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Monday, August 25, 2014

On the world stage

The Emperor Has No Clothes: The Limits of OPEC in the Global Oil Market

Jeff Colgan
International Organization, Summer 2014, Pages 599-632

Abstract:
Scholars have long debated the causal impact of international institutions such as the World Trade Organization or the International Monetary Fund. This study investigates Organization of Petroleum Exporting Countries (OPEC), an organization that purports to have significant influence over the market for the world's most important commodity – petroleum. Using four empirical tests, I find that OPEC has little or no impact on its members' production levels. These findings prompt the question of why so many people, including scholars, believe in OPEC's influence over the world's oil supply. The idea of OPEC as a cartel is a “rational myth” that supports the organization's true principal function, which is to generate political benefits for its members. One benefit it generates is international prestige. I test this idea using data on diplomatic representation and find that OPEC membership is associated with increased international recognition by other states. Overall, these findings help one to better understand international regimes and the process of ideational change in world politics.

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Terrorism and Voting: The Effect of Rocket Threat on Voting in Israeli Elections

Anna Getmansky & Thomas Zeitzoff
American Political Science Review, August 2014, Pages 588-604

Abstract:
How does the threat of becoming a victim of terrorism affect voting behavior? Localities in southern Israel have been exposed to rocket attacks from the Gaza Strip since 2001. Relying on variation across time and space in the range of rockets, we identify the effect of this threat on voting in Israeli elections. We first show that the evolution of the rockets’ range leads to exogenous variation in the threat of terrorism. We then compare voting in national elections within and outside the rockets’ range. Our results suggest that right-wing vote-share is 2 to 6 percentage points higher in localities that are within the range – a substantively significant effect. Unlike previous studies that explore the role of actual exposure to terrorism on political preferences and behavior, we show that the mere threat of an attack affects voting.

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Decline and Devolution: The Sources of Strategic Military Retrenchment

Kyle Haynes
International Studies Quarterly, forthcoming

Abstract:
This paper offers a theory of military retrenchment by states in relative decline. I argue that a declining state will choose to withdraw foreign military deployments and security commitments when there exists a suitable regional “successor” to which it can devolve its current responsibilities. The degree of a successor's suitability and the strategic importance of the region to the declining state interact to determine when and how rapidly retrenchment will occur. Importantly, this devolutionary model of retrenchment predicts significant variations in retrenchment patterns across a declining state's multiple regional commitments. It advances the literature by producing nuanced predictions of precisely where, when, and how quickly retrenchment will occur. This paper assesses the theory empirically through an examination of Great Britain's varying regional retrenchment strategies prior to World War I.

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Between Collaboration and Disobedience: The Behavior of the Guantánamo Detainees and its Consequences

Emanuel Deutschmann
Journal of Conflict Resolution, forthcoming

Abstract:
This article examines the behavior of the Guantánamo detainees in terms of collaboration and disobedience and how it influences their chances of getting a release recommendation. Joint Task Force Guantanamo–authored memoranda on 765 detainees are used to create a network of accusations between detainees and an attribute data set, which are analyzed using multivariate regression and Kolmogorov–Smirnov tests. It is found that while the distribution of incriminating statements obeys a power law, 62.6 percent of all detainees do not incriminate anyone. Yemenis and Saudi Arabians heavily overcontribute regarding incriminating statements and disobedient actions, whereas Afghans and Pakistanis undercontribute. Disobedient behavior does not affect the likelihood of getting a release recommendation, except for hunger striking, which has a negative effect. By releasing information, detainees don’t improve their own chances of getting release recommendations but impair those of the detainees they implicate. Three different groups of detainees are identified whose behavioral patterns seem to follow distinct logics.

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Children of War: The Long-Run Effects of Large-Scale Physical Destruction and Warfare on Children

Mevlude Akbulut-Yuksel
Journal of Human Resources, Summer 2014, Pages 634-662

Abstract:
This paper provides causal evidence on the long-term consequences of large-scale physical destruction on educational attainment, health status, and labor market outcomes of children. I exploit the plausibly exogenous region-by-cohort variation in the intensity of World War Two (WWII) destruction as a unique quasi-experiment. I find that exposure to destruction had long-lasting detrimental effects on the human capital formation, health, and labor market outcomes of Germans who were at school-age during WWII. An important channel for the effect of destruction on educational attainment is the destruction of schools whereas malnutrition is partly behind the estimated impact on health.

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Does Terrorism Pay? An Empirical Analysis

Max Abrahms & Matthew Gottfried
Terrorism and Political Violence, forthcoming

Abstract:
Does terrorism help perpetrators to achieve their demands? Few research questions about terrorism generate as much controversy. This study contributes to the debate in two main ways. First, we identify major limitations within the burgeoning literature on the effectiveness of terrorism. Specifically, we highlight the main methodological problems vexing empirical assessments of whether terrorism promotes government concessions. Second, we present a research design that circumvents those recurrent methodological shortcomings. In short, we find no empirical evidence to suggest that terrorism pays. In fact, multiple variants of the tactic in hostage standoffs impede the perpetrators from coercing government compliance. The negative effect of terrorism on the odds of compliance is significant and substantial across logistic and multilevel logistic model specifications, particularly when civilians are killed or wounded in the coercive incident. These findings have important implications for both scholars and practitioners of counterterrorism.

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From Shocks to Waves: Hegemonic Transitions and Democratization in the Twentieth Century

Seva Gunitsky
International Organization, Summer 2014, Pages 561-597

Abstract:
What causes democratic waves? This article puts forward a theory of institutional waves that focuses on the effects of systemic transformations. It argues that abrupt shifts in the distribution of power among leading states create unique and powerful incentives for sweeping domestic reforms. A variety of statistical tests reveals strong support for the idea that shifts in hegemonic power have shaped waves of democracy, fascism, and communism in the twentieth century, independent of domestic factors or horizontal diffusion. These “hegemonic shocks” produce windows of opportunity for external regime imposition, enable rising powers to rapidly expand networks of trade and patronage, and inspire imitators by credibly revealing hidden information about relative regime effectiveness to foreign audiences. I outline these mechanisms of coercion, influence, and emulation that connect shocks to waves, empirically test their relationship, and illustrate the theory with two case studies — the wave of democratic transitions after World War I, and the fascist wave of the late interwar period. In sum, democracy in the twentieth century cannot be fully understood without examining the effects of hegemonic shocks.

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Rewards for Ratification: Payoffs for Participating in the International Human Rights Regime?

Richard Nielsen & Beth Simmons
International Studies Quarterly, forthcoming

Abstract:
Among the explanations for state ratification of human rights treaties, few are more common and widely accepted than the conjecture that states are rewarded for ratification by other states. These rewards are expected to come in the form of tangible benefits — foreign aid, trade, and investment — and intangible benefits such as praise, acceptance, and legitimacy. Surprisingly, these explanations for ratification have never been tested empirically. We summarize and clarify the theoretical underpinnings of “reward-for-ratification” theories and test these propositions empirically by looking for increased international aid, economic agreements, and public praise and recognition following ratification of four prominent human rights treaties. We find almost no evidence that states can expect increased tangible or intangible rewards after ratification. Given the lack of empirical support, alternative explanations seem more appealing for understanding human rights treaty ratification.

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A Particular Difference: European Identity and Civilian Targeting

Tanisha Fazal & Brooke Greene
British Journal of Political Science, forthcoming

Abstract:
Recent scholarship has found identity variables to be insignificant predictors of civilian targeting in war. Drawing on the European origins of the law of war, this article argues that previous scholarship has neglected the one specification of ‘identity’ that is most theoretically justified for understanding civilian targeting: whether a European state is fighting a non-European state. This article replicates and extends three recent statistical analyses – Downes; Valentino, Huth and Croco; and Morrow – of civilian targeting by including a variable capturing whether a European state fought a non-European state. The study finds that civilian targeting, and non compliance with the law of war more generally, is significantly more likely in European v. non-European dyads than in other types of dyads.

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How Prior Military Experience Influences the Future Militarized Behavior of Leaders

Michael Horowitz & Allan Stam
International Organization, Summer 2014, Pages 527-559

Abstract:
Policy-makers and the electorate assume political executives' life experiences affect their policy choices once in office. Recent international relations work on leaders focuses almost entirely on how political institutions shape leaders' choices rather than on leaders' personal attributes and how they influence policy choices. This article focuses the analytic lens on leaders and their personal backgrounds. We theorize that the prior military background of a leader is an important life experience with direct relevance for how leaders evaluate the utility of using military force. We test several propositions employing a new data set, building on Archigos, that encompasses the life background characteristics of more than 2,500 heads of state from 1875 to 2004. The results show that the leaders most likely to initiate militarized disputes and wars are those with prior military service but no combat experience, as well as former rebels.

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Justa piratica: The ethics of piracy

James Pattison
Review of International Studies, October 2014, Pages 631-656

Abstract:
There has been widespread and vociferous condemnation of Somali piracy and several states have used force against the pirates. This reflects the prevailing view of pirates as belligerents and aggressors who act wrongly. In this article, I challenge this view by defending the conditional moral permissibility of piracy. More specifically, I first argue that piracy can be morally permissible when certain conditions are met. These are what I call the principles of ‘justa piratica’, that is, the principles of just piracy. Second, I claim that these conditions are likely to apply to some Somali pirates. Third, as a corollary, I argue that the case of piracy shows that one of the shibboleths of Just War Theory – that a war cannot be just on both sides – is mistaken.

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The Politics of Precedent in International Law: A Social Network Application

Krzysztof Pelc
American Political Science Review, August 2014, Pages 547-564

Abstract:
The concept of precedent is fundamental to domestic courts, especially in Anglo-American common law systems, where judges are bound to the court’s past decisions. By contrast, precedent has no formal authority in international law. Legal scholars point to Article 59 of the International Court of Justice (ICJ) Statute in this respect, according to which international legal rulings are binding only on the parties in the dispute at hand, and have no bearing on matters outside of the case.

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The sound of silence: Power, secrecy, and international audiences in US military basing negotiations

Jonathan Brown
Conflict Management and Peace Science, September 2014, Pages 406-431

Abstract:
Why do leaders draw attention to some cooperative security negotiations but shroud others in secrecy? Previous scholarship focuses on leaders’ efforts to gain better terms of agreement either by playing their cards close to the vest at the bargaining table or by leveraging/avoiding aroused public opinion at home. Yet, in many cases, it is neither dyadic nor domestic political pressures that motivate leaders’ decisions to publicly acknowledge or conceal the occurrence of talks. This article suggests, instead, that third-party states often constitute the primary targets of official secrecy and that a state’s international power position shapes its decision to conceal or acknowledge military cooperation by affecting the size and attentiveness of international audiences, the types of assets it brings to the relationship and the benefits it seeks from cooperation. I test five hypotheses about leaders’ use of secrecy and acknowledgment through a statistical analysis of an original dataset on US overseas military basing negotiations. This analysis produces strong support for my argument.

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Inaction Inertia in International Negotiations: The Consequences of Missed Opportunities

Lesley Terris & Orit Tykocinski
British Journal of Political Science, forthcoming

Abstract:
In international disputes, forgone settlement offers are frequently lamented, but their impact on the dynamics of ongoing negotiations is largely overlooked. In the psychological literature, however, the consequences of missing an advantageous action opportunity have been studied extensively in the context of the inaction inertia phenomenon. According to this literature, forgoing attractive action opportunities renders decision makers susceptible to regret and increases the likelihood that subsequent opportunities will also be missed. This article explores the explanatory potential of the inaction inertia effect in the context of international negotiations. Findings based on laboratory experiments and analysis of the negotiations between Israel and Hamas over the release of the Israeli soldier Gilad Shalit strongly suggest that the concept of inaction inertia can enrich the understanding of failures and deadlocks in international negotiations. The article defines the conditions that are instrumental in identifying inertia-induced deadlocks and discusses factors that encourage the termination of inaction inertia and promote dispute settlement.

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Implications of hydro-political dependency for international water cooperation and conflict: Insights from new data

Lucas Beck et al.
Political Geography, September 2014, Pages 23–33

Abstract:
Hydro-political dependencies between countries are widely regarded as having important implications for international water cooperation and conflict. Quantitative ex-post empirical research on the subject so far uses very simple characterizations of international river geography to proxy for such dependencies, though. The authors developed a new geo-spatial dataset for water catchments worldwide. This dataset combines elevation models, flow accumulation approaches, hydrological data, and data on international boundaries to generate more precise and nuanced measures of hydro-political dependencies among riparian countries. The paper discusses these measurement concepts, illustrates how dependencies are distributed worldwide, and revisits three prominent quantitative studies on the issue to show how using improved data affects empirical findings. In contrast to a very popular presumption, upstream–downstream dependencies turn out to have a very small to insignificant effect on international water cooperation or conflict.

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External Rebel Sponsorship and Civilian Abuse: A Principal-Agent Analysis of Wartime Atrocities

Idean Salehyan, David Siroky & Reed Wood
International Organization, Summer 2014, Pages 633-661

Abstract:
Although some rebel groups work hard to foster collaborative ties with civilians, others engage in egregious abuses and war crimes. We argue that foreign state funding for rebel organizations greatly reduces incentives to “win the hearts and minds” of civilians because it diminishes the need to collect resources from the population. However, unlike other lucrative resources, foreign funding of rebel groups must be understood in principal-agent terms. Some external principals — namely, democracies and states with strong human rights lobbies — are more concerned with atrocities in the conflict zone than others. Multiple state principals also lead to abuse because no single state can effectively restrain the organization. We test these conjectures with new data on foreign support for rebel groups and data on one-sided violence against civilians. Most notably, we find strong evidence that principal characteristics help influence agent actions.

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Complex Interstate Rivals

Brandon Valeriano & Matthew Powers
Foreign Policy Analysis, forthcoming

Abstract:
The goal of this article is to engage the concept of rivalry, analyze its possible deficiencies, and empirically identify which groups of states make up what we call complex rivals. A complex rivalry is defined as a group of at least three states whose relationships are linked by common issues, alignments, or dispute joiner dynamics in which there is a threat of militarized conflict and includes persistent long-term interactions and collective animosity. Once the cases that make up complex rivals are described, we examine the dynamics of conflict within complex rivalries. We show that complex rivals tend to follow a different path to war when compared to dyadic rivals in that they experience more war on average, are more likely to include major powers, and fight predominately over positional as opposed to spatial concerns.

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Circumstances, Domestic Audiences, and Reputational Incentives in International Crisis Bargaining

Alexandre Debs & Jessica Chen Weiss
Journal of Conflict Resolution, forthcoming

Abstract:
We present a new theory of interstate crisis bargaining. A country’s resolve is a function of intrinsic qualities of the government and external circumstances, both of which are unknown by the domestic electorate and the foreign country. When domestic political debate reveals that circumstances favor the use of force, the government can extract better terms than if circumstances are revealed to be unfavorable. The revelation of circumstances, however, exacerbates reputational incentives. Because governments can no longer hide behind unknown circumstances, voters can better discern the government’s type from its actions, strengthening the incentives to appear resolved. The model bridges the gap between audience costs and its critiques, showing how domestic audiences punish leaders for inappropriate policies rather than empty threats. At the same time, it highlights how the prospects for peace are worse if uncertainty about the circumstances is removed, suggesting that greater transparency does not always promote peaceful outcomes.

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The Changing Face of War in Textbooks: Depictions of World War II and Vietnam, 1970–2009

Richard Lachmann & Lacy Mitchell
Sociology of Education, July 2014, Pages 188-203

Abstract:
How have U.S. high school textbook depictions of World War II and Vietnam changed since the 1970s? We examined 102 textbooks published from 1970 to 2009 to see how they treated U.S. involvement in World War II and Vietnam. Our content analysis of high school history textbooks finds that U.S. textbooks increasingly focus on the personal experiences of soldiers, rather than presenting impersonal accounts of battles, and are increasingly likely to focus on soldiers’ suffering rather than glorify combat. This shift is greater for Vietnam than for World War II. We also find increasing attention in textbooks to the fact, but not the substance, of protests against the Vietnam War. These changes provide more support for theories that view textbooks as sites of contestation or expressions of a world culture of individualism rather than purveyors of a hidden curriculum of nationalistic militarism. Future research on textbook production and comparisons of U.S. versus other countries’ textbooks might show how much of the change is particular to the United States, perhaps due to the Vietnam War, or attributable to global changes in military conscription, tolerance for casualties, and attitudes toward individual rights and group obligations.

By KEVIN LEWIS | 09:00:00 AM

Sunday, August 24, 2014

Chancy

Time Preferences and Consumer Behavior

David Bradford et al.
NBER Working Paper, July 2014

Abstract:
We investigate the predictive power of survey-elicited time preferences using a representative sample of US residents. In regressions controlling for demographics and risk preferences, we show that the discount factor elicited from choice experiments using multiple price lists and real payments predicts various health, energy, and financial outcomes, including overall self-reported health, smoking, drinking, car fuel efficiency, and credit card balance. We allow for time-inconsistent preferences and find that the long-run and present bias discount factors (δ and β) are each significantly associated in the expected direction with several of these outcomes. Finally, we explore alternate measures of time preference. Elicited discount factors are correlated with several such measures, including self-reported willpower. A multiple proxies approach using these alternate measures shows that our estimated associations between the time-consistent discount factor and health, energy, and financial outcomes may be conservative.

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Pleasure Now, Meaning Later: Temporal Dynamics Between Pleasure and Meaning

Jinhyung Kim, Pyungwon Kang & Incheol Choi
Journal of Experimental Social Psychology, forthcoming

Abstract:
The present research investigated temporal dynamics between pleasure and meaning such that pleasure is favored in the near future, whereas meaning is favored in the distant future. As an underlying mechanism for this temporal effect, Study 1 demonstrated that pleasure was subordinate to meaning, suggesting that meaning constitutes a higher-level construal than pleasure. Consistent with construal level theory, Studies 2 and 3 found time-dependent changes in the relative weight of pleasure and meaning. Participants evaluated a meaningful life more positively than a pleasurable life as temporal distance increased (Study 2). They were also more likely to choose meaningful options in making distant- versus near-future decisions, compared to pleasurable options (Study 3). Implications and future research were discussed.

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Experimentally Measured Susceptibility to Peer Influence and Adolescent Sexual Behavior Trajectories: A Preliminary Study

Sophia Choukas-Bradley et al.
Developmental Psychology, forthcoming

Abstract:
A performance-based measure of peer influence susceptibility was examined as a moderator of the longitudinal association between peer norms and trajectories of adolescents’ number of sexual intercourse partners. Seventy-one 9th grade adolescents (52% female) participated in an experimental “chat room” paradigm involving “e-confederates” who endorsed sexual risk behaviors. Changes in participants’ responses to risk scenarios before versus during the “chat room” were used as a performance-based measure of peer influence susceptibility. Participants reported their perceptions of popular peers’ number of sexual intercourse partners at baseline and self-reported their number of sexual intercourse partners at baseline and 6, 12, and 18 months later. Susceptibility was examined as a moderator of the longitudinal association between perceptions of popular peers’ number of sexual intercourse partners and trajectories of adolescents’ own numbers of partners. High perceptions of the number of popular peers’ sexual intercourse partners combined with high peer influence susceptibility predicted steeper longitudinal trajectories of adolescents’ number of partners. Results provide novel preliminary evidence regarding the importance of peer influence susceptibility in adolescents’ development of sexual behaviors.

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Peer Effects in Risk Aversion

Ana Balsa, Néstor Gandelman & Nicolás González
Risk Analysis, forthcoming

Abstract:
We estimate peer effects in risk attitudes in a sample of high school students. Relative risk aversion is elicited from surveys administered at school. Identification of peer effects is based on parents not being able to choose the class within the school of their choice, and on the use of instrumental variables conditional on school-grade fixed effects. We find a significant and quantitatively large impact of peers’ risk attitudes on a male individual's coefficient of risk aversion. Specifically, a one standard deviation increase in the group's coefficient of risk aversion increases an individual's risk aversion by 43%. Our findings shed light on the origin and stability of risk attitudes and, more generally, on the determinants of economic preferences.

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Publication bias and the limited strength model of self-control: Has the evidence for ego depletion been overestimated?

Evan Carter & Michael McCullough
Frontiers in Psychology, July 2014

Abstract:
Few models of self-control have generated as much scientific interest as has the limited strength model. One of the entailments of this model, the depletion effect, is the expectation that acts of self-control will be less effective when they follow prior acts of self-control. Results from a previous meta-analysis concluded that the depletion effect is robust and medium in magnitude (d = 0.62). However, when we applied methods for estimating and correcting for small-study effects (such as publication bias) to the data from this previous meta-analysis effort, we found very strong signals of publication bias, along with an indication that the depletion effect is actually no different from zero. We conclude that until greater certainty about the size of the depletion effect can be established, circumspection about the existence of this phenomenon is warranted, and that rather than elaborating on the model, research efforts should focus on establishing whether the basic effect exists. We argue that the evidence for the depletion effect is a useful case study for illustrating the dangers of small-study effects as well as some of the possible tools for mitigating their influence in psychological science.

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The Value of Statistical Life: Evidence from Military Retention Incentives and Occupation-Specific Mortality

Michael Greenstone, Stephen Ryan & Michael Yankovich
MIT Working Paper, April 2014

Abstract:
Estimates of the Value of Statistical Life (VSL) are important for use in the cost-benefit analysis of policy-related issues involving trade-offs between wealth and risk of death. We propose a novel approach to estimating the VSL using a discrete choice model of hundreds of thousands of reenlistment decisions of first-time soldiers in the U.S. Army during the 2002-2010 years that encompasses periods of peace and war in Iraq and Afghanistan. The approach and setting provide solutions to many of the problems that have plagued the traditional hedonic labor market approach to estimating the VSL. We exploit substantial variation in both occupation-specific retention bonuses and occupation-specific mortality risk across military occupations and over time within occupations to estimate how soldiers trade off compensation and risk. Our points estimates of the VSL for the population of young men and women who volunteer for active military service range between $165,000 and $769,000 and are tightly estimated. Further, there is some evidence that individuals with the lowest VSLs sort into the most dangerous occupations.

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Negative affective reactions reduce perceived likelihood of risk

Heather Lench & Kathleen Darbor
Motivation and Emotion, August 2014, Pages 569-577

Abstract:
This investigation examined the influence of negative affective reactions on the perceived likelihood of experiencing a health risk. Concepts related to formaldehyde exposure were paired with negative stimuli to create affective reactions. In Study 1, perceived risk was reduced when the thought of formaldehyde exposure elicited negative affective reactions compared to a control condition and participants were less interested in information on the risk and recommended spending less money to alleviate the hazard. The potential boundary condition of emotional states was examined in Study 2. Sad or neutral emotion was elicited before learning about the hazard, which was again paired with negative stimuli or no affective stimuli. Sadness increased perceived risk; negative affective reactions reduced perceived risk only when participants were in a neutral incidental state. These findings suggest that negative affective reactions reduce the perceived likelihood of risk, but only in the absence of alternative emotional information.

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Introducing upfront losses as well as gains decreases impatience in intertemporal choices with rewards

Cheng-Ming Jiang, Feng-Pei Hu & Long-Fei Zhu
Judgment and Decision Making, July 2014, Pages 297–302

Abstract:
People tend to prefer smaller and sooner (SS) rewards over larger and later (LL) ones even when the latter are much larger. Previous research have identified several ways to enhance people’s patience. Adding to this literature, the current paper demonstrates that introduction of upfront losses as well as gains to both SS and LL rewards can decrease people’s impatience. This effect is incompatible with both the normative exponential and descriptive hyperbolic discounting models, which agree on the additive assumption and the independence assumption. We also exclude the integration explanation which assumes subjects integrate upfront money with final rewards and make a decision with bottom line at the end. We consider several possible explanations, including the salience hypothesis, which states that introducing upfront money makes the money dimension more salient than not and thus increases the attractiveness of LL options.

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Gender Differences in Decisions under Profound Uncertainty Are Non-Robust to the Availability of Information on Equally Informed Others’ Decisions

M. Hohnisch et al.
Journal of Economic Behavior & Organization, forthcoming

Abstract:
We investigated in the laboratory whether gender differences in decisions made under uncertainty without information on decisions of equally informed others are robust to the availability of that information. Participants specified in each of at most 60 periods four capital volumes making up the skeletal balance sheet of a financial institution in a computer-simulated environment with rare but potentially payoff-devastating crises. In the main study, we compared decision outcomes from two treatments: in the first, a participant had access to information on business numbers of two other participants, at least one of whom – unknown to the participant – was of the opposite sex (treatment with group information); in the second, no such outside information was available (treatment without group information). Our main finding is that, without group information, men adopted significantly more risk-exposed financial positions than women, whereas this pattern did not obtain beyond the first few periods when group information was available. A further study produced evidence that this effect of the availability of group information upon risk exposure is moderated by the gender composition of the groups. We also confirm the well-established tendency of social information to diminish cross-sectional variability in decisions in contexts with information sharing.

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ADHD subjects fail to suppress eye blinks and microsaccades while anticipating visual stimuli but recover with medication

Moshe Fried et al.
Vision Research, August 2014, Pages 62–72

Abstract:
Oculomotor behavior and parameters are known to be affected by the allocation of attention and could potentially be used to investigate attention disorders. We explored the oculomotor markers of Attention-deficit/hyperactivity disorder (ADHD) that are involuntary and quantitative and that could be used to reveal the core-affected mechanisms, as well as be used for differential diagnosis. We recorded eye movements in a group of 22 ADHD-diagnosed patients with and without medication (methylphenidate) and in 22 control observers while performing the test of variables of attention (t.o.v.a.). We found that the average microsaccade and blink rates were higher in the ADHD group, especially in the time interval around stimulus onset. These rates increased monotonically over session time for both groups, but with significantly faster increments in the unmedicated ADHD group. With medication, the level and time course of the microsaccade rate were fully normalized to the control level, regardless of the time interval within trials. In contrast, the pupil diameter decreased over time within sessions and significantly increased above the control level with medication. We interpreted the suppression of microsaccades and eye blinks around the stimulus onset as reflecting a temporal anticipation mechanism for the transient allocation of attention, and their overall rates as inversely reflecting the level of arousal. We suggest that ADHD subjects fail to maintain sufficient levels of arousal during a simple and prolonged task, which limits their ability to dynamically allocate attention while anticipating visual stimuli. This impairment normalizes with medication and its oculomotor quantification could potentially be used for differential diagnosis.

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Disposed to Distraction: Genetic Variation in the Cholinergic System Influences Distractibility But Not Time-on-Task Effects

Anne Berry et al.
Journal of Cognitive Neuroscience, September 2014, Pages 1981-1991

Abstract:
Both the passage of time and external distraction make it difficult to keep attention on the task at hand. We tested the hypothesis that time-on-task and external distraction pose independent challenges to attention and that the brain's cholinergic system selectively modulates our ability to resist distraction. Participants with a polymorphism limiting cholinergic capacity (Ile89Val variant [rs1013940] of the choline transporter gene SLC5A7) and matched controls completed self-report measures of attention and a laboratory task that measured decrements in sustained attention with and without distraction. We found evidence that distraction and time-on-task effects are independent and that the cholinergic system is strongly linked to greater vulnerability to distraction. Ile89Val participants reported more distraction during everyday life than controls, and their task performance was more severely impacted by the presence of an ecologically valid video distractor (similar to a television playing in the background). These results are the first to demonstrate a specific impairment in cognitive control associated with the Ile89Val polymorphism and add to behavioral and cognitive neuroscience studies indicating the cholinergic system's critical role in overcoming distraction.

By KEVIN LEWIS | 09:00:00 AM

Saturday, August 23, 2014

Charged

The Music of Power: Perceptual and Behavioral Consequences of Powerful Music

Dennis Hsu et al.
Social Psychological and Personality Science, forthcoming

Abstract:
Music has long been suggested to be a way to make people feel powerful. The current research investigated whether music can evoke a sense of power and produce power-related cognition and behavior. Initial pretests identified musical selections that generated subjective feelings of power. Experiment 1 found that music pretested to be powerful implicitly activated the construct of power in listeners. Experiments 2-4 demonstrated that power-inducing music produced three known important downstream consequences of power: abstract thinking, illusory control, and moving first. Experiments 5a and 5b held all features of music constant except for the level of bass and found that music with more bass increased participants' sense of power. This research expands our understanding of music’s influence on cognition and behavior and uncovers a novel antecedent of the sense of power.

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How Non-Consumption Shapes Desire

Xianchi Dai & Ayelet Fishbach
Journal of Consumer Research, forthcoming

Abstract:
How does non-consumption shape desire? The proposed model suggests that desire depends on the length of non-consumption of a good and the presence of salient alternatives, and that desire is at least partially constructed. In the absence of salient alternatives, a longer non-consumption period results in stronger desire for the unconsumed good. However, in the presence of salient alternatives, individuals infer that they have developed new tastes, and thus a longer non-consumption period results in a weaker desire for the unconsumed good. Five studies support this model across non-consumption of various goods: food from home when attending college (study 1); chametz food during the Passover holiday (study 2); social media (i.e., abstaining from Facebook; study 3); and cultural foods (i.e., forgoing Japanese food, study 4; and Thai food, study 5). We discuss implications of our findings for when and how the experience of desire is constructed and situationally determined.

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Cues of working together fuel intrinsic motivation

Priyanka Carr & Gregory Walton
Journal of Experimental Social Psychology, July 2014, Pages 169-184

Abstract:
What psychological mechanisms facilitate social coordination and cooperation? The present research examined the hypothesis that social cues that signal an invitation to work with others can fuel intrinsic motivation even when people work alone. Holding constant other factors, participants exposed to cues of working together persisted longer on a challenging task (Experiments 1 and 3), expressed greater interest in and enjoyment of the task (Experiments 1, 3, and 5), required less self-regulatory effort to persist on the task (Experiment 2), became more engrossed in and performed better on the task (Experiment 4), and, when encouraged to link this motivation to their values and self-concept, chose to do more related tasks in an unconnected setting 1-2 weeks later (Experiment 5). The results suggest that cues of working together can inspire intrinsic motivation, turning work into play. The discussion addresses the social-relational bases of motivation and implications for the !
self and application.

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Implicit Theories About Willpower Predict Self-Regulation and Grades in Everyday Life

Veronika Job et al.
Journal of Personality and Social Psychology, forthcoming

Abstract:
Laboratory research shows that when people believe that willpower is an abundant (rather than highly limited) resource they exhibit better self-control after demanding tasks. However, some have questioned whether this “nonlimited” theory leads to squandering of resources and worse outcomes in everyday life when demands on self-regulation are high. To examine this, we conducted a longitudinal study, assessing students’ theories about willpower and tracking their self-regulation and their academic performance. As hypothesized, a “nonlimited” theory predicted better self-regulation (better time management and less procrastination, unhealthy eating, and impulsive spending) for students who faced high self-regulatory demands. Moreover, among students taking a heavy course load, those with a nonlimited theory earned higher grades, which was mediated by less procrastination. These findings contradict the idea that a limited theory helps people all!
ocate their resources more effectively; instead, it is people with the nonlimited theory who self-regulate well in the face of high demands.

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Theories of intelligence and students' daily self-handicapping behaviors

Nicolette Rickert, Inez Meras & Melissa Witkow
Learning and Individual Differences, forthcoming

Abstract:
The current study sought to examine the relationship between students' theory of intelligence and daily self-handicapping behaviors. Ninth grade students completed a background survey with an eight-item measure assessing one's theory of intelligence (Dweck, 1999) and global measures of procrastination and self-handicapping. Participants then completed daily surveys for 2 weeks in which they reported how much homework they had, perceived school difficulty, time spent studying and in other domains, and how much effort they spent on their homework/studying. Results revealed that the strength of one's entity theory of intelligence was positively associated with self-handicapping and procrastination, replicating past findings. It was also found that entity theories of intelligence were associated with reduced responsiveness to daily school demands when compared to incremental theories. Not only do these results demonstrate an association between theory of intelligence and maladap!
tive school behaviors, but they show how these behaviors manifest on a daily basis.

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The effect of priming learning vs. performance goals on a complex task

Xiao Chen & Gary Latham
Organizational Behavior and Human Decision Processes, forthcoming

Abstract:
This research examined the effect of priming a learning goal, a performance goal, and both a learning and a performance goal on a task requiring the acquisition of knowledge. A photograph of Rodin’s “The Thinker” primed a learning goal, and a photograph of a racer primed a performance goal, as measured by a projective test. A laboratory experiment (n = 88) involving a 2 (a primed learning goal vs. control) × 2 (a primed performance goal vs. control) × 3 (trials) repeated measures factorial design revealed a significant main effect for only the primed learning goal. The results are interpreted within two frameworks, namely, goal setting theory and the automaticity model.

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Boredom and academic achievement: Testing a model of reciprocal causation

Reinhard Pekrun et al.
Journal of Educational Psychology, August 2014, Pages 696-710

Abstract:
A theoretical model linking boredom and academic achievement is proposed. Based on Pekrun’s (2006) control-value theory of achievement emotions, the model posits that boredom and achievement reciprocally influence each other over time. Data from a longitudinal study with college students (N = 424) were used to examine the hypothesized effects. The study involved 5 assessments of students’ boredom and test performance during a university course spanning an entire academic year. Structural equation modeling was used to examine effects of boredom on achievement, and vice versa. The results show that boredom had consistently negative effects on subsequent performance, and performance had consistently negative effects on subsequent boredom, while controlling for students’ gender, age, interest, intrinsic motivation, and prior achievement. These results provide robust evidence for the proposed links between boredom and achievement and support systems-theoretic!
al perspectives on the dynamics of emotions and achievement. From a broader educational perspective, the findings imply that researchers and practitioners alike should focus attention on boredom as an important, yet often overlooked, academic emotion.

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Daytime light exposure: Effects on biomarkers, measures of alertness, and performance

Levent Sahin et al.
Behavioural Brain Research, forthcoming

Abstract:
Light can elicit an alerting response in humans, independent from acute melatonin suppression. Recent studies have shown that red light significantly increases daytime and nighttime alertness. The main goal of the present study was to further investigate the effects of daytime light exposure on performance, biomarkers and measures of alertness. It was hypothesized that, compared to remaining in dim light, daytime exposure to narrowband long-wavelength (red) light or polychromatic (2568 K) light would induce greater alertness and shorter response times. Thirteen subjects experienced three lighting conditions: dim light (<5 lux), red light (λmax = 630 nm, 210 lux, 1.1 W/m2), and white light (3000 K, 360 lux, 1.1 W/m2). The presentation order of the lighting conditions was counterbalanced across the participants and each participant saw a different lighting condition each week. Our results demonstrate, for the first time, that red light can increase short-term performanc!
e as shown by the significant (p < 0.05) reduced response time and higher throughput in performance tests during the daytime. There was a significant decrease (p < 0.05) in alpha power and alpha-theta power after exposure to the white light, but this alerting effect did not translate to better performance. There was no significant effect of light on cortisol and alpha amylase. Alpha power was significantly reduced after red light exposure in the middle of the afternoon. The present results suggest that red light can be used to increase daytime performance.

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When motivational consequences of ego depletion collide: Conservation dominates over reward-seeking

Mauro Giacomantonio et al.
Journal of Experimental Social Psychology, November 2014, Pages 217-220

Abstract:
Existing research shows that ego depletion - impaired self-regulation following repeatedly exerting self-control - both increases the need to conserve energy, thus reducing engagement and persistence, and promotes approach tendencies and reward-seeking behaviors. These dual motivations may be paradoxical; in many situations, seeking rewards requires energy input. In such cases of competing motivations, which of the two motivations dominates over the other? To answer this question, we manipulated ego depletion and then had participants engage in a reward-seeking task that was either demanding or not demanding of energy. Results showed that, in line with previous research, in the less demanding condition, depleted participants were more reward-seeking than non-depleted participants. In contrast, in the more demanding condition, depleted individuals quit sooner and hence were less reward-seeking than the non-depleted participants. We conclude that in a state of ego depletion, c!
onserving energy is sometimes dominant over pursuing rewards.

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Association between serotonin Cumulative Genetic Score and the Behavioral Approach System (BAS): Moderation by early life environment

Rahel Pearson, John McGeary & Christopher Beevers
Personality and Individual Differences, November 2014, Pages 140-144

Abstract:
The present study investigates if genetic variation in the serotonergic system interacts with early adversity to predict changes in the Behavioral Approach System (BAS), a system that taps into reward processing. In a sample of community adults (N = 236) the influence of single serotonergic candidate polymorphisms on BAS was analyzed, we also examined the aggregate contribution of these genetic variants by creating a Cumulative Genetic Score (CGS). A CGS quantifies an individual’s cumulative risk by aggregating the number of risk alleles across the candidate polymorphisms. After individual gene analysis, three candidate genes rs7305115 (TPH2), rs6311 (HTR2A), and rs6295 (HTR1A) were combined into the CGS. There were no significant interactions between individual candidate polymorphisms and childhood adversity, but the CGS interacted with childhood adversity to explain a significant amount of variance (11.6%) in the BAS. Findings suggest that genetic variations in the !
serotonergic system in combination with childhood adversity contribute to individual differences in reward sensitivity.

By KEVIN LEWIS | 09:00:00 AM

Friday, August 22, 2014

Your money or your life

Health Spending Slowdown Is Mostly Due To Economic Factors, Not Structural Change In The Health Care Sector

David Dranove, Craig Garthwaite & Christopher Ody
Health Affairs, August 2014, Pages 1399-1406

Abstract:
The source of the recent slowdown in health spending growth remains unclear. We used new and unique data on privately insured people to estimate the effect of the economic slowdown that began in December 2007 on the rate of growth in health spending. By exploiting regional variations in the severity of the slowdown, we determined that the economic slowdown explained approximately 70 percent of the slowdown in health spending growth for the people in our sample. This suggests that the recent decline is not primarily the result of structural changes in the health sector or of components of the Affordable Care Act, and that — absent other changes in the health care system — an economic recovery will result in increased health spending.

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The Impact of Tort Reform on Intensity of Treatment: Evidence from Heart Patients

Ronen Avraham & Max Schanzenbach
Journal of Health Economics, forthcoming

Abstract:
This paper analyzes the effect of non-economic damage caps on the treatment intensity of heart attack victims. We focus on whether a patient receives a major intervention in the form of either a coronary artery by-pass or angioplasty. We find strong evidence that treatment intensity declines after a cap on non-economic damages. The probability of receiving a major intervention in the form of either an angioplasty or bypass declines by 1.25 to 2 percentage points after non-economic damage caps are enacted, and this effect is larger a year or two after reform. However, we also find clear evidence of substitution between major interventions. When doctors have discretion to perform a by-pass and patients have insurance coverage, caps on non-economic damages increase the probability that a by-pass is performed. The effect of non-economic damage caps on costs is not always statistically significant, but in models with state-specific trends, total costs decline by as much as four percent. We conclude that tort reform reduces treatment intensity overall, even though it changes the mix of treatments. Using the Center for Disease Control's Vital Statistics data, we find that tort reform is not associated with an increase in mortality from coronary heart disease; if anything, mortality declines.

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Moral Hazard and Less Invasive Medical Treatment for Coronary Artery Disease: The Case of Cigarette Smoking

Jesse Margolis et al.
NBER Working Paper, August 2014

Abstract:
Over the last several decades, numerous medical studies have compared the effectiveness of two common procedures for Coronary Artery Disease: Percutaneous Coronary Intervention (PCI) and Coronary Artery Bypass Graft (CABG). Most evidence indicates that CABG – the more invasive procedure – leads to superior long term outcomes for otherwise similar patients, though there is little consensus as to why. In this article, we propose a novel explanation: patient offsetting behavior. We hypothesize that patients who undergo the more invasive procedure, CABG, are more likely to improve their behavior – eating, exercise, smoking, and drinking – in a way that increases longevity. To test our hypothesis, we use Medicare records linked to the National Health Interview Survey to study one such behavior: smoking. We find that CABG patients are 12 percentage points more likely to quit smoking in the one-year period immediately surrounding their procedure than PCI patients, a result that is robust to numerous alternative specifications.

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Insurers' Negotiating Leverage and the External Effects of Medicare Part D

Darius Lakdawalla & Wesley Yin
Review of Economics and Statistics, forthcoming

Abstract:
By influencing the size and bargaining power of private insurers, public subsidization of private health insurance may project effects beyond the subsidized population. We test for such spillovers by analyzing how increases in insurer size resulting from the implementation of Medicare Part D affected drug prices negotiated in the non-Medicare commercial market. On average, Part D lowered prices for commercial enrollees by 3.7%. The external commercial market savings amount to $1.5 billion per year, which, if passed to consumers, approximates the internal cost-savings of newly-insured subsidized beneficiaries. If retained by insurers, it corresponds to a greater than 9.25% average increase in profitability on stand-alone drug insurance.

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California Safety-Net Hospitals Likely To Be Penalized By ACA Value, Readmission, And Meaningful-Use Programs

Matlin Gilman et al.
Health Affairs, August 2014, Pages 1314-1322

Abstract:
The Affordable Care Act includes provisions to increase the value obtained from health care spending. A growing concern among health policy experts is that new Medicare policies designed to improve the quality and efficiency of hospital care, such as value-based purchasing (VBP), the Hospital Readmissions Reduction Program (HRRP), and electronic health record (EHR) meaningful-use criteria, will disproportionately affect safety-net hospitals, which are already facing reduced disproportionate-share hospital (DSH) payments under both Medicare and Medicaid. We examined hospitals in California to determine whether safety-net institutions were more likely than others to incur penalties under these programs. To assess quality, we also examined whether mortality outcomes were different at these hospitals. Our study found that compared to non-safety-net hospitals, safety-net institutions had lower thirty-day risk-adjusted mortality rates in the period 2009–11 for acute myocardial infarction, heart failure, and pneumonia and marginally lower adjusted Medicare costs. Nonetheless, safety-net hospitals were more likely than others to be penalized under the VBP program and the HRRP and more likely not to meet EHR meaningful-use criteria. The combined effects of Medicare value-based payment policies on the financial viability of safety-net hospitals need to be considered along with DSH payment cuts as national policy makers further incorporate performance measures into the overall payment system.

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Does Seeing the Doctor More Often Keep You Out of the Hospital?

Robert Kaestner & Anthony Lo Sasso
Journal of Health Economics, forthcoming

Abstract:
By exploiting a unique health insurance benefit design, we provide novel evidence on the causal association between outpatient and inpatient care. Our results indicate that greater outpatient spending was associated with more hospital admissions: a $100 increase in outpatient spending was associated with a 1.9% increase in the probability of having an inpatient event and a 4.6% increase in inpatient spending among enrollees in our sample. Moreover, we present evidence that the increase in hospital admissions associated with greater outpatient spending was for conditions in which it is plausible to argue that the physician and patient could exercise discretion.

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Cohort Turnover and Productivity: The July Phenomenon in Teaching Hospitals

Robert Huckman, Hummy Song & Jason Barro
Harvard Working Paper, May 2014

Abstract:
We consider the impact of cohort turnover — the planned simultaneous exit of a large number of experienced employees and a similarly sized entry of new workers — on productivity in the context of teaching hospitals. Specifically, we examine the impact of the annual July turnover of residents in American teaching hospitals on levels of resource utilization and quality in teaching hospitals relative to a control group of non-teaching hospitals. We find that, despite the anticipated nature of the cohort turnover and the supervisory structures that exist in teaching hospitals, this annual cohort turnover results in increased resource utilization (i.e., longer length of hospital stay) for both minor and major teaching hospitals, and decreased quality (i.e., higher mortality rates) for major teaching hospitals. Particularly in major teaching hospitals, we find evidence of a gradual trend of decreasing performance that begins several months before the actual cohort turnover and may result from a transition of responsibilities at major teaching hospitals in anticipation of the cohort turnover.

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Non-Adherence In Health Care: A Positive and Normative Analysis

Mark Egan & Tomas Philipson
NBER Working Paper, July 2014

Abstract:
Non-adherence in health care results when a patient does not initiate or continue care that has been recommended by a provider. Previous researchers have identified non-adherence as a major source of waste in US healthcare, totaling approximately 2.3% of GDP, and have proposed a plethora of interventions to improve adherence. However, little explicit analysis exists in health economics of the dynamic demand behavior that drives non-adherence. We argue that while providers may be more informed about the population-wide effects of treatments, patients are more informed about their individual treatment effect. We interpret a patient’s adherence decision as an optimal stopping problem where patients learn the value of a treatment through experience. Our positive analysis derives an “adherence survival function” and shows how various observable factors affect adherence. Our normative analysis derives the efficiency effects of non-adherence, the conditions under which adherence is too high or too low, and why many common interventions aimed at raising adherence produce indeterminate welfare effects. We calibrate these welfare effects for one of the largest US drug categories, cholesterol reducing drugs. Contrary to frequent normative claims of under-adherence, our estimates suggest that the ex-post efficiency loss from over-adherence is over 80% larger than from under-adherence.

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The Long-Term Health Effects of Early Life Medicaid Coverage

Sarah Marie Miller & Laura Wherry
University of Michigan Working Paper, July 2014

Abstract:
Although the link between the fetal environment and later life health and achievement is well-established, few studies have evaluated the extent to which public policies aimed at improving fetal health have effects that persist into adulthood. In this study, we evaluate how a rapid expansion of prenatal and child health insurance coverage through the Medicaid program affected the adult health and health care utilization of individuals born between 1979 and 1993 who gained coverage in utero and as children. We find that those whose mothers gained eligibility for prenatal coverage under Medicaid have lower rates of obesity and lower body mass indices as adults. Using administrative data on hospital discharges, we find that cohorts who gained in utero Medicaid eligibility have fewer preventable hospitalizations and fewer hospitalizations related to endocrine, nutritional and metabolic diseases, and immunity disorders as adults. We find effects of public eligibility in other periods of childhood on hospitalizations later in life, but these effects are small. Our results indicate that expanding Medicaid prenatal coverage had long-term benefits for the health of the next generation.

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Bundled Payment Fails To Gain A Foothold In California: The Experience Of The IHA Bundled Payment Demonstration

Susan Ridgely et al.
Health Affairs, August 2014, Pages 1345-1352

Abstract:
To determine whether bundled payment could be an effective payment model for California, the Integrated Healthcare Association convened a group of stakeholders (health plans, hospitals, ambulatory surgery centers, physician organizations, and vendors) to develop, through a consensus process, the methods and means of implementing bundled payment. In spite of a high level of enthusiasm and effort, the pilot did not succeed in its goal to implement bundled payment for orthopedic procedures across multiple payers and hospital-physician partners. An evaluation of the pilot documented a number of barriers, such as administrative burden, state regulatory uncertainty, and disagreements about bundle definition and assumption of risk. Ultimately, few contracts were signed, which resulted in insufficient volume to test hypotheses about the impact of bundled payment on quality and costs. Although bundled payment failed to gain a foothold in California, the evaluation provides lessons for future bundled payment initiatives.

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Health insurer market power and primary care consolidation

Christopher Brunt & John Bowblis
Economics Letters, forthcoming

Abstract:
This paper analyses how health insurance market concentration impacts the market structure of primary care physicians. In more concentrated insurance markets, physicians are found to work in larger practices and their practices are more likely to have a hospital with an ownership interest. Physicians are also less likely to report being in a competitive physician market, consistent with practice consolidation. Our results suggest consolidation in insurance markets impacts the competitive structure of physicians markets.

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Socialized medicine and mortality

Sam Peltzman
International Journal of Health Care Finance and Economics, September 2014, Pages 179-205

Abstract:
Over the last century life expectancy has increased substantially and so has the share of health care expenditures financed by governments. In cross-country comparisons, the US, which has the lowest government health expenditure share, often has the poorest health outcomes. Is there a plausible connection between health outcomes and government financing of health care? This paper addresses this question with panel data from 20 developed countries from 1950 to 2010. I review the history of government involvement in health care financing over this period. Then I use panel regression methods to examine whether a variety of mortality based outcome measures are correlated with the extent of government involvement. The answers are robustly negative.

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Medicaid Primary Care Physician Fees and the Use of Preventive Services among Medicaid Enrollees

Adam Atherly & Karoline Mortensen
Health Services Research, August 2014, Pages 1306–1328

Objective: The Patient Protection and Affordable Care Act (ACA) increases Medicaid physician fees for preventive care up to Medicare rates for 2013 and 2014. The purpose of this paper was to model the relationship between Medicaid preventive care payment rates and the use of U.S. Preventive Services Task Force (USPSTF)–recommended preventive care use among Medicaid enrollees.

Data Sources/Study Session: We used data from the 2003 and 2008 Medical Expenditure Panel Survey (MEPS), a national probability sample of the U.S. civilian, noninstitutionalized population, linked to Kaiser state Medicaid benefits data, including the state Medicaid-to-Medicare physician fee ratio in 2003 and 2008.

Study Design: Probit models were used to estimate the probability that eligible individuals received one of five USPSF-recommended preventive services. A difference-in-difference model was used to separate out the effect of changes in the Medicaid payment rate and other factors.

Principal Findings: Although Medicaid enrollees had a lower rate of use of the five preventive services in univariate analysis, neither Medicaid enrollment nor changes in Medicaid payment rates had statistically significant effects on meeting screening recommendations for the five screenings. The results were robust to a number of different sensitivity tests. Individual and state characteristics were significant.

Conclusions: Our results suggest that although temporary changes in primary care provider payments for preventive services for Medicaid enrollees may have other desirable effects, they are unlikely to substantially increase the use of these selected USPSTF-recommended preventive care services among Medicaid enrollees.

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Paying Attention or Paying Too Much in Medicare Part D

Jonathan Ketcham, Claudio Lucarelli & Christopher Powers
American Economic Review, forthcoming

Abstract:
We study whether people became less likely to switch Medicare prescription drug plans (PDPs) due to more options and more time in Part D. Panel data for a random 20% sample of enrollees from 2006–2010 show that 50% were not in their original PDPs by 2010. Individuals switched PDPs in response to higher costs of their status quo plans, saving them money. Contrary to choice overload, larger choice sets increased switching unless the additional plans were relatively expensive. Neither switching overall nor responsiveness to costs declined over time, and above-minimum spending in 2010 remained below the 2006 and 2007 levels.

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Medication Affordability Gains Following Medicare Part D Are Eroding Among Elderly With Multiple Chronic Conditions

Huseyin Naci et al.
Health Affairs, August 2014, Pages 1435-1443

Abstract:
Elderly Americans, especially those with multiple chronic conditions, face difficulties paying for prescriptions, which results in worse adherence to and discontinuation of therapy, called cost-related medication nonadherence. Medicare Part D, implemented in January 2006, was supposed to address issues of affordability for prescriptions. We investigated whether the gains in medication affordability attributable to Part D persisted during the six years that followed its implementation. Overall, we found continued incremental improvements in medication affordability in the period 2007–09 that eroded during the period 2009–11. Among elderly beneficiaries with four or more chronic conditions, we observed an increase in the prevalence of cost-related nonadherence from 14.4 percent in 2009 to 17.0 percent in 2011, reversing previous downward trends. Similarly, the prevalence among the sickest elderly of forgoing basic needs to purchase medicines decreased from 8.7 percent in 2007 to 6.8 percent in 2009 but rose to 10.2 percent in 2011. Our findings highlight the need for targeted policy efforts to alleviate the persistent burden of drug treatment costs on this vulnerable population.

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Do Certificate-of-Need Laws Increase Indigent Care?

Thomas Stratmann & Jacob Russ
George Mason University Working Paper, July 2014

Abstract:
Many states have certificate-of-need regulations, which prohibit hospitals, nursing homes, and ambulatory surgical centers from entering new markets or making changes to the existing capacity of medical facilities without first gaining approval from certificate-of-need regulators. These regulations purport to limit the supply of medical services and to induce regulated institutions to use the resulting economic profits to cross-subsidize indigent care. We document that these regulations do limit supply. However, we do not find strong evidence of higher levels of indigent-care provision in states that have certificate-of-need regulations as opposed to those that do not.

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Tradeoffs in the Design of Health Plan Payment Systems: Fit, Power and Balance

Michael Geruso & Thomas McGuire
NBER Working Paper, July 2014

Abstract:
In many markets, including the new U.S. Exchanges, health plans are paid by risk-adjusted capitation, in some markets combined with reinsurance and other payment features. This paper proposes three metrics for grading these complex payment systems: fit, power and balance, each of which addresses a distinct market failure in health insurance. We implement these metrics in a study of Exchange payment systems with data similar to that used to develop the Exchange risk adjustment scheme and describe the tradeoffs among the metrics. We find that a simple reinsurance system scores better on fit, power and balance than the risk adjustment formula in use in the Exchanges.

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Price Transparency For MRIs Increased Use Of Less Costly Providers And Triggered Provider Competition

Sze-jung Wu et al.
Health Affairs, August 2014, Pages 1391-1398

Abstract:
To encourage patients to select high-value providers, an insurer-initiated price transparency program that focused on elective advanced imaging procedures was implemented. Patients having at least one outpatient magnetic resonance imaging (MRI) scan in 2010 or 2012 were divided according to their membership in commercial health plans participating in the program (the intervention group) or in nonparticipating commercial health plans (the reference group) in similar US geographic regions. Patients in the intervention group were informed of price differences among available MRI facilities and given the option of selecting different providers. For those patients, the program resulted in a $220 cost reduction (18.7 percent) per test and a decrease in use of hospital-based facilities from 53 percent in 2010 to 45 percent in 2012. Price variation between hospital and nonhospital facilities for the intervention group was reduced by 30 percent after implementation. Nonparticipating members residing in intervention areas also observed price reductions, which indicates increased price competition among providers. The program significantly reduced imaging costs. This suggests that patients select lower-price facilities when informed about available alternatives.

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Factors Affecting Receipt of Expensive Cancer Treatments and Mortality: Evidence from Stem Cell Transplantation for Leukemia and Lymphoma

Jean Mitchell & Elizabeth Conklin
Health Services Research, forthcoming

Objective: To identify factors that affect whether patients diagnosed with either leukemia or lymphoma receive a stem cell transplant and secondly if receipt of stem cell transplantation is linked to improved survival.

Data: California inpatient discharge records (2002–2003) for patients with either leukemia or lymphoma linked with vital statistics death records (2002–2005).

Study Design: Bivariate Probit treatment effects model that accounts for both the type of treatment received and survival while controlling for nonrandom selection due to unobservable factors.

Principal Findings: Having private insurance coverage and residence in a well-educated county increased the chances a patient with either disease received HSCT. Increasing age and travel distance to the nearest transplant hospital had the opposite effect. Receipt of HSCT had a significant impact on mortality. We found the probability of death was 4.3 percentage points higher for leukemia patients who did NOT have HSCT. Receipt of HSCT reduced the chances of dying by almost 50 percent. The likelihood of death among lymphoma patients who underwent HSCT was almost 5 percentage points lower, a 70 percent reduction in the probability of death.

Conclusions: The findings raise concern about access to expensive, but highly effective cancer treatments for patients with certain hematologic malignancies.

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For-Profit Medicare Home Health Agencies’ Costs Appear Higher And Quality Appears Lower Compared To Nonprofit Agencies

William Cabin et al.
Health Affairs, August 2014, Pages 1460-1465

Abstract:
For-profit, or proprietary, home health agencies were banned from Medicare until 1980 but now account for a majority of the agencies that provide such services. Medicare home health costs have grown rapidly since the implementation of a risk-based prospective payment system in 2000. We analyzed recent national cost and case-mix-adjusted quality outcomes to assess the performance of for-profit and nonprofit home health agencies. For-profit agencies scored slightly but significantly worse on overall quality indicators compared to nonprofits (77.18 percent and 78.71 percent, respectively). Notably, for-profit agencies scored lower than nonprofits on the clinically important outcome “avoidance of hospitalization” (71.64 percent versus 73.53 percent). Scores on quality measures were lowest in the South, where for-profits predominate. Compared to nonprofits, proprietary agencies also had higher costs per patient ($4,827 versus $4,075), were more profitable, and had higher administrative costs. Our findings raise concerns about whether for-profit agencies should continue to be eligible for Medicare payments and about the efficiency of Medicare’s market-oriented, risk-based home care payment system.

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Can Caesarean section improve child and maternal health? The case of breech babies

Vibeke Myrup Jensen & Miriam Wüst
Journal of Health Economics, forthcoming

Abstract:
This paper examines the health effects of Caesarean section (CS) for children and their mothers. We use exogenous variation in the probability of CS in a fuzzy regression discontinuity design. Using administrative Danish data, we exploit an information shock for obstetricians that sharply altered CS rates for breech babies. We find that CS decreases the child's probability of having a low APGAR score and the number of family doctor visits in the first year of life. We find no significant effects for severe neonatal morbidity or hospitalizations. While mothers are hospitalized longer after birth, we find no effects of CS for maternal post-birth complications or infections. Although the change in mode of delivery for the marginal breech babies increases direct costs, the health benefits show that CS is the safest option for these children.

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A Cross-Sectional Analysis of Variation in Charges and Prices across California for Percutaneous Coronary Intervention

Renee Hsia et al.
PLoS ONE, August 2014

Objectives: We sought to examine the variability in charges for percutaneous coronary intervention (PCI) with a drug-eluting stent and without major complications (MS-DRG-247), and determine whether hospital and market characteristics influenced these charges.

Methods: We conducted a cross-sectional analysis of adults admitted to California hospitals in 2011 for MS-DRG-247 using patient discharge data from the California Office of Statewide Health Planning and Development. We used a two-part linear regression model to first estimate hospital-specific charges adjusted for patient characteristics, and then examine whether the between-hospital variation in those estimated charges was explained by hospital and market characteristics.

Results: Adjusted charges for the average California patient admitted for uncomplicated PCI ranged from $22,047 to $165,386 (median: $88,350) depending on which hospital the patient visited. Hospitals in areas with the highest cost of living, those in rural areas, and those with more Medicare patients had higher charges, while government-owned hospitals charged less. Overall, our model explained 43% of the variation in adjusted charges. Estimated discounted prices paid by private insurers ranged from $3,421 to $80,903 (median: $28,571).

Conclusions: Charges and estimated discounted prices vary widely between hospitals for the average California patient undergoing PCI without major complications, a common and relatively homogeneous episode of care. Though observable hospital characteristics account for some of this variation, the majority remains unexplained.

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The effect of in-office waiting time on physician visit frequency among working-age adults

Hyo Jung Tak et al.
Social Science & Medicine, October 2014, Pages 43–51

Abstract:
Disparities in unmet health care demand resulting from socioeconomic, racial, and financial factors have received a great deal of attention in the United States. However, out-of-pocket costs alone do not fully reflect the total opportunity cost that patients must consider as they seek medical attention. While there is an extensive literature on the price elasticity of demand for health care, empirical evidence regarding the effect of waiting time on utilization is sparse. Using the nationally representative 2003 Community Tracking Study Household Survey, the most recent iteration containing respondents' physician office visit frequency and estimated in-office waiting time in the United States (N = 23,484), we investigated the association between waiting time and calculated time cost with the number of physician visits among a sample of working-age adults. To avoid the bias that literature suggests would result from excluding respondents with zero physician visits, we imputed waiting time for the essential inclusion of such individuals. On average, respondents visited physician offices 3.55 times, during which time they waited 28.7 min. The estimates from a negative binomial model indicated that a doubling of waiting time was associated with a 7.7 percent decrease (p-value < 0.001) in physician visit frequency. For women and unemployed respondents, who visited physicians more frequently, the decrease was even larger, suggesting a stronger response to greater waiting times. We believe this finding reflects the discretionary nature of incremental visits in these groups, and a consequent lower perceived marginal benefit of additional visits. The results suggest that in-office waiting time may have a substantial influence on patients' propensity to seek medical attention. Although there is a belief that expansions in health insurance coverage increase health care utilization by reducing financial barriers to access, our results suggest that unintended consequences may arise if in-office waiting time increases.

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Machines that Go ‘Ping’: Medical Technology and Health Expenditures in OECD Countries

Peter Willemé & Michel Dumont
Health Economics, forthcoming

Abstract:
Technology is believed to be a major determinant of increasing health spending. The main difficulty to quantify its effect is to find suitable proxies to measure medical technological innovation. This paper's main contribution is the use of data on approved medical devices and drugs to proxy for medical technology. The effects of these variables on total real per capita health spending are estimated using a panel model for 18 Organisation for Economic Co-operation and Development (OECD) countries covering the period 1981–2012. The results confirm the substantial cost-increasing effect of medical technology, which accounts for almost 50% of the explained historical growth of spending. Despite the overall net positive effect of technology, the effect of two subgroups of approvals on expenditure is significantly negative. These subgroups can be thought of as representing ‘incremental medical innovation’, whereas the positive effects are related to radically innovative pharmaceutical products and devices. A separate time series model was estimated for the USA because the FDA approval data in fact only apply to the USA, while they serve as proxies for the other OECD countries. Our empirical model includes an indicator of obesity, and estimations confirm the substantial contribution of this lifestyle variable to health spending growth in the countries studied.

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Beyond Adoption: Does Meaningful Use of EHR Improve Quality of Care?

Yu-Kai Lin, Mingfeng Lin & Hsinchun Chen
University of Arizona Working Paper, May 2014

Abstract:
Electronic health record (EHR) system holds great promise in transforming healthcare. Existing empirical literature typically focused on its adoption, and found mixed evidence on whether EHR improves care. The federal initiative for meaningful use (MU) of EHR aims to maximize the potential of quality improvement, yet there is little empirical study on the impact of the initiative and, more broadly, the relation between MU and quality of care. Leveraging features of the Medicare EHR Incentive Program for exogenous variations, we examine the impact of MU on healthcare quality, and also the clinical benefit of the multi-billion-dollar EHR incentive program. We found that MU significantly and consistently improves quality of care. More importantly, this effect is greater in historically disadvantaged hospitals such as small, non-teaching, or rural hospitals. These findings contribute not only to the literature on Health IT, but also the broader literature of IT adoption and value as well.

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The Impact of Tiered Physician Networks on Patient Choices

Anna Sinaiko & Meredith Rosenthal
Health Services Research, August 2014, Pages 1348–1363

Objective: To assess whether patient choice of physician or health plan was affected by physician tier-rankings.

Data Sources: Administrative claims and enrollment data on 171,581 nonelderly beneficiaries enrolled in Massachusetts Group Insurance Commission health plans that include a tiered physician network and who had an office visit with a tiered physician.

Study Design: We estimate the impact of tier-rankings on physician market share within a plan of new patients and on the percent of a physician's patients who switch to other physicians with fixed effects regression models. The effect of tiering on consumer plan choice is estimated using logistic regression and a pre–post study design.

Principal Findings: Physicians in the bottom (least-preferred) tier, particularly certain specialist physicians, had lower market share of new patient visits than physicians with higher tier-rankings. Patients whose physician was in the bottom tier were more likely to switch health plans. There was no effect of tier-ranking on patients switching away from physicians whom they have seen previously.

Conclusions: The effect of tiering appears to be among patients who choose new physicians and at the lower end of the distribution of tiered physicians, rather than moving patients to the “best” performers. These findings suggest strong loyalty of patients to physicians more likely to be considered their personal doctor.

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Do the Medicaid and Medicare programs compete for access to health care services? A longitudinal analysis of physician fees, 1998–2004

Larry Howard
International Journal of Health Care Finance and Economics, September 2014, Pages 229-250

Abstract:
As the demand for publicly funded health care continues to rise in the U.S., there is increasing pressure on state governments to ensure patient access through adjustments in provider compensation policies. This paper longitudinally examines the fees that states paid physicians for services covered by the Medicaid program over the period 1998–2004. Controlling for an extensive set of economic and health care industry characteristics, the elasticity of states’ Medicaid fees, with respect to Medicare fees, is estimated to be in the range of 0.2–0.7 depending on the type of physician service examined. The findings indicate a significant degree of price competition between the Medicaid and Medicare programs for physician services that is more pronounced for cardiology and critical care, but not hospital care. The results also suggest several policy levers that work to either increase patient access or reduce total program costs through changes in fees.

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Higher Medicare SNF Care Utilization by Dual-Eligible Beneficiaries: Can Medicaid Long-Term Care Policies Be the Answer?

Momotazur Rahman et al.
Health Services Research, forthcoming

Objective: To examine outcomes associated with dual eligibility (Medicare and Medicaid) of patients who are admitted to skilled nursing facility (SNF) care and whether differences in outcomes are related to states' Medicaid long-term care policies.

Data Sources/Collection: We used national Medicare enrollment data and claims, and the Minimum Data Set for 890,922 community-residing Medicare fee-for-service beneficiaries who were discharged to an SNF from a general hospital between July 2008 and June 2009.

Study Design: We estimated the effect of dual eligibility on the likelihood of 30-day rehospitalization, becoming a long-stay nursing home resident, and 180-day survival while controlling for clinical, demographic, socio-economic, residential neighborhood characteristics, and SNF-fixed effects. We estimated the differences in outcomes by dual eligibility status separately for each state and showed their relationship with state policies: the average Medicaid payment rate; presence of nursing home certificate-of-need (CON) laws; and Medicaid home and community-based services (HCBS) spending.

Principal Findings: Dual-eligible patients are equally likely to experience 30-day rehospitalization, 12 percentage points more likely to become long-stay residents, and 2 percentage points more likely to survive 180 days compared to Medicare-only patients. This longer survival can be attributed to longer nursing home length of stay. While higher HCBS spending reduces the length-of-stay gap without affecting the survival gap, presence of CON laws reduces both the length-of-stay and survival gaps.

Conclusions: Dual eligibles utilize more SNF care and experience higher survival rates than comparable Medicare-only patients. Higher HCBS spending may reduce the longer SNF length of stay of dual eligibles without increasing mortality and may save money for both Medicare and Medicaid.

By KEVIN LEWIS | 09:00:00 AM

Thursday, August 21, 2014

Shady past

The Old Jim Crow: Racial Residential Segregation and Neighborhood Imprisonment

Traci Burch
Law & Policy, July 2014, Pages 223–255

Abstract:
This article examines the impact of racial residential segregation on imprisonment rates at the neighborhood level. Key to the strength of this enterprise is block-group level data on imprisonment, crime, and other demographic factors for about 5,000 neighborhoods in North Carolina. These data also include information on county racial residential segregation from the Population Studies Center at the University of Michigan. Hierarchical linear models that control for neighborhood characteristics, such as racial diversity, crime, poverty, unemployment, median income, homeownership, and other factors, show that neighborhoods in more segregated counties have higher imprisonment rates than neighborhoods in less segregated counties. On average, neighborhoods in counties with segregation levels at the minimum of 41.4 are expected to have imprisonment rates of 0.186 percent, while neighborhoods in counties with segregation levels at the maximum of 95.6 are expected to have imprisonment rates more than twice as high, or about 0.494 percent.

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The Decline of Whiteness and the Rise of the Tea Party

Robb Willer
Stanford Working Paper, March 2014

Abstract:
The Tea Party is the most electorally influential social movement in recent American history. What factors led the movement to emerge when it did? And what role might racial prejudice play in Tea Party support? Here I test the claim that recent political, demographic, and economic events have threatened the status of white Americans, leading them to increased racial prejudice and support for the Tea Party. Five studies support this reasoning, demonstrating that various threats to the status of whites lead white Americans to express both greater prejudice and greater support for the movement. A final study finds that threatened whites reported greater support for the Tea Party when racialized aspects of its platform (e.g., opposition to immigration) were highlighted, not when libertarian positions (e.g., opposition to environmental regulation) were. These findings support a view of the Tea Party as, in part, a response to a perceived decline in the status of whiteness in America. I conclude by discussing prospects for a general theory of the role of group status in the mobilization of large scale collective actions.

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A Theory of African American Offending: A Test of Core Propositions

James Unnever
Race and Justice, April 2014, Pages 98-123

Abstract:
Analyzing the National Survey of American Life, which includes 3,570 Blacks, this research is the first to test core hypotheses of Unnever and Gabbidon’s Theory of African American Offending. A core assertion of Unnever and Gabbidon’s theory, which specifically and only focuses on Blacks, is that their offending is associated with the degree to which they encounter racial injustices. This article focuses on two forms of racial injustice that are prominently highlighted by Unnever and Gabbidon — racial discrimination and racist stereotypes. The results reveal that Blacks who experience racial discrimination and “buy into” the pejorative stereotype that they are violent are more likely to offend, as they experience heightened states of low self-control, anger, and depression. The data also show that experiences with racial injustices increase the likelihood that Blacks will become dependent on substances/alcohol. These findings were generated while including other correlates of arrests, including demographic characteristics, whether Blacks identify with other Blacks, the number of relatives in jail or prison, and strength of family bonds. The theoretical importance of these findings is discussed.

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Differences in Subprime Loan Pricing Across Races and Neighborhoods

Andra Ghent, Rubén Hernández-Murillo & Michael Owyang
Regional Science and Urban Economics, forthcoming

Abstract:
We investigate whether race and ethnicity influenced subprime loan pricing during 2005, the peak of the subprime mortgage expansion. We combine loan-level data on the performance of non-prime securitized mortgages with individual- and neighborhood-level data on racial and ethnic characteristics for metropolitan areas in California and Florida. Using a model of rate determination that accounts for predicted loan performance, we evaluate the differences in subprime mortgage rates in terms of racial and ethnic groups and neighborhood characteristics. We find evidence of adverse pricing for blacks and Hispanics. The evidence of adverse pricing is strongest for purchase mortgages and mortgages originated by non-depository institutions.

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Emerging Forms of Racial Inequality in Homeownership Exit, 1968–2009

Gregory Sharp & Matthew Hall
Social Problems, August 2014, Pages 427-447

Abstract:
Because homeownership continues to be a key mechanism underlying racial inequality in America, recent developments that led to the foreclosure crisis bring to the forefront issues concerning minority homeowners' ability to sustain ownership. This article uses longitudinal data from the Panel Study of Income Dynamics to examine racial differences in the likelihood of homeownership exit over the last four decades. We find that black homeowners are at a significantly higher risk of transitioning to renter status than are white homeowners, even after accounting for life-course, socioeconomic, and housing characteristics, and the selection into homeownership. Most importantly, we show that the racial gap in ownership exit has widened substantially over time, especially among owners who purchased their homes in the 1990s or later. These findings are consistent with arguments that the nature of racial stratification in U.S. housing markets has shifted over time from overt market exclusion to market exploitation.

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Ethnic Diversity and Its Effects on Social Cohesion

Tom van der Meer & Jochem Tolsma
Annual Review of Sociology, 2014, Pages 459-478

Abstract:
Recent years have seen a sharp increase in empirical studies on the constrict claim: the hypothesized detrimental effect of ethnic diversity on most if not all aspects of social cohesion. Studies have scrutinized effects of different measures of ethnic heterogeneity in different geographical areas on different forms of social cohesion. The result has been a cacophony of empirical findings. We explicate mechanisms likely to underlie the negative relationship between ethnic heterogeneity and social cohesion: the homophily principle, feelings of anomie, group threat, and social disorganization. Guided by a clear conceptual framework, we structure the empirical results of 90 recent studies and observe three patterns. We find that (a) there is consistent support for the constrict claim for aspects of social cohesion that are spatially bounded to neighborhoods, (b) support for the constrict claim is more common in the United States than in other countries, and (c) ethnic diversity is not related to less interethnic social cohesion. We discuss the implications of these patterns.

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Trends In The Black-White Life Expectancy Gap Among US States, 1990–2009

Sam Harper, Richard MacLehose & Jay Kaufman
Health Affairs, August 2014, Pages 1375-1382

Abstract:
Nationwide differences in US life expectancy trends for blacks and whites may mask considerable differences by state that are relevant to policies aimed at reducing health inequalities. We calculated annual state-specific life expectancies for blacks and whites from 1990 to 2009 using age-specific mortality counts and census-based denominators. Nationally, the black-white difference in life expectancy at birth shrank during the period by 2.7 years for males (from 8.1 to 5.4 years) and by 1.7 years for females (from 5.5 to 3.8 years). We found considerable variation across states in both the magnitude of the life expectancy gap (approximately fifteen years) and the change during the past two decades (about six years). Decomposition analysis showed that New York made the most profound contribution to reducing the gap, but less favorable trends in a number of states, notably California and Texas, kept the gap from shrinking further. Large state variations in the pace of change in the racial gap in life expectancy suggest that state-specific determinants merit further investigation.

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Neighborhoods and Racial/Ethnic Disparities in Adolescent Sexual Risk Behavior

Daniel Carlson et al.
Journal of Youth and Adolescence, September 2014, Pages 1536-1549

Abstract:
Understanding the determinants of racial/ethnic disparities in adolescent sexual risk behavior is important given its links to the differential risk of teen pregnancy, childbearing, and sexually transmitted infections. This article tests a contextual model that emphasizes the concentration of neighborhood disadvantage in shaping racial/ethnic disparities in sexual risk behavior. We focus on two risk behaviors that are prevalent among Black and Hispanic youth: the initiation of sexual activity in adolescence and the number of sex partners. Using data from the 1997 National Longitudinal Study of Youth (N = 6,985; 48 % female; 57 % non-Hispanic White) evidence indicates that neighborhood disadvantage — measured by concentrated poverty, unemployment rates, and the proportion of female-headed households — partially explains Black and Hispanic disparities from Whites in the odds of adolescent sexual debut, although the prevalence of female-headed households in neighborhoods appears to be the main driver in this domain. Likewise, accounting for neighborhood disadvantage reduces the Black-White and Hispanic-White disparity in the number of sexual partners, although less so relative to sexual debut. We discuss theoretical and practical implications of these findings.

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Diversity and the Civic Spirit in British Neighbourhoods: An Investigation with MCDS and EMBES 2010 Data

Neli Demireva & Anthony Heath
Sociology, August 2014, Pages 643-662

Abstract:
Recently, there has been a proliferation of studies investigating the relationship between diversity and outcomes such as social cohesion and civic mindedness. This article addresses several common problems in this field and, using data for British neighbourhoods, elaborates on the experiences of both white British and ethnic minority respondents. We conclude that, if anything, diversity should be encouraged to cement the integration progress of migrants and foster stronger identification with Britain in the second generation. Deprivation at the neighbourhood level along with individual factors such as fear of crime is a much stronger predictor of deterioration of the civic spirit than diversity. Bridging contacts have the expected strong positive association with cohesion outcomes; and contrary to policy concerns no strong negative impact is observed for associational bonding among minority ingroupers.

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“The Whole North Is Not Abolitionized”: Slavery’s Slow Death in New Jersey, 1830–1860

James Gigantino
Journal of the Early Republic, Fall 2014, Pages 411-437

Abstract:
This article explores how white and black New Jerseyans understood slavery and abolition in their state in the 1830s and 1840s. It examines how the emergence of an active abolition society, fervor over the presence of fugitive slaves, and the increasingly degraded relationship between the North and the South over slavery spurred a localized debate in New Jersey over slavery’s continuation. However, even with active abolitionist pressure and a population that increasingly eyed slavery and the South with suspicion, abolitionists never convinced the general population to support immediate black freedom. When New Jersey legislators finally abolished slavery in 1846, they did so grudgingly and under yet another graduated system. Instead of freeing all bound blacks, the legislature abolished the legal term “slave” and reclassified all former slaves as “apprentices for life.” New Jerseyans therefore displayed a remarkable ability to resist immediate abolition, which illustrates that slavery survived far longer and more powerfully in the North than previously imagined. More importantly, New Jerseyans did not disown their past relationships with slavery, but instead used them to inform their dealings with the institution in the 1840s and their relationship with the South in an increasingly divided nation. These past relationships then had a tangible impact on the sectional crisis as New Jersey and southern politicians shared an understanding of slavery and an astute knowledge of the various forms of unfreedom associated with it.

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Please pass me the skin coloured crayon! Semantics, socialisation, and folk models of race in contemporary Europe

Martina Zimmermann et al.
Language Sciences, forthcoming

Abstract:
This study explores the cultural semantics of colour words in the four urban, European communities of Munich, Berne, Aarhus, and Reykjavik, focussing on hautfarben (German), hutfarb (Bernese Swiss German), hudfarvet (Danish), and húðlitur (Icelandic), all of which can be translated as ‘skin coloured’. Unlike in English, where skin coloured has fallen out of use due to its racist semantic profile, these words are still widely present within the four communities. Using evidence from a referential colour naming task and semi-structured interviews, our study seeks to reveal the linguistic worldviews and idealised cognitive models embedded in skin-based colour concepts in contemporary German and Scandinavian languages. Arguing that colour concepts are linguistic constructs through which speakers have learned to pay attention to their visual worlds, we trace the origin of the skin-based colour concept to language socialisation. Our study suggests that children's use of crayons in pre-schools, homes, and kindergartens have a formative impact on the acquisition of colour concepts in general, and in particular, in acquiring a skin-based colour concept. Apart from ‘crayon socialisation’ and children's drawing practices, our study points to one other salient aspect of meaning associated with the skin-based colour concept, namely socio-political discourses of multiculturalism, political correctness and racism. Some speakers find it ‘natural’ to use a skin-based colour concept while others find it ‘racist’. Yet regardless of an individual speaker's views on the matter, they all appear to recognise the specific folk model of race, encoded in hautfarben, hutfarb, hudfarvet and húðlitur. In addition, based on the disagreement among speakers, we do find some evidence that discursive changes in German and Scandinavian languages could lead to similar changes as the ones which have taken place in English (i.e. the replacement of skin coloured with peach or a similar construct). Skin-based colours in Germanic languages also offer new perspectives on visual semantics, the social origins of colour, and on the interface of language, sociality and colour.

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Does School Policy Affect Housing Choices? Evidence From the End of Desegregation in Charlotte–Mecklenburg

David Liebowitz & Lindsay Page
American Educational Research Journal, August 2014, Pages 671-703

Abstract:
We examine whether the legal decision to grant unitary status to the Charlotte–Mecklenburg school district, which led to the end of race-conscious student assignment policies, increased the probability that families with children enrolled in the district would move to neighborhoods with a greater proportion of student residents of the same race as their own children. Motivated by the rich but inconclusive literature on the consequences of educational and residential segregation, we make use of a natural policy experiment — a judicial decision to end court-ordered busing — to estimate the causal impacts of this policy shift on household residential decisions. We find that, for those who moved, the legal decision made White families with children in the Charlotte–Mecklenburg Schools substantially more likely than they were during desegregation to move to a neighborhood with a greater proportion of White residents than their own neighborhood.

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Dangerous Climates: Factors Associated With Variation in Racist Hate Crimes on College Campuses

Nella Van Dyke & Griff Tester
Journal of Contemporary Criminal Justice, August 2014, Pages 290-309

Abstract:
Although hundreds of American college students are the victims of bias-motivated verbal and physical assaults every year, little research explores whether there is a systematic pattern to the hate crimes that occur on college campuses. In this article, we study why some campuses experience more racist hate crimes than do others. We explore how campus demographics, tuition increases, and the presence of fraternities influence reported hate crime incidence. Through a statistical analysis of the hate crimes reported to the FBI by 349 colleges, we find that ethnic-/racial-bias hate crimes are more likely to be reported on predominantly White college campuses and those that have a large Greek population. We contribute to theory on hate crime by illustrating some of the social characteristics that make hate crime more likely in certain geographic areas than others.

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“Without Regard to Race”: Critical Ideational Development in Modern American Politics

Desmond King & Rogers Smith
Journal of Politics, forthcoming

Abstract:
Many scholars note that racial policy issues now focus on color-blind versus race-conscious approaches to racial inequalities, but they have not adequately explained how this development occurred or its consequences. Using work theorizing the role of ideas in politics, this article argues that these changes represent a “critical ideational development.” Diverse strains in earlier racial policy positions were reformulated to advance not just old racial goals but new ones. This critical ideational development produced advantages for conservative coalition building and Republican electoral campaigns, thereby contributing to the Reagan Revolution and later polarization and gridlock, and it helped drive racial issues out of campaigns and into other venues, especially legislative, administrative, and judicial hearings. It has not been associated with great progress in reducing racial inequalities or promoting racial harmony.

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Self-Rated Health and Residential Segregation: How Does Race/Ethnicity Matter?

Joseph Gibbons & Tse-Chuan Yang
Journal of Urban Health, August 2014, Pages 648-660

Abstract:
Despite recent declines, racial segregation remains a detriment to minority neighborhoods. However, existing research is inconclusive as to the effects racial segregation has on health. Some argue that racial segregation is related to poor health outcomes, whereas others suspect that racial segregation may actually lead to improved health for some minority communities. Even less is known about whether minority access to white neighborhoods improves health. We address these gaps with individual data from the 2010 Public Health Management Corporation’s Southeastern Pennsylvania Household Health Survey and census tract data from the 2010 Decennial Census and the 2006–2010 American Community Survey. We implement logistic multilevel models to determine whether and how a resident’s self-rated health is affected by the racial/ethnic segregation of their neighborhoods. Our key finding suggests that the effects of segregation on self-rated health depend on an individual’s race/ethnicity, with blacks and Latino residents most likely to experience adverse effects. Particularly, minorities living in predominantly white communities have a significantly higher likelihood to report poor/fair health than they would in segregated minority neighborhoods. These findings make clear that access to white neighborhoods is not sufficient to improve minority health; fuller neighborhood integration is necessary to ensure all have health equity.

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Workplace Discrimination Predicting Racial/Ethnic Socialization Across African American, Latino, and Chinese Families

Carolin Hagelskamp & Diane Hughes
Cultural Diversity and Ethnic Minority Psychology, forthcoming

Abstract:
Informed by Kohn and Schooler’s (1969) occupational socialization framework, this study examined linkages between racial/ethnic minority mothers’ perceptions of racial/ethnic discrimination in the workplace and adolescents’ accounts of racial/ethnic socialization in the home. Data were collected from 100 mother–early adolescent dyads who participated in a longitudinal study of urban adolescents’ development in the Northeastern United States, including African American, Latino, and Chinese families. Mothers and adolescents completed surveys separately. We found that when mothers reported more frequent institutional discrimination at work, adolescents reported more frequent preparation for bias messages at home, across racial/ethnic groups. Mothers’ experiences of interpersonal prejudice at work were associated with more frequent cultural socialization messages among African American and Latino families. Chinese youth reported fewer cultural socialization messages when mothers perceived more frequent interpersonal prejudice at work. Findings are discussed in the context of minority groups’ distinct social histories and economic status in the United States.

By KEVIN LEWIS | 09:00:00 AM

Wednesday, August 20, 2014

Value at risk

Quantifying the semantics of search behavior before stock market moves

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

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

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Private Equity and Industry Performance

Shai Bernstein et al.
Stanford Working Paper, June 2014

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

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

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

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

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Did going public impair Moody's credit ratings?

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

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

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Capitalizing on Capitol Hill: Informed Trading by Hedge Fund Managers

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

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

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

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

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

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

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

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

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Access to management and the informativeness of analyst research

Clifton Green et al.
Journal of Financial Economics, forthcoming

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

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The behavioral basis of sell-side analysts' herding

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

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

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Money Doctors

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

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

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Private Equity Premium Puzzle Revisited

Katya Kartashova
American Economic Review, forthcoming

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

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

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

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

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

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

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

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

Stephen Ciccone & Fred Kaen
Defence and Peace Economics, forthcoming

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

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Disagreement and asset prices

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

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

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

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

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

By KEVIN LEWIS | 09:00:00 AM

Tuesday, August 19, 2014

Seeing a difference

Racial Disparities in Incarceration Increase Acceptance of Punitive Policies

Rebecca Hetey & Jennifer Eberhardt
Psychological Science, forthcoming

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Paul Adachi et al.
Psychology of Violence, forthcoming

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

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

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

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

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

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

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

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

Jo Phelan et al.
Social Psychology Quarterly, forthcoming

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

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

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

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

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The greatest magic of Harry Potter: Reducing prejudice

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

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

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

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

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

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

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

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

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Essentializing Ethnicity: Identification Constraint Reduces Diversity Interest

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

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

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Exploring implicit ingroup and outgroup bias toward Hispanics

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

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

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

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

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

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The Spontaneous Formation of Stereotypes via Cumulative Cultural Evolution

Douglas Martin et al.
Psychological Science, forthcoming

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

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The Inherence Heuristic as a Source of Essentialist Thought

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

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

By KEVIN LEWIS | 09:15:00 AM

Monday, August 18, 2014

Pay as you go

The Tax Gradient: Spatial Aspects of Fiscal Competition

David Agrawal
American Economic Review, forthcoming

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

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Taxes and Financial Constraints: Evidence from Linguistic Cues

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

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

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A Model of the Consumption Response to Fiscal Stimulus Payments

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

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

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Cognitive Biases in Government Procurement – An Experimental Study

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

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

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U.S. State Fiscal Policy and Natural Resources

Alexander James
American Economic Journal: Economic Policy, forthcoming

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

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Taxes and Fiscal Sociology

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

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

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

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

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

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Government size, composition of public expenditure, and economic development

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

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

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

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

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

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

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

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

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Taxes on the Internet: Deterrence Effects of Public Disclosure

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

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

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

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

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

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

Atif Mian & Amir Sufi
NBER Working Paper, May 2014

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

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

Byron Lutz
American Economic Journal: Economic Policy, forthcoming

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

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

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

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

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Tax Avoidance and Business Location in a State Border Model

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

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

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

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

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

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Complex Tax Incentives

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

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

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

Chi-Young Choi & Xiaojun Wang
Economic Inquiry, forthcoming

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

By KEVIN LEWIS | 09:00:00 AM

Sunday, August 17, 2014

Making a difference

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

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

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

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Conscience Accounting: Emotion Dynamics and Social Behavior

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

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

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

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

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

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Signaling Virtue: Charitable Behavior Under Consumer Elective Pricing

Minah Jung
University of California Working Paper, June 2014

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

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Priming Effects on Commitment to Help and on Real Helping Behavior

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

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

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

Jerry Burger et al.
Social Influence, forthcoming

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

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

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

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

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

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

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

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

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

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

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

Markus Paulus
Frontiers in Psychology, June 2014

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

By KEVIN LEWIS | 09:00:00 AM

Saturday, August 16, 2014

Ladies' night

Female Economic Dependence and the Morality of Promiscuity

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

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

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

Zhana Vrangalova
Journal of Sex Research, forthcoming

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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Some evidence for health-related marriage selection

Anna Lipowicz
American Journal of Human Biology, forthcoming

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

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

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

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

By KEVIN LEWIS | 09:00:00 AM


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