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Tuesday, October 7, 2014

Head of household

The Relationship Between Authoritarianism and Life Satisfaction Changes Depending on Stigmatized Status

Mark Brandt, P.J. Henry & Geoffrey Wetherell
Social Psychological and Personality Science, forthcoming

Abstract:

Members of stigmatized social groups are typically more authoritarian than their nonstigmatized or higher status counterparts. We draw on research demonstrating that authoritarianism compensates for the negative effects of stigma to predict that this endorsement will be more psychologically beneficial (and less harmful) for the stigmatized compared to their high-status counterparts. Consistent with this idea, data from the 2008 (N = 2,322) and 2012 (N = 5,916) American National Election Study indicate that for members of stigmatized social groups (low income, low education, and ethnic minority), authoritarian child rearing values have more positive psychological effects than for members of high-status groups. These results were robust to covariates, including demographics, religiosity, political ideology, and cognitive style.

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Maternal Education and the Unequal Significance of Family Structure for Children's Early Achievement

Jennifer March Augustine
Social Forces, forthcoming

Abstract:
The diverging destiny of US children is a modern-day phenomenon driven, in part, by the rise in women's education and its connection to patterns in women's union formation. In short, more educated mothers are more likely to be in stably married families, whereas less educated mothers are more likely to be in unmarried-parent families, because of either a nonmarital birth or a union dissolution, or remarried ones. This connection between education and family structure means that children of less educated mothers are often raised in homes with fewer resources to promote their well-being than children of more educated mothers. In this study, I argue that these patterns in women's education and family structure have implications for children's diverging destinies that also play out in a more subtle way. Specifically, unmarried or disrupted family structures will result in lower-quality parenting for less educated mothers than for more educated mothers in the same family types, producing greater negative consequences for the achievement trajectories of their children. The results of this study, based on data from the NICHD Study of Early Child Care and Youth Development (n = 1308) and a longitudinal moderated path model, provide support for this argument. In fact, I find that family structure had no connection to the parenting of more educated mothers, or to their children's achievement. These findings provide novel insight into the advantages that maternal education confers to children, beyond the various well-documented demographic and economic correlates that are accounted for in the study.

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The Happiness of Single Mothers: Evidence from the General Social Survey

John Ifcher & Homa Zarghamee
Journal of Happiness Studies, October 2014, Pages 1219-1238

Abstract:
A vast “single mothers’ well-being” literature exists but has not studied single mothers’ subjective well-being (SWB). This shortcoming is important since it has been shown that there are potentially large slippages between economic indicators and SWB. Using repeated cross-sectional data from the General Social Survey 1972–2008, we examine single mothers’ happiness in the US both in absolute terms and relative to other groups: all respondents who are not single mothers, all female respondents who are not single mothers, single childless women, and married mothers. In levels, we find a significant single-mother happiness deficit compared to other groups. This deficit is explained by being single, with the happiness of single mothers statistically indistinguishable from single women without children. Over time, however, the deficit has shrunk relative to all other groups except married mothers. We discuss possible explanations for our findings, including: changes to social welfare programs, increased labor force participation, compositional shifts in single motherhood, and stigma. Our findings are most consistent with compositional shifts and changes in the stigma associated with being a single mother.

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Do childhood experiences of neglect affect delinquency among child welfare involved-youth?

Susan Snyder & Darcey Merritt
Children and Youth Services Review, November 2014, Pages 64–71

Abstract:
Child neglect, which is the most common form of maltreatment in the United States, has been repeatedly linked to an increased risk of delinquency. However, the existing literature lacks studies that simultaneously investigate how distinct types of neglect differentially influence delinquency among child welfare involved-youth. In addition, few studies of the relationship between neglect and delinquency include measures of ADHD, peer deviance or community violence, even though these variables have been strongly associated with delinquency. This study uses data from 784 11 to 17 year old youth who participated in Wave I of the Second National Survey of Child and Adolescent Wellbeing (NSCAW II) to examine whether supervisory neglect, physical neglect and parental substance abuse affect delinquency after controlling for ADHD, peer deviance, exposure to community violence, and out-of-home placements. We conducted a negative binomial regression to account for the low rates of delinquency among NSCAW II participants. We did not find significant main effects for supervisory neglect, physical neglect or parental substance abuse. Our study found that as youth age the count of delinquency acts increases. Black and Hispanic youth had higher counts of delinquency than youth with White, multi-racial, or “other” racial identities. Youth in out-of-home care had nearly double the rate of delinquency. Youth with more deviant peer affiliations and youth who had been exposed to community violence engaged in more delinquent behaviors. Our findings underscore the importance of the environment surrounding the youth, and the peers with whom the youth affiliates.

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Are infants differentially sensitive to parenting? Early maternal care, DRD4 genotype and externalizing behavior during adolescence

Jörg Nikitopoulos et al.
Journal of Psychiatric Research, forthcoming

Abstract:
Insensitive and unresponsive caregiving during infancy has been linked to externalizing behavior problems during childhood and adolescence. The 7-repeat (7r) allele of the dopamine D4 receptor (DRD4) gene has meta-analytically been associated with a heightened susceptibility to adverse as well as supportive environments. In the present study, we examined long-term effects of early maternal care, DRD4 genotype and the interaction thereof on externalizing and internalizing psychopathology during adolescence. As part of an ongoing epidemiological cohort study, early maternal care was assessed at child's age 3 months during a nursing and playing situation. In a sample of 296 offspring, externalizing and internalizing symptoms were assessed using a psychiatric interview conducted at age 15 years. Parents additionally filled out a questionnaire on their children's psychopathic behaviors. Results indicated that adolescents with the DRD4 7r allele who experienced less responsive and stimulating early maternal care exhibited more symptoms of ADHD and CD/ODD as well as higher levels of psychopathic behavior. In accordance with the hypothesis of differential susceptibility, 7r allele carriers showed fewer ADHD symptoms and lower levels of psychopathic behavior when exposed to especially beneficial early caregiving. In contrast, individuals without the DRD4 7r allele proved to be insensitive to the effects of early maternal care. This study replicates earlier findings with regard to an interaction between DRD4 genotype and early caregiving on externalizing behavior problems in preschoolers. It is the first one to imply continuity of this effect until adolescence.

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Associations Between Family Structure Change and Child Behavior Problems: The Moderating Effect of Family Income

Rebecca Ryan, Amy Claessens & Anna Markowitz
Child Development, forthcoming

Abstract:
This study investigated conditions under which family structure matters most for child well-being. Using data from the Children of the National Longitudinal Survey of Youth (n = 3,936), a national sample of U.S. families, it was estimated how changes in family structure related to changes in children's behavior between age 3 and 12 separately by household income level to determine whether associations depended on families' resources. Early changes in family structure, particularly from a two-biological-parent to single-parent family, predicted increases in behavior problems more than later changes, and movements into single and stepparent families mattered more for children of higher versus lower income parents. Results suggest that for children of higher income parents, moving into a stepfamily may improve, not undermine, behavior.

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Maternal Buffering of Human Amygdala-Prefrontal Circuitry During Childhood but Not During Adolescence

Dylan Gee et al.
Psychological Science, forthcoming

Abstract:
Mature amygdala-prefrontal circuitry regulates affect in adulthood but shows protracted development. In altricial and semialtricial species, caregivers provide potent affect regulation when mature neurocircuitry is absent. The present investigation examined a potential mechanism through which caregivers provide regulatory influences in childhood. Children, but not adolescents, showed evidence of maternal buffering, such that maternal stimuli suppressed amygdala reactivity. In the absence of maternal stimuli, children exhibited immature amygdala-prefrontal connectivity. However, in the presence of maternal stimuli, children’s connectivity was more mature, resembling adolescents’ connectivity. Children showed improved affect-related regulation in the presence of their mothers. Individual differences emerged, with greater maternal influence on amygdala-prefrontal circuitry associated with stronger mother-child relationships and maternal modulation of behavioral regulation. These findings suggest a neural mechanism through which caregivers modulate children’s regulatory behavior by inducing more mature connectivity and buffering against heightened reactivity. Maternal buffering in childhood, but not adolescence, suggests that childhood may be a sensitive period for amygdala-prefrontal development.

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Female face preference in 4-month-olds: The importance of hairline

Anne Hillairet de Boisferon et al.
Infant Behavior and Development, November 2014, Pages 676–681

Abstract:
At 3–4 months of age, infants respond to gender information in human faces. Specifically, young infants display a visual preference toward female over male faces. In three experiments, using a visual preference task, we investigated the role of hairline information in this bias. In Experiment 1, we presented male and female composite faces with similar hairstyles to 4-month-olds and observed a preference for female faces. In Experiment 2, the faces were presented, but in this instance, without hairline cues, and the preference was eliminated. In Experiment 3, using the same cropping to eliminate hairline cues, but with feminized female faces and masculinized male faces, infants’ preference toward female faces was still not in evidence. The findings show that hairline information is important in young infants’ preferential orientation toward female faces.

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Neoliberal Mothering and Vaccine Refusal: Imagined Gated Communities and the Privilege of Choice

Jennifer Reich
Gender & Society, October 2014, Pages 679-704

Abstract:
Neoliberal cultural frames of individual choice inform mothers’ accounts of why they refuse state-mandated vaccines for their children. Using interviews with 25 mothers who reject recommended vaccines, this article examines the gendered discourse of vaccine refusal. First, I show how mothers, seeing themselves as experts on their children, weigh perceived risks of infection against those of vaccines and dismiss claims that vaccines are necessary. Second, I explicate how mothers see their own intensive mothering practices — particularly around feeding, nutrition, and natural living — as an alternate and superior means of supporting their children’s immunity. Third, I show how they attempt to control risk through management of social exposure, as they envision disease risk to lie in “foreign” bodies outside their networks, and, therefore, individually manageable. Finally, I examine how these mothers focus solely on their own children by evaluating — and often rejecting — assertions that their choices undermine community health, while ignoring how their children benefit from the immunity of others. By analyzing the gendered discourse of vaccines, this article identifies how women’s insistence on individual maternal choice as evidence of commitment to their children draws on and replicates structural inequality in ways that remain invisible, but affect others.

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Child care instability from 6 to 36 months and the social adjustment of children in prekindergarten

Mary Bratsch-Hines et al.
Early Childhood Research Quarterly, forthcoming

Abstract:
Most children in the United States experience nonparental child care during early childhood, and many children experience changes in their care during this period. Changes in care, or child care instability, have been argued to disrupt children's emerging relationships with others and may impede children's social-emotional development, particularly when changes occur during infancy and toddlerhood. Data for this study were drawn from the Family Life Project, a longitudinal study representative of families living in rural low-wealth areas. With a sample of 1292 children who were followed from six months to prekindergarten, this study examined the associations between cumulative child provider instability (measured as overall changes or changes across or within settings) from 6 to 36 months and children's social adjustment at prekindergarten. A number of factors were included to control for family selection into child care. Results suggested that more overall child care provider instability was negatively associated with teacher ratings of social adjustment at prekindergarten. This association was driven by provider instability across but not within settings, though effect sizes were small. These findings point to an increased need to understand how early child care instability may be related to children's subsequent development.

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Work Hours, Schedules, and Insufficient Sleep Among Mothers and Their Young Children

Ariel Kalil et al.
Journal of Marriage and Family, October 2014, Pages 891–904

Abstract:
Studies have linked parents' employment, work hours, and work schedules to their own sleep quality and quantity, but it is unclear whether these associations extend to children. The authors used data from the 5-year in-home survey of the Fragile Families and Child Wellbeing Study (N = 1,818) to examine the associations between maternal work hours and schedule and insufficient sleep among disadvantaged mothers and their young children. They found that mothers who worked more than 35 hours per week were more likely to experience insufficient sleep compared to mothers who worked fewer hours, whereas children were more likely to experience insufficient sleep when their mothers worked between 20 and 40 hours. Nonstandard work schedules were associated with an increased likelihood of insufficient sleep for mothers but not their children. The results highlight a potentially difficult balance between work and family for many disadvantaged working mothers in the United States.

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Can babies learn to read? A randomized trial of baby media

Susan Neuman et al.
Journal of Educational Psychology, August 2014, Pages 815-830

Abstract:
Targeted to children as young as 3 months old, there is a growing number of baby media products that claim to teach babies to read. This randomized controlled trial was designed to examine this claim by investigating the effects of a best-selling baby media product on reading development. One hundred and seventeen infants, ages 9 to 18 months, were randomly assigned to treatment and control groups. Children in the treatment condition received the baby media product, which included DVDs, word and picture flashcards, and word books to be used daily over a 7-month period; children in the control condition, business as usual. Examining a 4-phase developmental model of reading, we examined both precursor skills (such as letter name, letter sound knowledge, print awareness, and decoding) and conventional reading (vocabulary and comprehension) using a series of eye-tracking tasks and standardized measures. Results indicated that babies did not learn to read using baby media, despite some parents displaying great confidence in the program’s effectiveness.

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Single Parents, Unhappy Parents? Parenthood, Partnership, and the Cultural Normative Context

Olga Stavrova & Detlef Fetchenhauer
Journal of Cross-Cultural Psychology, forthcoming

Abstract:
Although the question of whether parenthood is generally beneficial for well-being is currently being hotly debated in the social sciences, single parents are nearly unanimously assumed to be worse off than their partnered counterparts. The present research questions this finding by demonstrating that whether single parents are actually less happy than partnered parents depends on a country’s cultural norms regarding childbearing practices. Using two large-scale international data sets (the European Values Study [EVS] and the European Social Survey [ESS]) covering altogether 43 countries, we show that only in collectivist countries and countries with a strong two-parent family norm did parenthood negatively affect the life satisfaction and the emotional well-being of single but not partnered (married or cohabiting) individuals. Most notably, the detrimental effect of a country’s social norm of a two-parent family existed even among single parents who did not share this norm themselves.

By KEVIN LEWIS | 09:00:00 AM

Monday, October 6, 2014

Slimy

When Going Green Backfires: How Firm Intentions Shape the Evaluation of Socially Beneficial Product Enhancements

George Newman, Margarita Gorlin & Ravi Dhar
Journal of Consumer Research, October 2014, Pages 823-839

Abstract:
Many companies offer products with social benefits that are orthogonal to performance (e.g., green products). The present studies demonstrate that information about a company’s intentions in designing the product plays an import role in consumers’ evaluations. In particular, consumers are less likely to purchase a green product when they perceive that the company intentionally made the product better for the environment compared to when the same environmental benefit occurred as an unintended side effect. This result is explained by consumers’ lay theories about resource allocation: intended (vs. unintended) green enhancements lead consumers to assume that the company diverted resources away from product quality, which in turn drives a reduction in purchase interest. The present studies also identify an important boundary condition based on the type of enhancement and show that the basic intended (vs. unintended) effect generalizes to other types of perceived tradeoffs, such as healthfulness and taste.

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The Labor Market Impacts of the 2010 Deepwater Horizon Oil Spill and Offshore Oil Drilling Moratorium

Joseph Aldy
NBER Working Paper, August 2014

Abstract:
In 2010, the Gulf Coast experienced the largest oil spill, the greatest mobilization of spill response resources, and the first Gulf-wide deepwater drilling moratorium in U.S. history. Taking advantage of the unexpected nature of the spill and drilling moratorium, I estimate the net effects of these events on Gulf Coast employment and wages. Despite predictions of major job losses in Louisiana — resulting from the spill and the drilling moratorium — I find that Louisiana coastal parishes, and oil-intensive parishes in particular, experienced a net increase in employment and wages. In contrast, Gulf Coast Florida counties, especially those south of the Panhandle, experienced a decline in employment. Analysis of accommodation industry employment and wage, business establishment count, sales tax, and commercial air arrival data likewise show positive economic activity impacts in the oil-intensive coastal parishes of Louisiana and reduced economic activity along the Non-Panhandle Florida Gulf Coast.

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BYOB: How Bringing Your Own Shopping Bags Leads to Treating Yourself, and the Environment

Uma Karmarkar & Bryan Bollinger
Harvard Working Paper, January 2014

Abstract:
As concerns about climate change and resource availability become more central in public discourse, using reusable grocery bags has been strongly promoted as an environmentally and socially conscious virtue. In parallel, firms have joined policy makers in using a variety of initiatives to reduce the use of plastic bags. However, little is known about how adopting reusable bags might alter consumers' in-store behavior. Using scanner panel data from a single California location of a major grocery chain, and completely controlling for consumer heterogeneity, we demonstrate that bringing your own bags simultaneously increases your purchases of environmentally conscious and indulgent (hedonic) items. Supporting these effects, we use experimental methods to demonstrate that participants who imagined shopping with their own bags are more likely to spontaneously consider purchasing chips or dessert items, and indicate relatively higher willingness to pay for foods in these categories, as well as for organic foods. Furthermore, we show that the impact on organic and indulgent items is dissociable in a manner dependent on the consumers' motivation for bringing bags. These findings have implications for decisions related to product pricing, placement and assortment, store layout, and the choice of strategies to increase the use of reusable bags.

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Gasoline Taxes and the Great Depression: A Comparative History

Carl-Henry Geschwind
Journal of Policy History, Fall 2014, Pages 595-624

"These four years, from 1930 to 1933, were a key turning point in the international history of the gasoline tax. At the end of 1929, motor fuel imposts in Germany and New Zealand were essentially equal to that in the highest-taxed state, Florida, at $0.66 to $0.68 per U.S. gallon in 2005 U.S. dollars, while the British rate was only slightly higher at $0.84 per U.S. gallon (within the range of exchange-rate uncertainties). But by the end of 1933, in nominal terms the rate had doubled in Great Britain, more than doubled in New Zealand, and nearly tripled in Germany, while it had increased only 42 percent in Florida and 52 percent on average in the United States as a whole. At the beginning of 1934, the gasoline tax amounted to $1.96 per U.S. gallon in 2005 U.S. dollars in Great Britain, $2.24 in New Zealand, and $2.54 in Germany. Meanwhile, in the United States the combined state and federal tax ranged from $0.45 in the lowest-taxed states to $1.21 in the highest-taxed states, with the average rate being $0.70. In other words, the rates overseas during these four years moved far above the range encountered in the United States, creating a disparity that has persisted ever since."

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Automatic Bill Payment and Salience Effects: Evidence from Electricity Consumption

Steven Sexton
Review of Economics and Statistics, forthcoming

Abstract:
The introduction of automatic bill payment (ABP) programs in 2005 eliminated the need for consumers to view recurring bills. If those enrolled in ABP programs offered by utilities and other service providers forego inspection of their recurring bills, then price salience declines, prices perceived by boundedly rational agents fall, and consumption increases. This paper considers the impact of such programs on consumer demand and welfare, and empirically tests whether enrollment in such programs increases demand. Results show ABP enrollment increases residential electricity consumption 4.0% and commercial electricity consumption as much as 8.1%. Enrollment in programs designed to smooth seasonal variation in monthly utility bills of low-income customers results in 6.7% greater electricity use.

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Does awareness effect the restorative function and perception of street trees?

Ying-Hsuan Lin et al.
Frontiers in Psychology, August 2014

Abstract:
Urban streetscapes are outdoor areas in which the general public can appreciate green landscapes and engage in outdoor activities along the street. This study tested the extent to which the degree of awareness of urban street trees impacts attention restoration and perceived restorativeness. We manipulated the degree of awareness of street trees. Participants were placed into four groups and shown different images: (a) streetscapes with absolutely no trees; (b) streetscapes with flashes of trees in which participants had minimal awareness of the content; (c) streetscapes with trees; and (d) streetscapes with trees to which participants were told to pay attention. We compared the performance of 138 individuals on measures of attention and their evaluations of perceived restorativeness. Two main findings emerged. First, streetscapes with trees improved the performance of participants on attentional tests even without their awareness of the trees. Second, participants who had raised awareness of street trees performed best on the attentional test and rated the streetscapes as being more restorative. These findings enhance our knowledge about the role of an individual's awareness of restorative elements and have implications for designers and individuals who are at risk of attentional fatigue.

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Enhanced Formation of Disinfection Byproducts in Shale Gas Wastewater-Impacted Drinking Water Supplies

Kimberly Parker et al.
Environmental Science & Technology, forthcoming

Abstract:
The disposal and leaks of hydraulic fracturing wastewater (HFW) to the environment pose human health risks. Since HFW is typically characterized by elevated salinity, concerns have been raised whether the high bromide and iodide in HFW may promote the formation of disinfection byproducts (DBPs) and alter their speciation to more toxic brominated and iodinated analogues. This study evaluated the minimum volume percentage of two Marcellus Shale and one Fayetteville Shale HFWs diluted by fresh water collected from the Ohio and Allegheny Rivers that would generate and/or alter the formation and speciation of DBPs following chlorination, chloramination, and ozonation treatments of the blended solutions. During chlorination, dilutions as low as 0.01% HFW altered the speciation toward formation of brominated and iodinated trihalomethanes (THMs) and brominated haloacetonitriles (HANs), and dilutions as low as 0.03% increased the overall formation of both compound classes. The increase in bromide concentration associated with 0.01–0.03% contribution of Marcellus HFW (a range of 70–200 μg/L for HFW with bromide = 600 mg/L) mimics the increased bromide levels observed in western Pennsylvanian surface waters following the Marcellus Shale gas production boom. Chloramination reduced HAN and regulated THM formation; however, iodinated trihalomethane formation was observed at lower pH. For municipal wastewater-impacted river water, the presence of 0.1% HFW increased the formation of N-nitrosodimethylamine (NDMA) during chloramination, particularly for the high iodide (54 ppm) Fayetteville Shale HFW. Finally, ozonation of 0.01–0.03% HFW-impacted river water resulted in significant increases in bromate formation. The results suggest that total elimination of HFW discharge and/or installation of halide-specific removal techniques in centralized brine treatment facilities may be a better strategy to mitigate impacts on downstream drinking water treatment plants than altering disinfection strategies. The potential formation of multiple DBPs in drinking water utilities in areas of shale gas development requires comprehensive monitoring plans beyond the common regulated DBPs.

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Conservation Policies: Who Responds to Price and Who Responds to Prescription?

Casey Wichman, Laura Taylor & Roger von Haefen
NBER Working Paper, September 2014

Abstract:
The efficiency properties of price and non-price instruments for conservation in environmental policy are well understood. Yet, there is little evidence comparing the effectiveness of these instruments, especially when considering water resource management. We exploit a rich panel of residential water consumption to examine heterogeneous responses to both price and non-price conservation policies during times of drought while controlling for unobservable household characteristics. Our empirical models suggest that the burden of pricing policies fall disproportionately on low-income households and fail to reduce consumption among households who generally are large consumers of water. However, prescriptive policies such as restrictions on outdoor water use result in uniform responses across income classes while simultaneously targeting reductions from households with irrigation systems or historically high consumption.

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The Persistent Impacts of Norm-Based Messaging and Their Implications for Water Conservation

María Bernedo, Paul Ferraro & Michael Price
Journal of Consumer Policy, September 2014, Pages 437-452

Abstract:
Although an increasing number of studies have demonstrated the short-term impacts of behavioral nudges to achieve public policy objectives, less is known about their longer-term impacts. In a randomized experimental design with over 100,000 households, we study the longer-term impacts of a one-time behavioral nudge that aimed to induce voluntary reductions in water use during a drought. Combining technical information, moral suasion, and social comparisons, the nudge has a surprisingly persistent effect. Although its effect size declines by almost 50% after 1 year, it remains detectable and policy-relevant six years later. In fact, the total reduction in water use achieved after the 4-month period targeted by the intervention is larger than the total reduction achieved during the target period. Further analysis suggests that the intervention works through both short-lived behavioral adjustments and longer-lived adjustments to habits or physical capital. Treatment effects are not detectable in homes from which the treated consumers have moved, which provides suggestive evidence that these longer-lived adjustments are mobile rather than incorporated into the housing stock. The persistence of the effect makes the intervention more cost-effective than previously assumed (cost drops by almost 60%). Nevertheless, water utilities may find this persistence undesirable if the nudges are intended to have only a short-run effect on demand during environmental emergencies.

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The Relative Weights of Direct and Indirect Experiences in the Formation of Environmental Risk Beliefs

Kip Viscusi & Richard Zeckhauser
Risk Analysis, forthcoming

Abstract:
Direct experiences, we find, influence environmental risk beliefs more than the indirect experiences derived from outcomes to others. This disparity could have a rational basis. Or it could be based on behavioral proclivities in accord with the well-established availability heuristic or the vested-interest heuristic, which we introduce in this article. Using original data from a large, nationally representative sample, this article examines the perception of, and responses to, morbidity risks from tap water. Direct experiences have a stronger and more consistent effect on different measures of risk belief. Direct experiences also boost the precautionary response of drinking bottled water and drinking filtered water, while indirect experiences do not. These results are consistent with the hypothesized neglect of indirect experiences in other risk contexts, such as climate change.

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Dutch Disease or Agglomeration? The Local Economic Effects of Natural Resource Booms in Modern America

Hunt Allcott & Daniel Keniston
NBER Working Paper, September 2014

Abstract:
Does natural resource production benefit producer economies, or does it instead create a “Natural Resource Curse,” perhaps as Dutch Disease crowds out the manufacturing sector? We combine a new panel dataset of oil and gas production and reserves with county-level aggregate outcomes and restricted-access Census of Manufactures microdata to estimate how oil and gas booms have affected local economic growth in the U.S. since the 1960s. We find that a boom that doubles national oil and gas employment increases total employment by 2.9 percent in a county with one standard deviation larger oil and gas endowment. Despite substantial migration, wages also rise. Notwithstanding, manufacturing employment and output are actually pro-cyclical with oil and gas booms, because many manufacturers in resource-abundant counties supply inputs to the oil and gas sector, while many others sell locally-traded goods and benefit from increases in local demand. Manufacturers' revenue productivity also grows during booms, especially in linked and local industries, but there is no evidence that output prices rise. The results demonstrate how a meaningful share of manufacturers produce locally traded goods, and they highlight how linkages to natural resources can be a driver of manufacturing growth.

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Hazardous Waste Hits Hollywood: Superfund and Housing Prices in Los Angeles

Ralph Mastromonaco
Environmental and Resource Economics, October 2014, Pages 207-230

Abstract:
This paper contributes to the ongoing debate concerning the effect of various actions taken by the U.S. Environmental Protection Agency under CERCLA, commonly known as the Superfund Program, on housing prices. This study uses a housing transaction panel dataset encompassing the five major counties of the Los Angeles Combined Statistical Area to estimate the program’s influence on the local housing market. Using house and time-varying census tract fixed effects, I am able to avoid many of the endogeneity problems seen in previous research attempting to measure the Superfund treatment effect. An estimate of the effect on housing prices is given for each of the major events that occur under a typical Superfund remediation. After controlling for confounding correlated unobservables, I find a 7.3 % increase in sales price for houses within 3 km of a site that moves through the complete Superfund program. The analysis gives evidence of positive price appreciation for housing markets and serves as a lower bound for measuring remediation benefits.

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Does environmental concern change the tragedy of the commons? Factors affecting energy saving behaviors and electricity usage

Adrienne Ohler & Sherrilyn Billger
Ecological Economics, November 2014, Pages 1–12

Abstract:
Electricity consumption produces private goods, such as heat for homes, but fossil fuel consumption impacts the public goods of clean air and water. While self interests can increase usage, social interests, such as global climate change, can impact an individual's attitude toward energy consumption. This paper examines the tragedy of the commons using household data, and compares the impact of self and social interests in predicting electricity consumption. Using both stated and observed behavioral data, the results show that self interests have a greater impact on energy saving behaviors and electricity use. We extend the analysis to control for an individual's environmental concern and perceived behavioral impact, finding similar results, and supporting the notion that the tragedy of the commons occurs regardless of a person's perception or environmental concern. These findings may explain why pro-environmental attitudes do not necessarily lead to pro-environmental behaviors, and it contributes to our understanding of the motivating factors for energy savings and electricity use by examining both stated and observed behaviors. Policies aimed at electricity reduction may have a greater impact if they focus on private interests, such as pricing, rebates, subsidies, and taxes, rather than social interests alone.

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A Direct Estimate of the Technique Effect: Changes in the Pollution Intensity of US Manufacturing 1990–2008

Arik Levinson
NBER Working Paper, August 2014

Abstract:
From 1990 to 2008, the real value of US manufacturing output grew by one-third while the pollution emitted from US factories fell by two-thirds. What accounts for this cleanup? Prior studies have documented that a relatively small share can be explained by changes in the composition of US manufacturing – a shift towards producing relatively more goods whose production processes involve less pollution. Those studies attribute the unexplained majority to “technique”, a mix of input substitution, process changes, and end-of-pipe controls. But because that technique effect is a residual left over after other explanations, any errors or interactions in the original calculation could inflate the estimated technique. In this paper I provide the first direct estimate of the technique effect. I combine the National Emissions Inventories with the NBER-CES Manufacturing Industry Database for each of over 400 manufacturing industries. I aggregate across industries using analogs to the Laspeyres and Paasche price indexes for each of six major air pollutants. The calculations using this direct estimation of the technique effect support the research findings using indirect measures. From 1990 to 2008, production technique changes account for more than 90 percent of the overall cleanup of US manufacturing.

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An analysis of U.S. federal mileage ratings for plug-in hybrid electric vehicles

Peter Friedman & Phil Grossweiler
Energy Policy, forthcoming

Abstract:
With the introduction of plug-in hybrid electric vehicles, the US Environmental Protection Agency developed a rule to calculate “miles per gallon equivalent” (MPGe) for electric vehicle window stickers and the US Department of Energy created a separate procedure for calculation of fuel economy for use in the federally mandated corporate average fuel economy (CAFE) standards. The EPA rule fails to account for inefficiencies in or emissions resulting from the production of electricity and as a result greatly overestimates the life cycle efficiency of covered vehicles, which would be evident using “exergy analysis.” The DOE rule accounts for conversion efficiencies, but includes a long-standing, policy based factor (originally developed to reduce oil consumption by promoting alternatively fueled vehicles). This factor disproportionately raises the calculated performance of electrically powered vehicles. As a result, both the EPA and DOE rules incentivize policies that are not substantiated by the immediate technical merits.

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Impact of Oil Boom and Bust on Human Capital Investment in the U.S.

Anil Kumar
Federal Reserve Working Paper, May 2014

Abstract:
This paper uses Census IPUMS data from 1970 to 2010 to estimate the impact of the oil boom and bust on wages and human capital formation in the US. The paper finds that the oil boom between 1970 and 1980 was associated with a slower growth in the relative demand for skills in the oil and gas sector and regions where the sector had a large presence. Overall, the oil boom led to a sharp rise in real wages in oil areas relative to non-oil parts of the nation, raising the opportunity cost of additional schooling. Real wage premium for a college degree declined during the oil boom in oil-rich regions such as Texas, compared with non-oil areas. The oil boom of the 1970’s potentially had an impact on human capital investment through two channels — by raising the opportunity cost of additional schooling as well as by lowering the returns from going to college. Using a synthetic cohort approach the paper finds that relative to cohorts who went to high school in the pre-boom period, the cohort reaching high school age during the oil boom was about 2 percentage points less likely to have a college degree by the time they turned 34 to 37 years of age in 2000.

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Energy Efficiency and Rebound Effects: An Econometric Analysis of Energy Demand in the Commercial Building Sector

Yueming Qiu
Environmental and Resource Economics, October 2014, Pages 295-335

Abstract:
It is widely recognized that the adoption of energy saving innovations can induce an increase in the usage of the corresponding technologies and thus can possibly increase energy consumption. Among other concerns is that uncertainties regarding the magnitude of this “rebound effect” can deter policy makers from promoting energy efficiency. This paper analyzes the rebound effects of the adoption of energy efficient technologies in commercial buildings. Based upon a structural model of technology adoption and subsequent energy demand at the building level, the empirical results are that energy efficiency can reduce electricity use by about 35 % and natural gas consumption by about 50 %.

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Seasonality in Birth Defects, Agricultural Production and Urban Location

Terra McKinnish, Daniel Rees & Peter Langlois
Economics & Human Biology, December 2014, Pages 120–128

Abstract:
This paper tests whether the strength of the “spring spike” in birth defects is related to agricultural production and urban location using Texas Birth Defects Registry data for the period 1996-2007. We find evidence of a spike in birth defects among children conceived in the spring and summer, but it is more pronounced in urban non-agricultural counties than in other types of counties. Furthermore, the spike lasts longer in urban non-agricultural counties as compared to other types of counties.

By KEVIN LEWIS | 09:00:00 AM

Sunday, October 5, 2014

How thoughtful

You Didn't Have to Do That: Belief in Free Will Promotes Gratitude

Michael MacKenzie, Kathleen Vohs & Roy Baumeister
Personality and Social Psychology Bulletin, forthcoming

Abstract:
Four studies tested the hypothesis that a weaker belief in free will would be related to feeling less gratitude. In Studies 1a and 1b, a trait measure of free will belief was positively correlated with a measure of dispositional gratitude. In Study 2, participants whose free will belief was weakened (vs. unchanged or bolstered) reported feeling less grateful for events in their past. Study 3 used a laboratory induction of gratitude. Participants with an experimentally reduced (vs. increased) belief in free will reported feeling less grateful for the favor. In Study 4, a reduced (vs. increased) belief in free will led to less gratitude in a hypothetical favor scenario. This effect was serially mediated by perceiving the benefactor as having less free will and therefore as being less sincerely motivated. These findings suggest that belief in free will is an important part of being able to feel gratitude.

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Addressing the empathy deficit: Beliefs about the malleability of empathy predict effortful responses when empathy is challenging

Karina Schumann, Jamil Zaki & Carol Dweck
Journal of Personality and Social Psychology, September 2014, Pages 475-493

Abstract:
Empathy is often thought to occur automatically. Yet, empathy frequently breaks down when it is difficult or distressing to relate to people in need, suggesting that empathy is often not felt reflexively. Indeed, the United States as a whole is said to be displaying an empathy deficit. When and why does empathy break down, and what predicts whether people will exert effort to experience empathy in challenging contexts? Across 7 studies, we found that people who held a malleable mindset about empathy (believing empathy can be developed) expended greater empathic effort in challenging contexts than did people who held a fixed theory (believing empathy cannot be developed). Specifically, a malleable theory of empathy - whether measured or experimentally induced - promoted (a) more self-reported effort to feel empathy when it is challenging (Study 1); (b) more empathically effortful responses to a person with conflicting views on personally important sociopolitical issues (Studies 2-4); (c) more time spent listening to the emotional personal story of a racial outgroup member (Study 5); and (d) greater willingness to help cancer patients in effortful, face-to-face ways (Study 6). Study 7 revealed a possible reason for this greater empathic effort in challenging contexts: a stronger interest in improving one's empathy. Together, these data suggest that people's mindsets powerfully affect whether they exert effort to empathize when it is needed most, and these data may represent a point of leverage in increasing empathic behaviors on a broad scale.

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What's in a Message? The Longitudinal Influence of a Supportive Versus Combative Orientation on the Performance of Non-Profits

Keith Botner, Arul Mishra & Himanshu Mishra
Journal of Marketing Research, forthcoming

Abstract:
In this article, the authors propose that in the long term, a non-profit organization with a supportively-oriented positioning (e.g., for a cause) is likely to survive for longer and achieve greater donations compared to a non-profit with a combative orientation (e.g., fighting against something). To test this proposition, the authors adopted a three-pronged approach that (1) used publicly available financial data from non-profits' tax filings over a ten year period, (2) measured annual donor pledges from a field study with a registered non-profit organization and (3) examined actual donation behavior of participants in a longitudinal lab study. Moreover, this proposition is tested for donations of money as well as time. The authors consider different theoretical mechanisms that might be at work in causing the proposed effect, such as regulatory focus theory, inertia in giving, and the preponderance of supportive charities.

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Neural and cognitive characteristics of extraordinary altruists

Abigail Marsh et al.
Proceedings of the National Academy of Sciences, forthcoming

Abstract:
Altruistic behavior improves the welfare of another individual while reducing the altruist's welfare. Humans' tendency to engage in altruistic behaviors is unevenly distributed across the population, and individual variation in altruistic tendencies may be genetically mediated. Although neural endophenotypes of heightened or extreme antisocial behavior tendencies have been identified in, for example, studies of psychopaths, little is known about the neural mechanisms that support heightened or extreme prosocial or altruistic tendencies. In this study, we used structural and functional magnetic resonance imaging to assess a population of extraordinary altruists: altruistic kidney donors who volunteered to donate a kidney to a stranger. Such donations meet the most stringent definitions of altruism in that they represent an intentional behavior that incurs significant costs to the donor to benefit an anonymous, nonkin other. Functional imaging and behavioral tasks included face-emotion processing paradigms that reliably distinguish psychopathic individuals from controls. Here we show that extraordinary altruists can be distinguished from controls by their enhanced volume in right amygdala and enhanced responsiveness of this structure to fearful facial expressions, an effect that predicts superior perceptual sensitivity to these expressions. These results mirror the reduced amygdala volume and reduced responsiveness to fearful facial expressions observed in psychopathic individuals. Our results support the possibility of a neural basis for extraordinary altruism. We anticipate that these findings will expand the scope of research on biological mechanisms that promote altruistic behaviors to include neural mechanisms that support affective and social responsiveness.

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Hey Look at Me: The Effect of Giving Circles on Giving

Dean Karlan & Margaret McConnell
Journal of Economic Behavior & Organization, October 2014, Pages 402-412

Abstract:
We conduct a randomized field experiment with a Yale service club and find that the promise of public recognition increases giving. Some may claim that they give when offered public recognition in order to motivate others to give too, rather than for the more obvious expected private gain from increasing one's social standing. To tease apart these two theories, we also conduct a laboratory experiment with undergraduates. We find that patterns of giving are more consistent with a desire to improve social image than a purely altruistic desire to motivate others' contributions. We discuss the external validity of our lab findings for other settings.

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Visceral needs and donation decisions: Do people identify with suffering or with relief?

Inbal Harel & Tehila Kogut
Journal of Experimental Social Psychology, January 2015, Pages 24-29

Abstract:
We examine the relations between people's experience of an ongoing visceral need (hunger) as well as the relief from that need and the willingness to help needy others actively experiencing the same or a different need. Results of two studies - one asking participants about the amount of time that had elapsed since they last ate and the other manipulating levels of hunger by asking people to fast before the experiment - reveal that overall, people tend to be more generous when satisfied than when actively experiencing a visceral need. When people experience an ongoing need, they tend to be less responsive to others' needs even when those needs match their own visceral state. However, experiencing partial relief from a recent visceral need, like eating something after a few hours of fasting, promotes the helping of others who are experiencing a corresponding need (hunger) but does not promote helping in general.

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Common Identity and the Voluntary Provision of Public Goods: An Experimental Investigation

Sherry Xin Li
University of Texas Working Paper, June 2014

Abstract:
We conduct a framed field experiment in two Dallas neighborhoods to examine how common identity affects individual contributions to local public goods. The participants' common identity is primed to make neighborhood membership salient before individuals make donations to local non-profit organizations. We find that the effect of the identity prime is sensitive to community context, increasing the likelihood of giving in the mid-income neighborhood, but decreasing giving in the poor neighborhood. The impact is statistically significant for women, but not for men, and is partially mediated by individuals' beliefs about whether others in their neighborhoods give.

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Vagal Activity Is Quadratically Related to Prosocial Traits, Prosocial Emotions, and Observer Perceptions of Prosociality

Aleksandr Kogan et al.
Journal of Personality and Social Psychology, forthcoming

Abstract:
In the present article, we introduce the quadratic vagal activity-prosociality hypothesis, a theoretical framework for understanding the vagus nerve's involvement in prosociality. We argue that vagus nerve activity supports prosocial behavior by regulating physiological systems that enable emotional expression, empathy for others' mental and emotional states, the regulation of one's own distress, and the experience of positive emotions. However, we contend that extremely high levels of vagal activity can be detrimental to prosociality. We present 3 studies providing support for our model, finding consistent evidence of a quadratic relationship between respiratory sinus arrhythmia - the degree to which the vagus nerve modulates the heart rate - and prosociality. Individual differences in vagal activity were quadratically related to prosocial traits (Study 1), prosocial emotions (Study 2), and outside ratings of prosociality by complete strangers (Study 3). Thus, too much or too little vagal activity appears to be detrimental to prosociality. The present article provides the 1st theoretical and empirical account of the nonlinear relationship between vagal activity and prosociality.

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Does generosity beget generosity? The relationships between transfer receipt and formal and informal volunteering

Charlene Kalenkoski
Review of Economics of the Household, September 2014, Pages 547-563

Abstract:
This paper examines whether receipt of public or private assistance is associated with recipients' own generosity in the form of formal and informal volunteering. Using matched data from the 2007-2011 American Time Use Survey and the Annual Social and Economic Supplement to the Current Population Survey, this paper finds that receipt of private assistance from friends and relatives is negatively associated with the time women spend caring for non-household adults and the time men spend caring for non-household children. Receipt of public assistance is found to be negatively associated with men's care of non-household adults. No associations are found between either type of assistance and time spent volunteering for a formal organization.

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Cooperation and conflict: Field experiments in Northern Ireland

Antonio Silva & Ruth Mace
Proceedings of the Royal Society: Biological Science, 7 October 2014

Abstract:
The idea that cohesive groups, in which individuals help each other, have a competitive advantage over groups composed of selfish individuals has been widely suggested as an explanation for the evolution of cooperation in humans. Recent theoretical models propose the coevolution of parochial altruism and intergroup conflict, when in-group altruism and out-group hostility contribute to the group's success in these conflicts. However, the few empirical attempts to test this hypothesis do not use natural groups and conflate measures of in-group and unbiased cooperative behaviour. We conducted field experiments based on naturalistic measures of cooperation (school/charity donations and lost letters' returns) with two religious groups with an on-going history of conflict - Catholics and Protestants in Northern Ireland. Conflict was associated with reduced donations to out-group schools and the return of out-group letters, but we found no evidence that it influences in-group cooperation. Rather, socio-economic status was the major determinant of cooperative behaviour. Our study presents a challenge to dominant perspectives on the origins of human cooperation, and has implications for initiatives aiming to promote conflict resolution and social cohesion.

By KEVIN LEWIS | 09:00:00 AM

Saturday, October 4, 2014

Strange attractor

Couple Longevity in the Era of Same-Sex Marriage in the United States

Michael Rosenfeld
Journal of Marriage and Family, October 2014, Pages 905–918

Abstract:
The author used a new longitudinal data set, the How Couples Meet and Stay Together surveys (N = 3,009), to generate the first nationally representative comparison of same-sex couple stability and heterosexual couple stability in the United States. He measured the association between marriage (by several definitions of marriage) and couple longevity for same-sex couples in the United States. Reports of same-sex relationship instability in the past were due in part to the low rate of marriages among same-sex couples. After controlling for marriage and marriage-like commitments, the break-up rate for same-sex couples was comparable to (and not statistically distinguishable from) the break-up rate for heterosexual couples. The results revealed that same-sex couples who had a marriage-like commitment had stable unions regardless of government recognition. A variety of predictors of relationship dissolution for heterosexual and for same-sex couples are explored.

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Marital status, gender, and sexual orientation: Implications for employment hiring decisions

Joel Nadler & Katie Kufahl
Psychology of Sexual Orientation and Gender Diversity, September 2014, Pages 270-278

Abstract:
Marital status and sexual orientation discrimination has been largely underresearched and has not been researched using working professionals, or with the incorporation of sexual orientation, marital status, and gender interactions. Additionally, with the growing acceptance of same-sex relationships, marriages, and partnerships, the interaction of marital status (i.e., applicants with or without a spouse) and sexual orientation bias in the workplace needs to be examined. Our study used an experimental design that manipulated gender, marital status, and sexual orientation in interview simulations and examined participants’ (N = 365 working adults) hiring decisions. A significant 3-way interaction was found such that single lesbian women received significantly higher ratings when compared with married lesbian women, and married heterosexual women received significantly higher ratings compared with single heterosexual women. The study revealed that sexual orientation interacted with marital status in women’s ratings, but not for men. This research updates current knowledge about discrimination in employment settings and provides updated information on a topic for which the existing research has been largely outdated and underresearched.

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Male and Female He Created Them: Gender Traditionalism, Masculine Images of God, and Attitudes Toward Same-Sex Unions

Andrew Whitehead
Journal for the Scientific Study of Religion, September 2014, Pages 479–496

Abstract:
Prior research demonstrates that religion and gender traditionalism are associated with less favorable attitudes toward same-sex unions because of its deviation from customary religious doctrine and traditional patterns of gender behavior. This study examines the link between religion, gender traditionalism, and attitudes toward same-sex unions by utilizing a novel measure of gender traditionalism that is distinctly religious as well. Recent work on images of God reveals that individuals’ views of the divine provide a glimpse of their underlying view of reality. The results suggest that individuals who view God as a “he” are much less favorable toward same-sex unions than those who do not view God as masculine, even while controlling for gender traditionalist beliefs and other images of God. Individuals who view God as masculine are signaling a belief in an underlying gendered reality that influences their perceptions of the proper ordering of that reality, which extends to marriage patterns. These findings encourage future research to identify innovative measures of religion that incorporate aspects of other social institutions to account for their interconnected nature.

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Feminist activist women are masculinized in terms of digit-ratio and social dominance: A possible explanation for the feminist paradox

Guy Madison et al.
Frontiers in Psychology, September 2014

Abstract:
The feminist movement purports to improve conditions for women, and yet only a minority of women in modern societies self-identify as feminists. This is known as the feminist paradox. It has been suggested that feminists exhibit both physiological and psychological characteristics associated with heightened masculinization, which may predispose women for heightened competitiveness, sex-atypical behaviors, and belief in the interchangeability of sex roles. If feminist activists, i.e., those that manufacture the public image of feminism, are indeed masculinized relative to women in general, this might explain why the views and preferences of these two groups are at variance with each other. We measured the 2D:4D digit ratios (collected from both hands) and a personality trait known as dominance (measured with the Directiveness scale) in a sample of women attending a feminist conference. The sample exhibited significantly more masculine 2D:4D and higher dominance ratings than comparison samples representative of women in general, and these variables were furthermore positively correlated for both hands. The feminist paradox might thus to some extent be explained by biological differences between women in general and the activist women who formulate the feminist agenda.

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The Impact of Legal Inequalty on Relational Power in Planned Lesbian Families

Jonniann Butterfield & Irene Padavic
Gender & Society, October 2014, Pages 752-774

Abstract:
Lesbian families have the potential to create families unmarked by the inequalities of power often found in cross-sex relationships. Yet, based on interviews with 27 women with children in such relationships, we find that living in a state that legally restricts the rights of nonbirth parents to child contact if the couple relationship dissolves severely undermines this possibility. Nonbirth parents engaged in three fear-induced strategies that were at odds with these couples’ desire for equitable partnership: acquiescing to the birth mother’s wishes; making themselves financially, emotionally, and legally indispensable; and using communities to police partners’ behavior and ensure accountability. As a result, the potential for such families to model egalitarian family forms that would help destabilize established gender patterns is diminished. We conclude by pointing to the importance of galvanizing to remove the remaining laws prohibiting second-parent adoption and by discussing strategies for social change.

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The development of online cross-group relationships among university students: Benefits of earlier (vs. later) disclosure of stigmatized group membership

Cara MacInnis & Gordon Hodson
Journal of Social and Personal Relationships, forthcoming

Abstract:
With our social lives increasingly experienced online, it is critical to understand online relationship development. The current study examined the outcomes of disclosing stigmatized group membership (i.e., being gay or lesbian) earlier (vs. later) in a developing online relationship. Heterosexuals (n = 214) engaged in an experimentally controlled closeness-inducing online interaction with an ostensible partner, learning that he/she was gay/lesbian either before (i.e., earlier) or after (i.e., later) the interaction. Earlier (vs. later) discovery led to a subjectively more positive contact experience, which predicted heightened bond with the partner, itself predicting more positive attitudes toward the partner. Outcomes were uninfluenced by pretest biases and authoritarianism, suggesting the general benefits of disclosing gay/lesbian identity earlier (vs. later) in online relationships.

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Divorce in Norwegian Same-Sex Marriages and Registered Partnerships: The Role of Children

Kenneth Aarskaug Wiik, Ane Seierstad & Turid Noack
Journal of Marriage and Family, October 2014, Pages 919–929

Abstract:
Using Norwegian register data on the total population of same-sex couples who formalized their unions from 1993 through 2010 (N = 3,422, 52% male), this study addressed the level and correlates of divorce among these couples as compared with all opposite-sex marriages in the same period (N = 407,495). In particular, the authors investigated the role of same-sex parenting, which has received little study so far. Multivariate results confirmed that same-sex couples had a higher divorce risk compared with opposite-sex couples and that female couples were more divorce prone than male couples. Furthermore, having children was negatively related to divorce among female couples, whereas male couples with common children were more divorce prone than their childless counterparts. No evidence was found that the gender gap in divorce or the difference between same-sex and opposite-sex couples narrowed over the study period.

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Relationships between digit ratio (2D:4D) and female competitive rowing performance

Melissa Hull et al.
American Journal of Human Biology, forthcoming

Objective: To examine the relationship between 2D:4D and measured on-water rowing performance in young females competing at the Australian Rowing Championships.

Methods: Using an observational, cross-sectional design, female rowers (n = 69, aged 12–30 years) who competed in single sculls events at the Australian Rowing Championships in 2007 and 2008 had numerous physical and digital anthropometric measurements taken, including 2D:4D measurements. Relationships between 2D:4Ds and race times were examined using Pearson's correlations, partial correlations and multiple regression. Partial Least Squares regression analysis determined the strength of the 2D:4D as a predictor of race time relative to 78 body dimensions plus age.

Results: Overall, weak to strong positive correlations between 2D:4D and race time were found; that is, females with smaller 2D:4Ds had faster race times than females with larger 2D:4Ds. Relationships were weak to moderate for all females (r = 0.29–0.32), moderate-to-strong for senior rowers (aged ≥20 years; r = 0.42–0.55), and weak for junior rowers (aged <20 years; r = 0.13–0.18), with all relationships persisting following adjustment for age. Partial Least Squares regression analysis showed that 2D:4Ds had high predictive importance relative to other body dimensions.

Conclusions: Females with smaller 2D:4Ds rowed substantially faster than females with larger 2D:4Ds, with the 2D:4D possibly linked to underlying characteristics that have been optimized over time resulting in better rowing performance.

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Sexual orientation disparities in mental health: The moderating role of educational attainment

David Barnes et al.
Social Psychiatry and Psychiatric Epidemiology, September 2014, Pages 1447-1454

Purpose: Mental health disparities between sexual minorities and heterosexuals remain inadequately understood, especially across levels of educational attainment. The purpose of the present study was to test whether education modifies the association between sexual orientation and mental disorder.

Methods: We compared the odds of past 12-month and lifetime psychiatric disorder prevalence (any Axis-I, any mood, any anxiety, any substance use, and comorbidity) between lesbian, gay, and bisexual (LGB) and heterosexual individuals by educational attainment (those with and without a bachelor’s degree), adjusting for covariates, and tested for interaction between sexual orientation and educational attainment. Data are drawn from the National Epidemiologic Survey on Alcohol and Related Conditions, a nationally representative survey of non-institutionalized US adults (N = 34,653; 577 LGB).

Results: Sexual orientation disparities in mental health are smaller among those with a college education. Specifically, the disparity in those with versus those without a bachelor’s degree was attenuated by 100 % for any current mood disorder, 82 % for any current Axis-I disorder, 76 % for any current anxiety disorder, and 67 % for both any current substance use disorder and any current comorbidity. Further, the interaction between sexual orientation and education was statistically significant for any current Axis-I disorder, any current mood disorder, and any current anxiety disorder. Our findings for lifetime outcomes were similar.

Conclusions: The attenuated mental health disparity at higher education levels underscores the particular risk for disorder among LGBs with less education. Future studies should consider selection versus causal factors to explain the attenuated disparity we found at higher education levels.

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Pink gives girls permission: Exploring the roles of explicit gender labels and gender-typed colors on preschool children's toy preferences

Erica Weisgram, Megan Fulcher & Lisa Dinella
Journal of Applied Developmental Psychology, September–October 2014, Pages 401–409

Abstract:
Children engage in gender-typed toy play to a greater extent than in non-gender-typed toy play leading to different developmental trajectories for boys and girls. The present studies examine the characteristics of toys and how they differentially affect boys' and girls' interests, stereotypes, and judgments of the toys. In Study 1, children (N = 73, Mage = 4.01) were presented with masculine and feminine toys that were decorated with masculine and feminine colors. Results indicated that boys were more interested in masculine toys than in feminine toys. Girls were significantly less interested in masculine toys with masculine colors than in all other combinations. Children's perceptions of others' interests also followed a similar pattern. In Study 2, children (N = 42, Mage = 3.84) were presented with novel items labeled as “for boys” and “for girls” and decorated in masculine and feminine colors. Among girls, both explicit labels and color of novel toys impacted interests. Children's predictions of others' interests also reflected this pattern.

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Searching For Evidence of Acculturation: Attitudes Toward Homosexuality Among Migrants Moving From Eastern to Western Europe

Rory Fitzgerald, Lizzy Winstone & Yvette Prestage
International Journal of Public Opinion Research, Autumn 2014, Pages 323-341

Abstract:
Attitudes toward gay men and lesbians are generally more tolerant in Western than in Eastern Europe. This study uses data from the first five rounds of the European Social Survey to examine acculturation among migrants moving from Eastern Europe to Western Europe, in terms of attitudes toward gay men and lesbians. After controlling for background factors associated with attitudes toward homosexuality, we find evidence of acculturation, whereby attitudes become more tolerant — and more typical of those prevalent in Western Europe — with longer residency in this region. This study builds on existing research into cross-national differences in attitudes toward homosexuality and extends the existing North American literature on acculturation to a European context.

By KEVIN LEWIS | 09:00:00 AM

Friday, October 3, 2014

Officeholders

The Value of the Revolving Door: Political Appointees and the Stock Market

Simon Luechinger & Christoph Moser
Journal of Public Economics, forthcoming

Abstract:
We analyze stock market reactions to announcements of political appointments from the private sector and corporate appointments of former government officials. Using unique data on corporate affiliations and announcements of all Senate-confirmed U.S. Defense Department appointees of six administrations, we find positive abnormal returns for political appointments. These estimates are not driven by important observations, volatile stocks, industry-wide developments or the omission of further commonly used return predictors. Placebo events for close competitors and alternative dates yield no effects. Effects are larger for top government positions and less anticipated announcements. We also find positive abnormal returns for corporate appointments and positive effects of political connections on procurement volume. Our results suggest that concerns over conflicts of interest created by the revolving door seem justified, even in a country with strong institutions.

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Too Close for Comfort? Geographic Propinquity to Political Power and Stock Returns

Christos Pantzalis & Jung Chul Park
Journal of Banking & Finance, November 2014, Pages 57-78

Abstract:
We show that firm headquarters' geographic proximity to political power centers (state capitals) is associated with higher abnormal returns. Consistent with the notion that this effect is rooted in social network links, we find it is more pronounced in communities with high levels of sociability and political values' homophily, and that it dissipates when firms move their headquarters to another state. Finally, in line with the view that investors perceive such networks to be associated with political risk, we find that this effect is particularly strong when there are substantial levels of corruption, dependency on government spending, and politicians' turnover.

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How Do Citizens React When Politicians Support Policies They Oppose? Field Experiments with Elite Communication

David Broockman & Daniel Butler
University of California Working Paper, September 2014

Abstract:
Politicians have been depicted as, alternatively, strongly constrained by public opinion, able to shape public opinion if they persuasively appeal to citizens' values, or relatively unconstrained by public opinion and able to shape it merely by announcing their positions. We conduct unique field experiments in cooperation with legislators to explore how constituents react when legislators take positions they oppose. For the experiments, state legislators sent their constituents official communications with randomly assigned content. In some letters, the representatives took positions on salient issues these constituents opposed, sometimes supported by extensive arguments but sometimes minimally justified. Results from an ostensibly unrelated telephone survey show that citizens often adopted their representatives' issue positions even when representatives offered little justification. Moreover, citizens did not evaluate their representatives more negatively when representatives took positions citizens opposed. These findings suggest politicians can enjoy broad latitude to shape public opinion.

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Institutional Design and the Attribution of Presidential Control: Insulating the President from Blame

Alex Ruder
Quarterly Journal of Political Science, Summer 2014, Pages 301-335

Abstract:
A lack of direct electoral checks on government bureaucrats challenges norms of democratic accountability. One proposed solution is to increase the president's control over federal agencies. It is, however, an open question as to whether voters will attribute responsibility to the president even when in charge of agencies. A key empirical challenge has been that presidential control is not randomly assigned across agencies. To overcome this issue, I compare two agencies that enforce the same policy but differ in insulation from presidential control. I examine a large, unique dataset of news coverage, showing that news coverage of the presidentially-controlled agency features more politicized content that ties the agency to the president. I then demonstrate experimentally that this political content increases attribution of control to the president. The results support theories that claim agency design moderates voter attribution of responsibility to the president. This paper broadly adds to the literature on institutional design and the determinants of agency discretion.

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For fear of popular politics? Public attention and the delegation of authority to the United States executive branch

Stéphane Lavertu
Regulation & Governance, forthcoming

Abstract:
Legislators are thought to delegate policymaking authority to administrative actors either to avoid blame for controversial policy or to secure policy outcomes. This study tests these competing perspectives and establishes that public attention to policymaking is a powerful predictor of the extent to which significant United States statutes delegate authority to the executive branch. Consistent with the policy-concerns perspective, by one calculation statutes dealing with high-attention issues entail 48 percent fewer delegating provisions than statutes dealing with low-attention issues - a far stronger relationship than is typically found in the delegation literature. As per the blame-avoidance perspective, a number of additional analyses yield results consistent with the notion that fears about future public attention motivate statutory delegation if legislative conflict is sufficiently great. Overall, however, the results suggest that conflict typically is not sufficiently great and that legislators are generally more inclined to limit statutory delegation when the public is paying attention.

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The two faces of congressional roll-call voting

Stephen Jessee & Sean Theriault
Party Politics, forthcoming

Abstract:
Most analyses of congressional voting, whether theoretical or empirical, treat all roll-call votes in the same way. We argue that such approaches mask considerable variation in voting behaviour across different types of votes. In examining all roll-call votes in the U.S. House of Representatives from the 93rd to the 110th Congresses (1973-2008), we find that the forces affecting legislators' voting on procedural and final passage matters have exhibited important changes over time, with differences between these two vote types becoming larger, particularly in recent congresses. These trends have important implications not only on how we study congressional voting behaviour, but also in how we evaluate representation and polarization in the modern Congress.

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Something Old, Something New, Something Borrowed From Something Blue: Experiments on Dual Viewing TV and Twitter

Jaclyn Cameron & Nick Geidner
Journal of Broadcasting & Electronic Media, Summer 2014, Pages 400-419

Abstract:
The use of second screens to dual-view television and social media is exponentially increasing. As a result, television producers are increasingly augmenting television content with social media comments from viewers, which may serve as a type of real-time public opinion indicator. The current research effort utilizes two experimental studies to explore the effects of this new media production practice on viewer's attitudes and opinions. In these studies, a Twitter feed was integrated in to entertainment (Study 1) and political (Study 2) television broadcasts and manipulated to convey either positive or negative opinions of the content. Participants' opinions were found to conform to the majority opinion presented in the manipulated Twitter feed in nearly all of the analyses. Implications for dual viewing and second screen use are discussed in light of findings.

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Politicians, Bureaucrats and Targeted Redistribution

Ruben Enikolopov
Journal of Public Economics, forthcoming

Abstract:
The paper argues that for political reasons elected politicians are more likely to be engaged in targeted redistribution than appointed bureaucrats. It uses the example of patronage jobs in the U.S. local governments to provide empirical support for this claim. It shows that the number of public employees is higher for elected chief executives. This difference is stronger in public services with bigger private-public wage differential and it increases during election years. It also finds that the number of public employees increases with the age of bureaucrats while there is no such relationship in the case of politicians, which is consistent with younger bureaucrats having stronger career concerns.

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The Structure of Political Institutions and Effectiveness of Corporate Political Lobbying

Seong-Jin Choi, Nan Jia & Jiangyong Lu
Organization Science, forthcoming

Abstract:
This paper investigates how the structure of political institutions influences the effectiveness of corporate political lobbying by shaping the "veto points" and "entry points" that lobbying firms encounter and require, respectively, when attempting to influence public policies; in so doing, this study deepens our understanding of the strategic implications of institutional environments. Using large-sample and cross-country firm-level data, we find that the influence of firms' lobbying activities on public policies is weakened when there are tighter constraints generated as a result of greater political (partisan) competition and more subnational government tiers. We find that the negative association between the effectiveness of lobbying and political (partisan) competition is particularly pronounced in countries with lower electoral accountability and that the negative association between the effectiveness of lobbying and subnational government tiers is particularly pronounced in more centralized political systems.

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Sunsets and Federal Lawmaking: Evidence from the 110th Congress

Frank Fagan & Fırat Bilgel
International Review of Law and Economics, March 2015, Pages 1-6

Abstract:
We test the hypothesis that the choice to include a sunset provision increases the likelihood that a bill becomes law. We develop a model where the legislator's knowledge of the increase in passage probability from including a sunset provision influences the legislator's choice to do so. Because legislators may either include a sunset provision to increase passage probability, or observe low passage probability and respond with a sunset provision, the choice to include a sunset provision is endogenous. Consequently, the causal effect of temporary enactment is identified by using the legislator's number of offspring as a source of exogenous variation in the choice to include a sunset provision. Employing recursive bivariate probit, we find that the average causal effect of including a sunset provision is sixty percent. We also find that the average causal effect of including sunset provisions in bills that already include them is about twenty percent.

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Presidential Priorities, Congressional Control, and the Quality of Regulatory Analysis: An Application to Health Care and Homeland Security

Jerry Ellig & Christopher Conover
Public Choice, forthcoming

Abstract:
Elected leaders delegate rulemaking to federal agencies, then seek to influence rulemaking via top-down directives and statutory deadlines. This paper documents an unintended consequence of these control strategies: they reduce regulatory agencies' ability and incentive to conduct high-quality economic analysis to inform their decisions. Using scoring data that measure the quality of regulatory impact analysis, we find that hastily-adopted "interim final" regulations reflecting signature policy priorities of the two most recent presidential administrations were accompanied by significantly lower-quality economic analysis. Interim final homeland security regulations adopted during the G.W. Bush administration and interim final regulations implementing the Affordable Care Act in the Obama administration were accompanied by less thorough analysis than other "economically significant" regulations (regulations with benefits, costs, or other economic impacts exceeding $100 million annually). The lower quality analysis apparently stems from the confluence of presidential priorities and very tight statutory deadlines associated with interim final regulations, rather than either factor alone.

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Soothing politics

Raphaël Levy
Journal of Public Economics, forthcoming

Abstract:
We consider a political agency model where voters learn information about some policy-relevant variable, which they can ignore when it impedes their desire to hold optimistic beliefs. Voters' excessive tendency to sustain optimism may result in inefficient political decision-making because political courage does not pay off when voters have poor information. However, voters infer information from policies and incentives to ignore bad news decrease when policy-making is more efficient. This generates multiple equilibria: an equilibrium where voters face up to the reality and politicians have political support to implement optimal policies, and another where they shy away from reforms to cater to the electorate's demand for soothing policies.

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Incumbent-Quality Advantage and Counterfactual Electoral Stagnation in the US Senate

Ivan Pastine, Tuvana Pastine & Paul Redmond
Politics, forthcoming

Abstract:
This article examines the extent to which electoral selection based on candidate quality alone can account for the pattern of re-election rates in the US Senate. In the absence of officeholder benefits, electoral selection is simulated using observed dropout rates from 1946 to 2010. This provides a benchmark for the re-election rate that would be generated by incumbent quality advantage alone. The simulation delivers a re-election rate that is almost identical to the observed rate prior to 1980, at around 78 per cent. In the later subsample, quality-based selection generates a re-election rate that is seven percentage points lower than observed. The divergence in the re-election rates in the later subsample is consistent with the findings of vote margin studies that indicate rising incumbency advantage due to officeholder benefits. In addition, it is found here that the quality-based selection first-term re-election rate is significantly lower than the observed first-term re-election rate. This result supports sophomore surge vote margin studies of officeholder benefits.

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The Decline of Daily Newspapers and the Third-Person Effect

Martin Johnson, Kirby Goidel & Michael Climek
Social Science Quarterly, forthcoming

Objective: In this article, we investigate the third-person effect within the context of the decision by the New Orleans Times-Picayune in September 2012 to end daily print circulation in favor of a three-day-per-week publication schedule and online news offerings.

Methods: We utilize original survey data based on 1,043 telephone interviews with respondents living in the greater New Orleans area, including 530 landline respondents selected via random digit dialing and 513 respondents randomly selected from available cellular telephone blocks.

Results: We find evidence of a third-person effect on judgments about changes at The Times-Picayune. New Orleans area residents worry that the decline of information will negatively affect the ability of others to keep up with the news. We also show that the effects are contingent upon physical location. The greater the distance from New Orleans, the more pronounced concerns are about the effect of the loss of this daily information source on others in the community.

Conclusions: To date, third-person effects have generally been studied within the context of enduring and established forms of communication, especially those viewed as having potential negative effects - politically biased messages, other forms of propaganda, and communication that could harm reputations. In this article, we extend this work to show third-person effects persist within the context of declining news coverage.

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Effects of Journalistic Adjudication on Factual Beliefs, News Evaluations, Information Seeking, and Epistemic Political Efficacy

Raymond James Pingree, Dominique Brossard & Douglas McLeod
Mass Communication and Society, September/October 2014, Pages 615-638

Abstract:
A frequent critique of contemporary journalism is that journalists rarely adjudicate factual disputes when covering politics; however, very little research has been done on the effects of such passive journalism on audiences. This study tests effects of active adjudication versus "he said/she said" journalism on a variety of outcomes, finding that adjudication can correct factual beliefs, increase perceived news quality, satisfy perceived informational needs, and increase the likelihood of future news use. However, for readers who were less interested in the issues under dispute, adjudication also reduced epistemic political efficacy, which is confidence in one's ability to find the truth in politics.

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Wealth, Officeholding, and Elite Demand for Slavery in Antebellum Georgia

Jason Poulos
University of California Working Paper, August 2014

Abstract:
This paper uses the first large-scale land lottery in US history to identify the effects of randomly-induced wealth on officeholding and the ideology of politicians. First, I link records from the 1805 Georgia land lottery to a roster of state politicians and estimate the effect of winning a lottery prize on ex-post officeholding. Lottery winners are 1.2% more likely to hold office compared to lottery losers (N = 21,612; p < 0.001). The treatment effect is larger for lottery winners who received higher-valued land lots. Second, I restrict the sample to members of the Georgia Assembly and measure support for slavery using roll call votes. Winning a lottery prize increases support for slavery by 7%, although this effect may be due to chance (N = 174; p = 0.220). The results demonstrate that wealth has a robust effect on officeholding, but does not significantly effect the ideology of politicians.

By KEVIN LEWIS | 09:00:00 AM

Thursday, October 2, 2014

Us versus them

Purpose in Life as a Resource for Increasing Comfort With Ethnic Diversity

Anthony Burrow et al.
Personality and Social Psychology Bulletin, forthcoming

Abstract:
Emerging demographic trends signal that White Americans will soon relinquish their majority status. As Whites’ acclimation to an increasingly diverse society is poised to figure prominently in their adjustment, identifying sources of greater comfort with diversity is important. Three studies (N = 519) revealed evidence that purpose in life bolsters comfort with ethnic diversity among White adults. Specifically, dispositional purpose was positively related to diversity attitudes and attenuated feelings of threat resulting from viewing demographic projections of greater diversity. In addition, when primed experimentally, purpose attenuated participants’ preferences for living in an ethnically homogeneous-White city, relative to a more diverse city when shown maps displaying ethno-demographic information. These effects persisted after controlling for positive affect and perceived connections to ethnic out-groups, suggesting the robust influence of purpose. Potential benefits of situating purpose as a unique resource for navigating an increasingly diverse society are discussed.

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Ethnic identity and self-esteem among Asian and European Americans: When a minority is the majority and the majority is a minority

Yiyuan Xu, Jo Ann Farver & Kristin Pauker
European Journal of Social Psychology, forthcoming

Abstract:
Three studies were conducted to examine the impact of being a numeric majority or minority in Hawai'i and U.S. mainland on the ethnic identity and self-esteem of Asian and European Americans. Results of Study 1 (N = 214, M age = 19.85 years) and Study 2 (N = 215, M age = 18.20 years) showed that Asian Americans who grew up on the U.S. mainland, where they are a numeric minority, reported higher ethnic identity than did Asian Americans who grew up in Hawai'i, where they are a numeric majority. In addition, ethnic identity was significantly associated with self-esteem for Asian Americans from the U.S. mainland and European Americans from Hawai'i (numeric minority), but not for Asian Americans from Hawai'i and European Americans from the U.S. mainland (numeric majority). Study 3 (N = 88, M age = 18.12) examined ethnic identity and self-esteem among Asian and European Americans who had moved from the U.S. mainland to attend a university in Hawai'i over a 1 year time period. The results showed significant relations between ethnic identity and self-esteem for Asian Americans when they initially moved to Hawai'i, but this relation decreased after they had lived in Hawai'i for 1 year. The findings highlight contextual variations in ethnic identity and self-esteem for members of both minority and majority groups in the U.S.

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Gendered Black Exclusion: The Persistence of Racial Stereotypes Among Daters

James Bany, Belinda Robnett & Cynthia Feliciano
Race and Social Problems, September 2014, Pages 201-213

Abstract:
Employing questionnaires of 381 college students, this study examines the reasons why Latinos, Asians, and whites choose to include or exclude blacks as potential dates. First, we find that past structural explanations for low rates of interracial intimacy explain current disparities less among young people today. Only 10 % of respondents cited a structural explanation, lack of familiarity, or contact, as the reason they excluded blacks as possible dates. Second, the reasons for black exclusion vary across racial–ethnic–gender groups. Among non-blacks, whites were the most open to dating blacks, followed by Latinos and Asians. Asians and Latinos were more likely to exclude blacks because of social disapproval, and whites were more likely to exclude blacks because of physical attraction. Black women were more highly excluded than black men and more excluded because of their perceived aggressive personalities or behavior and physical attraction. Black men were more excluded because of social disapproval. Thus, persistent racial ideology continues to drive the social distance between blacks and non-blacks, particularly toward black females.

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Implicit Closeness to Blacks, Support for Affirmative Action, Slavery Reparations, and Vote Intentions for Barack Obama in the 2008 Elections

Thomas Craemer
Basic and Applied Social Psychology, September/October 2014, Pages 413-424

Abstract:
Does pro-Black policy support require an individual to be unbiased? I distinguish two types of implicit attitudes based on whether the attitude-target is evaluated as an object (evaluative associations) or as an independent social agent (relational associations). In a series of studies (N = 3,073), a significant anti-Black evaluative association bias emerges. In contrast, relational associations are significantly pro-Black and are unrelated to evaluative associations. Relational associations predict opinions regarding affirmative action, government help for Blacks, slavery reparations, and intentions to vote for Barack Obama. Thus, minority representation based on relational associations may not require absence of anti-minority evaluative bias.

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Contextualizing the “Student Body”: Is Exposure to Older Students Associated With Body Dissatisfaction in Female Early Adolescents?

Jaine Strauss et al.
Psychology of Women Quarterly, forthcoming

Abstract:
Research on teens’ body dissatisfaction documents the role of proximal social influences (e.g., peers and family) and distal social influences (e.g., mass media) but largely ignores intermediate contextual factors such as school environment. Is there a link between individual body image and student body? We assessed drive for thinness, body dissatisfaction, thin-ideal internalization, and body objectification in an ethnically diverse sample of 1,536 female students educated in U.S. school districts varying in the degree to which younger students (fifth and sixth graders) are educated alongside older students (seventh and eighth graders). We studied three different grade groupings: junior high (Grades K–6 housed together/Grades 7–8 housed together), middle school (K–5/6–8), and extended middle school (K–4/5–8). As predicted, fifth and sixth graders attending schools with older students reported more negative body experiences than their age peers attending schools with younger students; similar effects were evident among seventh graders who had been educated with older peers during fifth and sixth grade. Our findings highlight the importance of considering contextual factors in understanding young women’s body image.

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Globally Themed Organizations as Labor Market Intermediaries: The Rise of Israeli-Palestinian Women's Employment in Retail

Erez Aharon Marantz, Alexandra Kalev & Noah Lewin-Epstein
Social Forces, forthcoming

Abstract:
This paper examines the labor-market incorporation of minority women. Industrial transformations and the expansion of service and retail have increased women's labor-market participation, but there remains a large variation between minority women groups, where multiple boundaries may hinder labor-market integration. Past research has explored the role of formal labor-market intermediates in overcoming social boundaries. But a precondition for labor-market intermediation is that majority employers perceive minorities as potential workers and minorities perceive the majority as potential employers. In this paper, we expand the concept of labor-market intermediation to include the social construction of groups as legitimate economic actors, and examine the role of organizational structures in this social construction. Using a comparative analysis of two Jewish malls and nearby shopping streets, and based on 190 interviews with various actors, we show that while supply of workers and demand for work are necessary factors, they are not sufficient for explaining the incorporation of Palestinian women into retail labor markets. Instead, we point to the unintended effect of the globally themed organization of the shopping malls on the erosion of social boundaries and the formation of consumption relations between Israeli-Palestinian women and Jewish employers, which turned into employment relations.

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Neighborhood linguistic diversity predicts infants’ social learning

Lauren Howard, Cristina Carrazza & Amanda Woodward
Cognition, November 2014, Pages 474–479

Abstract:
Infants’ direct interactions with caregivers have been shown to powerfully influence social and cognitive development. In contrast, little is known about the cognitive influence of social contexts beyond the infant’s immediate interactions with others, for example, the communities in which infants live. The current study addressed this issue by asking whether neighborhood linguistic diversity predicts infants’ propensity to learn from diverse social partners. Data were taken from a series of experiments in which 19-month-old infants from monolingual, English-speaking homes were tested in paradigms that assessed their tendency to imitate the actions of an adult who spoke either English or Spanish. Infants who lived in more linguistically diverse neighborhoods imitated more of the Spanish speaker’s actions. This relation was observed in two separate datasets and found to be independent from variation in infants’ general imitative abilities, age, median family income and population density. These results provide novel evidence suggesting that infants’ social learning is predicted by the diversity of the communities in which they live.

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Silent or Talking in the Classroom: Implicit Self-Stereotyping Among Asian and White Students

Thierry Devos & Yukiko Yokoyama
Basic and Applied Social Psychology, September/October 2014, Pages 386-396

Abstract:
In academic settings, Asian students are often described as less talkative than White students. We provide an account of this phenomenon based on research on cultural influences on the self, self-categorization, and implicit social cognition. We hypothesized that the classroom context activates a process of implicit self-stereotyping. Asian and White participants were asked to imagine themselves in a classroom or leisure context. Next, they completed Implicit Association Tests assessing their self-concept, ethnic stereotypes, and ethnic identification. In the classroom context only, ethnic stereotypes accounted for a more reserved self-concept among Asian participants and a more talkative self-concept among White participants.

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Does Unfairness Feel Different if it can be Linked to Group Membership? Cognitive, Affective, Behavioral and Physiological Implications of Discrimination and Unfairness

Tessa Dover et al.
Journal of Experimental Social Psychology, forthcoming

Abstract:
We assessed whether unfair treatment leads to different attributional, emotional, behavioral, and cardiovascular responses depending on whether or not the treatment is group-based. Latino and White men (N = 209) were treated fairly or unfairly by an ingroup or outgroup member. As expected, attributions to discrimination were greatest among those treated unfairly in an intergroup context. Moreover, among those treated unfairly in an intergroup context, Latinos who did not endorse the protestant work ethic (PWE) responded with more anger, had higher attributions to discrimination, and punished the offender more, compared to Whites and high-PWE Latinos. Cardiovascular responses to unfair intergroup treatment did not differ by ethnicity: unfair intergroup treatment was less threatening (more challenging) when low (vs. high) in PWE. Results suggest that for low-status group members responding to unfair intergroup treatment (i.e., discrimination), identifying the treatment as discriminatory and becoming angry may be more cardiovascularly-adaptive than not. Implications are discussed.

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Seen to Be Heard? Gender, Voice, and Body in Television Advertisements

Mark Pedelty & Morgan Kuecker
Communication and Critical/Cultural Studies, Summer 2014, Pages 250-269

Abstract:
A quantitative content analysis of 1,055 television ads reveals that male voiceovers outnumber female voiceovers 4:1. As has been the case for decades in television, a man is much more likely to serve as the disembodied and objective voice of authority, expertise, and reason. However, a woman's voice is twice as likely to be heard if her body is also represented on screen. Based on that finding, the authors argue that scopocentric sexism influences when and how gendered voices are presented. A woman's relative agency, her recourse to “voice” in both the literal and metaphoric sense, is conditioned by her visual presence. After completing the quantitative content analysis, a qualitative textual analysis was conducted on a subsample of ads in order to explore relationships between voice and body at a finer-grained level. The study provides an important update for critical ad research concerning voiceovers and is the first that systematically compares voice and body data. The authors conclude by presenting ideas for integrating critical sound research into media literacy curricula.

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Oxytocin increases liking for a country's people and national flag but not for other cultural symbols or consumer products

Xiaole Ma et al.
Frontiers in Behavioral Neuroscience, August 2014

Abstract:
The neuropeptide oxytocin enhances in-group favoritism and ethnocentrism in males. However, whether such effects also occur in women and extend to national symbols and companies/consumer products is unclear. In a between-subject, double-blind placebo controlled experiment we have investigated the effect of intranasal oxytocin on likeability and arousal ratings given by 51 adult Chinese males and females for pictures depicting people or national symbols/consumer products from both strong and weak in-groups (China and Taiwan) and corresponding out-groups (Japan and South Korea). To assess duration of treatment effects subjects were also re-tested after 1 week. Results showed that although oxytocin selectively increased the bias for overall liking for Chinese social stimuli and the national flag, it had no effect on the similar bias toward other Chinese cultural symbols, companies, and consumer products. This enhanced bias was maintained 1 week after treatment. No overall oxytocin effects were found for Taiwanese, Japanese, or South Korean pictures. Our findings show for the first time that oxytocin increases liking for a nation's society and flag in both men and women, but not that for other cultural symbols or companies/consumer products.

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The Relationship Between Culture, Geographic Region, and Gender on Body Image: A Comparison of College Students in the Southeast and Pacific Northwest Regions of the United States

Amber Paulk et al.
Sociological Spectrum, September/October 2014, Pages 442-452

Abstract:
Body image is a significant predictor of important psychological and physical outcomes. The current study sought to expand on previous research on cross-cultural differences in body image across countries by exploring differences in body image based on geographic region within the United States. A sample of 1,365 participants was recruited from universities in the Southeast and Pacific Northwest regions of the United States. Participants completed a survey that assessed their gender, geographic region, and body image. Women reported poorer body image than men, and young adults from the Southeast reported poorer body image than young adults from the Pacific Northwest. There were significant interaction effects for gender and geographic region with women from the Southeast reporting the poorest body image of any group. The authors suggest that sociocultural differences in standard of beauty in the Southeast as well as differences in dress related to climate may contribute to the findings.

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The status-legitimacy hypothesis revisited: Ethnic-group differences in general and dimension-specific legitimacy

Nikhil Sengupta, Danny Osborne & Chris Sibley
British Journal of Social Psychology, forthcoming

Abstract:
The status-legitimacy hypothesis, which predicts that low-status groups will legitimize inequality more than high-status groups, has received inconsistent empirical support. To resolve this inconsistency, we hypothesized that low-status groups would display enhanced legitimation only when evaluating the fairness of the specific hierarchy responsible for their disadvantage. In a New Zealand-based probability sample (N = 6,162), we found that low-status ethnic groups (Asians and Pacific Islanders) perceived ethnic-group relations to be fairer than the high-status group (Europeans). However, these groups did not justify the overall political system more than the high-status group. In fact, Māori showed the least support for the political system. These findings clarify when the controversial status-legitimacy effects predicted by System Justification Theory will – and will not – emerge.

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“Doing Race”: Latino Youth’s Identities and the Politics of Racial Exclusion

Nilda Flores-González, Elizabeth Aranda & Elizabeth Vaquera
American Behavioral Scientist, forthcoming

Abstract:
For most Latino youth, Latinos constitute a separate, while diverse, racial group. Our study demonstrates that, when asked about their identities, Latino youth do not follow conventional U.S. racial categories. Although they prefer to identify by national origin or panethnicity, they consider themselves to be part of a racial group rather than an ethnic group, as the U.S. Census designates them. Using findings from in-depth semistructured interviews with two samples of young adults in Chicago and Central Florida, this research joins the long-standing debate on the conceptual division between race and ethnicity arguing that there is a mismatch between existing sociological understandings of race and ethnicity and the current racial ideas and racial practices among Latino youth. There is also a mismatch between institutional measures of “race,” such as those found in the U.S. Census, and Latinos’ self-understandings of where they belong in the U.S. racial hierarchy. We suggest that not being officially designated as a racial group leads to the erosion of perceptions of belonging among Latinos to a nation in which being a member of a racial group allows for visibility and claims-making in a multiracial society.

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Out-group flies in the in-group’s ointment: Evidence of the motivational underpinnings of the in-group overexclusion effect

Mark Rubin & Stefania Paolini
Social Psychology, Fall 2014, Pages 265-273

Abstract:
People tend to misclassify ambiguous individuals as members of the out-group rather than the in-group. This in-group overexclusion effect (IO effect) is thought to occur because people are motivated to maintain their in-group’s positivity by protecting it from potential out-group intrusions. The present research tested this explanation by asking university students (N = 122) to complete a self-esteem scale and then recall the group memberships of individuals who belonged to minimal groups. Consistent with predictions, participants misassigned significantly fewer individuals to the in-group than to the out-group when the in-group was positive and the out-group was negative but not when these valences were reversed. In addition, self-esteem negatively predicted the IO effect. Alternative explanations of the IO effect are discussed.

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Social identity modifies face perception: An ERP study of social categorization

Belle Derks, Jeffrey Stedehouder & Tiffany Ito
Social Cognitive and Affective Neuroscience, forthcoming

Abstract:
Two studies examined whether social identity processes, i.e., group identification and social identity threat, amplify the degree to which people attend to social category information in early perception (assessed with ERPs). Participants were presented with faces of Muslims and non-Muslims in an evaluative priming task while event-related brain potentials were measured and implicit evaluative bias was assessed. Study 1 revealed that non-Muslims showed stronger differentiation between ingroup and outgroup faces in both early (N200) and later processing stages (implicit evaluations) when they identified more strongly with their ethnic group. Moreover, identification effects on implicit bias were mediated by inter-group differentiation in the N200. In Study 2, social identity threat (vs. control) was manipulated among Muslims. Results revealed that high social identity threat resulted in stronger differentiation of Muslims from non-Muslims in early (N200) and late (implicit evaluations) processing stages, with N200 effects again predicting implicit bias. Combined, these studies reveal how seemingly bottom-up early social categorization processes are affected by individual and contextual variables that affect the meaning of social identity. Implication of these results for the social identity perspective as well as social cognitive theories of person perception are discussed.

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“We have no quarrel with you”: Effects of group status on characterizations of “conflict” with an outgroup

Andrew Livingstone et al.
European Journal of Social Psychology, forthcoming

Abstract:
In three studies, we examined the effect of intergroup status on group members' tendencies to characterize the ingroup's relationship with an outgroup as conflictual following outgroup action. Findings from all three studies supported the prediction that the intergroup relationship would be characterized as less conflictual when the ingroup had relatively high rather than low status. Consistent with the hypothesis that the effect of status reflects strategic concerns, it was moderated by the perceived relevance of the outgroup's action to intergroup status relations (study 1), it was sensitive to audience (study 2), and it was partially mediated by status management concerns (study 3). The role of strategic, status-related factors in intergroup relations is discussed.

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Measuring Sexual Dimorphism With a Race–Gender Face Space

William Hopper et al.
Journal of Experimental Psychology: Human Perception and Performance, October 2014, Pages 1779-1788

Abstract:
Faces are complex visual objects, and faces chosen to vary in 1 regard may unintentionally vary in other ways, particularly if the correlation is a property of the population of faces. Here, we present an example of a correlation that arises from differences in the degree of sexual dimorphism. In Experiment 1, paired similarity ratings were collected for a set of 40 real face images chosen to vary in terms of gender and race (Asian vs. White). Multidimensional scaling (MDS) placed these stimuli in a “face space,” with different attributes corresponding to different dimensions. Gender was found to vary more for White faces, resulting in a negative or positive correlation between gender and race when only considering male or only considering female faces. This increased sexual dimorphism for White faces may provide an alternative explanation for differences in face processing between White and Asian faces (e.g., the own-race bias, face attractiveness biases, etc.). Studies of face processing that are unconfounded by this difference in the degree of sexual dimorphism require stimuli that are decorrelated in terms of race and gender. Decorrelated faces were created using a morphing technique, spacing the morphs uniformly around a ring in the 2-dimensional (2D) race–gender plane. In Experiment 2, paired similarity ratings confirmed the 2D positions of the morph faces. In Experiment 3, race and gender category judgments varied uniformly for these decorrelated stimuli. Our results and stimuli should prove useful for studying sexual dimorphism and for the study of face processing more generally.

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The development of race-based perceptual categorization: Skin color dominates early category judgments

Yarrow Dunham et al.
Developmental Science, forthcoming

Abstract:
Prior research on the development of race-based categorization has concluded that children understand the perceptual basis of race categories from as early as age 4 (e.g. Aboud, 1988). However, such work has rarely separated the influence of skin color from other physiognomic features considered by adults to be diagnostic of race categories. In two studies focusing on Black–White race categorization judgments in children between the ages of 4 and 9, as well as in adults, we find that categorization decisions in early childhood are determined almost entirely by attention to skin color, with attention to other physiognomic features exerting only a small influence on judgments as late as middle childhood. We further find that when skin color cues are largely eliminated from the stimuli, adults readily shift almost entirely to focus on other physiognomic features. However, 6- and 8-year-old children show only a limited ability to shift attention to facial physiognomy and so perform poorly on the task. These results demonstrate that attention to ‘race’ in younger children is better conceptualized as attention to skin color, inviting a reinterpretation of past work focusing on children's race-related cognition.

By KEVIN LEWIS | 09:00:00 AM

Wednesday, October 1, 2014

Officers, directors, and gentlemen

Masculinity, Testosterone, and Financial Misreporting

Yuping Jia, Laurence van Lent & Yachang Zeng
Journal of Accounting Research, forthcoming

Abstract:
We examine the relation between a measure of male CEOs’ facial masculinity and financial misreporting. Facial masculinity is associated with a complex of masculine behaviors (including aggression, egocentrism, risk-seeking, and maintenance of social status) in males. One possible mechanism for this relation is that the hormone testosterone influences both behavior and the development of the face shape. We document a positive association between CEO facial masculinity and various misreporting proxies in a broad sample of S&P1500 firms during 1996–2010. We complement this evidence by documenting that a CEO's facial masculinity predicts his firm's likelihood of being subject to an SEC enforcement action. We also show that an executive's facial masculinity is associated with the likelihood of the SEC naming him as a perpetrator. We find that facial masculinity is not a measure of overconfidence. Finally, we demonstrate that facial masculinity also predicts the incidence of insider trading and option backdating.

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What Happens in Nevada? Self-Selecting into Lax Law

Michal Barzuza & David Smith
Review of Financial Studies, forthcoming

Abstract:
We find that Nevada, the second most popular state for out-of-state incorporations and a state with lax corporate law, attracts firms that are 30–40% more likely to report financial results that later require restatement than firms incorporated in other states, including Delaware. Our results suggest that firms favoring protections for insiders select Nevada as a corporate home, and these firms are prone to financial reporting failures. We provide some evidence that Nevada law also has a causal impact by increasing a Nevada firm's propensity to misreport financials after the firm has incorporated in Nevada.

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Strategic News Releases in Equity Vesting Months

Alex Edmans et al.
NBER Working Paper, September 2014

Abstract:
We show that CEOs strategically time corporate news releases to coincide with months in which their equity vests. These vesting months are determined by equity grants made several years prior, and thus unlikely driven by the current information environment. CEOs reallocate news into vesting months, and away from prior and subsequent months. They release 5% more discretionary news in vesting months than prior months, but there is no difference for non-discretionary news. These news releases lead to favourable media coverage, suggesting they are positive in tone. They also generate a temporary run-up in stock prices and market liquidity, potentially resulting from increased investor attention or reduced information asymmetry. The CEO takes advantage of these effects by cashing out shortly after the news releases.

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Female Board Representation and Corporate Acquisition Intensity

Guoli Chen, Craig Crossland & Sterling Huang
Strategic Management Journal, forthcoming

Abstract:
This study examines the impact of female board representation on firm-level strategic behavior within the domain of mergers and acquisitions (M&A). We build on social identity theory to predict that greater female representation on a firm's board will be negatively associated with both the number of acquisitions the firm engages in and, conditional on doing a deal, acquisition size. Using a comprehensive, multi-year sample of U.S. public firms, we find strong support for our hypotheses. We demonstrate the robustness of our findings through the use of a difference-in-differences analysis on a sub-sample of firms that experienced exogenous changes in board gender composition as a result of director deaths.

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Growth Through Rigidity: An Explanation for the Rise in CEO Pay

Kelly Shue & Richard Townsend
University of Chicago Working Paper, April 2014

Abstract:
We explore a rigidity-based explanation of the dramatic and off-trend growth in US executive compensation during the 1990s and early 2000s. We show that executive option and stock grants are rigid in the number of shares granted. In addition, salary and bonus exhibit downward nominal rigidity. Rigidity implies that the value of executive pay will grow with firm equity returns, which averaged 30% annually during the Tech Boom. Rigidity can also explain the increased dispersion in pay, the difference in growth rates between the US and other countries, and the increased correlation between pay and firm-specific equity returns. Regulatory changes requiring the disclosure of the value of option grants help explain the moderation in executive pay in the late 2000s. Finally, we find suggestive evidence that number-rigidity in executive pay is generated by money illusion and rule-of-thumb decision-making.

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Labor Unemployment Insurance and Earnings Management

Yiwei Dou, Mozaffar Khan & Youli Zou
Harvard Working Paper, August 2014

Abstract:
There is relatively little prior evidence on the potential impact of rank and file employees on financial reporting choices outside union negotiations. We contribute to the literature by providing new evidence that firms appear to manage long-run earnings upward in order to manage employee perceptions of employment security. In particular, we exploit exogenous state-level changes in unemployment insurance benefits and test for unwinding of prior upward earnings management when benefits increase. An increase in unemployment benefits makes unemployment relatively less costly and reduces employees’ unemployment risk, thereby reducing firms’ upward earnings management incentives. Consistent with the hypothesis, we find a significant reduction in abnormal accruals, increased recognition of special items and writedowns, and greater downward restatement likelihood, following an increase in state-level unemployment benefits. Cross-sectional tests suggest greater unwinding of prior upward earnings management for firms with higher labor intensity, higher layoff propensity and a higher percentage of low-wage workers. Collectively the results provide new evidence of the impact of rank and file employees on firms’ financial reporting choices.

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Geographic Location, Excess Control Rights, and Cash Holdings

Sabri Boubaker, Imen Derouiche & Meziane Lasfer
International Review of Financial Analysis, forthcoming

Abstract:
We assess the extent to which remotely-located firms are likely to discretionarily accumulate cash rather than distribute it to shareholders. We consider that these firms are less subject to shareholder scrutiny and, thus, will have high agency conflicts as the distance will facilitate the extraction of private benefits. Consistent with our predictions, we find a positive relation between the distance to the main metropolitan area and cash holdings, and this impact is more pronounced when the controlling shareholder has high levels of excess control rights (i.e., separation of cash-flow rights and control rights). Our results hold even after accounting for all control variables, including financial constraints, and suggest that geographic remoteness can be conducive to severe agency problems, particularly when there is a large separation of cash-flow rights and control rights.

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Outsourcing Shareholder Voting to Proxy Advisory Firms

David Larcker, Allan McCall & Gaizka Ormazabal
Stanford Working Paper, June 2014

Abstract:
This paper examines the economic consequences of institutional investors outsourcing research and voting decisions on matters submitted to a vote of public company shareholders to proxy advisory firms. These outsourcing decisions appear to be the result of the regulatory requirement that institutional investors vote their shares combined with incentives for these investors to minimize their cost of voting activity. We investigate the implications of these decisions in the context of shareholder say-on-pay voting required in 2011 under the Dodd-Frank Act. Analyzing a large sample of firms from the Russell 3000 that are subject to the initial say-on-pay vote mandated by the Dodd-Frank Act, we find three primary results. First, consistent with prior research, proxy advisory firm recommendations have a substantive impact on say-on-pay voting outcomes. Second, a significant number of firms change their compensation programs in the time period before the formal shareholder vote in a manner consistent with the features known to be favored by proxy advisory firms in an effort to avoid a negative voting recommendation. Third, the stock market reaction to these compensation program changes is statistically negative. These results suggest that the outsourcing of voting to proxy advisory firms appears to have the unintended economic consequence that boards of directors are induced to make choices that decrease shareholder value. While this evidence does not speak to the optimality of outsourcing all voting decisions compared to alternative regulatory constructs (e.g. prohibiting proxy advisors or reducing the number of items to be voted on), it does inform this debate by providing evidence on the potential negative economic consequences of outsourcing shareholder voting to proxy advisors.

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Contractual vs. Actual Separation Pay Following CEO Turnover

Eitan Moshe Goldman & Peggy Peiju Huang
Management Science, forthcoming

Abstract:
Using hand-collected data, we document the details of the ex ante severance contracts and the ex post separation pay given to S&P 500 chief executive officers (CEOs) upon departing from their companies. We analyze what determines whether or not a CEO receives separation pay in excess of the amount specified in the severance contract. We find that discretionary separation pay is given to about 40% of departing CEOs and is, on average, $8 million, which amounts to close to 242% of a CEO’s annual compensation. We investigate the determinants of discretionary separation pay and find, for example, that discretionary separation pay positively correlates with weak internal governance in cases of voluntary CEO turnover but not when the CEO is forced out. We also find that discretionary pay is higher when the CEO has a noncompete clause in her ex ante severance contract. Event study analysis suggests that shareholders benefit from discretionary separation pay in forced turnovers but not in voluntary ones. Our overall results help to shed light on the complex role of discretionary separation pay in the bargaining game between boards and departing executives.

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Playing it Safe? Managerial Preferences, Risk, and Agency Conflicts

Todd Gormley & David Matsa
University of Pennsylvania Working Paper, September 2014

Abstract:
This paper examines managers’ incentive to “play it safe” by taking value-destroying actions that reduce their firms’ risk of distress. We find that, after managers are insulated by the adoption of an antitakeover law, firms take on less risk. Stock volatility decreases, cash holdings increase, and diversifying acquisitions increase by more than a quarter relative to firms that operate in the same state and industry. The acquisitions target “cash cows,” have negative announcement returns, and are concentrated among firms with greater risk of distress and inside ownership. Our findings suggest that shareholders face governance challenges beyond motivating managerial effort, and that instruments typically used to motivate managers, like greater financial leverage and larger ownership stakes, intensify these challenges.

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Corporate Goodness and Shareholder Wealth

Philipp Krüger
Journal of Financial Economics, forthcoming

Abstract:
Using a unique data set, I study how stock markets react to positive and negative events concerned with a firm's corporate social responsibility (CSR). I show that investors respond strongly negatively to negative events and weakly negatively to positive events. I then show that investors do value “offsetting CSR,” that is positive CSR news concerning firms with a history of poor stakeholder relations. In contrast, investors respond negatively to positive CSR news which is more likely to result from agency problems. Finally, I provide evidence that CSR news with stronger legal and economic information content generates a more pronounced investor reaction.

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The Impact of Insider Trading Laws on Dividend Payout Policy

Paul Brockman, Jiri Tresl & Emre Unlu
Journal of Corporate Finance, forthcoming

Abstract:
We posit that firms use dividend payout policy to reduce information asymmetry and agency costs caused by country-level institutional weaknesses. Firms operating in countries with weak insider trading laws attempt to mitigate this institutional weakness by committing themselves to paying out large and stable cash dividends. We test this central hypothesis (among others) using an international sample of firms across 24 countries, as well as by conducting a case study during an enforcement action. The results show that weak insider trading laws lead to a higher propensity of paying dividends, larger dividend amounts and greater dividend smoothing. We also show that the market’s valuation of dividend payouts is significantly higher when insider trading protection is weak. It is important to note that these insider trading results are not due to cross-country variations in investor or creditor protection, nor are they contingent on the enforcement of insider trading laws. Overall, our evidence supports the view that dividend payouts serve as a substitute bonding mechanism when country-level legal protections fail.

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Corporate Governance and the Timing of Earnings Announcements

Roni Michaely, Amir Rubin & Alexander Vedrashko
Review of Finance, October 2014, Pages 2003-2044

Abstract:
Using comprehensive time stamp data on earnings announcements collected from newswires, we show that earnings news announced within trading hours results in approximately 50% smaller immediate reaction compared to similar earnings announced outside trading hours. Negative news tends to be announced during trading hours, which, together with the reduced response, may allow for managerial opportunistic behavior. We also provide evidence that announcement timing is affected by internal corporate governance. Recent regulations that tightened firms’ governance are associated with a significant shift to announcing outside trading hours, especially for firms with better corporate governance. Our surveys of corporate managers corroborate these results.

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Family Ownership and Corporate Misconduct in U.S. Small Firms

Shujun Ding & Zhenyu Wu
Journal of Business Ethics, August 2014, Pages 183-195

Abstract:
This study adds to the theory of family business management by exploring the effects of family ownership on the corporate misconduct of small firms in the United States. The empirical findings indicate that small family-owned firms are less likely to commit misconduct than small non-family-owned firms. We interpret this finding as family firms aiming to achieve the trans-generational succession of moral capital. Further investigation shows a nonlinear family-ownership–misconduct relationship. A negative relationship between them only appears in mature firms. We further show that for relatively mature firms, only family firms with older owners are less likely to commit corporate misconduct.

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Passing Probation: Earnings Management by Interim CEOs and Its Effect on Their Promotion Prospects

Guoli Chen et al.
Academy of Management Journal, forthcoming

Abstract:
Drawing on CEO succession research and the impression management literature, we examine earnings management by interim CEOs, its impact on interim CEOs' promotion prospects, and the moderating effect of governance mechanisms on the relationship between the two. Based on a sample of 145 interim CEO succession events in U.S. public firms from 2004 to 2008, we find that (1) an interim CEO is more likely than a non-interim CEO to engage in earnings management to improve firm earnings performance ("income-increasing earnings management"); (2) the greater the income-increasing earnings management, the more likely the interim CEO will be promoted to the permanent position; and (3) the relationship between earnings management and the likelihood of interim CEO promotion is weakened when effective internal and external governance mechanisms are in place.

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Debtholders’ Demand for Conservatism: Evidence from Changes in Directors’ Fiduciary Duties

Jagadison Aier, Long Chen & Mikhail Pevzner
Journal of Accounting Research, forthcoming

Abstract:
Debtholders’ demand has been widely discussed as a key determinant of conservatism but clear causal evidence is not yet established. Using a natural experiment setting, wherein a Delaware court ruled that the fiduciary duties of directors in near insolvent Delaware companies extend to creditors, we predict and find that firms subject to the ruling significantly increased their accounting conservatism. Additionally, our results suggest that the increase in conservatism is more pronounced in near insolvent Delaware firms with stronger boards, confirming that the court ruling takes effect through the channel of board of directors. Our results are robust to using alternative measures of conservatism and near insolvency status, and controlling for potential confounding factors and other stakeholders’ demand for conservatism. Overall, our study provides empirical evidence to support the causal relation between debtholders’ demand and accounting conservatism previously suggested in the literature, and offers some insights into the role of board of directors in financial reporting.

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Valuing Diversity: CEOs’ Career Experiences and Corporate Investment

Conghui Hu & Yu-Jane Liu
Journal of Corporate Finance, forthcoming

Abstract:
This paper investigates the impact of CEOs’ career experiences on corporate investment decisions. We hypothesize that CEOs with more diverse career experiences are less likely to be constrained by insufficient internal capital. The potential mechanism is that rich external experiences help CEOs accumulate social connections and these connections mitigate information asymmetry and lead to better access to external funds. Consistent with this argument, we find that firms with CEOs who have more diverse career experiences exhibit lower investment-cash flow sensitivity and exploit more outside funds, including both bank loans and trade credit. These effects are more pronounced among financially constrained firms. Even controlling for connections gained through financial institutions or government offices, the effect of diversity still remains very strong. Finally, we conduct several tests to mitigate the concern that our results are driven by the endogeneity of CEOs’ appointments.

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Do busy directors and CEOs shirk their responsibilities? Evidence from mergers and acquisitions

Bradley Benson et al.
Quarterly Review of Economics and Finance, forthcoming

Abstract:
We examine the effects of busy directors on merger premiums and conclude that busy directors are not uniformly detrimental. We provide evidence that busy CEOs of acquirer firms are associated with lower premiums suggesting they do not shirk their responsibilities. Busy CEOs of target firms either accept lower premiums or do not play a significant role in determining the price, indicating they may either shirk or have hidden self-incentives. We find that when the majority of directors in target firms are busy, they negotiate better deals. The results show that busyness does not fully explain whether a CEO or director shirks responsibility. Additionally, our results confirm previous findings that the market reacts more negatively to high merger premiums.

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Contractual Freedom and the Evolution of Corporate Control in Britain, 1862 to 1929

Timothy Guinnane, Ron Harris & Naomi Lamoreaux
NBER Working Paper, September 2014

Abstract:
British general incorporation law granted companies an extraordinary degree of contractual freedom to craft their own governance rules. In this paper we study the uses to which this flexibility was put by examining the articles of association written by three samples of companies from the late nineteenth and early twentieth centuries. We find that incorporators consistently wrote rules that shifted power from shareholders to directors, that the extent of this shift became greater over time, and that Parliament made little effort to restrain it. Although large firms were less likely to enact the most extreme provisions, such as entrenching specific directors for life, they too wrote articles that gave managers essentially unchecked power. These findings have implications for the literature on corporate control, for the “law-and-finance” argument that the common law was more conducive to financial development than the code-based systems of civil law countries, and for the debate on entrepreneurial failure in Britain during the late nineteenth and early twentieth centuries.

By KEVIN LEWIS | 09:00:00 AM

Tuesday, September 30, 2014

On the fence

Can Acetaminophen Reduce the Pain of Decision-Making?

Nathan DeWall, David Chester & Dylan White
Journal of Experimental Social Psychology, forthcoming

Abstract:
Psychological and behavioral economic theories have shown that people often make irrational and suboptimal decisions. To describe certain decisions, people often use words related to pain (“hurt,” “painful”). Neuroscientific evidence suggests common overlap between systems involved in physical pain and decision-making. Yet no prior studies have explored whether a pharmacological intervention aimed at reducing physical pain could reduce the pain of decision-making. The current investigation filled this gap by assigning participants to consume the physical painkiller acetaminophen or placebo and then exposing them to situations known to produce cognitive dissonance (Experiment 1) or loss aversion (Experiment 2). Both experiments showed that acetaminophen reduced the pain of decision-making, as indicated by lower attitude change that accompanies cognitive dissonance and lower selling prices when selling personal possessions.

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Public policy for thee, but not for me: Varying the grammatical person of public policy justifications influences their support

James Cornwell & David Krantz
Judgment and Decision Making, September 2014, Pages 433–444

Abstract:
Past research has shown that people consistently believe that others are more easily manipulated by external influences than they themselves are — a phenomenon called the “third-person effect” (Davison, 1983). The present research investigates whether support for public policies aimed at changing behavior using incentives and other decision “nudges” is affected by this bias. Across two studies, we phrased justification for public policy initiatives using either the second- or third-person plural. In Study 1, we found that support for policies is higher when their justification points to people in general rather than the general “you”, and in Study 2 we found that this former phrasing also improves support compared to a no-justification control condition. Policy support is mediated by beliefs about the likelihood of success of the policies (as opposed to beliefs about the policies’ unintended consequences), and, in the second-person condition, is inversely related to a sense of personal agency. These effects suggest that the third-person effect holds true for nudge-type and incentive-based public policies, with implications for their popular support.

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Indecision and the construction of self

Daniel Newark
Organizational Behavior and Human Decision Processes, forthcoming

Abstract:
This paper proposes a theoretically grounded definition of indecision and considers one of indecision’s potential functions. It argues that, despite a reputation as mere choice pathology, indecision may play an important role in identity formation and maintenance. In particular, the contemplations and conversations characteristic of indecision may help construct, discover, or affirm who one is, even if ostensibly they are intended only to clarify what one should do. In addition to positing an underexplored function of indecision, the possibility that indecision facilitates identity development suggests that concentrated identity work need not be an explicit objective or even a process of which one is cognizant; it can be an unwitting byproduct of frustrated attempts at choice.

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Getting older isn’t all that bad: Better decisions and coping when facing “sunk costs”

Wändi Bruine de Bruin, JoNell Strough & Andrew Parker
Psychology and Aging, Summer 2014, Pages 642-647

Abstract:
Because people of all ages face decisions that affect their quality of life, decision-making competence is important across the life span. According to theories of rational decision making, one crucial decision skill involves the ability to discontinue failing commitments despite irrecoverable investments also referred to as “sunk costs.” We find that older adults are better than younger adults at making decisions to discontinue such failing commitments especially when irrecoverable losses are large, as well as at coping with the associated irrecoverable losses. Our results are relevant to interventions that aim to promote better decision-making competence across the life span.

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Do Children Who Experience Regret Make Better Decisions? A Developmental Study of the Behavioral Consequences of Regret

Eimear O'Connor, Teresa McCormack & Aidan Feeney
Child Development, September/October 2014, Pages 1995–2010

Abstract:
Although regret is assumed to facilitate good decision making, there is little research directly addressing this assumption. Four experiments (N = 326) examined the relation between children's ability to experience regret and the quality of their subsequent decision making. In Experiment 1 regret and adaptive decision making showed the same developmental profile, with both first appearing at about 7 years. In Experiments 2a and 2b, children aged 6–7 who experienced regret decided adaptively more often than children who did not experience regret, and this held even when controlling for age and verbal ability. Experiment 3 ruled out a memory-based interpretation of these findings. These findings suggest that the experience of regret facilitates children's ability to learn rapidly from bad outcomes.

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The Emotional Roots of Conspiratorial Perceptions, System Justification, and Belief in the Paranormal

Jennifer Whitson, Adam Galinsky & Aaron Kay
Journal of Experimental Social Psychology, forthcoming

Abstract:
We predicted that experiencing emotions that reflect uncertainty about the world (e.g., worry, surprise, fear, hope), compared to certain emotions (e.g., anger, happiness, disgust, contentment), would activate the need to imbue the world with order and structure across a wide range of compensatory measures. To test this hypothesis, three experiments orthogonally manipulated the uncertainty and the valence of emotions. Experiencing uncertain emotions increased government defense (Experiment 1) and led people to embrace conspiracies and the paranormal (Experiment 2). Self-affirmation eliminated the effects of uncertain emotions on compensatory control (Experiment 3). Across all experiments, the valence of the emotions had no main effects on compensatory control and never interacted with the uncertainty of emotions. These studies establish a link between the experience of emotions and the desire for structure.

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Wine as an Experience Good: Price Versus Enjoyment in Blind Tastings of Expensive and Inexpensive Wines

Robert Ashton
Journal of Wine Economics, August 2014, Pages 171-182

Abstract:
Economic theorists maintain that wine is an experience good, a product whose quality can be evaluated only after purchase and consumption. Theory holds that consumers often rely on the price of experience goods as one cue to judge their quality. In this paper, however, I provide evidence that an important segment of wine consumers do not consider price a useful cue to quality. Specifically, I test the robustness of Goldstein et al.'s (2008) finding that, in blind tastings, average wine drinkers consider less expensive wines to taste better than more expensive wines. Four blind tastings of 2006 red Bordeaux and 2009 white Burgundy with a price range of $20–$119 were conducted, in which members of a wine club rated their extent of enjoyment of each wine. In three of the tastings, there was no relationship between price and enjoyment, while in the other the relationship was negative, lending additional credibility to the contention that an important segment of wine consumers do not find enjoyment to increase with price.

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Differential Influence of Sadness and Disgust on Music Preference

Christa Taylor & Ronald Friedman
Psychology of Popular Media Culture, October 2014, Pages 195-205

Abstract:
Studies investigating the effects of negative affect on selective exposure to music have produced conflicting findings. In an effort to delineate whether this could be due to the common conceptualization of affect and related constructs as a 1-dimensional function of valence, the current study sought to determine if distinct forms of negative affect would influence music preference differentially. Participants were induced to feel sad, disgusted, or neutral via audio-guided visualization and asked to indicate their preferences for expressively happy and sad music selections. As expected, a significant interaction between condition (sad vs. disgust vs. neutral) and music emotion (sad vs. happy) was found. Participants induced to feel disgusted or neutral demonstrated a significantly greater desire to listen to happy (opposed to sad) music, whereas this effect was not present in individuals induced to feel sad. Results also elucidate the conflicting findings of studies investigating sadness in particular. These findings have important implications for understanding how affect influences music preference.

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It’s OK if ‘my brain made me do it’: People’s intuitions about free will and neuroscientific prediction

Eddy Nahmias, Jason Shepard & Shane Reuter
Cognition, November 2014, Pages 502–516

Abstract:
In recent years, a number of prominent scientists have argued that free will is an illusion, appealing to evidence demonstrating that information about brain activity can be used to predict behavior before people are aware of having made a decision. These scientists claim that the possibility of perfect prediction based on neural information challenges the ordinary understanding of free will. In this paper we provide evidence suggesting that most people do not view the possibility of neuro-prediction as a threat to free will unless it also raises concerns about manipulation of the agent’s behavior. In Experiment 1 two scenarios described future brain imaging technology that allows perfect prediction of decisions and actions based on earlier neural activity, and this possibility did not undermine most people’s attributions of free will or responsibility, except in the scenario that also allowed manipulation. In Experiment 2 the scenarios increased the salience of the physicalist implications of neuro-prediction, while in Experiment 3 the scenarios suggested dualism, with perfect prediction by mindreaders. The patterns of results for these two experiments were similar to the results in Experiment 1, suggesting that participants do not understand free will to require specific metaphysical conditions regarding the mind–body relation. Most people seem to understand free will in a way that is not threatened by perfect prediction based on neural information, suggesting that they believe that just because “my brain made me do it,” that does not mean that I didn’t do it of my own free will.

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Framing effect in evaluation of others’ predictions

Saiwing Yeung
Judgment and Decision Making, September 2014, Pages 445–464

Abstract:
This paper explored how frames influence people’s evaluation of others’ probabilistic predictions in light of the outcomes of binary events. Most probabilistic predictions (e.g., “there is a 75% chance that Denver will win the Super Bowl”) can be partitioned into two components: A qualitative component that describes the predicted outcome (“Denver will win the Super Bowl”), and a quantitative component that represents the chance of the outcome occurring (“75% chance”). Various logically equivalent variations of a single prediction can be created through different combinations of these components and their logical or numerical complements (e.g., “25% chance that Denver will lose the Super Bowl”, “75% chance that Seattle will lose the Super Bowl”). Based on the outcome of the predicted event, these logically equivalent predictions can be categorized into two classes: Congruently framed predictions, in which the qualitative component matches the outcome, and incongruently framed predictions, in which it does not. Although the two classes of predictions are logically equivalent, we hypothesize that people would judge congruently framed predictions to be more accurate. The paper tested this hypothesis in seven experiments and found supporting evidence across a number of domains and experimental manipulations, and even when the congruently framed prediction was logically inferior. It also found that this effect held even for subjects who saw both congruently framed and incongruently framed versions of a prediction and judged the two to be logically equivalent.

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Do we follow others when we should outside the lab? Evidence from the AP top 25

Daniel Stone & Basit Zafar
Journal of Risk and Uncertainty, August 2014, Pages 73-102

Abstract:
We use data from the Associated Press college American football poll to analyze two types of ex-post optimality of social learning in a non-lab setting. The poll is a weekly subjective ranking of the top 25 teams, voted on by over 60 sports journalists. Voters potentially can learn from their peers by observing the aggregate ranks before updating their individual ranks. Our results indicate that, while voters do learn from their peers to some extent, the informativeness of peer ranks appears to be under-valued.

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A Self-regulation Perspective on Hidden-profile Problems: If–Then Planning to Review Information Improves Group Decisions

Lukas Thürmer, Frank Wieber & Peter Gollwitzer
Journal of Behavioral Decision Making, forthcoming

Abstract:
In hidden-profile (HP) problems, groups squander their potential to make superior decisions because members fail to capitalize on each other's unique knowledge (unshared information). A new self-regulation perspective suggests that hindrances in goal striving (e.g., failing to seize action opportunities) contribute to this problem. Implementation intentions (if–then plans) are known to help deal with hindrances in goal striving; therefore, supporting decision goals with if–then plans should improve the impact of unshared information on group decisions. Indeed, in line with past research, control participants in two experiments rarely identified the best alternative despite monetary incentives and setting decision goals. In contrast, simply adding if–then plans to review advantages of the non-preferred alternatives before making the final decision significantly increased solution rates. Process manipulations (Experiment 1) and measures (Experiment 2) indicate that conceptualizing HP problems as a self-regulation challenge provides explanatory power beyond existing accounts.

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Extensive Imitation is Irrational and Harmful

Erik Eyster & Matthew Rabin
Quarterly Journal of Economics, forthcoming

Abstract:
Rationality leads people to imitate those with similar tastes but different information. But people who imitate common sources develop correlated beliefs, and rationality demands that later social learners take this correlation into account. This implies severe limits to rational imitation. We show that (i) in most natural observation structures besides the canonical single-file case, full rationality dictates that people must “anti-imitate” some of those they observe; and (ii) in every observation structure full rationality dictates that people imitate, on net, at most one person and are imitated by, on net, at most one person, over any set of interconnected players. We also show that in a very broad class of settings, any learning rule in which people regularly do imitate more than one person without anti-imitating others will lead to a positive probability of people converging to confident and wrong long-run beliefs.

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Referent Status Neglect: Winners Evaluate Themselves Favorably Even When the Competitor is Incompetent

Ethan Zell, Mark Alicke & Jason Strickhouser
Journal of Experimental Social Psychology, January 2015, Pages 18–23

Abstract:
People evaluate themselves more favorably when they outperform a referent (downward comparison) than when they underperform a referent (upward comparison). However, research has yet to examine whether people are sensitive to the status of the referent during social comparison. That is, does defeating a highly skilled referent yield more favorable self-evaluations than defeating an unskilled referent? Does losing to an unskilled referent yield less favorable self-evaluations than losing to a skilled referent? To address these questions, participants learned that they performed better or worse than another person (social comparison) who ranked above average or below average (referent status). Social comparison information had a more pronounced influence on self-evaluations than referent status information. Furthermore, consistent with self-enhancement theories, participants selectively highlighted referent status information when it had favorable implications for the self. These findings demonstrate that people neglect referent status information, leading winners to evaluate themselves favorably even when the competitor is incompetent.

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Gift Cards and Mental Accounting: Green-lighting Hedonic Spending

Chelsea Helion & Thomas Gilovich
Journal of Behavioral Decision Making, October 2014, Pages 386–393

Abstract:
In three studies, we examine the mental accounting rules that govern how gift cards are used. We predicted that their identity as gift cards would shift consumption from utilitarian to hedonic goods even in contexts where both types of goods are available and the consumer's needs are unchanged. In Study 1a, participants were asked to imagine that they had both a gift card and a specified amount of cash and needed to purchase both a hedonic item and a utilitarian item. When asked which currency they would use to buy which item, respondents were significantly more likely to say they would use the gift card to buy the hedonic item. Study 1b replicated this result and found that it was tied to participants' beliefs how different types of money should be used. In Study 2, we found that participants who were required to spend a certain amount of their compensation in a laboratory store spent more on hedonic goods if their payment was in the form of a gift card. In Study 3, we analyzed transactions at a campus bookstore and found that shoppers tended to spend disproportionately on hedonic goods when using their gift cards than when making credit card purchases. Taken together, these studies indicate that people tend to assign the monetary value of a gift card to a hedonic mental account and spend it accordingly.

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Increasing Hand Washing Compliance With a Simple Visual Cue

Eric Ford et al.
American Journal of Public Health, October 2014, Pages 1851-1856

Abstract:
We tested the efficacy of a simple, visual cue to increase hand washing with soap and water. Automated towel dispensers in 8 public bathrooms were set to present a towel either with or without activation by users. We set the 2 modes to operate alternately for 10 weeks. Wireless sensors were used to record entry into bathrooms. Towel and soap consumption rates were checked weekly. There were 97 351 hand-washing opportunities across all restrooms. Towel use was 22.6% higher (P = .05) and soap use was 13.3% higher (P = .003) when the dispenser presented the towel without user activation than when activation was required. Results showed that a visual cue can increase hand-washing compliance in public facilities.

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Analytic thinking reduces belief in conspiracy theories

Viren Swami et al.
Cognition, December 2014, Pages 572–585

Abstract:
Belief in conspiracy theories has been associated with a range of negative health, civic, and social outcomes, requiring reliable methods of reducing such belief. Thinking dispositions have been highlighted as one possible factor associated with belief in conspiracy theories, but actual relationships have only been infrequently studied. In Study 1, we examined associations between belief in conspiracy theories and a range of measures of thinking dispositions in a British sample (N = 990). Results indicated that a stronger belief in conspiracy theories was significantly associated with lower analytic thinking and open-mindedness and greater intuitive thinking. In Studies 2–4, we examined the causational role played by analytic thinking in relation to conspiracist ideation. In Study 2 (N = 112), we showed that a verbal fluency task that elicited analytic thinking reduced belief in conspiracy theories. In Study 3 (N = 189), we found that an alternative method of eliciting analytic thinking, which related to cognitive disfluency, was effective at reducing conspiracist ideation in a student sample. In Study 4, we replicated the results of Study 3 among a general population sample (N = 140) in relation to generic conspiracist ideation and belief in conspiracy theories about the July 7, 2005, bombings in London. Our results highlight the potential utility of supporting attempts to promote analytic thinking as a means of countering the widespread acceptance of conspiracy theories.

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Anchoring Effects in Simulated Academic Promotion Decisions: How the Promotion Criterion Affects Ratings and the Decision to Support an Application

Zhe Chen & Simon Kemp
Journal of Behavioral Decision Making, forthcoming

Abstract:
Six experiments investigated the effect of the promotion criterion in simulated academic promotion decisions. In total, 547 undergraduate students and 33 university faculty members rated a promotion application, and some also indicated their decisions to support or to reject it. Performance ratings were reliably affected by the criterion, with a high criterion resulting in higher ratings than a low criterion, and this criterion effect was found regardless of the evaluator's expertise, whether he or she took the role of an independent assessor or the line manager to the applicant, or whether the criterion was provided by the experimenter or randomly generated by the participant. The criterion also affected the level of support for a candidate when the position applied for was perceived to be extremely competitive, or when a lesser position was considered at a later time. These results provide evidence that the use of a criterion, a fairly common practice in decision-making processes, may bias performance evaluations, which in turn may have ripple effects that affect the outcome of a chain of events. Our results also shed light on the possible mechanisms that underlie the rating biases in performance appraisal.

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Individual Characteristics and the Disposition Effect: The Opposing Effects of Confidence and Self-Regard

Kathryn Kadous et al.
Journal of Behavioral Finance, Summer 2014, Pages 235-250

Abstract:
We conduct two experiments to examine potential causes of the disposition effect. In Experiment 1, we rule out beliefs in mean reversion as a cause of the disposition effect. Although a belief in the mean reversion of stock prices should be independent of whether an investor owns or only follows the stock, we show only investors who own the stock behave as though prices will reverse. In Experiment 2, participants buy and sell securities over multiple periods. We find that self-regard and investing confidence (two types of self-esteem) have opposing influences on investors’ tendency to hold losing investments. Investors with lower self-regard hold losing investments longer than those with higher self-regard, and investors with higher confidence hold losing investments longer than those with lower confidence. We focus on investors’ tendency to hold losing stocks too long because prior research suggests the gain versus loss sides of the disposition effect are driven by different biases.

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Motivated perception of probabilistic information

Heather Lench et al.
Cognition, November 2014, Pages 429–442

Abstract:
Desirability bias is the tendency to judge that, all else being equal, positive outcomes are more likely to occur than negative outcomes. The provision of probabilistic information about the likelihood that events will occur is typically viewed as a way to influence judgments by grounding them in objective information. Yet probabilistic information may be perceived differently when people are motivated to arrive at a particular conclusion, enabling the desirability bias. The present investigation explored how probabilistic information is used and perceived when people are motivated. In a game of chance, desirability bias was present for judgments about the likelihood of outcomes occurring to the self but not an unaffiliated other despite equal probabilities (Study 1). Probabilities were perceived as having more variance, both subjectively and in terms of probability spread (Studies 2, 3a, and 5), when participants were motivated to arrive at a particular conclusion (for the self or another person on the same team). Further, desirability bias was greater when probabilities were perceived as having more variance, either due to wide versus narrow probability ranges or subjective uncertainty (Studies 3b and 4). Together, these findings demonstrate that people perceive probabilistic information as having more variance when they are motivated to arrive at a conclusion and that this greater perceived variability contributes to bias in judgment.

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Affect and overconfidence: A laboratory investigation

John Ifcher & Homa Zarghamee
Journal of Neuroscience, Psychology, and Economics, September 2014, Pages 125-150

Abstract:
We conduct 2 incentivized random-assignment experiments to investigate whether overconfidence is impacted by (a) incidental mild positive affect, or (b) incidental mild negative affects — anger, fear, and sadness. We measure overconfidence using overestimation of past quiz-performance and overestimation of past quiz-performance compared to peers. The results of the first experiment indicate that the effect of positive affect on both measures of overconfidence is positive and significant for male subjects. Although mood-inducement is equally successful for female subjects, their overconfidence is unaffected by positive affect. These positive affect results are robust to various specification checks. In the second experiment, we find consistent evidence of neither anger, fear, nor sadness’s effect on overconfidence; the lack of a result is attributable either to a genuine lack of relationship between these affects and overconfidence or to confounded mood-inducements. The effect of positive affect on overconfidence may help explain the relationship between mood and speculative bubbles and between mood and trading volume. Further, our results have implications for the effect of happiness on overconfidence and the role of emotions in economic decision-making, in general. Finally, we examine the neural evidence supported by our data.

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From East to West: Accessibility and Bias in Self–Other Comparative Judgments

Colton Christian, I-Ching Lee & Sara Hodges
Personality and Social Psychology Bulletin, forthcoming

Abstract:
People often weight information about the self more heavily than information about other people when making social comparative judgments. One possible explanation for this egocentrism is that information about the self is more accessible than information about others. We examine this egocentrism in samples from the United States and Taiwan. Study 1 finds egocentrism in comparisons of the self with the average other person in both cultures. Study 2 measured reaction times, demonstrating that (a) information about the self is more accessible than information about the average other and (b) as the accessibility of self-information increases, so does the influence of that information. Study 3 replicates Study 2, using comparisons with a specific other person. Egocentrism occurred in both cultures, suggesting that heavier weighting of self-information occurs across the traditional East–West cultural divide.

By KEVIN LEWIS | 09:00:00 AM

Monday, September 29, 2014

Not my job

Labor Market Fluidity and Economic Performance

Steven Davis & John Haltiwanger
NBER Working Paper, September 2014

Abstract:
U.S. labor markets became much less fluid in recent decades. Job reallocation rates fell more than a quarter after 1990, and worker reallocation rates fell more than a quarter after 2000. The declines cut across states, industries and demographic groups defined by age, gender and education. Younger and less educated workers had especially large declines, as did the retail sector. A shift to older businesses, an aging workforce, and policy developments that suppress reallocation all contributed to fluidity declines. Drawing on previous work, we argue that reduced fluidity has harmful consequences for productivity, real wages and employment. To quantify the effects of reallocation intensity on employment, we estimate regression models that exploit low frequency variation over time within states, using state-level changes in population composition and other variables as instruments. We find large positive effects of worker reallocation rates on employment, especially for men, young workers, and the less educated. Similar estimates obtain when dropping data from the Great Recession and its aftermath. These results suggest the U.S. economy faced serious impediments to high employment rates well before the Great Recession, and that sustained high employment is unlikely to return without restoring labor market fluidity.

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The Changing Roles of Education and Ability in Wage Determination

Gonzalo Castex & Evgenia Kogan Dechter
Journal of Labor Economics, October 2014, Pages 685-710

Abstract:
This study examines changes in returns to formal education and cognitive skills over the past 20 years using the 1979 and 1997 waves of the National Longitudinal Survey of Youth. We show that cognitive skills had a 30%–50% larger effect on wages in the 1980s than in the 2000s. Returns to education were higher in the 2000s. These developments are not explained by changing distributions of workers’ observable characteristics or by changing labor market structure. We show that the decline in returns to ability can be attributed to differences in the growth rate of technology between the 1980s and 2000s.

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Skill Gaps, Skill Shortages and Skill Mismatches: Evidence for the US

Peter Cappelli
NBER Working Paper, August 2014

Abstract:
Concerns that there are problems with the supply of skills, especially education-related skills, in the US labor force have exploded in recent years with a series of reports from employer-associated organizations but also from independent and even government sources making similar claims. These complaints about skills are driving much of the debate around labor force and education policy, yet they have not been examined carefully. The discussion below examines the range of these charges as well as other evidence about skills in the labor force. There is very little evidence consistent with the complaints about skills and a wide range of evidence suggesting that they are not true. Indeed, a reasonable conclusion is that over-education remains the persistent and even growing situation of the US labor force with respect to skills. I consider three possible explanations for the employer complaints as well as the implications associated with those changes.

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Endogenous age discrimination

Christian Manger
Journal of Population Economics, October 2014, Pages 1087-1106

Abstract:
This paper shows that hiring discrimination against old workers occurs in imperfect labour markets even if individual productivity does not decrease with age and in the absence of a taste for discrimination. Search and informational frictions generate unemployment, with less productive workers facing higher risks of unemployment. Therefore, the employment status provides a signal for expected productivity. This stigma of unemployment becomes stronger with individual age and reduces the hiring opportunities of older workers. Political measures such as a reduction in dismissal protection can help to restore efficiency.

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Demographics and Entrepreneurship

James Liang, Hui Wang & Edward Lazear
NBER Working Paper, September 2014

Abstract:
Entrepreneurship requires creativity and business acumen. Creativity may decline with age, but business skills increase with experience in high level positions. Having too many older workers in society slows entrepreneurship. Not only are older workers less innovative, but more significant is that when older workers occupy key positions they block younger workers from acquiring business skills. A formal theoretical structure is presented and tested using the Global Entrepreneurship Monitor data. The results imply that a one-standard deviation decrease in the median age of a country increases the rate of new business formation by 2.5 percentage points, which is about forty percent of the mean rate. Furthermore, older societies have lower rates of entrepreneurship at every age.

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A New Method of Estimating Potential Real GDP Growth: Implications for the Labor Market and the Debt/GDP Ratio

Robert Gordon
NBER Working Paper, August 2014

Abstract:
Forecasts for the two or three years after mid-2014 have converged on growth rates of real GDP in the range of 3.0 to 3.5 percent, a major stepwise increase from realized growth of 2.1 percent between mid-2009 and mid-2014. However, these forecasts are based on the demand for goods and services. Less attention has been paid to how the accelerated growth of real GDP will be supplied. Will the unemployment rate, which has declined at roughly one percent per year, decline even faster from 6.1 percent in June, 2014 to 3.0 percent or below in 2017? Will the supply-side support for the demand-side optimism be provided instead by a major rebound of productivity growth from the average of 1.2 percent over the past decade and 0.6 percent for the last four years, or perhaps by a reversal of the minus 0.8 percent growth rate since 2007 of the labor-force participation rate? The paper develops a new and surprisingly simple method of calculating the growth rate of potential GDP over the next decade and concludes that projections of potential output growth for the same decade in the most recent reports of the Congressional Budget Office (CBO) are much too optimistic. If the projections in this paper are close to the mark, the level of potential GDP in 2024 will be almost 10 percent below the CBO’s current forecast. Further, the new potential GDP series implies that the debt/GDP ratio in 2024 will be closer to 87 percent than the CBO’s current forecast of 78 percent. This paper also has profound implications for the Federal Reserve. The unemployment rate has declined rapidly, particularly within the last year. Faster real GDP growth will accelerate the decline in the unemployment rate and soon reduce it beyond any estimate of the constant-inflation NAIRU, even if productivity growth experiences a rebound and the labor force participation rate stabilizes. The macro economy is on a collision course between demand-side optimism and supply-side pessimism.

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Import Competition and the Great U.S. Employment Sag of the 2000s

Daron Acemoglu et al.
NBER Working Paper, August 2014

Abstract:
Even before the Great Recession, U.S. employment growth was unimpressive. Between 2000 and 2007, the economy gave back the considerable gains in employment rates it had achieved during the 1990s, with major contractions in manufacturing employment being a prime contributor to the slump. The U.S. employment “sag” of the 2000s is widely recognized but poorly understood. In this paper, we explore the contribution of the swift rise of import competition from China to sluggish U.S. employment growth. We find that the increase in U.S. imports from China, which accelerated after 2000, was a major force behind recent reductions in U.S. manufacturing employment and that, through input-output linkages and other general equilibrium effects, it appears to have significantly suppressed overall U.S. job growth. We apply industry-level and local labor market-level approaches to estimate the size of (a) employment losses in directly exposed manufacturing industries, (b) employment effects in indirectly exposed upstream and downstream industries inside and outside manufacturing, and (c) the net effects of conventional labor reallocation, which should raise employment in non-exposed sectors, and Keynesian multipliers, which should reduce employment in non-exposed sectors. Our central estimates suggest net job losses of 2.0 to 2.4 million stemming from the rise in import competition from China over the period 1999 to 2011. The estimated employment effects are larger in magnitude at the local labor market level, consistent with local general equilibrium effects that amplify the impact of import competition.

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Long Workweeks and Strange Hours

Daniel Hamermesh & Elena Stancanelli
NBER Working Paper, September 2014

Abstract:
American workweeks are long compared to other rich countries’. Much less well-known is that Americans are more likely to work at night and on weekends. We examine the relationship between these two phenomena using the American Time Use Survey and time-diary data from 5 other countries. Adjusting for demographic differences, Americans’ incidence of night and weekend work would drop by about 10 percent if European workweeks prevailed. Even if no Americans worked long hours, the incidence of unusual work times in the U.S. would far exceed those in continental Europe.

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The Changing Benefits of Early Work Experience

Charles Baum & Christopher Ruhm
NBER Working Paper, August 2014

Abstract:
We examine whether the benefits of high school work experience have changed over the last 20 years by comparing effects for the 1979 and 1997 cohorts of the National Longitudinal Survey of Youth. Our main specifications suggest that the future wage benefits of working 20 hours per week in the senior year of high school have fallen from 8.3 percent for the earlier cohort, measured in 1987-1989, to 4.4 percent for the later one, in 2008-2010. Moreover, the gains of work are largely restricted to women and have diminished over time for them. We are able to explain about five-eighths of the differential between cohorts, with most of this being attributed to the way that high school employment is related to subsequent adult work experience and occupational attainment.

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The Effects of Minimum Wages over the Business Cycle

Joseph Sabia
Journal of Labor Research, September 2014, Pages 227-245

Abstract:
This study examines whether the low-skilled employment effects of minimum wage increases differ over the state business cycle. Controlling for spatial heterogeneity via state-specific productivity shocks to the low-skilled sector and state-specific non-linear time trends, the results suggest that minimum wage increases between 1989 and 2012 reduce low-skilled employment more during recessions than expansions. Estimated employment elasticities with respect to the minimum wage range from 0 to −0.2 during state economic expansions, but reach as high as −0.3 during troughs in the business cycle.

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A life-cycle model of unemployment and disability insurance

Sagiri Kitao
Journal of Monetary Economics, November 2014, Pages 1–18

Abstract:
A general equilibrium life-cycle model is developed, in which individuals choose a sequence of saving and labor supply faced with search frictions and uncertainty in longevity, health status and medical expenditures. Unemployed individuals decide whether to apply for disability insurance (DI) benefits if eligible. We investigate the effects of cash transfer and in-kind Medicare component of the DI system on the life-cycle employment. Without Medicare benefits, DI coverage could fall significantly. We also study how DI interacts with reforms of Social Security and Medicare and find that DI enrollment amplifies the effects of reforms.

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Taxation and the quality of entrepreneurship

Andrea Asoni & Tino Sanandaji
Journal of Economics, October 2014, Pages 101-123

Abstract:
We study the effect of taxation on entrepreneurship, investigating how taxes affect both the number of start-ups and their average quality. We show theoretically that even with risk neutral agents and no tax evasion progressive taxes can increase entrepreneurial entry, while reducing average firm quality. So called “success taxes” encourage start-ups with lower value business ideas by reducing the option value of pursuing better projects. This suggests that the most common measure used in the literature, the likelihood of entry into self-employment, may underestimate the adverse effect of taxation.

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Short-Time Compensation as a Tool to Mitigate Job Loss? Evidence on the U.S. Experience During the Recent Recession

Katharine Abraham & Susan Houseman
Industrial Relations, October 2014, Pages 543–567

Abstract:
During the recent recession only seventeen states offered short-time compensation (STC) — prorated unemployment benefits for workers whose hours are reduced for economic reasons. Federal legislation passed in 2012 will encourage the expansion of STC. Exploiting cross-state variation in STC, we present new evidence indicating that jobs saved during the recession as a consequence of STC may have been significant in manufacturing, but that the overall scale of the STC program was generally too small to have substantially mitigated aggregate job losses in the seventeen states. Expansion of the program is necessary for STC to be an effective countercyclical tool in the future.

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Do Tips Increase Workers' Income?

Oz Shy
Management Science, forthcoming

Abstract:
This paper constructs a model of service providers who compete in service and labor markets simultaneously to analyze the effects of tipping on hourly wages and total tip-inclusive hourly worker compensation. An increase in the tipping rate reduces hourly wages. Total worker compensation increases at different rates depending on the market structure, market coverage, and employment level, with the exception of price-taking (competitive) service providers, where the tip-inclusive hourly income declines with the tipping rate. The paper develops an index of “effective tipping” that measures the net percentage change in total hourly worker compensation associated with each tipping rate.

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Unemployed but Optimistic: Optimal Insurance Design with Biased Beliefs

Johannes Spinnewijn
Journal of the European Economic Association, forthcoming

Abstract:
This paper analyzes how biased beliefs about employment prospects affect the optimal design of unemployment insurance. Empirically, I find that the unemployed greatly overestimate how quickly they will find work. As a consequence, they would search too little for work, save too little for unemployment and deplete their savings too rapidly when unemployed. I analyze the use of the “sufficient-statistics” formula to characterize the optimal unemployment policy when beliefs are biased and revisit the desirability of providing liquidity to the unemployed. I also find that the optimal unemployment policy may involve increasing benefits during the unemployment spell.

By KEVIN LEWIS | 09:00:00 AM

Sunday, September 28, 2014

Smarty pants

Only in America: Cold Winters Theory, race, IQ and well-being

Bryan Pesta & Peter Poznanski
Intelligence, September–October 2014, Pages 271–274

Abstract:
Cold Winters Theory (CWT; Lynn, 1991) offers a viable explanation for race differences in intelligence. It proposes that IQ gaps exist because of different evolutionary pressures faced by the ancestral humans who left Africa, compared with those who remained. Support for CWT comes by showing correlations between national temperature and IQ. Here we test whether temperature correlates with IQ (and other well-being variables) across the 50 U.S. states. Although human evolution is recent, copious and regional (Wade, 2014), insufficient time has passed for it to have operated on non-native residents of the USA. Instead, CWT must predict no difference — or remain agnostic — on the existence of state-level correlations between temperature and IQ. Nonetheless, even after controlling for race, temperature strongly predicts state: IQ, religiosity, crime, education, health, income and global well-being. Evolution is therefore not necessary for temperature and IQ/well-being to co-vary meaningfully across geographic space.

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Why complex cognitive ability increases with absolute latitude

Federico León & Andrés Burga León
Intelligence, September–October 2014, Pages 291–299

Abstract:
Evolutionary psychologists attribute the superior IQs of light-skinned populations to genetic imprints left by millenary processes promoted by cold. But a novel theory that explains IQ gains observed across recent generations ascribes them to a latitude → UVB radiation → vitamin D3 → parents' sexual hormones → family size → child's intellectual environment → IQ chain of effects. Analyses of 506,347 Peruvian children's math and reading scores from a national census confirmed that complex cognitive ability increases with absolute latitude even under tropical megathermal climates and decreases with high altitude above sea level, birth rate and social development mediate most of the effects, and reading is more strongly influenced than math. The findings weaken the evolutionary cold hypothesis and strengthen the view that contraception has the potential to reduce latitudinal IQ gaps.

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Crimes and the Bell Curve: The Role of People with High, Average, and Low Intelligence

Nik Ahmad Sufian Burhan et al.
Intelligence, November–December 2014, Pages 12–22

Abstract:
The present study examines whether crime rates can be reduced by increasing the IQ of people with high, average, and low IQ. Previous studies have shown that as a determinant of the national level of income per capita growth and technological achievement, the IQ of the intellectual class (those at the 95th percentile of the bell curve distribution of population intelligence) is more important than the IQ of those with average ability at the 50th percentile. Extending these findings, our study incorporates the non-intellectual class (IQ at the 5th percentile) to examine the role of IQ classes in determining crime rates across countries. We conducted hierarchical multiple regression analyses with IQ, seven types of crimes, and nine control variables: urbanization, alcohol consumption, unemployment rate, young to old population ratio, income inequality, education attainment, drug consumption, police rate, and income per capita. Regardless of types of crimes, we found evidence that raising IQ will lessen crime rates, with raises in the 95th percentile group having the most number of significant impacts, followed by the 50th and then the 5th percentile groups. Furthermore, none of the nine control factors was stronger than the 95th percentile group in predicting crime rates. We conclude that the intellectual class influences rates of more types of crime than the non-intellectual class does. The intellectual class has the highest authority in determining law enforcement and development policies. Therefore, increasing the IQ of politicians and leaders from this class than other social classes will have a more significant influence in reducing crime rates, through enhanced functionality and quality of institutions across countries.

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Evaluation of tests of perceptual speed/accuracy and spatial ability for use in military occupational classification

Janet Held, Thomas Carretta & Michael Rumsey
Military Psychology, May 2014, Pages 199-220

Abstract:
With the exception of Assembling Objects (AO), a spatial ability test used only by the Navy in enlisted occupational classification, the Armed Services Vocational Aptitude Battery (ASVAB) is academic and knowledge-based, somewhat limiting its utility for occupational classification. This article presents the case for integrating the AO test into military classification composites and for expanding the breadth of ASVAB content by including a former ASVAB speed/accuracy test, Coding Speed (CS). Empirical evidence is presented that shows AO and CS (a) increment the validity of the ASVAB in predicting training grades for a broad array of occupations, (b) reduce adverse impact defined as test score barriers for women and minorities, and (c) improve classification in terms of matching recruits to occupations. Some cognitive theory is presented to support AO and CS, as well as nonverbal reasoning and working memory tests for inclusion in or adjuncts to the ASVAB.

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Replication of the Jensen effect on dysgenic fertility: An analysis using a large sample of American youth

Hannah Peach, Jordan Lyerly & Charlie Reeve
Personality and Individual Differences, December 2014, Pages 56–59

Abstract:
The purpose of this study is to replicate recent findings demonstrating that the dysgenic fertility trend is a Jensen effect. Data were drawn from Project TALENT. Present analyses included data from a total sample of 79,734 participants with complete data regarding number of biological children at the 11 year follow up, and analyses were further split by sex and race to examine possible differential trends among subgroups. Correlated vectors analyses revealed strong Jensen effects such that subtests with higher g-saturation were associated with larger dysgenic fertility gradients. This effect was evident in the total sample, and within all race/gender subgroups except for Asian males. Such findings yield further confirmation that g is in fact the principal factor by which the dysgenic fertility gradient operates.

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General intelligence, disease heritability, and health: A preliminary test

Satoshi Kanazawa
Personality and Individual Differences, December 2014, Pages 83–85

Abstract:
Cognitive epidemiology shows that more intelligent individuals stay healthier and live longer, but it is not known why. The system integrity theory predicts that more intelligent individuals are more protected from diseases that are more heritable, while the evolutionary novelty theory predicts that they are more protected from diseases that are less heritable. The paper proposes a new method of testing the competing hypotheses. An analysis of two large-scale population data sets from Sweden (n = 1 million for individual data and n = 9.6 million for heritability data) shows that intelligence is more important for health when the cancer heritability is low, supporting the evolutionary novelty theory. While the present results are merely suggestive, not conclusive, the proposed method can be extended to include other diseases and causes of death.

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Common genetic variants associated with cognitive performance identified using the proxy-phenotype method

Cornelius Rietveld et al.
Proceedings of the National Academy of Sciences, 23 September 2014, Pages 13790–13794

Abstract:
We identify common genetic variants associated with cognitive performance using a two-stage approach, which we call the proxy-phenotype method. First, we conduct a genome-wide association study of educational attainment in a large sample (n = 106,736), which produces a set of 69 education-associated SNPs. Second, using independent samples (n = 24,189), we measure the association of these education-associated SNPs with cognitive performance. Three SNPs (rs1487441, rs7923609, and rs2721173) are significantly associated with cognitive performance after correction for multiple hypothesis testing. In an independent sample of older Americans (n = 8,652), we also show that a polygenic score derived from the education-associated SNPs is associated with memory and absence of dementia. Convergent evidence from a set of bioinformatics analyses implicates four specific genes (KNCMA1, NRXN1, POU2F3, and SCRT). All of these genes are associated with a particular neurotransmitter pathway involved in synaptic plasticity, the main cellular mechanism for learning and memory.

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Metabolic costs and evolutionary implications of human brain development

Christopher Kuzawa et al.
Proceedings of the National Academy of Sciences, 9 September 2014, Pages 13010–13015

Abstract:
The high energetic costs of human brain development have been hypothesized to explain distinctive human traits, including exceptionally slow and protracted preadult growth. Although widely assumed to constrain life-history evolution, the metabolic requirements of the growing human brain are unknown. We combined previously collected PET and MRI data to calculate the human brain’s glucose use from birth to adulthood, which we compare with body growth rate. We evaluate the strength of brain–body metabolic trade-offs using the ratios of brain glucose uptake to the body’s resting metabolic rate (RMR) and daily energy requirements (DER) expressed in glucose-gram equivalents (glucosermr% and glucoseder%). We find that glucosermr% and glucoseder% do not peak at birth (52.5% and 59.8% of RMR, or 35.4% and 38.7% of DER, for males and females, respectively), when relative brain size is largest, but rather in childhood (66.3% and 65.0% of RMR and 43.3% and 43.8% of DER). Body-weight growth (dw/dt) and both glucosermr% and glucoseder% are strongly, inversely related: soon after birth, increases in brain glucose demand are accompanied by proportionate decreases in dw/dt. Ages of peak brain glucose demand and lowest dw/dt co-occur and subsequent developmental declines in brain metabolism are matched by proportionate increases in dw/dt until puberty. The finding that human brain glucose demands peak during childhood, and evidence that brain metabolism and body growth rate covary inversely across development, support the hypothesis that the high costs of human brain development require compensatory slowing of body growth rate.

By KEVIN LEWIS | 09:00:00 AM


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