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Wednesday, January 4, 2017

At the helm

Pilot CEOs and Corporate Innovation

Jayanthi Sunder, Shyam Sunder & Jingjing Zhang

Journal of Financial Economics, January 2017, Pages 209–224

Abstract:
We find evidence that chief executive officers’ (CEOs’) hobby of flying airplanes is associated with significantly better innovation outcomes, measured by patents and citations, greater innovation effectiveness, and more diverse and original patents. We rule out alternative explanations, leading us to conclude that CEO pilot credentials capture the personality trait of sensation seeking. Sensation seeking combines risk taking with a desire to pursue novel experiences and has been associated with creativity. Our evidence highlights sensation seeking as a valuable personality trait that can be used to identify CEOs who are likely to drive innovation success.

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How Destructive is Innovation?

Daniel Garcia-Macia, Chang-Tai Hsieh & Peter Klenow

NBER Working Paper, December 2016

Abstract:
Entrants and incumbents can create new products and displace the products of competitors. Incumbents can also improve their existing products. How much of aggregate productivity growth occurs through each of these channels? Using data from the U.S. Longitudinal Business Database on all non-farm private businesses from 1976–1986 and 2003–2013, we arrive at three main conclusions: First, most growth appears to come from incumbents. We infer this from the modest employment share of entering firms (defined as those less than 5 years old). Second, most growth seems to occur through improvements of existing varieties rather than creation of brand new varieties. Third, own-product improvements by incumbents appear to be more important than creative destruction. We infer this because the distribution of job creation and destruction has thinner tails than implied by a model with a dominant role for creative destruction.

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Impact of Financial Leverage on the Incidence and Severity of Product Failures: Evidence from Product Recalls

Omesh Kini, Jaideep Shenoy & Venkat Subramaniam

Review of Financial Studies, forthcoming

Abstract:
We study the impact of the financial condition of firms on firms’ ability to produce safer products that result in fewer recalls. Using a variety of tests, including two quasi-natural experiments that result in exogenous negative industry cash-flow shocks, we find that firms with higher leverage or distress likelihood have a greater probability of a product recall. These firms also face more frequent and severe recalls. Further, firms with more debt due at the onset of the financial crisis experience a greater likelihood and frequency of recalls. We conclude that a firm’s financial condition has real effects that impact product safety.

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Earnings Expectations and Employee Safety

Judson Caskey & Bugra Ozel

Journal of Accounting and Economics, February 2017, Pages 121–141

Abstract:
We examine the relation between workplace safety and managers’ attempts to meet earnings expectations. Using establishment-level data on workplace safety from the Occupational Safety and Health Administration, we document significantly higher injury/illness rates in firms that meet or just beat analyst forecasts compared to firms that miss or comfortably beat analyst forecasts. The higher injury/illness rates in firms that meet or just beat analyst forecasts are associated with both increases in employee workloads and in abnormal reductions of discretionary expenses. The relation between benchmark beating and workplace safety is stronger when there is less union presence, when workers’ compensation premiums are less sensitive to injury claims, and among firms with less government business. Our findings highlight a specific consequence of managers’ attempts to meet earnings expectations through real activities management.

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The Payoff to Consistency in Performance

Christian Deutscher et al.

Economic Inquiry, forthcoming

Abstract:
This study investigates whether firms are willing to pay higher wages to workers who demonstrate consistent performance than to those whose performance is more volatile. A formal model reflects a production technology view, assuming the law of diminishing marginal product. This model suggests that a more consistent worker produces higher expected output and therefore receives a higher wage. The test of the model uses data from the National Basketball Association. The empirical data support the model: Players whose performances were more consistent than the performances of other players received higher wages on average.

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Customer-Base Concentration, Profitability and the Information Environment: The U.S. Government as a Major Customer

Daniel Cohen & Bin Li

University of Texas Working Paper, October 2016

Abstract:
While prior research focuses on a firm’s relationships with corporate customers, we examine a firm’s interaction with the U.S. government as a unique and important customer. Specifically, we compare government customers vis-à-vis corporate customers by investigating their different economic implications for supplier firms. The evidence suggests that firms with more concentrated sales to government customers exhibit greater economies of scale as reflected in their better profitability, whereas firms with more concentrated sales to corporate customers do not. Our further analyses imply that relative to corporate customers, government customers help suppliers in achieving higher efficiencies in asset turnover and customer-specific SG&A investments, a consequence of lower operational uncertainty and a more transparent external information environment.

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Let them go? How losing employees to competitors can enhance firm status

David Tan & Christopher Rider

Strategic Management Journal, forthcoming

Abstract:
Because employees can provide a firm with human capital advantages over competitors, firms invest considerably in employee recruiting and retention. Departing from the retention imperative of strategic human capital management, we propose that certain employee departures can enhance a firm's competitiveness in the labor market. Specifically, increased rates of career-advancing departures by a firm's employees can signal to potential future employees that the firm offers a prestigious employment experience that enhances external mobility opportunities. Characterizing advancement based on subsequent employers and positions, we analyze data on U.S. law firm hiring and industry surveys of perceived firm status between 2004 and 2013. We find that increased rates of employee departures lead to increases in a firm's prestige when these departures are for promotions with high-status competitors.

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The Employee Clientele of Corporate Leverage

Jie He, Tao Shu & Huan Yang

University of Georgia Working Paper, November 2016

Abstract:
Using the Longitudinal Employer-Household Dynamics (LEHD) data from the Census Bureau, we document a robust, negative correlation between corporate leverage and employee job risk aversion. Specifically, we find that a firm uses less debt in its capital structure when its employees are more risk averse towards their jobs in the company, i.e., when a larger fraction of the employees’ total personal labor income or total household labor income is accounted for by their income from this particular firm. Meanwhile, firms with a lower existing level of leverage are more likely to recruit risk averse employees in terms of new hires. Our results continue to hold after we control for firm fixed effects, other employee characteristics such as wages, gender, age, race, and education, and the risk attitude of firm managers. Further, the matching between leverage and employee job risk attitude is more pronounced for firms with higher labor intensity and those in financial distress. Overall, our paper provides novel evidence for a clientele effect of corporate leverage with respect to employees, consistent with the theoretical predictions of Titman (1984) and Berk, Stanton, and Zechner (2010).

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Killer Incentives: Status Competition and Pilot Performance during World War II

Philipp Ager, Leonardo Bursztyn & Hans-Joachim Voth

NBER Working Paper, December 2016

Abstract:
A growing theoretical and empirical literature shows that public recognition can lead to greater effort amongst employees. At the same time, status competition can be associated with excessive expenditure on status goods, higher risk of bankruptcy, and more risk taking amongst money managers. In this paper, we look at the effects of recognition and status competition jointly: We focus on the spillover effects of public recognition on the performance and risk taking of peers. Using newly collected data on monthly victory scores of over 5,000 German pilots during World War II, we find corrosive effects of status competition: When the daily bulletin of the German armed forces mentioned the accomplishments of a particular fighter pilot, his former peers perform markedly better. Outperformance is differential across skill groups. When a former squadron peer is mentioned, the best pilots try harder, score more, and die no more frequently; average pilots win only a few additional victories, but die at a markedly higher rate. Our results suggest that the overall efficiency effects of non-financial rewards can be ambiguous in settings where both risk and output affect aggregate performance.

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The Contribution of Managers to Organizational Success: Evidence from German Soccer

Gerd Muehlheusser et al.

Journal of Sports Economics, forthcoming

Abstract:
We study the impact of managers on the success of professional soccer teams using data from the German Bundesliga, where we are exploiting the high turnover rate of managers between teams to disentangle the managers’ contributions. Teams employing a manager from the top of the ability distribution gain on average considerably more points than those employing a manager from the bottom. Moreover, estimated abilities have significant predictive power for future performance. Managers also affect teams’ playing style. Finally, teams whose manager has been a former professional player perform worse on average compared to managers without a professional player career.

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Expecting the Unexpected: Using Team Charters to Handle Disruptions and Facilitate Team Performance

Therese Sverdrup, Vidar Schei & Øystein Tjølsen

Group Dynamics, forthcoming

Abstract:
Teams are increasingly relied on to manage and adapt to a changing world. Previous studies have found adaptive teams to be less susceptible to disruptive events. In this study, we test whether or not the development of a team charter 2 weeks prior to a given task increases a team’s ability to adapt to disruptions and overall performance. We find that teams that develop team charters are better able to handle disruptive events, which in turn increases their performance.

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Fitting In or Standing Out? The Tradeoffs of Structural and Cultural Embeddedness

Amir Goldberg et al.

American Sociological Review, December 2016, Pages 1190-1222

Abstract:
A recurring theme in sociological research is the tradeoff between fitting in and standing out. Prior work examining this tension tends to take either a structural or a cultural perspective. We fuse these two traditions to develop a theory of how structural and cultural embeddedness jointly relate to individual attainment within organizations. Given that organizational culture is hard to observe, we develop a novel approach to assessing individuals’ cultural fit with their colleagues based on the language expressed in internal e-mail communications. Drawing on a unique dataset that includes a corpus of 10.24 million e-mail messages exchanged over five years among 601 employees in a high-technology firm, we find that network constraint impedes, whereas cultural fit promotes, individual attainment. More importantly, we find evidence of a tradeoff between the two forms of embeddedness: cultural fit benefits individuals with low network constraint (i.e., brokers), whereas network constraint promotes attainment for people with low cultural fit.

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Procrastination in the Workplace: Evidence from the U.S. Patent Office

Michael Frakes & Melissa Wasserman

NBER Working Paper, December 2016

Abstract:
Despite much theoretical attention over the concept of procrastination and much exploration of this phenomenon in laboratory settings, there remain few empirical investigations into procrastination in real world contexts, especially in the workplace. In this paper, we attempt to fill these gaps by exploring procrastination among U.S. patent examiners. We find that nearly half of examiners’ first substantive reports are completed immediately prior to the operable deadlines. Moreover, we find a range of additional empirical markers to support that this “endloading” of reviews results from a model of procrastination rather than various time-consistent models of behavior. In one such approach, we take advantage of the natural experiment afforded by the Patent Office’s staggered implementation of its telecommuting program, a development that we theorize might exacerbate employee self-control problems. Supporting the procrastination theory, we estimate an immediate spike in application endloading and other indicia of procrastination upon the onset of telecommuting. Finally, we assess the consequences of procrastination for the quality of the completed reviews. This analysis suggests that the primary harm stemming from procrastination is delay in the ultimate application process, with rushed reviews completed at deadlines resulting in the need for revisions in subsequent rounds of review.

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The Labor Market Signaling Value of Promotions

Bobak Moallemi, Ramana Ramakrishnan & Ryan Shyu

Stanford Working Paper, November 2016

Abstract:
Do firms learn from other firms' human resource allocation decisions? This paper studies this question in the context of worker promotions, which according to theory serve as informative signals to external employers under asymmetric learning about employee ability. Using variation in the timing of promotion reports on LinkedIn CVs, we implement a differences-in-differences strategy to demonstrate that online promotion reports increase recruiter-initiated worker contacts ("InMails''). The signaling impact of promotions is concentrated among those who have recently attracted previous recruiter interest, consistent with a higher expected value of firm information acquisition among such workers.

By KEVIN LEWIS | 09:00:00 AM

Tuesday, January 3, 2017

Expectant

Assisted Reproductive Technology and Women's Timing of Marriage and Childbearing

Joelle Abramowitz

Journal of Family and Economic Issues, forthcoming

Abstract:
This paper exploited variation in mandated insurance coverage of assisted reproductive technology (ART) across US states and over time to examine the connection between the price of ART and women's timing of family including marriage and child bearing in and out of wedlock. Duration and competing risks analyses were estimated to investigate the effects of ART insurance mandates on women's timing of first marriage and first birth using the 1968-2009 Panel Study of Income Dynamics. The findings suggest that the mandates were associated with delayed marriage and childbearing at younger ages and an increased likelihood of marriage and motherhood at ages 30 and older, but only for college graduate women. For the full sample of women, the mandates were associated with an increased likelihood of marriage at ages 25 and older and motherhood within marriage after at ages 30 and older, but not with delay at younger ages. Results by race were similar to those for the full sample for Whites, but were generally less significant for Blacks. No significant effects of the mandates were found for out-of-wedlock childbearing.

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Son-biased sex ratios in 2010 US census and 2011-2013 US natality data

Douglas Almond & Yixin Sun

Social Science & Medicine, forthcoming

Abstract:
If gender bias is receding, demographic manifestations of son preference should also tend to decrease. The sex composition of US children provides a key barometer of gender preference. In the 2010 US Population Census, Chinese and Asian-Indian families are more likely to have a son after a daughter, consistent with previous research. Korean-American families, by contrast, do not show this same pattern, paralleling recent declines in sex selection observed for South Korea. Non-Hispanic White families have sex ratios within the range of the biological norm regardless of the sex composition of previous children. We corroborate the 2010 Census data with 2011-2013 birth certificate microdata, which likewise show elevated sex ratios for Chinese and Asian Indians at higher birth orders.

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Seeing is believing -- Can increasing the number of female leaders reduce sex selection in rural India?

Priti Kalsi

Journal of Development Economics, May 2017, Pages 1-18

Abstract:
Cultural values regarding gender roles encourage gender discrimination and the practice of sex selection. Increasing political and work force participation of women challenges such norms. Exploiting the implementation of an Indian law that required one-third of local political seats to be reserved for women, I investigate the impact of female leadership on sex selection in rural India. I find an increase in the survival of higher birth order girls if political seats at the local level have been reserved for women. I argue that the likely underlying mechanism is a change in beliefs due to exposure to female leaders.

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The Roots of Modern Sex Ratios

Jesse Keith Anttila-Hughes, Patrick Krause & Yaniv Stopnitzky

University of San Francisco Working Paper, November 2016

Abstract:
While most measures of female empowerment have improved with development, sex ratios in many countries have become increasingly male. We exploit countries' prior history of plough-based agriculture to identify cultural variation in patriarchal norms following Boserup (1970) and Alesina, Giuliano, and Nunn (2013). Using detailed birth records from 76 countries between 1970 and 2010, we show that the cultural legacy of plough use explains a large portion of variation in modern sex ratios, and present evidence that plough countries' male-skewed sex ratios are achieved through a mix of in-utero sex-selection, son-based stopping rules, and increased mortality suggestive of neglect or infanticide. This cultural bias intensifies with lower fertility, even when controlling for a suite of economic and historical controls, a pattern that is not found in non-plough countries.

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Women's Mental Health and Well-being 5 Years After Receiving or Being Denied an Abortion: A Prospective, Longitudinal Cohort Study

Antonia Biggs et al.

JAMA Psychiatry, forthcoming

Design, Setting, and Participants: This study presents data from the Turnaway Study, a prospective longitudinal study with a quasi-experimental design. Women were recruited from January 1, 2008, to December 31, 2010, from 30 abortion facilities in 21 states throughout the United States, interviewed via telephone 1 week after seeking an abortion, and then interviewed semiannually for 5 years, totaling 11 interview waves. Interviews were completed January 31, 2016. We examined the psychological trajectories of women who received abortions just under the facility's gestational limit (near-limit group) and compared them with women who sought but were denied an abortion because they were just beyond the facility gestational limit (turnaway group, which includes the turnaway-birth and turnaway-no-birth groups). We used mixed effects linear and logistic regression analyses to assess whether psychological trajectories differed by study group.

Results: Of the 956 women (mean [SD] age, 24.9 [5.8] years) in the study, at 1 week after seeking an abortion, compared with the near-limit group, women denied an abortion reported more anxiety symptoms (turnaway-births, 0.57; 95% CI, 0.01 to 1.13; turnaway-no-births, 2.29; 95% CI, 1.39 to 3.18), lower self-esteem (turnaway-births, -0.33; 95% CI, -0.56 to -0.09; turnaway-no-births, -0.40; 95% CI, -0.78 to -0.02), lower life satisfaction (turnaway-births, -0.16; 95% CI, -0.38 to 0.06; turnaway-no-births, -0.41; 95% CI, -0.77 to -0.06), and similar levels of depression (turnaway-births, 0.13; 95% CI, -0.46 to 0.72; turnaway-no-births, 0.44; 95% CI, -0.50 to 1.39).

Conclusions and Relevance: In this study, compared with having an abortion, being denied an abortion may be associated with greater risk of initially experiencing adverse psychological outcomes. Psychological well-being improved over time so that both groups of women eventually converged. These findings do not support policies that restrict women's access to abortion on the basis that abortion harms women's mental health.

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Estimating the Effect of Abortion Facility Closures on Fertility, Sexual Health and Human Capital

Scott Cunningham & Andrea Schlosser

Baylor University Working Paper, November 2016

Abstract:
Historically, abortion regulation has sought to reduce abortions by raising the costs pregnant women face when seeking an abortion. But a more recent wave of regulations has sought to reduce abortions by raising abortion facility costs. A contemporary example of these supply-side regulations is Texas House Bill 2 (HB2) which in 2013 banned abortions after 20 weeks, required physicians to have admitting privileges at a hospital within 30 miles of the facility, mandated medical abortions follow the labeling approved by the FDA, and imposed the requirement that all abortion facilities meet the standards of an ambulatory surgical center. These regulations significantly increased firm costs and caused more than half of all abortion facilities to close. We exploit the fact that the closures increased the driving distance to the nearest abortion facility to identify the causal effect of HB2 on abortions, births, low weight births, first trimester prenatal care, and gonorrhea incidence. We find robust evidence that HB2 increased the distance to the nearest facility by 61 miles. We also find that this increased distance reduced abortions by 9-12%. These effects were concentrated among 15-24 year olds. We also find that the increased driving distance caused county-level births to increase, suggesting that the two are substitutes. We estimate the abortion elasticity of births is between -0.1 and -0.4. Finally, we find increases in driving distance increased prenatal healthcare investments, low weight births and gonorrhea incidence. While we ultimately find restrictive abortion access led to large changes in reproductive health, we find no evidence that it interrupted the schooling of high school students.

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Reducing Health Disparities by Removing Cost, Access, and Knowledge Barriers

Melody Goodman et al.

American Journal of Obstetrics and Gynecology, forthcoming

Importance: While the rate of unintended pregnancy has declined in the U.S. in recent years, unintended pregnancy among teens in the U.S. is the highest among industrialized nations, and disproportionately affects minority teens. Our objective of this secondary analysis was to estimate the risk of unintended pregnancy for both Black and White women age 15- 19 years when barriers to access, cost, and knowledge are removed. Our hypothesis was that the Black-White disparities would be reduced when access, education, and cost barriers are removed.

Design, Setting, and Participants: We performed an analysis of Contraceptive CHOICE Project (CHOICE) database. CHOICE is a longitudinal cohort study of 9,256 sexually active women ages 14-45 in the St. Louis region from 2007 to 2013. Two measures of disparities were used to analyze teenage pregnancy rates and pregnancy risk from 2008 to 2013 among teens ages 15-19. These rates were then compared to the rates of pregnancy among all sexually active teens in the US during the years 2008, 2009, 2010, and 2011. We estimated an absolute measure (rate difference (RD)) and a relative measure (rate ratio (RR)) to examine Black-White disparities in the rates of unintended pregnancy.

Results: While national rates of unintended pregnancy are decreasing, racial disparities in these rates persist. The Black-White rate difference dropped from 158.5 per 1,000 in 2008 to 120.1 per 1,000 in 2011; however, the relative ratio disparity decreased only from 2.6 to 2.5, suggesting that Black sexually active teens in the U.S. have 2.5 times the rate of unintended pregnancy as White teenagers. In the CHOICE Project, there was a decreasing trend in racial disparities in unintended pregnancy rates among sexually active teens (age 15-19); 2008-2009 (RD=18.2; RR=3.7), 2010-2011 (RD=4.3; RR=1.2) and 2013-2014 (RD=-1.5; RR=1.0).

Conclusions: When barriers to cost, access, and knowledge were removed, such as in the Contraceptive CHOICE Project, Black-White disparities in unintended pregnancy rates among sexually active teens are reduced on both absolute and relative scales. The rate of unintended pregnancy was almost equal between Black and White women compared to large Black-White disparities on the national level.

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Teen Childbearing and Depression: Do Pregnancy Attitudes Matter?

Tanya Rouleau Whitworth

Journal of Marriage and Family, forthcoming

Abstract:
The relationship between teen childbearing and depression has been extensively studied; however, little is known about how young women's own attitudes toward becoming pregnant shape this association. This study used data from the National Longitudinal Study of Adolescent Health to investigate whether the relationship between teen childbearing and adult depression is moderated by adolescent attitudes toward becoming pregnant. The results showed that although, on average, women who had first births between ages 16 and 19 experienced no more depressive symptoms in adulthood than women who had first births at age 20 or older, the relationship between teen childbearing and adult depression varied significantly based on adolescent pregnancy attitudes. When they had negative adolescent attitudes toward getting pregnant, teen mothers had similar levels of depression as adult mothers, but when they had positive adolescent pregnancy attitudes, teen mothers actually had fewer depressive symptoms than women with adult first births.

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Sperm Donor Anonymity and Compensation: An Experiment with American Sperm Donors

Glenn Cohen et al.

Journal of Law and the Biosciences, December 2016, Pages 468-488

Abstract:
Most sperm donation that occurs in the USA proceeds through anonymous donation. While some clinics make the identity of the sperm donor available to a donor-conceived child at age 18 as part of 'open identification' or 'identity release programs,' no US law requires clinics to do so, and the majority of individuals do not use these programs. By contrast, in many parts of the world, there have been significant legislative initiatives requiring that sperm donor identities be made available to children after a certain age (typically when the child turns 18). One major concern with prohibiting anonymous sperm donation has been that the number of willing sperm donors will decrease leading to shortages, as have been experienced in some of the countries that have prohibited sperm donor anonymity. One possible solution, suggested by prior work, would be to pay current anonymous sperm donors more per donation to continue to donate when their anonymity is removed. Using a unique sample of current anonymous and open identity sperm donors from a large sperm bank in the USA, we test that approach. As far as we know, this is the first attempt to examine what would happen if the USA adopted a prohibition on anonymous sperm donation that used the most ecologically valid population, current sperm donors. We find that 29% of current anonymous sperm donors in the sample would refuse to donate if the law changed such that they were required to put their names in a registry available to donor-conceived children at age 18. When we look at the remaining sperm donors who would be willing to participate, we find that they would demand an additional $60 per donation (using our preferred specification). We also discuss the ramifications for the industry.

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The 9/11 Dust Cloud and Pregnancy Outcomes: A Reconsideration

Janet Currie & Hannes Schwandt

Journal of Human Resources, Fall 2016, Pages 805-831

Abstract:
The events of 9/11 released a million tons of toxic dust into lower Manhattan, an unparalleled environmental disaster. It is puzzling, then, that the literature has shown little effect of fetal exposure to the dust. However, inference is complicated by preexisting differences between the affected mothers and other NYC mothers as well as heterogeneity in effects on boys and girls. Using all births in-utero on 9/11 in NYC and comparing them to their siblings, we show that residence in the affected area increased prematurity and low birth weight, especially for boys.

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Testosterone and immune-reproductive tradeoffs in healthy women

Tierney Lorenz, Julia Heiman & Gregory Demas

Hormones and Behavior, forthcoming

Abstract:
Although testosterone (T) has been characterized as universally immunosuppressive across species and sexes, recent ecoimmunology research suggests that T's immunomodulatory effects (enhancing/suppressing) depend on the organism's reproductive context. Very little is known about the immune effects of T in healthy females, and even less about how reproductive effort modulates the immune effects of T in humans. We investigated how the interaction between endogenous T and sexual activity predicted menstrual cycle-related changes in several measures of immunity: inflammation (indexed by interleukin-6, IL-6), adaptive immunity (indexed by immunoglobulin A, IgA), and functional immunity (indexed by bactericidal assay). Thirty-two healthy women (sexually abstinent, N = 17; sexually active with one male partner, N = 15) provided saliva samples at four points in the menstrual cycle: menses, follicular, ovulation, and luteal phases. Among sexually abstinent women, T was positively associated with IL-6 across the cycle; for sexually active women, however, T was positively associated with IL-6 in the luteal phase only, and negatively associated with IL-6 at ovulation. High T predicted higher IgA among women who reported infrequent intercourse, but lower IgA among women who reported very frequent intercourse. Finally, across groups, T was positively associated with greater bacterial killing at menses, but negatively associated in the luteal phase. Overall, rather than being universally immunosuppressive, T appeared to signal immunomodulation relevant to reproduction (e.g., lowering inflammation at ovulation, potentially preventing immune interference with conception). Our findings support the hypothesis that the immunomodulatory effects of endogenous T in healthy females depend on sexual and reproductive context.

By KEVIN LEWIS | 09:00:00 AM

Monday, January 2, 2017

How the sausage is made

Does Public Attention Reduce the Influence of Interest Groups? Policy Positions on SOPA/PIPA before and after the Internet Blackout

Ulrich Matter & Alois Stutzer

Harvard Working Paper, December 2016

Abstract:
We investigate the role that public attention plays in determining the effect that campaign contributions funded by interests groups have on legislators’ policy positions. In so doing, we exploit the Internet service blackout of January 2012 as a quasi-experiment in which a shock increases the salience of the SOPA/PIPA bills aimed at securing stronger protection of property rights on the Internet. Using a newly compiled dataset of U.S. congressmen’s public statements, which capture their positions throughout the debate, we find an initially strong statistical relationship between campaign contributions funded by the affected industries and legislators’ positions. However, this relationship evaporates once the two bills become primary policy issues. The evidence presented is in line with the theoretical notion that legislators choose positions on secondary policy issues in order to cater to organized interests, whereas positions on primary policy issues are driven by electoral support.

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A Very Particular Set of Skills: Former Legislator Traits and Revolving Door Lobbying in Congress

Todd Makse

American Politics Research, forthcoming

Abstract:
In recent decades, observers of Congress have devoted increasing attention to the phenomenon of the revolving door, whereby members of Congress and staffers go on to careers in lobbying. This practice raises a number of normative concerns that are perhaps most heightened when it comes to the lobbying activities of members of Congress themselves. In this article, I examine the factors determining which former members go through the revolving door, and find that members with central network positions and highly effective legislators are more likely to become lobbyists. I then examine the extent to which members-turned-lobbyists have an impact on bills in Congress. I find evidence that lobbying by former members increases a bill’s probability of progressing and some evidence that highly effective legislators also go on to become more effective lobbyists. Taken together, these findings support conventional wisdom that former members become some of the most influential lobbyists.

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All the President's Senators: Presidential Copartisans and the Allocation of Federal Grants

Dino Christenson, Douglas Kriner & Andrew Reeves

Legislative Studies Quarterly, forthcoming

Abstract:
Previous scholarship argues that House members' partisan relationship to the president is among the most important determinants of the share of federal dollars they bring home to their constituents. Do presidential politics also shape distributive outcomes in the Senate? Analyzing the allocation of more than $8.5 trillion of federal grants across the states from 1984 to 2008, we show that presidential copartisan senators are more successful than opposition party members in securing federal dollars for their home states. Moreover, presidents appear to target grants ex post to states that gain presidential copartisans in recent elections.

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The Effects of Gender on Winnowing in the U.S. House of Representatives

Victoria Rickard

Politics & Gender, December 2016, Pages 807-834

Abstract:
Notwithstanding the importance of winnowing, scholars have devoted little attention to deciphering and systematically explaining the effects that gender may have on determining which small proportion of bills ultimately receive committee attention from the thousands that are introduced every legislative session. Building on past research evincing gendered differences in legislative behavior and effectiveness, this study analyzes the 111th and 112th Congresses in order to ascertain the extent to which gender affects winnowing in the U.S. House of Representatives. The findings suggest that female lawmakers are working hard to achieve legislative success by sponsoring a greater number of bills than their male colleagues, but that their efforts are not being similarly rewarded. Female sponsored bills fail to progress past the winnowing stage at rates comparable to male sponsored bills. Thus, policymaking may be skewed toward the preferences of male lawmakers despite the numeric and positional gains of women in the U.S. Congress.

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Labor Union Strength and the Equality of Political Representation

Patrick Flavin

British Journal of Political Science, forthcoming

Abstract:
Amid growing evidence of ‘unequal democracy’ in the United States, labor unions can play a potentially important role by ensuring that low-income citizens’ opinions receive more equal consideration when elected officials make policy decisions. To investigate this possibility, this article evaluates the relationship between labor union strength and representational equality across states and finds evidence that states with higher levels of union membership weigh citizens’ opinions more equally in the policy-making process. In contrast, there is no relationship between the volume of labor union contributions to political campaigns in a state and the equality of its political representation. These findings suggest that labor unions promote greater political equality primarily by mobilizing their working-class members to political action and, more broadly, underscore the important role that organized labor continues to play in shaping the distribution of political power across American society.

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Losers Go to Jail: Congressional Elections and Union Officer Prosecutions

Mitch Downey

University of California Working Paper, November 2016

Abstract:
Democratic societies rely on fair judicial systems and competitive political systems. If politicians can control criminal investigations of influential groups and use them to undermine political opponents and protect supporters, it subverts these systems. I test whether prosecutions of politically active labor unions respond to Congressional election outcomes. I use novel data on federal indictments, campaign contributions to measure support, and a regression discontinuity to recover causal effects. I find that union officers are 67% more likely to be indicted when the candidate their union supported barely loses. These indictments weaken unions’ ability to influence politics, making reelection more difficult for union-supported Representatives and easier for the union-opposed. As such, the discontinuity might reflect reduced indictments to protect election winners’ union supporters or increased indictments to target winners’ union opponents. A series of analyses suggest it includes both. The results show that US politicians manipulate the justice system to maintain power.

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It's a Sweetheart of a Deal: Political Connections and Federal Contracting

Stephen Ferris & Reza Houston

Indiana State University Working Paper, November 2016

Abstract:
We examine whether political connections measured by political contributions influences the choice of terms included in government contracts awarded to firms. We construct an index of four “sweetheart” contract terms that are highly favorable to the firm, but not obviously advantageous to the government. We find that firms making larger political contributions more frequently have these terms included in their contracts. We then examine how changes in a firm’s political contributions influence the terms of subsequent contracts. We find that firms which increase their contributions are more likely to have these terms as part of their contract. We conclude that there is a political effect on the choice of terms included in federal contracts awarded to firms.

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Networks, Big Data, and Intermedia Agenda Setting: An Analysis of Traditional, Partisan, and Emerging Online U.S. News

Chris Vargo & Lei Guo

Journalism & Mass Communication Quarterly, forthcoming

Abstract:
This large-scale intermedia agenda–setting analysis examines U.S. online media sources for 2015. The network agenda–setting model showed that media agendas were highly homogeneous and reciprocal. Online partisan media played a leading role in the entire media agenda. Two elite newspapers — The New York Times and The Washington Post — were found to no longer be in control of the news agenda and were more likely to follow online partisan media. This article provides evidence for a nuanced view of the network agenda–setting model; intermedia agenda–setting effects varied by media type, issue type, and time periods.

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Congressional Investigations and the Electoral Connection

Kenneth Lowande & Justin Peck

Journal of Law, Economics, and Organization, forthcoming

Abstract:
We demonstrate that a direct “electoral connection” with voters motivates members of Congress to more vigorously investigate the executive branch during divided government. Our strategy for estimating the effect of the electoral connection is to leverage the enactment of 17th Amendment — which influenced the electoral mechanism for senators but not for members of the House of Representatives. This plausibly exogenous institutional variation allows us to isolate the effect of the electoral connection from other possible historical influences — such as the growth of the administrative state or the rise of political progressivism. We find that the 17th Amendment dramatically increased the Senate’s propensity to investigate during divided party control. Importantly, we also find little evidence of such an increase in the House. Our findings support the contemporary claim that congressional investigations are political tool motivated by the desire to discredit the opposition and reap individual electoral gains.

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Dynamics of Senate Retirements

Theodore Masthay & Marvin Overby

Political Research Quarterly, forthcoming

Abstract:
Although there is a large literature on the career decisions of House members, there is a dearth of critical scholarship examining retirement decisions in the Senate. This study aims to address this under-explored topic and identify the key factors in Senate retirement decisions. With a less demanding election schedule, greater power afforded to individual senators, more prestige attached to the office, and fewer attractive options for progressive ambition, we find that Senate retirement decisions differ substantially from patterns observed in the House. Among other things, the partisan retirement differential that is so obvious and persistent in the House (with Republican MCs retiring at higher rates than Democrats) is markedly absent in the Senate. We explore this and other inter-chamber differences, discussing both their empirical and normative ramifications, and noting their importance for our understanding not only of the two chambers but also of the two parties.

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Elections, Ideology, and Turnover in the U.S. Federal Government

Alexander Bolton, John de Figueiredo & David Lewis

NBER Working Paper, December 2016

Abstract:
A defining feature of public sector employment is the regular change in elected leadership. Yet, we know little about how elections influence public sector careers. We describe how elections alter policy outputs and disrupt the influence of civil servants over agency decisions. These changes shape the career choices of employees motivated by policy, influence, and wages. Using new Office of Personnel Management data on the careers of millions of federal employees between 1988 and 2011, we evaluate how elections influence employee turnover decisions. We find that presidential elections increase departure rates of career senior employees, particularly in agencies with divergent views relative to the new president and at the start of presidential terms. We also find suggestive evidence that vacancies in high-level positions after elections may induce lower-level executives to stay longer in hopes of advancing. We conclude with implications of our findings for public policy, presidential politics, and public management.

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The political economy of wage and price controls: Evidence from the Nixon tapes

Burton Abrams & James Butkiewicz

Public Choice, January 2017, Pages 63–78

Abstract:
In late July, 1971, Nixon reiterated his adamant opposition to wage and price controls calling them a scheme to socialize America. Yet, less than a month later, in a stunning reversal, he imposed the first and only peacetime wage and price controls in U.S. history. The Nixon tapes, personal tape recordings made during the presidency of Richard Nixon, provide a unique body of evidence to investigate the motivations for Nixon’s stunning reversal. We uncover and report in this paper evidence that Nixon manipulated his New Economic Policy to help secure his reelection victory in 1972. He became convinced that wage and price controls were necessary to grab the headlines away from the defeatist abandonment of the Bretton Woods Agreement and the closing of the U.S. gold window. Nixon understood the impact of his wage and price controls, but chose to trade off longer-term economic costs to the economy for his own short-term political gain.

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The Role of Elite Accounts in Mitigating the Negative Effects of Repositioning

Joshua Robison

Political Behavior, forthcoming

Abstract:
Repositioning by political elites plays a key role in a variety of political phenomena, including legislative policymaking and campaigning. While previous studies suggest that repositioning will lead to negative evaluations, these studies have not explored the role of elite communications in structuring mass responses. We argue that this omission is problematic because elite explanations for their actions may limit the costs associated with ‘flip-flopping’ by persuading some citizens to update their attitudes so that they agree with the elite’s new stance and also by molding beliefs about the motives of the elite when repositioning. We present evidence supportive of this argument obtained from two large experiments conducted on samples of American adults. Ultimately, we show that elites offering a satisfactory justification for their change can avoid most, if not all, of the evaluative costs that would otherwise occur. This study thus has important implications not just for this particular element of elite behavior, but also related questions concerning governmental accountability and representation.

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Captured Development: Industry Influence and State Economic Development Subsidies in the Great Recession Era

Joshua Jansa & Virginia Gray

Economic Development Quarterly, forthcoming

Abstract:
Scholars focus on interstate competition and intrastate economic conditions as the primary determinants of state economic development policies, including direct subsidies. New data from the Good Jobs First Subsidy Tracker illustrates large differences in subsidy spending across the states and that established firms are the disproportionate beneficiaries. In light of this new evidence, we argue that the political presence of the business sector within the state is an important determinant of state subsidy spending. A large political presence helps forward industry interests before government and has the potential to capture state governments. We find support for the cultural capture model by demonstrating that a greater number of lobbyists and campaign contributions from businesses leads to more subsidy spending, all else equal. We conclude that subsidies, and which companies receive them, are a product of both politics and economics.

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A Room for One’s Own? The Partisan Allocation of Affordable Housing

Claudine Gay

Urban Affairs Review, January 2017, Pages 40-70

Abstract:
Millions of Americans live in communities without an adequate supply of affordable housing. The governmental response to the crisis has focused on subsidies to private developers who build below-market housing, with the Low-Income Housing Tax Credit (LIHTC) at the center of this effort. Although federally funded, the LIHTC program grants states wide latitude in distributing billions of dollars of tax credits annually. Do state officials exploit this discretion to channel housing subsidies to geographic constituencies for political ends? Drawing on 20 years of LIHTC administrative data, I test whether electoral support for the state’s governing party predicts the level of tax credit investment directed to an area. The analysis reveals a modest relationship between partisan loyalty and housing investment, conditional on the partisan and institutional contexts. Democratic governors steer tax credits to areas of core support, but only where the governor exercises a high level of control over the state’s LIHTC-allocating agency.

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The Birth of Pork: Local Appropriations in America's First Century

Sanford Gordon & Hannah Katherine Simpson

NYU Working Paper, December 2016

Abstract:
After describing a newly assembled dataset consisting of all local appropriations made by the U.S. Congress between 1789 and 1882, we test a number of competing accounts of the politics surrounding them before offering a more nuanced, historically contingent view of the emergence of the pork barrel. First, we demonstrate that the pattern of appropriations is inconsistent with credit-claiming motivations, even accounting for the frequent rotation in office common during the period. Second, it was rare that over fifty percent of districts directly benefited from these appropriations until the 1870s, even aggregating by congressional session. Moreover, support for these appropriations was not reducible to geographic proximity, but did, until the end of Reconstruction, map cleanly onto the partisan/ideological structure of Congress. Finally, we show how the growth of recurrent expenditures and the emergence of a solid Democratic South eventually produced the universalistic coalitions commonly associated with pork-barrel spending.

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Veto Override Requirements and Executive Success

Robert McGrath, Jon Rogowski & Josh Ryan

Political Science Research and Methods, forthcoming

Abstract:
Presidential systems around the world vary in the proportion of legislators required to override an executive veto. We argue that the nature of the override provision affects executive influence in policymaking; as the proportion needed to override a veto increases, so should executive influence. We leverage varying override requirements across the US states to conduct a comparative study of executive influence over budgetary outcomes. Using governors’ budget requests and enacted appropriations for fiscal years 1987–2011, we provide evidence that state legislatures better accommodate budgetary requests in states with higher override requirements. Further, governors whose preferences are extreme relative to the legislature are more likely to have their budgetary goals met in states with a higher veto threshold.

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Electoral Rules and Legislative Particularism: Evidence from U.S. State Legislatures

Tanya Bagashka & Jennifer Hayes Clark

American Political Science Review, August 2016, Pages 441-456

Abstract:
We argue that state legislative politics is qualitatively different from national congressional politics in the extent to which it focuses on localized and geographically specific legislation salient to subconstituencies within a legislative district. Whereas congressional politics focuses on casework benefits for individual constituents, state legislative politics is more oriented to the delivery of localized benefits for groups of citizens in specific areas within a district, fostering a geographically specific group connection. A primary way to build such targeted geographical support is for members to introduce particularistic legislation designed to aid their specific targeted geographical area within the district. We argue that this is primarily a function of electoral rules. Using original sponsorship data from U.S. state houses, we demonstrate that greater district magnitude and more inclusive selection procedures such as open primaries are associated with more particularism. Our findings provide strong support for a voter-group alignment model of electoral politics distinct from the personal vote/electoral connection model that characterizes U.S. congressional politics and is more akin to patterns of geographically specific group-oriented electoral politics found in Europe and throughout the world.

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The Role of Constituency, Party, and Industry in Pennsylvania’s Act 13

Bradford Bishop & Mark Dudley

State Politics & Policy Quarterly, forthcoming

Abstract:
While a large body of research exists regarding the role of industry money on roll-call voting in the U.S. Congress, there is surprisingly little scholarship pertaining to industry influence on state politics. This study fills this void in an analysis of campaign donations and voting during passage of Act 13 in Pennsylvania during 2011 and 2012. After collecting information about natural gas production in state legislative districts, we estimate a series of multivariate models aimed at uncovering whether campaign donations contributed to a more favorable policy outcome for industry. Our findings indicate that campaign donations played a small but systematic role in consideration of the controversial legislation, which represented one of the first and most important state-level regulatory reforms for the hydraulic fracturing industry.

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Opportunities in Parliament and Political Careers: A Natural Experiment in the United Kingdom

Yusaku Horiuchi & Peter John

University College London Working Paper, October 2016

Abstract:
Why do some politicians acquire more posts and achieve faster career progression, while others do not? We argue that it is the opportunity for members of parliament (MPs) to develop and demonstrate their effectiveness as lawmakers and politicians that helps them develop political careers. By leveraging a natural experiment in the United Kingdom where randomly selected twenty MPs are given an opportunity to bring in legislation in each session, we show that winning the ballot decreases the probability of getting a new post among less experienced MPs, while it increases the probability among the more experienced. This finding shows that whether or not MPs can seize the randomly assigned new career-boosting opportunity hinges on the non-randomly generated pre-existing opportunity gap.

By KEVIN LEWIS | 09:00:00 AM

Sunday, January 1, 2017

The way I see it

The headwinds/tailwinds asymmetry: An availability bias in assessments of barriers and blessings

Shai Davidai & Thomas Gilovich

Journal of Personality and Social Psychology, December 2016, Pages 835-851

Abstract:
Seven studies provide evidence of an availability bias in people's assessments of the benefits they've enjoyed and the barriers they've faced. Barriers and hindrances command attention because they have to be overcome; benefits and resources can often be simply enjoyed and largely ignored. As a result of this "headwind/tailwind" asymmetry, Democrats and Republicans both claim that the electoral map works against them (Study 1), football fans take disproportionate note of the challenging games on their team's schedules (Study 2), people tend to believe that their parents have been harder on them than their siblings are willing to grant (Study 3), and academics think that they have a harder time with journal reviewers, grant panels, and tenure committees than members of other subdisciplines (Study 7). We show that these effects are the result of the enhanced availability of people's challenges and difficulties (Studies 4 and 5) and are not simply the result of self-serving attribution management (Studies 6 and 7). We also show that the greater salience of a person's headwinds can lead people to believe they have been treated unfairly and, as a consequence, more inclined to endorse morally questionable behavior (Study 7). Our discussion focuses on the implications of the headwind/tailwind asymmetry for a variety of ill-conceived policy decisions.

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Not I, but she: The beneficial effects of self-distancing on challenge/threat cardiovascular responses

Lindsey Streamer et al.

Journal of Experimental Social Psychology, forthcoming

Abstract:
Self-distancing has been shown to lead to benefits in the face of upcoming stressors, but the process by which this occurs remains unclear. We applied the cardiovascular measures of the biopsychosocial model of challenge/threat to test two plausible explanations: whether manipulating self-distancing (vs. a control condition) (1) makes a subsequent active-performance stressor seem less personally relevant, thereby leading to lower task engagement during task performance, and/or (2) promotes more favorable evaluations of personal resources relative to situational demands, resulting in greater challenge during performance. Participants who self-distanced by using non-first-person (vs. first-person) pronouns and their own name while preparing for a speech showed cardiovascular responses consistent with greater challenge while delivering the speech. Self-distancing did not, however, influence cardiovascular responses reflecting task engagement during the speech. Moreover, the effect of self-distancing persisted in the form of relative challenge during a second speech on an unrelated topic. These findings suggest self-distancing can lead to a positively valenced experience during active-performance stressors, rather than simply muted responses based on decreasing the stressor's self-relevance.

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Hurricane Sandy Exposure Alters the Development of Neural Reactivity to Negative Stimuli in Children

Ellen Kessel et al.

Child Development, forthcoming

Abstract:
This study examined whether exposure to Hurricane Sandy-related stressors altered children's brain response to emotional information. An average of 8 months (Mage = 9.19) before and 9 months after (Mage = 10.95) Hurricane Sandy, 77 children experiencing high (n = 37) and low (n = 40) levels of hurricane-related stress exposure completed a task in which the late positive potential, a neural index of emotional reactivity, was measured in response to pleasant and unpleasant, compared to neutral, images. From pre- to post-Hurricane Sandy, children with high stress exposure failed to show the same decrease in emotional reactivity to unpleasant versus neutral stimuli as those with low stress exposure. Results provide compelling evidence that exposure to natural disaster-related stressors alters neural emotional reactivity to negatively valenced information.

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Let's go outside! Environmental restoration amongst adolescents and the impact of friends and phones

Alison Greenwood & Birgitta Gatersleben

Journal of Environmental Psychology, December 2016, Pages 131-139

Abstract:
Adolescents are experiencing an increasing number of psychological difficulties due to mental fatigue and stress. Natural environments have been found to be beneficial to psychological wellbeing by reducing stress and improving mood and concentration for most people. However, a number of studies have suggested that this may not be the case for adolescents perhaps because they have different social and emotional needs (to be with friends, not to be bored), although evidence is lacking. In a field experiment with 120 16-18 year olds in the UK we tested restoration of stress and mental fatigue in an outdoor or indoor environment, alone, with a friend or while playing a game on a mobile phone. The findings showed greater restoration amongst adolescents who had been in an outdoor setting containing natural elements, compared with those who had been in an indoor one. Moreover, being with a friend considerably increased positive affect in nature for this age group. The findings indicated that spending short school breaks in a natural environment with a friend can have a significant positive impact on the psychological wellbeing of teenagers.

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Non-Social Features of Smartphone Use Are Most Related to Depression, Anxiety and Problematic Smartphone Use

Jon Elhai et al.

Computers in Human Behavior, April 2017, Pages 75-82

Abstract:
Little is known about the mechanisms of smartphone features that are used in sealing relationships between psychopathology and problematic smartphone use. Our purpose was to investigate two specific smartphone usage types - process use and social use - for associations with depression and anxiety; and in accounting for relationships between anxiety/depression and problematic smartphone use. Social smartphone usage involves social feature engagement (e.g., social networking, messaging), while process usage involves non-social feature engagement (e.g., news consumption, entertainment, relaxation). 308 participants from Amazon's Mechanical Turk internet labor market answered questionnaires about their depression and anxiety symptoms, and problematic smartphone use along with process and social smartphone use dimensions. Statistically adjusting for age and sex, we discovered the association between anxiety symptoms was stronger with process versus social smartphone use. Depression symptom severity was negatively associated with greater social smartphone use. Process smartphone was more strongly associated with problematic smartphone use. Finally, process smartphone use accounted for relationships between anxiety severity and problematic smartphone use.

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Methylation of the oxytocin receptor gene mediates the effect of adversity on negative schemas and depression

Ronald Simons et al.

Development and Psychopathology, forthcoming

Abstract:
Building upon various lines of research, we posited that methylation of the oxytocin receptor gene (OXTR) would mediate the effect of adult adversity on increased commitment to negative schemas and in turn the development of depression. We tested our model using structural equation modeling and longitudinal data from a sample of 100 middle-aged, African American women. The results provided strong support for the model. Analysis of the 12 CpG sites available for the promoter region of the OXTR gene identified four factors. One of these factors was related to the study variables, whereas the others were not. This factor mediated the effect of adult adversity on schemas relating to pessimism and distrust, and these schemas, in turn, mediated the impact of OXTR methylation on depression. All indirect effects were statistically significant, and they remained significant after controlling for childhood trauma, age, romantic relationship status, individual differences in cell types, and average level of genome-wide methylation. These finding suggest that epigenetic regulation of the oxytocin system may be a mechanism whereby the negative cognitions central to depression become biologically embedded.

By KEVIN LEWIS | 09:00:00 AM

Saturday, December 31, 2016

Kissable

She’s Not One of Us: Group Membership Moderates the Effect of Fertility Cues on Attractiveness Ratings

Natasha Tidwell, Paul Eastwick & Anita Kim

Social Psychological and Personality Science, forthcoming

Abstract:
The ability to differentiate in-group from out-group members on the basis of symbolic cues may be unique to Homo sapiens. The current research examined whether meaningful cues of in-group status moderate ovulatory shifts — a psychological adaptation that likely evolved earlier in humans’ evolutionary timeline. Four studies demonstrated that men were more attracted to fertile than nonfertile women’s voices only when men were evaluating in-group members. In Study 1, the fertility of Caucasian, but not Hispanic, women’s voices positively predicted 92 Caucasian male students’ attraction ratings. Study 2a (N = 56) replicated this effect among older participants, and Study 2b (N = 233) included a public preregistration and replicated it again. Study 3 replicated the effect in a sample of 47 Caucasian male students, and an experimental manipulation of the targets’ school membership produced a conceptual replication. These results stress the utility of considering the phylogeny of human evolution when testing evolutionary hypotheses.

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Sexual History and Present Attractiveness: People Want a Mate With a Bit of a Past, But Not Too Much

Steve Stewart-Williams, Caroline Butler & Andrew Thomas

Journal of Sex Research, forthcoming

Abstract:
The aim of this study was to explore how people’s sexual history affects their attractiveness. Using an Internet survey, 188 participants rated their willingness to engage in a relationship with a hypothetical individual with a specified number of past sexual partners, ranging from 0 to 60+. The effect of past partner number was very large. Average willingness ratings initially rose as past partner number rose, but then fell dramatically. For short-term relationships, men were more willing than women to get involved (although the difference was not large). For long-term relationships, in contrast, there was virtually no sex difference. Thus, contrary to the idea that male promiscuity is tolerated but female promiscuity is not, both sexes expressed equal reluctance to get involved with someone with an overly extensive sexual history. Finally, participants with an unrestricted sociosexual orientation (high SO participants) were more tolerant than low SO participants of prospective mates with higher numbers of past sexual partners but were also less tolerant of prospective mates with low numbers of past sexual partners.

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Marrying Up by Marrying Down: Status Exchange between Social Origin and Education in the United States

Christine Schwartz, Zhen Zeng & Yu Xie

Sociological Science, November 2016

Abstract:
Intermarriage plays a key role in stratification systems. Spousal resemblance reinforces social boundaries within and across generations, and the rules of intermarriage govern the ways that social mobility may occur. We examine intermarriage across social origin and education boundaries in the United States using data from the 1968–2013 Panel Study of Income Dynamics. Our evidence points to a pattern of status exchange — that is, persons with high education from modest backgrounds tend to marry those with lower education from more privileged backgrounds. Our study contributes to an active methodological debate by pinpointing the conditions under which the results pivot from evidence against exchange to evidence for exchange and advances theory by showing that the rules of exchange are more consistent with the notion of diminishing marginal utility than the more general theory of compensating differentials.

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Physical attraction to reliable, low variability nervous systems: Reaction time variability predicts attractiveness

Emily Butler et al.

Cognition, January 2017, Pages 81–89

Abstract:
The human face cues a range of important fitness information, which guides mate selection towards desirable others. Given humans’ high investment in the central nervous system (CNS), cues to CNS function should be especially important in social selection. We tested if facial attractiveness preferences are sensitive to the reliability of human nervous system function. Several decades of research suggest an operational measure for CNS reliability is reaction time variability, which is measured by standard deviation of reaction times across trials. Across two experiments, we show that low reaction time variability is associated with facial attractiveness. Moreover, variability in performance made a unique contribution to attractiveness judgements above and beyond both physical health and sex-typicality judgements, which have previously been associated with perceptions of attractiveness. In a third experiment, we empirically estimated the distribution of attractiveness preferences expected by chance and show that the size and direction of our results in Experiments 1 and 2 are statistically unlikely without reference to reaction time variability. We conclude that an operating characteristic of the human nervous system, reliability of information processing, is signalled to others through facial appearance.

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Attractive men's desirability as a long-term partner varies with ascribed excitement values

Guilherme Lopes et al.

Personality and Individual Differences, March 2017, Pages 6–9

Abstract:
Values guide behaviors and cognitively represent needs. Expressed values may provide relevant cues that affect mate selection. In particular, individuals endorsing excitement values (e.g., emotion, pleasure, sexuality) are more likely to commit infidelity. Therefore, a person's desirability as a long-term partner may be negatively affected by that person's endorsement of excitement values. To test this hypothesis, we conducted a 2 (sex) × 2 (ascribed values) × 2 (facial attractiveness) factorial design experiment. Participants were 80 individuals, aged between 17 and 48 years (M = 24.1, SD = 5.61), mostly heterosexual (93.8%). Participants rated how desirable the person depicted in the factorial scenarios is as a long-term partner, on a 6-point Likert scale (undesirable–very desirable). Attractive men's desirability as a long-term partner decreased when associated with excitement values, providing some support for evolutionarily informed hypotheses. We discuss results in light of evolutionary hypotheses of mate selection, highlighting limitations and identifying directions for future research.

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The Relationship Between Cognitive Ability and Experiences of Vaginal, Oral, and Anal Sex in the United States

Nicole Fran Kahn & Carolyn Tucker Halpern

Journal of Sex Research, forthcoming

Abstract:
Few studies have investigated the sexual development of populations with low cognitive abilities in the United States. This article examines the relationship between cognitive ability and various sexual experiences from adolescence (ages 12 to 18) to early adulthood (ages 28 to 34). Data were from 13,845 respondents interviewed at Waves I and IV of the National Longitudinal Study of Adolescent to Adult Health (Add Health), a probability sample of adolescents in the United States followed from adolescence to adulthood. Adjusted logistic regression models were used to study relationships between cognitive ability, approximated by the Add Health Picture Vocabulary Test (AHPVT), and experiences of vaginal, oral, and anal sex. After controlling for biological sex, age, race/ethnicity, and socioeconomic status (SES), individuals in the lowest cognitive ability group had significantly lower odds of experiencing each type of sex than those in the average ability group. Although individuals in the highest cognitive ability group had significantly lower odds of experiencing vaginal intercourse than those in the average ability group, this association did not remain significant when analyses were stratified by biological sex. These differences in experiences have implications for future health and warrant further study to understand policy implications for sexual health services and education.

By KEVIN LEWIS | 09:00:00 AM

Friday, December 30, 2016

Landslide

Populism and the Return of the "Paranoid Style": Some Evidence and a Simple Model of Demand for Incompetence as Insurance against Elite Betrayal

Rafael Di Tella & Julio Rotemberg

NBER Working Paper, December 2016

Abstract:
We present a simple model of populism as the rejection of “disloyal” leaders. We show that adding the assumption that people are worse off when they experience low income as a result of leader betrayal (than when it is the result of bad luck) to a simple voter choice model yields a preference for incompetent leaders. These deliver worse material outcomes in general, but they reduce the feelings of betrayal during bad times. We find some evidence consistent with our model in a survey carried out on the eve of the recent U.S. presidential election. Priming survey participants with questions about the importance of competence in policymaking usually reduced their support for the candidate who was perceived as less competent; this effect was reversed for rural, and less educated white, survey participants.

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Does negative advertising affect giving behavior? Evidence from campaign contributions

Sarah Niebler & Carly Urban

Journal of Public Economics, February 2017, Pages 15–26

Abstract:
This paper contributes to a growing literature that explains why individuals contribute to political campaigns. We build a panel dataset that follows contributors from primary to general elections to quantify the persistence of giving in political contests. Those who gave to winning candidates in the primary were most likely to contribute again in the general election. Next, we use an instrumental variable strategy to document that within party negative advertising decreases the probability that individuals contribute to their preferred party in the general election, regardless of whether they initially contributed to a winning or losing primary candidate.

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How Do Female Candidates Affect Voter Turnout? Evidence from a Regression Discontinuity Approach

Daniel Jones

University of South Carolina Working Paper, October 2016

Abstract:
How does the presence of a woman on the ballot impact election outcomes, aggregate turnout, and the voting behavior of particular groups of voters? Using a regression discontinuity approach, I exploit quasi-random variation in the presence of a female candidate in US House elections stemming from narrowly won primary elections between candidates of different genders. I find that the presence of a female candidate leads to lower overall turnout, but otherwise has no bearing on the outcome of the election. The change in turnout is driven entirely by male voters, which falls uniformly for (male) voters of both parties.

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The Impact of Gender Stereotypes on Voting for Women Candidates by Level and Type of Office

Kathleen Dolan & Timothy Lynch

Politics & Gender, September 2016, Pages 573-595

Abstract:
Previous research has documented that the public often views women candidates through the lens of gender stereotypes. However, as much of this work draws on experimental designs and hypothetical candidates, we have less information about whether and how voters employ stereotypes in the face of real candidates for office. This project examines one important aspect of the impact of stereotypes on the fate of actual women candidates: whether gender stereotypes have a different influence on elections for different levels and types of offices. Previous research suggests that voters are more likely to apply male stereotypes and evaluate candidates differently as the level of office increases and as we consider executive versus legislative office. The research reported here draws on new data that capture voter attitudes and behaviors in real-world elections to test a series of hypotheses related to when and how gender stereotypes affect candidates for the U.S. Congress and governorships. In general, we find little evidence to support claims that voters stereotype women candidates differently when they seek different kinds of offices.

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When You Don't Snooze, You Lose: A Natural Experiment on the Effect of Sleep Deprivation on Voter Turnout and Election Outcomes

John Holbein & Jerome Pablo Schafer

Princeton Working Paper, December 2016

Abstract:
In this article, we show that many citizens fail to vote because they are too tired. To do so, we leverage multiple approaches, including a unique natural quasi-experiment that exploits discontinuous decreases in sleep times on the eastern side of U.S. time zone boundaries. Our preferred model specification indicates that these exogenous decreases in sleep times depress county-level turnout in Congressional elections by about 2 percentage points. This effect is magnified in areas where obstacles to voting are greatest. Moreover, tiredness appears to exacerbate participatory inequality — depressing turnout in low propensity communities most — and push election outcomes towards Republicans. Supplementing this analysis, we conduct an observational study validating the direct relationship between tiredness and turnout. Our findings have important theoretical implications for the study of political participation. They suggest that many citizens hold the precursors to participation but lack the general, rather than expressly political, motivation to act on their intentions.

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Weather Affects Voting Decisions

Jon Jachimowicz, Jochen Menges & Adam Galinsky

Columbia University Working Paper, November 2016

Abstract:
Election outcomes in democratic societies are predicated on rational choice models that require deliberate consideration of electoral options. The current research finds that an incidental feature to the electoral process – weather on Election Day – affects voting decisions. Specifically, we find that increases in wind speed enhance the chances of electoral options in favor of safety, risk-aversion, and continuation of the status quo. Theoretically, we present a causal model for how wind speed affects voting decisions: higher wind speed increases a psychological prevention focus that makes voters opt for low-risk options (status-quo) rather than high-risk options (change). Results of a series of archival analyses of actual elections (the “Brexit” vote, the Scotland independence referendum, 10 years of Swiss referendums, and 100 years of US presidential elections), two field studies, and four experiments support the idea that individuals exposed to higher wind speeds are more prevention focused and more likely to support electoral options that emphasize prevention-focus oriented themes. The findings bear importance for polling forecasts and the scheduling of elections.

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Swingin' in the Rain: The Impact of Inclement Weather on Voting Behavior in U.S. Presidential Elections

Erik Duhaime & Taylor Moulton

MIT Working Paper, October 2016

Abstract:
While political experts have long claimed that bad weather lowers voter turnout, the impact of weather on U.S. election outcomes remains unclear. The most rigorous work to date found that precipitation benefits Republicans and suggested that Florida rains influenced the outcome of the 2000 presidential election, but a more recent analysis finding that precipitation only lowers turnout in uncompetitive election states calls this claim into question. Here, we reanalyze the 1972-2000 U.S. presidential elections with a focus on supporters of non-major party candidates, an oft-overlooked contingency. We propose that bad weather affects election outcomes not through its effect on turnout — as has long been assumed — but rather, through its psychological effect on swing voters. Specifically, we find evidence that bad weather increases regret aversion among supporters of non-major party candidates in competitive elections, leading some to instead vote for their preferred two-party candidate.

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Turnout and weather disruptions: Survey evidence from the 2012 presidential elections in the aftermath of Hurricane Sandy

Narayani Lasala-Blanco, Robert Shapiro & Viviana Rivera-Burgos

Electoral Studies, forthcoming

Abstract:
This paper examines the rational choice reasoning that is used to explain the correlation between low voter turnout and the disruptions caused by weather related phenomena in the United States. Using in-person as well as phone survey data collected in New York City where the damage and disruption caused by Hurricane Sandy varied by district and even by city blocks, we explore, more directly than one can with aggregate data, whether individuals who were more affected by the disruptions caused by Hurricane Sandy were more or less likely to vote in the 2012 Presidential Election that took place while voters still struggled with the devastation of the hurricane and unusually low temperatures. Contrary to the findings of other scholars who use aggregate data to examine similar questions, we find that there is no difference in the likelihood to vote between citizens who experienced greater discomfort and those who experienced no discomfort even in non-competitive districts. We theorize that this is in part due to the resilience to costs and higher levels of political engagement that vulnerable groups develop under certain institutional conditions.

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Paths to victory in presidential elections: The setup power of noncompetitive states

Steven Brams & Marc Kilgour

Public Choice, January 2017, Pages 99–113

Abstract:
In US presidential elections, voters in noncompetitive states seem not to count — and have zero power, according to standard measures of voting power — because they cannot influence the outcome in their states. But the electoral votes of these states are essential to a candidate’s victory, so they do count, but in a different way. We propose a simple model that enables us to measure the setup power of voters in noncompetitive states by modeling how these states structure the contest in the competitive states, as illustrated by the 2012, 2008, 2004, and 2000 presidential elections. We define three measures of setup power — winningness, vulnerability, and fragility — and show how they pinpoint the advantages of the candidate who leads in electoral votes of noncompetitive states. In fact, this candidate won in all four elections.

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Why Won't Lola Run? An Experiment Examining Stereotype Threat and Political Ambition

Scott Pruysers & Julie Blais

Politics & Gender, forthcoming

Abstract:
Among the most well-documented and long-standing gender gaps in political behavior are those relating to political ambition, as men have consistently been shown to express a significantly higher level of political ambition than women. Although this gap is well established, the reasons for the differences between men and women remain largely unknown. One possible explanation is that negative stereotypes about women's political ability are responsible. Stereotype threat, as it is referred to in the psychology literature, is a phenomenon where individuals of a social group suffer cognitive burdens and anxiety after being exposed to negative stereotypes that relate to their identity. These disruptions have been shown to alter attitudes and behavior. In order to test this possibility, we employed an experimental design whereby we randomly assigned 501 undergraduate students into threat and nonthreat conditions. While men exhibited higher levels of political ambition in both conditions, women in the nonthreat condition expressed significantly higher levels of political ambition than those women who were exposed to negative stereotypes. The results of this study therefore suggest that the gender gap in political ambition may be partly explained by negative stereotypes about women in politics.

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Electoral Consequences of Welfare State Expansion: The Case of the Food Stamp Program

Vladimir Kogan

Ohio State University Working Paper, November 2016

Abstract:
Welfare programs are hard to reconcile with the notion that politicians are motivated primarily by electoral considerations, since these programs benefit the most politically marginalized citizens. I present evidence to resolve this apparent puzzle, documenting how welfare can indeed pay dividends at the ballot box. Taking advantage of the decade-long rollout of the American Food Stamp Program, I estimate the effect of this new benefit on election outcomes. Overall, I find that Democrats gained votes in counties where the program had been implemented, primarily through mobilization of new supporters rather than the conversion of political opponents. Reflecting the implementation challenges that plagued FSP in its early years, I also show that Democrats paid an initial electoral price when the program was first introduced, but that this penalty faded quickly as Democratic candidates began to see significant, persistent gains only a few years later.

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The Demand for Bad Policy when Voters Underappreciate Equilibrium Effects

Ernesto Dal Bó, Pedro Dal Bó & Erik Eyster

NBER Working Paper, December 2016

Abstract:
Although most of the political-economy literature blames inefficient policies on institutions or politicians' motives to supply bad policy, voters may themselves be partially responsible by demanding bad policy. In this paper, we posit that voters may systematically err when assessing potential changes in policy by underappreciating how new policies lead to new equilibrium behavior. This biases voters towards policy changes that create direct benefits — welfare would rise if behavior were held constant — even if these policies lower welfare because people adjust behavior. Conversely, voters are biased against policies that impose direct costs even if they induce larger indirect benefits. Using a lab experiment, we find that a majority of subjects vote against policies that, while inflicting negative direct effects, would help them to overcome social dilemmas and thereby increase welfare; conversely, subjects support policies that, while producing direct benefits, create social dilemmas and ultimately hurt welfare; both mistakes arise because subjects fail to fully anticipate the equilibrium effects of new policies. More precisely, we establish that subjects systematically underappreciate the extent to which policy changes affect other people's behavior, and that these mistaken beliefs exert a causal effect on the demand for bad policy.

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Are People Really Turning Away from Democracy?

Erik Voeten

Georgetown University Working Paper, December 2016

Abstract:
In an important and already influential 2016 article in the Journal of Democracy, Roberto Stefan Foa and Yascha Mounk argue that citizens in consolidated democracies in Europe and the United States have “become more cynical about the value of democracy as a political system” and “more willing to express support for authoritarian alternatives” (Foa and Mounk 2016, p.7). Moreover, millennials are especially culpable. These are important and broad claims that are worthy of a systematic follow-up analysis. My purpose is not to replicate Foa and Mounk’s findings but to examine the veracity of their substantive claims more systematically. I show that there is no evidence for the first claim. Trends in overall support for democracy and its non-democratic alternatives have been flat for the past two decades. This finding is very robust to different ways of defining the countries of interest. There is some support for the second claim. Millennials are somewhat more favorably inclined towards non-democratic ways of ruling their countries even after we account for age. Nevertheless these effects primarily come from the United States. Moreover, when we look at confidence in actual democratic institutions, then the opposite pattern emerges: older people have lost faith in U.S. Congress and the Executive to a greater extent than younger people.

By KEVIN LEWIS | 09:00:00 AM

Thursday, December 29, 2016

What you are

Gulliver's Politics: Conservatives Envision Potential Enemies as Readily Vanquished and Physically Small

Colin Holbrook et al.

Social Psychological and Personality Science, forthcoming

Abstract:
Political conservatives have been widely documented to regard out-group members as hostile, perceive individuals of ambiguous intent as malevolent, and favor aggressive solutions to intergroup conflict. A growing literature indicates that potential violent adversaries are represented using the dimensions of envisioned physical size/strength to summarize opponents' fighting capacities relative to the self or in-group. Integrating these programs, we hypothesized that, compared to liberals, conservatives would envision an ambiguous out-group target as more likely to pose a threat, yet as vanquishable through force, and thus as less formidable. Participants from the United States (Study 1) and Spain (Study 2) assessed Syrian refugees, a group that the public widely suspects includes terrorists. As predicted, in both societies, conservatives envisioned refugees as more likely to be terrorists and as less physically formidable. As hypothesized, this "Gulliver effect" was mediated by confidence in each society's capacity to thwart terrorism via aggressive military or police measures.

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The "Bad Is Black" Effect: Why People Believe Evildoers Have Darker Skin Than Do-Gooders

Adam Alter et al.

Personality and Social Psychology Bulletin, December 2016, Pages 1653-1665

Abstract:
Across six studies, people used a "bad is black" heuristic in social judgment and assumed that immoral acts were committed by people with darker skin tones, regardless of the racial background of those immoral actors. In archival studies of news articles written about Black and White celebrities in popular culture magazines (Study 1a) and American politicians (Study 1b), the more critical rather than complimentary the stories, the darker the skin tone of the photographs printed with the article. In the remaining four studies, participants associated immoral acts with darker skinned people when examining surveillance footage (Studies 2 and 4), and when matching headshots to good and bad actions (Studies 3 and 5). We additionally found that both race-based (Studies 2, 3, and 5) and shade-based (Studies 4 and 5) associations between badness and darkness determine whether people demonstrate the "bad is black" effect. We discuss implications for social perception and eyewitness identification.

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Beliefs about Gender

Pedro Bordalo et al.

NBER Working Paper, December 2016

Abstract:
We conduct a laboratory experiment on the determinants of beliefs about own and others' ability across different domains. A preliminary look at the data points to two distinct forces: miscalibration in estimating performance depending on the difficulty of tasks and gender stereotypes. We develop a theoretical model that separates these forces and apply it to analyze a large laboratory dataset in which participants estimate their own and a partner's performance on questions across six subjects: arts and literature, emotion recognition, business, verbal reasoning, mathematics, and sports. We find that participants greatly overestimate not only their own ability but also that of others, suggesting that miscalibration is a substantial, first order factor in stated beliefs. Women are better calibrated than men, providing more accurate estimates of ability both for themselves and for others. Gender stereotypes also have strong predictive power for beliefs, particularly for men's beliefs about themselves and others' beliefs about the ability of men. Our findings help interpret evidence on gender gaps in self-confidence.

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A Content Analytic Study of Appearance Standards for Women of Color in Magazines

Leah Boepple & Kevin Thompson

Psychology of Popular Media Culture, forthcoming

Abstract:
Media portrayals of Caucasian women have received a great deal of research attention. However, substantially less research exists examining media portrayals of women of color. This content analytic study examined appearance messages and standards for women of color present in popular magazines. The 17 magazines (aimed for female audiences) with the highest circulation ratings were rated. All images and text of the magazines were coded. Cohen's Kappa for all variables was .86. Ninety-six percent of Black women, 91.67% of Asian women, and 96.61% of Latina women had either light- or medium-toned skin. Sixty-three percent of Black women, 100% of Asian women, and 98.59% of Latina women had long, straight hair. Forty-two percent of Black women, 100% of Asian women, and 54% of Latina women had smaller facial features consistent with Caucasian norms. The current study is the first of its kind to examine media-based appearance standards for Asian and Latina women in magazines.

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Ingroups, outgroups, and the gateway groups between: The potential of dual identities to improve intergroup relations

Aharon Levy et al.

Journal of Experimental Social Psychology, forthcoming

Abstract:
Research on dual identity focuses mainly on how dual identifiers feel and behave, and on the reactions they elicit from others. In this article we test an unexplored aspect of dual identity: the dual identity group's potential to act as a possible gateway between the groups that represent the respective sources of the dual identity (e.g., Israeli Arabs as a gateway between Israelis and Palestinians). We predicted that to the extent that a group is perceived to have a dual identity, intergroup attitudes and behavior of the groups comprising that dual identity will be improved. This idea was tested across four studies. Study 1a and b were real-world correlational studies which revealed positive correlations between the perception of a dual identity and attitudes towards the outgroup. In Studies 2 and 3 we demonstrated experimentally that the mere presence of a group with a dual identity leads to improved outgroup orientations. In Study 4 we demonstrated how the manipulation of perceived dual identity can help improve attitudes towards the outgroup, and also provided initial indications regarding the mechanisms underlying the process at hand. We discuss the implications of the findings for the improvement of intergroup relations, and offer an outline for future research.

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"Catching" Social Bias: Exposure to Biased Nonverbal Signals Creates Social Biases in Preschool Children

Allison Skinner, Andrew Meltzoff & Kristina Olson

Psychological Science, forthcoming

Abstract:
Identifying the origins of social bias is critical to devising strategies to overcome prejudice. In two experiments, we tested the hypothesis that young children can catch novel social biases from brief exposure to biased nonverbal signals demonstrated by adults. Our results are consistent with this hypothesis. In Experiment 1, we found that children who were exposed to a brief video depicting nonverbal bias in favor of one individual over another subsequently explicitly preferred, and were more prone to behave prosocially toward, the target of positive nonverbal signals. Moreover, in Experiment 2, preschoolers generalized such bias to other individuals. The spread of bias observed in these experiments lays a critical foundation for understanding the way that social biases may develop and spread early in childhood.

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Social projection to liked and disliked targets: The role of perceived similarity

Mark Davis

Journal of Experimental Social Psychology, forthcoming

Abstract:
Some accounts of social projection view it as an essentially cognitive phenomenon, prompted by the need for a relatively low-effort way to arrive at inferences about others. Other accounts argue that projection is motivated by self-enhancement and self-protection concerns. This investigation evaluates these accounts by having participants make inferences about liked and disliked real-world targets. In Studies 1 and 2, participants projected more to liked than disliked targets, supporting a motivational account; however, when perceived similarity was accounted for, this difference disappeared, supporting the cognitive account. In Study 3 participants made inferences about targets who varied along both the valence and similarity dimensions; there was greater projection to all similar targets, but target valence only influenced projection if the targets were also seen as similar. The implications of these findings are discussed.

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Face-Blind for Other-Race Faces: Individual Differences in Other-Race Recognition Impairments

Lulu Wan et al.

Journal of Experimental Psychology: General, forthcoming

Abstract:
We report the existence of a previously undescribed group of people, namely individuals who are so poor at recognition of other-race faces that they meet criteria for clinical-level impairment (i.e., they are "face-blind" for other-race faces). Testing 550 participants, and using the well-validated Cambridge Face Memory Test for diagnosing face blindness, results show the rate of other-race face blindness to be nontrivial, specifically 8.1% of Caucasians and Asians raised in majority own-race countries. Results also show risk factors for other-race face blindness to include: a lack of interracial contact; and being at the lower end of the normal range of general face recognition ability (i.e., even for own-race faces); but not applying less individuating effort to other-race than own-race faces. Findings provide a potential resolution of contradictory evidence concerning the importance of the other-race effect (ORE), by explaining how it is possible for the mean ORE to be modest in size (suggesting a genuine but minor problem), and simultaneously for individuals to suffer major functional consequences in the real world (e.g., eyewitness misidentification of other-race offenders leading to wrongful imprisonment). Findings imply that, in legal settings, evaluating an eyewitness's chance of having made an other-race misidentification requires information about the underlying face recognition abilities of the individual witness. Additionally, analogy with prosopagnosia (inability to recognize even own-race faces) suggests everyday social interactions with other-race people, such as those between colleagues in the workplace, will be seriously impacted by the ORE in some people.

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Persuasive message scrutiny as a function of implicit-explicit discrepancies in racial attitudes

India Johnson et al.

Journal of Experimental Social Psychology, forthcoming

Abstract:
Past research has shown that individuals low in prejudice think more carefully when information is from or about stigmatized individuals than non-stigmatized individuals. One explanation for this effect is that the heightened scrutiny stems from a motivation to guard against potential prejudice toward stigmatized others (i.e. "watchdog motivation"). The present research tested a variation of the watchdog hypothesis based on the idea of implicit ambivalence. Specifically, we argue that among individuals low in explicit (i.e., deliberative) prejudice, it is those who are also relatively high in implicit (i.e., automatic) prejudice who will do the most processing in prejudice relevant contexts. The implicit ambivalence framework also makes a novel prediction that individuals who are relatively high in explicit prejudice but low in implicit prejudice would also engage in enhanced information processing. As predicted, people with racial implicit-explicit attitude discrepancies, regardless of the direction of discrepancy, were found to engage in greater of scrutiny of a message about the hiring of Black faculty (study 1), a message about a Black job candidate (study 2), and even when the Black concept was merely primed subliminally prior to reading a race-irrelevant message (study 3).

By KEVIN LEWIS | 09:00:00 AM

Wednesday, December 28, 2016

Coming and going

The Economic Contribution of Unauthorized Workers: An Industry Analysis

Ryan Edwards & Francesc Ortega

NBER Working Paper, November 2016

Abstract:
This paper provides a quantitative assessment of the economic contribution of unauthorized workers to the U.S. economy, and the potential gains from legalization. We employ a theoretical framework that allows for multiple industries and a heterogeneous workforce in terms of skills and productivity. Capital and labor are the inputs in production and the different types of labor are combined in a multi-nest CES framework that builds on Borjas (2003) and Ottaviano and Peri (2012). The model is calibrated using data on the characteristics of the workforce, including an indicator for imputed unauthorized status (Center for Migration Studies, 2014), and industry output from the Bureau of Economic Analysis. Our results show that the economic contribution of unauthorized workers to the U.S. economy is substantial, at approximately 3% of private-sector GDP annually, which amounts to close to $5 trillion over a 10-year period. These effects on production are smaller than the share of unauthorized workers in employment, which is close to 5%. The reason is that unauthorized workers are less skilled and appear to be less productive, on average, than natives and legal immigrants with the same observable skills. We also find that legalization of unauthorized workers would increase their contribution to 3.6% of private-sector GDP. The source of these gains stems from the productivity increase arising from the expanded labor market opportunities for these workers which, in turn, would lead to an increase in capital investment by employers.

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The Impact of Immigration on the Labor Market Outcomes of Native Workers: Evidence Using Longitudinal Data from the LEHD

Ted Mouw

U.S. Census Bureau Working Paper, December 2016

Abstract:
Empirical estimates of the effect of immigration on native workers that rely on spatial comparisons have generally found small effects, but have been subject to the criticism that out-migration by native workers dampens the observed effect by spreading it over a larger area. In contrast, studies that rely on variation in immigration across industries, occupations, or education-based skill-levels often report large negative effects, but rely primarily on repeated cross-sectional data sets which also cannot account for the adjustment of native workers over time. In this paper, we use a newly available data set, the Longitudinal Employer Household Data (LEHD), which provides quarterly earnings records, geographic location, and firm and industry identifiers for 97% of all privately employed workers in 29 states. We use this data to analyze the impact of immigration on earnings changes and the mobility response of native workers. Overall, we find that although immigration has a negative effect on the earnings and employment of native workers, and positive effects on their firm, industry, and cross-state mobility, the overall size of the effects is small.

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The Dynamics of State and Local Contexts and Immigration Asylum Hearing Decisions

Daniel Chand, William Schreckhise & Marianne Bowers

Journal of Public Administration Research and Theory, January 2017, Pages 182-196

Abstract:
Immigration judges (IJs) preside over cases related to immigration law, determining whether an individual should be granted asylum. The few prior studies of IJs have focused on factors of interest to judicial politics scholars, such as characteristics of the judge or applicant in a case. Drawing from public administration literature, we add a new set of factors related to local and state context in which the IJ works. Using multilevel regression analysis, we examine the decisions of 245 IJs made from fiscal years 2009 through 2014. Indeed, it appears context is important. We find IJs grant asylum less often in communities where citizens more often vote Republican and where the local economy is poor. Judges in states where statewide agencies have opted to participate in the restrictive immigration program 287(g) also granted significantly lower percentages of asylum applications. States with Democratic governors and state legislative majorities granted asylum more often, as do IJs working in United States-Mexico border communities. With respect to traditional factors, judges with more experience and those that hear higher percentages of cases involving individuals from Guatemala, El Salvador, and Honduras, grant significantly fewer petitions for asylum. Judges who hear high percentages of petitions from applicants with attorneys grant significantly more asylums.

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Immigrant Chinese Mothers’ Socialization of Achievement in Children: A Strategic Adaptation to the Host Society

Florrie Fei-Yin Ng et al.

Child Development, forthcoming

Abstract:
Academic socialization by low-income immigrant mothers from Mainland China was investigated in two studies. Immigrant Chinese mothers of first graders (n = 52; Mage = 38.69) in the United States (Study 1) and kindergartners (n = 86; Mage = 36.81) in Hong Kong (Study 2) tell stories that emphasized achieving the best grade through effort more than did African American (n = 39; Mage = 31.44) and native Hong Kong (n = 76; Mage = 36.64) mothers, respectively. The emphasis on achievement was associated with mothers' heightened discussion on discrimination (Study 1) and beliefs that education promotes upward mobility (Study 2), as well as children's expectations that a story protagonist would receive maternal criticism for being nonpersistent in learning (Study 2).

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Immigration concern and the white/non-white difference in smoking: Group position theory and health

Frank Samson

SSM - Population Health, 2017, Pages 111–120

Abstract:
National data indicate that U.S. whites have a higher prevalence of smoking compared to non-whites. Group position theory and public opinion data suggest racial differences in immigration concern. This study examines whether immigration concern mediates the racial difference in smoking. Drawing on the 2012 General Social Survey, the 2012 American National Election Study, and the 2006 Portraits of American Life Study, immigration concern was associated with smoking, controlling for covariates across all three nationally representative surveys. Mediation analysis indicated that immigration concern partially mediated the higher odds of smoking among whites across all surveys. Immigration concern also presents a possible explanation for the healthy immigrant advantage and Hispanic paradox as they pertain to smoking differences.

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New Trends and Patterns in Western European Immigration to the United States: Linking European and American Databases

Elyakim Kislev

ANNALS of the American Academy of Political and Social Science, January 2017, Pages 168-189

Abstract:
This study explores the latest changes in Western European immigration to the United States by integrating several large databases: the U.S. census, the American Community Surveys, the European Social Survey, as well as the Human Development Index and Gini index. Findings show that the number of individuals born in Western Europe but with family origins elsewhere who have been immigrating to and settling in the United States is increasing. I divide the Western European population that immigrates to the United States into seven different subpopulations by their ancestries and explore the characteristics of these populations before and after immigrating to the United States. I also examine their relative success in terms of economic and labor outcomes in America, finding, for example, that some of the least advantaged immigrant groups have some of the best economic outcomes in the United States. The different self-selection and assimilation patterns among these immigrants have implications for U.S. public policy, which we identify and begin to explore.

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Changes in the Transnational Family Structures of Mexican Farm Workers in the Era of Border Militarization

Erin Hamilton & Jo Mhairi Hale

Demography, October 2016, Pages 1429–1451

Abstract:
Historically, undocumented Mexican farm workers migrated circularly, leaving family behind in Mexico on short trips to the United States. Scholars have argued that border militarization has disrupted circular migration as the costs of crossing the border lead to longer stays, increased settlement, and changing transnational family practices. Yet, no study has explored changes in the transnational family structures of Mexico-U.S. migrants that span the era of border militarization. Using data from the National Agricultural Workers Survey, we document a dramatic shift away from transnational family life (as measured by location of residence of dependent children) among undocumented Mexican farm workers and a less dramatic shift among documented Mexican farm workers in the United States between 1993 and 2012. These trends are not explained by changes in the sociodemographic characteristics of farm workers or by changing demographic conditions or rising violence in Mexico. One-half of the trend can be accounted for by lengthened duration of stay and increased connections to the United States among the undocumented, but none of the trend is explained by these measures of settlement among the documented, suggesting that some Mexican farm workers adopt new family migration strategies at first migration. Increases in border control are associated with lower likelihood that children reside in Mexico — a finding that holds up to instrumental variable techniques. Our findings confirm the argument that U.S. border militarization — a policy designed to deter undocumented migration — is instead disrupting transnational family life between Mexico and the United States and, in doing so, is creating a permanent population of undocumented migrants and their children in the United States.

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The immigration–unemployment nexus: Do education and Protestantism matter?

Jakob Madsen & Stojanka Andric

Oxford Economic Papers, January 2017, Pages 165-188

Abstract:
Using annual data from 1850 to 2010 for Argentina, Australia, Brazil, Canada, New Zealand, and the USA, this paper examines the impact of immigration and the immigrants’ educational and cultural background on unemployment. Instruments for 27 emigrating countries are used to deal with the feedback effects from unemployment to immigration. The results show that educated immigrants, in particular, and immigrants from Protestant countries significantly reduce unemployment, while poorly educated and non-Protestant immigrants enhance unemployment.

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All Politics Is Local? County Sheriffs and Localized Policies of Immigration Enforcement

Emily Farris & Mirya Holman

Political Research Quarterly, forthcoming

Abstract:
Immigration enforcement and policy making has increasingly devolved to the local level in the United States. American sheriffs present a unique opportunity to evaluate decisions made about immigration policies in the local context. In dealing with immigration concerns in their counties, sheriffs act both within the confines of federal and state mandates and as local policymakers. However, little research comprehensively assesses the role sheriffs play in immigration policy making. Using data from an original, national survey of more than five hundred elected sheriffs in the United States, we provide a broad account of sheriffs’ roles in immigration enforcement and policy making. Our research demonstrates that sheriffs’ ideology and personal characteristics shape their personal attitudes about immigrants. In turn, these attitudes play a key role in influencing local enforcement decisions. Sheriffs’ immigration attitudes relate strongest to checks of the immigration status of witnesses and victims and those stopped for traffic violations or arrested for non-violent crimes. Our results demonstrate the important role of the sheriff in understanding local variation in immigration policy and the connection between the personal preferences of representatives and policy making that can emerge across policy environments and levels of government.

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The second shift: Assimilation in housework time among immigrants

Jisoo Hwang

Review of Economics of the Household, December 2016, Pages 941–959

Abstract:
Using the 2003–2014 American Time Use Survey, this paper studies the assimilation in housework time among married US immigrants. The gender gap in housework time narrows from first to one-point-five to second generation, where assimilation is driven by a decrease in housework time of women, particularly of those from countries with low female labor supply. The findings are robust to including couple’s working hours and number of children, indicating that there is assimilation in the burden of the second shift — household work — in addition to that in immigrants’ labor market outcomes and fertility rates.

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United We Stand? The Role of Ethnic Heterogeneity in the Immigration and Violent Crime Relationship at the Neighborhood Level

Feodor Gostjev

Sociology of Race and Ethnicity, forthcoming

Abstract:
The current study makes several contributions to the extant literature on the relationship between immigration and neighborhood crime. I review classical and contemporary theories and argue that these theories make contradictory predictions regarding the moderating effects of ethnic heterogeneity on the immigration and crime relationship. Previous immigration and crime studies cannot help adjudicate between these positions because they have only considered diversity as a mediator or a control variable. I use multiple measures of diversity to conduct the first comprehensive study of the moderating effects of ethnic heterogeneity on the immigration and violent crime relationship at the neighborhood level. The results indicate that greater diversity strengthens the protective effect of immigrant residential concentration. These findings contradict the assumptions of classical theories and support the more recent immigration and crime perspectives.

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Association of Skin Color and Generation on Arrests Among Mexican-Origin Latinos

Héctor Alcalá & Mónica Montoya

Race and Justice, forthcoming

Abstract:
Arrest and interaction with the criminal justice system can have negative impacts to health and socioeconomic status. In the United States, Latinos are disproportionately arrested and jailed, when compared to their non-Latino peers. However, Latinos are not a homogeneous group. For example, generation and skin color are two factors that impact the social standing of Latinos in the United States. As a result, the present study tested if the effects of skin color on odds of arrest depended on generation among Mexican-origin Latinos living in the Greater Los Angeles County Area using data from the Immigration and International Mobility in Metropolitan Los Angeles (IIMMLA) survey (N = 1,226). Unadjusted analyses showed that arrest rates increased with generation. Multivariate results revealed that darker skin color was associated with higher odds of arrest, but only for the second generation. These findings suggest that the likelihood of being arrested for Mexican-origin Latinos is not uniform. Observed differences could set the stage for disparities in health and socio-economic status.

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Physical-psychiatric comorbidity: Implications for health measurement and the Hispanic Epidemiological Paradox

Christy Erving

Social Science Research, forthcoming

Abstract:
Few studies examine the co-occurrence of physical and psychiatric health problems (physical-psychiatric comorbidity), and whether these patterns differ across social groups. Using the National Comorbidity Survey-Replication and National Latino and Asian American Study, the current study asks: what are the patterns of physical-psychiatric comorbidity (PPC) between non-Hispanic Whites and Latino subgroups, further differentiated by gender and nativity? Does the PPC measurement approach reveal different patterns across groups compared to when only physical or only psychiatric health problems are the health outcomes of interest? To what extent do sociodemographic characteristics (SES, stress exposure, social support, immigration-related factors) explain PPC differences between groups? Results reveal that compared to U.S.-born non-Hispanic White men, island-born Puerto Rican men experience elevated PPC risk. Mexican and Other Latino women and men experience relatively lower risk of PPC relative to their non-Hispanic White counterparts. Social factors explain some of the health disadvantage of island-born Puerto Rican men, but do not explain the health advantage of Mexicans and Other Latinos.

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Self-Selection and Host Country Context in the Economic Assimilation of Political Refugees in the United States, Sweden, and Israel

Debora Pricila Birgier et al.

International Migration Review, forthcoming

Abstract:
We study the interplay between host countries' characteristics and self-selection patterns in relation to refugees' economic assimilation using a natural experiment in which immigrants from one region migrated to three destinations under similar circumstances. We focus on emigrants fleeing from Argentina and Chile during the military regimes there to the United States, Sweden, and Israel. We find that those refugees show patterns of selection and assimilation similar to those of economic immigrants. Immigrants to the United States and Israel exhibit better selection patterns and consequently faster assimilation than immigrants to Sweden even considering the positive effect of the Swedish market structure.

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For You Were Strangers in the Land of Egypt: Clergy, Religiosity, and Public Opinion toward Immigration Reform in the United States

Kevin Wallsten & Tatishe Nteta

Politics and Religion, September 2016, Pages 566-604

Abstract:
Recently, a number of influential clergy leaders have declared their support for liberal immigration reforms. Do the pronouncements of religious leaders influence public opinion on immigration? Using data from a survey experiment embedded in the 2012 Cooperative Congressional Election Study, we find that exposure to the arguments from high profile religious leaders can compel some individuals to reconsider their views on the immigration. To be more precise, we find that Methodists, Southern Baptists, and Evangelical Lutheran Church in America leaders successfully persuaded respondents who identify with these religious denominations to think differently about a path to citizenship and about the plight of undocumented immigrants. Interestingly, we also uncovered that religiosity matters in different ways for how parishioners from different religious faiths react to messages from their leaders. These findings force us to reconsider the impact that an increasingly strident clergy may be having on public opinion in general and on support for immigration reform in particular.

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Welcoming Cities: Immigration Policy at the Local Government Level

Xi Huang & Cathy Yang Liu

Urban Affairs Review, forthcoming

Abstract:
In the face of continued immigration to the United States and federal policy inertia, many local governments have started to adopt their own immigrant-related policies to cope with the newcomers. Among them, welcoming cities represent a new wave of inclusive local government responses that seeks to incorporate immigrants socially and economically and deviates from the previous policies that focus on law enforcement and legal status. In this article, we explore the rationales behind these cities’ commitment to immigrant integration by examining the effect of theory-based local demographic, economic, political, fiscal, and institutional characteristics and national network organization on local governments’ policy adoption. Our results indicate that cities that have an educated, diverse, and liberal population, are more economically troubled but fiscally sound are more likely to become welcoming cities. The Welcoming America as an umbrella organization also plays an important role in facilitating the welcoming movement.

By KEVIN LEWIS | 09:00:00 AM

Tuesday, December 27, 2016

Smart money

Hedge fund politics and portfolios

Luke DeVault & Richard Sias

Journal of Banking & Finance, February 2017, Pages 80–97

Abstract:
Consistent with the well-documented relation between political orientation and psychological traits, hedge funds’ political orientations are related to their portfolio decisions. Relative to politically conservative hedge funds, politically liberal hedge funds exhibit a preference for smaller stocks, less mature companies, volatile stocks, unprofitable companies, non-dividend paying companies, and lottery-type securities. Politically liberal hedge funds are also more likely to enter new positions or fully exit existing positions, and make larger adjustments to their U.S. equity market exposure. Our results suggest that psychological characteristics can influence the portfolio decisions of even those at the very top of the financial sophistication ladder.

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WSJ Category Kings - The impact of media attention on consumer and mutual fund investment decisions

Ron Kaniel & Robert Parham

Journal of Financial Economics, forthcoming

Abstract:
We exploit a novel natural experiment to establish a causal relation between media attention and consumer investment behavior, independent of the conveyed information. Our findings indicate a 31% local average increase in quarterly capital flows into mutual funds mentioned in a prominent Wall Street Journal “Category Kings” ranking list, compared to those funds which just missed making the list. This flow increase is about seven times larger than extra flows due to the well-documented performance-flow relation. Other funds in the same fund complex receive substantial extra flows as well, especially in smaller complexes. There is no increase in flows when the Wall Street Journal publishes similar lists absent the prominence of the Category Kings labeling. We show mutual fund managers react to the incentive created by the media effect in a strategic way predicted by theory, and present evidence for the existence of propagation mechanisms including increased fund complex advertising subsequent to having a Category King and increased efficacy of subsequent fund media mentions.

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Discrimination, Social Risk, and Portfolio Choice

Yosef Bonaparte et al.

University of Miami Working Paper, November 2016

Abstract:
This study examines whether social discrimination affects the risk perceptions and, subsequently, the investment decisions of individual investors. We conjecture that minority groups such as gays/lesbians, African Americans, and women, who are more likely to experience discrimination, over-estimate their risk exposures (i.e., they experience social risk) and invest more cautiously. Consistent with our conjecture, we find that minorities with high social risk participate less in the stock market and allocate a lower proportion of their wealth to risky assets. These results indicate that non-financial risks, such as social risk, influence financial risk-taking behavior of U.S. households.

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Does Local Religiosity Affect Organizational Risk-Taking? Evidence from the Hedge Fund Industry

Lei Gao

Iowa State University Working Paper, November 2016

Abstract:
We examine the impact of local religious beliefs on organizational risk-taking behaviors using hedge funds as a new and unique setting. We find that local religiosity is significantly negatively related to both total and idiosyncratic volatilities of hedge funds during 1996-2013, even after controlling for endogeneity using managers’ college-location religiosity. Consistent with the local preference channel, the impact of local religiosity on risk-taking is only pronounced among funds for which local managers and investors are more important, namely semi-directional, young, and small funds. Further, hedge funds located in more religious counties tend to hold less risky stocks and diversify their stock portfolios across industries, thus contributing to lower hedge fund risk-taking. Overall, our evidence suggests that local religiosity may motivate hedge fund managers to reduce risk.

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Sensation Seeking, Sports Cars, and Hedge Funds

Stephen Brown et al.

NYU Working Paper, December 2016

Abstract:
We find that hedge fund managers who own powerful sports cars take on more investment risk. Conversely, managers who own practical but unexciting cars take on less investment risk. The incremental risk taking by performance car buyers does not translate to higher returns. Consequently, they deliver lower Sharpe ratios than do car buyers who eschew performance. In addition, performance car owners are more likely to terminate their funds, engage in fraudulent behavior, load up on non-index stocks, exhibit lower R-squareds with respect to systematic factors, and succumb to overconfidence. We consider several alternative explanations and conclude that manager revealed preference in the automobile market captures the personality trait of sensation seeking, which in turn drives manager behavior in the investment arena.

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Why Does Capital No Longer Flow More to the Industries with the Best Growth Opportunities?

Dong Lee, Han Shin & René Stulz

NBER Working Paper, December 2016

Abstract:
With functionally efficient capital markets, we expect capital to flow more to the industries with the best growth opportunities. As a result, these industries should invest more and see their assets grow more relative to industries with the worst growth opportunities. We find that industries that receive more funds have a higher industry Tobin’s q until the mid-1990s, but not since then. Since industries with a higher funding rate grow more, there is a negative correlation not only between an industry’s funding rate and industry q but also between capital expenditures and industry q since the mid-1990s. We show that capital no longer flows more to the industries with the best growth opportunities because, since the middle of the 1990s, firms in high q industries increasingly repurchase shares rather than raise more funding from the capital markets.

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Global Economic Growth and Expected Returns Around the World: The End-of-the-Year Effect

Stig Møller & Jesper Rangvid

Management Science, forthcoming

Abstract:
Global economic growth at the end of the year strongly predicts returns from a wide spectrum of international assets, such as global, regional, and individual-country stocks, FX, and commodities. Global economic growth at other times of the year does not predict international returns. Low growth in the global economy at the end of the year predicts higher returns over the following year. It also predicts the global business cycle. When global economic growth at the end of the year is low, investors expect a worsening of the global business cycle and increase their required returns.

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A Proposal to Limit the Anti-Competitive Power of Institutional Investors

Eric Posner, Fiona Scott Morton & Glen Weyl

University of Chicago Working Paper, November 2016

Abstract:
Recent scholarship has shown that mutual funds and other institutional investors may cause softer competition among product market rivals because of their significant ownership stakes in competing firms in concentrated industries. While recent calls for litigation against them under Section 7 of the Clayton Act are understandable, private or indiscriminate government litigation could also cause significant disruption to equity markets because of its inherent unpredictability and would fail to eliminate most of the harms from common ownership. To minimize this disruption while achieving competitive conditions in oligopolistic markets, the Department of Justice and the Federal Trade Commission should take the lead by adopting a public enforcement policy of the Clayton Act against institutional investors. We outline such a policy in this article. Investors in firms in well-defined oligopolistic industries must choose either to limit their holdings of an industry to a small stake (no more than 1% of the total size of the industry) or to hold the shares of only a single “effective firm” per industry. Investors that violate this rule face government litigation. Using simulations based on empirical evidence, we show that under broad assumptions this rule would generate large competitive gains while having minimal negative effects on diversification and other values. The rule would also improve corporate governance by institutional investors.

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The Relevance of Broker Networks for Information Diffusion in the Stock Market

Marco Di Maggio et al.

Harvard Working Paper, October 2016

Abstract:
This paper shows that the network of relationships between brokers and institutional investors shapes the information diffusion in the stock market. We exploit trade-level data to show that trades channeled through central brokers earn significantly positive abnormal returns. This result is not due to differences in the investors that trade through central brokers or to stocks characteristics, as we control for this heterogeneity; nor is it the result of better trading execution. We find that a key driver of these excess returns is the information that central brokers gather by executing informed trades, which is then leaked to their best clients. We show that after large informed trades, a significantly higher volume of other investors execute similar trades through the same central broker, allowing them to capture higher returns in the first few days after the initial trade. The best clients of the broker executing the informed trade, and the asset managers affiliated with the broker, are among the first to benefit from the information about order flow. This evidence also suggests that an important source of alpha for fund managers is the access to better connections rather than superior skill.

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Robo-Journalism and Capital Markets

Elizabeth Blankespoor, Ed deHaan & Christina Zhu

Stanford Working Paper, November 2016

Abstract:
In 2014, the Associated Press (AP) began using algorithms to write media articles about firms’ earnings announcements. These “robo-journalism” articles synthesize information from firms’ press releases, analyst reports, and stock performance, and are widely disseminated by major news outlets a few hours after the earnings release. The articles are available for thousands of firms on a quarterly basis, many of which previously received little or no media attention. We use AP’s staggered implementation of robo-journalism to examine the effects of media synthesis and dissemination, in a setting where the articles are devoid of private information and are largely exogenous to the firm’s earnings news and disclosure choices. We find compelling evidence that automated articles increase firms’ trading volume and liquidity. We find no evidence that the articles improve or impede the speed of price discovery. Our study provides novel evidence on the impact of pure synthesis and dissemination of public information in capital markets, and initial insights on the implications of automated journalism for market efficiency.

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Did Government Regulations Lead to Inflated Credit Ratings?

Patrick Behr, Darren Kisgen & Jérôme Taillard

Management Science, forthcoming

Abstract:
Securities and Exchange Commission (SEC) regulations in 1975 gave select rating agencies increased market power by increasing both barriers to entry and the reliance on ratings for regulations. We test whether these regulations led to ratings inflation. We find that defaults and negative financial changes are more likely for firms given the same rating if the rating was assigned after the SEC action. Furthermore, firms initially rated Baa in the post-regulation period are 19% more likely to be negatively downgraded to speculative grade than firms rated Baa in the pre-regulation period. These results indicate that the market power derived from the SEC led to ratings inflation.

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The Dividend Disconnect

Samuel Hartzmark & David Solomon

University of Chicago Working Paper, November 2016

Abstract:
We show that investors trade as if they consider dividends and capital gains in separate mental accounts, without fully appreciating that dividends come at the expense of price decreases. Investors trade differently in response to each component - trading patterns such as the disposition effect are driven by price changes, with dividends being ignored or downweighted. Investors hold dividend-paying stocks longer, and are less sensitive to price changes, consistent with dividends being valued as a separate desirable attribute of stocks. The demand for dividend-paying stocks is higher when interest rates and recent market returns are lower, consistent with investors comparing dividends to other income streams and capital gains. Investors spend the proceeds of each component differently - mutual funds and institutions rarely reinvest dividends into the stocks from which they came, but instead purchase other stocks. This leads to predictable marketwide price increases on days of large aggregate dividend payouts, including stocks not paying dividends.

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Stock Market Overvaluation, Moon Shots, and Corporate Innovation

Ming Dong, David Hirshleifer & Siew Hong Teoh

University of California Working Paper, November 2016

Abstract:
We test how market overvaluation affects corporate innovative activities and success. We find that estimated stock overvaluation is very strongly associated with R&D spending, innovative output, and measures of innovation originality, generality and novelty. R&D spending is much more sensitive than capital investment to overvaluation. Although both channels operate, the effects of misvaluation on R&D spending come more from direct catering of firms to investor optimism than via equity issuance. The sensitivity of R&D and innovative output to misvaluation is greater among growth, overvalued, and high turnover firms. This evidence suggests that market overvaluation may have social value by increasing innovative output and by encouraging firms to engage in ambitious ‘moon shots.’

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Retail Short Selling and Stock Prices

Eric Kelley & Paul Tetlock

Review of Financial Studies, forthcoming

Abstract:
Using proprietary data on millions of trades by retail investors, we provide the first large-scale evidence that retail short selling predicts negative stock returns. A portfolio that mimics weekly retail shorting earns an annualized risk-adjusted return of 9%. The predictive ability of retail short selling lasts for one year and is not subsumed by institutional short selling. In contrast to institutional shorting, retail shorting best predicts returns in small stocks and those that are heavily bought by other retail investors. Our findings are consistent with retail short sellers having unique insights into the retail investor community and small firms’ fundamentals.

By KEVIN LEWIS | 09:00:00 AM

Monday, December 26, 2016

More to eat

Mere experience of low subjective socioeconomic status stimulates appetite and food intake

Bobby Cheon & Ying-Yi Hong

Proceedings of the National Academy of Sciences, forthcoming

Abstract:
Among social animals, subordinate status or low social rank is associated with increased caloric intake and weight gain. This may reflect an adaptive behavioral pattern that promotes acquisition of caloric resources to compensate for low social resources that may otherwise serve as a buffer against environmental demands. Similarly, diet-related health risks like obesity and diabetes are disproportionately more prevalent among people of low socioeconomic resources. Whereas this relationship may be associated with reduced financial and material resources to support healthier lifestyles, it remains unclear whether the subjective experience of low socioeconomic status may alone be sufficient to stimulate consumption of greater calories. Here we show that the mere feeling of lower socioeconomic status relative to others stimulates appetite and food intake. Across four studies, we found that participants who were experimentally induced to feel low (vs. high or neutral) socioeconomic status subsequently exhibited greater automatic preferences for high-calorie foods (e.g., pizza, hamburgers), as well as intake of greater calories from snack and meal contexts. Moreover, these results were observed even in the absence of differences in access to financial resources. Our results demonstrate that among humans, the experience of low social class may contribute to preferences and behaviors that risk excess energy intake. These findings suggest that psychological and physiological systems regulating appetite may also be sensitive to subjective feelings of deprivation for critical nonfood resources (e.g., social standing). Importantly, efforts to mitigate the socioeconomic gradient in obesity may also need to address the psychological experience of low social status.

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Childhood Bullying Victimization and Overweight in Young Adulthood: A Cohort Study

Jessie Baldwin et al.

Psychosomatic Medicine, November/December 2016, Pages 1094-1103

Objective: To test whether bullied children have an elevated risk of being overweight in young adulthood and whether this association is: (1) consistent with a dose-response relationship, namely, its strength increases with the chronicity of victimization; (2) consistent across different measures of overweight; (3) specific to bullying and not explained by co-occurring maltreatment; (4) independent of key potential confounders; and (5) consistent with the temporal sequence of bullying preceding overweight.

Method: A representative birth cohort of 2,232 children was followed to age 18 years as part of the Environmental Risk Longitudinal Twin Study. Childhood bullying victimization was reported by mothers and children during primary school and early secondary school. At the age-18 follow-up, we assessed a categorical measure of overweight, body mass index, and waist-hip ratio. Indicators of overweight were also collected at ages 10 and 12. Co-twin body mass and birth weight were used to index genetic and fetal liability to overweight, respectively.

Results: Bullied children were more likely to be overweight than non-bullied children at age 18, and this association was (1) strongest in chronically bullied children (odds ratio = 1.69; 95% confidence interval [CI] = 1.21-2.35); (2) consistent across measures of overweight (body mass index: b = 1.12; 95% CI = 0.37-1.87; waist-hip ratio: b = 1.76; 95% CI = 0.84-2.69); (3) specific to bullying and not explained by co-occurring maltreatment; (4) independent of child socioeconomic status, food insecurity, mental health, and cognition, and pubertal development; and (5) not present at the time of bullying victimization, and independent of childhood weight and genetic and fetal liability.

Conclusion: Childhood bullying victimization predicts overweight in young adulthood.

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Visceral adiposity and metabolic syndrome after very high-fat and low-fat isocaloric diets: A randomized controlled trial

Vivian Veum et al.

American Journal of Clinical Nutrition, forthcoming

Design: Forty-six men (aged 30-50 y) with body mass index (in kg/m2) >29 and waist circumference >98 cm were randomly assigned to a very high-fat, low-carbohydrate (VHFLC; 73% of energy fat and 10% of energy carbohydrate) or low-fat, high-carbohydrate (LFHC; 30% of energy fat and 53% of energy carbohydrate) diet for 12 wk. The diets were equal in energy (8750 kJ/d), protein (17% of energy), and food profile, emphasizing low-processed, lower-glycemic foods. Fat mass was quantified with computed tomography imaging.

Results: Recorded intake of carbohydrate and total and saturated fat in the LFHC and VHFLC groups were 51% and 11% of energy, 29% and 71% of energy, and 12% and 34% of energy, respectively, with no difference in protein and polyunsaturated fatty acids. Mean energy intake decreased by 22% and 14% in the LFHC and VHFLC groups. The diets similarly reduced waist circumference (11-13 cm), abdominal subcutaneous fat mass (1650-1850 cm3), visceral fat mass (1350-1650 cm3), and total body weight (11-12 kg). Both groups improved dyslipidemia, with reduced circulating triglycerides, but showed differential responses in total and low-density lipoprotein cholesterol (decreased in LFHC group only), and high-density lipoprotein cholesterol (increased in VHFLC group only). The groups showed similar reductions in insulin, insulin C-peptide, glycated hemoglobin, and homeostasis model assessment of insulin resistance. Notably, improvements in circulating metabolic markers in the VHFLC group mainly were observed first after 8 wk, in contrast to more acute and gradual effects in the LFHC group.

Conclusions: Consuming energy primarily as carbohydrate or fat for 3 mo did not differentially influence visceral fat and metabolic syndrome in a low-processed, lower-glycemic dietary context. Our data do not support the idea that dietary fat per se promotes ectopic adiposity and cardiometabolic syndrome in humans.

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How Strongly Does Appetite Counter Weight Loss? Quantification of the Feedback Control of Human Energy Intake

David Polidori et al.

Obesity, November 2016, Pages 2289-2295

Methods: A validated mathematical method was used to calculate energy intake changes during a 52-week placebo-controlled trial in 153 patients treated with canagliflozin, a sodium glucose co-transporter inhibitor that increases urinary glucose excretion, thereby resulting in weight loss without patients being directly aware of the energy deficit. The relationship between the body weight time course and the calculated energy intake changes was analyzed using principles from engineering control theory.

Results: It was discovered that weight loss leads to a proportional increase in appetite resulting in eating above baseline by ∼100 kcal/day per kilogram of lost weight - an amount more than threefold larger than the corresponding energy expenditure adaptations.

Conclusions: While energy expenditure adaptations have often been considered the main reason for slowing of weight loss and subsequent regain, feedback control of energy intake plays an even larger role and helps explain why long-term maintenance of a reduced body weight is so difficult.

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Body Weight Can Change How Your Emotions Are Perceived

Yujung Oh, Norah Hass & Seung-Lark Lim

PLoS ONE, November 2016

Abstract:
Accurately interpreting other’s emotions through facial expressions has important adaptive values for social interactions. However, due to the stereotypical social perception of overweight individuals as carefree, humorous, and light-hearted, the body weight of those with whom we interact may have a systematic influence on our emotion judgment even though it has no relevance to the expressed emotion itself. In this experimental study, we examined the role of body weight in faces on the affective perception of facial expressions. We hypothesized that the weight perceived in a face would bias the assessment of an emotional expression, with overweight faces generally more likely to be perceived as having more positive and less negative expressions than healthy weight faces. Using two-alternative forced-choice perceptual decision tasks, participants were asked to sort the emotional expressions of overweight and healthy weight facial stimuli that had been gradually morphed across six emotional intensity levels into one of two categories - “neutral vs. happy” (Experiment 1) and “neutral vs. sad” (Experiment 2). As predicted, our results demonstrated that overweight faces were more likely to be categorized as happy (i.e., lower happy decision threshold) and less likely to be categorized as sad (i.e., higher sad decision threshold) compared to healthy weight faces that had the same levels of emotional intensity. The neutral-sad decision threshold shift was negatively correlated with participant’s own fear of becoming fat, that is, those without a fear of becoming fat more strongly perceived overweight faces as sad relative to those with a higher fear. These findings demonstrate that the weight of the face systematically influences how its emotional expression is interpreted, suggesting that being overweight may make emotional expressions appear more happy and less sad than they really are.

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Economic preferences and fast food consumption in US adults: Insights from behavioral economics

Kerem Shuval et al.

Preventive Medicine, December 2016, Pages 204-210

Objective: To examine the relationship between economic time preferences and frequency of fast food and full-service restaurant consumption among U.S. adults.

Methods: Participants included 5871 U.S. adults who responded to a survey conducted in 2011 pertaining to the lifestyle behaviors of families and the social context of these behaviors. The primary independent variable was a measure of time preferences, an intertemporal choice assessing delay discounting. This was elicited via responses to preferences for an immediate dollar amount or a larger sum in 30 (30-day time horizon) or 60 days (60-day time horizon). Outcomes were the frequency of fast food and full-service restaurant consumption. Ordered logistic regression was performed to examine the relationship between time preferences and food consumption while adjusting for covariates (e.g. socio-demographics).

Results: Multivariable analysis revealed that higher future time preferences were significantly related to less frequent fast food intake for both the 30- and 60-day time horizon variables (P for linear trend < 0.05; both). Notably, participants with the highest future time preference were significantly less likely to consume fast food than those with very low future time preferences (30-day: OR = 0.74, 95%CI: 0.62-0.89; and 60-day: OR = 0.86, 95%CI: 0.74-1.00). In comparison, higher future time preferences were not significantly associated with full-service restaurant intake (30-day: p for linear trend = 0.73; 60-day: p for linear trend = 0.83).

Conclusions: Higher future time preferences were related to a lower frequency of fast food consumption. Utilizing concepts from behavioral economics (e.g. pre-commitment contracts) to facilitate more healthful eating is warranted using experimental studies.

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The Effects of the Graduated Driver Licensing Restrictions on Teenage Obesity

Qihua Qiu

Georgia State University Working Paper, October 2016

Abstract:
Little evidence exists on the association between driving and obesity among teenagers. In this paper, I estimate the effects of Graduated Driver Licensing (GDL) restrictions on obesity prevalence among adolescents aged 14 to 17 in the U.S. My findings suggest that a mandatory holding period, nighttime restriction, or passenger restriction significantly raises adolescents’ probability of being obese by 1.57, 1.04, and 0.94 percentage points respectively, corresponding to increases in obesity rate of 12.6%, 8.3%, and 7.5%. These effects are generally stronger among male or white teenagers. Overall, I estimate that nearly 24% of the rise in obesity among teenagers aged 14 to 17 in the U.S from 1999 to 2015 can be explained by less driving due to the GDL restrictions. In addition, I find that the restrictions reduce teenagers’ exercise frequency while increasing their time spent watching TV, which may help to explain the adverse effects on obesity.

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Beyond Supermarkets: Food Outlet Location Selection in Four U.S. Cities Over Time

Pasquale Rummo et al.

American Journal of Preventive Medicine, forthcoming

Methods: Neighborhood-level data from four U.S. cities (Birmingham, AL; Chicago, IL; Minneapolis, MN; Oakland, CA) from 1986, 1993, 1996, 2001, 2006, and 2011 were used with two-step econometric models to estimate longitudinal associations between neighborhood-level characteristics (z-scores) and the log-transformed count/km2 (density) of food outlets within real estate-derived neighborhoods. Associations were examined with lagged neighborhood-level sociodemographics and lagged density of food outlets, with interaction terms for neighborhood-level income. Data were analyzed in 2016.

Results: Neighborhood-level income at earlier years was negatively associated with the current density of convenience stores (β= -0.27, 95% CI= -0.16, -0.38, p<0.001). The percentage of neighborhood white population was negatively associated with fast food restaurant density in low-income neighborhoods (10th percentile of income: β= -0.17, 95% CI= -0.34, -0.002, p=0.05), and the density of smaller grocery stores across all income levels (β= -0.27, 95% CI= -0.45, -0.09, p=0.003). There was a lack of policy-relevant associations between the pre-existing food environment and the current density of food outlet types, including supermarkets.

Conclusions: Socioeconomically disadvantaged and minority populations may attract “unhealthy” food outlets over time. To support equal access to healthy food outlets, the availability of “less healthy” food outlets types may be relatively more important than the potential lack of supermarkets or full-service restaurants.

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Food insecurity as a driver of obesity in humans: The insurance hypothesis

Daniel Nettle, Clare Andrews & Melissa Bateson

Behavioral and Brain Sciences, forthcoming

Abstract:
Integrative explanations of why obesity is more prevalent in some sectors of the human population than others are lacking. Here, we outline and evaluate one candidate explanation, the insurance hypothesis (IH). The IH is rooted in adaptive evolutionary thinking: the function of storing fat is to provide a buffer against shortfall in the food supply. Thus, individuals should store more fat when they receive cues that access to food is uncertain. Applied to humans, this implies that an important proximate driver of obesity should be food insecurity rather than food abundance per se. We integrate several distinct lines of theory and evidence that bear on this hypothesis. We present a theoretical model that shows it is optimal to store more fat when food access is uncertain, and we review the experimental literature from non-human animals showing that fat reserves increase when access to food is restricted. We provide a meta-analysis of 125 epidemiological studies of the association between perceived food insecurity and high body weight in humans. There is a robust positive association, but it is restricted to adult women in high-income countries. We explore why this could be in light of the IH and our theoretical model. We conclude that whilst the IH alone cannot explain the distribution of obesity in the human population, it may represent a very important component of a pluralistic explanation. We also discuss insights it may offer into the developmental origins of obesity, dieting-induced weight gain, and Anorexia Nervosa.

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Parental Misclassification of Child Overweight/Obese Status: The Role of Parental Education and Parental Weight Status

John Cullinan & John Cawley

Economics & Human Biology, February 2017, Pages 92-103

Abstract:
Childhood overweight and obesity is a major public health challenge for policymakers in many countries. As the most common supervisors of children’s activities, parents have a potentially important role to play in obesity prevention. However, a precondition for parents to improve their children’s diets, encourage them to be more physically active, or take them to see a doctor about their weight is for the parent to first recognize that their child is overweight or obese. This paper examines the extent of parental misclassification of child weight status, and its correlates, focusing on the role of parental education and the parent’s own obesity status. We find evidence that, among non-obese parents, those who are better-educated report their child’s weight status more accurately, but among obese parents, the better-educated are 45.18% more likely than parents with lower secondary education to give a false negative report of their child’s overweight/obesity; this may reflect social desirability bias.

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Social Norms Shift Preferences for Healthy and Unhealthy Foods

Emma Templeton, Michael Stanton & Jamil Zaki

PLoS ONE, November 2016

Abstract:
This research investigated whether people change their food preferences and eating behavior in response to health-based social norms. One hundred twenty participants rated a series of healthy and unhealthy food images. After each rating, participants sometimes viewed a rating that ostensibly represented the average rating of previous participants. In fact, these average ratings were manipulated to convey a particular social norm. Participants either saw average ratings that favored healthy foods, favored unhealthy foods, or did not see any average ratings. Participants then re-rated those same food images after approximately ten minutes and again three days later. After the norm manipulation, participants were given the chance to take as many M&Ms as they wanted. Participants exposed to a healthy social norm consistently reported lower preferences for unhealthy foods as compared to participants in the other two conditions. This preference difference persisted three days after the social norm manipulation. However, health-based social norm manipulations did not influence the amount of M&Ms participants took. Although health-based social norm manipulations can influence stated food preferences, in this case they did not influence subsequent eating behavior.

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From Kindergarten Through Second Grade, U.S. Children's Obesity Prevalence Grows Only During Summer Vacations

Paul von Hippel & Joseph Workman

Obesity, November 2016, Pages 2296-2300

Methods: In the Early Childhood Longitudinal Study, Kindergarten Class of 2010-11, a nationally representative complex random sample of 18,170 U.S. children was followed from the fall of kindergarten in 2010 through the spring of second grade in 2013. Children's weight and heights were measured in schools each fall and spring. A multilevel growth model was used to estimate growth in mean BMI, overweight prevalence, and obesity prevalence during each summer and each school year.

Results: From the fall of kindergarten to the spring of second grade, the prevalence of obesity increased from 8.9% to 11.5%, and the prevalence of overweight increased from 23.3% to 28.7%. All of the increase in prevalence occurred during the two summer vacations; no increase occurred during any of the three school years.

Conclusions: The risk of obesity is higher when children are out of school than when they are in school.

By KEVIN LEWIS | 09:00:00 AM


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