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Wednesday, July 9, 2014

Exhausting

Quantifying the consensus on anthropogenic global warming in the literature: A re-analysis

Richard Tol
Energy Policy, forthcoming

Abstract:
A claim has been that 97% of the scientific literature endorses anthropogenic climate change (Cook et al., 2013. Environ. Res. Lett. 8, 024024). This claim, frequently repeated in debates about climate policy, does not stand. A trend in composition is mistaken for a trend in endorsement. Reported results are inconsistent and biased. The sample is not representative and contains many irrelevant papers. Overall, data quality is low. Cook׳s validation test shows that the data are invalid. Data disclosure is incomplete so that key results cannot be reproduced or tested.

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Energy Investments under Climate Policy: A Comparison of Global Models

David McCollum et al.
Climate Change Economics, November 2013

Abstract:
The levels of investment needed to mobilize an energy system transformation and mitigate climate change are not known with certainty. This paper aims to inform the ongoing dialogue and in so doing to guide public policy and strategic corporate decision making. Within the framework of the LIMITS integrated assessment model comparison exercise, we analyze a multi-IAM ensemble of long-term energy and greenhouse gas emissions scenarios. Our study provides insight into several critical but uncertain areas related to the future investment environment, for example in terms of where capital expenditures may need to flow regionally, into which sectors they might be concentrated, and what policies could be helpful in spurring these financial resources. We find that stringent climate policies consistent with a 2°C climate change target would require a considerable upscaling of investments into low-carbon energy and energy efficiency, reaching approximately $45 trillion (range: $30–$75 trillion) cumulative between 2010 and 2050, or about $1.1 trillion annually. This represents an increase of some $30 trillion ($10–$55 trillion), or $0.8 trillion per year, beyond what investments might otherwise be in a reference scenario that assumes the continuation of present and planned emissions-reducing policies throughout the world. In other words, a substantial "clean-energy investment gap" of some $800 billion/yr exists — notably on the same order of magnitude as present-day subsidies for fossil energy and electricity worldwide ($523 billion). Unless the gap is filled rather quickly, the 2°C target could potentially become out of reach.

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It's political: How the salience of one's political identity changes climate change beliefs and policy support

Kerrie Unsworth & Kelly Fielding
Global Environmental Change, July 2014, Pages 131–137

Abstract:
Previous research has demonstrated a striking difference in climate change beliefs and policy support between people who identify with the right-wing of politics and with the left-wing of politics. But are we destined to continue with this divergence? We suggest that there is movement around these differences based on the politicization of climate change and we conducted two experimental studies with 126 and 646 people, respectively, to examine this effect. We found that those people whose political identity was made salient were less likely to believe in an anthropogenic cause of climate change and less likely to support government climate change policies than those whose identity was not made salient; particularly when those people were aligned with the right-wing of politics. The results demonstrate the importance of the salience of one's political identity in determining attitudes and beliefs even for scientific facts such as climate change. Our research also identifies some ways forward in dealing with climate change-based on depoliticizing the issue.

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Trends in Extreme U.S. Temperatures

Jaechoul Lee, Shanghong Li & Robert Lund
Journal of Climate, June 2014, Pages 4209–4225

Abstract:
This paper develops trend estimation techniques for monthly maximum and minimum temperature time series observed in the 48 conterminous United States over the last century. While most scientists concur that this region has warmed on aggregate, there is no a priori reason to believe that temporal trends in extremes and averages will exhibit the same patterns. Indeed, under minor regularity conditions, the sample partial sum and maximum of stationary time series are asymptotically independent (statistically). Previous authors have suggested that minimum temperatures are warming faster than maximum temperatures in the United States; such an aspect can be investigated via the methods discussed in this study. Here, statistical models with extreme value and changepoint features are used to estimate trends and their standard errors. A spatial smoothing is then done to extract general structure. The results show that monthly maximum temperatures are not often greatly changing — perhaps surprisingly, there are many stations that show some cooling. In contrast, the minimum temperatures show significant warming. Overall, the southeastern United States shows the least warming (even some cooling), and the western United States, northern Midwest, and New England have experienced the most warming.

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Climate Exposure of US National Parks in a New Era of Change

William Monahan & Nicholas Fisichelli
PLoS ONE, July 2014

Abstract:
US national parks are challenged by climate and other forms of broad-scale environmental change that operate beyond administrative boundaries and in some instances are occurring at especially rapid rates. Here, we evaluate the climate change exposure of 289 natural resource parks administered by the US National Park Service (NPS), and ask which are presently (past 10 to 30 years) experiencing extreme (<5th percentile or >95th percentile) climates relative to their 1901–2012 historical range of variability (HRV). We consider parks in a landscape context (including surrounding 30 km) and evaluate both mean and inter-annual variation in 25 biologically relevant climate variables related to temperature, precipitation, frost and wet day frequencies, vapor pressure, cloud cover, and seasonality. We also consider sensitivity of findings to the moving time window of analysis (10, 20, and 30 year windows). Results show that parks are overwhelmingly at the extreme warm end of historical temperature distributions and this is true for several variables (e.g., annual mean temperature, minimum temperature of the coldest month, mean temperature of the warmest quarter). Precipitation and other moisture patterns are geographically more heterogeneous across parks and show greater variation among variables. Across climate variables, recent inter-annual variation is generally well within the range of variability observed since 1901. Moving window size has a measureable effect on these estimates, but parks with extreme climates also tend to exhibit low sensitivity to the time window of analysis. We highlight particular parks that illustrate different extremes and may facilitate understanding responses of park resources to ongoing climate change. We conclude with discussion of how results relate to anticipated future changes in climate, as well as how they can inform NPS and neighboring land management and planning in a new era of change.

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Optimal CO2 mitigation under damage risk valuation

Benjamin Crost & Christian Traeger
Nature Climate Change, July 2014, Pages 631–636

Abstract:
The current generation has to set mitigation policy under uncertainty about the economic consequences of climate change. This uncertainty governs both the level of damages for a given level of warming, and the steepness of the increase in damage per warming degree. Our model of climate and the economy is a stochastic version of a model employed in assessing the US Social Cost of Carbon (DICE). We compute the optimal carbon taxes and CO2 abatement levels that maximize welfare from economic consumption over time under different risk states. In accordance with recent developments in finance, we separate preferences about time and risk to improve the model’s calibration of welfare to observed market interest. We show that introducing the modern asset pricing framework doubles optimal abatement and carbon taxation. Uncertainty over the level of damages at a given temperature increase can result in a slight increase of optimal emissions as compared to using expected damages. In contrast, uncertainty governing the steepness of the damage increase in temperature results in a substantially higher level of optimal mitigation.

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Nonlinear permanent migration response to climatic variations but minimal response to disasters

Pratikshya Bohra-Mishra, Michael Oppenheimer & Solomon Hsiang
Proceedings of the National Academy of Sciences, 8 July 2014, Pages 9780–9785

Abstract:
We present a microlevel study to simultaneously investigate the effects of variations in temperature and precipitation along with sudden natural disasters to infer their relative influence on migration that is likely permanent. The study is made possible by the availability of household panel data from Indonesia with an exceptional tracking rate combined with frequent occurrence of natural disasters and significant climatic variations, thus providing a quasi-experiment to examine the influence of environment on migration. Using data on 7,185 households followed over 15 y, we analyze whole-household, province-to-province migration, which allows us to understand the effects of environmental factors on permanent moves that may differ from temporary migration. The results suggest that permanent migration is influenced by climatic variations, whereas episodic disasters tend to have much smaller or no impact on such migration. In particular, temperature has a nonlinear effect on migration such that above 25 °C, a rise in temperature is related to an increase in outmigration, potentially through its impact on economic conditions. We use these results to estimate the impact of projected temperature increases on future permanent migration. Though precipitation also has a similar nonlinear effect on migration, the effect is smaller than that of temperature, underscoring the importance of using an expanded set of climatic factors as predictors of migration. These findings on the minimal influence of natural disasters and precipitation on permanent moves supplement previous findings on the significant role of these variables in promoting temporary migration.

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Identifying hot spots of security vulnerability associated with climate change in Africa

Joshua Busby et al.
Climatic Change, June 2014, Pages 717-731

Abstract:
Given its high dependence on rainfed agriculture and its comparatively low adaptive capacity, Africa is frequently invoked as especially vulnerable to climate change. Within Africa, there is likely to be considerable variation in vulnerability to climate change both between and within countries. This paper seeks to advance the agenda of identifying the hot spots of what we term “climate security” vulnerability, areas where the confluence of vulnerabilities could put large numbers of people at risk of death from climate-related hazards. This article blends the expertise of social scientists and climate scientists. It builds on a model of composite vulnerability that incorporates four “baskets” or processes that are thought to contribute to vulnerability including: (1) physical exposure, (2) population density, (3) household and community resilience, and (4) governance and political violence. Whereas previous iterations of the model relied on historical physical exposure data of natural hazards, this paper uses results from regional model simulations of African climate in the late 20th century and mid-21st century to develop measures of extreme weather events — dry days, heat wave events, and heavy rainfall days — coupled with an indicator of low-lying coastal elevation. For the late 20th century, this mapping process reveals the most vulnerable areas are concentrated in Chad, the Democratic Republic of the Congo, Niger, Somalia, Sudan, and South Sudan, with pockets in Burkina Faso, Ethiopia, Guinea, Mauritania, and Sierra Leone. The mid 21st century projection shows more extensive vulnerability throughout the Sahel, including Burkina Faso, Chad, Mali, northern Nigeria, Niger, and across Sudan.

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The windy city: Property value impacts of wind turbines in an urban setting

Corey Lang, James Opaluch & George Sfinarolakis
Energy Economics, July 2014, Pages 413–421

Abstract:
This paper examines the impact of wind turbines on house values in Rhode Island. In contrast to wind farms surrounded by sparse development, in Rhode Island single turbines have been built in relatively high population dense areas. As a result, we observe 48,554 single-family, owner-occupied transactions within five miles of a turbine site, including 3254 within one mile, which is far more than most related studies. We estimate hedonic difference-in-differences models that allow for impacts of wind turbines by proximity, viewshed, and contrast with surrounding development. Across a wide variety of specifications, the results suggest that wind turbines have no statistically significant negative impacts on house prices, in either the post public announcement phase or post construction phase. Further, the lower bound of statistically possible impacts is still outweighed by the positive externalities generated from CO2 mitigation.

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Probabilistic 21st and 22nd century sea-level projections at a global network of tide gauge sites

Robert Kopp et al.
Earth's Future, forthcoming

Abstract:
Sea-level rise due to both climate change and non-climatic factors threatens coastal settlements, infrastructure and ecosystems. Projections of mean global sea level (GSL) rise provide insufficient information to plan adaptive responses; local decisions require local projections that accommodate different risk tolerances and time frames and that can be linked to storm surge projections. Here we present a global set of local sea level (LSL) projections to inform decisions on timescales ranging from the coming decades through the 22nd century. We provide complete probability distributions, informed by a combination of expert community assessment, expert elicitation, and process modeling. Between the years 2000 and 2100, we project a very likely (90% probability) GSL rise of 0.5–1.2 m under Representative Concentration Pathway (RCP) 8.5, 0.4–0.9 m under RCP 4.5, and 0.3–0.8 m under RCP 2.6. Site-to-site differences in LSL projections are due to varying non-climatic background uplift or subsidence, oceanographic effects, and spatially-variable responses of the geoid and the lithosphere to shrinking land ice. The Antarctic ice sheet (AIS) constitutes a growing share of variance in GSL and LSL projections. In the global average and at many locations, it is the dominant source of variance in late 21st century projections, though at some sites oceanographic processes contribute the largest share throughout the century. LSL rise dramatically reshapes flood risk, greatly increasing the expected number of ‘1-in-10’ and ‘1-in-100’ year events.

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World drought frequency, duration, and severity for 1951–2010

Jonathan Spinoni et al.
International Journal of Climatology, 30 June 2014, Pages 2792–2804

Abstract:
In the context of climate change characterized by rising temperature and more extreme precipitation regimes, drought is one of the most relevant natural disasters. This paper presents maps of global drought frequency, duration, and severity for the periods 1951–1970, 1971–1990, and 1991–2010, to give an overview of the respective drought hot spots. Drought frequency is defined as the number of drought events occurred, drought duration as the number of months in drought conditions, and drought severity as the sum of the integral area below zero of each event. Because drought is mainly driven by rainfall deficits, we chose the Standardized Precipitation Index (SPI) as the base indicator to derive drought-related quantities. SPI-12 has been calculated on a monthly basis using a Gamma distribution fitted to a 60-year baseline period (1951–2010). Global grids (0.5° × 0.5°) of the Full Data Reanalysis Version 6.0 dataset provided by the Global Precipitation Climatology Centre (GPCC) have been used as precipitation data input. The regions most exposed to prolonged and severe droughts during 1951–1970 were the Central United States, the Argentinian Pampas, Russia, and Central Australia; during 1971–1990 they were Southern Chile, the Sahel, and Siberia; during 1991–2010 they were the Amazon Forest, the Congo River Basin, Mongolia, North Eastern China, and Borneo. A linear trend analysis between 1951 and 2010 shows a small global increase in each drought component, but drought frequency decreased in the Northern Hemisphere. The increase in drought frequency, duration, and severity is found to be significant in Africa, Eastern Asia, Mediterranean region, and Southern Australia, while the Americas and Russia show a decrease in each drought component.

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Necessity as the Mother of Invention: Innovative Responses to Natural Disasters

Qing Miao & David Popp
Journal of Environmental Economics and Management, forthcoming

Abstract:
How do innovators respond to the shock of a natural disaster? Do natural disasters spur technical innovations that can reduce the risk of future hazards? This paper examines the impact of three types of natural disasters — floods, droughts and earthquakes — on the innovation of their respective mitigation technologies. Using patent and disaster data, our study is the first to empirically examine adaptation responses across multiple sectors at the country level. Considering the potential endogeneity of disaster damages, we use meteorological and geophysical data to create hazard intensity measures as instrumental variables. Overall, we show that natural disasters lead to more risk-mitigating innovations, while the degree of influence varies across different types of disasters and technologies.

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Dietary greenhouse gas emissions of meat-eaters, fish-eaters, vegetarians and vegans in the UK

Peter Scarborough et al.
Climatic Change, July 2014, Pages 179-192

Abstract:
The production of animal-based foods is associated with higher greenhouse gas (GHG) emissions than plant-based foods. The objective of this study was to estimate the difference in dietary GHG emissions between self-selected meat-eaters, fish-eaters, vegetarians and vegans in the UK. Subjects were participants in the EPIC-Oxford cohort study. The diets of 2,041 vegans, 15,751 vegetarians, 8,123 fish-eaters and 29,589 meat-eaters aged 20–79 were assessed using a validated food frequency questionnaire. Comparable GHG emissions parameters were developed for the underlying food codes using a dataset of GHG emissions for 94 food commodities in the UK, with a weighting for the global warming potential of each component gas. The average GHG emissions associated with a standard 2,000 kcal diet were estimated for all subjects. ANOVA was used to estimate average dietary GHG emissions by diet group adjusted for sex and age. The age-and-sex-adjusted mean (95 % confidence interval) GHG emissions in kilograms of carbon dioxide equivalents per day (kgCO2e/day) were 7.19 (7.16, 7.22) for high meat-eaters ( > = 100 g/d), 5.63 (5.61, 5.65) for medium meat-eaters (50-99 g/d), 4.67 (4.65, 4.70) for low meat-eaters ( < 50 g/d), 3.91 (3.88, 3.94) for fish-eaters, 3.81 (3.79, 3.83) for vegetarians and 2.89 (2.83, 2.94) for vegans. In conclusion, dietary GHG emissions in self-selected meat-eaters are approximately twice as high as those in vegans. It is likely that reductions in meat consumption would lead to reductions in dietary GHG emissions.

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Net carbon uptake has increased through warming-induced changes in temperate forest phenology

Trevor Keenan et al.
Nature Climate Change, July 2014, Pages 598–604

Abstract:
The timing of phenological events exerts a strong control over ecosystem function and leads to multiple feedbacks to the climate system. Phenology is inherently sensitive to temperature (although the exact sensitivity is disputed) and recent warming is reported to have led to earlier spring, later autumn and increased vegetation activity. Such greening could be expected to enhance ecosystem carbon uptake, although reports also suggest decreased uptake for boreal forests. Here we assess changes in phenology of temperate forests over the eastern US during the past two decades, and quantify the resulting changes in forest carbon storage. We combine long-term ground observations of phenology, satellite indices, and ecosystem-scale carbon dioxide flux measurements, along with 18 terrestrial biosphere models. We observe a strong trend of earlier spring and later autumn. In contrast to previous suggestions we show that carbon uptake through photosynthesis increased considerably more than carbon release through respiration for both an earlier spring and later autumn. The terrestrial biosphere models tested misrepresent the temperature sensitivity of phenology, and thus the effect on carbon uptake. Our analysis of the temperature–phenology–carbon coupling suggests a current and possible future enhancement of forest carbon uptake due to changes in phenology. This constitutes a negative feedback to climate change, and is serving to slow the rate of warming.

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Dependence of US hurricane economic loss on maximum wind speed and storm size

Alice Zhai & Jonathan Jiang
Environmental Research Letters, June 2014

Abstract:
Many empirical hurricane economic loss models consider only wind speed and neglect storm size. These models may be inadequate in accurately predicting the losses of super-sized storms, such as Hurricane Sandy in 2012. In this study, we examined the dependences of normalized US hurricane loss on both wind speed and storm size for 73 tropical cyclones that made landfall in the US from 1988 through 2012. A multi-variate least squares regression is used to construct a hurricane loss model using both wind speed and size as predictors. Using maximum wind speed and size together captures more variance of losses than using wind speed or size alone. It is found that normalized hurricane loss (L) approximately follows a power law relation with maximum wind speed (Vmax) and size (R), L = 10^c Vmax^a R^b , with c determining an overall scaling factor and the exponents a and b generally ranging between 4–12 and 2–4 respectively. Both a and b tend to increase with stronger wind speed. Hurricane Sandy's size was about three times of the average size of all hurricanes analyzed. Based on the bi-variate regression model that explains the most variance for hurricanes, Hurricane Sandy's loss would be approximately 20 times smaller if its size were of the average size with maximum wind speed unchanged. It is important to revise conventional empirical hurricane loss models that are only dependent on maximum wind speed to include both maximum wind speed and size as predictors.

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South Korean energy scenarios show how nuclear power can reduce future energy and environmental costs

Sanghyun Hong, Corey Bradshaw & Barry Brook
Energy Policy, forthcoming

Abstract:
South Korea is an important case study for understanding the future role of nuclear power in countries with on-going economic growth, and limited renewable energy resources. We compared quantitatively the sustainability of two ‘future-mapping’ exercises (the ‘Governmental’ scenario, which relies on fossil fuels, and the Greenpeace scenario, which emphasises renewable energy and excludes nuclear power). The comparison was based on a range of environmental and technological perspectives, and contrasted against two additional nuclear scenarios that instead envisage a dominant role for nuclear energy. Sustainability metrics included energy costs, external costs (greenhouse-gas emissions, air pollutants, land transformation, water consumption and discharge, and safety) and additional costs. The nuclear-centred scenarios yielded the lowest total cost per unit of final energy consumption by 2050 ($14.37 GJ−1), whereas the Greenpeace scenario has the highest ($25.36 GJ−1). We used probabilistic simulations based on multi-factor distributional sampling of impact and cost metrics to estimate the overlapping likelihoods among scenarios to understand the effect of parameter uncertainty on the integrated recommendations. Our simulation modelling implies that, despite inherent uncertainties, pursuing a large-scale expansion of nuclear-power capacity offers the most sustainable pathway for South Korea, and that adopting a nuclear-free pathway will be more costly and produce more greenhouse-gas emissions.

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Cooperating with the future

Oliver Hauser et al.
Nature, forthcoming

Abstract:
Overexploitation of renewable resources today has a high cost on the welfare of future generations. Unlike in other public goods games, however, future generations cannot reciprocate actions made today. What mechanisms can maintain cooperation with the future? To answer this question, we devise a new experimental paradigm, the ‘Intergenerational Goods Game’. A line-up of successive groups (generations) can each either extract a resource to exhaustion or leave something for the next group. Exhausting the resource maximizes the payoff for the present generation, but leaves all future generations empty-handed. Here we show that the resource is almost always destroyed if extraction decisions are made individually. This failure to cooperate with the future is driven primarily by a minority of individuals who extract far more than what is sustainable. In contrast, when extractions are democratically decided by vote, the resource is consistently sustained. Voting is effective for two reasons. First, it allows a majority of cooperators to restrain defectors. Second, it reassures conditional cooperators that their efforts are not futile. Voting, however, only promotes sustainability if it is binding for all involved. Our results have implications for policy interventions designed to sustain intergenerational public goods.

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Climate Change Beliefs and Perceptions of Weather-Related Changes in the United Kingdom

Andrea Taylor, Wändi Bruine de Bruin & Suraje Dessai
Risk Analysis, forthcoming

Abstract:
Public perception research in different countries has suggested that real and perceived periods of high temperature strengthen people's climate change beliefs. Such findings raise questions about the climate change beliefs of people in regions with moderate climates. Relatively little is known about whether public concerns about climate change may also be associated with perceived changes in other weather-related events, such as precipitation or flooding. We examine the relationship between perceived changes in weather-related events and climate change beliefs among U.K. residents at a time of below-average winter temperatures and recent flooding. National survey data (n = 1,848) revealed that heat waves and hot summers were perceived to have become less common during respondents’ lifetimes, while flooding, periods of heavy rainfall, coastal erosions, and mild winters were perceived to have increased in frequency and cold winters were perceived to be unchanged. Although perceived changes in hot-weather-related events were positively associated with climate change beliefs, perceived changes in wet-weather-related events were found to be an even stronger predictor. Self-reported experience of “flooding in own area” and “heat-wave discomfort” also significantly contributed to climate change beliefs. These findings highlight the importance of salient weather-related events and experiences in the formation of beliefs about climate change. We link our findings to research in judgment and decision making, and propose that those wishing to engage with the public on the issue of climate change should not limit their focus to heat.

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Steering the Climate System: Using Inertia to Lower the Cost of Policy

Derek Lemoine & Ivan Rudik
University of Arizona Working Paper, May 2014

Abstract:
Conventional wisdom holds that the efficient way to achieve a climate target is to implement a carbon price that increases exponentially. We show that an exponential path is not efficient when climate targets are expressed in terms of temperature. In that case, the least-cost policy path deviates from an exponential trajectory in order to take advantage of the climate system's inertia. Carbon dioxide temporarily overshoots the steady-state level consistent with the temperature limit, and the efficient carbon price follows an inverse-U-shaped path. We find that a policy to limit warming to 2 degrees C can be 2-9 times cheaper than implied by the conventionally assumed policy path. Integrated assessment models that assume exponentially increasing carbon prices may be overestimating the minimum cost of a temperature target by billions of dollars.

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Short-Lived Climate Pollution

R.T. Pierrehumbert
Annual Review of Earth and Planetary Sciences, 2014, Pages 341-379

Abstract:
Although carbon dioxide emissions are by far the most important mediator of anthropogenic climate disruption, a number of shorter-lived substances with atmospheric lifetimes of under a few decades also contribute significantly to the radiative forcing that drives climate change. In recent years, the argument that early and aggressive mitigation of the emission of these substances or their precursors forms an essential part of any climate protection strategy has gained a considerable following. There is often an implication that such control can in some way make up for the current inaction on carbon dioxide emissions. The prime targets for mitigation, known collectively as short-lived climate pollution (SLCP), are methane, hydrofluo-rocarbons, black carbon, and ozone. A re-examination of the issues shows that the benefits of early SLCP mitigation have been greatly exaggerated, largely because of inadequacies in the methodologies used to compare the climate effects of short-lived substances with those of CO2, which causes nearly irreversible climate change persisting millennia after emissions cease. Eventual mitigation of SLCP can make a useful contribution to climate protection, but there is little to be gained by implementing SLCP mitigation before stringent carbon dioxide controls are in place and have caused annual emissions to approach zero. Any earlier implementation of SLCP mitigation that substitutes to any significant extent for carbon dioxide mitigation will lead to a climate irreversibly warmer than will a strategy with delayed SLCP mitigation. SLCP mitigation does not buy time for implementation of stringent controls on CO2 emissions.

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Tropical countries may be willing to pay more to protect their forests

Jeffrey Vincent et al.
Proceedings of the National Academy of Sciences, forthcoming

Abstract:
Inadequate funding from developed countries has hampered international efforts to conserve biodiversity in tropical forests. We present two complementary research approaches that reveal a significant increase in public demand for conservation within tropical developing countries as those countries reach upper-middle-income (UMI) status. We highlight UMI tropical countries because they contain nearly four-fifths of tropical primary forests, which are rich in biodiversity and stored carbon. The first approach is a set of statistical analyses of various cross-country conservation indicators, which suggests that protective government policies have lagged behind the increase in public demand in these countries. The second approach is a case study from Malaysia, which reveals in a more integrated fashion the linkages from rising household income to increased household willingness to pay for conservation, nongovernmental organization activity, and delayed government action. Our findings suggest that domestic funding in UMI tropical countries can play a larger role in (i) closing the funding gap for tropical forest conservation, and (ii) paying for supplementary conservation actions linked to international payments for reduced greenhouse gas emissions from deforestation and forest degradation in tropical countries.

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Optimal Directions for Directional Distance Functions: An Exploration of Potential Reductions of Greenhouse Gases

Benjamin Hampf & Jens Krüger
American Journal of Agricultural Economics, forthcoming

Abstract:
This article explores the reduction potential of greenhouse gases for major pollution-emitting countries of the world using nonparametric productivity measurement methods and directional distance functions. In contrast to the existing literature, we apply optimization methods to endogenously determine optimal directions for the efficiency analysis. These directions represent the compromise of output enhancement and emissions reduction. The results show that for reasonable directions the adoption of best practices would lead to sizable emission reductions in a range of approximately 20% compared with current levels.

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Increased frequency of extreme Indian Ocean Dipole events due to greenhouse warming

Wenju Cai et al.
Nature, 12 June 2014, Pages 254–258

Abstract:
The Indian Ocean dipole is a prominent mode of coupled ocean–atmosphere variability, affecting the lives of millions of people in Indian Ocean rim countries. In its positive phase, sea surface temperatures are lower than normal off the Sumatra–Java coast, but higher in the western tropical Indian Ocean. During the extreme positive-IOD (pIOD) events of 1961, 1994 and 1997, the eastern cooling strengthened and extended westward along the equatorial Indian Ocean through strong reversal of both the mean westerly winds and the associated eastward-flowing upper ocean currents. This created anomalously dry conditions from the eastern to the central Indian Ocean along the Equator and atmospheric convergence farther west, leading to catastrophic floods in eastern tropical African countries but devastating droughts in eastern Indian Ocean rim countries. Despite these serious consequences, the response of pIOD events to greenhouse warming is unknown. Here, using an ensemble of climate models forced by a scenario of high greenhouse gas emissions (Representative Concentration Pathway 8.5), we project that the frequency of extreme pIOD events will increase by almost a factor of three, from one event every 17.3 years over the twentieth century to one event every 6.3 years over the twenty-first century. We find that a mean state change — with weakening of both equatorial westerly winds and eastward oceanic currents in association with a faster warming in the western than the eastern equatorial Indian Ocean — facilitates more frequent occurrences of wind and oceanic current reversal. This leads to more frequent extreme pIOD events, suggesting an increasing frequency of extreme climate and weather events in regions affected by the pIOD.

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Rapid subsurface warming and circulation changes of Antarctic coastal waters by poleward shifting winds

Paul Spence et al.
Geophysical Research Letters, forthcoming

Abstract:
The southern hemisphere westerly winds have been strengthening and shifting poleward since the 1950s. This wind trend is projected to persist under continued anthropogenic forcing, but the impact of the changing winds on Antarctic coastal heat distribution remains poorly understood. Here we show that a poleward wind shift at the latitudes of the Antarctic Peninsula can produce an intense warming of subsurface coastal waters that exceeds 2 °C at 200-700 m depth. The model simulated warming results from a rapid advective heat flux induced by weakened near-shore Ekman pumping, and is associated with weakened coastal currents. This analysis shows that anthropogenically induced wind changes can dramatically increase the temperature of ocean water at ice sheet grounding lines and at the base of floating ice shelves around Antarctica, with potentially significant ramifications for global sea level rise.

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Trends in U.S. Total Cloud Cover from a Homogeneity-Adjusted Dataset

Melissa Free & Bomin Sun
Journal of Climate, July 2014, Pages 4959–4969

Abstract:
Cloud cover data from ground-based weather observers can be an important source of climate information, but the record of such observations in the United States is disrupted by the introduction of automated observing systems and other artificial shifts that interfere with our ability to assess changes in cloudiness at climate time scales. A new dataset using 54 National Weather Service (NWS) and 101 military stations that continued to make human-augmented cloud observations after the 1990s has been adjusted using statistical changepoint detection and visual scrutiny. The adjustments substantially reduce the trends in U.S. mean total cloud cover while increasing the agreement between the cloud cover time series and those of physically related climate variables. For 1949–2009, the adjusted time series give a trend in U.S. mean total cloud of 0.11% ± 0.22% decade−1 for the military data, 0.55% ± 0.24% decade−1 for the NWS data, and 0.31% ± 0.22% decade−1 for the combined dataset. These trends are less than one-half of those in the original data. For 1976–2004, the original data give a significant increase but the adjusted data show an insignificant trend from −0.17% decade−1 (military stations) to 0.66% decade−1 (NWS stations). Trends have notable regional variability, with the northwest United States showing declining total cloud cover for all time periods examined, while trends for most other regions are positive. Differences between trends in the adjusted datasets from military stations and NWS stations may be rooted in the difference in data source and reflect the uncertainties in the homogeneity adjustment process.

By KEVIN LEWIS | 09:00:00 AM

Tuesday, July 8, 2014

Using

Punishment and Deterrence: Evidence from Drunk Driving

Benjamin Hansen
NBER Working Paper, June 2014

Abstract:
Traditional economic models of criminal behavior have straightforward predictions: raising the expected cost of crime via apprehension probabilities or punishments decreases crime. I test the effect of harsher punishments on deterring driving under the influence (DUI). In this setting, punishments are determined by strict rules on Blood Alcohol Content (BAC) and previous offenses. Regression discontinuity derived estimates suggest that having a BAC above the DUI threshold reduces recidivism by up to 2 percentage points (17 percent). Likewise having a BAC over the aggravated DUI threshold reduces recidivism by an additional percentage point (9 percent). The results suggest that recent recommendations to lower the BAC limit to .05 would save relatively few lives, while increasing marginal punishments and sanctions monotonically along the BAC distribution would more effectively deter the drunk drivers most likely to be involved in fatal crashes.

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Cannabis depenalisation, drug consumption and crime - Evidence from the 2004 cannabis declassification in the UK

Nils Braakmann & Simon Jones
Social Science & Medicine, August 2014, Pages 29-37

Abstract:
This paper investigates the link between cannabis depenalisation and crime using individual-level panel data for England and Wales from 2003 to 2006. We exploit the declassification of cannabis in the UK in 2004 as a natural experiment. Specifically, we use the fact that the declassification changed expected punishments differently in various age groups due to thresholds in British criminal law and employ a difference-in-differences type design using data from the longitudinal version of the Offending, Crime and Justice Survey. Our findings suggest essentially no increases in either cannabis consumption, consumption of other drugs, crime and other forms of risky behaviour.

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Adolescent Drinking and Motivated Decision-Making: A Cotwin-Control Investigation with Monozygotic Twins

Stephen Malone et al.
Behavior Genetics, July 2014, Pages 407-418

Abstract:
The present study used a monozygotic (MZ) cotwin-control (CTC) design to investigate associations between alcohol use and performance on the Iowa gambling task (IGT) in a sample of 96 adolescents (half female). The MZ CTC design is well suited to shed light on whether poor decision-making, as reflected on IGT performance, predisposes individuals to abuse substances or is a consequence of use. Participants completed structural MRI scans as well, from which we derived gray matter volumes for cortical and subcortical regions involved in IGT performance and reduced in adolescents with problematic alcohol use. Drinking was associated with poorer task performance and with reduced volume of the left lateral orbital-frontal cortex. CTC analyses indicated that the former was due to differences between members of twin pairs in alcohol use (suggesting a causal effect of alcohol), whereas the latter was due to factors shared by twins (consistent with a pre-existing vulnerability for use). Although these preliminary findings warrant replication, they suggest that normative levels of alcohol use may diminish the quality of adolescent decision-making and thus have potentially important public health implications.

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Neuroendocrine and cardiovascular reactions to acute psychological stress are attenuated in smokers

Annie Ginty et al.
Psychoneuroendocrinology, October 2014, Pages 87-97

Abstract:
A number of studies have now examined the association between smoking and the magnitude of physiological reactions to acute psychological stress. However, no large-scale study has demonstrated this association incorporating neuroendocrine in addition to cardiovascular reactions to stress. The present study compared neuroendocrine and cardiovascular reactions to acute stress exposure in current smokers, ex-smokers, and those who had never smoked in a large community sample. Salivary cortisol, systolic and diastolic blood pressure, heart rate and frequency components of systolic blood pressure and heart rate variability were measured at rest and during exposure to a battery of three standardised stress tasks in 480 male and female participants from the Dutch Famine Birth Cohort Study. Current smokers had significantly lower cortisol, systolic and diastolic blood pressure, and heart rate reactions to stress. They also exhibited smaller changes in the low frequency band of blood pressure variability compared to ex- and never smokers. There were no group differences in stress related changes in overall heart rate variability as measured by the root mean square of successive interbeat interval differences or in the high frequency band of heart rate variability. In all cases, effects remained significant following statistical adjustment for a host of variables likely to be associated with reactivity and/or smoking. In secondary analyses, there were no significant associations between lifetime cigarette consumption or current consumption and stress reactivity. In conclusion, compared to non-smokers and ex-smokers, current smokers exhibited attenuated neuroendocrine and cardiovascular reactions to acute psychological stress. Among smokers and ex-smokers, there is no evidence that lifetime exposure was associated with physiological reactions to acute stress, nor that current levels of cigarette consumption were associated with reactivity. It is possible, then, that attenuated stress reactivity may be a marker for an increased susceptibility to take up and/or maintain smoking behaviour once initiated.

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Gambling with Our Health: Smoke-Free Policy Would Not Reduce Tribal Casino Patronage

Isaiah "Shaneequa" Brokenleg et al.
American Journal of Preventive Medicine, forthcoming

Purpose: To conduct a tribally-led assessment to identify the characteristics of casino patrons at Lake of the Torches Resort Casino in Lac du Flambeau WI and their preferences for a smoke-free casino.

Methods: A survey was administered from April to August 2011 to a stratified random sample of 957 members of the casino players club to assess their preferences for a smoke-free casino. These members were categorized into three groups: those who reported being likely to (1) visit more; (2) visit less; or (3) visit the same if the casino prohibited smoking. They were characterized by age, education, sex, race/ethnicity, annual income, players club level, and reasons for visiting the casino. Statistical analyses were conducted on weighted data in October to December 2011. Weighted logistic regression was calculated to control for potential confounding of patron characteristics.

Results: Of the 957 surveyed patrons, 520 (54%) patrons were likely to visit more; 173 (18%) patrons to visit less; and 264 (28%) patrons were indifferent to the smoke-free status. Patrons more likely to prefer a smoke-free casino tended to be white, elderly, middle class and above, and visit the casino restaurants. Patrons within the lower tiers of the players club, almost half of the players club members, also showed a higher preference for a smoke-free casino.

Conclusions: This tribal casino would likely realize increased patronage associated with smoke-free status while also contributing to improved health for casino workers and patrons.

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The American Temperance Movement and Market-Based Violence

Emily Owens
American Law and Economics Review, forthcoming

Abstract:
The net impact of market legality on crime is ambiguous if consumption of the illegally traded good causes violence. With modern crime data, I show that drug control policy that increases market-based violence while reducing violence associated with intoxication raises homicide rates for individuals in their 20s relative to older and younger people. Using a state-level panel of age-specific homicides from 1900 to 1940, when many states and eventually the federal government criminalized alcohol markets, I demonstrate that the spread of the temperance movement similarly compressed the age distribution of homicide victims, primarily in northern, urban states with large immigrant populations.

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Age at Menarche and Adolescent Alcohol Use

Melissa Verhoef et al.
Journal of Youth and Adolescence, August 2014, Pages 1333-1345

Abstract:
Research has shown that early maturation is related to problematic alcohol use, yet the differential effect of early pubertal timing (i.e., younger age at menarche) on the onset of alcohol use and subsequent level of alcohol use has rarely been examined. This distinction is relevant, as younger age at menarche can have differential effects on these outcomes, which in turn can have long-lasting effects. Therefore, the present study examined the relationship between age at menarche and adolescent alcohol use among girls, hereby distinguishing between onset and level of alcohol use. In addition, the moderating effects of alcohol-specific rules, child disclosure and class gender composition were examined. Participants were 430 girls from a Dutch four-wave survey, with a mean age of 12.17 years (SD = 0.50) at the beginning of the study. Results showed that the probability of onset of alcohol use was increased by younger age at menarche, but only when girls were younger than 15. Moderation analyses showed that younger age at menarche increased the risk of alcohol onset only in low risk girls (with high levels of alcohol-specific rules and in classes with a high percentage of girls). Once adolescent girls started drinking alcohol, younger age at menarche was associated positively with alcohol consumption only for girls in classes with a moderate to high percentage of girls. These findings confirm that younger age at menarche is a risk factor for the onset of alcohol use, but strongly suggest that this effect is strongest for girls having restrictive alcohol-specific rules and in classes with a high percentage of girls. Possibly, in the absence of social factors that "push" to alcohol use, biological factors (like age at menarche) become more important. Another possibility is that adolescent girls start drinking alcohol to oppose their parents if they set too strict alcohol-specific rules.

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Hookah Use Among US High School Seniors

Joseph Palamar et al.
Pediatrics, forthcoming

Objectives: Prevalence of hookah use is increasing significantly among adolescents. This study aimed to delineate demographic and socioeconomic correlates of hookah use among high school seniors in the United States. We hypothesized that more impoverished adolescents and those who smoked cigarettes would be more likely to use hookahs.

Methods: Data were examined for 5540 high school seniors in Monitoring the Future (years 2010-2012), an annual nationally representative survey of high school students in the United States. Using data weights provided by Monitoring the Future, we used multivariable binary logistic regression to delineate correlates of hookah use in the last 12 months.

Results: Eighteen percent of students reported hookah use in the past year. Compared with white students, black students were at lower odds for use (adjusted odds ratio [AOR] = 0.27, P < .0001). High parent education increased the odds for use (AOR = 1.58, P < .001), and student weekly income from a job of >$50/week (AOR = 1.26, P < .05) or $11 to $50 per week from other sources (AOR = 1.35, P < .01) also increased odds for use. Males and urban students were also at higher odds for use, as were users of alcohol, marijuana, and other illicit substances. Former cigarette smokers were at higher risk, and current smokers were at highest risk for use.

Conclusions: Adolescents of higher socioeconomic status appear to be at particularly high risk for hookah use in the United States. Prevention efforts must target this group as prevalence continues to increase.

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In utero exposure to cigarette smoke dysregulates human fetal ovarian developmental signaling

Paul Fowler et al.
Human Reproduction, July 2014, Pages 1471-1489

Study question: How does maternal cigarette smoking disturb development of the human fetal ovary?

Study design, size, duration: The effects of maternal cigarette smoking on the second trimester human fetal ovary, fetal endocrine signalling and fetal chemical burden were studied. A total of 105 fetuses were studied, 56 from mothers who smoked during pregnancy and 49 from those who did not.

Participants/materials, setting methods: Ovary, liver and plasma samples were collected from electively terminated, normally progressing, second trimester human fetuses. Circulating fetal hormones, levels of 73 fetal ovarian transcripts, protein localization, density of oocytes/primordial follicles and levels of 16 polycyclic aromatic hydrocarbons (PAHs) in the fetal liver were determined.

Main results and the role of chance: Circulating fetal estrogen levels were very high and were increased by maternal smoking (ANOVA, P = 0.055-0.004 versus control). Smoke exposure also dysregulated (two-way ANOVA, smoking versus gestation weeks interaction, P = 0.046-0.023) four fetal ovarian genes (cytochrome P450 scc [CYP11A1], NOBOX oogenesis homeobox [NOBOX], activator of apoptosis harakiri [HRK], nuclear receptor subfamily 2, group E, member 1 [NR2E1]), shifted the ovarian Inhibin βA/inhibin α ratio (NHBA/INHA) transcript ratio in favour of activin (ANOVA, P = 0.049 versus control) and reduced the proportion of dominant-negative estrogen receptor 2 (ERβ: ESR2) isoforms in half the exposed fetuses. PAHs, ligands for the aryl hydrocarbon receptor (AHR), were increased nearly 6-fold by maternal smoking (ANOVA, P = 0.011 versus control). A fifth transcript, COUP transcription factor 1 (nuclear receptor subfamily 2, group F, member 1: NR2F1, which contains multiple AHR-binding sites), was both significantly increased (ANOVA, P = 0.026 versus control) and dysregulated by (two-way ANOVA, smoking versus gestation weeks interaction, P = 0.021) maternal smoking. NR2F1 is associated with repression of FSHR expression and smoke-exposed ovaries failed to show the normal increase in FSHR expression during the second trimester. There was a significantly higher number of DEAD (Asp-Glu-Ala-Asp) box polypeptide 4 (DDX4) VASA-positive (ANOVA, P = 0.016 versus control), but not POU domain, class 1, transcription factor 1 (POU5F1) OCT3/4-positive, oocytes in smoke-exposed fetuses and this matched with a significantly higher number of primordial follicles (ANOVA, P = 0.024 versus control).

Wider implications of the findings: Fetal exposure to chemicals in cigarette smoke is known to lead to reduced fecundity in women. Our study suggests, for the first time, that this occurs via mechanisms involving activation of AHR, disruption of inhibin/activin and estrogen signalling, increased exposure to estrogen and dysregulation of multiple molecular pathways in the exposed human fetal ovary. Our data also suggest that alterations in the ESR2 positive and dominant negative isoforms may be associated with reduced sensitivity of some fetuses to increased estrogens and maternal smoking.

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Drinking to Reach the Top: Young Adults' Drinking Patterns as a Predictor of Status within Natural Drinking Groups

Tara Dumas et al.
Addictive Behaviors, October 2014, Pages 1510-1515

Abstract:
In this study we examined associations between young adults' drinking patterns and social status within their natural drinking groups (NDGs) and assessed gender differences in these relationships. Same-sex NDGs (n = 104) on route to a bar district were recruited and completed a peer-nominated measure of within-NDG status. In a follow-up online survey, participants (n = 293; 174 men and 119 women) reported their usual drinking pattern within the past year. Hierarchical Linear Modeling revealed that men who engaged in more frequent heavy episodic drinking (HED) (both for 5 + and 8 + drinks in one sitting) and women who drank more frequently were nominated as occupying higher-status positions within their NDGs compared to their peers who drank less. Further, for both men and women, drinking more than one's peers during one's heaviest drinking occasion in the past year was also associated with higher within-NDG status. These findings suggest that higher social status is associated with riskier drinking patterns and have important implications for prevention programming.

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The Market for Mules: Risk and Compensation of Cross-Border Drug Couriers

David Bjerk & Caleb Mason
International Review of Law and Economics, forthcoming

Abstract:
This paper uses a unique dataset to examine the economics of cross-border drug smuggling. Our results reveal that loads are generally quite large (median 30 kg), but with substantial variance within and across drug types. Males and females, as well as U.S. citizens and non-U.S. citizens are all well represented among mules. We also find that mule compensation is substantial (median $1,313), and varies with load characteristics. Specifically, for mules caught with cocaine and meth, pay appears to be strongly correlated to expected sentence if caught, while pay appears to be primarily correlated with load size for marijuana mules, who generally smuggle much larger loads than those smuggling cocaine and meth. We argue that our results suggest that this underground labor market generally acts like a competitive labor market, where a risk-sensitive, reasonably well-informed, and relatively elastic labor force is compensated for higher risk tasks.

By KEVIN LEWIS | 09:00:00 AM

Monday, July 7, 2014

On queue

A Nation of Immigrants: Assimilation and Economic Outcomes in the Age of Mass Migration

Ran Abramitzky, Leah Platt Boustan & Katherine Eriksson
Journal of Political Economy, June 2014, Pages 467-506

Abstract:
During the Age of Mass Migration (1850–1913), the United States maintained an open border, absorbing 30 million European immigrants. Prior cross-sectional work finds that immigrants initially held lower-paid occupations than natives but converged over time. In newly assembled panel data, we show that, in fact, the average immigrant did not face a substantial occupation-based earnings penalty upon first arrival and experienced occupational advancement at the same rate as natives. Cross-sectional patterns are driven by biases from declining arrival cohort skill level and departures of negatively selected return migrants. We show that assimilation patterns vary substantially across sending countries and persist in the second generation.

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Foreign Nurse Importation and the Supply of Native Nurses

Patricia Cortés & Jessica Pan
Journal of Health Economics, forthcoming

Abstract:
The importation of foreign registered nurses has been used as a strategy to ease nursing shortages in the United States. The effectiveness of this policy depends critically on the long-run response of native nurses. We examine the effects of immigration of foreign-born registered nurses on the long-run employment and occupational choice of native nurses. Using a variety of empirical strategies that exploit the geographical distribution of immigrant nurses across US cities, we find evidence of large displacement effects -- over a ten-year period, for every foreign nurse that migrates to a city, between 1 to 2 fewer native nurses are employed in the city. We find similar results using data on nursing board exam-takers at the state level -- an increase in the flow of foreign nurses significantly reduces the number of natives sitting for licensure exams in more dependent states relative to less dependent states. Using data on self-reported workplace satisfaction among a sample of California nurses, we find suggestive evidence that part of the displacement effects could be driven by a decline in the perceived quality of the workplace environment.

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In the Belly of the Beast: Effects of Anti-Immigration Policy on Latino Community Members

Seline Szkupinski Quiroga, Dulce Medina & Jennifer Glick
American Behavioral Scientist, forthcoming

Abstract:
This paper examines the experiences of Latino adults in South Phoenix, Arizona, during a time of changing immigration policy, through the theoretical lenses of structural vulnerability and macro- and microaggression. The analyses describe how U.S.- and foreign-born Latinos experience the effects of local immigration laws and anti-immigrant sentiment. The results suggest that while there are differences between the U.S.-born and foreign-born in perceived impacts of immigration enforcement, there are few differences in perceptions of vulnerability and no evidence of lesser psychological distress among those who are not the direct targets of immigration enforcement activities. Even if they do not feel directly at risk, most respondents express concerns for family members and others in their social networks as a result of increased attention to immigration enforcement or anti-immigrant sentiment. These shared impacts may have long-term implications for Latino communities in the United States.

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What Makes Muslims Feel French?

Rahsaan Maxwell & Erik Bleich
Social Forces, forthcoming

Abstract:
In this article, we analyze the extent to which Muslims self-identify as French. A common interpretation of Muslim political attitudes assumes that Islam fundamentally conflicts with mainstream European society and that when Muslims are more attached to their religion they will be less likely to identify as French. We examine this assumption by exploring whether Muslim national identification is more strongly related to religiosity or other factors such as socio-economic status, social networks, and immigrant integration. Our results offer some support for each explanation, but we find that religiosity is not the dominant force shaping Muslims' attitudes. Instead, factors associated with immigrant integration have the most profound relationship with Muslim identification. These conclusions are supported by the fact that religiosity and immigrant integration variables have similar effects on the national identification of Christian immigrants. Our findings suggest that focusing on religiosity is not the best way to analyze Muslims' attitudes or identities, and that tensions surrounding Muslims' self-identification with France are likely to decrease in future generations, as immigrant integration proceeds through the increased prevalence of birth in France, having French citizenship, and French language fluency.

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The immigrant paradox: Immigrants are less antisocial than native-born Americans

Michael Vaughn et al.
Social Psychiatry and Psychiatric Epidemiology, July 2014, Pages 1129-1137

Purpose: Although recent research on crime and violence among immigrants suggests a paradox — where immigrants are more socially disadvantaged yet less likely to commit crime — previous research is limited by issues of generalizability and assessment of the full depth of antisocial behavior.

Methods: We surmount these limitations using data from waves I and II of the National Epidemiologic Survey on Alcohol and Related Conditions (NESARC) and compare immigrants (N = 7,320) from Asia, Africa, Europe, and Latin America to native-born Americans (N = 34,622) with respect to violent and nonviolent forms of antisocial behavior.

Results: After controlling for an extensive array of confounds, results indicate that immigrants are significantly less antisocial despite being more likely to have lower levels of income, less education, and reside in urban areas. These findings hold for immigrants from major regions of the world including Africa, Asia, Europe, and Latin America.

Conclusions: This study confirms and extends prior research on crime and antisocial behavior, but suggests that it is premature however to think of immigrants as a policy intervention for treating high crime areas.

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Culture: Persistence and Evolution

Francesco Giavazzi, Ivan Petkov & Fabio Schiantarelli
NBER Working Paper, May 2014

Abstract:
This paper presents evidence on the speed of evolution (or lack thereof) of a wide range of values and beliefs of different generations of European immigrants to the US. The main result is that persistence differs greatly across cultural attitudes. Some, for instance deep personal religious values, some family and moral values, and political orientation converge very slowly to the prevailing US norm. Other, such as attitudes toward cooperation, redistribution, effort, children's independence, premarital sex, and even the frequency of religious practice or the intensity of association with one's religion, converge rather quickly. The results obtained studying higher generation immigrants differ greatly from those found when the analysis is limited to the second generation, as typically done in the literature, and they imply a lesser degree of persistence than previously thought. Finally, we show that persistence is "culture specific" in the sense that the country from which one's ancestors came matters for the pattern of generational convergence.

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The importance of timing in the U.S. response to undocumented immigrants: A recursive dynamic approach

Angel Aguiar & Terrie Walmsley
Economic Modelling, August 2014, Pages 253–262

Abstract:
In an attempt to control the flow of undocumented immigrants, successive U.S. governments have considered large scale deportation, amnesties, expanding visa programs, and fining firms who hire undocumented workers. Using a comparative static model, Aguiar and Walmsley (2013), find that amnesties have a positive impact on the U.S. economy. However, such policies are one-time changes in the labor force, whose benefits diminish over time, and which are unlikely to stop the flow of undocumented workers or fulfill the demands of U.S. firms for cheap foreign labor. In this paper, we use a global dynamic model to investigate the long run implications of three policy scenarios: 1) a one-time amnesty for undocumented workers living in the U.S.; 2) a permanent increase in the number of foreign worker visas; and 3) enhanced border security. We find that an amnesty is much less effective than a permanent increase in the number of visas at promoting economic growth in the U.S., while enhanced border control by the U.S. has a small negative effect due to the relative size of the undocumented labor market in the U.S. Combined, the three policies offer a mechanism for supporting U.S. short- and long-term economic growth, while also benefiting suppliers of migrant workers, such as Mexico.

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Trapped in the Working Class? Prospects for the Intergenerational (Im)Mobility of Latino Youth

Veronica Terriquez
Sociological Inquiry, forthcoming

Abstract:
Opportunities for upward mobility have been declining in the United States in recent decades. Within this context, I examine the mobility trajectories of a contemporary cohort of 1.5-, second-, and third-plus-generation Latino youth. Drawing on survey data from California that accounts for the precarious legal status of many 1.5 generation immigrants, I find that Latino youths' patterns of postsecondary enrollment and employment do not differ by generation since migration. Additionally, I do not find evidence of racial/ethnic barriers to Latino youths' enrollment in less selective colleges and participation in the labor market. Yet, given the low socioeconomic origins of many Latino youth and their correspondingly low 4-year college enrollment rates, only a small proportion will likely enjoy upward mobility through jobs that require a bachelor's degree. Overall, the cohort of Latino youth coming of age during the Great Recession is poised to experience working-class stagnation. This group's future access to economic and political positions of power will likely be limited by their low enrollment rates in 4-year colleges in general, but in selective postsecondary institutions in particular.

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Living in the Eye of the Storm: How did Hazleton’s Restrictive Immigration Ordinance Affect Local Interethnic Relations?

René Flores
American Behavioral Scientist, forthcoming

Abstract:
As Hispanic immigrants have moved beyond traditional immigrant gateways in recent years, local restrictive immigrant ordinances have proliferated. Although scholars have studied the determinants of these policies, we still know little about their social consequences. Drawing on ethnographic and interview data with 103 white, black, and Hispanic residents, collected in 2007 and 2011 in Hazleton, Pennsylvania, which passed an anti-immigrant ordinance in 2006, the author found that the law motivated anti-immigrant activism, hardened native views of Hispanics (regardless of documentation status), and increased native whites’ fears of lawlessness and crime. By 2011, however, locals reported significantly lower ethnic animosity, and the Latino population, led by Dominicans, continued to grow. This research reveals the unintended consequences of symbolic exclusionary laws and also highlights their limitations. It also demonstrates the capacity that microlevel political factors have to affect immigrant incorporation and intergroup relations and shows that the recent spread of local and state immigrant restrictionist policies may negatively affect immigrants’ ability to incorporate in new destinations of settlement at least in the short term.

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The Two-Way Street of Acculturation, Discrimination, and Latino Immigration Restrictionism

Francisco Pedraza
Political Research Quarterly, forthcoming

Abstract:
Existing research concludes that acculturation converges Latino immigration policy views with those of Anglo-Americans. Yet, polls show few Latinos support restricting immigration. This article reconciles these statements with theory and evidence. I argue acculturation is part of a broader give-and-take process, the two-way street in which the contrast between expected and perceived treatment by the receiving community shapes whether or not Latino acculturation leads to restrictionism and “convergence” with Anglos. Regression analysis of survey data shows that perceived group discrimination, but not perceived individual discrimination or Latino within-group discrimination, moderates the link between acculturation and support for restrictive policy.

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The Great Recession and Health Spending among Uninsured U.S. Immigrants: Implications for the Affordable Care Act Implementation

Arturo Vargas Bustamante & Jie Chen
Health Services Research, forthcoming

Objective: We study the association between the timing of the Great Recession (GR) and health spending among uninsured adults distinguishing by citizenship/nativity status and time of U.S. residence.

Data Source: Uninsured U.S. citizens and noncitizens from the 2005–2006 and 2008–2009 Medical Expenditure Panel Survey.

Principal Findings: The probability of reporting any spending diminished for recent immigrants compared to citizens during the GR. For those with any spending, recent immigrants reported higher spending during the GR (27 percent). Average reductions in total spending were driven by the decline in the share of the population reporting any spending among citizens and noncitizens.

Conclusions: Our study findings suggest that recent immigrants could be forgoing essential care, which later translates into higher spending. It portrays the vulnerability of a population that would remain exposed to income shocks, even after the Affordable Care Act (ACA) implementation.

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Gender Inequalities in the Education of the Second Generation in Western Countries

Fenella Fleischmann et al.
Sociology of Education, July 2014, Pages 143-170

Abstract:
Drawing on comparative analyses from nine Western countries, we ask whether local-born children from a wide range of immigrant groups show patterns of female advantage in education that are similar to those prevalent in their host Western societies. We consider five outcomes throughout the educational career: test scores or grades at age 15, continuation after compulsory schooling, choice of academic track in upper-secondary education, completion of upper secondary, and completion of tertiary education. Despite great variation in gender gaps in education in immigrants’ origin countries (with advantages for males in many cases), we find that the female advantage in education observed among the majority population is usually present among second-generation immigrants. We interpret these findings in light of ideas about gender role socialization and immigrant selectivity.

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The Consequences of Migration to the United States for Short-Term Changes in the Health of Mexican Immigrants

Noreen Goldman et al.
Demography, forthcoming

Abstract:
Although many studies have attempted to examine the consequences of Mexico-U.S. migration for Mexican immigrants’ health, few have had adequate data to generate the appropriate comparisons. In this article, we use data from two waves of the Mexican Family Life Survey (MxFLS) to compare the health of current migrants from Mexico with those of earlier migrants and nonmigrants. Because the longitudinal data permit us to examine short-term changes in health status subsequent to the baseline survey for current migrants and for Mexican residents, as well as to control for the potential health selectivity of migrants, the results provide a clearer picture of the consequences of immigration for Mexican migrant health than have previous studies. Our findings demonstrate that current migrants are more likely to experience recent changes in health status — both improvements and declines — than either earlier migrants or nonmigrants. The net effect, however, is a decline in health for current migrants: compared with never migrants, the health of current migrants is much more likely to have declined in the year or two since migration and not significantly more likely to have improved. Thus, it appears that the migration process itself and/or the experiences of the immediate post-migration period detrimentally affect Mexican immigrants’ health.

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The Land of the Free: Undocumented Families in the Juvenile Justice System

Caitlin Cavanagh & Elizabeth Cauffman
Law and Human Behavior, forthcoming

Abstract:
Approximately 8 million Latinos in the United States are undocumented immigrants, nearly half of whom are parents to a minor. Concerns over deportation may affect the way families with undocumented members perceive legal authorities relative to documented immigrant families. Yet, there have been few studies on how Latinos (documented or undocumented) interact with, and form attitudes about, police and no studies on adjudicated youth from families with an undocumented member. To address this gap, 155 pairs (N = 310) of Latina immigrant mothers and their first-time offending sons were interviewed. More than half of the mothers, and 12.3% of youth, were undocumented residents. Controlling for key contextual factors, youth whose mothers were undocumented held more negative attitudes toward the police than youth whose mothers were documented. Youth, however, did not perceive judges differently based on mother’s documentation status, suggesting that documentation status relates to police specifically rather than justice system attitudes broadly. The same pattern was noted when considering youth’s own documentation status. Because negative attitudes toward police have been associated with decreased reports of victimization and other crimes, policy related to undocumented immigration should consider the unintended effects of such laws.

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Police Arrests in a Time of Uncertainty: The Impact of 287(g) on Arrests in a New Immigrant Gateway

Katharine Donato & Leslie Ann Rodríguez
American Behavioral Scientist, forthcoming

Abstract:
Using a novel data set created from police narratives between 2005 and 2010, this article examines whether and how police reporting varies before and after the implementation of 287(g), a local enforcement program located in Nashville’s Davidson County, a new immigrant gateway city. We examine patterns of symbolic language used by police officers related to arrests of immigrants and U.S. natives, and examine whether differences emerge before and after May 2007, when the 287(g) program began. Results show significant shifts in the reasons given for arrests before and after implementation of 287(g), and characteristics about foreignness such as country of origin, language use, and legal status that became more salient after 287(g). We argue that the 287(g) program — coupled with the political climate in which it was embedded — bestowed salience on traits that, in the past, were not relevant. That is, our findings suggest that anti-immigrant laws, such as 287(g), play an important role in the social construction of legal status among police officers.

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Perceptions of Commonality and Latino-Black, Latino-White Relations in a Multiethnic United States

Betina Cutaia Wilkinson
Political Research Quarterly, forthcoming

Abstract:
This study examines the extent that Latinos’ sense of social, economic, and political power shapes their perceptions of commonality with blacks and whites. In accordance with my theory, which builds on the racial threat and group position theories, I find that Latinos’ sense of power structures their perceptions of blacks and whites. When native-born Latinos feel economically threatened, they are less likely to perceive commonality with blacks. When native-born Latinos gain some political influence, they identify less with whites. Among Latino immigrants who perceive discrimination, residing in a high-threat economic setting is negatively related to perceiving commonality with whites.

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Selection, Language Heritage, and the Earnings Trajectories of Black Immigrants in the United States

Tod Hamilton
Demography, June 2014, Pages 975-1002

Abstract:
Research suggests that immigrants from the English-speaking Caribbean surpass the earnings of U.S.-born blacks approximately one decade after arriving in the United States. Using data from the 1980–2000 U.S. censuses and the 2005–2007 American Community Surveys on U.S.-born black and non-Hispanic white men as well as black immigrant men from all the major sending regions of the world, I evaluate whether selective migration and language heritage of immigrants’ birth countries account for the documented earnings crossover. I validate the earnings pattern of black immigrants documented in previous studies, but I also find that the earnings of most arrival cohorts of immigrants from the English-speaking Caribbean, after residing in the United States for more than 20 years, are projected to converge with or slightly overtake those of U.S.-born black internal migrants. The findings also show three arrival cohorts of black immigrants from English-speaking African countries are projected to surpass the earnings of U.S.-born black internal migrants. No arrival cohort of black immigrants is projected to surpass the earnings of U.S.-born non-Hispanic whites. Birth-region analysis shows that black immigrants from English-speaking countries experience more rapid earnings growth than immigrants from non-English-speaking countries. The arrival-cohort and birth-region variation in earnings documented in this study suggest that selective migration and language heritage of black immigrants’ birth countries are important determinants of their initial earnings and earnings trajectories in the United States.

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Anti-Immigrant Ordinances and Discrimination in New and Established Destinations

Kim Ebert & Sarah Ovink
American Behavioral Scientist, forthcoming

Abstract:
Immigrants and their children come to the U.S. in search of upward mobility, but in many contexts they experience discrimination and restrictive political climates. Contexts vary widely, however, given the growing number of new immigrant destinations. Past studies tend to focus on what immigrants and their children are (or are not) doing to adapt to local contexts, a focus that strengthens the perception that immigrants are a “problem” group. In this article, we move the debate away from more familiar economic analyses to assess how destination type and exclusionary ordinances, defined as laws that restrict the rights of and services accorded to immigrant groups, influence “subjective” outcomes, including reports of discrimination among Mexican Americans. Our results reveal three main findings that illustrate the importance of local context. First, individuals living in a county with a greater share of co-ethnics report fewer experiences with discrimination. Second, in counties with an exclusionary ordinance, share of co-ethnics increases reports of discrimination. Finally, being born in the U.S. and speaking English do not provide protection from discrimination; rather, such characteristics shield Mexican Americans from discrimination only in contexts with larger shares of co-ethnics.

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Disparities in Early Exposure to Book Sharing Within Immigrant Families

Natalia Festa et al.
Pediatrics, July 2014, Pages e162-e168

Objective: This study examined the early developmental context of children in immigrant families (CIF), measured by the frequency with which parents share books with their children.

Methods: Trends in the frequency with which parents report book sharing, defined in this analysis as reading or sharing picture books with their young children, were analyzed across immigrant and nonimmigrant households by using data from the 2005, 2007, and 2009 California Health Interview Survey. Stepwise multivariate logistic regression assessed the likelihood that CIF shared books with parents daily.

Results: In this study, 57.5% of parents in immigrant families reported daily book sharing (DBS), compared with 75.8% of native-born parents. The lowest percentage of DBS was seen in Hispanic families with 2 foreign-born parents (47.1%). When controlling for independent variables, CIF with 2 foreign-born parents had the lowest odds of sharing books daily (odds ratio [OR]: 0.61; 95% confidence interval [CI]: 0.54–0.68). When stratified by race/ethnicity, separate multivariate logistic regressions revealed CIF status to be associated with lower odds of DBS for Asian (OR: 0.56; 95% CI: 0.38–0.81) and Hispanic CIF (OR: 0.49; 95% CI: 0.42–0.58).

Conclusions: There is an association between the lower odds of DBS and parental immigrant status, especially for Hispanic and Asian children. This relationship holds after controlling for variables thought to explain differences in literacy-related practices, such as parental education and income. Because book sharing is central to children’s development of early literacy and language skills, this disparity merits further exploration with the aim of informing future interventions.

By KEVIN LEWIS | 09:00:00 AM

Sunday, July 6, 2014

Disturbia

Honor and the Stigma of Mental Healthcare

Ryan Brown, Mikiko Imura & Lara Mayeux
Personality and Social Psychology Bulletin, forthcoming

Abstract:
Most prior research on cultures of honor has focused on interpersonal aggression. The present studies examined the novel hypothesis that honor-culture ideology enhances the stigmatization of mental health needs and inhibits the use of mental health services. Study 1 demonstrated that people who strongly endorsed honor-related beliefs and values were especially concerned that seeking help for mental health needs would indicate personal weakness and would harm their reputations. Studies 2 and 3 showed that honor states in the U.S. South and West invested less in mental healthcare resources, compared with non-honor states in the North (Study 2), and that parents living in honor states were less likely than parents in non-honor states to use mental health services on behalf of their children (Study 3). Together, these studies reveal an overlooked consequence of honor ideology for psychological well-being at the individual, social, and institutional levels.

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A Changing Epidemiology of Suicide? The Influence of Birth Cohorts on Suicide Rates in the United States

Julie Phillips
Social Science & Medicine, August 2014, Pages 151–160

Abstract:
The increases in suicide among middle-aged baby boomers (born between 1946 and 1964) in the United States since 1999 suggest a changing epidemiology of suicide. Using data from 1935 to 2010, this paper conducts age-period-cohort analyses to determine the impact of cohorts in shaping temporal patterns of suicide in the United States. The analysis demonstrates that age, period and cohort effects are all important in determining suicide trends. Net of age and period effects, the cohort pattern of suicide rates is U-shaped, with cohorts born between 1915 and 1945 possessing among the very lowest suicide rates. Suicide rates begin to rise with boomers and subsequent cohorts exhibit increasingly higher rates of suicide. The general pattern exists for both men and women but is especially pronounced among males. The average suicide rate over the entire period for males is about 28 per 100,000, 95% CI [27.4, 28.7]. For males born in 1930-34, the suicide rate is estimated to be 17.4 per 100,000, 95% CI [15.9, 18.8]; for males born between 1955 and 1959, the rate is essentially the same as the average for the period while for males born between 1985 and 1989, the suicide rate is estimated to be 37.8 per 100,000, 95% CI [33.1, 43.4]. The results dispute popular claims that boomers exhibit an elevated suicide rate relative to other generations, but boomers do appear to have ushered in new cohort patterns of suicide rates over the life course. These patterns are interpreted within a Durkheimian framework that suggests weakened forms of social integration and regulation among postwar cohorts may be producing increased suicide rates.

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Do Generous Unemployment Benefit Programs Reduce Suicide Rates? A State Fixed-Effect Analysis Covering 1968–2008

Jonathan Cylus, Maria Glymour & Mauricio Avendano
American Journal of Epidemiology, 1 July 2014, Pages 45-52

Abstract:
The recent economic recession has led to increases in suicide, but whether US state unemployment insurance programs ameliorate this association has not been examined. Exploiting US state variations in the generosity of benefit programs between 1968 and 2008, we tested the hypothesis that more generous unemployment benefit programs reduce the impact of economic downturns on suicide. Using state linear fixed-effect models, we found a negative additive interaction between unemployment rates and benefits among the US working-age (20–64 years) population (β = −0.57, 95% confidence interval: −0.86, −0.27; P < 0.001). The finding of a negative additive interaction was robust across multiple model specifications. Our results suggest that the impact of unemployment rates on suicide is offset by the presence of generous state unemployment benefit programs, though estimated effects are small in magnitude.

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Job loss, wealth and depression during the Great Recession in the USA and Europe

Carlos Riumallo-Herl et al.
International Journal of Epidemiology, forthcoming

Aim: To examine whether late-career job loss increased depression among older workers approaching retirement in the USA and Europe.

Methods: Longitudinal data came from the Health and Retirement Survey and the Survey of Health, Ageing, and Retirement in Europe. Workers aged 50 to 64 years in 13 European countries and the USA were assessed biennially from 2006 to 2010. Individual fixed effects models were used to test the effect of job loss on depressive symptoms, controlling for age, sex, physical health, initial wealth and socio-demographic factors.

Results: Job loss was associated with a 4.78% [95% confidence interval (CI): 0.823% to 8.74%] increase in depressive symptoms in the USA compared with a 3.35% (95% CI: 0.486% to 6.22%) increase in Europe. Job loss due to a worker’s unexpected firm closure increased depression scores in both the USA (beta = 28.2%, 95% CI: 8.55% to 47.8%) and Europe (beta = 7.50%, 95% CI: 1.25% to 13.70%), but pooled models suggested significantly stronger effects for US workers (P < 0.001). American workers who were poorer before the recession experienced significantly larger increases in depressive symptoms compared with wealthier US workers (beta for interaction = −0.054, 95% CI: −0.082 to −0.025), whereas pre-existing wealth did not moderate the impact of job loss among European workers.

Conclusions: Job loss is associated with increased depressive symptoms in the USA and Europe, but effects of job loss due to plant closure are stronger for American workers. Wealth mitigates the impact of job loss on depression in the USA more than in Europe.

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Effects of college education on demonstrated happiness in the United States

Pavlo Buryi & Scott Gilbert
Applied Economics Letters, forthcoming

Abstract:
Among the many documented benefits of a college education is a higher level of self-reported happiness. The present work considers instead the level of demonstrated happiness and unhappiness within groups, the latter proxied by the conditional probability of suicide within groups having a college education and those without. Those with college are not happier for it, in these terms, and actually have slightly higher rates of suicide than those without college, based on a recent US data.

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Consequences of ADHD Medication Use for Children's Outcomes

Søren Dalsgaard, Helena Skyt Nielsen & Marianne Simonsen
Journal of Health Economics, September 2014, Pages 137–151

Abstract:
This paper estimates effects of early ADHD medication use on key human capital outcomes for children diagnosed with ADHD while using rarely available register based data on diagnoses and prescription drug purchases. Our main identification strategy exploits plausible exogenous assignment of children to hospitals with specialist physicians, while our analysis of health outcomes also allows for an individual level panel data strategy. We find that the behavior of specialist physicians varies considerably across hospitals and that the prescribing behavior does affect the probability that a given child is treated. Results show that children diagnosed with ADHD in pharmacological treatment have fewer hospital contacts if treated and that treatment to some extent protects against criminal behavior.

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Happy Twitter Tweets Are More Likely in American States with Lower Levels of Resident Neuroticism

Stewart McCann
Psychological Reports, June 2014, Pages 891-895

Abstract:
Relations between Big Five personality scores aggregated at the American state level and the happiness of Twitter tweet content emanating from each of the 50 American states were explored with the 50 states as the units of analysis. Tweet happiness correlated negatively with Neuroticism, and the relation remained when partial correlation and multiple regression adjusted and controlled for state socioeconomic status, white population percent, and urban population percent. In contrast, state levels of Openness, Conscientiousness, Extraversion, and Agreeableness showed no relation to state levels of the happiness of tweet content.

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Making sense of misfortune: Deservingness, self-esteem, and patterns of self-defeat

Mitchell Callan, Aaron Kay & Rael Dawtry
Journal of Personality and Social Psychology, July 2014, Pages 142-162

Abstract:
Drawing on theorizing and research suggesting that people are motivated to view their world as an orderly and predictable place in which people get what they deserve, the authors proposed that (a) random and uncontrollable bad outcomes will lower self-esteem and (b) this, in turn, will lead to the adoption of self-defeating beliefs and behaviors. Four experiments demonstrated that participants who experienced or recalled bad (vs. good) breaks devalued their self-esteem (Studies 1a and 1b), and that decrements in self-esteem (whether arrived at through misfortune or failure experience) increase beliefs about deserving bad outcomes (Studies 1a, 1b, 2a, 2b). Five studies (Studies 3–7) extended these findings by showing that this, in turn, can engender a wide array of self-defeating beliefs and behaviors, including claimed self-handicapping ahead of an ability test (Study 3), the preference for others to view the self less favorably (Studies 4–5), chronic self-handicapping and thoughts of physical self-harm (Study 6), and choosing to receive negative feedback during an ability test (Study 7). The current findings highlight the important role that concerns about deservingness play in the link between lower self-esteem and patterns of self-defeating beliefs and behaviors. The theoretical and practical implications of these findings are discussed.

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Forgiveness Increases Meaning in Life

Daryl Van Tongeren et al.
Social Psychological and Personality Science, forthcoming

Abstract:
Close relationships are a source of meaning in life. Interpersonal offenses can disrupt one’s sense of meaning within close relationships. To restore a sense of meaning, people may employ relational repair strategies such as forgiveness. We hypothesized that forgiveness is a meaning-making mechanism because it helps repair relationships, thus restoring the positive effects of relationships on meaning. Study 1 (N = 491) revealed that dispositional forgiveness and the degree of forgiveness following an offense were positively related to meaning in life. Study 2 (N = 210), a 6-month longitudinal study of romantic couples, revealed that participants who regularly forgave their partner reported increased meaning in life over time. In addition, forgiveness helped recover lost meaning among those participants reporting more frequent partner offenses. These results provide initial evidence that forgiveness recovers a sense of meaning in life after interpersonal offenses.

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Crowd-powered positive psychological interventions

Robert Morris & Rosalind Picard
Journal of Positive Psychology, forthcoming

Abstract:
Recent advances in crowdsourcing have led to new forms of assistive technologies, commonly referred to as crowd-powered devices. To best serve the user, these technologies crowdsource human intelligence as needed, when automated methods alone are insufficient. In this paper, we provide an overview of how these systems work and how they can be used to enhance technological interventions for positive psychology. As a specific example, we describe previous work that crowdsources positive reappraisals, providing users timely and personalized suggestions for ways to reconstrue stressful thoughts and situations. We then describe how this approach could be extended for use with other positive psychological interventions. Finally, we outline future directions for crowd-powered positive psychological interventions.

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Suicide and the Great Recession of 2007-2009: The Role of Economic Factors in the 50 U.S. States

Julie Phillips & Colleen Nugent
Social Science & Medicine, September 2014, Pages 22–31

Abstract:
After several decades of decline, U.S. suicide rates have risen since 2005, a trend driven largely by increases among those aged 45-64 that began in 1999. A prominent explanation for this pattern relates to deteriorating economic conditions, especially the sharp rise in unemployment associated with the Great Recession of 2007-2009. We pool data from 1997 to 2010 on the 50 U.S. states to examine the role of economic factors in producing the recent rise in suicide rates. Unlike prior studies, we examine trends in the total suicide rate and in the rate disaggregated by sex, age group and time period and include a number of important confounding factors in a multivariate analysis. We find a strong positive association between unemployment rates and total suicide rates over time within states. The association appears stronger in states that had higher female labor force participation rates over the period, suggesting that the Great Recession may generate greater levels of anomie in this context. Once we consider contextual factors such as female labor force participation, we find that rising unemployment had a similar adverse effect on male and female suicide rates. A positive effect of unemployment on temporal variation in middle-aged suicide exists but not for other age groups. Other economic characteristics, such as percent of manufacturing jobs and per capita income, are not associated with temporal variation in suicide rates within states but are associated with variation between states in suicide rates. The findings suggest that the following may be important components of effective prevention strategies: 1) specifically targeting employers and workplaces as important stakeholders in the prevention of suicide, 2) disseminating information about health risks tied to un/employment, and 3) linking the unemployed to mental health resources.

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Revenge and psychological adjustment after homicidal loss

Mariëtte van Denderen et al.
Aggressive Behavior, forthcoming

Abstract:
Feelings of revenge are a common human response to being hurt by others. Among crime victims of severe sexual or physical violence, significant correlations have been reported between revenge and Posttraumatic Stress Disorder (PTSD). Homicide is one of the most severe forms of interpersonal violence. It is therefore likely that individuals bereaved by homicide experience high levels of revenge, which may hamper efforts to cope with traumatic loss. The relationship between revenge and psychological adjustment following homicidal loss has not yet been empirically examined. In the current cross-sectional study, we used self-report data from 331 spouses, family members and friends of homicide victims to examine the relationships between dispositional revenge and situational revenge on the one hand and symptom-levels of PTSD and complicated grief, as well as indices of positive functioning, on the other hand. Furthermore, the association between revenge and socio-demographic and offense-related factors was examined. Participants were recruited from a governmental support organization, a website with information for homicidally bereaved individuals, and members of support groups. Levels of both dispositional and situational revenge were positively associated with symptoms of PTSD and complicated grief, and negatively with positive functioning. Participants reported significantly less situational revenge in cases where the perpetrator was a direct family member than cases where the perpetrator was an indirect family member, friend, or someone unknown. Homicidally bereaved individuals reported more situational revenge, but not more dispositional revenge than a sample of students who had experienced relatively mild interpersonal transgressions.

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Regulating emotion to improve physical health through the amygdala

Yiying Song et al.
Social Cognitive and Affective Neuroscience, forthcoming

Abstract:
The opinion of mind-body interaction has been increasingly acknowledged in recent years, as exemplified by accumulating evidence indicating that physical health (body) is associated with emotion and emotion regulation (mind). Yet the neural basis linking emotion regulation with physical health remains largely uninvestigated. Here we used magnetic resonance imaging to investigate the neural basis of this pathway in a large population of healthy young adults. With a systematic study revealing the association of self-reported physical health and emotion traits of personality and general affective experiences, we further demonstrated that, for better physical health, individuals needed to regulate their emotion more effectively. Importantly, individuals who had larger gray matter (GM) volume in the amygdala reported not only a higher ability of emotion regulation but also better physical health. Further, GM volume in the amygdala mediated the correlation between emotion regulation ability and physical health. Our findings suggest that the amygdala plays a critical role in the neural circuit through which emotion regulation may influence physical health. Therefore, our study takes the first step towards exploring the neuroanatomical basis for body-mind interaction, and may inform interventions aimed at promoting physical health by augmenting skills of emotion regulation.

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Behavior Problems After Early Life Stress: Contributions of the Hippocampus and Amygdala

Jamie Hanson et al.
Biological Psychiatry, forthcoming

Background: Early life stress (ELS) can compromise development, with higher amounts of adversity linked to behavior problems. To understand this linkage, a growing body of research has examined two brain regions involved with socio-emotional functioning- the amygdala and hippocampus. Yet empirical studies have reported increases, decreases, and also no differences within human and non-human animal samples exposed to different forms of ELS. Divergence in findings may stem from methodological factors and/or non-linear effects of ELS.

Methods: We completed rigorous hand-tracing of the amygdala and hippocampus in three samples of children who suffered different forms of ELS (i.e., physical abuse, early neglect, or low SES). In addition, interview-based measures of cumulative life stress were also collected with children and their parents or guardians. These same measures were also collected in a fourth sample of comparison children who had not suffered any of these forms of ELS.

Results: Smaller amygdala volumes were found for children exposed to these different forms of ELS. Smaller hippocampal volumes were also noted for children who suffered physical abuse or from low SES-households. Smaller amygdala and hippocampal volumes were also associated with greater cumulative stress exposure and also behavior problems. Hippocampal volumes partially mediated the relationship between ELS and greater behavior problems.

Conclusions: This study suggests ELS may shape the development of brain areas involved with emotion processing and regulation in similar ways. Differences in the amygdala and hippocampus may be a shared diathesis for later negative outcomes related to ELS.

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Experiential avoidance and well-being: A daily diary analysis

Kyla Machell, Fallon Goodman & Todd Kashdan
Cognition and Emotion, forthcoming

Abstract:
Experiential avoidance (EA) is a regulatory strategy characterised by efforts to control or avoid unpleasant thoughts, feelings and bodily sensations. Most studies of EA have used trait measures without considering the effects of EA on psychological functioning in naturalistic settings. To address this gap, we used daily diary methodology to examine the influence of EA of anxiety on everyday well-being. For two weeks, 89 participants provided daily reports of EA, positive and negative affect, enjoyment of daily events and meaning in life (MIL). Daily EA predicted higher negative affect, lower positive affect, less enjoyment of daily events (exercising, eating food and listening to music) and less MIL. The effect of EA on positive affect was not accounted for by the amount of negative affect experienced. Our daily measure of EA was a stronger predictor of daily well-being than a traditional trait measure (The Acceptance and Action Questionnaire). Taken together, results offer insights into the adverse effects of EA on daily well-being and suggest that EA is a context-specific regulatory strategy that might be best captured using a state-dependent measure.

By KEVIN LEWIS | 09:00:00 AM

Saturday, July 5, 2014

Ill will

The dark side of inclusion: Undesired acceptance increases aggression

Katharine Greenaway et al.
Group Processes & Intergroup Relations, forthcoming

Abstract:
It is generally assumed that being accepted by others should have universally positive effects. The present research questions this assumption and shows that acceptance can sometimes arouse aggressive thoughts and feelings when people have a low desire to belong to the accepting group. In Study 1 (N = 61), international students who had low, compared to high, desire for inclusion in a host society behaved more aggressively when informed that the host society accepted them. Study 2 (N = 57) replicated this finding on attributions of aggression to members of the host society. In Study 3 (N = 76) individuals accepted into a workgroup showed more implicit aggressive cognitions when they did not desire inclusion compared to individuals who desired inclusion. The findings reveal a potential limit to the positive effects of acceptance and highlight the importance of considering group members' motives for inclusion when investigating the effects of group acceptance.

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The human anger face evolved to enhance cues of strength

Aaron Sell, Leda Cosmides & John Tooby
Evolution and Human Behavior, forthcoming

Abstract:
Animals typically deploy their morphology during conflict to enhance competitors' assessments of their fighting ability (e.g. bared fangs, piloerection, dewlap inflation). Recent research has shown that humans assess others' fighting ability by monitoring cues of strength, and that the face itself contains such cues. We propose that the muscle movements that constitute the human facial expression of anger were selected because they increased others' assessments of the angry individual's strength, thereby increasing bargaining power. This runs contrary to the traditional theory that the anger face is an arbitrary set of features that evolved simply to signal aggressive intent. To test between these theories, the seven key muscle movements constituting the anger face were systematically manipulated one by one and in the absence of the others. Raters assessed faces containing any one of these muscle movements as physically stronger, supporting the hypothesis that the anger face evolved to enhance cues of strength.

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Face of a fighter: Bizygomatic width as a cue of formidability

Samuele Zilioli et al.
Aggressive Behavior, forthcoming

Abstract:
Humans can accurately extract information about men's formidability from their faces; however, the actual facial cues that inform these judgments have not been established. Here, through three studies, we test the hypothesis that bizygomatic width (i.e. facial width-to-height ratio, fWHR) covaries with actual physical formidability (hypothesis #1) and that humans use this cue when making assessments of formidability (hypothesis #2). Our data confirm that fWHR is predictive of actual fighting ability among professional combatants (study 1). We further show that subjects' assessments of formidability covary with the target's fWHR on natural faces (study 2), computer-generated images of strong and weak faces (study 2), and experimentally manipulated computer-generated faces (study 3). These results support the hypothesis that bizygomatic width is a cue of formidability that is assessed during agonistic encounters.

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Protective buttressing of the hominin face

David Carrier & Michael Morgan
Biological Reviews, forthcoming

Abstract:
When humans fight hand-to-hand the face is usually the primary target and the bones that suffer the highest rates of fracture are the parts of the skull that exhibit the greatest increase in robusticity during the evolution of basal hominins. These bones are also the most sexually dimorphic parts of the skull in both australopiths and humans. In this review, we suggest that many of the facial features that characterize early hominins evolved to protect the face from injury during fighting with fists. Specifically, the trend towards a more orthognathic face; the bunodont form and expansion of the postcanine teeth; the increased robusticity of the orbit; the increased robusticity of the masticatory system, including the mandibular corpus and condyle, zygoma, and anterior pillars of the maxilla; and the enlarged jaw adductor musculature are traits that may represent protective buttressing of the face. If the protective buttressing hypothesis is correct, the primary differences in the face of robust versus gracile australopiths may be more a function of differences in mating system than differences in diet as is generally assumed. In this scenario, the evolution of reduced facial robusticity in Homo is associated with the evolution of reduced strength of the upper body and, therefore, with reduced striking power. The protective buttressing hypothesis provides a functional explanation for the puzzling observation that although humans do not fight by biting our species exhibits pronounced sexual dimorphism in the strength and power of the jaw and neck musculature. The protective buttressing hypothesis is also consistent with observations that modern humans can accurately assess a male's strength and fighting ability from facial shape and voice quality.

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Rejection Perceptions: Feeling Disrespected Leads to Greater Aggression than Feeling Disliked

Amber DeBono & Mark Muraven
Journal of Experimental Social Psychology, November 2014, Pages 43-52

Abstract:
Social rejection can lead to feeling disliked and disrespected. From research on the culture of honor and perception of procedural justice, we predicted that feeling disrespected should be a more potent predictor of retaliatory aggression than feeling disliked. In four experiments, using correlational measures and experimental manipulations of dislike and disrespect, people who felt disrespected responded with greater aggression than people who felt disliked. The results suggest that merely being rejected may not be enough to trigger aggression; the person needs to feel disrespected. This has implications for understanding why people are more likely to respond to rejection with aggression, as well as future research explaining how people's perception of rejection affects their behavior.

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Narcissism and Other-Derogation in the Absence of Ego Threat

Sun Park & Randall Colvin
Journal of Personality, forthcoming

Objective: The relation between narcissism and other-derogation has been examined primarily in the context of ego threat. In three studies, we investigated whether narcissistic individuals derogate others in the absence of ego threat.

Method: In Study 1, judges watched four videotaped dyadic interactions and rated the personality of the same four people. In Study 2, judges rated the personality of a friend. In Study 3, judges considered the average Northeastern University student and rated the personality of this hypothetical person. Across the three studies, targets' personality characteristics were described on the 100-item California Adult Q-Sort (CAQ; Block, 2008). Judges' ratings of targets were compared to a CAQ prototype of the optimally adjusted person to assess target-derogation.

Results: Judges' narcissism and other-derogation were positively related in Study 1 and 2. Narcissism positively predicted and self-esteem negatively predicted target-derogation after controlling for each other in Study 3.

Conclusion: Narcissistic individuals derogate others more than non-narcissistic individuals regardless of whether ego threat is present or absent.

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The Commitment Function of Angry Facial Expressions

Lawrence Ian Reed, Peter DeScioli & Steven Pinker
Psychological Science, forthcoming

Abstract:
What function do facial expressions have? We tested the hypothesis that some expressions serve as honest signals of subjective commitments - in particular, that angry faces increase the effectiveness of threats. In an ultimatum game, proposers decided how much money to offer a responder while seeing a film clip depicting an angry or a neutral facial expression, together with a written threat that was either inherently credible (a 50-50 split) or less credible (a demand for 70% of the money). Proposers offered greater amounts in response to the less credible threat when it was accompanied by an angry expression than when it was accompanied by a neutral expression, but were unaffected by the expression when dealing with the credible threat. This finding supports the hypothesis that angry expressions are honest signals that enhance the credibility of threats.

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Who does that anyway? Predictors and personality correlates of cyberbullying in college

Zebbedia Gibb & Paul Devereux
Computers in Human Behavior, September 2014, Pages 8-16

Abstract:
Less is known about cyberbullying behaviors in college populations because studies on this topic traditionally have focused on adolescent populations, have not measured correlates of this behavior within college samples, or have methodological weaknesses limiting their findings. By using a more comprehensive measure of cyberbullying behaviors and examining what is associated with its occurrence, the current study aims to extend the knowledge about cyberbullying behaviors in college. Results showed that approximately 52% of college students report engaging in cyberbullying behaviors and indicated that victims of CBB and individuals high on a subclinical measure of psychopathy were more likely to report having engaged in CBB. It was also found that victims of CBB, men, and individuals high on subclinical psychopathy engaged in a wider range of cyberbullying behaviors. Age was the only factor associated with a decrease in CBB.

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Pluralistic ignorance in revenge attitudes and behavior in interpersonal relationships

Susan Boon & Stephen Yoshimura
Personal Relationships, June 2014, Pages 258-271

Abstract:
We investigated whether people's perceptions of social norms concerning interpersonal revenge reflect a tendency for individuals to believe that others' revenge attitudes and behavior differ from their own (i.e., pluralistic ignorance). As part of a survey on revenge experiences in relationships with romantic partners, family members, and associates (e.g., friends), participants (N = 534) judged the acceptability and frequency of revenge in significant personal relationships. As expected, participants believed that others (a) saw revenge as more acceptable and (b) engaged in revenge more frequently than they did themselves. They did not, however, perceive others' revenge attitudes and behaviors to be any more variable than their own attitudes and behaviors actually were. Explanations for and implications of these findings are discussed.

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In the face of dominance: Self-perceived and other-perceived dominance are positively associated with facial-width-to-height ratio in men

V.R. Mileva et al.
Personality and Individual Differences, October 2014, Pages 115-118

Abstract:
In recent research, facial width-to-height ratio (fWHR) has garnered considerable attention because it has been linked with different behavioural characteristics (e.g., achievement drive, deception, aggression). Here we examined whether other-perceptions and self-perceptions of dominance are related to fWHR. In study 1, we found that other-perceived dominance was positively associated with fWHR, but only in men. In studies 2 and 3, using two different self-perceived dominance scales, and two different samples of participants, we found that fWHR was positively related to self-perceived dominance, again only in men. There was no relationship between fWHR and self-perceived prestige scores. Consistent with previous work, we also found that there was no sexual dimorphism in fWHR across all three studies. Together these results suggest that fWHR may be a reliable cue to dominant social behaviour in men.

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Culture of honour theory and social anxiety: Cross-regional and sex differences in relationships among honour-concerns, social anxiety and reactive aggression

Ashley Howell, Julia Buckner & Justin Weeks
Cognition and Emotion, forthcoming

Abstract:
Consistent with the "flight or fight" model of anxiety, social anxiety may incite withdrawal or attack; yet, it is unclear why some socially anxious individuals are vulnerable to aggress. It may be that culture impacts tendencies to "fight" or "flee" from social threat. Honour cultures, including the American South, permit or even promote aggression in response to honour-threats. Thus, social anxiety in the South may be more associated with aggression than in non-honour cultures. In the current sample, region moderated the relation between social anxiety and aggression; social anxiety related positively to reactive (but not proactive) aggression among Southerners (n = 285), but not Midwesterners (n = 258). Participant sex further moderated the relationship, such that it was significant only for Southern women. Also, for Southerners, prototypically masculine honour-concerns mediated the relationship between social anxiety and reactive aggression. Cultural factors may play key roles in aggressive behaviour among some socially anxious individuals.

By KEVIN LEWIS | 09:00:00 AM

Friday, July 4, 2014

Borrowed time

In Harm's Way? Payday Loan Access and Military Personnel Performance

Scott Carrell & Jonathan Zinman
Review of Financial Studies, forthcoming

Abstract:
Does borrowing at 400% APR do more harm than good? The U.S. Department of Defense thinks so and successfully lobbied for a 36% APR cap on loans to servicemen. But existing evidence on how access to high-interest debt affects borrowers is inconclusive. We estimate effects of payday loan access on enlisted personnel using exogenous variation in Air Force rules assigning personnel to bases across the United States, and within-state variation in lending laws over time. Airmen job performance and retention declines with payday loan access, and severely poor readiness increases. These effects are strongest among relatively inexperienced and financially unsophisticated airmen.

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Payday Loans and Consumer Financial Health

Neil Bhutta
Journal of Banking & Finance, forthcoming

Abstract:
The annualized interest rate for a payday loan often exceeds 10 times that of a typical credit card, yet this market grew immensely in the 1990s and 2000s, elevating concerns about the risk payday loans pose to consumers and whether payday lenders target minority neighborhoods. This paper employs individual credit record data, and Census data on payday lender store locations, to assess these concerns. Taking advantage of several state law changes since 2006 and, following previous work, within-state-year differences in access arising from proximity to states that allow payday loans, I find little to no effect of payday loans on credit scores, new delinquencies, or the likelihood of overdrawing credit lines. The analysis also indicates that neighborhood racial composition has little influence on payday lender store locations conditional on income, wealth and demographic characteristics.

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Banks Are Where The Liquidity Is

Oliver Hart & Luigi Zingales
NBER Working Paper, June 2014

Abstract:
What is so special about banks that their demise often triggers government intervention? In this paper we develop a simple model where, even ignoring interconnectedness issues, the failure of a bank causes a larger welfare loss than the failure of other institutions. The reason is that agents in need of liquidity tend to concentrate their holdings in banks. Thus, a shock to banks disproportionately affects the agents who need liquidity the most, reducing aggregate demand and the level of economic activity. In the context of our model, the optimal fiscal response to such a shock is to help people, not banks, and the size of this response should be larger if a bank, rather than a similarly-sized nonfinancial firm, fails.

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The revolving door and worker flows in banking regulation

David Lucca, Amit Seru & Francesco Trebbi
Journal of Monetary Economics, forthcoming

Abstract:
This paper traces career transitions of federal and state U.S. banking regulators from a large sample of publicly available curricula vitae, and provides basic facts on worker flows between the regulatory and private sector resulting from the revolving door. We find strong countercyclical net worker flows into regulatory jobs, driven largely by higher gross outflows into the private sector during booms. These worker flows are also driven by state-specific banking conditions as measured by local banks' profitability, asset quality and failure rates. The regulatory sector seems to experience a retention challenge over time, with shorter regulatory spells for workers, and especially those with higher education. Evidence from cross-state enforcement actions of regulators shows gross inflows into regulation and gross outflows from regulation are both higher during periods of intense enforcement, though gross outflows are significantly smaller in magnitude. These results appear inconsistent with a “quid-pro-quo” explanation of the revolving door, but consistent with a “regulatory schooling” hypothesis.

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The Variance in Foreclosure Spillovers across Neighborhood Types

Keith Ihlanfeldt & Tom Mayock
Public Finance Review, forthcoming

Abstract:
The estimation of foreclosure spillover effects has been the subject of a number of studies following the most recent housing market crash. An important issue largely overlooked by these studies is the extent to which these spillovers vary across neighborhoods. In this article, we use data from the South Florida metropolitan area to study the variance in these foreclosure spillovers across neighborhoods with different income levels and racial concentrations. We find that the largest foreclosure spillovers occur in higher-income neighborhoods. In low-income, minority neighborhoods, we find no evidence of spillover effects. The results have important implications for local governments.

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Complex Securities and Underwriter Reputation: Do Reputable Underwriters Produce Better Securities?

John Griffin, Richard Lowery & Alessio Saretto
Review of Financial Studies, forthcoming

Abstract:
Conventional wisdom suggests that high-reputation banks will generally produce good securities to maintain their long-run reputation. We show with a simple model that, when securities are complex a high-reputation bank may produce assets that underperform during market downturns. We examine this possibility using a unique sample of $10.1 trillion of CLO, MBS, ABS, and CDOs. Contrary to the conventional view, securities issued by more reputable banks did not outperform but, rather, had higher proportions of capital in default.

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The Role of Proximity in Foreclosure Externalities: Evidence from Condominiums

Lynn Fisher, Lauren Lambie-Hanson & Paul Willen
NBER Working Paper, April 2014

Abstract:
We measure the effect of foreclosures on the sale prices of nearby properties using a dataset of condominiums in Boston. A foreclosure in the same association and at the same address depresses the sale price by 2.5 percent, but properties in the same association but located at a different address have an effect that is tightly estimated at zero. Since properties in the same association are close substitutes, we argue that the evidence points against the pecuniary externality of property coming on the market and toward a physical externality as the source of measured foreclosure externalities.

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Bankruptcy Law and the Cost of Credit: The Impact of Cramdown on Mortgage Interest Rates

Joshua Goodman & Adam Levitin
Journal of Law and Economics, February 2014, Pages 139-158

Abstract:
Recent proposals to address housing market troubles through principal modification could increase the cost of credit in the mortgage market. We explore this possibility using historical variation in federal judicial rulings regarding whether Chapter 13 bankruptcy filers could reduce the principal owed on a home loan to the home’s market value. The practice, known as cramdown, was definitively prohibited by the Supreme Court in 1993. We find that home loans closed during the time when cramdown was allowed had interest rates 12–16 basis points higher than loans closed in the same state when cramdown was not allowed, which translates to a roughly 1 percent increase in monthly payments. Consistent with the theory that lenders are pricing in the risk of principal modification, interest rate increases are higher for the riskiest borrowers and zero for the least risky and higher in states where Chapter 13 filing is more common.

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The US finance wage premium before and after the financial crisis: A decomposition exercise

Stella Capuano, Tat-kei Lai & Hans-Jörg Schmerer
Applied Economics Letters, forthcoming

Abstract:
Does the recent financial crisis change the wage structures of the US finance and nonfinance sectors? In this article, we study the wage gap between workers in these two sectors between 1990 and 2011. Using data from the Current Population Survey, we find that the finance wage premium increased over time and only dropped modestly during the crisis. Using the Oaxaca–Blinder method to decompose the wage gap into ‘explained’ and ‘unexplained’ parts, we also find that the wage gap was entirely driven by unexplained factors.

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Wishful Thinking or Effective Threat? Tightening Bank Resolution Regimes and Bank Risk-Taking

Magdalena Ignatowski & Josef Korte
Journal of Financial Stability, forthcoming

Abstract:
We propose a framework for testing the effects of changes in bank resolution regimes on bank behavior. By exploiting the differential relevance of recent changes in U.S. bank resolution (i.e., the introduction of the Orderly Liquidation Authority, OLA) for different types of banks, we are able to simulate a quasi-natural experiment using a difference-in-difference framework. We find that banks that are more affected by the introduction of the OLA (1) significantly decrease their overall risk-taking and (2) shift their loan origination toward lower risk, indicating the general effectiveness of the regime change. This effect, however, does (3) not hold for the largest and most systemically important banks. Hence, the introduction of the OLA in the U.S. alone does not appear to have solved the too-big-to-fail problem and might need to be complemented with other measures to limit financial institutions’ risk-taking.

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Monetary policy and the transaction role of money in the United States

Alexander Kriwoluzky & Christian Stoltenberg
Economic Journal, forthcoming

Abstract:
The declining importance of money in transactions can explain the well-known fact that U.S. interest rate policy was passive in the pre-Volcker period and active after 1982. We generalise a standard cashless New Keynesian model (Woodford, 2003) by incorporating an explicit transaction role for money. In the pre-Volcker period, we estimate that money did play an important role and determinacy required a passive interest rate policy. However, after 1982, money no longer played an important role in facilitating transactions. Correspondingly, the conventional view prevails and an active policy ensured equilibrium determinacy.

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The Dark Side of Sunshine: Regulatory Oversight and Status Quo Bias

Michael Collins & Carly Urban
Journal of Economic Behavior & Organization, forthcoming

Abstract:
As the mortgage foreclosure crisis accelerated in the U.S. in the late 2000s, state-level policymakers implemented measures designed to protect consumers and stem the tide of foreclosures. One form of policy was simply to require lenders to report on foreclosure prevention activities. Such policies represented a shift from the status quo for mortgage loan servicing firms operating under incomplete information — doing nothing with non-paying loans while waiting for more information to be revealed — to either foreclosing on the borrower or offering the borrower a modification of loan terms. Using a difference-in-difference-in-differences empirical strategy, we exploit one policy implemented in Maryland for a subset of mortgage servicers and find evidence that firms perform more loan modifications, as well as file more foreclosures. Increasing foreclosure filings was contrary to the intent of the policy, suggesting that policymakers should be aware of how firms exhibit systematic biases, much like individuals.

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Neighborhood Impact of Foreclosure: A Quantile Regression Approach

Lei Zhang & Tammy Leonard
Regional Science and Urban Economics, forthcoming

Abstract:
This paper uses quantile regression, while accounting for spatial autocorrelation, to examine the simultaneous space-time impact of foreclosures on neighborhood property values. We find that negative price externalities associated with neighborhood foreclosures are greatest (1) among lower-priced homes, (2) within 250 feet of the property and (3) in the 12 months following a foreclosure auction. By using quantile regression, we are able to also investigate changes in the distribution of house prices associated with varying levels of neighborhood foreclosures.

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A Comparative Study of the Forecasting Performance of Three International Organizations

Pingfan Hong & Zhibo Tan
Journal of Policy Modeling, forthcoming

Abstract:
This article evaluates and compares the forecasting performance of three international organizations: the United Nations, the International Monetary Fund and the World Bank. The annual forecasts made by the United Nations in the period of 1981-2011 are found to be fairly robust, in terms of bias and efficiency. In comparison, the forecasting performance of the United Nations is found to be marginally better than the other two organizations during the period of 2000-2012. However, the forecasts of all these organizations missed the Great Recession of 2009 by a large margin.

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State Foreclosure Laws and the Incidence of Mortgage Default

Cem Demiroglu, Evan Dudley & Christopher James
Journal of Law and Economics, February 2014, Pages 225-280

Abstract:
This paper examines how differences in state foreclosure laws influence the incidence of default in the residential mortgage market. In particular, we examine how judicial review requirements, lenders’ recourse rights (deficiency judgments), and state assistance programs for distressed borrowers affected the likelihood of default during the recent U.S. housing crisis. We argue that state foreclosure laws should have little effect on the likelihood of liquidity events (for example, shocks to borrowers’ ability to make payments) and thus provide a good instrument for identifying borrowers’ costs of default. We find that borrowers with negative home equity are significantly more likely to default in states with borrower-friendly foreclosure laws. Finally, we examine how recent state and federal loan foreclosure prevention programs affected the likelihood of default. Overall, we find a significant decline in the effect of judicial review requirements but not deficiency judgments on default after 2008.

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Did Railroads Make Antebellum U.S. Banks More Sound?

Jeremy Atack, Matthew Jaremski & Peter Rousseau
NBER Working Paper, April 2014

Abstract:
We investigate the relationships of bank failures and balance sheet conditions with measures of proximity to different forms of transportation in the United States over the period from 1830-1860. A series of hazard models and bank-level regressions indicate a systematic relationship between proximity to railroads (but not to other means of transportation) and “good” banking outcomes. Although railroads improved economic conditions along their routes, we offer evidence of another channel. Specifically, railroads facilitated better information flows about banks that led to modifications in bank asset composition consistent with reductions in the incidence of moral hazard.

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Mortgage convexity

Samuel Hanson
Journal of Financial Economics, August 2014, Pages 270–299

Abstract:
Most home mortgages in the United States are fixed-rate loans with an embedded prepayment option. When long-term rates decline, the effective duration of mortgage-backed securities (MBS) falls due to heightened refinancing expectations. I show that these changes in MBS duration function as large-scale shocks to the quantity of interest rate risk that must be borne by professional bond investors. I develop a simple model in which the risk tolerance of bond investors is limited in the short run, so these fluctuations in MBS duration generate significant variation in bond risk premia. Specifically, bond risk premia are high when aggregate MBS duration is high. The model offers an explanation for why long-term rates could appear to be excessively sensitive to movements in short rates and explains how changes in MBS duration act as a positive-feedback mechanism that amplifies interest rate volatility. I find strong support for these predictions in the time series of US government bond returns.

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Credit CARD Act of 2009: What Did Banks Do?

Vikram Jambulapati & Joanna Stavins
Journal of Banking & Finance, September 2014, Pages 21–30

Abstract:
The Credit CARD Act of 2009 was intended to prevent practices in the credit card industry that lawmakers viewed as deceptive and abusive. Among other changes, the Act restricted issuers’ account closure policies, eliminated certain fees, and made it more difficult for issuers to change terms on credit card plans. Critics of the Act argued that because of the long lag between approval and implementation of the law, issuing banks would be able to take preemptive actions that might disadvantage cardholders before the law could take effect. Using credit bureau data as well as individual data from a survey of U.S. consumers, we test whether banks closed consumers’ credit card accounts or otherwise restricted access to credit just before the enactment of the CARD Act. Because the period prior to the enactment of the CARD Act coincided with the financial crisis and recession, causality in this case is particularly difficult to establish. We find evidence that a higher fraction of credit card accounts were closed following the Federal Reserve Board’s adoption of its credit card rules, but not between May 2009, when the CARD Act was signed, and when most of its provisions became law in February 2010. However, we do find evidence that banks deteriorated terms of credit card plans at a higher rate during this period, especially lowered the credit limits. Among the survey respondents whose bank accounts were closed during that period, account holders were much more likely to close their own credit card accounts than to have them closed by their card issuers.

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Local Banking Panics of the 1920s: Identification and Determinants

Lee Davison & Carlos Ramirez
Journal of Monetary Economics, September 2014, Pages 164–177

Abstract:
Using a newly discovered dataset of U.S. bank suspensions from 1921 to 1929, we discovered that banking panics were more common in the 1920s than had been believed. Besides identifying panics, we investigate their determinants, finding that local banking panics were more likely when fundamental economic conditions were generally weak and more likely in “overbanked” states; they were less likely in states with deposit insurance or states where a relatively large share of banks belonged to chain banking organizations.

By KEVIN LEWIS | 09:00:00 AM

Thursday, July 3, 2014

Just my type

Economic scarcity alters the perception of race

Amy Krosch & David Amodio
Proceedings of the National Academy of Sciences, 24 June 2014, Pages 9079–9084

Abstract:
When the economy declines, racial minorities are hit the hardest. Although existing explanations for this effect focus on institutional causes, recent psychological findings suggest that scarcity may also alter perceptions of race in ways that exacerbate discrimination. We tested the hypothesis that economic resource scarcity causes decision makers to perceive African Americans as “Blacker” and that this visual distortion elicits disparities in the allocation of resources. Studies 1 and 2 demonstrated that scarcity altered perceptions of race, lowering subjects’ psychophysical threshold for seeing a mixed-race face as “Black” as opposed to “White.” In studies 3 and 4, scarcity led subjects to visualize African American faces as darker and more “stereotypically Black,” compared with a control condition. When presented to naïve subjects, face representations produced under scarcity elicited smaller allocations than control-condition representations. Together, these findings introduce a novel perceptual account for the proliferation of racial disparities under economic scarcity.

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Female hurricanes are deadlier than male hurricanes

Kiju Jung et al.
Proceedings of the National Academy of Sciences, 17 June 2014, Pages 8782–8787

Abstract:
Do people judge hurricane risks in the context of gender-based expectations? We use more than six decades of death rates from US hurricanes to show that feminine-named hurricanes cause significantly more deaths than do masculine-named hurricanes. Laboratory experiments indicate that this is because hurricane names lead to gender-based expectations about severity and this, in turn, guides respondents’ preparedness to take protective action. This finding indicates an unfortunate and unintended consequence of the gendered naming of hurricanes, with important implications for policymakers, media practitioners, and the general public concerning hurricane communication and preparedness.

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Polyculturalism and Sexist Attitudes: Believing Cultures are Dynamic Relates to Lower Sexism

Lisa Rosenthal, Sheri Levy & Maria Militano
Psychology of Women Quarterly, forthcoming

Abstract:
In cultural contexts in which sexist beliefs are considered traditional, shifts toward gender equality represent an example of cultural change. Polyculturalism is defined as the belief that cultures change constantly through different racial and ethnic groups’ interactions, influences, and exchanges with each other and, therefore, are dynamic and socially constructed rather than static. Thus, polyculturalism may involve openness to cultural change and, thereby, would be expected to be associated with lower sexist attitudes. Four studies (both cross-sectional and longitudinal) with undergraduate and community samples in the Northeastern United States tested whether endorsement of polyculturalism is inversely associated with sexism, above and beyond potentially confounding belief systems. Across studies, for both women and men, endorsement of polyculturalism was associated with lower sexist attitudes for two classes of sexism measures: (a) attitudes toward the rights and roles of women and (b) ambivalent sexist attitudes toward women. Associations remained significant while controlling for potentially confounding variables (colorblindness, conservatism, egalitarianism, gender and ethnic identity, gender and race essentialism, multiculturalism, right-wing authoritarianism, and social dominance orientation). Greater openness to criticizing one’s culture mediated polyculturalism’s association with attitudes toward the rights and roles of women but not with ambivalent sexist attitudes toward women. Studying polyculturalism may provide unique insights into sexism, and more work is needed to understand the mechanisms involved.

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An eye for the I: Preferential attention to the eyes of ingroup members

Kerry Kawakami et al.
Journal of Personality and Social Psychology, July 2014, Pages 1-20

Abstract:
Human faces, and more specifically the eyes, play a crucial role in social and nonverbal communication because they signal valuable information about others. It is therefore surprising that few studies have investigated the impact of intergroup contexts and motivations on attention to the eyes of ingroup and outgroup members. Four experiments investigated differences in eye gaze to racial and novel ingroups using eye tracker technology. Whereas Studies 1 and 3 demonstrated that White participants attended more to the eyes of White compared to Black targets, Study 2 showed a similar pattern of attention to the eyes of novel ingroup and outgroup faces. Studies 3 and 4 also provided new evidence that eye gaze is flexible and can be meaningfully influenced by current motivations. Specifically, instructions to individuate specific social categories increased attention to the eyes of target group members. Furthermore, the latter experiments demonstrated that preferential attention to the eyes of ingroup members predicted important intergroup biases such as recognition of ingroup over outgroup faces (i.e., the own-race bias; Study 3) and willingness to interact with outgroup members (Study 4). The implication of these findings for general theorizing on face perception, individuation processes, and intergroup relations are discussed.

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On the Flexibility of Attention to Race

Joshua Correll, Steffanie Guillermo & Julia Vogt
Journal of Experimental Social Psychology, November 2014, Pages 74–79

Abstract:
Research on the flexibility of race-based processing offers divergent results. Some studies find that race affects processing in an obligatory fashion. Other studies suggest dramatic flexibility. The current study attempts to clarify this divergence by examining a process that may mediate flexibility in race-based processing: the engagement of visual attention. In this study, White participants completed an exogenous cuing task designed to measure attention to White and Black faces. Participants in the control condition showed a pronounced bias to attend to Black faces. Critically, participants in a goal condition were asked to process a feature of the stimulus that was unrelated to race. The induction of this goal eliminated differential attention to Black faces, suggesting that attentional engagement responds flexibly to top-down goals, rather than obligatorily to bottom-up racial cues.

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“Not One of Us”: Predictors and Consequences of Denying Ingroup Characteristics to Ambiguous Targets

Nour Kteily et al.
Personality and Social Psychology Bulletin, forthcoming

Abstract:
We investigated individual difference predictors of ascribing ingroup characteristics to negative and positive ambiguous targets. Studies 1 and 2 investigated events involving negative targets whose status as racial (Tsarnaev brothers) or national (Woolwich attackers) ingroup members remained ambiguous. Immediately following the attacks, we presented White Americans and British individuals with the suspects’ images. Those higher in social dominance orientation (SDO) and right-wing authoritarianism (RWA) — concerned with enforcing status boundaries and adherence to ingroup norms, respectively — perceived these low status and low conformity suspects as looking less White and less British, thus denying them ingroup characteristics. Perceiving suspects in more exclusionary terms increased support for treating them harshly, and for militaristic counter-terrorism policies prioritizing ingroup safety over outgroup harm. Studies 3 and 4 experimentally manipulated a racially ambiguous target’s status and conformity. Results suggested that target status and conformity critically influence SDO’s (status) and RWA’s (conformity) effects on inclusionary versus exclusionary perceptions.

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The role of stereotypical beliefs in gender-based activation of the Proteus effect

Brett Sherrick, Jennifer Hoewe & Franklin Waddell
Computers in Human Behavior, September 2014, Pages 17–24

Abstract:
Informed by the Proteus effect, the current study examined the moderating effect of belief in stereotypes on the relationship between avatar appearance and user behavior, via an interactive fiction. The results of a one-factor (avatar gender: male vs. female), between-subjects experiment revealed that female avatars elicited more frequent masculine behaviors (particularly among individuals high in feminine gender stereotypes) and that male avatars elicited more frequent feminine behaviors. Conversely, self-reported gender led to stereotypic behaviors as expected. A moderating effect of awareness of the avatar’s influence on stereotypically gender-based decisions on frequency of gender-typed behavior was not found, suggesting individuals are not aware of the influence of avatars on their subsequent decisions.

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Do Intergroup Conflicts Necessarily Result from Outgroup Hate?

Michael Mäs & Jacob Dijkstra
PLoS ONE, June 2014

Abstract:
We developed a new experimental design to test whether or not individuals engage in conflict between social groups because they seek to harm outgroup members. Challenging prominent social psychological theories, we did not find support for such negative social preferences. Nevertheless, subjects heavily engaged in group conflict. Results support the argument that processes that act within social groups motivate engagement in conflict between groups even in the absence of negative social preferences. In particular, we found that “cheap talk” communication between group members fuels conflict. Analyses did not support the notion that the effect of communication results from guilt-aversion processes.

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Heart Rate and Affective Reactions to State Self-Objectification as a Function of Gender

Melinda Green et al.
Basic and Applied Social Psychology, May/June 2014, Pages 259-271

Abstract:
The purpose of the present study was to examine heart rate (HR) and affective reactions to state self-objectification as a function of gender. We examined negative affect, positive affect, guilt, and HR at 6-second and 5-minute intervals across baseline, control, high objectification, low objectification, and cologne conditions in men (n = 53) and women (n = 57). Mixed factorial MANOVA results indicated a statistically significant Gender × Condition interaction. Both men and women showed a cardiac orienting response to high versus low objectification. Cardiac stress reactions to objectification were higher among women. Negative affective reactions to objectification were more pervasive across conditions among women.

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A little similarity goes a long way: The effects of peripheral but self-revealing similarities on improving and sustaining interracial relationships

Tessa West et al.
Journal of Personality and Social Psychology, July 2014, Pages 81-100

Abstract:
Integrating theory on close relationships and intergroup relations, we construct a manipulation of similarity that we demonstrate can improve interracial interactions across different settings. We find that manipulating perceptions of similarity on self-revealing attributes that are peripheral to the interaction improves interactions in cross-race dyads and racially diverse task groups. In a getting-acquainted context, we demonstrate that the belief that one’s different-race partner is similar to oneself on self-revealing, peripheral attributes leads to less anticipatory anxiety than the belief that one’s partner is similar on peripheral, nonself-revealing attributes. In another dyadic context, we explore the range of benefits that perceptions of peripheral, self-revealing similarity can bring to different-race interaction partners and find (a) less anxiety during interaction, (b) greater interest in sustained contact with one’s partner, and (c) stronger accuracy in perceptions of one’s partners’ relationship intentions. By contrast, participants in same-race interactions were largely unaffected by these manipulations of perceived similarity. Our final experiment shows that among small task groups composed of racially diverse individuals, those whose members perceive peripheral, self-revealing similarity perform superior to those who perceive dissimilarity. Implications for using this approach to improve interracial interactions across different goal-driven contexts are discussed.

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Status processes in human-computer interactions: Does gender matter?

Marek Posard
Computers in Human Behavior, August 2014, Pages 189–195

Abstract:
This paper examines the conditions that cause status processes to emerge in groups of humans and computers. It presents the results from an experiment where participants worked on a gender-neutral task with a computerized partner described as being a man or woman. These participants evaluated the performance of their partner on a collective task and estimated the cost to purchase this machine. The gender descriptors of these machines did not affect the performance ratings by participants. These participants did estimate that male computers would cost significantly more money than female machines. The findings show how status characteristics shape user perceptions of their computers, which lack the human features that define these characteristics.

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The Impact of Race and Inclusionary Status on Memory for Ingroup and Outgroup Faces

Michael Bernstein et al.
Basic and Applied Social Psychology, May/June 2014, Pages 191-198

Abstract:
We explore how rejection by racial ingroup or outgroup members influences the Other Race Effect (ORE; the tendency to have better memory for same-race [SR] relative to other-race [OR] faces). White and Black participants were rejected or accepted by two racial ingroup or outgroup members during an online game. Participants then completed a face recognition task assessing SR and OR targets. Those playing with ingroup members showed the classic ORE. However, inclusion by outgroup members led to the ORE, while exclusion by outgroup members eliminated this effect by increasing outgroup face memory. We discuss future work on exclusion and the ORE.

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Trio of terror (pregnancy, menstruation, and breastfeeding): An existential function of literal self-objectification among women

Kasey Lynn Morris, Jamie Goldenberg & Nathan Heflick
Journal of Personality and Social Psychology, July 2014, Pages 181-198

Abstract:
Research and theorizing suggest that objectification entails perceiving a person not as a human being but, quite literally, as an object. However, the motive to regard the self as an object is not well understood. The current research tested the hypothesis that literal self-objectification can serve a terror management function. From this perspective, the female body poses a unique existential threat on account of its role in reproduction, and regarding the self as an object is posited to shield women from this threat because objects, in contrast to humans, are not mortal. Across 5 studies, 3 operationalizations of literal self-objectification were employed (a denial of essentially human traits to the self, overlap in the explicit assignment of traits to the self and objects, and implicit associations between self and objects using an implicit association test) in response to 3 aspects of women’s bodies involved in reproduction (pregnancy, menstruation, and breastfeeding). In each study, priming mortality led women (but not men, included in Studies 1, 3, 4, and 5) to literally self-objectify in conditions where women’s reproductive features were salient. In addition, literal self-objectification was found to mediate subsequent responsiveness to death-related stimuli (Study 4). Together, these findings are the first to demonstrate a direct link between mortality salience, women’s role in reproduction, and their self-objectification, supporting an existential function of self-objectification in women.

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When Having Black Friends Isn’t Enough: How Threat Cues Undermine Safety Cues in Friendship Formation

Daryl Wout, Mary Murphy & Sabrica Barnett
Social Psychological and Personality Science, forthcoming

Abstract:
People’s concerns about being rejected temper their interest in forming interracial friendships. For Blacks, identity threat can magnify their rejection concerns and reduce friendship interest. The present research explores the role that threat and safety cues play in Blacks’ concerns about being rejected by Whites. Prior to an interaction, participants learned information about their partner that was comprised of two safety cues or a safety cue accompanied by a threat cue. In Study 1, Blacks who received both a safety and a threat cue were more concerned about being rejected and were less interested in forming an interracial friendship than Blacks who received only safety cues. Whites were unaffected by these cues. In Study 2, Blacks’ perceptions of their interaction partner’s warmth mediated the cues’ effects on rejection concerns and friendship interest. This research suggests that a single threatening cue can undermine safety cues during interracial interactions.

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Feeling (Mis)Understood and Intergroup Friendships in Interracial Interactions

Nicole Shelton et al.
Personality and Social Psychology Bulletin, forthcoming

Abstract:
The present research investigated whether having out-group friends serves as a buffer for feeling misunderstood in interracial interactions. Across three experience sampling studies, we found that among ethnic minorities who have few White friends or are not interacting with White friends, daily interracial interactions are associated with feeling less understood. By contrast, we found that among ethnic minorities who have more White friends or are interacting with White friends, the relationship between daily interracial interactions and feeling understood is not significant. We did not find similar results for Whites; that is, having ethnic minority friends did not play a role in the relationship between daily interracial interactions and feeling understood. Together, these studies demonstrate the beneficial effects of intergroup friendships for ethnic minorities.

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Visualizing minimal ingroup and outgroup faces: Implications for impressions, attitudes, and behavior

Kyle Ratner et al.
Journal of Personality and Social Psychology, June 2014, Pages 897-911

Abstract:
More than 40 years of research have shown that people favor members of their ingroup in their impressions, attitudes, and behaviors. Here, we propose that people also form different mental images of minimal ingroup and outgroup members, and we test the hypothesis that differences in these mental images contribute to the well-established biases that arise from minimal group categorization. In Study 1, participants were assigned to 1 of 2 groups using a classic minimal group paradigm. Next, a reverse correlation image classification procedure was used to create visual renderings of ingroup and outgroup face representations. Subsequently, a 2nd sample naive to the face generation stage rated these faces on a series of trait dimensions. The results indicated that the ingroup face was significantly more likely than the outgroup face to elicit favorable impressions (e.g., trusting, caring, intelligent, attractive). Extending this finding, Study 2 revealed that ingroup face representations elicited more favorable implicitly measured attitudes than did outgroup representations, and Study 3 showed that ingroup faces were trusted more than outgroup faces during an economic game. Finally, Study 4 demonstrated that facial physiognomy associated with trustworthiness more closely resembled the facial structure of the average ingroup than outgroup face representation. Together, these studies suggest that minimal group distinctions can elicit different mental representations, and that this visual bias is sufficient to elicit ingroup favoritism in impressions, attitudes and behaviors.

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Virtual ideals: The effect of video game play on male body image

Zeely Sylvia, Teresa King & Brendan Morse
Computers in Human Behavior, August 2014, Pages 183–188

Abstract:
The perpetuation of unrealistic body ideals by popular media has been linked to negative body image and self-esteem; however, the influence of video games has remained largely unexamined despite their growing popularity as a media form, particularly among men. The purpose of this study was to investigate whether playing video games that emphasize an unrealistic male body ideal has a negative impact on body satisfaction. Participants played a highly realistic video game for 45 min and then completed questionnaires measuring muscularity concerns and body image. Men randomized to the experimental group played the game with a character of exaggerated muscularity, whereas those randomized to the control group played with a character of average build. Men in the muscular condition reported significantly lower body satisfaction than men in the control condition. Considering the wide-spread use of video games, as well as the increasing muscularity of the ideal male body in popular culture, this finding could have important implications for the psychological well-being of men who regularly play video games. Further research should assess whether this lowered body satisfaction is maintained and to determine if negative behavioral consequences emerge.

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The Role of Anonymity in the Effects of Inadvertent Exposure to Online Pornography Among Young Adult Males

Jae Woong Shim & Bryant Paul
Social Behavior and Personality, Summer 2014, Pages 823-834

Abstract:
We investigated how the sexist attitudes of young adult males were affected when they were inadvertently exposed to online pornography, and the role of the sense of anonymity in subsequent selection by these individuals of sexually explicit material. Participants were 84 male university students. Results showed that participants were more likely to pursue extreme pornography when they felt anonymous, as compared with situations in which they did not feel anonymous. This tendency was especially apparent for those exposed for 10 seconds to sexual online pop-up commercials that include pornographic content. The results also showed that inadvertent exposure to such sexual online pop-up commercials, coupled with feelings of anonymity, could increase participants' sexist attitudes toward women. The implications of these findings for future research are discussed.

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Stereotype Transmission and Maintenance Through Interpersonal Communication: The Irony Bias

Christian Burgers & Camiel Beukeboom
Communication Research, forthcoming

Abstract:
In interpersonal communication, stereotypes are predominantly transmitted through language. Linguistic bias theory presupposes that speakers systematically vary their language when communicating stereotype-consistent and stereotype-inconsistent information. We investigate whether these findings can be extended to verbal irony use. The irony bias posits that irony is more appropriate to communicate stereotype-inconsistent than stereotype-consistent information. Three experiments support this hypothesis by showing that irony is found more appropriate (Experiments 1-2) and used more often (Experiment 3) in stereotype-inconsistent than in stereotype-consistent situations. Furthermore, linguistic biases have important communicative consequences, because they implicitly serve to maintain stereotypic expectancies. Experiment 4 shows that irony shares this characteristic with other linguistic biases, in that irony — compared to literal language — leads to more external attribution. Taken together, these results indicate that stereotypic expectancies are subtly revealed and confirmed by verbal irony, and that verbal irony plays an important role in stereotype communication and maintenance.

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Their pain gives us pleasure: How intergroup dynamics shape empathic failures and counter-empathic responses

M. Cikara et al.
Journal of Experimental Social Psychology, forthcoming

Abstract:
Despite its early origins and adaptive functions, empathy is not inevitable; people routinely fail to empathize with others, especially members of different social or cultural groups. In five experiments, we systematically explore how social identity, functional relations between groups, competitive threat, and perceived entitativity contribute to intergroup empathy bias: the tendency not only to empathize less with out-group relative to in-group members, but also feel pleasure in response to their pain (and pain in response to their pleasure). When teams are set in direct competition, affective responses to competition-irrelevant events are characterized not only by less empathy toward out-group relative to in-group members, but also by increased counter-empathic responses: Schadenfreude and Glückschmerz (Experiment 1). Comparing responses to in-group and out-group targets against responses to unaffiliated targets in this competitive context suggests that intergroup empathy bias may be better characterized by out-group antipathy rather than extraordinary in-group empathy (Experiment 2). We find also that intergroup empathy bias is robust to changes in relative group standing — feedback indicating that the out-group has fallen behind (Experiment 3a) or is no longer a competitive threat (Experiment 3b) does not reduce the bias. However, reducing perceived in-group and out-group entitativity can significantly attenuate intergroup empathy bias (Experiment 4). This research establishes the boundary conditions of intergroup empathy bias and provides initial support for a more integrative framework of group-based empathy.

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We Take Care of Our Own: Caregiving Salience Increases Out-Group Bias in Response to Out-Group Threat

Michael Gilead & Nira Liberman
Psychological Science, forthcoming

Abstract:
The parental caregiving motivational system leads people to behave selflessly. However, given that the purpose of this motivation is the protection of close kin, it might also lead to aggression toward distant, threatening others. In the present studies, we wished to investigate the effects of behaviorally activating the caregiving motivational system on out-group bias. On the basis of previous work in behavioral ecology, we predicted that activation of the caregiving system would enhance bias against out-groups whenever their members posed a salient threat. This prediction was confirmed in three studies (total N = 866) across different populations, manipulations, and measures. We discuss the possible importance of continued research into the behavioral consequences of caregiving salience.

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Evidence of Self-Informant Agreement in Ethnic Identity

Stevie Yap et al.
Social Psychological and Personality Science, forthcoming

Abstract:
Ethnic identity is considered to be a psychologically important characteristic that is associated with adjustment outcomes. However, little is known about the degree to which ethnic identity manifests itself in characteristics that are observable to others. This study is the first to evaluate self-other agreement in ethnic identity and to use a multimethod approach for testing the associations between ethnic identity and adjustment outcomes. Results provide evidence of agreement across self and informant reports of the Multigroup Ethnic Identity Measure, the most widely used measure of ethnic identity in the literature. We also find evidence for shared method effects across informant reports of life satisfaction and ethnic identity. Finally, we find evidence for an association between latent ethnic identity and latent life satisfaction and self esteem scores, suggesting that the association between ethnic identity and both life satisfaction and self-esteem is more than just shared method variance.

By KEVIN LEWIS | 09:00:00 AM

Wednesday, July 2, 2014

Toxic assets

Environmental Externalities and Cost of Capital

Sudheer Chava
Management Science, forthcoming

Abstract:
I analyze the impact of a firm's environmental profile on its cost of equity and debt capital. Using implied cost of capital derived from analysts' earnings estimates, I find that investors demand significantly higher expected returns on stocks excluded by environmental screens (such as hazardous chemical, substantial emissions, and climate change concerns) compared to firms without such environmental concerns. Lenders also charge a significantly higher interest rate on the bank loans issued to firms with these environmental concerns. I provide evidence that the environmental profile of a firm is not simply proxying for an omitted component of its default risk. Further, firms with these environmental concerns have lower institutional ownership and fewer banks participate in their loan syndicate than firms without such environmental concerns. These results suggest that exclusionary socially responsible investing and environmentally sensitive lending can have a material impact on the cost of equity and debt capital of affected firms.

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The Effect of Competition on Toxic Pollution Releases

Daniel Simon
Indiana University Working Paper, June 2014

Abstract:
We examine how competition affects toxic industrial releases, using five years of data from thousands of facilities across hundreds of different industries. Our main result indicates that competition reduces toxic plant-level releases. On average, each one-percentage-point reduction in the Herfindahl Index (HHI) results in a two-percent reduction in a facility’s toxic releases. We find similar effects using four- and eight-firm concentration ratios, and the effect is larger in more concentrated industries. In addition, we find that competition reduces releases of carcinogenic chemicals, a category of pollutants that pose a particularly acute public health concern. Our results also shed some light on the mechanisms through which firms reduce pollution releases. We find that facilities in more competitive industries engage in more pollution reduction activities. At the same time, we find some evidence that is consistent with facilities in more competitive industries reducing pollution by reducing output. Taken together, our results fail to provide support for the hypothesis that competition leads to more socially undesirable behavior.

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Fine Particulate Matter Air Pollution and Cognitive Function Among Older US Adults

Jennifer Ailshire & Eileen Crimmins
American Journal of Epidemiology, forthcoming

Abstract:
Existing research on the adverse health effects of exposure to pollution has devoted relatively little attention to the potential impact of ambient air pollution on cognitive function in older adults. We examined the cross-sectional association between residential concentrations of particulate matter with aerodynamic diameter of 2.5 μm or less (PM2.5) and cognitive function in older adults. Using hierarchical linear modeling, we analyzed data from the 2004 Health and Retirement Study, a large, nationally representative sample of US adults aged 50 years or older. We linked participant data with 2000 US Census tract data and 2004 census tract–level annual average PM2.5 concentrations. Older adults living in areas with higher PM2.5 concentrations had worse cognitive function (β = −0.26, 95% confidence interval: −0.47, −0.05) even after adjustment for community- and individual-level social and economic characteristics. Results suggest that the association is strongest for the episodic memory component of cognitive function. This study adds to a growing body of research highlighting the importance of air pollution to cognitive function in older adults. Improving air quality in large metropolitan areas, where much of the aging US population resides, may be an important mechanism for reducing age-related cognitive decline.

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Chronic exposure to low-dose radiation at Chernobyl favors adaptation to oxidative stress in birds

Ismael Galván et al.
Functional Ecology, forthcoming

Abstract:
Ionizing radiation produces oxidative stress, but organisms can adapt to their exposure with physiological adaptive responses. However, the role of radioadaptive responses in wild populations remains poorly known. At Chernobyl, studies of birds and other taxa including humans show that chronic exposure to radiation depletes antioxidants and increases oxidative damage. Here we present analyses of levels of the most important intracellular antioxidant (i.e., glutathione, GSH), its redox status, DNA damage and body condition in 16 species of birds exposed to radiation at Chernobyl. We use an approach that allows considering the individual bird as the sampling unit while controlling for phylogenetic effects, thus increasing the statistical power by avoiding the use of species means as done for most previous comparative studies. As a consequence, we found a pattern radically different from previous studies in wild populations, showing that GSH levels and body condition increased, and oxidative stress and DNA damage decreased, with increasing background radiation. Thus, when several species are considered, the overall pattern indicates that birds are not negatively affected by chronic exposure to radiation and may even obtain beneficial hormetic effects following an adaptive response. Analysis of the phylogenetic signal supports the existence of adaptation in the studied traits, particularly in GSH levels and DNA damage. We also show that, under equal levels of radiation, the birds that produce larger amounts of the pigment pheomelanin and lower amounts of eumelanin pay a cost in terms of decreased GSH levels, increased oxidative stress and DNA damage, and poorer body condition. Radiation, however, diminished another potential cost of pheomelanin, namely its tendency to produce free radicals when exposed to radiation, because it induced a change toward the production of less pro-oxidant forms of pheomelanin with higher benzothiazole-to-benzothiazine ratios, which may have facilitated the acclimation of birds to radiation exposure. Our findings represent the first evidence of adaptation to ionizing radiation in wild animals, and confirm that pheomelanin synthesis represents an evolutionary constraint under stressful environmental conditions because it requires GSH consumption.

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The future of oil: Geology versus technology

Jaromir Benes et al.
International Journal of Forecasting, forthcoming

Abstract:
We discuss and reconcile the geological and economic/technological views concerning the future of world oil production and prices, and present a nonlinear econometric model of the world oil market that encompasses both views. The model performs far better than existing empirical models in forecasting oil prices and oil output out-of-sample. Its point forecast is for a near doubling of the real price of oil over the coming decade, though the error bands are wide, reflecting sharply differing judgments on the ultimately recoverable reserves, and on future price elasticities of oil demand and supply.

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Imminence of peak in US coal production and overestimation of reserves

Nathan Reaver & Sanjay Khare
International Journal of Coal Geology, September 2014, Pages 90–105

Abstract:
Coal is the bulwark of US energy production making up about a third of all energy produced and about half of its electricity generation capacity, over the last decade. Current energy policy in the Unites States assumes that there is at least a century of coal remaining within the nation that can be produced at the current rate of consumption. This assumption is based on the large reported coal reserves and resources. We show that, in coal producing regions and nations, historically reported reserves are generally overestimated by a substantial magnitude. We demonstrate that a similar situation currently exists with US reserves. We forecast future US coal production, in both raw tonnage and energy, using a multi-cyclic logistic model fit to historic production data. Robustness of the model is validated using production data from regions within the US, as well as outside, that have completed a full production cycle. Results from the model indicate maximum raw tonnage coal production will occur in a time window between the years 2009 and 2023, with 2010 being the most likely year of such a maximum. Similarly, energy production from coal will reach a maximum in the years between 2003 and 2018, with 2006 the most likely year of maximum occurrence. The estimated energy ultimate recoverable reserves (URR) from the logistic model is 2750 quadrillion BTU (2900 EJ) with 1070 quadrillion BTU (1130 EJ) yet to be mined, while the estimated raw tonnage URR is 124 billion short tons (112 Gt) with 52 billion short tons yet (47 Gt) to be mined. This latter value is merely a fifth of the long held estimate of 259 billion short tons (235 Gt).

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Uplift and seismicity driven by groundwater depletion in central California

Colin Amos et al.
Nature, 22 May 2014, Pages 483–486

Abstract:
Groundwater use in California’s San Joaquin Valley exceeds replenishment of the aquifer, leading to substantial diminution of this resource and rapid subsidence of the valley floor. The volume of groundwater lost over the past century and a half also represents a substantial reduction in mass and a large-scale unburdening of the lithosphere, with significant but unexplored potential impacts on crustal deformation and seismicity. Here we use vertical global positioning system measurements to show that a broad zone of rock uplift of up to 1–3 mm per year surrounds the southern San Joaquin Valley. The observed uplift matches well with predicted flexure from a simple elastic model of current rates of water-storage loss, most of which is caused by groundwater depletion. The height of the adjacent central Coast Ranges and the Sierra Nevada is strongly seasonal and peaks during the dry late summer and autumn, out of phase with uplift of the valley floor during wetter months. Our results suggest that long-term and late-summer flexural uplift of the Coast Ranges reduce the effective normal stress resolved on the San Andreas Fault. This process brings the fault closer to failure, thereby providing a viable mechanism for observed seasonality in microseismicity at Parkfield and potentially affecting long-term seismicity rates for fault systems adjacent to the valley. We also infer that the observed contemporary uplift of the southern Sierra Nevada previously attributed to tectonic or mantle-derived forces is partly a consequence of human-caused groundwater depletion.

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An Examination of the “Greening of Christianity” Thesis Among Americans, 1993–2010

John Clements, Chenyang Xiao & Aaron McCright
Journal for the Scientific Study of Religion, June 2014, Pages 373–391

Abstract:
Some environmental and religious scholars, religious leaders, and media figures have claimed there has been a “greening of Christianity” in the United States since the mid-1990s. Such a trend would be socially significant, as the integration of Christian values and environmental values may invigorate both domains. Using nationally representative data from the 1993 and 2010 General Social Surveys, we analyze how green self-identified Christians in the U.S. general public are in their pro-environmental attitudes, beliefs, and behaviors. Using structural equation modeling, we find no clear evidence of a greening of Christianity among rank-and-file Christians in the general public between 1993 and 2010. Indeed, the patterns of our results are quite similar to those from earlier decades, which documented that self-identified Christians reported lower levels of environmental concern than did non-Christians and nonreligious individuals. We did find evidence of some greening among evangelical Protestants, especially relative to mainline Protestants, between 1993 and 2010. We close by suggesting a few fruitful avenues for further research in this area via variable-oriented, case-oriented, and experimental studies and discussing some theoretical implications of our findings.

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Neurodevelopmental Disorders and Prenatal Residential Proximity to Agricultural Pesticides: The CHARGE Study

Janie Shelton et al.
Environmental Health Perspectives, forthcoming

Objectives: To evaluate whether residential proximity to agricultural pesticides during pregnancy is associated with autism spectrum disorders (ASD) or developmental delay (DD) in the Childhood Autism Risks from Genetics and Environment (CHARGE) Study.

Methods: The CHARGE study is a population-based case-control study of ASD, developmental delay (DD), and typical development. For 970 participants, commercial pesticide application data from the California Pesticide Use Report (1997-2008) were linked to the addresses during pregnancy. Pounds of active ingredient applied for organophophates, organochlorines, pyrethroids, and carbamates were aggregated within 1.25km, 1.5km, and 1.75km buffer distances from the home. Multinomial logistic regression was used to estimate the odds ratio (OR) of exposure comparing confirmed cases of ASD (n = 486) or DD (n = 168) with typically developing referents (n = 316).

Results: Approximately one-third of CHARGE Study mothers lived, during pregnancy, within 1.5 km (just under one mile) of an agricultural pesticide application. Proximity to organophosphates at some point during gestation was associated with a 60% increased risk for ASD, higher for 3rd trimester exposures [OR = 2.0, 95% confidence interval (CI) = (1.1, 3.6)], and 2nd trimester chlorpyrifos applications: OR = 3.3 [95% CI = (1.5, 7.4)]. Children of mothers residing near pyrethroid insecticide applications just prior to conception or during 3rd trimester were at greater risk for both ASD and DD, with OR’s ranging from 1.7 to 2.3. Risk for DD was increased in those near carbamate applications, but no specific vulnerable period was identified.

Conclusions: This study of ASD strengthens the evidence linking neurodevelopmental disorders with gestational pesticide exposures, and particularly, organophosphates and provides novel results of ASD and DD associations with, respectively, pyrethroids and carbamates.

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Environmental Justice: Evidence from Superfund Cleanup Durations

Martin Burda & Matthew Harding
Journal of Economic Behavior & Organization, forthcoming

Abstract:
This paper investigates the extent to which cleanup durations at Superfund sites reflect demographic biases incongruent with the principles of Environmental Justice. We argue that the duration of cleanup, conditional on a large number of site characteristics, should be independent of the race and income profile of the neighborhood in which the site is located. Since the demographic composition of a neighborhood changes during the cleanup process, we explore whether cleanup durations are related to neighborhood demographics recorded at the time when the cleanup is initiated. We estimate a semiparametric Bayesian proportional hazard model, which also allows for unobserved site specific heterogeneity, and find that sites located in black, urban and lower educated neighborhoods were discriminated against at the beginning of the program but that the degree of bias diminished over time. Executive Order 12898 of 1994 appears to have re-prioritized resources for the faster cleanup of sites located in less wealthy neighborhoods. We do not find that the litigation process is an impediment in the cleanup process, and support the notion that community involvement plays an important role.

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Comparing Disproportionate Exposure to Acute and Chronic Pollution Risks: A Case Study in Houston, Texas

Jayajit Chakraborty et al.
Risk Analysis, forthcoming

Abstract:
While environmental justice (EJ) research in the United States has focused primarily on the social distribution of chronic pollution risks, previous empirical studies have not analyzed disparities in exposure to both chronic (long-term) and acute (short-term) pollution in the same study area. Our article addresses this limitation though a case study that compares social inequities in exposure to chronic and acute pollution risks in the Greater Houston Metropolitan Statistical Area, Texas. The study integrates estimates of chronic cancer risk associated with ambient exposure to hazardous air pollutants from the Environmental Protection Agency's National-Scale Air Toxics Assessment (2005), hazardous chemical accidents from the National Response Center's Emergency Response Notification System (2007–2011), and sociodemographic characteristics from the American Community Survey (2007–2011). Statistical analyses are based on descriptive comparisons, bivariate correlations, and locally derived spatial regression models that account for spatial dependence in the data. Results indicate that neighborhoods with a higher percentage of Hispanic residents, lower percentage of homeowners, and higher income inequality are facing significantly greater exposure to both chronic and acute pollution risks. The non-Hispanic black percentage is significantly higher in neighborhoods with greater chronic cancer risk, but lower in areas exposed to acute pollution events. Households isolated by language — those highly likely to face evacuation problems during an actual chemical disaster — tend to reside in areas facing significantly greater exposure to high-impact acute events. Our findings emphasize the growing need to examine social inequities in exposure to both chronic and acute pollution risks in future EJ research and policy.

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Government Green Procurement Spillovers: Evidence from Municipal Building Policies in California

Timothy Simcoe & Michael Toffel
Harvard Working Paper, May 2014

Abstract:
We study how government green procurement policies influence private-sector demand for similar products. Specifically, we measure the impact of municipal policies requiring governments to construct green buildings on private-sector adoption of the US Green Building Council's Leadership in Energy and Environmental Design (LEED) standard. Using matching methods, panel data, and instrumental variables, we find that government procurement rules produce spillover effects that stimulate both private-sector adoption of the LEED standard and investments in green building expertise by local suppliers. These findings suggest that government procurement policies can accelerate the diffusion of new environmental standards that require coordinated complementary investments by various types of private adopter.

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Plastic debris in the open ocean

Andrés Cózar et al.
Proceedings of the National Academy of Sciences, forthcoming

Abstract:
There is a rising concern regarding the accumulation of floating plastic debris in the open ocean. However, the magnitude and the fate of this pollution are still open questions. Using data from the Malaspina 2010 circumnavigation, regional surveys, and previously published reports, we show a worldwide distribution of plastic on the surface of the open ocean, mostly accumulating in the convergence zones of each of the five subtropical gyres with comparable density. However, the global load of plastic on the open ocean surface was estimated to be on the order of tens of thousands of tons, far less than expected. Our observations of the size distribution of floating plastic debris point at important size-selective sinks removing millimeter-sized fragments of floating plastic on a large scale. This sink may involve a combination of fast nano-fragmentation of the microplastic into particles of microns or smaller, their transference to the ocean interior by food webs and ballasting processes, and processes yet to be discovered. Resolving the fate of the missing plastic debris is of fundamental importance to determine the nature and significance of the impacts of plastic pollution in the ocean.

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Air Pollution and Infant Mortality: A Natural Experiment from Power Plant Desulfurization

Simon Luechinger
Journal of Health Economics, forthcoming

Abstract:
The paper estimates the effect of SO2 pollution on infant mortality in Germany, 1985-2003. To avoid endogeneity problems, I exploit the natural experiment created by the mandated desulfurization at power plants and power plants’ location and prevailing wind directions, which together determine treatment intensity for counties. Estimates translate into an elasticity of 0.07-0.13 and the observed reduction in pollution implies an annual gain of 826-1460 infant lives. There is no evidence for disproportionate effects on neonatal mortality, but for an increase in the number of infants with comparatively low birth weight and length.

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Is economic rebalancing towards consumption “greener”? Evidence from visibility in China, 1984-2006

Zhigang Li et al.
Journal of Comparative Economics, forthcoming

Abstract:
The Chinese government has adopted a rebalancing strategy since 2011, shifting from an investment- to consumption-oriented growth model. An aim of this reform is for a “greener” development mode, but relevant empirical evidence is slim. In this study, we propose an innovative methodology to shed light on the environmental externalities of economic rebalancing. First, we use air visibility across China to reflect air quality during 1984-2006. Second, with the daily visibility data, we propose a weekend-effect regression model to difference out city-specific unobserved heterogeneity. Third, we approximate local consumption intensity with the portion of the residential electricity usage in the total electricity usage. To our surprise, the estimates suggest that the pollution intensity of consumption activities has not only been significant, but also exceeded that of production since the mid-1990s. Hence, rebalancing towards consumption is not necessarily more environmentally friendly according to the recent development experience of China.

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Does Foreign Environmental Policy Influence Domestic Innovation? Evidence from the Wind Industry

Antoine Dechezleprêtre & Matthieu Glachant
Environmental and Resource Economics, July 2014, Pages 391-413

Abstract:
This paper analyses the relative influence of domestic and foreign demand-pull policies in wind power across OECD countries on the rate of innovation in this technology. We use annual wind power generation to capture the stringency of the portfolio of demand-pull policies in place (e.g., guaranteed tariffs, investment and production tax credits), and patent data as an indicator of innovation activity. We find that wind technology improvements respond positively to policies both home and abroad, but the marginal effect of domestic policies is 12 times greater. The influence of foreign polices is reduced by barriers to technology diffusion, in particular lax intellectual property rights. Reducing such barriers therefore constitutes a powerful policy leverage for boosting environmental innovation globally.

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Do conservation auctions crowd out voluntary environmentally friendly activities?

Gerda Kits, Wiktor Adamowicz & Peter Boxall
Ecological Economics, September 2014, Pages 118–123

Abstract:
Research has shown that introducing external incentives to encourage pro-social behavior, such as monetary rewards or regulation, may crowd out voluntary pro-social activity. This has implications for the appropriate design and use of such incentive-based programs. This study investigates motivational crowding out in the case of conservation auctions, a relatively new tool that provides monetary incentives to encourage landowners to adopt environmentally friendly management practices. Our experimental evidence shows that the introduction and subsequent removal of a conservation auction significantly reduces voluntary provision of environmental quality (via monetary donations to an environmental charity), compared to a control group that does not experience an auction. We also attempt to examine some economic theories of behavior that explain this effect according to either individual motivations or social interactions, and our initial exploration finds that crowding out occurs regardless of whether or not participants have opportunities to interact with one another during the experiment.

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Can deep boreholes solve America׳s nuclear waste problem?

E.A. Bates et al.
Energy Policy, September 2014, Pages 186–189

Abstract:
The United States is in need of a new and more adaptive long-term strategy for spent nuclear fuel. In this communication, we outline the fundamental reasons why deep borehole disposal should receive more detailed investigation, alongside traditional shallow mined repositories. This potential solution is supported by advancing drilling technologies and an improving understanding of extremely long fluid residence times in deep bedrock. Radionuclide isolation is supported by verifiable and stable geologic barriers such as long transport distances to aquifers, low permeability, and reducing chemical conditions. The modular nature of implementing deep borehole disposal could offer unique programmatic and economic advantages. Experience with a pilot borehole program will be required to confirm the feasibility of drilling and emplacement operations, and key chemical and hydraulic conditions.

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Public Goods Provision in the Presence of Heterogeneous Green Preferences

Mark Jacobsen, Jacob LaRiviere & Michael Price
NBER Working Paper, June 2014

Abstract:
We develop a model of the private provision of public goods in a world where agents face convex costs of provision. Consonant with prior empirical evidence, we introduce preference heterogeneity by allowing a subset of agents to exhibit pro-social behavior that reflects "green" preferences. We use the model to compare different policies to promote private provision of public goods such as environmental quality or energy conservation. Counter to the standard result, we find that technology standards are frequently preferred to price-based instruments. Extending the model to allow for both benefit and cost heterogeneity, we find that policy choice depends on the correlation between the two forms of heterogeneity.

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Are anthropomorphic persuasive appeals effective? The role of the recipient's motivations

Kim-Pong Tam
British Journal of Social Psychology, forthcoming

Abstract:
Anthropomorphic persuasive appeals are prevalent. However, their effectiveness has not been well studied. The present research addresses this issue with two experiments in the context of environmental persuasion. It shows that anthropomorphic messages, relative to non-anthropomorphic ones, appear to motivate more conservation behaviour and elicit more favourable message responses only among recipients who have a strong need for effectance or social connection. Among recipients whose such need is weak, anthropomorphic appeals seem to backfire. These findings extend the research on motivation and persuasion and add evidence to the motivational bases of anthropomorphism. In addition, joining some recent studies, the present research highlights the implications of anthropomorphism of nature for environmental conservation efforts, and offers some practical suggestions for environmental persuasion.

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Civil unrest and the poaching of rhinos in the Kaziranga National Park, India

Adrian Lopes
Ecological Economics, July 2014, Pages 20–28

Abstract:
Civil unrest and political instability have been associated with endangered species poaching. This paper accounts for a period of civil unrest in Assam, India, which saw a marked increase in rhino poaching. Census data on the greater one-horned rhinoceros (Rhinoceros unicornis) in the Kaziranga National Park in Assam are used to estimate a population growth function. In calibrating the growth function's parameters the census data are used in conjunction with rhino poaching data. The rhino population and poaching data are used to econometrically estimate a harvest function. The relationship between civil unrest and rhino poaching is identified as positive and significant. The analysis factors in the probable relationships between poaching and several additional variables — including black market rhino horn prices, potential size of black markets, and anti-poaching efforts. These variables are seen to have the predicted associations with poaching, and help isolate the latter's relationship with civil unrest in the regression models. The goodness of fit between the data on rhino population and poaching and the estimates from regression models are studied.

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Convincing people to go green: Managing strategic action by minimising political talk

Janet Lorenzen
Environmental Politics, May/June 2014, Pages 454-472

Abstract:
At a time when the US public is deeply divided over how to address climate change, I investigate the way environmentally conscious actors attempt to recruit people to change their lifestyles and become more environmentally responsible. I draw on data from 45 interviews and participant observation with voluntary simplifiers, religious environmentalists, and green homeowners. Aware of the public’s aversion to discussing contentious issues such as climate change, informants focus on changing practices while downplaying political ideas and engagements. This is part of a pragmatic lifestyle change strategy which unites several persuasive techniques that include tailoring appeals to particular audiences, making ‘I feel’ statements, being role models, highlighting financial rewards such as the ‘win–win’ proposition, and the rare environmental appeal. I discuss how informants manipulate the lack of public political talk to their advantage in order to reach a wider audience. In this case, avoiding politics is not only active but strategic.

By KEVIN LEWIS | 09:00:00 AM

Tuesday, July 1, 2014

Behave

Can Classic Moral Stories Promote Honesty in Children?

Kang Lee et al.
Psychological Science, forthcoming

Abstract:
The classic moral stories have been used extensively to teach children about the consequences of lying and the virtue of honesty. Despite their widespread use, there is no evidence whether these stories actually promote honesty in children. This study compared the effectiveness of four classic moral stories in promoting honesty in 3- to 7-year-olds. Surprisingly, the stories of “Pinocchio” and “The Boy Who Cried Wolf” failed to reduce lying in children. In contrast, the apocryphal story of “George Washington and the Cherry Tree” significantly increased truth telling. Further results suggest that the reason for the difference in honesty-promoting effectiveness between the “George Washington” story and the other stories was that the former emphasizes the positive consequences of honesty, whereas the latter focus on the negative consequences of dishonesty. When the “George Washington” story was altered to focus on the negative consequences of dishonesty, it too failed to promote honesty in children.

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The morality of larks and owls: Unethical behavior depends on chronotype as well as time-of-day

Brian Gunia, Christopher Barnes & Sunita Sah
Psychological Science, forthcoming

Abstract:
The recently-documented “morning morality effect” indicates that people act most ethically in the morning because their energy wanes with the day. An estimated 40% of the population, however, experience increased energy levels later in the day. These “evening people,” we propose, should not show the morning morality effect. Instead, they should show the same or an increasing propensity toward ethicality in the evening, depending on the relative strength of the two processes governing their sleep. Two experiments supported the predicted interaction, showing that people with a morning chronotype tend to behave more ethically in the morning than the evening, while people with an evening chronotype tend to behave more ethically in the evening than the morning. Thus, understanding when people will behave unethically may require an appreciation of both the person (chronotype) and the situation (time-of-day): a chronotype morality effect.

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Free Will and Punishment: A Mechanistic View of Human Nature Reduces Retribution

Azim Shariff et al.
Psychological Science, forthcoming

Abstract:
If free-will beliefs support attributions of moral responsibility, then reducing these beliefs should make people less retributive in their attitudes about punishment. Four studies tested this prediction using both measured and manipulated free-will beliefs. Study 1 found that people with weaker free-will beliefs endorsed less retributive, but not consequentialist, attitudes regarding punishment of criminals. Subsequent studies showed that learning about the neural bases of human behavior, through either lab-based manipulations or attendance at an undergraduate neuroscience course, reduced people’s support for retributive punishment (Studies 2–4). These results illustrate that exposure to debates about free will and to scientific research on the neural basis of behavior may have consequences for attributions of moral responsibility.

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Three attempts to replicate the moral licensing effect

Irene Blanken et al.
Social Psychology, Summer 2014, Pages 232-238

Abstract:
The present work includes three attempts to replicate the moral licensing effect by Sachdeva, Iliev, and Medin (2009). The original authors found that writing about positive traits led to lower donations to charity and decreased cooperative behavior. The first two replication attempts (student samples, 95% power based on the initial findings, NStudy1 = 105, NStudy2 = 150), did not confirm the original results. The third replication attempt (MTurk sample, 95% power based on a meta-analysis on self-licensing, N = 940) also did not confirm the moral licensing effect. We conclude that (1) there is as of yet no strong support for the moral self-regulation framework proposed in Sachdeva et al. (2009) (2) the manipulation used is unlikely to induce moral licensing, and (3) studies on moral licensing should use a neutral control condition.

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Does cleanliness influence moral judgments? A direct replication of Schnall, Benton, and Harvey (2008)

David Johnson, Felix Cheung & Brent Donnellan
Social Psychology, Summer 2014, Pages 209-215

Abstract:
Schnall, Benton, and Harvey (2008) hypothesized that physical cleanliness reduces the severity of moral judgments. In support of this idea, they found that individuals make less severe judgments when they are primed with the concept of cleanliness (Exp. 1) and when they wash their hands after experiencing disgust (Exp. 2). We conducted direct replications of both studies using materials supplied by the original authors. We did not find evidence that physical cleanliness reduced the severity of moral judgments using samples sizes that provided over .99 power to detect the original effect sizes. Our estimates of the overall effect size were much smaller than estimates from Experiment 1 (original d = −0.60, 95% CI [−1.23, 0.04], N = 40; replication d = −0.01, 95% CI [−0.28, 0.26], N = 208) and Experiment 2 (original d = −0.85, 95% CI [−1.47, −0.22], N = 43; replication d = 0.01, 95% CI [−.34, 0.36], N = 126). These findings suggest that the population effect sizes are probably substantially smaller than the original estimates. Researchers investigating the connections between cleanliness and morality should therefore use large sample sizes to have the necessary power to detect subtle effects.

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For the greater goods? Ownership rights and utilitarian moral judgment

Charles Millar, John Turri & Ori Friedman
Cognition, October 2014, Pages 79–84

Abstract:
People often judge it unacceptable to directly harm a person, even when this is necessary to produce an overall positive outcome, such as saving five other lives. We demonstrate that similar judgments arise when people consider damage to owned objects. In two experiments, participants considered dilemmas where saving five inanimate objects required destroying one. Participants judged this unacceptable when it required violating another’s ownership rights, but not otherwise. They also judged that sacrificing another’s object was less acceptable as a means than as a side-effect; judgments did not depend on whether property damage involved personal force. These findings inform theories of moral decision-making. They show that utilitarian judgment can be decreased without physical harm to persons, and without personal force. The findings also show that the distinction between means and side-effects influences the acceptability of damaging objects, and that ownership impacts utilitarian moral judgment.

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The social and ethical consequences of a calculative mindset

Long Wang, Chen-Bo Zhong & Keith Murnighan
Organizational Behavior and Human Decision Processes, forthcoming

Abstract:
Rational choice models suggest that decisions should be both deliberate and calculative. In contrast, the current research suggests that calculations may lead to unintended social and moral consequences. We tested whether engaging in a calculative task would lead decision makers to overlook the social and moral consequences of their subsequent decisions and act selfishly and unethically. In each of the first four experiments, participants first completed either a calculative or a comparable, non-calculative task followed by an ostensibly unrelated decision task (either a Dictator or a modified Ultimatum Game). Compared to the non-calculative tasks, completing the calculative tasks led people to be consistently more selfish in the Dictator Game and more unethical in the modified Ultimatum Game. A final experiment tested whether the calculative task led to more self-interested behavior through increased utilitarian judgments and dampened emotional reactions; it also examined whether a subtle, social intervention might mitigate these effects.

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The Moral Ties That Bind...Even to Out-Groups: The Interactive Effect of Moral Identity and the Binding Moral Foundations

Isaac Smith et al.
Psychological Science, forthcoming

Abstract:
Throughout history, principles such as obedience, loyalty, and purity have been instrumental in binding people together and helping them thrive as groups, tribes, and nations. However, these same principles have also led to in-group favoritism, war, and even genocide. Does adhering to the binding moral foundations that underlie such principles unavoidably lead to the derogation of out-group members? We demonstrated that for people with a strong moral identity, the answer is “no,” because they are more likely than those with a weak moral identity to extend moral concern to people belonging to a perceived out-group. Across three studies, strongly endorsing the binding moral foundations indeed predicted support for the torture of out-group members (Studies 1a and 1b) and withholding of necessary help from out-group members (Study 2), but this relationship was attenuated among participants who also had a strong moral identity.

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Moral concerns across the United States: Associations with life-history variables, pathogen prevalence, urbanization, cognitive ability, and social class

Florian van Leeuwen et al.
Evolution and Human Behavior, forthcoming

Abstract:
This study evaluated the extent to which predictions derived from several theories could account for variability in human moral values across US states. We investigated moral values as conceptualized by Moral Foundations Theory, which argues that morality evolved in response to adaptive challenges in at least five domains: Ingroup/loyalty, Authority/respect, Purity/sanctity ("binding" foundations) and Harm/care, Fairness/reciprocity ("individualizing" foundations). We report correlations for measures of cognitive ability, social class, urbanization, pathogen prevalence, life expectancy, and teenage birth rates. Social class and educational attainment had fairly consistent but small effects across moral foundations (social class: positively associated with Ingroup/loyalty, negatively with individualizing foundations and Purity/sanctity; education: positively associated with individualizing foundations, negatively with binding foundations). We conducted multilevel regressions that were stratified for ethnicity. The most consistent state-level predictor of moral values was teenage birth rates (negatively associated with individualizing foundations, positively with binding foundations). This suggests that life-history theory may provide an explanation for individual differences in moral values, although the directions of effects for teenage birth rates diverged from predictions of life-history theory. We conclude that none of the tested theories provides a good explanation for the observed variability in moral values in the USA. We discuss how a life-history approach might account for the findings, and note the need for improved measurement of pathogen stress to better distinguish its effects from those of life-history variables.

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Moral hypocrisy: Impression Management or Self-Deception?

Jan-Erik Lönnqvist, Bernd Irlenbusch & Gari Walkowitz
Journal of Experimental Social Psychology, November 2014, Pages 53–62

Abstract:
In three studies (S1-S3; N = 256) we investigated whether moral hypocrisy (MH) is motivated by conscious impression management concerns or whether it is self-deceptive. In a dictator game, MH occurred both within participants (saying one thing, doing another; S1) and between participants (doing one thing when it is inconsequential, doing another thing when it affects payoffs; S2). People were willing to let an ostensibly fair coin determine payoffs only if they could fudge the results of the coin flip, suggesting that hypocrites do not deceive themselves (S3). Also supporting this view, MH was associated with adherence to Conformity values (S1-S2), indicative of a desire to appear moral in the eyes of others but not indicative of self-deception. Universalism values were predictive of moral integrity (S1, S3).

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Limited capacity to lie: Cognitive load interferes with being dishonest

Anna van’t Veer, Mariëlle Stel & Ilja van Beest
Judgment and Decision Making, May 2014, Pages 199–206

Abstract:
The current study tested the boundary conditions of ethical decision-making by increasing cognitive load. This manipulation is believed to hinder deliberation, and, as we argue, reduces the cognitive capacity needed for a self-serving bias to occur. As telling a lie is believed to be more cognitively taxing than telling the truth, we hypothesized that participants would be more honest under high cognitive load than low cognitive load. 173 participants anonymously rolled a die three times and reported their outcomes — of which one of the rolls would be paid out — while either under high or low cognitive load. For the roll that determined pay, participants under low cognitive load, but not under high cognitive load, reported die rolls that were significantly different from a uniform (honest) distribution. The reported outcome of this roll was also significantly higher in the low load condition than in the high load condition, suggesting that participants in the low load condition lied to get higher pay. This pattern was not observed for the second and third roll where participants knew the rolls were not going to be paid out and where therefore lying would not serve self-interest. Results thus indicate that having limited cognitive capacity will unveil a tendency to be honest in a situation where having more cognitive capacity would have enabled one to serve self-interest by lying.

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Does 'Could' Lead to Good? Toward a Theory of Moral Insight

Ting Zhang, Francesca Gino & Joshua Margolis
Harvard Working Paper, June 2014

Abstract:
We introduce the construct of moral insight and study how it can be elicited when people face ethical dilemmas - challenging decisions that feature tradeoffs between competing and seemingly incompatible values. Moral insight consists of discovering solutions that move beyond selecting one conflicting ethical option over another. Moral insight encompasses both a cognitive process and a discernible output: it involves the realization that an ethical dilemma might be addressed other than by conceding one set of moral imperatives to meet another, and it involves the generation of solutions that allow competing objectives to be met. Across four studies, we find that moral insight is generated when individuals are prompted to consider the question “What could I do?” in place of their intuitive approach of considering “What should I do?” Together, these studies point toward a theory of moral insight and important practical implications.

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Repeated Exposure to Narrative Entertainment and the Salience of Moral Intuitions

Allison Eden et al.
Journal of Communication, June 2014, Pages 501–520

Abstract:
R. Tamborini (2011, 2012) recently proposed the model of intuitive morality and exemplars (MIME), which combines theoretical developments in moral psychology with media theory to predict the influence of media exposure on morality. To test predictions from this model, a quasi-experimental study conducted over 8 weeks exposed selected participants to an online soap opera. Participants' moral intuitions were measured pre-exposure and postexposure. Consistent with predictions, results showed that repeated exposure to morally relevant media content is capable of influencing the salience of moral intuitions. The findings are consistent with the model's description of underlying mechanisms explicating the manner in which entertainment can influence moral judgments, and demonstrate the value of understanding the relationship between exposure to entertainment and moral judgment processes.

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How selfish is memory for cheaters? Evidence for moral and egoistic biases

Raoul Bell, Cécile Schain & Gerald Echterhoff
Cognition, September 2014, Pages 437–442

Abstract:
We remember very well when another person has cheated us, but is this due to the cheating’s immorality or due to its negative consequences? Theories claiming that reputational memory helps retaliate cheating imply that we should be sensitive both to the norm violation and to the personal consequences of another person’s cheating. In the present study, faces were presented with descriptions of immoral and moral behavior. In contrast to previous studies, the morality and the personal consequences of the behaviors were orthogonally manipulated (both cheating and trustworthy behavior could lead to personal benefits or costs). In a surprise memory test, participants were required to remember whether the faces were associated with moral or immoral behaviors, or with personal benefits or costs. Overall, the morality of the behaviors was better remembered than were the personal consequences of the same behaviors. However, the immorality of morally questionable behaviors was well remembered when associated with personal costs, and poorly remembered when associated with personal benefits. Apparently, people’s categorization of the social environment is based on moral judgments, but also reflects self-serving biases.

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Conscience without Cognition: The Effects of Subconscious Priming on Ethical Behavior

David Welsh & Lisa Ordóñez
Academy of Management Journal, June 2014, Pages 723-742

Abstract:
Research in the field of behavioral ethics has traditionally viewed ethical decision making as rational and deliberate. However, some recent research has proposed a dual process model of ethical decision making that has both conscious and subconscious components (Reynolds, 2006). We extend current theory by using subconscious ethical and unethical priming to test the effects of subconscious processes on ethical behavior through an automatic process of schema activation and implicit association. Studies 1 and 2 extend self-concept maintenance theory (Mazar, Amir, & Ariely, 2008) by exploring the mediated process through which subconscious ethical and unethical primes trigger the activation of moral standards, thereby influencing categorization and subsequent responses to morally ambiguous situations. Study 3 demonstrates that both subconscious ethical and unethical priming reduce dishonesty even when participants are unmonitored and are given difficult performance goals that previously have been shown to lead to unethical behavior.

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Bringing free will down to Earth: People’s psychological concept of free will and its role in moral judgment

Andrew Monroe, Kyle Dillon & Bertram Malle
Consciousness and Cognition, July 2014, Pages 100–108

Abstract:
Belief in free will is widespread, and this belief is supposed to undergird moral and legal judgment. Despite the importance of the free will concept, however, there remains widespread confusion regarding its definition and its connection to blame. We address this confusion by testing two prominent models of the folk concept of free will — a metaphysical model, in which free will involves a soul as an uncaused “first mover,” and a psychological model, in which free will involves choice, alignment with desires, and lack of constraints. We test the predictions of these two models by creating agents that vary in their capacity for choice and the presence of a soul. In two studies, people’s judgments of free will and blame for these agents show little to no basis in ascriptions of a soul but are powerfully predicted by ascriptions of choice capacity. These results support a psychological model of the folk concept of free will.

By KEVIN LEWIS | 09:00:00 AM

Monday, June 30, 2014

Price mechanism

The Genetics of Investment Biases

Henrik Cronqvist & Stephan Siegel
Journal of Financial Economics, August 2014, Pages 215–234

Abstract:
For a long list of investment “biases,” including lack of diversification, excessive trading, and the disposition effect, we find that genetic differences explain up to 45% of the remaining variation across individual investors, after controlling for observable individual characteristics. The evidence is consistent with a view that investment biases are manifestations of innate and evolutionary ancient features of human behavior. We find that work experience with finance reduces genetic predispositions to investment biases. Finally, we find that even genetically identical investors, who grew up in the same family environment, often differ substantially in their investment behaviors due to individual-specific experiences or events.

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Political Uncertainty and Financial Market Quality

Paolo Pasquariello & Christina Zafeiridou
University of Michigan Working Paper, April 2014

Abstract:
We examine the effects of political uncertainty surrounding the outcome of U.S. presidential elections on financial market quality. We postulate those effects to depend on a positive relation between political uncertainty and information asymmetry among investors, ambiguity about the quality of their information, or dispersion of their beliefs. We find that market quality deteriorates (trading volume and various measures of liquidity decrease) in the months leading up to those elections (when political uncertainty is likely highest), but it improves (trading volume and liquidity increase) in the months afterwards. These effects are more pronounced for more uncertain elections and more speculative, difficult-to-value stocks (small, high book-to-market, low beta, traded on NASDAQ, or in less politically sensitive industries), but not for direct proxies of the market-wide extent of information asymmetry and heterogeneity among market participants (accruals, analysts' forecast dispersion, and forecast error). These findings provide the strongest support for the predictions of the ambiguity hypothesis.

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Facebook's daily sentiment and international stock markets

Antonios Siganos, Evangelos Vagenas-Nanos & Patrick Verwijmeren
Journal of Economic Behavior & Organization, forthcoming

Abstract:
We examine the relation between daily sentiment and trading behavior within 20 international markets by exploiting Facebook's Gross National Happiness Index. We find that sentiment has a positive contemporaneous relation to stock returns. Moreover, sentiment on Sunday affects stock returns on Monday, suggesting causality from sentiment to stock markets. We observe that the relation between sentiment and returns reverses the following weeks. We further show that negative sentiments are related to increases in trading volume and return volatility. These results highlight the importance of behavioral factors in stock investing.

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The Stock Market Speaks: How Dr. Alchian Learned to Build the Bomb

Joseph Michael Newhard
Journal of Corporate Finance, August 2014, Pages 116–132

Abstract:
At RAND in 1954, Armen A. Alchian conducted the world’s first event study to infer the fissile fuel material used in the manufacturing of the newly-developed hydrogen bomb. Successfully identifying lithium as the fissile fuel using only publicly available financial data, the paper was seen as a threat to national security and was immediately confiscated and destroyed. The bomb’s construction being secret at the time but having since been partially declassified, the nuclear tests of the early 1950s provide an opportunity to observe market efficiency through the dissemination of private information as it becomes public. I replicate Alchian’s event study of capital market reactions to the Operation Castle series of nuclear detonations in the Marshall Islands, beginning with the Bravo shot on March 1, 1954 at Bikini Atoll which remains the largest nuclear detonation in US history, confirming Alchian’s results. The Operation Castle tests pioneered the use of lithium deuteride dry fuel which paved the way for the development of high yield nuclear weapons deliverable by aircraft. I find significant upward movement in the price of Lithium Corp. relative to the other corporations and to DJIA in March 1954; within three weeks of Castle Bravo the stock was up 48% before settling down to a monthly return of 28% despite secrecy, scientific uncertainty, and public confusion surrounding the test; the company saw a return of 461% for the year.

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Categories and Organizational Status: The Role of Industry Status in the Response to Organizational Deviance

Amanda Sharkey
American Journal of Sociology, March 2014, Pages 1380-1433

Abstract:
Extant research in organizational and economic sociology posits that organizations derive status from their prior demonstrations of quality, as well as their affiliations with high-status alters. Yet there are also indications that organizations may acquire status by virtue of their membership in salient social categories that are themselves status valued. In this article, the author explicitly theorizes and measure the concept of categorical status among organizations and test whether it influences the evaluation of organizational actions. More concretely, she develops a measure of industry status and test whether it affects the market reaction to U.S. firms announcing earnings restatements between 2000 and 2009. Results of the empirical analyses indicate that investors react less negatively to earnings restatements announced by firms from higher-status industries, supporting the argument that category status acts as a lens that shapes the extent to which an organization’s actions are viewed favorably.

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Rise of the Machines: Algorithmic Trading in the Foreign Exchange Market

Alain Chaboud et al.
Journal of Finance, forthcoming

Abstract:
We study the impact of algorithmic trading in the foreign exchange market using a long time series of high-frequency data that identify computer-generated trading activity. We find that algorithmic trading causes an improvement in two measures of price efficiency: the frequency of triangular arbitrage opportunities and the autocorrelation of high-frequency returns. We show that the reduction in arbitrage opportunities is associated primarily with computers taking liquidity. This result is consistent with the view that AT improves informational efficiency by speeding up price discovery, but that it may also impose higher adverse selection costs on slower traders. In contrast, the reduction in the autocorrelation of returns owes more to the algorithmic provision of liquidity. We also find evidence consistent with the strategies of algorithmic traders being highly correlated. This correlation, however, does not appear to cause a degradation in market quality, at least not on average.

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Investor Sentiment from Internet Message Postings and the Predictability of Stock Returns

Soon-Ho Kim & Dongcheol Kim
Journal of Economic Behavior & Organization, forthcoming

Abstract:
By using an extensive dataset of more than 32 million messages on 91 firms posted on the Yahoo! Finance message board over the period January 2005 to December 2010, we examine whether investor sentiment as expressed in posted messages has predictive power for stock returns, volatility, and trading volume. In intertemporal and cross-sectional regression analyses, we find no evidence that investor sentiment forecasts future stock returns either at the aggregate or at the individual firm level. Rather, we find evidence that investor sentiment is positively affected by prior stock price performance. We also find no significant evidence that investor sentiment from Internet postings has predictive power for volatility and trading volume. A distinctive feature of our study is the use of sentiment information explicitly revealed by retail investors as well as classified by a machine learning classification algorithm and a much longer sample period relative to prior studies.

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Religious Holidays, Investor Distraction, and Earnings Announcement Effects

Christos Pantzalis & Erdem Ucar
Journal of Banking & Finance, forthcoming

Abstract:
We examine price reactions to U.S. firms’ earnings announcements during Easter week in order to analyze whether and how the religious holiday calendar impacts investors’ information processing. We find that there is an asymmetric pattern of immediate and delayed responses to earnings surprises experienced during Easter, entailing similar immediate reactions to both good and bad news and a stronger delayed response to bad news. Moreover, local religious characteristics affect investor’s response to firm news. The results are consistent with a religion-induced distraction effect on investors’ information processing ability. We also show that this effect can form the basis for a profitable trading strategy. The findings highlight the importance of religion for firms’ information environment and for the local component of stock prices.

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High-Frequency Trading and Price Discovery

Jonathan Brogaard, Terrence Hendershott & Ryan Riordan
Review of Financial Studies, forthcoming

Abstract:
We examine the role of high-frequency traders (HFTs) in price discovery and price efficiency. Overall HFTs facilitate price efficiency by trading in the direction of permanent price changes and in the opposite direction of transitory pricing errors, both on average and on the highest volatility days. This is done through their liquidity demanding orders. In contrast, HFTs' liquidity supplying orders are adversely selected. The direction of HFTs' trading predicts price changes over short horizons measured in seconds. The direction of HFTs' trading is correlated with public information, such as macro news announcements, market-wide price movements, and limit order book imbalances.

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Which Limited Partners Limit VC Opportunism?

Vladimir Atanasov et al.
Northwestern University Working Paper, April 2014

Abstract:
We examine the response of different types of Limited Partners (LPs) to alleged opportunistic behavior on the part of Venture Capitalists (VCs). We use a sample of litigated VCs (identified by Atanasov, et al, 2012, Journal of Finance) to proxy for VC opportunistic behavior. Based on their presumed sensitivity to VC malfeasance and headline risk, we predict that university endowments and economic development authorities will be most likely to respond negatively to potential bad press. To test our hypothesis, we employ differences-in-differences (DiD) analysis and compare the participation of different types of LPs in VC funds before and after litigation relative to the LPs of otherwise similar, matched VCs that are not subject to litigation. We find that endowments reduce by more than 50% their participation in follow-on investment funds offered by litigated VCs relative to other types of LPs. Our results suggest that the threat of university endowment withdrawal of funding can deter VC opportunism.

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Limited Liability and Share Transferability: An Analysis of California Firms, 1920-1940

Leonce Bargeron & Kenneth Lehn
Journal of Corporate Finance, forthcoming

Abstract:
In 1931, California became the last U.S. state to adopt limited liability. Prior to that, from its inception as a state in 1849, stockholders of California corporations faced pro rata unlimited liability. California’s unique liability rule during 1849-1931 provides a natural experiment for testing Woodward’s (1985) and Alchian and Woodward’s (1987, 1988) hypothesis that limited liability reduces transaction costs and facilitates the transferability of shares. Using a small sample of publicly traded California firms and a corresponding sample of benchmark companies, we find that trading volume and share turnover were significantly lower for California firms when California had unlimited liability. After California adopted limited liability, trading volume and share turnover increased significantly for California firms relative to non-California firms. In addition, bid-ask spreads were significantly higher for California firms during the period of unlimited liability and they declined for California firms relative to non-California firms after California adopted limited liability. The results support Alchian and Woodward’s hypothesis that limited liability reduces transaction costs and promotes the transferability of shares.

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Attracting Early Stage Investors: Evidence from a Randomized Field Experiment

Shai Bernstein, Arthur Korteweg & Kevin Laws
Stanford Working Paper, May 2014

Abstract:
Which start-up characteristics are most important to investors in early-stage firms? This paper uses a randomized field experiment involving 4,500 active, early stage investors. The experiment takes place on AngelList, an online platform that matches investors with start-ups seeking capital. The experiment randomizes investors’ information sets on start-up characteristics through the use of nearly 17,000 emails. The average investor responds strongly to information about the founding team, but not to information about either firm traction or existing lead investors. This is in contrast to the least experienced investors, who respond to all categories of information. Our results suggest that information about human assets is causally important for the funding of early-stage firms.

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Participation and Self-Entrapment: A 12-Year Ethnography of Wall Street Participation Practices' Diffusion and Evolving Consequences

Alexandra Michel
Sociological Quarterly, Summer 2014, Pages 514–536

Abstract:
A 12-year ethnography illustrates how two investment banks' participative work practices entrapped bankers in indiscriminate overwork, and what the evolving consequences were for the banks and the organizations that the bankers joined subsequently. The banks' participative work practices eliminated all visible organizational controls. Invested in the task, the bankers collectively designed work practices that benefited the banks, but had the unintended consequences of intensifying work pace and habituating bankers to indiscriminate overwork that they experienced as self-chosen. Prior organizational behavioral research predicts outcomes only for about one year. During this time, the banks benefited from the bankers' hard work. Starting in year four, the practices' extremes produced opposite effects, namely declining performance because of body breakdowns, and cultural distance, because depleted bodies made it impossible for bankers to work in culturally normative ways. The bankers carried this pattern of overwork and subsequent breakdowns into the organizations that they joined subsequently, where they introduced the banks' practices.

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Second-order Beliefs and the Individual Investor

Daniel Egan, Christoph Merkle & Martin Weber
Journal of Economic Behavior & Organization, forthcoming

Abstract:
In a panel survey of individual investors, we show that investors’ second-order beliefs — their beliefs about the return expectations of other investors — influence investment decisions. Investors who believe others hold more optimistic stock market expectations allocate more of their own portfolio to stocks even after controlling for their own risk and return expectations. However, second-order beliefs are inaccurate and exhibit several well-known psychological biases. We observe both the tendency of investors to believe that their own opinion is relatively more common among the population (false consensus) and that others who hold divergent beliefs are considered to be biased (bias blind spot).

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The implications of high-frequency trading on market efficiency and price discovery

Viktor Manahov & Robert Hudson
Applied Economics Letters, forthcoming

Abstract:
This study investigates the implications of high-frequency trading (HFT) on market efficiency and price discovery by using state-space models and real-life one-minute high-frequency data of the six most traded currency pairs worldwide – USD/EUR, USD/JPY, USD/GBP, USD/AUD, USD/CHF and USD/CAD. We found significant evidence that HFT enhances market efficiency and has a beneficial role in price discovery by trading in the direction of the permanent component of the state-space model and in the opposite direction of its transitory component.

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Do Firms Buy Their Stock at Bargain Prices? Evidence from Actual Stock Repurchase Disclosures

Azi Ben-Rephael, Jacob Oded & Avi Wohl
Review of Finance, July 2014, Pages 1299-1340

Abstract:
Using new monthly data, we investigate open-market repurchase executions of US firms. We find that firms repurchase at prices that are significantly lower than average market prices. This price discount is negatively related to size and positively related to market-to-book ratio. Firms’ repurchase activity is followed by a positive and significant abnormal return. Importantly, the market response occurs when firms disclose their actual repurchase data in earnings announcements, and this positive response is followed by a 1-month drift. Consistent with these results, we find that insider trading is positively related to actual repurchases.

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Why don’t you trade only four days a year? An empirical study into the abnormal returns of quarters first trading day

Gil Cohen
Economics Letters, forthcoming

Abstract:
In this research I examined a calendar anomaly that occurs at the beginning of each quarter. Through an examination of 34 years of daily and annual returns for the S&P500 and 13 years of returns for popular ETFs, I have demonstrated the existence of the First Day of Quarter (FDQ) effect. By trading only four days a year from the beginning of 2000 until the end of 2013, an investor could have gained 113.1% of the S&P500 return for that period, while being exposed to stock risk for only 56 days. Moreover, for 11 of those 14 years of trading, the FDQ was responsible for more than 10% of the annual return. Only for two years since 2000 (2001, 2005) has the FDQ yielded a negative return. The biggest beneficiary of the FDQ is the financial sector, which for the last 13 years of investing has been non-fertile, showing −6.12% total return. Investing only at the beginning of each quarter for a total of 52 days would have yielded a return of 40.17%. The next beneficiary of the FDQ is the technological sector. The 82.5% of total return gained in this sector over the last 13 years could have been gained in only 52 days of trading.

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Self-Attribution Bias in Consumer Financial Decision-Making: How Investment Returns Affect Individuals’ Belief in Skill

Arvid Hoffmann & Thomas Post
Journal of Behavioral and Experimental Economics, forthcoming

Abstract:
Self-attribution bias is a long-standing concept in psychology research and refers to individuals’ tendency to attribute successes to personal skills and failures to factors beyond their control. Recently, this bias is also being studied in household finance research and is considered to underlie and reinforce investor overconfidence. To date, however, the existence of self-attribution bias amongst individual investors is not directly empirically tested. That is, it remains unclear whether good (vs. bad) returns indeed make investors believe more (vs. less) strongly that skills drive their performance. Using a unique combination of survey data and matching trading records of a sample of clients from a large discount brokerage firm, we find that: (1) the higher the returns in a previous period are, the more investors agree with a statement claiming that their recent performance accurately reflects their investment skills (and vice versa); and (2) while individual returns relate to more agreement, market returns have no such effect.

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Clustering of shareholder annual meetings: A ‘new anomaly’ in stock returns

Weishen Wang & Frank Hefner
Applied Financial Economics, Summer 2014, Pages 1103-1110

Abstract:
The study documents the clustering of annual general meetings (AGMs) in the months of March, April and May and shows that this clustering of AGMs in dates is positively related to average monthly stock returns in these months. The study not only documents a ‘new anomaly’ in the stock market in the recent two decades, but also provides explanations why it is so. The study shows that an economic event is behind the regularity in stock returns.

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Star Analysts’ Rankings and Strategic Announcements: The Case of Battleground Stocks

Gil Aharoni, Joshua Shemesh & Fernando Zapatero
University of Southern California Working Paper, April 2014

Abstract:
We find that direct competition among star analysts plays a key role in the annual rankings of the Institutional Investor magazine that selects them. When two or more star analysts cover the same stock (battleground stock), the most accurate star analyst is more likely to improve her ranking, which has substantial effects on income. We also find that the forecast error of star analysts is substantially lower in battleground stocks. Overall, our findings are consistent with star analysts optimally allocating more effort to battleground stocks than to stocks that are not covered by other star analysts.

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Friends Do Let Friends Buy Stocks Actively

Rawley Heimer
Journal of Economic Behavior & Organization, forthcoming

Abstract:
This research provides empirical evidence that social interaction is more prevalent among active rather than passive investors. While previous empirical work, spearheaded by Hong et al. (2004), shows that proxies for sociability are related to participation in asset markets, the literature is unable to distinguish between the types of participants because of data limitations. I address this shortcoming by using data from the Consumer Expenditure Quarterly Interview Survey, which contains information on individual holdings and the buying and selling of financial assets, as well as expenditure variables that imply variation in the level of social activity. This finding supports a new explanation for the active-investing puzzle in which informal communication tends to promote active rather than passive strategies (Han and Hirshleifer, 2012).

By KEVIN LEWIS | 09:00:00 AM


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