing red have scarcely been investigated. We hypothesized that women would also interpret female red as a sexual receptivity cue, and that this perception would be accompanied by rival derogation and intentions to mate-guard. Experiment 1 demonstrated that women perceive another woman in a red, relative to white, dress as sexually receptive. Experiment 2 demonstrated that women are more likely to derogate the sexual fidelity of a woman in red, relative to white. Experiment 3 revealed that women are more likely to intend to guard their romantic partner from a woman wearing a red, relative to a green, shirt. These results suggest that some color signals are interpreted similarly across sex, albeit with associated reactions that are sex-specific.

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Functional Variation in Sensitivity to Cues that a Partner is Cheating with a Rival

Katherine Hanson Sobraske, Steven Gaulin & James Boster
Archives of Sexual Behavior, forthcoming

Abstract:
The costs imposed by a romantic partner's mixed reproductive strategy (MRS) generate selection pressures for anticipatory responses to mitigate or avoid those costs. People will differ in their vulnerability to those costs, based in part on the qualities of their romantic rivals. Thus, we predicted that individuals at high risk of a partner's MRS - women with many sexually accessible rivals and men with many rivals more physically attractive than themselves - would be more attentive to cues that an MRS was being employed than those at lower risk. Based on similarity judgments derived from a successive-pile-sort method, this prediction was supported in a study involving over 1,300 students and community members. These results complement a growing body of research on selection pressures generated by romantic rivals.

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Fruit over sunbed: Carotenoid skin coloration is found more attractive than melanin coloration

Carmen Lefevre & David Perrett
Quarterly Journal of Experimental Psychology, forthcoming

Abstract:
Skin coloration appears to play a pivotal part in facial attractiveness. Skin yellowness contributes to an attractive appearance and is influenced both by dietary carotenoids and by melanin. While both increased carotenoid coloration and increased melanin coloration enhance apparent health in Caucasian faces by increasing skin yellowness, it remains unclear firstly, whether both pigments contribute to attractiveness judgements, secondly, whether one pigment is clearly preferred over the other, and thirdly, whether these effects depend on the sex of the face. Here, in three studies, we examine these questions using controlled facial stimuli transformed to be either high or low in (a) carotenoid coloration, or (b) melanin coloration. We show, firstly, that both increased carotenoid coloration and increased melanin coloration are found attractive compared to lower levels of these pigments. Secondly, we show that carotenoid coloration is consistently preferred over melanin coloration when levels of coloration are matched. In addition, we find an effect of the sex of stimuli with stronger preferences for carotenoids over melanin in female compared to male faces, irrespective of the sex of the observer. These results are interpreted as reflecting preferences for sex-typical skin coloration: men have darker skin than women and high melanisation in male faces may further enhance this masculine trait, thus carotenoid coloration is not less desirable, but melanin coloration is relatively more desirable in males compared to females. Taken together, our findings provide further support for a carotenoid-linked health-signalling system that is highly important in mate choice.

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Love Is in the Gaze: An Eye-Tracking Study of Love and Sexual Desire

Mylene Bolmont, John Cacioppo & Stephanie Cacioppo
Psychological Science, forthcoming

Abstract:
Reading other people's eyes is a valuable skill during interpersonal interaction. Although a number of studies have investigated visual patterns in relation to the perceiver's interest, intentions, and goals, little is known about eye gaze when it comes to differentiating intentions to love from intentions to lust (sexual desire). To address this question, we conducted two experiments: one testing whether the visual pattern related to the perception of love differs from that related to lust and one testing whether the visual pattern related to the expression of love differs from that related to lust. Our results show that a person's eye gaze shifts as a function of his or her goal (love vs. lust) when looking at a visual stimulus. Such identification of distinct visual patterns for love and lust could have theoretical and clinical importance in couples therapy when these two phenomena are difficult to disentangle from one another on the basis of patients' self-reports.

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Some evidence for health-related marriage selection

Anna Lipowicz
American Journal of Human Biology, forthcoming

Objectives: Married people live longer and are healthier than unmarried people. This can be explained in terms of marriage protection and marriage selection. The aim of the present study was to examine the direct effect of marriage selection on health status.

Methods: Data were collected from the archives of the Lower Silesian Medical Center (DOLMED) in Wrocław, Poland. The sample consisted of 2,265 adult (never married or currently married) men. Subjects were assigned to categories for selected variables, including age, level of education, military category upon conscription, height, hearing acuity, and visual acuity. Military category, objective data gathered upon military conscription at age 18, was used to assess initial health status. To identify any relationships between marital status and health status, generalized linear models with binomially distributed dependent variable were used.

Results: The never-married subjects were more likely to have been assigned to lower military categories, which indicates that their health status at age 18 was inferior to those conscripts who would later marry. Hearing acuity and visual acuity were generally worse in never-married subjects than in married subjects. Never-married subjects were also more likely to be short and less likely to be tall.

Conclusions: The results provide evidence for direct health-related marriage selection in men between 25 and 60 years of age. Poor health status reduces the likelihood of marriage.

By KEVIN LEWIS | 09:00:00 AM

Friday, August 15, 2014

Due process

Racial Disparity in Federal Criminal Sentences

Marit Rehavi & Sonja Starr
Journal of Political Economy, forthcoming

Abstract:
Using rich data linking federal cases from arrest through to sentencing, we find that initial case and defendant characteristics, including arrest offense and criminal history, can explain most, but not all, of the large raw racial disparity in federal sentences. Across the sentence distribution, blacks receive sentences that are almost 10% longer than comparable whites arrested for the same crimes. Most of this disparity can be explained by prosecutors' initial charging decisions, particularly the filing of charges carrying mandatory minimum sentences. Ceteris paribus, the odds of black arrestees facing such a charge are 1.75 times higher than those of white arrestees.

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The Chief Justice as Executive: Judicial Conference Committee Appointments

Dawn Chutkow
Journal of Law and Courts, Fall 2014, Pages 301-325

Abstract:
This article is the first comprehensive empirical study of chief justice appointments to the Judicial Conference committees of the US Courts, entities with influence over substantive public and legal policy. Using a newly created database of all judges appointed to serve on Judicial Conference committees between 1986 and 2012, the results indicate that a judge's partisan alignment with the chief justice matters, as do personal characteristics such as race, experience on the bench, and court level. These results support claims that Judicial Conference committee selection, membership, and participation may present a vehicle for advancing the chief justice's individual political and policy interests.

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An Empirical Evaluation of the Connecticut Death Penalty System Since 1973: Are There Unlawful Racial, Gender, and Geographic Disparities?

John Donohue
Journal of Empirical Legal Studies, forthcoming

Abstract:
This article analyzes the 205 death-eligible murders leading to homicide convictions in Connecticut from 1973-2007 to determine if discriminatory and arbitrary factors influenced capital outcomes. A regression analysis controlling for an array of legitimate factors relevant to the crime, defendant, and victim provides overwhelming evidence that minority defendants who kill white victims are capitally charged at substantially higher rates than minority defendants who kill minorities, that geography influences both capital charging and sentencing decisions (with the location of a crime in Waterbury being the single most potent influence on which death-eligible cases will lead to a sentence of death), and that the Connecticut death penalty system has not limited its application to the worst of the worst death-eligible defendants. The work of an expert hired by the State of Connecticut provided emphatic, independent confirmation of these three findings, and found that women who commit death-eligible crimes are less likely than men to be sentenced to death. There is also strong and statistically significant evidence that minority defendants who kill whites are more likely to end up with capital sentences than comparable cases with white defendants. Regression estimates of the effect of both race and geography on death sentencing reveal the disparities can be glaring. Considering the most common type of death-eligible murder - a multiple victim homicide - a white on white murder of average egregiousness outside Waterbury has a .57 percent chance of being sentenced to death, while a minority committing the identical crime on white victims in Waterbury would face a 91.2 percent likelihood. In other words, the minority defendant in Waterbury would be 160 times more likely to get a sustained death sentence than the comparable white defendant in the rest of the state. Among the nine Connecticut defendants to receive sustained death sentences over the study period, only Michael Ross comports with the dictates that "within the category of capital crimes, the death penalty must be reserved for 'the worst of the worst.'" For the eight defendants on death row (after the 2005 execution of Ross), the median number of equally or more egregious death-eligible cases that did not receive death sentences is between 35 and 46 (depending on the egregiousness measure). In light of the prospective abolition of the Connecticut death penalty in April 2012, which eliminated the deterrence rationale for the death penalty, Atkins v. Virginia teaches that unless the Connecticut death penalty regime "measurably contributes to [the goal of retribution], it is nothing more than the purposeless and needless imposition of pain and suffering, and hence an unconstitutional punishment." Apart from Ross, the evidence suggests that the eight others residing on death row were not measurably more culpable than the many who were not capitally sentenced. Moreover, Connecticut imposed sustained death sentences at a rate of 4.4 percent (9 of 205). This rate of death sentencing is among the lowest in the nation and more than two-thirds lower than the 15 percent pre-Furman Georgia rate that was deemed constitutionally problematic in that "freakishly rare" sentences of death are likely to be arbitrary.

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Influence of Race and Ethnicity on Charge Severity in Chicago Homicide Cases: An Investigation of Prosecutorial Discretion

Christine Martin
Race and Justice, April 2014, Pages 152-174

Abstract:
This research examines prosecutorial decision making at the initial charging stage in Chicago homicide cases during the late 1990s. The objectives of this investigation are to determine whether African Americans were prosecuted more severely than similarly situated White and Latino defendants in Chicago homicide cases prior to the abolition of the death penalty in Illinois and to identify the factors that affected how severely prosecutors prosecuted defendants during that time. The study participants are adults who were identified by the Chicago Police Department as suspects in homicide incidents during the years of 1994 and 1995 and whose cases were selected for prosecution. Other relevant factors that may have influenced charging decisions include the defendant-victim relationship, the homicide circumstances, and the number of victims in a particular homicide incident. General linear regression modeling is used to determine the factors that affected how severely prosecutors prosecuted Chicago homicide defendants. Charge severity is measured by the number of charges of Class M felony murder that were filed against a defendant. The results indicate that prior to the moratorium on the death penalty in Chicago, all defendants studied (regardless of the race/ethnicity of their victims) were charged with fewer counts of murder (prosecuted less severely) than African American defendants who were charged with killing White victims. This direct and significant relationship persists even after adding defendant-victim relationship and homicide circumstance interaction terms to the analysis.

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The intersection of race and gender: An examination of sentencing outcomes in North Carolina

Katrina Rebecca Bloch, Rodney Engen & Kylie Parrotta
Criminal Justice Studies, forthcoming

Abstract:
This study examines the intersection of offenders' race and gender in the sentencing process using data on felony cases sentenced in North Carolina. Analyses examine the likelihood that charges were reduced in severity between initial filing and conviction, the likelihood of imprisonment, and the length of sentence imposed, and test whether race affects punishment similarly for men and women. Results indicate that status characteristics predict both reductions in charge severity and the severity of the final sentence, and that racial disparity is conditional on gender. However, the results are not entirely consistent with predictions derived from the extant literature. Gender significantly predicts case outcomes at each stage, but black men were not uniformly disadvantaged, and black women received the least severe treatment in two out of four analyses. Theoretical implications for the intersection of race and gender in sentencing theories are discussed.

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The Difference "Hate" Makes in Clearing Crime: An Event History Analysis of Incident Factors

Christopher Lyons & Aki Roberts
Journal of Contemporary Criminal Justice, August 2014, Pages 268-289

Abstract:
Studying hate crime clearance rates provides an opportunity to uncover the factors that influence police effectiveness for a relatively new legal category - one that was designed ostensibly to protect minorities, and that may pose unique challenges for police reporting, defining, and investigation. Using multiple years (2005-2010) of data from the National Incident-Based Reporting System (NIBRS), we estimate event history models to compare the incident-level predictors and relative probability of arrest for hate and nonbias crimes. As an aggregate category, we find hate crimes are less likely to clear than nonbias crimes. However, the most prototypical hate crimes - White-on-non-White incidents motivated by racial and ethnic bias - are as likely to clear as the most successfully cleared nonbias crimes. Our results suggest that only hate crimes that fit popular constructions of "normal victims and offenders" receive investigative outcomes comparable with otherwise similar nonbias offenses.

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Judicial Bond-Setting Behavior: The Perceived Nature of the Crime May Matter More Than How Serious It Is

Robert Beattey, Taiki Matsuura & Elizabeth Jeglic
Psychology, Public Policy, and Law, forthcoming

Abstract:
Whether a criminal defendant will be released on bail or held in jail pretrial is one of the first decisions made in a criminal prosecution. This study examined whether a certain group of defendants is subject to the setting of higher bonds by virtue of the subjectively perceived nature of the offense with which the defendants are charged. We specifically tested whether, despite lower overall rearrest rates, judges are imposing higher bonds on defendants charged with a sex offense than on defendants charged with a nonsex offense of equal statutory offense level. Results showed a statistically significant difference in the bond rates between sex offenders and nonsex offenders, with the mean sex offense bond being set approximately $30,000 higher than the mean nonsex offense bond, despite controlling for level of offense, sex of the defendant, and judge setting the bond amount. Given the high costs of pretrial detention to both the defendant and the state, the utility of empirically based bond setting is discussed.

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An Investigation of Implied Miranda Waivers and Powell Wording in a Mock-Crime Study

Nathan Gillard et al.
Law and Human Behavior, forthcoming

Abstract:
To guard against coerced self-incrimination, the Supreme Court of the United States outlined in Miranda v. Arizona (1966) what arresting officers must convey to custodial suspects for resulting statements to be admissible into evidence. During the ensuing decades, the Court has continued to grapple with the requisite wording and practical enforcement of these Constitutional rights. In Florida v. Powell (2010), the Court upheld the conviction of a defendant whose Miranda warning affirmed that before questioning he had the right to an attorney, but failed to specify that during questioning he had this right as well. In Berghuis v. Thompkins (2010), the Court ruled that the right to silence must be invoked explicitly, while valid Miranda waivers could be "implied" by a suspect's actions as well as words. The current study employed a mock crime design to assess the practical effects of these 2 rulings on waiver decisions. The wording change enabled by Powell had little effect on Miranda knowledge and reasoning. With regard to Thompkins, the type of waiver profoundly affected subsequent decisions: 13.7% exercised their rights following implied waivers versus 81.1% with explicit waivers. Importantly, the implied waiver condition produced much higher percentages of confessions (17.6% vs. 3.8%) and of admissions about incriminating information (29.4% vs. 9.4%).

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Squealer Dealers: The Market for Information in Federal Drug Trafficking Prosecutions

Andrew Nutting
Economic Inquiry, forthcoming

Abstract:
Federal data on drug trafficking sentences are used to determine factors that affect market quantities of providing information against other defendants (i.e., defendant probabilities of receiving testimony-related sentence reductions) and market prices of information (i.e., the sizes of such sentence reductions). Women and better-educated defendants experience high demand (higher quantities and prices) for information. Blacks, Hispanics, and non-U.S. citizens experience low demand. Defendants expecting longer sentences have higher supply of information. Conditional on expected sentence, crack dealers, high-level dealers, and dealers with long criminal histories experience low demand, while low-level dealers experience high demand. Women of all races experience high demand for information.

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Lawyer and Nonlawyer Susceptibility to Framing Effects in Out-of-Court Civil Litigation Settlement

Ian Belton, Mary Thomson & Mandeep Dhami
Journal of Empirical Legal Studies, September 2014, Pages 578-600

Abstract:
Settling a legal dispute out of court is typically a good result for both parties. However, many disputes do not settle: the presence of cognitive biases, such as those observed through framing manipulations, is thought to be one of the many reasons for settlement failure. The present study used quantitative and qualitative data to compare the impact of a gain- or loss-framed hypothetical civil litigation scenario on settlement decisions made by lawyers and other nonlawyer professionals. A significant effect of framing was found for both groups. As predicted, both nonlawyers and lawyers were much more likely to settle their claim in the gain scenario than in the loss scenario. This finding was supported by the qualitative data: risk-averse comments were more frequent in the gain frame whereas risk-seeking statements were more common in the loss frame. There was also evidence that lawyers may be less affected by framing than nonlawyers, although a smaller difference was observed than in previous studies. In addition, lawyers were more likely than nonlawyers to consider the expected financial value of the litigation in making their decision. We discuss the implications of these results and suggest avenues for future research.

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Examining Pretrial Publicity in a Shadow Jury Paradigm: Issues of Slant, Quantity, Persistence and Generalizability

Tarika Daftary-Kapur et al.
Law and Human Behavior, forthcoming

Abstract:
The purpose of this study was to examine the influence of pretrial publicity (PTP) on mock juror decision making. Specifically, we examined the influence of quantity and slant of the PTP (proprosecution vs. prodefense), the persistence of PTP effects over time, and whether the PTP effects demonstrated in research laboratories would also occur in more naturalistic settings (generalizability). Using a shadow jury paradigm we examined these effects using a real trial as stimulus. Mock jurors included 115 jury-eligible community members who were naturally exposed to PTP in the venue in which the actual case occurred and 156 who were experimentally exposed. We found mock jurors were significantly influenced by both the slant and quantity of the PTP to which they were exposed, such that those exposed to proprosecution or prodefense PTP tended to render decision in support of the party favored in the PTP, and those exposed to greater quantities of PTP tended to be more biased. Additionally, PTP effects persisted throughout the course of the trial and continued to influence judgments in face of trial evidence and arguments. A finding of no significant difference in the effect of exposure slant between the naturally exposed and experimentally exposed samples provides support for the external validity of laboratory studies examining PTP effects. This research helps address some of the concerns raised by courts with regard to the durability of PTP effects and the application of laboratory findings to real world settings.

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"Midnight Confessions": The Effect of Chronotype Asynchrony on Admissions of Wrongdoing

Kyle Scherr et al.
Basic and Applied Social Psychology, July/August 2014, Pages 321-328

Abstract:
Confession evidence is highly incriminating in court. We examined the interaction between chronotype and time of day on the confession decisions of 60 participants using an experimental paradigm. Pre-identified morning- and evening-type people were randomly assigned to participate in morning or evening sessions. Results supported an interactional asynchrony hypothesis that individuals are more likely to confess during "off-peak" periods (i.e., evening-types in the morning and morning-types in the evening). This interaction was obtained for both high- and low-seriousness transgressions. These results suggest that chronotype asynchrony constitutes a significant risk factor for false confessions and the wrongful convictions that often follow.

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Birds of a feather get misidentified together: High entitativity decreases recognition accuracy for groups of other-race faces

Mollie McGuire & Kathy Pezdek
Legal and Criminological Psychology, forthcoming

Purpose: The cross-race effect can be exaggerated when faces are presented in groups, leading to less accurate eyewitness identifications (Pezdek, O'Brien, & Wasson, 2012, Law Hum. Behav., 36, 488). Our current study examined the effect of entitativity, the degree to which members of a group are perceived as a coherent unit (Campbell, 1958, Behav. Sci., 3, 14), on recognition accuracy for same- and cross-race faces presented in groups.

Methods: White participants viewed 16 slides of 3-face groups (eight White groups, eight Black groups). Prior to viewing the faces they were told that the entitativity of each 3-face group was high ('friends who do things together') or low ('people in line at the bank'). They were then tested on 32 individually presented faces (16 old and 16 new).

Results: When cross-race faces were presented in high rather than low entitativity groups, less accurate face recognition memory resulted. Increasing group entitativity decreased recognition accuracy for cross-race faces but increased recognition accuracy for same-race faces.

Conclusions: The results suggest that the perception of a group negatively impacts eyewitness memory. Contextual factors such as entitativity need to be considered along with other estimator variables when assessing eyewitness identification accuracy.

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On Courts and Pocketbooks: Macroeconomic Judicial Behavior across Methods of Judicial Selection

Douglas Rice
Journal of Law and Courts, Fall 2014, Pages 327-347

Abstract:
Scholars studying judicial behavior have identified a host of factors theoretically and empirically connected to judicial decision making. One recent theory identifies economic conditions - which have implications for the decisions of voters and politicians - as influencing the voting behavior of US Supreme Court justices. Yet the US Supreme Court is a unique judicial institution addressing limited - though indisputably important - economic cases every year. State courts, on the other hand, address a multitude of issues every year with economic ramifications. Building on the rich body of literature examining state courts of last resort, I analyze whether judges, across a variety of methods for judicial selection and retention, respond to temporary changes in the state of the economy. Results indicate that the responses of state supreme court judges to changes in the state of the economy are conditional on the electoral vulnerability of the justice. This research thus offers considerable insight into judicial behavior under different selection mechanisms and the conditional influence of the state of the economy.

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Hypothesis Testing in Attorney-Conducted Voir Dire

Caroline Crocker Otis et al.
Law and Human Behavior, August 2014, Pages 392-404

Abstract:
Attorneys may hold expectations about jurors based on stereotypes about the relationships between demographic characteristics and attitudes. Attorneys test their hypotheses about prospective jurors during voir dire, but it is unclear whether their questioning strategies are likely to produce accurate information from jurors. In 2 studies, attorneys and law students formulated voir dire questions to test a particular hypothesis about the attitudes held by a prospective juror (venireperson) and provided their subsequent inferences about that individual given certain hypothetical responses to the questions. Bayes's theorem was used to compare attorneys' actual conclusions about the venireperson with the conclusions they would reach if correctly using the available information. Attorneys' conclusions were biased by the questions they asked, and in some cases, by the hypothesis that they were asked to test. Compared with normative models derived using Bayes' theorem, attorneys overrelied on venirepersons' responses when drawing conclusions about their attitudes. These findings suggest that even if traditional attorney-conducted voir dire elicited accurate information about prospective jurors' attitudes, attorneys may not use that information to draw normatively accurate conclusions about the attitudes that they hold.

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Knowledge and Death Penalty Opinion: The Marshall Hypotheses Revisited

Gavin Lee, Robert Bohm & Lynn Pazzani
American Journal of Criminal Justice, September 2014, Pages 642-659

Abstract:
This study tests the three hypotheses derived from the written opinion of Justice Thurgood Marshall in Furman v Georgia in 1972. Subjects completed questionnaires at the beginning and the end of the fall a semester. Experimental group subjects were enrolled in a death penalty class, while control group subjects were enrolled in another criminal justice class. The death penalty class was the experimental stimulus. Findings provided strong support for the first and third hypotheses, i.e., subjects were generally lacking in death penalty knowledge before the experimental stimulus, and death penalty proponents who scored "high" on a retribution index did not change their death penalty opinions despite exposure to death penalty knowledge. Marshall's second hypothesis--that death penalty knowledge and death penalty support were inversely related--was not supported by the data. Two unexpected findings were that death penalty proponents who scored "low" on a retribution index also did not change their death penalty opinions after becoming more informed about the subject, and that death penalty knowledge did not alter subjects' initial retributive positions. Suggestions for future research are provided.

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High stakes lies: Police and non-police accuracy in detecting deception

Clea Wright Whelan, Graham Wagstaff & Jacqueline Wheatcroft
Psychology, Crime & Law, forthcoming

Abstract:
To date, the majority of investigations into accuracy in detecting deception has used low-stakes lies as stimulus materials, and findings from these studies suggest that people are generally poor at detecting deception. The research presented here utilised real-life, high-stakes lies as stimulus materials, to investigate the accuracy of police and non-police observers in detecting deception. It was hypothesised that both police and non-police observers would achieve above chance levels of accuracy in detecting deception, that police officers would be more accurate at detecting deception than non-police observers, that confidence in veracity judgements would be positively related to accuracy and that consensus judgements would predict veracity. One hundred and seven observers (70 police officers and 37 non-police participants) watched 36 videos of people lying or telling the truth in an extremely high-stakes, real-life situation. Police observers achieved mean accuracy in detecting deception of 72%, non-police observers achieved 68% mean accuracy, and confidence in veracity judgements was positively related to accuracy. Consensus judgements correctly predicted veracity in 92% of cases.

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Parsing Disciplinary Disproportionality: Contributions of Infraction, Student, and School Characteristics to Out-of-School Suspension and Expulsion

Russell Skiba et al.
American Educational Research Journal, August 2014, Pages 640-670

Abstract:
In the context of a national conversation about exclusionary discipline, we conducted a multilevel examination of the relative contributions of infraction, student, and school characteristics to rates of and racial disparities in out-of-school suspension and expulsion. Type of infraction; race, gender, and to a certain extent socioeconomic status at the individual level; and, at the school level, mean school achievement, percentage Black enrollment, and principal perspectives all contributed to the probability of out-of-school suspension or expulsion. For racial disparities, however, school-level variables, including principal perspectives on discipline, appear to be among the strongest predictors. Such a pattern suggests that schools and districts looking to reduce racial and ethnic disparities in discipline would do well to focus on school- and classroom-based interventions.

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Legislating Incentives for Attorney Representation in Civil Rights Litigation

Sean Farhang & Douglas Spencer
Journal of Law and Courts, Fall 2014, Pages 241-271

Abstract:
Congress routinely relies on private lawsuits to enforce its mandates. In this article, we investigate whether, when it does so, the details of the legislation can importantly influence the extent to which the private bar is mobilized to carry out the prosecutorial function. Using an original and novel data set based on review of archived litigation documents for cases filed in the Northern and Eastern Districts of California over the two decades spanning 1981-2000, we examine the effects of the Civil Rights Act of 1991, which increased economic damages available to Title VII job discrimination plaintiffs, on their ability to secure counsel. We find that over the course of the decade after passage, the law substantially increased the probability that Title VII plaintiffs would be represented by counsel and that in doing so it reversed a decade-long trend in the opposite direction.

By KEVIN LEWIS | 09:00:00 AM

Thursday, August 14, 2014

Ups and downs

Is there a cannabis epidemic model? Evidence from France, Germany and USA

Stephane Legleye et al.
International Journal of Drug Policy, forthcoming

Background: Cannabis is the most popular illicit drug in the world, but the process of its diffusion through the population has rarely been studied. The unfolding of the tobacco epidemic was accompanied by a shift in the educational gradient of users across generations. As a consequence, cannabis may show the same pattern of widening social inequalities. We test the diffusion hypotheses that a positive value in older cohorts – the more educated experimenting more – shifts to a negative one in younger cohorts – the more educated experimenting less, first for males and then females.

Methods: Three nationwide subsamples (18-64 years old) of representative surveys conducted in France (n = 21,818), Germany (n = 7,887) and USA (n = 37,115) in 2009-2010 recorded age at cannabis experimentation (i.e., first use), educational level, gender, and age. Cumulative prevalence of experimentation was plotted for three retrospective cohorts (50-64, 35-49, 18-34 years old at data collection) and multivariate time-discrete logistic regression was computed by gender and generation to model age at experimentation adjusted on age at data collection and educational level. This latter was measured according to four categories derived from the International Standard Classification of Education (ISCED) and a relative (rather than absolute) index of education.

Results: The findings demonstrate a consistent pattern of evolution of the prevalence, gender ratio and educational gradient across generations and countries that supports the hypothesis of an “epidemic” of cannabis experimentation that mimics the epidemic of tobacco.

Conclusion: We provide evidence for a cannabis epidemic model similar to the tobacco epidemic model. In the absence of clues regarding the future of cannabis use, our findings demonstrate that the gender gap is decreasing and, based on the epidemic model, suggest that we may expect widening social inequalities in cannabis experimentation if cannabis use decreases in the future.

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The Effects of Medical Marijuana Laws on Illegal Marijuana Use

Yu-Wei Luke Chu
Journal of Health Economics, forthcoming

Abstract:
More and more states have passed laws that allow individuals to use marijuana for medical purposes. There is an ongoing, heated policy debate over whether these laws have increased marijuana use among non-patients. In this paper, I address that question empirically by studying marijuana possession arrests in cities from 1988 to 2008. I estimate fixed effects models with city-specific time trends that can condition on unobserved heterogeneities across cities in both their levels and trends. I find that these laws increase marijuana arrests among adult males by about 15–20%. These results are further validated by findings from data on treatment admissions to rehabilitation facilities: marijuana treatments among adult males increased by 10–20% after the passage of medical marijuana laws.

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Medical Marijuana Laws and Teen Marijuana Use

Mark Anderson, Benjamin Hansen & Daniel Rees
NBER Working Paper, July 2014

Abstract:
While at least a dozen state legislatures in the United States have recently considered bills to allow the consumption of marijuana for medicinal purposes, the federal government is intensifying its efforts to close medical marijuana dispensaries. Federal officials contend that the legalization of medical marijuana encourages teenagers to use marijuana and have targeted dispensaries operating within 1,000 feet of schools, parks and playgrounds. Using data from the national and state Youth Risk Behavior Surveys, the National Longitudinal Survey of Youth 1997 and the Treatment Episode Data Set, we estimate the relationship between medical marijuana laws and marijuana use. Our results are not consistent with the hypothesis that legalization leads to increased use of marijuana by teenagers.

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Crime and the Depenalization of Cannabis Possession: Evidence from a Policing Experiment

Imran Rasul, Jerome Adda & Brendon McConnell
Journal of Political Economy, forthcoming

Abstract:
We evaluate the impact on crime of a localized policing experiment that depenalized the possession of small quantities of cannabis in the London borough of Lambeth. We find that depenalization policy caused the police to reallocate effort towards non-drug crime. Despite the overall fall in crime attributable to the policy, we find the total welfare of local residents likely fell, as measured by house prices. We shed light on what would be the impacts on crime of a citywide depenalization policy, by developing and calibrating a structural model of the market for cannabis and crime.

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The Next Generation of Users: Prevalence and Longitudinal Patterns of Tobacco Use Among US Young Adults

Amanda Richardson et al.
American Journal of Public Health, August 2014, Pages 1429-1436

Objectives: We monitored the prevalence and patterns of use of the array of tobacco products available to young adults, who are at risk for initiation and progression to established tobacco use.

Methods: We used data from waves 1 to 3 of GfK’s KnowledgePanel (2011–2012), a nationally representative cohort of young adults aged 18 to 34 years (n = 2144). We examined prevalence and patterns of tobacco product use over time, associated demographics, and state-level tobacco policy. We used multivariable logistic regression to determine predictors of initiation of cigarettes as well as noncombustible and other combustible products.

Results: The prevalence of ever tobacco use rose from 57.28% at wave 1 to 67.43% at wave 3. Use of multiple products was the most common pattern (66.39% of tobacco users by wave 3). Predictors of initiation differed by product type and included age, race/ethnicity, policy, and use of other tobacco products.

Conclusions: Tobacco use is high among young adults and many are using multiple products. Efforts to implement policy and educate young adults about the risks associated with new and emerging products are critical to prevent increased initiation of tobacco use.

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Probing the Smoking–Suicide Association: Do Smoking Policy Interventions Affect Suicide Risk?

Richard Grucza et al.
Nicotine & Tobacco Research, forthcoming

Introduction: Smokers exhibit elevated risk for suicide, but it is unknown whether smoking interventions reduce suicide risk. We examined whether state-level policy interventions—increases in cigarette excise taxes and strengthening of smoke-free air laws—corresponded to reduction in suicide risk during the 1990s and early 2000s. We also examined whether the magnitude of such reductions correlated with individuals’ predicted probability of smoking, as would be expected if the associations stemmed from changes in smoking behavior.

Methods: We paired individual-level data on suicide deaths from the U.S. Multiple Cause of Death files, years 1990–2004, with living population data from the same period. These were linked with state data on cigarette excise taxes and smoke-free air policies. Utilizing a quasi-experimental analytical approach, we estimated the association between changes in policy and suicide risk. To examine whether associations correlated with individuals’ probability of smoking, we used external survey data to derive a predicted probability of smoking function from demographic variables, which was then used to stratify the population by predicted smoking prevalence.

Results: Cigarette excise taxes, smoke-free air policies, and an index combining the two policies all exhibited protective associations with suicide. The associations were strongest in segments of the population where predicted smoking prevalence was the highest and weaker in segments of the population where predicted smoking prevalence was the lowest, suggesting that the protective associations were related to changes in smoking behavior.

Conclusion: These results provide support for the proposition that population interventions for smoking could reduce risk for suicide.

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Cannabis-Related Impairment: The Impacts of Social Anxiety and Misconceptions of Friends’ Cannabis-Related Problems

Anthony Ecker, Ashley Richter & Julia Buckner
Addictive Behaviors, December 2014, Pages 1746–1749

Objective: Socially anxious cannabis users are especially vulnerable to cannabis-related impairment, yet mechanisms underlying this vulnerability remain unclear. Socially anxious persons may use cannabis despite related problems if they believe such problems are common, and thus socially acceptable. Yet no known studies have examined the impact of beliefs regarding others’ cannabis-related problems on one’s own use-related problems.

Method: This study investigated the impact of beliefs about a close friend’s experience with cannabis-related problems on the relationship between social anxiety and cannabis-related problems. The sample consisted of 158 (75% female) current (past-month) cannabis-using undergraduates.

Results: Believing one’s friend experienced more cannabis problems was related to experiencing more cannabis-related problems oneself. In fact, perceived friend’s problems accounted for 40% of the unique variance in one’s own cannabis problems. Descriptive norms (others’ use) and injunctive norms (others’ approval of risky use) were unrelated to number of one’s own problems. Social anxiety was related to experiencing more cannabis problems. This relation was moderated by perceived friend’s problems such that greater social anxiety was related to more cannabis-related problems among participants who believed their friend experienced more cannabis-related problems. This was not the case among participants who believed their friend experienced fewer problems.

Conclusions: Normative beliefs regarding a close friend’s cannabis problems were robustly and uniquely related to experiencing more cannabis-related impairment. Beliefs regarding friends’ experience with cannabis-related problems may play an especially important role in the experience of cannabis-related problems among socially anxious users.

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Electronic Cigarettes and Conventional Cigarette Use Among US Adolescents: A Cross-sectional Study

Lauren Dutra & Stanton Glantz
JAMA Pediatrics, July 2014, Pages 610-617

Objective: To examine e-cigarette use and conventional cigarette smoking.

Design, Setting, and Participants: Cross-sectional analyses of survey data from a representative sample of US middle and high school students in 2011 (n = 17 353) and 2012 (n = 22 529) who completed the 2011 and 2012 National Youth Tobacco Survey.

Results: Among cigarette experimenters (≥1 puff), ever e-cigarette use was associated with higher odds of ever smoking cigarettes (≥100 cigarettes; odds ratio [OR] = 6.31; 95% CI, 5.39-7.39) and current cigarette smoking (OR = 5.96; 95% CI, 5.67-6.27). Current e-cigarette use was positively associated with ever smoking cigarettes (OR = 7.42; 95% CI, 5.63-9.79) and current cigarette smoking (OR = 7.88; 95% CI, 6.01-10.32). In 2011, current cigarette smokers who had ever used e-cigarettes were more likely to intend to quit smoking within the next year (OR = 1.53; 95% CI, 1.03-2.28). Among experimenters with conventional cigarettes, ever use of e-cigarettes was associated with lower 30-day (OR = 0.24; 95% CI, 0.21-0.28), 6-month (OR = 0.24; 95% CI, 0.21-0.28), and 1-year (OR = 0.25; 95% CI, 0.21-0.30) abstinence from cigarettes. Current e-cigarette use was also associated with lower 30-day (OR = 0.11; 95% CI, 0.08-0.15), 6-month (OR = 0.11; 95% CI, 0.08-0.15), and 1-year (OR = 0.12; 95% CI, 0.07-0.18) abstinence. Among ever smokers of cigarettes (≥100 cigarettes), ever e-cigarette use was negatively associated with 30-day (OR = 0.61; 95% CI, 0.42-0.89), 6-month (OR = 0.53; 95% CI, 0.33-0.83), and 1-year (OR = 0.32; 95% CI, 0.18-0.56) abstinence from conventional cigarettes. Current e-cigarette use was also negatively associated with 30-day (OR = 0.35; 95% CI, 0.18-0.69), 6-month (OR = 0.30; 95% CI, 0.13-0.68), and 1-year (OR = 0.34; 95% CI, 0.13-0.87) abstinence.

Conclusions and Relevance: Use of e-cigarettes was associated with higher odds of ever or current cigarette smoking, higher odds of established smoking, higher odds of planning to quit smoking among current smokers, and, among experimenters, lower odds of abstinence from conventional cigarettes. Use of e-cigarettes does not discourage, and may encourage, conventional cigarette use among US adolescents.

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The Relationship Between Brand-Specific Alcohol Advertising on Television and Brand-Specific Consumption Among Underage Youth

Craig Ross et al.
Alcoholism, forthcoming

Background: Being able to investigate the relationship between underage drinkers' preferences for particular brands and their exposure to advertising for those brands would represent a significant advance in alcohol marketing research. However, no previous national study has examined the relationship between underage youth exposure to brand-specific alcohol advertising and consumption of those brands.

Methods: We conducted a cross-sectional, Internet-based survey of a national sample of 1,031 youth, ages 13–20, who had consumed at least 1 drink of alcohol in the past 30 days. We ascertained all alcohol brands consumed by respondents in the past 30 days. The main outcome measure was brand-specific consumption during the past 30 days, measured as a dichotomous variable. The main predictor variable was exposure to brand-specific alcohol advertising on television. The respondents reported which of 20 television shows popular with youth they had watched during the past 30 days. For each respondent, we calculated a standard measure of potential exposure to the brand-specific alcohol advertising that aired on those shows during the preceding 12 months, based on Nielsen (New York, NY) estimates of the youth audience for each show's telecasts.

Results: Compared to no brand-specific advertising exposure, any exposure was associated with an increased likelihood of brand-specific consumption (adjusted odds ratio 3.02; 95% confidence interval: 2.61–3.49) after controlling for several individual- and brand-level variables. When measured as a continuous variable, the relationship between advertising exposure and brand consumption was nonlinear, with a large association at lower levels of exposure and diminishing incremental effects as the level of exposure increased.

Conclusions: There is a robust relationship between youth's brand-specific exposure to alcohol advertising on television and their consumption of those same alcohol brands during the past 30 days. This study provides further evidence of a strong association between alcohol advertising and youth drinking behavior.

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The influence of societal individualism on a century of tobacco use: Modelling the prevalence of smoking

John Lang, Daniel Abrams & Hans De Sterck
University of Waterloo Working Paper, July 2014

Abstract:
Smoking of tobacco is predicted to cause approximately six million deaths worldwide in 2014. Responding effectively to this epidemic requires a thorough understanding of how smoking behaviour is transmitted and modified. Here, we present a new mathematical model of the social dynamics that cause cigarette smoking to spread in a population. Our model predicts that more individualistic societies will show faster adoption and cessation of smoking. Evidence from a new century-long composite data set on smoking prevalence in 25 countries supports the model, with direct implications for public health interventions around the world. Our results suggest that differences in culture between societies can measurably affect the temporal dynamics of a social spreading process, and that these effects can be understood via a quantitative mathematical model matched to observations.

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Tobacco Control Policies and Sudden Infant Death Syndrome in Developed Nations

Christian King, Sara Markowitz & Hana Ross
Health Economics, forthcoming

Abstract:
This paper estimates the effects of higher cigarette prices and smoke-free policies on the prevalence of Sudden Infant Death Syndrome (SIDS). Using a panel of developed countries over a 20 year period, we find that higher cigarette prices are associated with reductions in the prevalence of SIDS. However, we find no evidence that smoke-free policies are associated with declines in SIDS.

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The Interactive Effect of Neighborhood Peer Cigarette Use and 5HTTLPR Genotype on Individual Cigarette Use

Jonathan Daw et al.
Addictive Behaviors, forthcoming

Abstract:
Previous cross-sectional research has shown that adolescents’ cigarette use is interactively associated with that of their school peers and their 5HTTLPR genotype, such that the cigarette use of persons with more copies of the 5HTTLPR*S’ allele is more dependent on school peers’ cigarette use behaviors than their counterparts. This analysis seeks to extend this novel finding by examining whether the same conclusion can be reached when substituting neighborhood peers for school peers and examining the timing of the initiation of any and regular smoking in adolescence. A similar conclusion is reached using an independent sample with longitudinal measures of cigarette use among 6th through 8th graders clustered in 82 neighborhoods, of whom 1,098 contributed genetic data. The proportion of respondents who had ever smoked cigarettes by the first wave was calculated for each Census block group in the study. 5HTTLPR genotype was assayed using the method of Whisman and colleagues (2011). The timing of any or regular smoking initiation and over four years were modeled as dependent variables using Cox proportional hazards models. The interaction of neighborhood peer smoking behavior in the first wave and 5HTTLPR genotype statistically significantly predicted any smoking initiation (hazard ratio: 3.532; p-value = 0.002) and regular smoking initiation (hazard ratio: 5.686; p-value = 0.000), net of controls for sex, race/ethnicity, grade in the first wave of data, and parental educational attainment. These findings reach the same conclusions as previous cross-sectional research. The findings for any smoking initiation are consistent with the diathesis-stress model of gene-environment interaction; the findings for regular smoking initiation are consistent with the differential susceptibility model.

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Awareness of Novel Drug Legality in a Young Adult Population

Michael Singleton, John Stogner & Bryan Lee Miller
American Journal of Criminal Justice, September 2014, Pages 425-435

Abstract:
In recent years, use of substances commonly referred to as ‘legal highs’ has become a significant concern to policy makers and public health officials. Though legislation banning the use and possession of these novel and synthetic drugs often follows the initial media attention and public outcry, potential users may often be unaware of the legislation. A survey including self-reported drug use and perceptions of the legality of various psychoactive substances was administered to 2,346 students in randomly selected classes at a large public university to determine what portion accurately knew four types of novel drugs were locally illegal. Results indicated that numerous potential and current users incorrectly believed that the former ‘legal highs’ remained unrestricted. This sample did include a number of novel drug users; lifetime use of at least one novel drug was reported by 17.1 %, many of which reported using multiple types of novel drugs. Approximately one-third of the overall sample inaccurately believed that Salvia divinorum (34.7 %), K2/Spice (36.5 %), and Mr. Miyagi/Pot-pourri (32.1 %) were legal in the state and over half (50.3 %) inaccurately believed ‘bath salts’ (synthetic cathinones, MDPV, and other synthetic stimulants) remained legal. As these misperceptions have the potential to influence substance use decisions, they may need to be corrected through educational campaigns as widespread as the preceding media coverage that labeled the drug as ‘legal highs.’ Results also indicated that Blacks and previous users of the substances were more likely to hold inaccurate legal beliefs.

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Productive Addicts and Harm Reduction: How Work Reduces Crime – But Not Drug Use

Christopher Uggen & Sarah Shannon
Social Problems, February 2014, Pages 105-130

Abstract:
From the Works Progress Administration of the New Deal to the Job Corps of the Great Society era, employment programs have been advanced to fight poverty and social disorder. In today's context of stubborn unemployment and neoliberal policy change, supported work programs are once more on the policy agenda. This article asks whether work reduces crime and drug use among heavy substance users. And, if so, whether it is the income from the job that makes a difference, or something else. Using the nation's largest randomized job experiment, we first estimate the treatment effects of a basic work opportunity and then partition these effects into their economic and extra-economic components, using a logit decomposition technique generalized to event history analysis. We then interview young adults leaving drug treatment to learn whether and how they combine work with active substance use, elaborating the experiment's implications. Although supported employment fails to reduce cocaine or heroin use, we find clear experimental evidence that a basic work opportunity reduces predatory economic crime, consistent with classic criminological theory and contemporary models of harm reduction. The rate of robbery and burglary arrests fell by approximately 46 percent for the work treatment group relative to the control group, with income accounting for a significant share of the effect.

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Maladaptive Decision Making and Substance Use Outcomes in High-Risk Individuals: Preliminary Evidence for the Role of 5-HTTLPR Variation

Jessica O'Brien, Sarah Lichenstein & Shirley Hill
Journal of Studies on Alcohol and Drugs, July 2014, Pages 643–652

Objective: Individuals with multiple alcohol-dependent (AD) relatives are at increased risk for substance use disorders (SUDs). Prospective, longitudinal studies of high-risk (HR) individuals afford the opportunity to determine potential risk markers of SUDs. The current study assessed the effect of familial risk and genetic variation on Iowa Gambling Task (IGT) performance and tested for an association between IGT performance and SUD outcomes.

Method: Individuals from multiplex AD families (n = 63) and low-risk (LR; n = 45) control families, ages 16–34 years, were tested using a computerized version of the IGT. SUD outcomes were assessed at approximately yearly intervals. 5-HTTLPR and COMT genotypes were available for the majority of participants (n = 86).

Results: HR offspring showed poorer performance overall on the IGT and especially poor performance on the final trial block (Block 5), indicating a failure to improve decision making with previous experience. The 5-HTTLPR short-allele homozygote participants performed worse than long-allele carriers, with HR S/S carriers exhibiting particularly poor performance. There was no main effect of COMT on IGT performance and no significant COMT by Risk interaction. Significantly more individuals in the HR than LR group met criteria for SUD. Importantly, disadvantageous performance on IGT Block 5 was significantly associated with an earlier age at SUD onset.

Conclusions: This is the first study to show that both familial risk of SUD and 5-HTTLPR variation impact performance on the IGT. Poorer IGT performance was associated with earlier onset of SUD, suggesting that HR individuals who fail to appropriately attend to long-term costs and benefits during a decision-making task are especially at risk for developing SUD in adolescence and young adulthood.

By KEVIN LEWIS | 09:00:00 AM

Wednesday, August 13, 2014

The grass is greener

Affirming belief in scientific progress reduces environmentally friendly behavior

Marijn Meijers & Bastiaan Rutjens
European Journal of Social Psychology, August 2014, Pages 487–495

Abstract:
Many people are reluctant to behave in environmentally friendly ways. One possible explanation might be that the motivation to behave in environmentally friendly ways is undermined by the way scientific progress is overstated in the popular media. Four experiments show that portraying science as rapidly progressing — and thus enabling society to control problems related to the natural environment and human health in the not-too-distant future — is detrimental to environmentally friendly behaviour because such a frame affirms perceptions of an orderly (vs chaotic) world. This in turn negatively affects the likelihood of engaging in environmentally friendly behaviour. Simultaneously, communication that questions (vs affirms) scientific progress leads to lower perceptions of order and consequential increases in environmentally friendly behaviour. These findings show that when the aim is to promote environmentally friendly attitudes and behaviour, it helps to not overstate scientific progress.

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Free to Choose: Promoting Conservation by Relaxing Outdoor Watering Restrictions

Anita Castledine et al.
NBER Working Paper, July 2014

Abstract:
Many water utilities use outdoor watering restrictions based on assigned weekly watering days to promote conservation and delay costly capacity expansions. We find that such policies can lead to unintended consequences - customers who adhere to the prescribed schedule use more water than those following a more flexible irrigation pattern. For our application to residential watering in a high-desert environment, this "rigidity penalty" is robust to an exogenous policy change that allowed an additional watering day per week. Our findings contribute to the growing literature on leakage effects of regulatory policies. In our case inefficiencies arise as policies limit the extent to which agents can temporally re-allocate actions.

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Sharp increase in central Oklahoma seismicity since 2008 induced by massive wastewater injection

K.M. Keranen et al.
Science, 25 July 2014, Pages 448-451

Abstract:
Unconventional oil and gas production provides a rapidly growing energy source; however, high-production states in the United States, such as Oklahoma, face sharply rising numbers of earthquakes. Subsurface pressure data required to unequivocally link earthquakes to injection are rarely accessible. Here we use seismicity and hydrogeological models to show that fluid migration from high-rate disposal wells in Oklahoma is potentially responsible for the largest swarm. Earthquake hypocenters occur within disposal formations and upper-basement, between 2-5 km depth. The modeled fluid pressure perturbation propagates throughout the same depth range and tracks earthquakes to distances of 35 km, with a triggering threshold of ~0.07 MPa. Although thousands of disposal wells operate aseismically, four of the highest-rate wells are capable of inducing 20% of 2008-2013 central US seismicity.

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The reliance on symbolically significant behavioral attributes when judging energy consumption behaviors

Bernadette Sütterlin & Michael Siegrist
Journal of Environmental Psychology, forthcoming

Abstract:
This research provides evidence for people’s susceptibility to the symbolic significance fallacy when judging energy-related behaviors. The fallacy describes people’s tendency to rely on symbolically significant behavioral attributes while neglecting other information. Participants were presented with two energy consumer descriptions. One entailed a positive symbolically significant attribute (e.g., driving a Prius) and a negative symbolically neutral attribute (e.g., covering 28,700 km); for the other one, the reverse was true (e.g., driving an SUV and covering 11,400 km). Thereby, the former actually consumed more energy. As expected, the energy consumer with the positive symbolically significant attribute was considered more energy conscious than the one with the negative symbolically significant attribute. The effect even persisted when providing detailed information on energy consumption, enabling an exact calculation, and asking to directly rate energy consumption. This research points to misperceptions in the estimation of energy consumption that could impede adoption of adequate energy-friendly behavior.

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The Effects of Regulation in the Presence of Multiple Unpriced Externalities: Evidence from the Transportation Sector

Antonio Bento et al.
American Economic Journal: Economic Policy, August 2014, Pages 1-29

Abstract:
In transportation systems with unpriced congestion, allowing single-occupant low-emission vehicles in high occupancy vehicle (HOV) lanes to encourage their adoption exacerbates congestion costs for carpoolers. The resulting welfare effects of the policy are negative, with environmental benefits overwhelmingly dominated by the increased congestion costs. Exploiting the introduction of the Clean Air Vehicle Stickers policy in California with a regression discontinuity design, our results imply a best-case cost of $124 per ton of reductions in greenhouse gases, $606,000 dollars per ton of nitrogen oxides reduction, and $505,000 dollars per ton of hydrocarbon reduction, exceeding those of other options readily available to policymakers.

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Moral Outpouring: Shock and Generosity in the Aftermath of the BP Oil Spill

Justin Farrell
Social Problems, August 2014, Pages 482-506

Abstract:
The 2010 BP oil spill is the largest human-caused disaster in U.S. history. Using nationally representative panel data measured before, during, and after the spill I find that rather than giving time and money to actual relief efforts, Americans responded primarily through dramatic increases in time and money given for environmental causes. This expands current understandings about how and why Americans respond to large-scale catastrophe. I argue that this phenomenon can be made sense of theoretically by focusing on the cultural context of “moral shock” precipitated by historic environmental harm and corporate negligence, both of which were amplified in the wake of the spill by national media. This heightened emotional climate interacted with Americans' empathetic identities, practices and habits, politics, and culture to produce different pathways to philanthropic engagement. Consistent with this argument, the results show that all four of these factors mattered for predicting generous behavior in this case, but did so at different points in time. I close by outlining the substantive and theoretical implications of my argument.

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Wielding the green stick: Criminal enforcement at the EPA under the Bush and Obama administrations

Joshua Ozymy & Melissa Jarrell
Environmental Politics, forthcoming

Abstract:
The criminal prosecution of environmental offenders by the US Environmental Protection Agency (EPA) is one of the agency’s most politicised yet poorly understood responsibilities. Through content analysis of the Agency’s criminal prosecutions in 2001–2011, we undertook analysis of nearly 1000 cases to understand better whether and how the outcomes of the criminal enforcement division change under presidential administrations. Using a principal-agent framework, our results suggest presidents do matter for enforcement outcomes. Yet, the more interesting conclusion is that these outcomes are not extremely divergent, suggesting that the Agency is able to navigate the often conflicting dictates of various political principals, under similar budgetary constraints, and in step with an Agency culture that values strong enforcement. Moreover, we find that such enforcement efforts are substantively valuable, as many of these cases involve serious and willful violations of law that result in significant harm to humans and the environment.

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Cash for Corollas: When Stimulus Reduces Spending

Mark Hoekstra, Steven Puller & Jeremy West
NBER Working Paper, July 2014

Abstract:
Cash for Clunkers was a 2009 economic stimulus program aimed at increasing new vehicle spending by subsidizing the replacement of older vehicles. Using a regression discontinuity design, we show the increase in sales during the two month program was completely offset during the following seven to nine months, consistent with previous research. However, we also find the program's fuel efficiency restrictions induced households to purchase more fuel efficient but less expensive vehicles, thereby reducing industry revenues by three billion dollars over the entire nine to eleven month period. This highlights the conflict between the stimulus and environmental objectives of the policy.

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Prenatal exposure to airborne polycyclic aromatic hydrocarbons and IQ: Estimated benefit of pollution reduction

Frederica Perera et al.
Journal of Public Health Policy, August 2014, Pages 327–336

Abstract:
Outdoor air pollution, largely from fossil fuel burning, is a major cause of morbidity and mortality in the United States, costing billions of dollars every year in health care and loss of productivity. The developing fetus and young child are especially vulnerable to neurotoxicants, such as polycyclic aromatic hydrocarbons (PAH) released to ambient air by combustion of fossil fuel and other organic material. Low-income populations are disproportionately exposed to air pollution. On the basis of the results of a prospective cohort study in a low-income population in New York City (NYC) that found a significant inverse association between child IQ and prenatal exposure to airborne PAH, we estimated the increase in IQ and related lifetime earnings in a low-income urban population as a result of a hypothesized modest reduction of ambient PAH concentrations in NYC of 0.25 ng/m3. For reference, the current estimated annual mean PAH concentration is ~1 ng/m3. Restricting to NYC Medicaid births and using a 5 per cent discount rate, we estimated the gain in lifetime earnings due to IQ increase for a single year cohort to be US$215 million (best estimate). Using much more conservative assumptions, the estimate was $43 million. This analysis suggests that a modest reduction in ambient concentrations of PAH is associated with substantial economic benefits to children.

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Long-term effects of income specialization in oil and gas extraction: The U.S. West, 1980–2011

Julia Haggerty et al.
Energy Economics, September 2014, Pages 186–195

Abstract:
The purpose of the study is to evaluate the relationships between oil and natural gas specialization and socioeconomic well-being during the period 1980 to 2011 in a large sample of counties within the six major oil- and gas-producing states in the interior U.S. West: Colorado, Montana, New Mexico, North Dakota, Utah, and Wyoming. The effects of participation in the early 1980s oil and gas boom and long-term specialization were considered as possible drivers of socioeconomic outcomes. Generalized estimating equations were used to regress 11 measures of economic growth and quality of life on oil and gas specialization while accounting for various confounding factors including degree of access to markets, initial socioeconomic conditions in 1980, and dependence on other economic sectors. Long-term oil and gas specialization is observed to have negative effects on change in per capita income, crime rate, and education rate. Participation in the early 1980s boom was positively associated with change in per capita income; however the positive effect decreases the longer counties remain specialized in oil and gas. Our findings contribute to a broader public dialogue about the consequences of resource specialization involving oil and natural gas and call into question the assumption that long-term oil and gas development confers economic advantages upon host communities.

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Lead Exposure and Behavior: Effects on Antisocial and Risky Behavior among Children and Adolescents

Jessica Wolpaw Reyes
NBER Working Paper, August 2014

Abstract:
It is well known that exposure to lead has numerous adverse effects on behavior and development. Using data on two cohorts of children from the NLSY, this paper investigates the effect of early childhood lead exposure on behavior problems from childhood through early adulthood. I find large negative consequences of early childhood lead exposure, in the form of an unfolding series of adverse behavioral outcomes: behavior problems as a child, pregnancy and aggression as a teen, and criminal behavior as a young adult. At the levels of lead that were the norm in United States until the late 1980s, estimated elasticities of these behaviors with respect to lead range between 0.1 and 1.0.

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An Empirical Analysis of Cost Recovery in Superfund Cases: Implications for Brownfields and Joint and Several Liability

Howard Chang & Hilary Sigman
Journal of Empirical Legal Studies, September 2014, Pages 477–504

Abstract:
Economic theory developed in the prior literature indicates that under the joint and several liability imposed by the federal Superfund statute, the government should recover more of its costs of cleaning up contaminated sites than it would under nonjoint liability, and the amount recovered should increase with the number of defendants and with the independence among defendants in trial outcomes. We test these predictions empirically using data on outcomes in federal Superfund cases. Theory also suggests that this increase in the amount recovered may discourage the sale and redevelopment of potentially contaminated sites (or “brownfields”). We find the increase to be substantial, which suggests that this implicit tax on sales may be an important deterrent for parties contemplating brownfields redevelopment.

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The Impact of Trial Runs on the Acceptability of Environmental Taxes: Experimental Evidence

Todd Cherry, Steffen Kallbekken & Stephan Kroll
Resource and Energy Economics, November 2014, Pages 84–95

Abstract:
This paper examines the political difficulty of enacting welfare-enhancing environmental taxes. Using referenda in a market experiment with externalities, we investigate the effect of trial periods on the acceptability of two theoretically equivalent Pigouvian tax schemes. While implementing either tax is in subjects’ material self-interest, we find significant levels of opposition to both schemes, though the level differs considerably. Results show that trial runs can overcome initial tax aversion, which is robust across schemes, but a trial with one scheme does not affect the acceptability of the other. Trial periods also mitigate initial biases in preferences of alternative tax schemes.

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Would you rule out going green? The effect of inclusion versus exclusion mindset on pro-environmental willingness

Rachel McDonald, Ben Newell & Thomas Denson
European Journal of Social Psychology, August 2014, Pages 507–513

Abstract:
Two experiments demonstrate that participants' willingness to endorse adopting pro-environmental behaviors is influenced substantially by a decision-framing effect: the inclusion–exclusion discrepancy. Participants were presented with a list of 26 pro-environmental behaviors (e.g., take a shorter shower, buy local produce). In both experiments, participants asked to cross out the behaviors they would not be willing to engage in (exclusion mindset) generated 30% larger consideration sets than those asked to circle behaviors that they would be willing to do (inclusion mindset). Experiment 2 identified qualities of the behaviors that accounted for the differences in the size of consideration sets, namely effort and opportunity. The results suggest the counter-intuitive notion that encouraging people to think about what they would not do for the environment might lead them to do more.

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Fault Zone Regulation, Seismic Hazard, and Social Vulnerability in Los Angeles, California: Hazard or Urban Amenity?

Nathan Toké, Christopher Boone & Ramón Arrowsmith
Earth's Future, forthcoming

Abstract:
Public perception and regulation of environmental hazards are important factors in the development and configuration of cities. Throughout California, probabilistic seismic hazard mapping and geologic investigations of active faults have spatially quantified earthquake hazard. In Los Angeles, these analyses have informed earthquake engineering, public awareness, the insurance industry, and the government regulation of developments near faults. Understanding the impact of natural hazards regulation on the social and built geography of cities is vital for informing future science and policy directions. We constructed a relative social vulnerability index classification for Los Angeles to examine the social condition within regions of significant seismic hazard; including areas regulated as Alquist-Priolo (AP) Act earthquake fault zones. Despite hazard disclosures, social vulnerability is lowest within AP regulatory zones and vulnerability increases with distance from them. Because the AP Act requires building setbacks from active faults, newer developments in these zones are bisected by parks. Parcel-level analysis demonstrates that homes adjacent to these fault zone parks are the most valuable in their neighborhoods. At a broad scale, a Landsat-based normalized difference vegetation index shows that greenness near AP zones is greater than the rest of the metropolitan area. In the parks-poor city of Los Angeles, fault zone regulation has contributed to the construction of park space within areas of earthquake hazard, thus transforming zones of natural hazard into amenities, attracting populations of relatively high social status, and demonstrating that the distribution of social vulnerability is sometimes more strongly tied to amenities than hazards.

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Estimating the net implicit price of energy efficient building codes on U.S. households

Bishwa Koirala, Alok Bohara & Robert Berrens
Energy Policy, October 2014, Pages 667–675

Abstract:
Requiring energy efficiency building codes raises housing prices (or the monthly rental equivalent), but theoretically this effect might be fully offset by reductions in household energy expenditures. Whether there is a full compensating differential or how much households are paying implicitly is an empirical question. This study estimates the net implicit price of energy efficient buildings codes, IECC 2003 through IECC 2006, for American households. Using sample data from the American Community Survey 2007, a heteroskedastic seemingly unrelated estimation approach is used to estimate hedonic price (house rent) and energy expenditure models. The value of energy efficiency building codes is capitalized into housing rents, which are estimated to increase by 23.25 percent with the codes. However, the codes provide households a compensating differential of about a 6.47 percent reduction (about $7.71) in monthly energy expenditure. Results indicate that the mean household net implicit price for these codes is about $140.87 per month in 2006 dollars ($163.19 in 2013 dollars). However, this estimated price is shown to vary significantly by region, energy type and the rent gradient.

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Shale Gas Development and Housing Values over a Decade: Evidence from the Barnett Shale

Jeremy Glenn Weber, Wesley Burnett & Irene Xiarchos
U.S. Association for Energy Economics Working Paper, July 2014

Abstract:
Extracting natural gas from shale formations can create local economic benefits such as public revenues but also disamenities such as truck traffic, both of which change over time. We study how shale gas development affected zip code level housing values in Texas’ Barnett Shale, which splits the Dallas-Fort Worth region in half and is the most extensively developed shale formation in the U.S. We find that housing in shale zip codes appreciated more than nonshale zip codes during peak development and less afterwards, with a net positive effect of five to six percentage points from 1997 to 2013. The greater appreciation in part reflects improved local public finances: the value of natural gas rights expanded the local tax base by $82,000 per student, increasing school revenues and expenditures. Within shale zip codes, however, an extra well per square kilometer was associated with a 1.6 percentage point decrease in appreciation over the study period.

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A tale of trade-offs: The impact of macroeconomic factors on environmental concern

Stephen Conroy & Tisha Emerson
Journal of Environmental Management, December 2014, Pages 88–93

Objective: We test whether macroeconomic conditions affect individuals' willingness to pay for environmental quality improvements.

Method: We use a nearly 40-year span (27 periods) of the General Social Survey (1974–2012) to estimate attitudes toward environmental spending while controlling for U.S. macroeconomic conditions and respondent-specific factors such as age, gender, marital status, number of children, residential location, educational attainment, personal financial condition, political party affiliation and ideology. Macroeconomic conditions include one-year lagged controls for the unemployment rate, the rate of economic growth (percentage change in real GDP), and an indicator for whether the U.S. economy was experiencing a recession.

Results: We find that, in general, when economic conditions are unfavorable (i.e., during a recession, or with higher unemployment, or lower GDP growth), respondents are more likely to believe the U.S. is spending too much on “improving and protecting the environment”. Interacting lagged macroeconomic controls with respondent's income, we find that these views are at least partially offset by the respondent's own economic condition (i.e., their own real income).

Conclusion: Our findings are consistent with the notion that environmental quality is a normal, or procyclical good, i.e., that environmental spending should rise when the economy is expanding and fall during economic contractions.

By KEVIN LEWIS | 09:00:00 AM

Tuesday, August 12, 2014

Cultural landscape

National Happiness and Genetic Distance: A Cautious Exploration

Eugenio Proto & Andrew Oswald
University of Warwick Working Paper, July 2014

Abstract:
This paper examines a famous puzzle in social science. Why do some nations report such high happiness? Denmark, for instance, regularly tops the league table of rich nations’ wellbeing; Great Britain and the US enter further down; France and Italy do relatively poorly. Yet the explanation for this ranking – one that holds even after adjustment for GDP and socioeconomic and cultural variables – remains unknown. We explore a new avenue. Using data on 131 countries, we document a range of evidence consistent with the hypothesis that certain nations may have a genetic advantage in well-being.

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Unhappy Cities

Edward Glaeser, Joshua Gottlieb & Oren Ziv
NBER Working Paper, July 2014

Abstract:
There are persistent differences in self-reported subjective well-being across U.S. metropolitan areas, and residents of declining cities appear less happy than other Americans. Newer residents of these cities appear to be as unhappy as longer term residents, and yet some people continue to move to these areas. While the historical data on happiness are limited, the available facts suggest that cities that are now declining were also unhappy in their more prosperous past. One interpretation of these facts is that individuals do not aim to maximize self-reported well-being, or happiness, as measured in surveys, and they willingly endure less happiness in exchange for higher incomes or lower housing costs. In this view, subjective well-being is better viewed as one of many arguments of the utility function, rather than the utility function itself, and individuals make trade-offs among competing objectives, including but not limited to happiness.

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The French Unhappiness Puzzle: The Cultural Dimension of Happiness

Claudia Senik
Journal of Economic Behavior & Organization, forthcoming

Abstract:
This article sheds light on the important differences in self-declared happiness across countries of similar affluence. It hinges on the different happiness statements of natives and immigrants in a set of European countries to disentangle the influence of objective circumstances versus psychological and cultural factors. The latter turn out to be of non-negligible importance. In some countries, such as France, they are responsible for the best part of the country's unobserved idiosyncratic source of unhappiness. French natives are less happy than other Europeans, whether they live in France or outside. By contrast, immigrants are not less happy in France than they are elsewhere in Europe, but their happiness fall with the passage of time and generations. I show that these gaps in self-declared happiness have a real emotional counterpart and do not boil down to purely nominal differences.

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The (True) Legacy of Two Really Existing Economic Systems

Dan Ariely et al.
Duke University Working Paper, June 2014

Abstract:
By running an experiment among Germans collecting their passports or ID cards in the citizen centers of Berlin, we find that individuals with an East German family background cheat significantly more on an abstract task than those with a West German family background. The longer individuals were exposed to socialism, the more likely they were to cheat on our task. While it was recently argued that markets decay morals (Falk and Szech, 2013), we provide evidence that other political and economic regimes such as socialism might have an even more detrimental effect on individuals’ behavior.

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Cyber-shilling in Automobile Auctions: Evidence from a Field Experiment

David Grether, David Porter & Matthew Shum
American Economic Journal: Microeconomics, forthcoming

Abstract:
We run a large field experiment with an online company specializing in selling used automobiles via ascending auctions. We manipulate experimentally the "price grid," or the possible amounts that bidders can bid above the current standing price. Using two diverse auction sites, one in New York and one in Texas, we find that buyer and seller behavior differs strikingly across the two sites. Specifically, in Texas we find peculiar patterns of bidding among a small but prominent group of buyers suggesting that they are "cyber-shills" working on behalf of sellers. These patterns do not appear in the New York auctions.

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Cultural differences in indecisiveness: The role of naïve dialecticism

Andy Ng & Michaela Hynie
Personality and Individual Differences, November 2014, Pages 45–50

Abstract:
East Asians exhibit naïve dialecticism, a set of worldviews that tolerates contradictions. As influenced by naïve dialecticism, East Asians are more likely to hold and less likely to change ambivalent attitudes, compared with European North Americans. If East Asians have a heightened tendency to see both positive and negative aspects of an object or issue, but a lesser inclination to resolve these inconsistencies, East Asians (vs. European North Americans) may experience more difficulty in committing to an action, and thus be more indecisive. Consistent with this hypothesis, we found that East Asian Canadians scored higher on a measure of chronic indecisiveness than did European Canadians and South Asian Canadians, and that naïve dialecticism and need for cognition mediated the relationship between culture and indecisiveness. These results add to the extant literature on indecisiveness, demonstrating cultural variations in indecisiveness and an underlying cultural factor that is responsible for these cultural differences.

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Differences in voice-hearing experiences of people with psychosis in the USA, India and Ghana: Interview-based study

T.M. Luhrmann et al.
British Journal of Psychiatry, forthcoming

Aims: To compare auditory hallucinations across three different cultures, by means of an interview-based study.

Method: An anthropologist and several psychiatrists interviewed participants from the USA, India and Ghana, each sample comprising 20 persons who heard voices and met the inclusion criteria of schizophrenia, about their experience of voices.

Results: Participants in the USA were more likely to use diagnostic labels and to report violent commands than those in India and Ghana, who were more likely than the Americans to report rich relationships with their voices and less likely to describe the voices as the sign of a violated mind.

Conclusions: These observations suggest that the voice-hearing experiences of people with serious psychotic disorder are shaped by local culture. These differences may have clinical implications.

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A Socio-Ecological Approach to Cross-Cultural Differences in the Sensitivity to Social Rejection: The Partially Mediating Role of Relational Mobility

Kosuke Sato, Masaki Yuki & Vinai Norasakkunkit
Journal of Cross-Cultural Psychology, forthcoming

Abstract:
The authors propose that cross-cultural differences in sensitivity to social rejection, or the extent to which one is alert to potential rejection from significant others, can be understood as an adaptation to different social ecological contexts varying in the degrees of relational mobility. In societies low in relational mobility, such as East Asia, relationships and group memberships are stable and exclusive, and thus it is difficult for individuals to recover once rejected from current relationships or groups. In these contexts, one would expect people to be continuously paying attention to negative feedback from others to avoid potential rejection. In contrast, this type of anxiety will be less pronounced in societies high in relational mobility, such as North America, because there are a greater number of relationship alternatives available, even if individuals were to be excluded from a particular relationship. Results from two cross-national studies showed that, as expected, individuals’ perceptions of relational mobility partially mediated rejection sensitivity (Study 1) and Taijin Kyofusho, an allocentric subtype of social anxiety (Study 2).

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How Persistent Are Consumption Habits? Micro-Evidence from Russia's Alcohol Market

Lorenz Kueng & Evgeny Yakovelv
NBER Working Paper, July 2014

Abstract:
We use the Anti-Alcohol Campaign in 1986 and the rapid expansion of the beer market after the collapse of the Soviet Union as two quasi-natural experiments to identify highly persistent habit formation in alcohol consumption among Russian males. Importantly, these results apply to all levels of alcohol consumption and are not driven by heavy drinking or alcoholism. The two large shocks combined with persistent habits lead to large cohort differences in consumer behavior even decades later. We derive a basic model of habit formation with homogeneous preferences over two habit-forming goods, which is consistent with these facts. Using placebo tests as well as simple descriptive statistics, we show that habits are formed during early adulthood and remain largely unaffected afterward. The main alternative hypotheses such as income effects, unobserved taste heterogeneity, stepping-stone effects, and changes in culture or social norms are inconsistent with those patterns. Using the experiments as IVs, we estimate the first-order autoregressive coefficient to be 0.83, which is almost three times larger than its OLS estimate. Finally, our results suggest that male mortality in Russia will decrease by one quarter within twenty years even under current policies and prices due to the long-run consequences of the large changes in the alcohol market.

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Spontaneous or controlled: Overall structural organization of political phone-ins in two countries and their relations to societal norms

Gonen Dori-Hacohen
Journal of Pragmatics, September 2014, Pages 1–15

Abstract:
This study describes the differing overall structural organization of political radio phone-in interactions in Israel and the USA. The American phone-in is highly organized, tightly controlled by the host, who knows and introduces the caller at the opening, and closes the interaction unilaterally. In the Israeli phone-in, the opening resembles the mundane phone call: the call-taker acts as if he responds to a summons, there are greeting sequences, and the caller has the task of self-identification, since hosts do not know with whom they talk. Closings in Israel are negotiated and include pre-closings and closing sequences. Unlike the US structure, the Israeli structure promotes non-hierarchical institutional relations between participants, akin to mundane relations, often taken as relations between equals. The conclusion connects the overall structural organizations with the communication patterns in each society, suggesting phone-ins are one site that resonates and recreates societal norms.

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Subjective and Objective Hierarchies and Their Relations to Psychological Well-Being: A U.S./Japan Comparison

Katherine Curhan et al.
Social Psychological and Personality Science, forthcoming

Abstract:
Hierarchy can be conceptualized as objective social status (e.g., education level) or subjective social status (i.e., one’s own judgment of one’s status). Both forms predict well-being. This is the first investigation of the relative strength of these hierarchy–well-being relationships in the U.S. and Japan, cultural contexts with different normative ideas about how social status is understood and conferred. In probability samples of Japanese (N = 1,027) and U.S. (N = 1,805) adults, subjective social status more strongly predicted life satisfaction, positive affect, sense of purpose, and self-acceptance in the United States than in Japan. In contrast, objective social status more strongly predicted life satisfaction, positive relations with others, and self-acceptance in Japan than in the United States. These differences reflect divergent cultural models of self. The emphasis on independence characteristic of the United States affords credence to one’s own judgment (subjective status), and the interdependence characteristic of Japan gives weight to what others can observe (objective status).

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Mortality Salience and Cultural Cringe: The Australian Way of Responding to Thoughts of Death

Emiko Kashima et al.
Journal of Cross-Cultural Psychology, forthcoming

Abstract:
Terror Management Theory predicts that mortality salience (MS) instigates cultural worldview defenses, especially among individuals with lower self-esteem. That MS intensifies positive evaluations of pro-U.S. essay authors, and negative evaluations of anti-U.S. essay authors have been documented as supportive evidence. However, the evidence to date may have been limited to where praising for the former and rejection of the latter authors is consistent with a shared cultural script and thus normative. In the case of Australian people, the cultural script of cringe prescribes them to evaluate their country modestly and to reject high praise of their country. We therefore predicted that MS (vs. control) should lead Australians, with low self-esteem in particular, to evaluate pro-Australia essay authors less positively while not affecting their evaluations of anti-Australia essay authors. Results from two studies were consistent with this prediction. It is important to distinguish MS effects on adherence to cultural norms from those on reaffirming collective self-esteem, and to consider relevant cultural scripts when interpreting evidence for worldview defenses.

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False Commitments: Local Misrepresentation and the International Norms Against Female Genital Mutilation and Early Marriage

Karisa Cloward
International Organization, Summer 2014, Pages 495-526

Abstract:
A substantial international relations literature addresses the various ways in which international actors, and the norms they promote, influence state behavior. But less attention has been paid to the influence these actors directly exert at the local level, despite the fact that many transnational campaigns promote norms for which individuals — not states — are the primary transgressors. If individuals behave as some states do, publicly embracing international norms only because they expect a financial or reputational benefit from doing so, then the campaigns have not fully succeeded. But when do individuals engage in real behavior change, and when do they simply change the public image they present to the international community? To begin to address this question, I employ a randomized field experiment to evaluate individuals' willingness to make claims that differ from their true normative commitments. I conducted the experiment in the context of an original 2008 opinion survey about female genital mutilation and early marriage, run in rural Kenya. I find that respondents misrepresent their behavior and intentions, and I supplement these findings with an exploration of causal mechanisms through qualitative interviews.

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When You Think About It, Your Past Is in Front of You: How Culture Shapes Spatial Conceptions of Time

Juanma de la Fuente et al.
Psychological Science, forthcoming

Abstract:
In Arabic, as in many languages, the future is “ahead” and the past is “behind.” Yet in the research reported here, we showed that Arabic speakers tend to conceptualize the future as behind and the past as ahead of them, despite using spoken metaphors that suggest the opposite. We propose a new account of how space-time mappings become activated in individuals’ minds and entrenched in their cultures, the temporal-focus hypothesis: People should conceptualize either the future or the past as in front of them to the extent that their culture (or subculture) is future oriented or past oriented. Results support the temporal-focus hypothesis, demonstrating that the space-time mappings in people’s minds are conditioned by their cultural attitudes toward time, that they depend on attentional focus, and that they can vary independently of the space-time mappings enshrined in language.

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Culture and the Ownership Concentration of Public Corporations around the World

Clifford Holderness
Journal of Corporate Finance, forthcoming

Abstract:
As a country’s attitude toward egalitarianism increases, which means a societal preference for the equal as opposed to hierarchical treatment of individuals, the ownership of the public corporations in the country becomes more concentrated. This finding is robust to a wide range of specifications and methodologies. Once egalitarianism is accounted for, there is no evidence that other cultural attitudes, including trust and religion, or legal protections for public market investors, including those laws that figure prominently in the literature, are related to ownership concentration. One explanation for the robust association between egalitarianism and ownership concentration is that large shareholders are valuable when employees have strong legal rights.

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Fitting in or Sticking Together: The Prevalence and Adaptivity of Conformity, Relatedness, and Autonomy in Japan and Turkey

Derya Güngör et al.
Journal of Cross-Cultural Psychology, forthcoming

Abstract:
In this research, we compare two forms of interdependent agency. Whereas all interdependent cultures emphasize interpersonal connectedness, we suggest that the nature of this connection may differ between face and honor cultures. In a large survey, with 163 Japanese and 172 Turkish students, we tested the idea that, consistent with the concern for face, Japanese interdependence emphasizes conformity; that is, fitting in, whereas, consistent with the concern for honor, Turkish interdependence stresses relatedness; that is, sticking together. The results confirmed these hypotheses: Japanese described their agency more in terms of conformity than Turks, whereas Turks described their agency more in terms of relatedness. Moreover, relational well-being was predicted by conformity in the Japanese group and by relatedness in the Turkish group. Autonomy was also important for both samples, and it predicted personal well-being. Results suggest that a multi-dimensional approach to interdependent agency is needed to distinguish meaningfully between different interdependent cultures.

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Trust Issues: Evidence on the Intergenerational Trust Transmission among Children of Immigrants

Martin Ljunge
Journal of Economic Behavior & Organization, October 2014, Pages 175–196

Abstract:
This paper estimates the intergenerational transmission of trust by studying children of immigrants in 29 European countries with ancestry in 87 nations. There is significant transmission of trust on the mother's side, and the transmission is significantly stronger than on the father's side. The transmission is stronger in high trust countries. Building trust in high trust environments is a process lasting generations. Intriguingly, trust transmission is strong also in low trust birth countries if ancestral trust is very high. There is persistence of very high trust in low trusting environments through cultural transmission in the family.

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Culture-dependent strategies in coordination games

Matthew Jackson & Yiqing Xing
Proceedings of the National Academy of Sciences, 22 July 2014, Pages 10889-10896

Abstract:
We examine different populations’ play in coordination games in online experiments with over 1,000 study participants. Study participants played a two-player coordination game that had multiple equilibria: two equilibria with highly asymmetric payoffs and another equilibrium with symmetric payoffs but a slightly lower total payoff. Study participants were predominantly from India and the United States. Study participants residing in India played the strategies leading to asymmetric payoffs significantly more frequently than study participants residing in the United States who showed a greater play of the strategy leading to the symmetric payoffs. In addition, when prompted to play asymmetrically, the population from India responded even more significantly than those from the United States. Overall, study participants’ predictions of how others would play were more accurate when the other player was from their own populations, and they coordinated significantly more frequently and earned significantly higher payoffs when matched with other study participants from their own population than when matched across populations.

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“Express the Real You”: Cultural Differences in the Perception of Self-Expression as Authenticity

Michail Kokkoris & Ulrich Kühnen
Journal of Cross-Cultural Psychology, September 2014, Pages 1221-1228

Abstract:
Prior research shows that people feel authentic when they express themselves. In this research, we examined how people from different cultures make inferences about a target person’s authenticity based on information about that person’s self-expression. Our cultural-fit hypothesis proposes that acts of self-expression enhance perceptions of authenticity when they are congruent with the culturally prevalent self-expression norms. In an experiment with Germans and Chinese reading scenarios and making inferences about a hypothetical person, we found that authenticity judgments were the highest, when the target person’s self-expression matched the culturally valued self-expression style — that is, expressing both likes and dislikes in Germany, and expressing only likes but no dislikes in China. Moreover, we found that the interactive effect of self-expression and culture had downstream effects on information processing, such that in the case of counter-cultural self-expression practices participants were more likely to seek information that would compensate for this cultural incongruence.

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Cross-Cultural Agreement in Facial Attractiveness Preferences: The Role of Ethnicity and Gender

Vinet Coetzee et al.
PLoS ONE, July 2014

Abstract:
Previous work showed high agreement in facial attractiveness preferences within and across cultures. The aims of the current study were twofold. First, we tested cross-cultural agreement in the attractiveness judgements of White Scottish and Black South African students for own- and other-ethnicity faces. Results showed significant agreement between White Scottish and Black South African observers' attractiveness judgements, providing further evidence of strong cross-cultural agreement in facial attractiveness preferences. Second, we tested whether cross-cultural agreement is influenced by the ethnicity and/or the gender of the target group. White Scottish and Black South African observers showed significantly higher agreement for Scottish than for African faces, presumably because both groups are familiar with White European facial features, but the Scottish group are less familiar with Black African facial features. Further work investigating this discordance in cross-cultural attractiveness preferences for African faces show that Black South African observers rely more heavily on colour cues when judging African female faces for attractiveness, while White Scottish observers rely more heavily on shape cues. Results also show higher cross-cultural agreement for female, compared to male faces, albeit not significantly higher. The findings shed new light on the factors that influence cross-cultural agreement in attractiveness preferences.

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Facial emotion recognition: A cross-cultural comparison of Chinese, Chinese living in Australia, and Anglo-Australians

Catherine Prado et al.
Motivation and Emotion, June 2014, Pages 420-428

Abstract:
This study investigated how the cultural match or mismatch between observer and perceiver can affect the accuracy of judgements of facial emotion, and how acculturation can affect cross-cultural recognition accuracy. The sample consisted of 51 Caucasian-Australians, 51 people of Chinese heritage living in Australia (PCHA) and 51 Mainland Chinese. Participants were required to identify the emotions of happiness, sadness, fear, anger, surprise and disgust displayed in photographs of Caucasian and Chinese faces. The PCHA group also responded to an acculturation measure that assessed their adoption of Australian cultural values and adherence to heritage (Chinese) cultural values. Counter to the hypotheses, the Caucasian-Australian and PCHA groups were found to be significantly more accurate at identifying both the Chinese and Caucasian facial expressions than the Mainland Chinese group. Adoption of Australian culture was found to predict greater accuracy in recognising the emotions displayed on Caucasian faces for the PCHA group.

By KEVIN LEWIS | 09:14:00 AM

Monday, August 11, 2014

A pen and a phone

Preemptive Policy Experimentation

Steven Callander & Patrick Hummel
Econometrica, July 2014, Pages 1509–1528

Abstract:
We develop a model of experimentation and learning in policymaking when control of power is temporary. We demonstrate how an early office holder who would otherwise not experiment is nonetheless induced to experiment when his hold on power is temporary. This preemptive policy experiment is profitable for the early office holder as it reveals information about the policy mapping to his successor, information that shapes future policy choices. Thus policy choices today can cast a long shadow over future choices purely through information transmission and absent any formal institutional constraints or real state variables. The model we develop utilizes a recent innovation that represents the policy mapping as the realized path of a Brownian motion. We provide a precise characterization of when preemptive experimentation emerges in equilibrium and the form it takes. We apply the model to several well known episodes of policymaking, reinterpreting the policy choices as preemptive experiments.

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Corporate Distress and Lobbying Evidence from the Stimulus Act

Manuel Adelino & Serdar Dinc
Journal of Financial Economics, forthcoming

Abstract:
The literature on distressed firms has focused on these firms’ investment, capital structure, and labor decisions. This paper investigates a novel aspect of firm behavior in distress: how financial health affects a firm's lobbying and, consequently, its relationship with the government. We exploit the shock to nonfinancial firms during the 2008 financial crisis and the availability of the stimulus package in the first quarter of 2009. We find that firms with weaker financial health, as measured by credit default swap spreads, lobbied more. We also show that the amount spent on lobbying was associated with a greater likelihood of receiving stimulus funds.

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Presidents and the U.S. Economy: An Econometric Exploration

Alan Blinder & Mark Watson
NBER Working Paper, July 2014

Abstract:
The U.S. economy has grown faster — and scored higher on many other macroeconomic metrics — when the President of the United States is a Democrat rather than a Republican. For many measures, including real GDP growth (on which we concentrate), the performance gap is both large and statistically significant, despite the fact that postwar history includes only 16 complete presidential terms. This paper asks why. The answer is not found in technical time series matters (such as differential trends or mean reversion), nor in systematically more expansionary monetary or fiscal policy under Democrats. Rather, it appears that the Democratic edge stems mainly from more benign oil shocks, superior TFP performance, a more favorable international environment, and perhaps more optimistic consumer expectations about the near-term future. Many other potential explanations are examined but fail to explain the partisan growth gap.

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Can the President Really Affect Economic Growth? Presidential Effort and the Political Business Cycle

Chris Rohlfs, Ryan Sullivan & Robert McNab
Economic Inquiry, forthcoming

Abstract:
Presidential elections are often seen as referendums on the health of the economy; however, little evidence exists on the president's ability to influence gross domestic product (GDP). This study examines the effect of the incentive to be reelected and the resulting increase in presidential effort on GDP growth. Growth is found to rise in reelection years for first-term presidents after 1932 and to fall in election years before 1932, when reelection was uncommon, and for second-term presidents generally. This effect is largest for high-quality presidents — who probably have the highest return to effort — and is spread across multiple sectors of the economy.

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Policy Experimentation, Political Competition, and Heterogeneous Beliefs

Antony Millner, Hélène Ollivier & Leo Simon
London School of Economics Working Paper, June 2014

Abstract:
We consider a two period model in which an incumbent political party chooses the level of a current policy variable unilaterally, but faces competition from a political opponent in the future. Both parties care about voters payoffs, but they have different beliefs about how policy choices will map into future economic outcomes. We show that when the incumbent party can endogenously influence whether learning occurs through its policy choices (policy experimentation), future political competition gives it a new incentive to distort its policies - it manipulates them so as to reduce uncertainty and disagreement in the future, thus avoiding facing competitive elections with an opponent very different from itself. The model thus demonstrates that all incumbents can find it optimal to ‘over experiment’, relative to a counter-factual in which they are sure to be in power in both periods. We thus identify an incentive for strategic policy manipulation that does not depend on self-serving behavior by political parties, but rather stems from their differing beliefs about the consequences of their actions.

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Guns and Votes

Laurent Bouton et al.
NBER Working Paper, June 2014

Abstract:
Why are U.S. congressmen reluctant to support gun control regulations, despite the fact that most Americans are in favor of them? We argue that re-election motives can lead politicians to take a pro-gun stance against the interests of an apathetic majority of the electorate, but in line with the interests of an intense minority. We develop a model of gun control choices in which incumbent politicians are both office and policy motivated, and voters differ in the direction and intensity of their preferences. We derive conditions under which politicians support gun control early in their terms, but oppose them when they approach re-election. We test the predictions of the model by analyzing votes on gun-related legislation in the U.S. Senate, in which one third of the members are up for re-election every two years. We find that senators are more likely to vote pro gun when they are close to facing re-election, a result which holds comparing both across and within legislators. Only Democratic senators "flip flop'' on gun control, and only if the group of pro-gun voters in their constituency is of intermediate size.

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Flip-Flopping: Ideological Adjustment Costs in the United States Senate

Jason DeBacker
Economic Inquiry, forthcoming

Abstract:
Using a long panel of roll call voting data, I find that “flip-flopping” senators face significant electoral costs when changing positions. In models of electoral competition, as the costs to candidates changing position approach zero, the equilibrium prediction is the convergence of platforms. Such convergence is at odds with empirical observation. Using a dynamic, structural model of candidate positioning, I identify the nature of the costs associated with changing position that may result in such non-convergence.

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The Constraining, Liberating, and Informational Effects of Nonbinding Law

Justin Fox & Matthew Stephenson
Journal of Law, Economics, and Organization, forthcoming

Abstract:
We show that nonbinding law can have a constraining effect on political leaders, because legal compliance is a costly signal to imperfectly informed voters that the leader is unbiased. Moreover, nonbinding law can also have a liberating effect, enabling some leaders to take action when they otherwise would have done nothing. In addition, we illustrate how voters may face a trade-off between the legal standard that induces optimal behavior of the current leader (i.e., that most effectively addresses the moral hazard problem) and the legal standard that optimizes selection of future leaders (i.e., that most effectively addresses the adverse selection problem). We discuss a range of positive and normative implications that follow from our analysis.

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Is It Whom You Know or What You Know? An Empirical Assessment of the Lobbying Process

Marianne Bertrand, Matilde Bombardini & Francesco Trebbi
American Economic Review, forthcoming

Abstract:
Do lobbyists provide issue-specific information to members of Congress? Or do they provide special interests access to politicians? We present evidence to assess the role of issue expertise versus connections in the US Federal lobbying process and illustrate how both are at work. In support of the connections view, we show that lobbyists follow politicians they were initially connected to when those politicians switch to new committee assignments. In support of the expertise view, we show that there is a group of experts that even politicians of opposite political affiliation listen to. However, we find a more consistent monetary premium for connections than expertise.

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Partisan Effects of Legislative Term Limits

Andrew Hall
Legislative Studies Quarterly, August 2014, Pages 407–429

Abstract:
Term limits remain a popular policy reform and have generated a great deal of scholarship as a result. Although many predicted that term limits would benefit the Republican party, the literature finds no marked partisan effects, possibly because termed-out legislators have largely been replaced by copartisans. This article demonstrates that term limits have indeed had partisan effects — just not on electoral outcomes. Term limits have caused a significant reallocation of institutional power from Democrats to Republicans (as measured by contributions from access-oriented interest groups), in large part because they have removed more senior Democrats than Republicans. The partisan effects of term limits therefore point to the institutional value of seniority.

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Civil Service Reform

Gergely Ujhelyi
Journal of Public Economics, October 2014, Pages 15–25

Abstract:
Civil service rules governing the selection and motivation of bureaucrats are among the defining institutions of modern democracies. Although this is an active area of reform in the US and elsewhere, economic analyses of the issue are virtually nonexistent. This paper provides a welfare evaluation of civil service reform. It describes the effect of reform on the interaction of politicians, voters, and bureaucrats, and shows that society often faces trade-offs between improving the bureaucracy or improving the performance of politicians. My results characterize the conditions under which merit-based recruitment and civil service protections such as tenure can improve welfare.

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The Political Mobilization of Firms and Industries

Edward Walker & Christopher Rea
Annual Review of Sociology, 2014, Pages 281-304

Abstract:
Corporate political activity is both a long-standing preoccupation and an area of innovation for sociologists. We examine the limitations of investigating business unity without focusing directly on processes and outcomes and then review studies of five types of business political action that offer lenses into corporate power in the United States: engagement in electoral politics, direct corporate lobbying, collective action through associations and coalitions, business campaigns in civil society, and political aspects of corporate responsibility. Through these avenues, we highlight four shifts since the 1970s: (a) increasing fragmentation of capitalist interests, (b) closer attention to links between business lobbying and firms' social embeddedness, (c) a turn away from the assumption that money buys political victories, and (d) new avenues of covert corporate influence. This body of research has reinvigorated the classic elitist/pluralist debate while also raising novel questions about how business actors are adapting to (and generating changes within) their sociopolitical environments.

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Cities Where Women Rule: Female Political Incorporation and the Allocation of Community Development Block Grant Funding

Adrienne Smith
Politics & Gender, September 2014, Pages 313-340

Abstract:
While individual women representatives in government have been found to behave differently than men, the causal connection between the increased presence of women in elected offices and the production of women-friendly policies is tenuous at best. This study leverages the variation in women's office holding, government structures, and policy outputs found in American cities to address that puzzle. It argues that when women obtain leadership positions in municipal government and when the positions they hold have greater power relative to other municipal positions, cities will be more likely to produce policy outputs that are often associated with women's interests and needs. Utilizing an original city-level dataset and modeling women's presence as mayors and policy outputs endogenously, the results reveal that empowered female executives in municipal governments influence expenditure decisions made as part of the federal Community Development Block Grant program. The findings suggest that political scientists should consider not only the presence of an underrepresented group, but also the relative amount of power that group has when assessing the effects on substantive representation.

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Representing Latinos: Examining Descriptive and Substantive Representation in Congress

Sophia Wallace
Political Research Quarterly, forthcoming

Abstract:
Using an original data set of roll call votes and bill co-sponsorships across three high salience issues (immigration, labor, and education) and one low salience issue (social security), this article analyzes the 111th Congress to assess representation of Latinos. Partisanship is the key determinant in member behavior on voting, not the member’s race or ethnicity or constituent demographics. For bill co-sponsorships, Latino members are only more active on high salience issue areas compared with non-Latino members. Increases in Latino population do not influence behavior. The results also indicate that African American and Democratic legislators offer Latinos considerable amounts of substantive representation.

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Electoral Incentives and Legislative Organization: An Examination of Committee Autonomy in U.S. State Legislatures

Tanya Bagashka & Jennifer Hayes Clark
State Politics & Policy Quarterly, forthcoming

Abstract:
We investigate the relationship between electoral institutions and committee autonomy in the context of U.S. state legislatures. The distributive theories of legislative organization suggest that electoral rules that make personal reputations more important motivate legislators to decentralize power and enhance committee autonomy to be able to target particularistic goods to their local constituencies. We argue that the distributive theories have direct implications for the relationship between candidate selection procedures and committee autonomy. The need to reach out to a large number of voters and to amass significant financial resources in states with more inclusive candidate selection procedures such as the open primary makes representatives more dependent on special interests, which is conducive to legislative particularism and committee autonomy. We take advantage of the great variation across the American states to investigate the effects of candidate selection procedures, a factor neglected in the previous literature. Examining 24 state legislatures from 1955 to 1995, we find that the inclusiveness of the selectorate, or the body electing candidates, has a significant effect on committee autonomy with more inclusive primary elections leading to more autonomous committee systems. By contrast, however, term limits were not a significant predictor of committee autonomy. This contributes to our understanding of how legislators amend institutional arrangements to achieve their electoral goals.

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Blacklisted Benefactors: The Political Contestation of Nonmarket Strategy

Mary-Hunter McDonnell & Timothy Werner
University of Texas Working Paper, July 2014

Abstract:
To identify whether or not social movement challenges affect firms’ political strategies, we exploit boycotts of firms through a matched sample, difference-in-difference analysis of PAC donations. Using a new dataset that includes all boycotts of public firms over a 15-year period that received national media attention, we ask a) whether, when facing a boycott, firms decrease their giving to politicians running for federal office, b) whether politicians running for office refund a higher proportion of the donations given by these boycotted firms, and c) what mechanisms drive the relationship between activist challenges and refunded contributions. Ultimately, we find robust evidence that when a firm faces a boycott, it subsequently decreases its PAC contributions and has more of its PAC contributions refunded. With regard to the boycott’s characteristics, we find that the percentage of donations refunded is greater when the boycott receives more media attention and targets a parent company and when the public perceives the claim behind the boycott as more legitimate. With regard to the target firm’s characteristics, we find that boycotts increase the percentage of donations refunded when the firm occupies a position of low status within its industry, operates in an unregulated industry, does not engage in attempts to manage public impressions of its social behavior, and concedes to the boycott. These findings have three implications. First, as the first researchers to analyze politicians’ refunds to firms, we provide new evidence as to how these elites react when the cost of associating with such interests rise. Second, in an era in which the cost of organizing against corporate interests is dropping, we provide the first evidence that activists can constrain corporate nonmarket strategy, at least in the public realm of campaign finance. Finally, since our results demonstrate that firms’ disclosed electoral activity is constrained by activism, firms’ may shift more of their contributions and political expenditures into the undisclosed electoral channels allowed by Citizens United v. FEC.

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From Political Pathways to Legislative Folkways: Electoral Reform, Professionalization, and Representation in the U.S. Senate

Scott MacKenzie
Political Research Quarterly, forthcoming

Abstract:
The Seventeenth Amendment transferred responsibility for selecting senators from state legislatures to voters. Scholars argue that voters’ ability to sanction performance ex post altered senators’ legislative activities. I focus on voters’ ex ante screening of senators. Using original data on senators’ political experiences, I show that direct elections increased the professionalization of pre-Senate careers. I then use sequence analysis methods to identify career paths to the Senate. Pre-Senate career paths help explain which senators received important committee assignments. These findings challenge claims that direct elections had minimal effects on the Senate’s composition and that recruitment is unrelated to legislative behavior.

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Interest-Group Size and Legislative Lobbying

Maik Schneider
Journal of Economic Behavior & Organization, October 2014, Pages 29–41

Abstract:
We develop a model of legislative decision making in which lobbying and public policy are jointly determined. We examine how policy outcomes depend on the sizes of the interest groups. While a larger size typically involves favorable effects on policy, we also identify threshold levels of interest-group size where a lobby will be harmed if it becomes larger. This may provide another rationale as to why some interests do not or not fully organize. Spending limits can remove adverse policy effects of interest-group size. However, this is not necessarily welfare improving. Moreover, we find that endogenous proposal making may turn a second-mover advantage in standard legislative lobbying models into a second-mover disadvantage.

By KEVIN LEWIS | 09:00:00 AM


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