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Monday, June 30, 2014

Price mechanism

The Genetics of Investment Biases

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

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

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Political Uncertainty and Financial Market Quality

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

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

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Facebook's daily sentiment and international stock markets

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

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

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

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

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

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

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

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

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

Alain Chaboud et al.
Journal of Finance, forthcoming

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

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

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

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

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Religious Holidays, Investor Distraction, and Earnings Announcement Effects

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

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

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High-Frequency Trading and Price Discovery

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

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

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Which Limited Partners Limit VC Opportunism?

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

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

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

Leonce Bargeron & Kenneth Lehn
Journal of Corporate Finance, forthcoming

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

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Attracting Early Stage Investors: Evidence from a Randomized Field Experiment

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

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

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

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

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

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Second-order Beliefs and the Individual Investor

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

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

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

Viktor Manahov & Robert Hudson
Applied Economics Letters, forthcoming

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

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

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

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

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

Gil Cohen
Economics Letters, forthcoming

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

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

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

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

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

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

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

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

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

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

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Friends Do Let Friends Buy Stocks Actively

Rawley Heimer
Journal of Economic Behavior & Organization, forthcoming

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

By KEVIN LEWIS | 09:00:00 AM

Sunday, June 29, 2014

If you're so smart

A Decline in Creativity? It Depends on the Domain

Emily Weinstein et al.
Creativity Research Journal, Spring 2014, Pages 174-184

Abstract:
Earlier studies using psychometric tests have documented declines in creativity over the past several decades. Our study investigated whether and how this apparent trend would replicate through a qualitative investigation using an authentic nontest measure of creativity. Three-hundred and fifty-four visual artworks and 50 creative writing works produced by adolescents between 1990–1995 and 2006–2011 were assessed. Products were analyzed using a structured assessment method based on technical criteria and content elements. Criteria included in the current investigation (e.g., genre, medium, stylistic approach) are relevant both to the specific media domains and to previously established dimensions of creativity, such as originality and complexity. Results showed strong domain differences: performance in visual arts increased on a variety of indices of complexity and technical proficiency, and performance in writing decreased on indices related to originality and technical proficiency. Findings highlight the value of analysing creativity across domains. The importance of considering cultural and technological changes in characterizing and understanding apparent trends in amount and types of creativity is discussed.

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Forgetting as a consequence and enabler of creative thinking

Benjamin Storm & Trisha Patel
Journal of Experimental Psychology: Learning, Memory, and Cognition, forthcoming

Abstract:
Four experiments examined the interplay of memory and creative cognition, showing that attempting to think of new uses for an object can cause the forgetting of old uses. Specifically, using an adapted version of the Alternative Uses Task (Guilford, 1957), participants studied several uses for a variety of common household objects before attempting to generate new uses for half of those objects. As revealed by performance on a final cued-recall task, attempting to generate new uses caused participants to forget the studied uses. This thinking-induced forgetting effect was observed regardless of whether participants attempted to generate unusual uses or common uses, but failed to emerge when participants used the studied uses as hints to guide their generation of new uses. Additionally, the forgetting effect correlated with individual differences in creativity such that participants who exhibited more forgetting generated more creative uses than participants who exhibited less forgetting. These findings indicate that thinking can cause forgetting and that such forgetting may contribute to the ability to think creatively.

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Video-Games Do Not Negatively Impact Adolescent Academic Performance in Science, Mathematics or Reading

Aaron Drummond & James Sauer
PLoS ONE, April 2014

Abstract:
Video-gaming is a common pastime among adolescents, particularly adolescent males in industrialized nations. Despite widespread suggestions that video-gaming negatively affects academic achievement, the evidence is inconclusive. We reanalyzed data from over 192,000 students in 22 countries involved in the 2009 Programme for International Student Assessment (PISA) to estimate the true effect size of frequency of videogame use on adolescent academic achievement in science, mathematics and reading. Contrary to claims that increased video-gaming can impair academic performance, differences in academic performance were negligible across the relative frequencies of videogame use. Videogame use had little impact on adolescent academic achievement.

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Contributions of COMT Val158Met to cognitive stability and flexibility in infancy

Julie Markant et al.
Developmental Science, May 2014, Pages 396–411

Abstract:
Adaptive behavior requires focusing on relevant tasks while remaining sensitive to novel information. In adult studies of cognitive control, cognitive stability involves maintaining robust cognitive representations while cognitive flexibility involves updating of representations in response to novel information. Previous adult research has shown that the Met allele of the COMT Val158Met gene is associated with enhanced cognitive stability whereas the Val allele is associated with enhanced cognitive flexibility. Here we propose that the stability/flexibility framework can also be applied to infant research, with stability mapping onto early indices of behavioral regulation and flexibility mapping onto indices of behavioral reactivity. From this perspective, the present study examined whether COMT genotype was related to 7-month-old infants' reactivity to novel stimuli and behavioral regulation. Cognitive stability and flexibility were assessed using (1) a motor approach task, (2) a habituation task, and (3) a parental-report measure of temperament. Val carriers were faster to reach for novel toys during the motor approach task and received higher scores on the temperament measure of approach to novelty. Met carriers showed enhanced dishabituation to the novel stimulus during the habituation task and received higher scores on the temperament measures of sustained attention and behavioral regulation. Overall, these results are consistent with adult research suggesting that the Met and Val alleles are associated with increased cognitive stability and flexibility, respectively, and thus suggest that COMT genotype may similarly affect cognitive function in infancy.

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Young blood reverses age-related impairments in cognitive function and synaptic plasticity in mice

Saul Villeda et al.
Nature Medicine, June 2014, Pages 659–663

Abstract:
As human lifespan increases, a greater fraction of the population is suffering from age-related cognitive impairments, making it important to elucidate a means to combat the effects of aging. Here we report that exposure of an aged animal to young blood can counteract and reverse pre-existing effects of brain aging at the molecular, structural, functional and cognitive level. Genome-wide microarray analysis of heterochronic parabionts — in which circulatory systems of young and aged animals are connected — identified synaptic plasticity–related transcriptional changes in the hippocampus of aged mice. Dendritic spine density of mature neurons increased and synaptic plasticity improved in the hippocampus of aged heterochronic parabionts. At the cognitive level, systemic administration of young blood plasma into aged mice improved age-related cognitive impairments in both contextual fear conditioning and spatial learning and memory. Structural and cognitive enhancements elicited by exposure to young blood are mediated, in part, by activation of the cyclic AMP response element binding protein (Creb) in the aged hippocampus. Our data indicate that exposure of aged mice to young blood late in life is capable of rejuvenating synaptic plasticity and improving cognitive function.

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Heritability of Creative Achievement

Davide Piffer & Yoon-Mi Hur
Creativity Research Journal, Spring 2014, Pages 151-157

Abstract:
Although creative achievement is a subject of much attention to lay people, the origin of individual differences in creative accomplishments remain poorly understood. This study examined genetic and environmental influences on creative achievement in an adult sample of 338 twins (mean age = 26.3 years; SD = 6.6 years). Twins completed the Creative Achievement Questionnaire (CAQ) that assesses observable creative accomplishments in various domains. The CAQ includes Artistic Creative Achievement (ACA), Scientific Creative Achievement (SCA), and the Total Creative Achievement (TCA) scales. Across all 3 scales, monozygotic twin correlations were consistently and substantially higher than dizygotic twin correlations, suggesting the importance of genetic influences on creative achievements. Heritability estimates for the 3 scales ranged from 43% to 67%, with the remaining variance being attributable to nonshared environmental influences plus measurement error. The effects of shared environmental factors were negligible. These results were in contrast with those of early twin studies of creativity, which yielded a significant amount of shared family environmental influences. Discrepancies in findings between this study and prior investigations may be due in part to the differences in ages of twins and measures.

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Over the Hill at 24: Persistent Age-Related Cognitive-Motor Decline in Reaction Times in an Ecologically Valid Video Game Task Begins in Early Adulthood

Joseph Thompson, Mark Blair & Andrew Henrey
PLoS ONE, April 2014

Abstract:
Typically studies of the effects of aging on cognitive-motor performance emphasize changes in elderly populations. Although some research is directly concerned with when age-related decline actually begins, studies are often based on relatively simple reaction time tasks, making it impossible to gauge the impact of experience in compensating for this decline in a real world task. The present study investigates age-related changes in cognitive motor performance through adolescence and adulthood in a complex real world task, the real-time strategy video game StarCraft 2. In this paper we analyze the influence of age on performance using a dataset of 3,305 players, aged 16-44, collected by Thompson, Blair, Chen & Henrey. Using a piecewise regression analysis, we find that age-related slowing of within-game, self-initiated response times begins at 24 years of age. We find no evidence for the common belief expertise should attenuate domain-specific cognitive decline. Domain-specific response time declines appear to persist regardless of skill level. A second analysis of dual-task performance finds no evidence of a corresponding age-related decline. Finally, an exploratory analyses of other age-related differences suggests that older participants may have been compensating for a loss in response speed through the use of game mechanics that reduce cognitive load.

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Of babies and birds: Complex tool behaviours are not sufficient for the evolution of the ability to create a novel causal intervention

Alex Taylor et al.
Proceedings of the Royal Society: Biological Sciences, 22 July 2014

Abstract:
Humans are capable of simply observing a correlation between cause and effect, and then producing a novel behavioural pattern in order to recreate the same outcome. However, it is unclear how the ability to create such causal interventions evolved. Here, we show that while 24-month-old children can produce an effective, novel action after observing a correlation, tool-making New Caledonian crows cannot. These results suggest that complex tool behaviours are not sufficient for the evolution of this ability, and that causal interventions can be cognitively and evolutionarily disassociated from other types of causal understanding.

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Low-grade inflammation disrupts structural plasticity in the human brain

C. Szabóa, O. Kelemen & S. Kéri
Neuroscience, forthcoming

Abstract:
Increased low-grade inflammation is thought to be associated with several neuropsychiatric disorders characterized by decreased neuronal plasticity. The purpose of the present study was to investigate the relationship between structural changes in the human brain during cognitive training and the intensity of low-grade peripheral inflammation in healthy individuals (n = 56). A two-month training (30 min/day) with a platformer video game resulted in a significantly increased volume of the right hippocampal formation. The number of stressful life events experienced during the past year was associated with less pronounced enlargement of the hippocampus. However, the main predictor of hippocampal volume expansion was the relative peripheral expression of Nuclear Factor-κB (NF-κB), a transcription factor playing a central role in the effect of pro-inflammatory cytokines. Interleukin-6 (IL-6) and C-reactive protein levels were not related to hippocampal plasticity when NF-κB was taken into consideration. These results suggest that more intensive peripheral inflammation is associated with weaker neuronal plasticity during cognitive training.

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Targeted Intervention to Increase Creative Capacity and Performance: A Randomized Controlled Pilot Study

Eliza Kienitz et al.
Thinking Skills and Creativity, September 2014, Pages 57–66

Abstract:
Creativity is generally regarded as the ability to synthesize novel connections to create meaningful outcomes. Previous studies in adults have mainly focused on creativity as a static construct. In this study, we tested the hypothesis that creativity is a fluid construct within normal adults that can be enhanced with a targeted intervention. We also explored the relationship between baseline personality characteristics and level of creativity enhancement. A 5-week creativity capacity building program (CCBP) was conducted in parallel with a 5-week language capacity building training program (LCBP) designed as a control intervention. Creativity was measured, before and after training using a standardized assessment of creativity: the Torrance Test of Creative Thinking-Figural (TTCT-F). Personality was measured before training using the NEO Five-Factor Inventory (NEO-FFI). Results revealed greater increase for CCBP than LCBP on two primary factors of the TTCT-F: Resistance to Premature Closure and Elaboration. Analysis of NEO-Openness and Extraversion factors revealed more improvement on the TTCT-F scores after intervention for individuals with high Extraversion (E) scores, but this did not differ between groups. Altogether, our results indicate that creativity is a fluid construct, functioning independently of personality traits, which can be enhanced through targeted creativity intervention.

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Home sweet home: Does where you live matter to working memory and other cognitive skills?

Tracy Packiam Alloway, Ross Alloway & Samantha Wootan
Journal of Experimental Child Psychology, August 2014, Pages 124–131

Abstract:
Learning outcomes are associated with a variety of environmental and cognitive factors, and the aim of the current study was to compare the predictive power of these factors in longitudinal outcomes. We recruited children in kindergarten and tested their learning outcomes 2 years later. In kindergarten, children completed tests of IQ, phonological awareness, and memory (sentence memory, short-term memory, and working memory). After 2 years, they took national assessments in reading, writing, and math. Working memory performance was not affected by socioeconomic status (SES), whereas IQ, phonological awareness, and sentence memory scores differed as a function of SES. A series of hierarchical regression analyses indicated that working memory and phonological awareness were better predictors of learning than any other factors tested, including SES. Educational implications include providing intervention during the early years to boost working memory and phonological awareness so as to prevent subsequent learning difficulties.

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Who is afraid of math? Two sources of genetic variance for mathematical anxiety

Zhe Wang et al.
Journal of Child Psychology and Psychiatry, forthcoming

Background: Emerging work suggests that academic achievement may be influenced by the management of affect as well as through efficient information processing of task demands. In particular, mathematical anxiety has attracted recent attention because of its damaging psychological effects and potential associations with mathematical problem solving and achievement. This study investigated the genetic and environmental factors contributing to the observed differences in the anxiety people feel when confronted with mathematical tasks. In addition, the genetic and environmental mechanisms that link mathematical anxiety with math cognition and general anxiety were also explored.

Methods: Univariate and multivariate quantitative genetic models were conducted in a sample of 514 12-year-old twin siblings.

Results: Genetic factors accounted for roughly 40% of the variation in mathematical anxiety, with the remaining being accounted for by child-specific environmental factors. Multivariate genetic analyses suggested that mathematical anxiety was influenced by the genetic and nonfamilial environmental risk factors associated with general anxiety and additional independent genetic influences associated with math-based problem solving.

Conclusions: The development of mathematical anxiety may involve not only exposure to negative experiences with mathematics, but also likely involves genetic risks related to both anxiety and math cognition. These results suggest that integrating cognitive and affective domains may be particularly important for mathematics and may extend to other areas of academic achievement.

By KEVIN LEWIS | 09:00:00 AM

Saturday, June 28, 2014

Impressionable

Embodied free will beliefs: Some effects of physical states on metaphysical opinions

Michael Ent & Roy Baumeister
Consciousness and Cognition, July 2014, Pages 147-154

Abstract:
The present research suggests that people's bodily states affect their beliefs about free will. People with epilepsy and people with panic disorder, which are disorders characterized by a lack of control over one's body, reported less belief in free will compared to people without such disorders (Study 1). The more intensely people felt sexual desire, physical tiredness, and the urge to urinate, the less they believed in free will (Study 2). Among non-dieters, the more intensely they felt hunger, the less they believed in free will. However, dieters showed a trend in the opposite direction (Study 3).

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Oral approach-avoidance: Affective consequences of muscular articulation dynamics

Sascha Topolinski et al.
Journal of Personality and Social Psychology, June 2014, Pages 885-896

Abstract:
Can mouth movements shape attitudes? When people articulate different consonants (e.g., B or K) they press the tongue and the lips against various spots in the mouth. This allows for construction of words that feature systematic wanderings of consonantal stricture spots either from the front to the rear (inward; e.g., BENOKA) or from the rear to the front (outward; e.g., KENOBA) of the mouth. These wanderings of muscular strictures resemble the oral kinematics during either deglution (swallowing-like, inward movement) or expectoration (spitting-like, outward movement). Thus, we predicted that the articulation of inward and outward words induces motivational states associated with deglutition and expectoration - namely, approach and avoidance - which was tested in 9 experiments (total N = 822). Inward words were preferred over outward words, being labeled as nonsense words (Experiments 1, 4, 5, 6, and 9), company names (Experiment 2), or person names (Experiments 3, 7, and 8), with control words falling in between (Experiment 5). As a social-behavioral consequence, ostensible chat partners were more often chosen to interact with when having inward compared to outward names (Experiment 7). The effect was found in German-speaking (Experiments 1-5) and English-speaking (Experiment 6) samples, and it occurred even under silent reading (all experiments) and for negatively labeled targets (names of villains; Experiment 8). Showing articulation simulations as being the causal undercurrent, this effect was absent in aphasia patients who lacked covert subvocalizations (Experiment 9).

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Implicit and Explicit Illusory Correlation as a Function of Political Ideology

Luciana Carraro et al.
PLoS ONE, May 2014

Abstract:
Research has demonstrated that people who embrace different ideological orientations often show differences at the level of basic cognitive processes. For instance, conservatives (vs. liberals) display an automatic selective attention for negative (vs. positive) stimuli, and tend to more easily form illusory correlations between negative information and minority groups. In the present work, we further explored this latter effect by examining whether it only involves the formation of explicit attitudes or it extends to implicit attitudes. To this end, following the typical illusory correlation paradigm, participants were presented with members of two numerically different groups (majority and minority) each performing either a positive or negative behaviour. Negative behaviors were relatively infrequent, and the proportion of positive and negative behaviors within each group was the same. Next, explicit and implicit (i.e., IAT-measured) attitudes were assessed. Results showed that conservatives (vs. liberals) displayed stronger explicit as well as implicit illusory correlations effects, forming more negative attitudes toward the minority (vs. majority) group at both the explicit and implicit level.

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Carbohydrate in the mouth enhances activation of brain circuitry involved in motor performance and sensory perception

Clare Turner et al.
Appetite, September 2014, Pages 212-219

Abstract:
The presence of carbohydrate in the human mouth has been associated with the facilitation of motor output and improvements in physical performance. Oral receptors have been identified as a potential mode of afferent transduction for this novel form of nutrient signalling that is distinct from taste. In the current study oral exposure to carbohydrate was combined with a motor task in a neuroimaging environment to identify areas of the brain involved in this phenomenon. A mouth-rinsing protocol was conducted whilst carbohydrate (CHO) and taste-matched placebo (PLA) solutions were delivered and recovered from the mouths of 10 healthy volunteers within a double-blind, counterbalanced design. This protocol eliminates post-oral factors and controls for the perceptual qualities of solutions. Functional magnetic resonance imaging of the brain was used to identify cortical areas responsive to oral carbohydrate during rest and activity phases of a hand-grip motor task. Mean blood-oxygen-level dependent signal change experienced in the contralateral primary sensorimotor cortex was larger for CHO compared with PLA during the motor task when contrasted with a control condition. Areas of activation associated with CHO exclusively were observed over the primary taste cortex and regions involved in visual perception. Regions in the limbic system associated with reward were also significantly more active with CHO. This is the first demonstration that oral carbohydrate signalling can increase activation within the primary sensorimotor cortex during physical activity and enhance activation of neural networks involved in sensory perception.

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Misleading First Impressions: Different for Different Facial Images of the Same Person

Alexander Todorov & Jenny Porter
Psychological Science, forthcoming

Abstract:
Studies on first impressions from facial appearance have rapidly proliferated in the past decade. Almost all of these studies have relied on a single face image per target individual, and differences in impressions have been interpreted as originating in stable physiognomic differences between individuals. Here we show that images of the same individual can lead to different impressions, with within-individual image variance comparable to or exceeding between-individuals variance for a variety of social judgments (Experiment 1). We further show that preferences for images shift as a function of the context (e.g., selecting an image for online dating vs. a political campaign; Experiment 2), that preferences are predictably biased by the selection of the images (e.g., an image fitting a political campaign vs. a randomly selected image; Experiment 3), and that these biases are evident after extremely brief (40-ms) presentation of the images (Experiment 4). We discuss the implications of these findings for studies on the accuracy of first impressions.

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Embodied metaphor and abstract problem solving: Testing a metaphoric fit hypothesis in the health domain

Lucas Keefer et al.
Journal of Experimental Social Psychology, November 2014, Pages 12-20

Abstract:
How do people evaluate candidate solutions to abstract problems that are difficult to grasp? According to conceptual metaphor theory, people can conceptualize abstract ideas in terms of well-known bodily states, even if they are not currently experiencing those bodily states. Extending this perspective, we test a novel metaphoric fit hypothesis concerning the (mis)match between embodied-metaphoric framings of an abstract problem (in these studies, depression) and candidate solutions (depression treatments). In Studies 1 and 2, framing depression metaphorically as being physically down or darkened increased the perceived effectiveness of depression medications framed metaphorically as solving those bodily problems ("lifting" and "illuminating," respectively). Consistent with conceptual metaphor theory, this effect was mediated by subjective certainty about depression. Studies 3 and 4 manipulated problem and solution framings to test the interactive effects of metaphoric fit and misfit on solution evaluations. These findings reveal a new route by which embodied knowledge influences problem solving.

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Peer Passenger Influences on Male Adolescent Drivers' Visual Scanning Behavior During Simulated Driving

Anuj Pradhan et al.
Journal of Adolescent Health, May 2014, Pages S42-S49

Purpose: There is a higher likelihood of crashes and fatalities when an adolescent drives with peer passengers, especially for male drivers and male passengers. Simulated driving of male adolescent drivers with male peer passengers was studied to examine passenger influences on distraction and inattention.

Methods: Male adolescents drove in a high-fidelity driving simulator with a male confederate who posed either as a risk-accepting passenger or as a risk-averse passenger. Drivers' eye movements were recorded. The visual scanning behavior of the drivers was compared when driving alone with when driving with a passenger and when driving with a risk-accepting passenger or with a risk-averse passenger.

Results: The visual scanning of a driver significantly narrowed horizontally and vertically when driving with a peer passenger. There were no significant differences in the times the drivers' eyes were off the forward roadway when driving with a passenger versus when driving alone. Some significant correlations were found between personality characteristics and the outcome measures.

Conclusions: The presence of a male peer passenger was associated with a reduction in the visual scanning range of male adolescent drivers. This reduction could be a result of potential cognitive load imposed on the driver due to the presence of a passenger and the real or perceived normative influences or expectations from the passenger.

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Looking up to others: Social status, Chinese honorifics, and spatial attention

Aitao Lu et al.
Canadian Journal of Experimental Psychology, June 2014, Pages 77-83

Abstract:
Two experiments were carried out to investigate whether social status encoded in Chinese honorifics has metaphorical effects on up-down spatial orientation. In Experiment 1, participants judged whether a word was an elevating or denigrating term immediately prior to judging whether an arrow was pointing up or down. Arrow orientation was identified faster when its direction was congruent with the perceived social status of the preceding honorific (e.g., elevating word and up arrow). In Experiment 2, participants identified the letter p or q after judging whether honorifics were elevating or denigrating terms. Letters were identified faster when placed at the top of the screen following elevating terms, and faster at the bottom following denigrating terms. These results suggest that the mere activation of social status differences by honorific terms orients attention toward schema-congruent space. Social status appears to have pragmatic effects, not only for lexical decision-making, but also in where Chinese speakers are most likely to look.

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Spontaneous Neural Fluctuations Predict Decisions to Attend

Jesse Bengson et al.
Journal of Cognitive Neuroscience, forthcoming

Abstract:
Ongoing variability in neural signaling is an intrinsic property of the brain. Often this variability is considered to be noise and ignored. However, an alternative view is that this variability is fundamental to perception and cognition and may be particularly important in decision-making. Here, we show that a momentary measure of occipital alpha-band power (8-13 Hz) predicts choices about where human participants will focus spatial attention on a trial-by-trial basis. This finding provides evidence for a mechanistic account of decision-making by demonstrating that ongoing neural activity biases voluntary decisions about where to attend within a given moment.

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Hearing brighter: Changing in-depth visual perception through looming sounds

Clare Sutherland, Gregor Thut & Vincenzo Romei
Cognition, September 2014, Pages 312-323

Abstract:
Rapidly approaching (looming) sounds are ecologically salient stimuli that are perceived as nearer than they are due to overestimation of their loudness change and underestimation of their distance. Despite evidence for crossmodal influence by looming sounds onto visual areas, it is unknown whether such sounds bias visual percepts in similar ways. Nearer objects appear to be larger and brighter than distant objects. If looming sounds impact visual processing, then visual stimuli paired with looming sounds should be perceived as brighter and larger, even when the visual stimuli do not provide motion cues, i.e. are static. In Experiment 1 we found that static visual objects paired with looming tones (but not static or receding tones) were perceived as larger and brighter than their actual physical properties, as if they appear closer to the observer. In a second experiment, we replicate and extend the findings of Experiment 1. Crucially, we did not find evidence of such bias by looming sounds when visual processing was disrupted via masking or when catch trials were presented, ruling out simple response bias. Finally, in a third experiment we found that looming tones do not bias visual stimulus characteristics that do not carry visual depth information such as shape, providing further evidence that they specifically impact in-depth visual processing. We conclude that looming sounds impact visual perception through a mechanism transferring in-depth sound motion information onto the relevant in-depth visual dimensions (such as size and luminance but not shape) in a crossmodal remapping of information for a genuine, evolutionary advantage in stimulus detection.

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Neuroticism and resting mean arterial pressure interact to predict pain tolerance in pain-free adults

Ian Boggero et al.
Personality and Individual Differences, October 2014, Pages 140-143

Abstract:
Personality traits and resting mean arterial pressure are known to play a role in how people experience and cope with chronic pain, but their relationships with acute pain responses in healthy adults remain unknown. The current study aims to examine the effects of personality variables, blood pressure variables, and their interactions on pain tolerance in a sample of healthy, pain-free adults. Data were collected from 41 pain-free participants. Results revealed a significant crossover interaction such that those with higher mean arterial pressure (MAP) were able to tolerate more pain only at low levels of neuroticism. At high levels of neuroticism, MAP was inversely related to pain tolerance. The current study is the first to our knowledge to suggest that stable personality traits interact with physiology to influence pain tolerance in healthy populations. These findings could be useful in advancing the theoretical understanding of the psychological correlates of pain.

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When Perception Says "No" to Action: Approach Cues Make Steep Hills Appear Even Steeper

Dario Krpan & Simone Schnall
Journal of Experimental Social Psychology, November 2014, Pages 89-98

Abstract:
Previous research has established that people's resources and action capabilities influence visual perception, and for example, make hills appear more or less steep. What has remained unexamined, however, is whether perception also changes when an action is impending. We propose that when action is expected in an environment that is challenging because it poses high energetic costs, perceptual estimates are increased. Experiment 1 showed that motor movements of approach led to steeper slant estimates than motor movements of avoidance, but only if participants were in good physical condition and thus capable of undertaking costly actions. Experiment 2 used a mindset priming task and found that approach resulted in higher slant estimates than either avoidance, or a neutral control condition, again for participants who were in good, but not for those in poor physical condition. Experiment 3 further showed that the approach cue on its own had the same effect as when combined with instructions that climbing was involved, thus suggesting that approach manipulations indeed implied the action of climbing. However, the effect of approach disappeared when climbing was explicitly ruled out. We suggest that inflated perceptual visual estimates in the face of challenging environments are adaptive because they discourage future actions that may be costly to perform.

By KEVIN LEWIS | 09:00:00 AM

Friday, June 27, 2014

Power of the purse

Quantifying the Lasting Harm to the U.S. Economy from the Financial Crisis

Robert Hall
NBER Working Paper, May 2014

Abstract:
The financial crisis and ensuing Great Recession left the U.S. economy in an injured state. In 2013, output was 13 percent below its trend path from 1990 through 2007. Part of this shortfall — 2.2 percentage points out of the 13 — was the result of lingering slackness in the labor market in the form of abnormal unemployment and substandard weekly hours of work. The single biggest contributor was a shortfall in business capital, which accounted for 3.9 percentage points. The second largest was a shortfall of 3.5 percentage points in total factor productivity. The fourth was a shortfall of 2.4 percentage points in labor-force participation. I discuss these four sources of the injury in detail, focusing on identifying state variables that may or may not return to earlier growth paths. The conclusion is optimistic about the capital stock and slackness in the labor market and pessimistic about reversing the declines in total factor productivity and the part of the participation shortfall not associated with the weak labor market.

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Law, Focal Points, and Fiscal Discipline in the United States and the European Union

Daniel Kelemen & Terence Teo
American Political Science Review, May 2014, Pages 355-370

Abstract:
Many studies suggest that strict balanced budget rules can restrain sovereign debt and lower sovereign borrowing costs, even if those rules are never enforced in court. Why might public officials adhere to a rule that is practically never enforced in court? Existing literature points to a legal deterrence logic in which the threat of judicial enforcement deters sovereigns from violating the rules in the first place. By contrast, we argue that balanced budget rules work by coordinating decentralized punishment of sovereigns by bond markets, rather than by posing a credible threat of judicial enforcement. Therefore, the clarity of the focal point provided by the rule, rather than the strength of its judicial enforcement mechanisms, determines its effectiveness. We develop a formal model that captures the logic of our argument, and we assess this model using data on U.S. states. We then consider implications of our argument for the impact of the balanced budget rules recently imposed on eurozone states in the Fiscal Compact Treaty.

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What do firms do when dividend tax rates change? An examination of alternative payout responses

Michelle Hanlon & Jeffrey Hoopes
Journal of Financial Economics, forthcoming

Abstract:
This paper investigates whether investor-level taxes affect corporate payout policy decisions. We predict and find a surge of special dividends in the final months of 2010 and 2012, immediately before individual-level dividend tax rates were expected to increase. We also find evidence that immediately before the expected tax increases, firms altered the timing of their regular dividend payments by shifting what would normally be January regular dividend payments into the preceding December. To our knowledge this is the first evidence in the literature about changes in the timing of regular dividend payments in response to tax law changes. For both actions (specials and shifting), we find that it was more likely for a firm to respond to individual-level tax rates if insiders owned a relatively large amount of the firm. Overall, our paper provides evidence that managers consider individual-level taxes in making corporate payout decisions.

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Productivity and Potential Output Before, During, and After the Great Recession

John Fernald
NBER Working Paper, June 2014

Abstract:
U.S. labor and total-factor productivity growth slowed prior to the Great Recession. The timing rules out explanations that focus on disruptions during or since the recession, and industry and state data rule out “bubble economy” stories related to housing or finance. The slowdown is located in industries that produce information technology (IT) or that use IT intensively, consistent with a return to normal productivity growth after nearly a decade of exceptional IT-fueled gains. A calibrated growth model suggests trend productivity growth has returned close to its 1973-1995 pace. Slower underlying productivity growth implies less economic slack than recently estimated by the Congressional Budget Office. As of 2013, about ¾ of the shortfall of actual output from (overly optimistic) pre-recession trends reflects a reduction in the level of potential.

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Toward Obtaining a Consistent Estimate of the Elasticity of Taxable Income Using Difference-in-Differences

Caroline Weber
Journal of Public Economics, September 2014, Pages 90–103

Abstract:
The elasticity of taxable income (ETI) is a central parameter for tax policy debates. This paper shows that mean reversion prevents most estimators employed in the literature from obtaining consistent estimates of the ETI. A new method is proposed that will resolve inconsistency due to mean reversion under testable assumptions regarding the degree of serial correlation in the error term. Using this procedure, I estimate an ETI of 0.858, which is about twice as large as the estimates found in the most frequently cited paper on this subject. The corresponding elasticity of broad income is 0.475.

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Defense Government Spending Is Contractionary, Civilian Government Spending Is Expansionary

Roberto Perotti
NBER Working Paper, May 2014

Abstract:
Impulse responses to government spending shocks in Standard Vector Autoregressions (SVARs) typically display "expansionary" features. However, SVARs can be subject to a "non-fundamentalness" problem. "Expectations - Augmented" VARs (EVARs), which use direct measures of forecasts of defense spending, typically display "contractionary" responses to a defense news shock. I show that, when properly specified, SVARs and EVARs give virtually identical results. The reason for the widespread, opposite view is that defense shocks have "contractionary" effects while civilian government spending shocks have "expansionary" effects. Existing EVARs and SVARs, however, include only total government spending. In addition, the former are typically estimated on samples that include WWII and the Korean war, when defense shocks prevailed, while the latter are estimated mostly on post-1953 samples, when civilian shocks prevailed.

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Expansionary Austerity? International Evidence

Jaime Guajardo, Daniel Leigh & Andrea Pescatori
Journal of the European Economic Association, forthcoming

Abstract:
This paper investigates the short-term effects of fiscal consolidation on economic activity in OECD economies. We examine contemporaneous policy documents to identify changes in fiscal policy motivated by a desire to reduce the budget deficit and not by responding to prospective economic conditions. Using this new dataset, our estimates suggest that fiscal consolidation has contractionary effects on private demand and GDP. By contrast, estimates based on conventional measures of the fiscal policy stance used in the literature support the expansionary fiscal contractions hypothesis but appear to be biased toward overstating expansionary effects.

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The 2007–2008 U.S. Recession: What Did the Real-Time Google Trends Data Tell the United States?

Tao Chen et al.
Contemporary Economic Policy, forthcoming

Abstract:
In the extant literature of business cycle predictions, the signals for business cycle turning points are generally issued with a lag of at least 5 months. In this paper, we make use of a novel and timely indicator — the Google search volume data — to help to improve the timeliness of business cycle turning point identification. We identify multiple query terms to capture the real-time public concern on the aggregate economy, the credit market, and the labor market condition. We incorporate the query indices in a Markov-switching framework and successfully “nowcast” the peak date within a month that the turning occurred.

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A General Rationale for a Governmental Role in the Relief of Large Risks

Steven Shavell
NBER Working Paper, June 2014

Abstract:
The government often provides relief against large risks, such as disasters. A simple, general rationale for this role of government is considered here that applies even when private contracting to share risks is not subject to market imperfections. Specifically, the optimal private sharing of risks will not result in complete coverage against them when they are sufficiently large. Hence, when such risks eventuate, the marginal utility to individuals of governmental relief may exceed the marginal value of public goods. Consequently, social welfare may be raised if the government reduces public goods expenditures and directs these freed resources toward individuals who have suffered losses.

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How Do Business Owners Perceive the State Business Climate?: Using Heierarchical Models to Examine Business Climate Perception and State Rankings

Yasuyuki Motoyama & Iris Hui
Economic Development Quarterly, forthcoming

Abstract:
State business climate rankings are popular and can be influential in policymaking. Past academic studies have criticized those rankings for being based on some subjective criteria and on state-level data. However, in this article, we propose, first, that a business climate is an individual perception, and second, that a business climate is a case-specific condition depending on industries and stages of firm development. Thus, it is critical to measure the business climate at the decentralized, individual level. We employ a newly released survey of over 3,600 small business owners and conduct hierarchical models to control both individual and state variables, and to examine within and between state covariates. Regression results demonstrate that most state rankings are null even for individual perception of business climate, and in fact some rankings are negatively associated. Moreover, contrary to the conventional understanding, personal income, corporate income, and sales taxes are not reflected in the perception, but property taxes are. These findings suggest a need for fundamental reconsideration of how policymakers use business climate rankings.

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Mansion Tax: The Effect of Transfer Taxes on the Residential Real Estate Market

Wojciech Kopczuk & David Munroe
NBER Working Paper, May 2014

Abstract:
Houses and apartments sold in New York and New Jersey at prices above $1 million are subject to the so-called 1% "mansion tax" imposed on the full value of the transaction. This policy generates a discontinuity (a "notch") in the overall tax liability. We rely on this and other discontinuities to analyze implications of transfer taxes in the real estate market. Using administrative records of property sales, we find robust evidence of substantial bunching and show that the incidence of this tax for transactions local to the discontinuity falls on sellers, may exceed the value of the tax, and is not explained by tax evasion (although supply-side quality adjustments may play a role). Above the notch, the volume of missing transactions exceeds those bunching below the notch. Interpreting our results in the context of an equilibrium bargaining model, we conclude that the market unravels in the neighborhood of the notch: its presence provides strong incentive for buyers and sellers in the proximity of the threshold not to transact. This effect, the identification and recognition of which is novel to this paper, is above and beyond the standard extensive margin response. When present, unraveling affects interpretation and estimation of bunching estimates. Finally, we show that the presence of the tax affects how the market operates away from the threshold --- taxation increases price reductions during the search process and in the bargaining stage and weakens the relationship between listing and sale prices. We interpret these results as demonstrating that taxation affects the ultimate allocation in this search market.

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Quasi-Experimental Analysis on the Effects of Adoption of a Value Added Tax

Alex Ufier
Economic Inquiry, forthcoming

Abstract:
Value added taxes (VATs) have become an important source of government funding in past decades, but little empirical work has been carried out on their macroeconomic impacts. As the decision to implement a VAT is endogenous, regression methods analyzing the impact of the policy choice will yield biased estimates. To solve this problem, I first model the VAT adoption decision for 192 countries using survival analysis. I then match adopters to non-adopters using propensity score matching. I find that VAT adoption is associated with an increase in growth and investment as well as lower inflation and government spending as a share of GDP.

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Monetary/Fiscal Policy Mix and Agents' Beliefs

Francesco Bianchi & Cosmin Ilut
NBER Working Paper, June 2014

Abstract:
We reinterpret post World War II US economic history using an estimated microfounded model that allows for changes in the monetary/fiscal policy mix. We find that the fiscal authority was the leading authority in the '60s and the '70s. The appointment of Volcker marked a change in the conduct of monetary policy, but inflation dropped only when fiscal policy accommodated this change two years later. In fact, a disinflationary attempt of the monetary authority leads to more inflation if not supported by the fiscal authority. If the monetary authority had always been the leading authority or if agents had been confident about the switch, the Great Inflation would not have occurred and debt would have been higher. This is because the rise in trend inflation and the decline in debt of the '70s were caused by a series of fiscal shocks that are inflationary only when monetary policy accommodates fiscal policy. The reversal in the debt-to-GDP ratio dynamics, the sudden drop in inflation, and the fall in output of the early '80s are explained by the switch in the policy mix itself. If such a switch had not occurred, inflation would have been high for another fifteen years. Regime changes account for the stickiness of inflation expectations during the '60s and the '70s and for the break in the persistence and volatility of inflation.

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State Income Taxes and Military Service Members' Legal Residency Choices

Whitney Afonso
Contemporary Economic Policy, forthcoming

Abstract:
Using military residency data from 1998 to 2005 across all 50 states, I find that income taxes deter legal residencies and that the effect grows as income increases. My results indicate that states with no income tax or with exemptions for military wages experience 100% and 39% more service member residencies, respectively, than states with an income tax. The influence of state tax policy increases with higher pay and tenure. My findings are in keeping with economic theory, which suggests that high income workers will migrate out of high tax areas and be replaced by low income workers.

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Trade and the Topography of the Spatial Economy

Treb Allen & Costas Arkolakis
Quarterly Journal of Economics, forthcoming

Abstract:
We develop a general equilibrium framework to determine the spatial distribution of economic activity on any surface with (nearly) any geography. Combining the gravity structure of trade with labor mobility, we provide conditions for the existence, uniqueness, and stability of a spatial economic equilibrium and derive a simple set of equations which govern the relationship between economic activity and the geography of the surface. We then use the framework to estimate the topography of trade costs, productivities and amenities in the United States. We find that geographic location accounts for at least twenty percent of the spatial variation in U.S. income. Finally, we calculate that the construction of the interstate highway system increased welfare by 1.1 to 1.4 percent, which is substantially larger than its cost.

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The “Amazon Tax”: Empirical Evidence from Amazon and Main Street Retailers

Brian Baugh, Itzhak Ben-David & Hoonsuk Park
NBER Working Paper, April 2014

Abstract:
Several states have recently implemented laws requiring the collection of sales tax on online purchases. In practice, however, only Amazon.com has been affected. We find that households living in these states reduce Amazon expenditures by 9.5%, implying an elasticity of –1.3. We find the effect to be more pronounced for large purchases, for which we estimate an elasticity of –3.2. Further, we find that the decline in Amazon purchases is offset by a 2.0% increase in purchases at local brick-and-mortar retailers and a 19.8% increase in purchases at the online operations of competing retailers.

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The Role of Publicly Provided Electricity in Economic Development: The Experience of the Tennessee Valley Authority, 1929–1955

Carl Kitchens
Journal of Economic History, June 2014, Pages 389-419

Abstract:
I study the impacts of one of the largest regional development projects in American History, the Tennessee Valley Authority (TVA), on a variety of economic outcomes. The TVA has been noted as an example of how to develop a region's water power potential to stimulate growth. In what follows, I show using a county-level panel dataset, that the TVA had little impact on economic growth in the South. I attribute these results to the institutional history of the TVA and the contractual agreements it signed in an effort to expand its service territory.

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Averting Catastrophes: The Strange Economics of Scylla and Charybdis

Ian Martin & Robert Pindyck
NBER Working Paper, June 2014

Abstract:
How should we evaluate public policies or projects to avert, or reduce the likelihood of, a catastrophic event? Examples might include inspection and surveillance programs to avert nuclear terrorism, investments in vaccine technologies to help respond to a "mega-virus," or the construction of levees to avert major flooding. A policy to avert a particular catastrophe considered in isolation might be evaluated in a cost-benefit framework. But because society faces multiple potential catastrophes, simple cost-benefit analysis breaks down: Even if the benefit of averting each one exceeds the cost, we should not necessarily avert all of them. We explore the policy interdependence of catastrophic events, and show that considering these events in isolation can lead to policies that are far from optimal. We develop a rule for determining which events should be averted and which should not.

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Tax Havens and Disclosure Aggregation

Herita Akamah, Ole-Kristian Hope & Wayne
Thomas University of Oklahoma Working Paper, April 2014

Abstract:
Many are concerned with multinational firms’ ability to avoid taxes by shifting profits to low-tax geographic areas. Calls have been made to improve financial disclosures to better reveal these firms’ geographic tax-avoidance behavior. Currently, however, firms are afforded considerable discretion in their disclosure of financial information by geographic area. While some firms choose to provide country-level disclosures of financial information, most disclose geographic operations at a much more aggregated level, such as by continent or even a single total foreign area. We develop novel measures of geographic disclosure quality by manually matching the countries of firms’ foreign subsidiaries listed in Exhibit 21 of the Form 10-K to the aggregation level of geographic disclosures in the segment note. Using these hand-coded measures of 2,774 unique geographic titles disclosed by our sample firms, we find that firms with tax havens are more likely to aggregate their geographic disclosures (i.e., provide lower-quality disclosures). The evidence is consistent with managers attempting to conceal their tax-avoidance activities. We further find that the association between tax havens and disclosure aggregation is more severe for larger firms (i.e., firms with higher political costs) and for firms in natural-resources industries, in retail industries, or with low competition. This study offers evidence relevant to policy makers and others who are concerned with the potential role of financial reporting in helping to understand the tax-avoidance activities of multinational firms.

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The Economic Stimulus Payments of 2008 and the Aggregate Demand for Consumption

Christian Broda & Jonathan Parker
NBER Working Paper, May 2014

Abstract:
Using a survey of households in the Nielsen Consumer Panel and the randomized timing of disbursement of the 2008 Economic Stimulus Payments, we find that a household’s spending rose by ten percent the week it received a Payment and remained high cumulating to 1.5-3.8 percent of spending over three months. Our estimates imply partial-equilibrium increases in aggregate demand of 1.3 percent of consumption in the second quarter of 2008 and 0.6 percent in the third. Spending is concentrated among households with low wealth or low past income; a household’s spending did not increase significantly when it learned about its Payment.

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HOT or not: Driver elasticity to price on the MnPASS HOT lanes

Michael Janson & David Levinson
Research in Transportation Economics, June 2014, Pages 21–32

Abstract:
The Minnesota Department of Transportation (MnDOT) has added MnPASS High Occupancy Toll (HOT) lanes on two freeway corridors in the Twin Cities. While not the first HOT lanes in the country, the MnPASS lanes are the first implementation of road pricing in Minnesota and possess a dynamic pricing schedule. Tolls charged to single occupant vehicles (SOVs) are adjusted every 3 min according to HOT lane vehicle density. Given the infancy of systems like MnPASS, questions remain about drivers' responses to toll prices. Three field experiments were conducted on the corridors during which prices were changed. Data from the field experiments as well as two years of toll and traffic data were analyzed to measure driver responses to pricing changes. Driver elasticity to price was positive with magnitudes less than 1.0. This positive relationship between price and demand is in contrast with the previously held belief that raising the price would discourage demand. In addition, drivers consistently paid between approximately $60–120 per hour of travel time savings, much higher than the average value of time. Reasons for these results is discussed as well as the implications these results have on the pricing of HOT lanes.

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How Does Government Borrowing Affect Corporate Financing and Investment?

John Graham, Mark Leary & Michael Roberts
Duke University Working Paper, April 2014

Abstract:
Using a novel dataset of accounting and market information that spans most publicly traded nonfinancial firms over the last century, we find an economically large and robust negative relation between U.S. federal government debt and corporate debt and investment. A one standard deviation increase in Treasury debt is associated with a one third standard deviation reduction in corporate debt issuances, no significant change in corporate equity issuances, and a one third standard deviation reduction in corporate investment. These relations are more pronounced in larger, less risky firms whose debt is a closer substitute for Treasuries. The channel through which this effect operates is financial intermediaries, whose asset portfolios reveal a substitution between federal government debt and corporate debt. The relations between government debt and corporate policies, as well as the substitution between government and corporate debt by intermediaries, are stronger after 1970 when foreign demand increased competition for Treasury securities. In concert, our results suggest that large, financially healthy corporations act as liquidity providers by supplying relatively safe securities to investors when alternatives are in short supply, and that this financial strategy influences firms’ capital structures and investment policies.

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Transfer Payments and the Macroeconomy: The Effects of Social Security Benefit Changes, 1952-1991

Christina Romer & David Romer
NBER Working Paper, May 2014

Abstract:
From the early 1950s to the early 1990s, increases in Social Security benefits in the United States varied widely in size and timing, and were only rarely undertaken in response to short-run macroeconomic developments. This paper uses these benefit increases to investigate the macroeconomic effects of changes in transfer payments. It finds a large, immediate, and statistically significant response of consumption to permanent changes in transfers. The response appears to decline at longer horizons, however, and there is no clear evidence of effects on industrial production or employment. These effects differ sharply from the effects of relatively exogenous tax changes: the impact of transfers is faster, but much less persistent and dramatically smaller overall. Finally, we find strong statistical and narrative evidence of a sharply contractionary monetary policy response to permanent benefit increases that is not present for tax changes. This may account for the lower persistence of the consumption effects of transfers and their failure to spread to broader indicators of economic activity.

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The Impact of the Taxpayer Relief Act of 1997 on Housing Turnover in the U.S. Single-Family Residential Market

Andrea Heuson & Gary Painter
Real Estate Economics, forthcoming

Abstract:
The Taxpayer Relief Act of 1997 (TRA97) replaced a one-time, post-age-55 capital gain exclusion with a larger gain exclusion amount that could be protected every two years without requiring that the taxpayer trades up in housing. This action had the potential to impact housing transactions for every existing homeowner, regardless of age, as well as future purchasers of housing. We analyze household-level data to determine if the repeated ability to exclude periodic recognized capital gains on housing from taxation shortened housing tenure significantly after TRA97 became effective. We next consider whether the decline was heterogeneous across age groups, across trading up and trading down and across geography. Given that the impact of TRA97 appears at first glance to be most profound for taxpayers close to 55 years of age, a somewhat surprising result of our research is that significant decreases in tenure are pervasive, appearing in all age ranges and in samples of homeowners who trade up and who trade down. Finally, we provide additional evidence at the aggregate level that TRA97 led to measurable changes in the price elasticity of housing turnover in the four geographic regions defined by the U.S. Census Bureau (Northeast, Midwest, South and West) and in states that are home to large metropolitan housing markets.

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Local Government Responses to Fiscal Stress: Evidence from the Public Education Sector

Ashlyn Aiko Nelson & Rekha Balu
Public Administration Review, forthcoming

Abstract:
This article investigates local government responses to fiscal stress through the lens of the K–12 public education sector, examining two major policy options available to school districts for managing fiscal hardship: (1) cutting costs, especially through layoffs, and (2) raising revenues locally through voter referenda. The article employs district-level administrative and survey data from California and Indiana to examine whether school districts exhibit features of a rational or natural system — in which their behaviors largely reflect fiscal pressures only — or whether they exhibit features of an open system in which nonfinancial factors also shape responses. In Indiana, district fiscal characteristics explain differences in cost-cutting and revenue-raising behaviors; there is little empirical evidence that school districts exhibit features of an open system. In California, both fiscal and environmental attributes, including poverty characteristics, average student achievement levels, and the enrollment of English learner students, explain school district behaviors.

By KEVIN LEWIS | 09:00:00 AM

Thursday, June 26, 2014

Indigenous

Tightness–looseness across the 50 United States

Jesse Harrington & Michele Gelfand
Proceedings of the National Academy of Sciences, 3 June 2014, Pages 7990–7995

Abstract:
This research demonstrates wide variation in tightness–looseness (the strength of punishment and degree of latitude/permissiveness) at the state level in the United States, as well as its association with a variety of ecological and historical factors, psychological characteristics, and state-level outcomes. Consistent with theory and past research, ecological and man-made threats — such as a higher incidence of natural disasters, greater disease prevalence, fewer natural resources, and greater degree of external threat — predicted increased tightness at the state level. Tightness is also associated with higher trait conscientiousness and lower trait openness, as well as a wide array of outcomes at the state level. Compared with loose states, tight states have higher levels of social stability, including lowered drug and alcohol use, lower rates of homelessness, and lower social disorganization. However, tight states also have higher incarceration rates, greater discrimination and inequality, lower creativity, and lower happiness relative to loose states. In all, tightness–looseness provides a parsimonious explanation of the wide variation we see across the 50 states of the United States of America.

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Large-Scale Psychological Differences Within China Explained by Rice Versus Wheat Agriculture

T. Talhelm et al.
Science, 9 May 2014, Pages 603-608

Abstract:
Cross-cultural psychologists have mostly contrasted East Asia with the West. However, this study shows that there are major psychological differences within China. We propose that a history of farming rice makes cultures more interdependent, whereas farming wheat makes cultures more independent, and these agricultural legacies continue to affect people in the modern world. We tested 1162 Han Chinese participants in six sites and found that rice-growing southern China is more interdependent and holistic-thinking than the wheat-growing north. To control for confounds like climate, we tested people from neighboring counties along the rice-wheat border and found differences that were just as large. We also find that modernization and pathogen prevalence theories do not fit the data.

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Why Is Polygyny More Prevalent in Western Africa? An African Slave Trade Perspective

John Dalton & Tin Cheuk Leung
Economic Development and Cultural Change, July 2014, Pages 599-632

Abstract:
Polygyny rates are higher in western Africa than in eastern Africa. The African slave trades help explain this difference. More male slaves were exported in the transatlantic slave trades from western Africa, while more female slaves were exported in the Indian Ocean slave trades from eastern Africa. The slave trades led to prolonged periods of abnormal sex ratios, which affected the rates of polygyny across Africa. In order to assess these claims, we present evidence from a variety of sources. We find that the transatlantic slave trades have a positive correlation with historical levels of polygyny across African ethnic groups. We also construct an ethnic group level data set linking current rates of polygyny with historical trade flow data from the transatlantic and Indian Ocean slave trades. We find that the transatlantic slave trades cause polygyny at the ethnic group level, while the Indian Ocean slave trades do not. We provide cross-country evidence corroborating our findings.

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Comparison of WIC Benefit Redemptions in Michigan Indicates Higher Utilization Among Arab American Families

Jennifer Pooler & Stacy Gleason
Journal of Nutrition Education and Behavior, May–June 2014, Pages S45–S52

Objective: To assess Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) benefit use across Arab American, Hispanic, and non-Arab/non-Hispanic families participating in the Michigan WIC program using point-of-sale Electronic Benefits Transfer data.

Results: About 12% of WIC families fully redeemed their benefits in March, 2012. Compared with non-Arab/non-Hispanic families, Arab American WIC families were significantly more likely to use all of their monthly WIC benefits, even after controlling for family characteristics (adjusted odds ratio, 3.6; 95% confidence interval, 3.4–3.8). Rates of redemption for Hispanic families, however, were the same as for non-Arab/non-Hispanic families (adjusted odds ratio, 1.0; 95% confidence interval, 0.9–1.0).

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Development of Cultural Perspectives on Verbal Deception in Competitive Contexts

Dana Dmytro et al.
Journal of Cross-Cultural Psychology, forthcoming

Abstract:
Verbal deception may be considered morally reprehensible or acceptable depending on culturally relevant contextual factors and ethical perspectives. In the current study, Euro-Canadian (n = 180) and Han Chinese (n = 180) children ages 8 to 16 were recruited to investigate their moral evaluations of lying and truth-telling in competitive situations. The participants classified a story character’s statement told to either harm or help themselves or collectives of various group sizes (i.e., their class, school, or country) as a lie, the truth, or something else. Participants then made moral judgments regarding the statements and provided justifications for their evaluations. Chinese children’s evaluations became more nuanced with age: They evaluated lies told to benefit a collective as less negative than Canadian children, and truths told to harm a collective as more negative. These evaluations became more pronounced with the increasing size of the collectivity. Cultural and contextual factors relevant to evaluations and justifications of verbal deception are discussed.

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Cultural values and population health: A quantitative analysis of variations in cultural values, health behaviours and health outcomes among 42 European countries

Johan Mackenbach
Health & Place, July 2014, Pages 116–132

Abstract:
Variations in ‘culture’ are often invoked to explain cross-national variations in health, but formal analyses of this relation are scarce. We studied the relation between three sets of cultural values and a wide range of health behaviours and health outcomes in Europe. Cultural values were measured according to Inglehart׳s two, Hofstede׳s six, and Schwartz׳s seven dimensions. Data on individual and collective health behaviours (30 indicators of fertility-related behaviours, adult lifestyles, use of preventive services, prevention policies, health care policies, and environmental policies) and health outcomes (35 indicators of general health and of specific health problems relating to fertility, adult lifestyles, prevention, health care, and violence) in 42 European countries around the year 2010 were extracted from harmonized international data sources. Multivariate regression analysis was used to relate health behaviours to value orientations, controlling for socioeconomic confounders. In univariate analyses, all scales are related to health behaviours and most scales are related to health outcomes, but in multivariate analyses Inglehart׳s ‘self-expression’ (versus ‘survival’) scale has by far the largest number of statistically significant associations. Countries with higher scores on ‘self-expression’ have better outcomes on 16 out of 30 health behaviours and on 19 out of 35 health indicators, and variations on this scale explain up to 26% of the variance in these outcomes in Europe. In mediation analyses the associations between cultural values and health outcomes are partly explained by differences in health behaviours. Variations in cultural values also appear to account for some of the striking variations in health behaviours between neighbouring countries in Europe (Sweden and Denmark, the Netherlands and Belgium, the Czech Republic and Slovakia, and Estonia and Latvia). This study is the first to provide systematic and coherent empirical evidence that differences between European countries in health behaviours and health outcomes may partly be determined by variations in culture. Paradoxically, a shift away from traditional ‘survival’ values seems to promote behaviours that increase longevity in high income countries.

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Developing leaders’ strategic thinking through global work experience: The moderating role of cultural distance

Lisa Dragoni et al.
Journal of Applied Psychology, forthcoming

Abstract:
To respond to the challenge of how organizations can develop leaders who can think strategically, we investigate the relation of leaders’ global work experiences — that is, those experiences that require the role incumbent to transcend national boundaries — to their competency in strategic thinking. We further examine whether leaders’ exposure to a country whose culture is quite distinct from the culture of their own country (i.e., one that is culturally distant) moderates these relationships. Our analyses of 231 upper level leaders reveals that the time they have spent in global work experiences positively relates to their strategic thinking competency, particularly for leaders who have had exposure to a more culturally distant country. We discuss these findings in light of the research on international work experiences and leader development.

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Fashion with a Foreign Flair: Professional Experiences Abroad Facilitate the Creative Innovations of Organizations

Frédéric Godart et al.
Academy of Management Journal, forthcoming

Abstract:
The current research explores whether the foreign professional experiences of influential executives predict firm-level creative output. We introduce a new theoretical model, the Foreign Experience Model of Creative Innovations, to explain how three dimensions of executives' foreign work experiences — breadth, depth, and cultural distance — predict an organization's creative innovations, which we define as the extent to which final, implemented products or services are novel and useful from the standpoint of external audiences. We examined 11 years (21 seasons) of fashion collections of the world's top fashion houses and found that the foreign professional experiences of creative directors predicted the creativity ratings of their collections. The results revealed individual curvilinear effects for all three dimensions: moderate levels of breadth and cultural distance were associated with the highest levels of creative innovations, whereas depth showed a decreasing positive effect that never turned negative. A significant three-way interaction shows that depth is the most critical dimension for achieving creative innovations, with breadth and cultural distance important at low but not high levels of depth. Our results show how and why leaders' foreign professional experiences can be a critical catalyst for creativity and innovation in their organizations.

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Beliefs in Emotional Residue in Japan and the United States

Helen Boucher & MacKenzie Vile
Journal of Cross-Cultural Psychology, July 2014, Pages 986-991

Abstract:
Japanese participants endorsed a belief in emotional residue (i.e., emotions lingering in a physical space can affect a new person entering it) more strongly than Americans when the question was posed with explicit items. However, both Japanese and Americans expressed the belief when it was measured with indirect, scenario-based questions. Also, both groups thought that negative emotional residues would decay over time. We discuss future research directions.

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The influence of cultural lay beliefs: Dialecticism and indecisiveness in European Canadians and Hong Kong Chinese

Liman Man Wai Li, Takahiko Masuda & Matthew Russell
Personality and Individual Differences, October 2014, Pages 6–12

Abstract:
Previous findings in cultural psychology suggest that East Asians are more likely than North Americans to view the world dialectically and that this dialectic view of the world affects their psychological tendencies. Extending these findings, our research examined the relationship between dialecticism and indecisiveness in European Canadians and Hong Kong Chinese. Evidence from three studies demonstrated that: Hong Kong Chinese were more indecisive than European Canadians and that dialecticism mediated this cultural difference (Study 1), dialectically primed individuals were more likely than non-dialectically primed individuals to experience indecisiveness (Study 2), and decisions’ importance affected cultural variations: no cultural difference in indecisiveness was found for important decisions, with Hong Kong Chinese reporting a higher level of indecisiveness for less important decisions compared to European Canadians. Furthermore, the cultural variation for less important decisions was mediated by dialecticism (Study 3). The importance of studying decision making processes across cultures is discussed.

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Undergraduates’ Perceptions of Parental Relationship-Oriented Guilt Induction Versus Harsh Psychological Control: Does Cultural Group Status Moderate Their Associations With Self-Esteem?

Duane Rudy et al.
Journal of Cross-Cultural Psychology, July 2014, Pages 905-920

Abstract:
In this study, we examined whether culture moderates the correlates of psychological control as a function of the type of measure used. We administered two measures of parental psychological control to university undergraduates from India (n = 166) and the United States (n = 177), as well as a measure of participants’ self-esteem. One measure assessed harsh psychologically controlling tactics; the other relationship-oriented guilt induction. We argued that while relationship-oriented guilt induction might be deemed inappropriate in the United States, Indian parents might more frequently use this technique to promote familial interdependence, a culturally specific value. Harsh psychological control, on the other hand, is unlikely to be used for benign purposes in either group. We had the following hypotheses: (a) across groups, harsh psychological control would be more strongly associated than relationship-oriented guilt induction with lower levels of reported self-esteem; (b) reports of relationship-oriented guilt induction and harsh psychological control would be more strongly associated in the United States than in India; (c) reports of relationship-oriented parental guilt induction would be more strongly associated with lower levels of self-esteem in the United States than in India; and (d) the negative associations between relationship-oriented guilt induction and self-esteem for students from the United States would become non-significant when controlling for harsh parental psychological control. Support was found for all hypotheses. Unexpectedly, in the Indian group, relationship-oriented guilt induction was positively associated with self-esteem. The implications for the measurement of psychological control are discussed.

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Evidence of bias in the Eurovision song contest: Modelling the votes using Bayesian hierarchical models

Marta Blangiardo & Gianluca Baio
Journal of Applied Statistics, October 2014, Pages 2312-2322

Abstract:
The Eurovision Song Contest is an annual musical competition held among active members of the European Broadcasting Union since 1956. The event is televised live across Europe. Each participating country presents a song and receive a vote based on a combination of tele-voting and jury. Over the years, this has led to speculations of tactical voting, discriminating against some participants and thus inducing bias in the final results. In this paper we investigate the presence of positive or negative bias (which may roughly indicate favouritisms or discrimination) in the votes based on geographical proximity, migration and cultural characteristics of the participating countries through a Bayesian hierarchical model. Our analysis found no evidence of negative bias, although mild positive bias does seem to emerge systematically, linking voters to performers.

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How Modernization Instigates Social Change: Laptop Usage as a Driver of Cultural Value Change and Gender Equality in a Developing Country

Nina Hansen et al.
Journal of Cross-Cultural Psychology, forthcoming

Abstract:
This research examines how technology usage can instigate social change in a developing country. We expected that technology usage leads to changes in modern cultural values and attitudes toward gender equality while traditional values persist. This was tested in an information and communication technology (ICT) for Development Aid project among Ethiopian children who had received a laptop. A longitudinal field experiment compared children who received a laptop (n = 573) with a matched control group without a laptop (n = 485). Measures were taken before laptop introduction and 6 months later. Laptops had medium to strong effects on value and attitude change, particularly in rural areas. Children with laptops endorsed modern values more strongly, but traditional values were bolstered as well. Modern value change mediated the effect of laptop usage on the endorsement of gender equality. Theoretical and practical implications for cultural changes related to gender equality are discussed.

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Ownership reasoning in children across cultures

Philippe Rochat et al.
Cognition, September 2014, Pages 471–484

Abstract:
To what extent do early intuitions about ownership depend on cultural and socio-economic circumstances? We investigated the question by testing reasoning about third party ownership conflicts in various groups of three- and five-year-old children (N = 176), growing up in seven highly contrasted social, economic, and cultural circumstances (urban rich, poor, very poor, rural poor, and traditional) spanning three continents. Each child was presented with a series of scripts involving two identical dolls fighting over an object of possession. The child had to decide who of the two dolls should own the object. Each script enacted various potential reasons for attributing ownership: creation, familiarity, first contact, equity, plus a control/neutral condition with no suggested reasons. Results show that across cultures, children are significantly more consistent and decisive in attributing ownership when one of the protagonists created the object. Development between three and five years is more or less pronounced depending on culture. The propensity to split the object in equal halves whenever possible was generally higher at certain locations (i.e., China) and quasi-inexistent in others (i.e., Vanuatu and street children of Recife). Overall, creation reasons appear to be more primordial and stable across cultures than familiarity, relative wealth or first contact. This trend does not correlate with the passing of false belief theory of mind.

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Long-term consequences of birth in an ‘unlucky’ year: Evidence from Japanese women born in 1966

Satoshi Shimizutani & Hiroyuki Yamada
Applied Economics Letters, forthcoming

Abstract:
This article explores the long-term consequence of a prevailing superstition regarding women who were born in 1966, a year of the fire horse, who were around 44 years of age in 2010. The findings indicate that ‘fire horse women’ are disadvantaged in some aspects such as divorce rates, educational attainment and their own and household level income, suggesting discrimination against fire horse women as a result of the superstition.

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Standing out as a signal to selfishness: Culture and devaluation of non-normative characteristics

Zoe Kinias et al.
Organizational Behavior and Human Decision Processes, July 2014, Pages 190–203

Abstract:
This article proposes and tests a theoretical model articulating when and why differences in devaluation and avoidance of individuals with non-normative characteristics emerge between East Asian and Western cultural contexts. Four main studies examined this theoretical model. In a pilot study, relative to Americans, Koreans devalued a target individual with a non-normative characteristic, and in Study 1 the target’s efforts to forestall disruption of group processes eliminated the devaluation in Korea, with perceived selfishness mediating this process. In Study 2, Koreans, relative to Americans, devalued and avoided coworkers with non-normative characteristics, particularly when the non-normative characteristic was controllable. Study 3 further showed that perceived selfishness mediates this effect with a behavioral dependent variable. Study 4 tested the generalizability to positively valenced characteristics and found that Koreans (relative to Americans) also devalue individuals with positive characteristics at non-normative levels. Implications for individuals with non-normative characteristics, organizational diversity, and cross-cultural interaction are discussed.

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A cross-culture, cross-gender comparison of perspective taking mechanisms

Klaus Kessler et al.
Proceedings of the Royal Society: Biological Sciences, 22 June 2014

Abstract:
Being able to judge another person's visuo-spatial perspective is an essential social skill, hence we investigated the generalizability of the involved mechanisms across cultures and genders. Developmental, cross-species, and our own previous research suggest that two different forms of perspective taking can be distinguished, which are subserved by two distinct mechanisms. The simpler form relies on inferring another's line-of-sight, whereas the more complex form depends on embodied transformation into the other's orientation in form of a simulated body rotation. Our current results suggest that, in principle, the same basic mechanisms are employed by males and females in both, East-Asian (EA; Chinese) and Western culture. However, we also confirmed the hypothesis that Westerners show an egocentric bias, whereas EAs reveal an other-oriented bias. Furthermore, Westerners were slower overall than EAs and showed stronger gender differences in speed and depth of embodied processing. Our findings substantiate differences and communalities in social cognition mechanisms across genders and two cultures and suggest that cultural evolution or transmission should take gender as a modulating variable into account.

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Returns to Dialect: Identity Exposure through Language in the Chinese Labor Market

Zhao Chen, Ming Lu & Le Xu
China Economic Review, September 2014, Pages 27–43

Abstract:
Though Mandarin is China's common language, each region/city has its own dialect. Using a unique self-collected data set, this paper estimates returns to dialect familiarity in China’s largest and most developed city, Shanghai. We evaluate migrant workers’ comprehension and fluency of the Shanghai dialect, and instrument their dialect fluency by determining whether the workers' hometowns were located in the Wu dialect region and the distance between those hometowns and Shanghai. We determined that in OLS regressions, the returns to dialect are a consequence of endogeneity bias. After using IV (instrumental variable), dialect fluency was shown to significantly impact one’s income in the service industry, in particular affecting sales jobs. In manufacturing and construction jobs, migrants with higher dialect fluency tended to be self-employed in order to earn more income. By distinguishing between listening and speaking abilities, we found that auditory comprehension does not significantly increase one’s earning, while oral fluency does. Since local residents in Shanghai can understand Mandarin, migrants who can understand Shanghainese won’t have difficulty in the information exchange. Therefore, our results confirm that dialect is a channel through which people expose their identity. Speaking the local dialect is a way for migrant workers to integrate into the local society and also to reduce transaction costs in the labor market.

By KEVIN LEWIS | 09:00:00 AM

Wednesday, June 25, 2014

Tipping the scales

Identifying Judicial Empathy: Does Having Daughters Cause Judges to Rule for Women's Issues?

Adam Glynn & Maya Sen
American Journal of Political Science, forthcoming

Abstract:
In this article, we consider whether personal relationships can affect the way that judges decide cases. To do so, we leverage the natural experiment of a child's gender to identify the effect of having daughters on the votes of judges. Using new data on the family lives of U.S. Courts of Appeals judges, we find that, conditional on the number of children a judge has, judges with daughters consistently vote in a more feminist fashion on gender issues than judges who have only sons. This result survives a number of robustness tests and appears to be driven primarily by Republican judges. More broadly, this result demonstrates that personal experiences influence how judges make decisions, and this is the first article to show that empathy may indeed be a component in how judges decide cases.

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Indigent Defense Counsel, Attorney Quality, and Defendant Outcomes

Michael Roach
American Law and Economics Review, forthcoming

Abstract:
County governments typically provide legal defense services for the indigent through one of two methods: public defenders and assigned counsel. I measure differences in defendant outcomes between these two types of counsel, finding that assigned counsel generate significantly less favorable outcomes for defendants than public defenders. Since assigned counsel work involves attorneys selecting into it, outside labor market options could affect attorney selection decisions. With that in mind, I analyze how attorneys of different quality levels respond to exogenous changes in their respective outside options, finding a significant impact on the performance of assigned counsel relative to public defenders.

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Rate of false conviction of criminal defendants who are sentenced to death

Samuel Gross et al.
Proceedings of the National Academy of Sciences, 20 May 2014, Pages 7230–7235

Abstract:
The rate of erroneous conviction of innocent criminal defendants is often described as not merely unknown but unknowable. There is no systematic method to determine the accuracy of a criminal conviction; if there were, these errors would not occur in the first place. As a result, very few false convictions are ever discovered, and those that are discovered are not representative of the group as a whole. In the United States, however, a high proportion of false convictions that do come to light and produce exonerations are concentrated among the tiny minority of cases in which defendants are sentenced to death. This makes it possible to use data on death row exonerations to estimate the overall rate of false conviction among death sentences. The high rate of exoneration among death-sentenced defendants appears to be driven by the threat of execution, but most death-sentenced defendants are removed from death row and resentenced to life imprisonment, after which the likelihood of exoneration drops sharply. We use survival analysis to model this effect, and estimate that if all death-sentenced defendants remained under sentence of death indefinitely, at least 4.1% would be exonerated. We conclude that this is a conservative estimate of the proportion of false conviction among death sentences in the United States.

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A Critical Examination of the “White Victim Effect” and Death Penalty Decision-Making from a Propensity Score Matching Approach: The North Carolina Experience

Wesley Jennings et al.
Journal of Criminal Justice, September–October 2014, Pages 384–398

Purpose: Death penalty research has rather consistently demonstrated a statistically significant relationship between defendant race and victim race in general, and for the Black defendant/White victim race dyad specifically. The bulk of this evidence has been derived from correlational studies and from cases over relatively condensed time frames.

Methods: The current study uses data from North Carolina (n = 1,113) over several decades (1977–2009) to evaluate the link between defendant/victim racial dyad and jury death penalty decision-making.

Results: Results suggest that there is an apparent “White victim effect” that can be observed in death penalty decision-making in traditional logistic regression models. Yet, once cases are matched via propensity score matching on approximately 50 case characteristics/confounders including the type of aggravators and mitigators accepted by the jury in addition to the number of aggravators and mitigators accepted, the relationship is rendered insignificant. Furthermore, these results hold for a defendant of any race killing a White victim and for the “most disadvantaged” situation for Black defendants (e.g., cases with White victims).

Conclusions: The “White victim effect” on capital punishment decision-making is better considered as a “case effect” rather than a “race effect.”

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Does Officer Race Matter?

Sarath Sanga
American Law and Economics Review, forthcoming

Abstract:
Do racial profiling tactics differ by officer race? The literature has relied on a test based on hit rates in vehicle searches to answer this question. This paper instead argues for a test based on patrol officers’ stop rates since it is less manipulable by officers, requires fewer assumptions, and includes all officer–citizen interactions. I compare these two methods of testing for discrimination using detailed data from Oakland, California. The hit rate test concludes that officer race does not matter on average or within neighborhoods. In contrast, the stop rate test concludes that officer race does matter within neighborhoods, and further suggests that the same officers discriminate in favor of their own race in some neighborhoods, yet against their own race in other neighborhoods. The contradictory nature of this discrimination suggests that it is more likely driven by information than animus.

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The New Face of Legal Inequality: Noncitizens and the Long-Term Trends in Sentencing Disparities across U.S. District Courts, 1992–2009

Michael Light
Law & Society Review, June 2014, Pages 447–478

Abstract:
In the wake of mass immigration from Latin America, legal scholars have shifted focus from racial to ethnic inequality under the law. A series of studies now suggest that Hispanics may be the most disadvantaged group in U.S. courts, yet this body of work has yet to fully engage the role of citizenship status. The present research examines the punishment consequences for non-U.S. citizens sentenced in federal courts between 1992 and 2009. Drawing from work in citizenship studies and sociolegal inequality, I hypothesize that nonstate members will be punished more severely than U.S. citizens, and any trends in Hispanic ethnicity over this period will be linked to punitive changes in the treatment of noncitizens. In line with this hypothesis, results indicate a considerable punishment gap between citizens and noncitizens — larger than minority-white disparities. Additionally, this citizenship “penalty” has increased at the incarceration stage, explaining the majority of the increase in Hispanic-white disparity over the past two decades. As international migration increases, these findings call for greater theoretical and empirical breadth in legal inequality research beyond traditional emphases, such as race and ethnicity.

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Strategic Judicial Preference Revelation

Álvaro Bustos & Tonja Jacobi
Journal of Law and Economics, February 2014, Pages 113-137

Abstract:
We examine the revelation of preferences of justices whose true ideologies are not known when entering the Court but gradually become apparent through their judicial decisions. In a 2-period president-Senate-Court game, we show that some new justices vote disingenuously and so move the perceived ideology of the overall Court closer to their ideally preferred outcome, which influences the selection of future justices. Justices will sometimes have an incentive to exaggerate the extremeness of their preferences and at other times will seek to appear more moderate. Systematic changes in judicial behavior can be predicted on the basis of the characteristics of the cases; the initial ideologies of the justices, the president, and the Senate; and the probabilities of retirement of the justices. These results have important implications for interpreting judicial voting behavior: particularly, it is not safe to infer changes in actual judicial preferences from changes in expression of judicial preferences.

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Narrow versus broad judicial decisions

Justin Fox & Georg Vanberg
Journal of Theoretical Politics, July 2014, Pages 355-383

Abstract:
A central debate among judges and legal scholars concerns the appropriate scope of judicial opinions: should decisions be narrow, and stick to the facts at hand, or should they be broad, and provide guidance in related contexts? A central argument for judicial ‘minimalism’ holds that judges should rule narrowly because they lack the knowledge required to make general rules to govern unknown future circumstances. In this paper, we challenge this argument. Our argument focuses on the fact that, by shaping the legal landscape, judicial decisions affect the policies that are adopted, and that may therefore subsequently be challenged before the court. Using a simple model, we demonstrate that in such a dynamic setting, in which current decisions shape future cases, judges with limited knowledge confront incentives to rule broadly precisely because they are ignorant.

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Overstating the Satisfaction of Lawyers

David Chambers
Law & Social Inquiry, Spring 2014, Pages 313–333

Abstract:
Recent literature commonly reports US lawyers as disheartened and discontented, but more than two dozen statistically based studies report that the great majority of lawyers put themselves on the satisfied side of scales of job satisfaction. The claim of this article is that, in three ways, these statistically based studies convey an overly rosy impression of lawyers' attitudes: first, that many of those who put themselves above midpoints on satisfaction scales are barely more positive than negative about their careers and often have profound ambivalence about their work; second, that surveys conducted at a single point in time necessarily fail to include the views of those who once worked in that setting but have now gone elsewhere; and third, that few studies address the problems of bias that may be caused by lower rates of response from the least satisfied persons in the population sampled.

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Testing Judicial Power: The Influence of the U.S. Supreme Court on Federal Incarceration

Matthew Hall
American Politics Research, forthcoming

Abstract:
The U.S. Supreme Court is traditionally thought to hold little influence over social or political change; however, recent evidence suggests the Court may wield significant power, especially with regard to criminal justice. Most studies evaluate judicial power by examining the effects of individual rulings on the implementation of specific policies, but this approach may overlook the broader impact of courts on society. Instead, I adopt an aggregate approach to test U.S. Supreme Court power. I find that aggregate conservative decision making by the Court is positively associated with long-term shifts in new admissions to U.S. federal prisons. These results suggest the Court possesses significant power to influence important social outcomes, at least in the context of the criminal justice system.

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Approval of social security disability appeals: Analysis of judges’ decisions

Robert Nakosteen & Michael Zimmer
Applied Economics, Summer 2014, Pages 2783-2791

Abstract:
This article is an empirical analysis of decisions by judges regarding requests by individuals for disability benefits. Applicants for disability benefits who are twice denied through the normal process can appeal to one of the Social Security Administration’s administrative law judges, who hold appointed positions. The data for this study are taken from decisions made by approximately 1000 judges for cases heard from 2010 through 2012. Using each judge as a unit of observation, the data reveal the number of cases heard and the number of approvals granted. We augmented the data with additional information on the presiding judge, and with data from the state in which the court resides. The purpose of the study is to determine whether a simple model can explain, first, the volume of decisions rendered at the judge level and, second, the proportion of approvals. Results indicate that the volume of decisions can be explained in part by the judge’s recent record of leniency. Evidence also supports the hypothesis that approval outcomes depend on judges’ professional tenure and economic factors in the state of jurisdiction.

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The influence of defendant race and victim physical attractiveness on juror decision-making in a sexual assault trial

Evelyn Maeder, Susan Yamamoto & Paula Saliba
Psychology, Crime & Law, forthcoming

Abstract:
Previous research has examined separately the influence of defendant race and victim physical attractiveness on juror decision-making in sexual assault trials. The current study sought to examine the combined effects of defendant race and victim physical attractiveness in a trial of alleged acquaintance sexual assault. Mock jurors read a trial transcript in which the defendant race and victim physical attractiveness were manipulated via photographs. Results demonstrated that women were not influenced by victim attractiveness, but that men were more certain of the defendant guilt when the victim was unattractive. Defendant race and victim attractiveness interacted with regards to victim responsibility ratings – when the defendant was White, attractive victims were rated as more responsible for the alleged assault than unattractive victims; this effect was reversed for trials with a Black defendant and nonexistent for trials with an Aboriginal Canadian defendant.

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Likable co-witnesses increase eyewitness accuracy and decrease suggestibility

Jenna Kieckhaefer & Daniel Wright
Memory, forthcoming

Abstract:
This study examines the impact of likability on memory accuracy and memory conformity between two previously unacquainted individuals. After viewing a crime, eyewitnesses often talk to one another and may find each other likable or dislikable. One hundred twenty-seven undergraduate students arrived at the laboratory with an unknown confederate and were assigned to a likability condition (i.e., control, likable or dislikable). Together, the pair viewed pictures and was then tested on their memory for those pictures in such a way that the participant knew the confederate's response. Thus, the participant's response could be influenced both by his or her own memory and by the answers of the confederate. Participants in the likable condition were more accurate and less influenced by the confederate, compared with the other conditions. Results are discussed in relation to research that shows people are more influenced by friends than strangers and in relation to establishing positive rapport in forensic interviewing.

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Whatever you say, say nothing: Individual differences in counter interrogation tactics amongst a field sample of right wing, AQ inspired and paramilitary terrorists

Laurence Alison et al.
Personality and Individual Differences, October 2014, Pages 170–175

Abstract:
Principal component analysis of an operational field sample of 181 police interrogations with terrorist suspects identified five counter interrogation factors: passive (refusing to look at interviewers, remaining silent); passive verbal (monosyllabic response, claiming lack of memory); verbal (discussing an unrelated topic, providing well known information, providing a scripted response) with two single item components: retraction of previous statements and no comment. Analysis revealed significant differences in the use of counter interrogation tactics between terrorist groups, with paramilitary suspects using more passive, verbal and no comment tactics than right wing and international terrorists. International terrorists made significantly more use of retraction tactics than right wing and paramilitary groups.

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Psychological effects of criminal proceedings through contact with the judge: The moderating effect of legal system structure

Malini Laxminarayan
Psychology, Crime & Law, Fall 2014, Pages 781-797

Abstract:
Psychological effects of criminal proceedings on victims have often been the focus of victimological research. The criminal justice system is repeatedly acknowledged as a source of additional harm for victims. Such a generalization, however, cannot be made to all legal systems universally to the same degree. This article compares the adversarial and inquisitorial structures of criminal justice and examines how the latter may in fact be beneficial to victim's well-being. More specifically, contact with the judge and presence at trial may be one positive form of victim participation in its most informal sense. Hierarchical regression analysis is conducted using victims of serious crimes in the Netherlands and New South Wales (NSW), Australia, to test this hypothesis. The type of legal system (i.e., inquisitorial versus adversarial) is used as a moderating variable on the relationship between contact with the judge and psychological effects. The findings indicate that victims in the Netherlands report a significant relationship, where contact with the judge is predictive of a less negative impact on psychological effects, while a non-significant relationship is found for victims in NSW.

By KEVIN LEWIS | 09:00:00 AM

Tuesday, June 24, 2014

Family life

Complex Living Arrangements and Child Health: Examining Family Structure Linkages with Children's Health Outcomes

Kathleen Ziol-Guest & Rachel Dunifon
Family Relations, July 2014, Pages 424–437

Abstract:
Using data on 67,558 children (age 0 to 17) from the 1999 and 2002 rounds of the National Survey of America's Families, the association between complex living arrangements and children's health is examined. The authors consider children residing in a wide range of living arrangements, including with stepparents, single fathers, custodial grandparents, and nonkin foster parents. Findings suggest that children's health varies by family structure. The authors find a key role for living with a biological father when predicting children's health. Children living with a single father are less likely to have poor health outcomes than most other groups, whereas those with a stepfather have reduced health outcomes. The same is not true for those living with a single mother or stepmother. Children being raised by a grandparent and those in foster care have particularly poor health outcomes. Mediation analysis suggests income and health insurance status do not explain these relationships.

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Maternal gender role attitudes, human capital investment, and labour supply of sons and daughters

David Johnston, Stefanie Schurer & Michael Shields
Oxford Economic Papers, July 2014, Pages 631-659

Abstract:
Recent studies have shown that beliefs, preferences, and attitudes are important pathways for the intergenerational transmission of economic outcomes. We contribute to this literature by documenting the importance of gender role attitudes with data from the 1970 British Cohort Study. We find that mothers’ and children’s gender role attitudes, measured 25 years apart, are strongly correlated, equally so for sons and daughters. We also find that daughters and sons’ wives/partners have greater human capital and labour supply if their mothers held nontraditional attitudes. A fixed effect analysis shows that the female labour supply effects are particularly large following childbirth. Importantly, sons’ human capital and labour supply are unaffected, suggesting the results are not driven by unobserved heterogeneity. All these findings imply that the intergenerational transmission of gender role attitudes explains a substantive part of gender inequalities.

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High Educational Aspirations Among Pregnant Adolescents Are Related to Pregnancy Unwantedness and Subsequent Parenting Stress and Inadequacy

Patricia East & Jennifer Barber
Journal of Marriage and Family, June 2014, Pages 652–664

Abstract:
On the basis of theories of maternal identity development, role conflict, and childbearing motivation, the authors tested whether high educational aspirations among pregnant adolescents are related to the unwantedness of the pregnancy and whether pregnancy unwantedness leads to subsequent parenting stress and inadequacy. Longitudinal data from 100 first-time-pregnant, unmarried Latina adolescents (M age = 17.3 years) were analyzed. Results from structural equation path modeling confirmed these associations, with strong educational ambitions related to greater unwantedness of the pregnancy, which led to feeling trapped by parenting at 6 months postpartum, which in turn was related to unaffectionate parenting and feeling inadequate in mothering at 1 year postpartum. The potential long-term negative consequences of high educational aspirations for pregnant adolescents' adjustment to parenting are discussed.

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Early Maternal Employment and Children’s School Readiness in Contemporary Families

Caitlin McPherran Lombardi & Rebekah Levine Coley
Developmental Psychology, forthcoming

Abstract:
This study assessed whether previous findings linking early maternal employment to lower cognitive and behavioral skills among children generalized to modern families. Using a representative sample of children born in the United States in 2001 (N = 10,100), ordinary least squares regression models weighted with propensity scores assessed links between maternal employment in the 2 years after childbearing and children’s school readiness skills at kindergarten. There were neutral associations between maternal employment and children’s school readiness, which were not differentiated by maternal time, stress, or wages. However, as nonmaternal household income decreased, maternal employment begun prior to 9 months was linked with higher cognitive skills, while employment begun between 9 and 24 months was linked with lower conduct problems.

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Parenting with Style: Altruism and Paternalism in Intergenerational Preference Transmission

Matthias Doepke & Fabrizio Zilibotti
NBER Working Paper, June 2014

Abstract:
We develop a theory of intergenerational transmission of preferences that rationalizes the choice between alternative parenting styles (as set out in Baumrind 1967). Parents maximize an objective function that combines Beckerian altruism and paternalism towards children. They can affect their children's choices via two channels: either by influencing children's preferences or by imposing direct restrictions on their choice sets. Different parenting styles (authoritarian, authoritative, and permissive) emerge as equilibrium outcomes, and are affected both by parental preferences and by the socioeconomic environment. Parenting style, in turn, feeds back into the children's welfare and economic success. The theory is consistent with the decline of authoritarian parenting observed in industrialized countries, and with the greater prevalence of more permissive parenting in countries characterized by low inequality.

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Less-structured time in children's daily lives predicts self-directed executive functioning

Jane Barker et al.
Frontiers in Psychology, June 2014

Abstract:
Executive functions (EFs) in childhood predict important life outcomes. Thus, there is great interest in attempts to improve EFs early in life. Many interventions are led by trained adults, including structured training activities in the lab, and less-structured activities implemented in schools. Such programs have yielded gains in children's externally-driven executive functioning, where they are instructed on what goal-directed actions to carry out and when. However, it is less clear how children's experiences relate to their development of self-directed executive functioning, where they must determine on their own what goal-directed actions to carry out and when. We hypothesized that time spent in less-structured activities would give children opportunities to practice self-directed executive functioning, and lead to benefits. To investigate this possibility, we collected information from parents about their 6–7 year-old children's daily, annual, and typical schedules. We categorized children's activities as “structured” or “less-structured” based on categorization schemes from prior studies on child leisure time use. We assessed children's self-directed executive functioning using a well-established verbal fluency task, in which children generate members of a category and can decide on their own when to switch from one subcategory to another. The more time that children spent in less-structured activities, the better their self-directed executive functioning. The opposite was true of structured activities, which predicted poorer self-directed executive functioning. These relationships were robust (holding across increasingly strict classifications of structured and less-structured time) and specific (time use did not predict externally-driven executive functioning). We discuss implications, caveats, and ways in which potential interpretations can be distinguished in future work, to advance an understanding of this fundamental aspect of growing up.

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Child Care, Socio-economic Status and Problem Behavior: A Study of Gene–Environment Interaction in Young Dutch Twins

Christel Middeldorp et al.
Behavior Genetics, July 2014, Pages 314-325

Abstract:
The influences of formal child care before age 4 on behavioral problems at 3, 5, and 7 years of age were assessed in 18,932 Dutch twins (3,878 attended formal child care). The effect of formal child care was studied on the average level of problem behavior and as moderator of genetic and non-genetic influences, while taking into account effects of sex and parental socio-economic status (SES). There was a small association between attending formal child care and higher externalizing problems, especially when SES was low. Heritability was lower for formal child care and in lower SES conditions. These effects were largest at age 7 and for externalizing problems. In 7 year-old boys and girls, the difference in heritability between the formal child care group of low SES and the home care group of high SES was 30 % for externalizing and ~20 % for internalizing problems. The decrease in heritability was explained by a larger influence of the environment, rather than by a decrease in genetic variance. These results support a bioecological model in which heritability is lower in circumstances associated with more problem behavior.

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Paternal autonomy restriction, neighborhood safety, and child anxiety trajectory in community youth

Christine Cooper-Vince et al.
Journal of Applied Developmental Psychology, July–August 2014, Pages 265–272

Abstract:
Intrusive parenting, primarily examined among middle to upper-middle class mothers, has been positively associated with the presence and severity of anxiety in children. This study employed cross-sectional linear regression and longitudinal latent growth curve analyses to evaluate the main and interactive effects of early childhood paternal autonomy restriction (AR) and neighborhood safety (NS) on the trajectory of child anxiety in a sample of 596 community children and fathers from the NICHD SECYD. Longitudinal analyses revealed that greater paternal AR at age 6 was actually associated with greater decreases in child anxiety in later childhood. Cross-sectional analyses revealed main effects for NS across childhood, and interactive effects of paternal AR and NS that were present only in early childhood, whereby children living in safer neighborhoods demonstrated increased anxiety when experiencing lower levels of paternal AR. Findings further clarify for whom and when paternal AR impacts child anxiety in community youth.

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The Association of Telomere Length With Family Violence and Disruption

Stacy Drury et al.
Pediatrics, forthcoming

Background: To enhance the understanding of biological mechanisms connecting early adversity and negative health, we examine the association between family interpersonal violence and disruption and telomere length in youth. These specific exposures were selected because of their established links with negative health consequences across the life-course.

Methods: Children, age 5 to 15, were recruited from the greater New Orleans area, and exposure to family disruption and violence was assessed through caregiver report. Telomere length, from buccal cell DNA (buccal telomere length [bTL]), was determined by using monochrome multiplex quantitative real-time polymerase chain reaction. The association between bTL and adversity exposure was tested (n = 80).

Results: Cumulative exposure to interpersonal violence and family disruption was correlated with bTL. Controlling for other sociodemographic factors, bTL was significantly shorter in children with higher exposure to family violence and disruption. Witnessing family violence exerted a particularly potent impact. A significant gender interaction was found (β = −0.0086, SE = 0.0031, z test= −2.79, P = .0053) and analysis revealed the effect only in girls.

Conclusions: bTL is a molecular biomarker of adversity and allostatic load that is detectable in childhood. The present results extend previous studies by demonstrating that telomeres are sensitive to adversity within the overarching family domain. These findings suggest that the family ecology may be an important target for interventions to reduce the biological impact of adversity in the lives of children.

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Adoptive parent hostility and children’s peer behavior problems: Examining the role of genetically informed child attributes on adoptive parent behavior

Kit Elam et al.
Developmental Psychology, May 2014, Pages 1543-1552

Abstract:
Socially disruptive behavior during peer interactions in early childhood is detrimental to children’s social, emotional, and academic development. Few studies have investigated the developmental underpinnings of children’s socially disruptive behavior using genetically sensitive research designs that allow examination of parent-on-child and child-on-parent (evocative genotype–environment correlation [rGE]) effects when examining family process and child outcome associations. Using an adoption-at-birth design, the present study controlled for passive genotype–environment correlation and directly examined evocative rGE while examining the associations between family processes and children’s peer behavior. Specifically, the present study examined the evocative effect of genetic influences underlying toddler low social motivation on mother–child and father–child hostility and the subsequent influence of parent hostility on disruptive peer behavior during the preschool period. Participants were 316 linked triads of birth mothers, adoptive parents, and adopted children. Path analysis showed that birth mother low behavioral motivation predicted toddler low social motivation, which predicted both adoptive mother–child and father–child hostility, suggesting the presence of an evocative genotype–environment association. In addition, both mother–child and father–child hostility predicted children’s later disruptive peer behavior. Results highlight the importance of considering genetically influenced child attributes on parental hostility that in turn links to later child social behavior. Implications for intervention programs focusing on early family processes and the precursors of disrupted child social development are discussed.

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The Prevalence of Confirmed Maltreatment Among US Children, 2004 to 2011

Christopher Wildeman et a l.
JAMA Pediatrics, forthcoming

Objective: To estimate the proportion of US children with a report of maltreatment (abuse or neglect) that was indicated or substantiated by Child Protective Services (referred to as confirmed maltreatment) by 18 years of age.

Design, Setting, and Participants: The National Child Abuse and Neglect Data System (NCANDS) Child File includes information on all US children with a confirmed report of maltreatment, totaling 5 689 900 children (2004-2011). We developed synthetic cohort life tables to estimate the cumulative prevalence of confirmed childhood maltreatment by 18 years of age.

Results: At 2011 rates, 12.5% (95% CI, 12.5%-12.6%) of US children will experience a confirmed case of maltreatment by 18 years of age. Girls have a higher cumulative prevalence (13.0% [95% CI, 12.9%-13.0%]) than boys (12.0% [12.0%-12.1%]). Black (20.9% [95% CI, 20.8%-21.1%]), Native American (14.5% [14.2%-14.9%]), and Hispanic (13.0% [12.9%-13.1%]) children have higher prevalences than white (10.7% [10.6%-10.8%]) or Asian/Pacific Islander (3.8% [3.7%-3.8%]) children. The risk for maltreatment is highest in the first few years of life; 2.1% (95% CI, 2.1%-2.1%) of children have confirmed maltreatment by 1 year of age, and 5.8% (5.8%-5.9%), by 5 years of age. Estimates from 2011 were consistent with those from 2004 through 2010.

Conclusions and Relevance: Annual rates of confirmed child maltreatment dramatically understate the cumulative number of children confirmed to be maltreated during childhood. Our findings indicate that maltreatment will be confirmed for 1 in 8 US children by 18 years of age, far greater than the 1 in 100 children whose maltreatment is confirmed annually. For black children, the cumulative prevalence is 1 in 5; for Native American children, 1 in 7.

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Divorce, approaches to learning, and children's academic achievement: A longitudinal analysis of mediated and moderated effects

Christopher Anthony, James Clyde DiPerna & Paul Amato
Journal of School Psychology, June 2014, Pages 249–261

Abstract:
Data from the Early Childhood Longitudinal Study — Kindergarten Cohort (ECLS-K) were used to test the hypothesis that approaches to learning (ATL) mediates the link between parental divorce and academic achievement. Fixed effects regression was utilized to test for mediation, and subsequent moderation analyses examining gender and age at time of divorce also were conducted. Results indicated that divorce was associated with less growth in test scores and that ATL mediated 18% and 12% of this association in reading and mathematics respectively. Parental divorce also was associated with larger negative effects for children who experienced divorce at an older age as well as for girls' mathematics test scores. These findings contribute to the understanding of the impact of parental divorce on children's academic achievement and underscore the importance of focusing on the variability of child outcomes following parental divorce.

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Has Work Replaced Home as a Haven? Re-examining Arlie Hochschild’s Time Bind Proposition with Objective Stress Data

Sarah Damaske, Joshua Smyth & Matthew Zawadzki
Social Science & Medicine, forthcoming

Abstract:
Using innovative data with objective and subjective measures of stress collected from 122 employed men and women, this paper tests the thesis of the Time Bind by asking whether people report lower stress levels at work than at home. The study finds consistent support for the Time Bind hypothesis when examining objective stress data: when participants were at work they had lower values of the stress hormone cortisol than when they were at home. Two variables moderated this association – income and children at home – such that the work as haven effect was stronger for those with lower incomes and no children living at home. Participants also, however, consistently reported higher subjective stress levels on work days than on non-work days, which is in direct contrast to the Time Bind hypothesis. Although our overall findings support Hochschild’s hypothesis that stress levels are lower at work, it appears that combining work and home increases people’s subjective experience of daily stress.

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Differential neural responses to child and sexual stimuli in human fathers and non-fathers and their hormonal correlates

Jennifer Mascaro, Patrick Hackett & James Rilling
Psychoneuroendocrinology, August 2014, Pages 153–163

Abstract:
Despite the well-documented importance of paternal caregiving for positive child development, little is known about the neural changes that accompany the transition to fatherhood in humans, or about how changes in hormone levels affect paternal brain function. We compared fathers of children aged 1-2 with non-fathers in terms of hormone levels (oxytocin and testosterone), neural responses to child picture stimuli, and neural responses to visual sexual stimuli. Compared to non-fathers, fathers had significantly higher levels of plasma oxytocin and lower levels of plasma testosterone. In response to child picture stimuli, fathers showed stronger activation than non-fathers within regions important for face emotion processing (caudal middle frontal gyrus [MFG]), mentalizing (temporo-parietal junction [TPJ]) and reward processing (medial orbitofrontal cortex [mOFC]). On the other hand, non-fathers had significantly stronger neural responses to sexually provocative images in regions important for reward and approach-related motivation (dorsal caudate and nucleus accumbens). Testosterone levels were negatively correlated with responses to child stimuli in the MFG. Surprisingly, neither testosterone nor oxytocin levels predicted neural responses to sexual stimuli. Our results suggest that the decline in testosterone that accompanies the transition to fatherhood may be important for augmenting empathy toward children.

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Paternal Hostility and Maternal Hostility in European American and African American Families

Ed Wu et al.
Journal of Marriage and Family, June 2014, Pages 638–651

Abstract:
The authors examined the hypothesized influence of maternal and paternal hostility on youth delinquency over time. The investigation addressed significant gaps in earlier research on parental hostility, including the neglect of father effects, especially in African American families. Using prospective, longitudinal data from community samples of European American (n = 422) and African American (n = 272) 2-parent families, the authors examined the independent effects of paternal and maternal hostility on youth delinquency. The results indicated that paternal hostility significantly predicted relative increases in youth delinquent behaviors above and beyond the effects of maternal hostility; conversely, maternal hostility did not predict youth delinquency after controlling for paternal hostility. Multiple-group analyses yielded similar results for both ethnic groups and for boys and girls. These results underscore the importance of including both parents in research on diverse families. Neglecting fathers provides an incomplete account of parenting in relation to youth development.

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Parenting Styles and Practices of Latino Parents and Latino Fifth Graders’ Academic, Cognitive, Social, and Behavioral Outcomes

John Jabagchourian et al.
Hispanic Journal of Behavioral Sciences, May 2014, Pages 175-194

Abstract:
A vast literature documents a host of advantages conferred upon middle class European American children whose parents employ an authoritative style of parenting, including enhanced academic achievement and positive behavioral outcomes. The literature is much less clear about the relationship between parental authority style and child outcomes in other cultural contexts. In this study, we examined the relations among authoritative, authoritarian, and permissive parenting styles and practices and several academic and behavioral outcomes among fifth grade Latino/a students. We found significant positive relations between parental authoritativeness and grades, academic engagement, social competence, self-regulation, and perspective-taking as well as negative relations between authoritativeness and aggression. We found no relations between authoritarian or permissive parenting styles and child outcomes. We consider these findings in light of what other researchers have posited about collectivist parenting styles and practices.

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Long-term effects of birth weight and breastfeeding duration on inflammation in early adulthood

Thomas McDade et al.
Proceedings of the Royal Society: Biological Sciences, 7 June 2014

Abstract:
Chronic inflammation is a potentially important physiological mechanism linking early life environments and health in adulthood. Elevated concentrations of C-reactive protein (CRP) — a key biomarker of inflammation — predict increased cardiovascular and metabolic disease risk in adulthood, but the developmental factors that shape the regulation of inflammation are not known. We investigated birth weight and breastfeeding duration in infancy as predictors of CRP in young adulthood in a large representative cohort study (n = 6951). Birth weight was significantly associated with CRP in young adulthood, with a negative association for birth weights 2.8 kg and higher. Compared with individuals not breastfed, CRP concentrations were 20.1%, 26.7%, 29.6% and 29.8% lower among individuals breastfed for less than three months, three to six months, 6–12 months and greater than 12 months, respectively. In sibling comparison models, higher birth weight was associated with lower CRP for birth weights above 2.5 kg, and breastfeeding greater than or equal to three months was significantly associated with lower CRP. Efforts to promote breastfeeding and improve birth outcomes may have clinically relevant effects on reducing chronic inflammation and lowering risk for cardiovascular and metabolic diseases in adulthood.

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Impacts of child development accounts on maternal depressive symptoms: Evidence from a randomized statewide policy experiment

Jin Huang, Michael Sherraden & Jason Purnell
Social Science & Medicine, July 2014, Pages 30–38

Abstract:
This study examines the impact of Child Development Accounts (CDAs) — asset-building accounts created for children at birth — on the depressive symptoms of mothers in a statewide randomized experiment conducted in the United States. The experiment identified the primary caregivers of children born in Oklahoma during 2007, and 2704 of the caregivers completed a baseline interview before random assignment to the treatment (n = 1358) or the control group (n = 1346). To treatment participants, the experiment offered CDAs built on the existing Oklahoma 529 College Savings Plan. The baseline and follow-up surveys measured the participants’ depressive symptoms with a shortened version of the Center for Epidemiologic Studies Depression Scale (CES-D). In models that control for baseline CES-D scores, the mean follow-up score of treatment mothers is .17 lower than that of control mothers (p < .05). Findings suggest that CDAs have a greater impact among subsamples that reported lower income or lower education. Although designed as an economic intervention for children, CDAs may improve parents’ psychological well-being. Findings also suggest that CDAs’ impacts on maternal depressive symptoms may be partially mediated through children’s social-emotional development.

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Salivary oxytocin mediates the association between emotional maltreatment and responses to emotional infant faces

Ritu Bhandari et al.
Physiology & Behavior, 28 May 2014, Pages 123–128

Abstract:
Childhood emotional maltreatment has been associated with a higher risk for maltreating one's own offspring. In the current study, we explored a possible role of oxytocin in mediating the association between childhood emotional maltreatment and participants' interpretation of infant facial expressions. Oxytocin levels were measured in 102 female participants using saliva samples. They rated the mood of thirteen infants with happy, sad and neutral facial expressions. Emotional maltreatment indirectly influenced responses to happy infant faces by modulating oxytocin levels: higher self-reported emotional maltreatment was related to higher levels of salivary oxytocin which were in turn related to a more positive evaluation of happy infant expressions, but not to the evaluation of sad infant expressions. Oxytocin receptor polymorphism rs53576 did not moderate the relation between maltreatment experiences and salivary oxytocin levels. Early emotional maltreatment might indirectly affect emotional information processing by altering the oxytonergic system.

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Fathers' versus mothers' social referencing signals in relation to infant anxiety and avoidance: A visual cliff experiment

Eline Möller, Mirjana Majdandžić & Susan Bögels
Developmental Science, forthcoming

Abstract:
Infants use signals from others to guide their behavior when confronted with novel situations, a process called ‘social referencing’ (SR). Via SR, signs of parental anxiety can lead to infant anxiety. Little is known about differences in the effect of paternal and maternal SR signals on child anxiety. Using a visual cliff paradigm, we studied whether SR processes between fathers and their infants differed from mothers and their infants. Eighty-one infants aged 10–15 months were randomly assigned to conduct the visual cliff task with their father (n = 41) or mother (n = 40). The infant was placed on the shallow side of the cliff and the parent, standing at the deep side, was instructed to encourage the infant to cross. Results showed that although mothers showed more intense facial expressions of encouragement than fathers, no differences occurred in how fast, and with how much anxiety, infants crossed the cliff with fathers and mothers. However, path analyses showed that paternal, but not maternal, expressed anxiety was positively associated with infant expressed anxiety and avoidance. For infants who participated with their mother, infants' anxious temperament was negatively associated with infant avoidance of the cliff. Infant anxious temperament moderated the link between paternal expressed anxiety and infant avoidance: the higher the level of infant anxious temperament the stronger the positive association between paternal expressed anxiety and infant's avoidance of the cliff. Lastly, parental encouragement was unrelated to infant expressed anxiety and avoidance. Our results suggest that SR processes between fathers and their infants differ from those between mothers and their infants.

By KEVIN LEWIS | 09:00:00 AM

Monday, June 23, 2014

Blood and treasure

Millions for Credit: Peace with Algiers and the Establishment of America’s Commercial Reputation Overseas, 1795–96

Hannah Farber
Journal of the Early Republic, Summer 2014, Pages 187-217

Abstract:
In September 1795, the United States of America agreed to pay a large sum of money to the independent Ottoman regency of Algiers so that Algiers would not interfere with its trade in and around the Mediterranean. This trade was of great importance for American farmers and merchants, who hoped to meet warring European armies’ increased demand for grain, as well as for the American commercial fleet, which sought to increase its share of the Mediterranean carrying trade. For the next thirteen months, however, the United States struggled to make the payment, and the Dey of Algiers repeatedly threatened to cancel the treaty. American historians usually describe this series of events as a diplomatic crisis and national disgrace, during which the United States was forced to pay protection money to safeguard its ships from the Algerian corsair fleets mistakenly termed “pirates.” This article argues, however, that the American payment to Algiers benefited the United States by establishing American commercial credit and political credibility overseas. As the treaty payment left the Bank of the United States in Philadelphia, entered the London financial markets, and passed through the hands of merchant houses in Cadiz and Livorno, a diverse group of international creditors became invested in American success. When the payment at last arrived as specie in Algiers, government leaders, diplomats, merchants and insurers around Europe and the Mediterranean had new reason to believe that the credit of the new republic was good.

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A Revealed Preference Approach to the Elicitation of Political Attitudes: Experimental Evidence on Anti-Americanism in Pakistan

Leonardo Bursztyn et al.
NBER Working Paper, May 2014

Abstract:
We develop an indirect, revealed preference method of eliciting attitudes and apply it in an experiment in Pakistan designed to understand the expression of anti-American views. Following the completion of a personality survey, we offer subjects a bonus payment for completing the survey. We find that around one-quarter of subjects forgo a 100 Rupee payment (roughly one-fifth of a day's wage) to avoid anonymously checking a box indicating gratitude toward the United States government for providing funds. We experimentally vary the identity of the funder, the payment size, and subjects' expectations of privacy, and find that rejection of the payment is responsive to all of these treatments. Rejection of the U.S. government bonus payment is an indirect measure of anti-American attitudes. This approach mitigates concerns with experimenter demand, social desirability, and other biases, which can distort reported attitudes. We discuss and present suggestive evidence of the advantages of our methodology.

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Just How Important Are ‘Hearts and Minds’ Anyway? Counterinsurgency Goes to the Polls

Raphael Cohen
Journal of Strategic Studies, forthcoming

Abstract:
Despite all the talk of ‘hearts and minds’ being the key to counterinsurgency, local public opinion is rarely studied and when it is, it often yields surprising conclusions. Through analyzing polling data from Vietnam, Iraq and Afghanistan, this article shows that public opinion is less malleable, more of an effect rather than a cause of tactical success, and a poor predictor of strategic victory. As a result, modern counterinsurgency doctrine’s focus on winning popular support may need to be rethought.

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Civil War and U.S. Foreign Influence

Facundo Albornoz & Esther Hauk
Journal of Development Economics, forthcoming

Abstract:
We study how foreign interventions affect civil war around the world. In an infinitely repeated game we combine a gambling for resurrection mechanism for the influencing country with the canonical bargaining model of war in the influenced country to micro-found sudden shifts in power among the domestic bargaining partners, which are known to lead to war due to commitment problems. We test two of our model predictions that allow us to identify the influence of foreign intervention on civil war incidence : (i) civil wars around the world are more likely under Republican governments and (ii) the probability of civil wars decreases with U.S. presidential approval rates. These results withstand several robustness checks and, overall, suggest that foreign influence is a sizable driver of domestic conflict.

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US Food Aid and Civil Conflict

Nathan Nunn & Nancy Qian
American Economic Review, June 2014, Pages 1630-1666

Abstract:
We study the effect of U.S. food aid on conflict in recipient countries. Our analysis exploits time variation in food aid shipments due to changes in U.S. wheat production and cross-sectional variation in a country's tendency to receive any U.S. food aid. According to our estimates, an increase in U.S. food aid increases the incidence and duration of civil conflicts, but has no robust effect on inter-state conflicts or the onset of civil conflicts. We also provide suggestive evidence that the effects are most pronounced in countries with a recent history of civil conflict.

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The Effect of Female Suicide Attacks on Foreign Media Framing of Conflicts: The case of the Palestinian-Israeli Conflict

Moran Yarchi
Studies in Conflict & Terrorism, forthcoming

Abstract:
The study examines the effect of female suicide attacks on foreign media framing of conflicts. Examining the Palestinian-Israeli conflict, 2,731 articles were sampled that covered terrorist events (American, British, and Indian press); 625 appeared in the week following a female's suicide attack, 97 reported an attack by a female perpetrator. The findings suggest that foreign media discourse around female suicide bombers promotes more messages about the society within which the terrorists are embedded. Since the coverage of female terrorists tends to provide more detailed information about the perpetrator, it focuses more on the terror organizations’ side of the conflict's story.

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Misestimation: Explaining US Failures to Predict Nuclear Weapons Programs

Alexander Montgomery & Adam Mount
Intelligence and National Security, May/June 2014, Pages 357-386

Abstract:
Various policy options have been proposed for slowing or halting the spread of nuclear weapons, yet all rely on sound intelligence about the progress of nuclear aspirants. Historically, the United States' record of estimating foreign weapons programs has been uneven, overestimating the progress made by some proliferators while underestimating others. This paper seeks to catalogue and evaluate the intelligence work surrounding 16 of the 25 states that are thought to have pursued nuclear weapons and to provide a framework for evaluating the causes of distorted intelligence estimates of nuclear proliferation. In particular, we identify 12 specific hypotheses related to politics, culture, bureaucracy and organizational culture, then explore how they play out in practice through two case studies (North Korea and Israel). We find that the US has overestimated nuclear programs much more frequently than it has underestimated or correctly estimated them.

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Networks of Military Alliances, Wars, and International Trade

Matthew Jackson & Stephen Nei
Stanford Working Paper, May 2014

Abstract:
We investigate the role of networks of military alliances in preventing or encouraging wars between groups of countries. A country is vulnerable to attack if some allied group of countries can defeat the defending country and its (remaining) allies based on their collective military strengths. We show that there do not exist any networks which contain no vulnerable countries and that are stable against the pairwise addition of a new alliance as well as against the unilateral deletion of any existing alliance. We then show that economic benefits from international trade provide incentives to form alliances in ways that restore stability and prevent wars, both by increasing the density of alliances so that countries are less vulnerable and by removing the incentives of countries to attack their allies. In closing, we examine historical data on interstate wars and trade, noting that a dramatic (more than ten-fold) drop in the rate of interstate wars since 1950 is paralleled by the advent of nuclear weapons and an unprecedented growth in trade over the same period, matched with a similar densification and stabilization of alliances, consistent with the model.

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International Cooperation, Spoiling, and Transnational Terrorism

Justin Conrad & James Igoe Walsh
International Interactions, forthcoming

Abstract:
Do interstate relations influence the sources and targets of transnational terrorism? A considerable body of recent research suggests that the answer to this question is yes, and that one state may sponsor terrorist attacks to weaken the bargaining positions of other states. We suggest, in contrast, that positive or cooperative actions invite terrorist attacks from a different source: non-state groups wishing to spoil interstate cooperation that they oppose. We assess this argument with a dyadic dataset using monthly data on transnational terrorist attacks and cooperative and non-cooperative actions between states. Our results suggest that spoiling in response to interstate cooperation is an important determinant of transnational terrorism.

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The Nonproliferation Emperor Has No Clothes: The Gas Centrifuge, Supply-Side Controls, and the Future of Nuclear Proliferation

Scott Kemp
International Security, Spring 2014, Pages 39-78

Abstract:
Technology has been long understood to play a central role in limiting the proliferation of nuclear weapons. Evolving nuclear technology, increased access to information, and systematic improvements in design and manufacturing tools, however, should in time ease the proliferation challenge. Eventually, even developing countries could possess a sufficient technical ability. There is evidence that this transition has already occurred. The basic uranium-enrichment gas centrifuge, developed in the 1960s, has technical characteristics that are within reach of nearly all states, without foreign assistance or access to export-controllable materials. The history of centrifuge development in twenty countries supports this perspective, as do previously secret studies carried out by the governments of the United States and the United Kingdom. Complicating matters, centrifuges also have properties that make the detection of a clandestine program enormously difficult. If conditions for the clandestine and indigenous production of weapons have emerged, then nonproliferation institutions focused on technology will be inadequate. Although it would represent a near-foundational shift in nuclear security policy, the changed technology landscape may now necessitate a return to institutions focused instead on motivations.

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It's Easier to Decapitate a Snake than It Is a Hydra: An Analysis of Colombia's Targeted Killing Program

Matthew Morehouse
Studies in Conflict & Terrorism, July 2014, Pages 541-566

Abstract:
While the use of targeted killings by the United States and Israel has received the most press coverage, Colombia has also utilized targeted killings in its conflict with the Revolutionary Armed Forces of Colombia (FARC). Utilizing an original dataset, this study quantitatively gauges the effectiveness of Colombia's targeted killing program, by examining the influence of FARC leadership deaths upon the number and severity of FARC attacks during the years 2004 to 2011. The results suggest that the Colombian government's killing of FARC leaders has been effective in decreasing the number of attacks, but not the severity of attacks.

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Why the Internet Is Not Increasing Terrorism

David Benson
Security Studies, Spring 2014, Pages 293-328

Abstract:
Policymakers and scholars fear that the Internet has increased the ability of transnational terrorists, like al Qaeda, to attack targets in the West, even in the face of increased policing and military efforts. Although access to the Internet has increased across the globe, there has been no corresponding increase in completed transnational terrorist attacks. This analysis examines the causal logics — which have led to the conventional wisdom — and demonstrates both theoretically and empirically that the Internet is not a force multiplier for transnational terrorist organizations. Far from being at a disadvantage on the Internet, state security organs actually gain at least as much utility from the Internet as terrorist groups do, meaning that at worst the Internet leaves the state in the same position vis-à-vis terrorist campaigns as it was prior to the Internet.

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The domestic sources of China’s more assertive foreign policy

Jian Zhang
International Politics, May 2014, Pages 390–397

Abstract:
China’s more assertive policy in the East and South East Asia region since 2008 has been explained either in terms of its rising power, a belief that the United States is in decline, or even the complexities of the Chinese state’s bureaucratic political structures. This article suggests another explanation – namely that China’s more assertive strategy is an attempt to shore up legitimacy at home at a time of increasing domestic stress.

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Attacking the Leader, Missing the Mark: Why Terrorist Groups Survive Decapitation Strikes

Jenna Jordan
International Security, Spring 2014, Pages 7-38

Abstract:
Leadership targeting has become a key feature of counterterrorism policy. Both academics and policymakers have argued that the removal of leaders is an effective strategy in combating terrorism. Leadership decapitation is not always successful, however, and existing empirical work does not account for this variability. A theory of organizational resilience explains why decapitation results in the decline of some terrorist organizations and the survival of others. Organizational resilience is dependent on two variables: bureaucratization and communal support. Older and larger organizations tend to develop bureaucratic features, facilitating a clear succession process and increasing their stability and ability to withstand attacks on their leadership. Communal support plays an important role in providing the resources necessary for terrorist groups to function and survive. Religious and separatist groups typically enjoy a high degree of support from the communities in which they operate, and thus access to critical resources. Application of this theoretical model to the case of al-Qaida reveals that Osama bin Laden’s death and the subsequent targeting of other high-level al-Qaida operatives are unlikely to produce significant organizational decline.

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Technology and the Era of the Mass Army

Massimiliano Gaetano Onorato, Kenneth Scheve & David Stasavage
Journal of Economic History, June 2014, Pages 449-481

Abstract:
We investigate how technology has influenced the size of armies. During the nineteenth century, the development of the railroad made it possible to field and support mass armies, significantly increasing the observed size of military forces. During the late twentieth century, further advances in technology made it possible to deliver explosive force from a distance and with precision, making mass armies less desirable. We find support for our technological account using a new data set covering thirteen great powers between 1600 and 2000. We find little evidence that the French Revolution was a watershed in terms of levels of mobilization.

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The Who, What, and Why of Human Intelligence Gathering: Self-Reported Measures of Interrogation Methods

Allison Redlich, Christopher Kelly & Jeaneé Miller
Applied Cognitive Psychology, forthcoming

Abstract:
A great deal of research in the past two decades has been devoted to interrogation and interviewing techniques. This study contributes to the existing literature using an online survey to examine the frequency of use and perceived effectiveness of interrogation methods for up to 152 military and federal-level interrogators from the USA. We focus on the who (objective and subjective interrogator characteristics), the what (situational and detainee characteristics), and the why (intended goal of interrogation). Results indicate that rapport and relationship-building techniques were employed most often and perceived as the most effective regardless of context and intended outcome, particularly in comparison to confrontational techniques. In addition, context was found to be important in that depending on the situational and detainee characteristics and goal, interrogation methods were viewed as more or less effective.

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First Steps Towards Hearts and Minds? USAID's Countering Violent Extremism Policies in Africa

Daniel Aldrich
Terrorism and Political Violence, Summer 2014, Pages 523-546

Abstract:
The United States government has adopted new approaches to counter violent extremist organizations around the world. “Soft security” and development programs include focused educational training for groups vulnerable to terrorist recruitment, norm messaging through local radio programming, and job creation in rural communities. This article evaluates the effectiveness of one set of these multi-vectored, community-level programs through data from 200 respondents in two similar, neighboring towns in northern Mali, Africa. The data show that residents in Timbuktu who were exposed to the programming for up to five years displayed measurably altered civic behavior and listening patterns in comparison with their counterparts in the control town of Diré, which had no programming (controlling for potential covariates including age, ethnicity, and political and socioeconomic conditions). However, there was little measurable difference between the groups in terms of their cultural identities and attitudes towards the West. While this study is unable to definitively prove a causal connection between programming and behavioral outcomes, it nonetheless strongly suggests that the process of “winning hearts and minds” can be effective at certain levels but may require extended time and dedicated resources to generate higher-level results.

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The Changing Nonlinear Relationship between Income and Terrorism

Walter Enders, Gary Hoover & Todd Sandler
Journal of Conflict Resolution, forthcoming

Abstract:
This article reinvestigates the relationship between real per capita gross domestic product (GDP) and terrorism. We devise a terrorism Lorenz curve to show that domestic and transnational terrorist attacks are each more concentrated in middle-income countries, thereby suggesting a nonlinear income–terrorism relationship. Moreover, this point of concentration shifted to lower income countries after the rising influence of the religious fundamentalist and nationalist/separatist terrorists in the early 1990s. For transnational terrorist attacks, this shift characterized not only the attack venue but also the perpetrators’ nationality. The article then uses nonlinear smooth transition regressions to establish the relationship between real per capita GDP and terrorism for eight alternative terrorism samples, accounting for venue, perpetrators’ nationality, terrorism type, and the period. Our nonlinear estimates are shown to be favored over estimates using linear or quadratic income determinants of terrorism. These nonlinear estimates are robust to additional controls.

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The Changing Face of Terrorism in the 21st Century: The Communications Revolution and the Virtual Community of Hatred

Jerrold Post, Cody McGinnis & Kristen Moody
Behavioral Sciences & the Law, May/June 2014, Pages 306–334

Abstract:
There are no psychological characteristics or psychopathology separating terrorists from the general population. Rather, it is group dynamics, with a particular emphasis on collective identity, that helps to explain terrorist psychology. Just as there is a diverse spectrum of kinds of terrorism, so too is there a spectrum of terrorist psychologies. Some terrorists, those in nationalist-separatist groups, such as Fatah and the IRA, are continuing with the mission of their parents who are dissident to the regime. The opposite generational provenance is seen among social-revolutionary terrorists, such as the Weather Underground and the Red Army Faction in Germany, who are rebelling against their parents’ generation, which is loyal to the regime. Four waves of terrorism can be distinguished: the “anarchist wave”; the “anti-colonial wave” (nationalist-separatist), with minority groups seeking to be liberated from their colonial masters or from the majority in their country; the “new left” wave (social-revolutionary); and now the “religious” wave. With the communications revolution, a new phenomenon is emerging which may presage a fifth wave: lone wolf terrorists who through the Internet are radicalized and feel they belong to the virtual community of hatred. A typology of lone wolf terrorism is proposed.

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Mechanisms of Convergence in Domestic Counter-Terrorism Regulations: American Influence, Domestic Needs, and International Networks

Jesse Paul Lehrke & Rahel Schomaker
Studies in Conflict & Terrorism, forthcoming

Abstract:
This article seeks to determine the mechanism(s) behind the convergence of domestic counter-terrorism regulations that has been noted across many OECD countries. Four hypotheses are developed and tested through regression analyses. These hypotheses examine (1) US influence, operationalized though a unique US footprint indictor; (2) national characteristics; (3) the extent to which states’ domestic structures match; and (4) international networks. We find little support that US influence matters. The international influence that does exist seems to operate through networks promoting learning, especially following a rise in the general global threat level. National characteristics as a driver also find some support.

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Institutional Opposition, Regime Accountability, and International Conflict

Daina Chiba & Songying Fang
Journal of Politics, forthcoming

Abstract:
Can international organizations constrain a leader’s behavior during a military crisis? Existing studies have shown that joint membership in international organizations reduces the likelihood of dispute initiation; however, whether institutional opposition can prevent an ongoing conflict from escalating has yet to be investigated. We develop and test a theory of how domestic politics provides a mechanism through which international organizations can reverse the course of a military crisis. The argument leads to the hypothesis that more accountable regimes are less likely to escalate military crises when an international organization opposes their actions. We test the hypothesis with an analysis of territorial disputes from 1946 to 1995. We find that while neither institutional opposition nor the degree of regime accountability independently reduces the tendency for a country to escalate a conflict, the joint effect of the two does.

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Women as Policy Makers and Donors: Female Legislators and Foreign Aid

Daniel Hicks, Joan Hamory Hicks & Beatriz Maldonado
University of Oklahoma Working Paper, May 2014

Abstract:
This paper investigates whether the gender composition of national legislatures in donor countries impacts the level, composition, and pattern of foreign aid. We provide causal evidence that the election of female legislators leads countries to increase aid both in total and as a percentage of GDP. Our estimates suggest that, consistent with the existing evidence for domestic expenditures, the empowerment of women in national legislatures leads to higher levels of aid for specific projects such as education and health. These increased flows occur predominately through bilateral aid and reflect a redistribution of aid towards developing countries and for humanitarian purposes in particular.

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Leader Turnover, Institutions, and Voting at the UN General Assembly

Alastair Smith
Journal of Conflict Resolution, forthcoming

Abstract:
Using evidence from voting in the UN General Assembly (UNGA), this article shows that leader turnover, especially in small coalition, nondemocratic systems, increases the likelihood of policy realignment. Autocrats who are beholden to only a small proportion of the population represent the foreign policy interests of their small number of supporters. When leader turnover occurs, the interests represented often shift too and this results in an increased volatility and regression toward a neutral position of a nation’s alignment at the United Nations vis-à-vis the United States. While such realignments can offer an opportunity to reduce enmity between states, they can also signal growing differences between friends. The impact of leaders change in large coalitions produces more moderate shifts in alignments.

By KEVIN LEWIS | 09:00:00 AM

Sunday, June 22, 2014

A little help

The Price of Being Beautiful: Negative Effects of Attractiveness on Empathy for Children in Need

Robert Fisher & Yu Ma
Journal of Consumer Research, forthcoming

Abstract:
The research examines how the attractiveness of children in need affects the empathy they evoke and the subsequent help they receive from unrelated adults. We find that attractive children are attributed desirable characteristics related to social competence, which is consistent with the beautiful is good stereotype. Ironically, we find that these attributions reduce the empathy evoked by attractive children and the help they receive from unrelated adults as long as their need is not severe. We demonstrate these effects in four experiments. The research identifies a significant cost of being beautiful and an important exception to the beautiful is good stereotype. The results also have practical implications for how children are portrayed in promotional materials for disaster relief agencies, children’s hospitals, and other charities.

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Social Heterogeneity and Volunteering in U.S. Cities

Thomas Rotolo & John Wilson
Sociological Forum, June 2014, Pages 429–452

Abstract:
In this research we explore the relationship between social heterogeneity and volunteering across U.S. metropolitan areas testing a theory that race heterogeneity, racial segregation, and income inequality are negatively associated with the rate of volunteering. Theorizing that social heterogeneity will have different effects for religious and secular volunteering rates, we analyze them separately. We use nonlinear multilevel models to analyze nearly 200,000 individuals across 248 cities, controlling for nonprofits per capita, religious congregations per capita, proportion of the population with college degrees, and the family poverty rate. While much of the intercity variation in volunteering is due to the composition of the population living in each city, we find general support for the predicted negative effect of social heterogeneity on volunteering. However, the effects vary by volunteering type. Race heterogeneity is negatively related only to secular volunteering, racial segregation is negatively related to both general volunteering and secular volunteering, and income inequality is negatively related to all types of volunteering.

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The Chicago Fire of 1871: A bottom-up approach to disaster relief

Emily Skarbek
Public Choice, July 2014, Pages 155-180

Abstract:
Can bottom-up relief efforts lead to recovery after disasters? Conventional wisdom and contemporary public policy suggest that major crises require centralized authority to provide disaster relief goods. Using a novel set of comprehensive donation and expenditure data collected from archival records, this paper examines a bottom-up relief effort following one of the most devastating natural disasters of the nineteenth century: the Chicago Fire of 1871. Findings show that while there was no central government relief agency present, individuals, businesses, corporate entities and municipal governments were able to finance the relief effort though donations. The Chicago Relief and Aid Society, a voluntary association of agents with a stake in relief outcomes, leveraged organizational assets and constitutional rules to administer aid.

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A Field Experiment on Directed Giving at a Public University

Catherine Eckel, David Herberich & Jonathan Meer
NBER Working Paper, May 2014

Abstract:
The use of directed giving - allowing donors to target their gifts to specific organizations or functions - is pervasive in fundraising, yet little is known about its effectiveness. We conduct a field experiment at a public university in which prospective donors are presented with either an opportunity to donate to the unrestricted Annual Fund, or an opportunity of donating to the Annual Fund and directing some or all of their donation towards the academic college from which they graduated. While there is no effect on the probability of giving, donations are significantly larger when there is the option of directing. However, the value of the option does not come directly from use, as very few donors choose to direct their gift.

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An Upward Spiral Between Gratitude and Humility

Elliott Kruse et al.
Social Psychological and Personality Science, forthcoming

Abstract:
In two experiments and one diary study, we examined the relationship between self- and other-oriented processes by considering how gratitude can influence humility and vice versa. Humility is characterized by low self-focus, secure sense of self, and increased valuation of others. Gratitude is marked by a sense that one has benefited from the actions of another. In the first experiment, participants who wrote a gratitude letter showed higher state humility than those who performed a neutral activity. In the second experiment, baseline state humility predicted the amount of gratitude felt after writing a gratitude letter compared to a neutral activity. Finally, in a 14-day diary study, humility and gratitude mutually predicted one another, even after controlling for the other’s prior level. Our results suggest that humility and gratitude are mutually reinforcing.

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Be Fair, Your Employees Are Watching: A Relational Response Model of External Third-Party Justice

Benjamin Dunford et al.
Personnel Psychology, forthcoming

Abstract:
There is growing theoretical recognition in the organizational justice literature that an organization's treatment of external parties (such as patients, community members, customers, and the general public) shapes its own employees’ attitudes and behavior toward it. However, the emerging third-party justice literature has an inward focus, emphasizing perceptions of the treatment of other insiders (e.g., co-workers or team members). This inward focus overlooks meaningful “outward” employee concerns relating to how organizations treat external parties. We propose a relational response model to advance the third-party justice literature asserting that the organization's fair treatment of external parties sends important relational signals to employees that shape their social exchange perceptions toward their employer. Supporting this proposition, in two multi-source studies in separate healthcare organizations we found that patient-directed justice had indirect effects on supervisory cooperative behavior ratings through organizational trust and organizational identification.

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Paying it forward: How helping others can reduce the psychological threat of receiving help

Katherina Alvarez & Esther van Leeuwen
Journal of Applied Social Psychology, forthcoming

Abstract:
This paper shows that receiving help could be psychologically harmful for recipients, and passing on help to others after receiving help (“helping forward”) is a good strategy to improve and restore help recipients' self-competence. Participants (N = 87) received autonomy- or dependency-oriented help and anticipated helping forward or not. Compared to receiving autonomy-oriented help, receiving dependency-oriented help negatively affected participants' self-competence and their evaluation of the helper. Anticipation of future helping increased the liking for and evaluation of the helper. After paying help forward, participants felt more self-competent than before helping, and this effect was more pronounced among former recipients of dependency-oriented help. These results show that helping forward can negate the psychological threat associated with receiving help.

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Unofficial Development Assistance: A Model of Development Charities’ Donation Income

Wiji Arulampalam, Peter Backus & John Micklewright
Oxford Bulletin of Economics and Statistics, forthcoming

Abstract:
The empirical literature on the determinants of charities’ donation income, distinguishing the charitable cause, is small. We consider the case of development charities specifically. Using a panel covering a quarter of a century, we observe a strong fundraising effect and a unitary household income elasticity. We find evidence that the conventionally identified ‘price’ effect may simply be the product of omitted variable bias. Our results further suggest that public spending on development crowds in private donations for development. We find a positive spillover effect of fundraising, suggesting the efforts of one development charity may increase contributions to other development charities.

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Sweetened blood sweetens behavior: Ego depletion, glucose, guilt, and prosocial behavior

Hanyi Xu et al.
Appetite, October 2014, Pages 8–11

Abstract:
Although guilt feels bad to the individual, it is good for society because guilty feelings can prompt people to perform good deeds. Previous research shows that fatigue decreases guilty feelings and helpful behavior. This present research tests whether glucose restores guilty feelings and increases helpful behavior. Depleted participants watched a movie about butchering animals for their meat or skin and were told to express no emotions, whereas non-depleted participants watched the same movie, but could express their emotions. Afterwards they drank a glucose or placebo beverage. Having participants play a game in which another person was punished for their errors induced guilt. Finally, participants played a dictator game in which they could leave lottery tickets for the next participant. Depleted participants felt less guilty and helped less than non-depleted participants, and those who consumed a placebo beverage felt less guilt and helped less than those who consumed a glucose beverage.

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Helping the self help others: Self-affirmation increases self-compassion and pro-social behaviors

Emily Lindsay & David Creswell
Frontiers in Psychology, May 2014

Abstract:
Reflecting on an important personal value in a self-affirmation activity has been shown to improve psychological functioning in a broad range of studies, but the underlying mechanisms for these self-affirmation effects are unknown. Here we provide an initial test of a novel self-compassion account of self-affirmation in two experimental studies. Study 1 shows that an experimental manipulation of self-affirmation (3-min of writing about an important personal value vs. writing about an unimportant value) increases feelings of self-compassion, and these feelings in turn mobilize more pro-social behaviors to a laboratory shelf-collapse incident. Study 2 tests and extends these effects by evaluating whether self-affirmation increases feelings of compassion toward the self (consistent with the self-compassion account) or increases feelings of compassion toward others (an alternative other-directed compassion account), using a validated storytelling behavioral task. Consistent with a self-compassion account, Study 2 demonstrates the predicted self-affirmation by video condition interaction, indicating that self-affirmation participants had greater feelings of self-compassion in response to watching their own storytelling performance (self-compassion) compared to watching a peer’s storytelling performance (other-directed compassion). Further, pre-existing levels of trait self-compassion moderated this effect, such that self-affirmation increased self-compassionate responses the most in participants low in trait self-compassion. This work suggests that self-compassion may be a promising mechanism for self-affirmation effects, and that self-compassionate feelings can mobilize pro-social behaviors.

By KEVIN LEWIS | 09:00:00 AM

Saturday, June 21, 2014

Team Player

The Too-Much-Talent Effect: Team Interdependence Determines When More Talent Is Too Much or Not Enough

Roderick Swaab et al.
Psychological Science, forthcoming

Abstract:
Five studies examined the relationship between talent and team performance. Two survey studies found that people believe there is a linear and nearly monotonic relationship between talent and performance: Participants expected that more talent improves performance and that this relationship never turns negative. However, building off research on status conflicts, we predicted that talent facilitates performance — but only up to a point, after which the benefits of more talent decrease and eventually become detriments as intrateam coordination suffers. We also predicted that the level of task interdependence is a key determinant of when more talent is detrimental rather than beneficial. Three archival studies revealed that the too-much-talent effect emerged when team members were interdependent (football and basketball) but not independent (baseball). Our basketball analysis established the mediating role of team coordination. When teams need to come together, more talent can tear them apart.

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Handshaking Promotes Cooperative Dealmaking

Juliana Schroeder et al.
Harvard Working Paper, May 2014

Abstract:
Humans use subtle sources of information — like nonverbal behavior — to determine whether to act cooperatively or antagonistically when they negotiate. Handshakes are particularly consequential nonverbal gestures in negotiations because people feel comfortable initiating negotiations with them and believe they signal cooperation (Study 1). We show that handshakes increase cooperative behaviors, affecting outcomes for integrative and distributive negotiations. In two studies with MBA students, pairs who shook hands before integrative negotiations obtained higher joint outcomes (Studies 2a and 2b). Pairs randomly assigned to shake hands were more likely to openly reveal their preferences on trade-off issues, which improved joint outcomes (Study 3). In a fourth study using a distributive negotiation, pairs of executives assigned to shake hands were less likely to lie about their preferences and crafted agreements that split the bargaining zone more equally. Together, these studies show that handshaking promotes the adoption of cooperative strategies and influences negotiation outcomes.

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Cynicism in negotiation: When communication increases buyers’ skepticism

Eyal Ert, Stephanie Creary & Max Bazerman
Judgment and Decision Making, May 2014, Pages 191–198

Abstract:
The economic literature on negotiation shows that strategic concerns can be a barrier to agreement, even when the buyer values the good more than the seller. Yet behavioral research demonstrates that human interaction can overcome these strategic concerns through communication. We show that there is also a downside of this human interaction: cynicism. Across two studies we focus on a seller-buyer interaction in which the buyer has uncertain knowledge about the goods for sale, but has a positive expected payoff from saying “yes” to the available transaction. Study 1 shows that most buyers accept offers made by computers, but that acceptance rates drop significantly when offers are made by human sellers who communicate directly with buyers. Study 2 clarifies that this effect results from allowing human sellers to communicate with buyers, and shows that such communication focuses the buyers’ attention on the seller’s trustworthiness. The mere situation of negotiated interaction increases buyers’ attention to the sellers’ self-serving motives and, consequently, buyers’ cynicism. Unaware of this downside of interaction, sellers actually prefer to have the opportunity to communicate with buyers.

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“I am Disgusted by Your Proposal”: The Effects of a Strategic Flinch in Negotiations

Neil Fassina & Glen Whyte
Group Decision and Negotiation, July 2014, Pages 901-920

Abstract:
To flinch in negotiations refers to verbal or physical displays of shock, disgust, or disbelief made in response to an opening offer. We investigated the impact of advising negotiators to strategically flinch in distributive bargaining. In experiment 1, negotiators who flinched claimed significantly more value than negotiators who did not flinch. Targets of a flinch, however, viewed the negotiation relationship less positively than negotiators in a control condition. Yet, flinching appeared to have no effect on the target negotiators’ perceptions of how well they did. In experiment 2, the notion that a subtle flinch might still facilitate value claiming but without imperilling the bargaining relationship was supported. Implications for negotiation theory and practice, and directions for future research, are discussed.

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Measuring Aggregate Social Capital Using Census Response Rates

David Martin & Benjamin Newman
American Politics Research, forthcoming

Abstract:
Despite the importance of social capital to political science research, conventional means of measuring it are subject to a range of problems, including nonresponse bias, declining validity over time, and/or a lack of conceptual coherence. We argue that, in the case of the United States, rates of response to the decennial census represent a powerful yet overlooked measure for aggregate social capital. In this research note, we elaborate a theoretical rationale for the measure and empirically validate it, showing across multiple data sets and levels of geographic aggregation that census response rates (CRR) strongly predict various dimensions of social capital. Our findings highlight an important opportunity for social capital scholars to use existing governmental data to better measure geospatial variation in a key social science construct.

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Amazonian horticulturalists live in larger, more related groups than hunter-gatherers

Robert Walker
Evolution and Human Behavior, forthcoming

Abstract:
The relatedness of human groups has important ramifications for kin (group) selection to favor more collective action and invites the potential for more exploitation by political leaders. Endogamous marriages among kin create intensive kinship systems with high group relatedness, while exogamous marriages among nonrelatives create extensive kinship with low group relatedness. Here, a sample of 58 societies (7,565 adults living in 353 residential groups) shows that average group relatedness is higher in lowland horticulturalists than in hunter-gatherers. Higher relatedness in horticulturalists is remarkable given that village sizes are larger, harboring over twice the average number of adults than in hunter-gatherer camps. The relatedness differential between subsistence regimes increases for larger group sizes. Large and dense networks of kin may have favored an increased propensity for some forms of in-group cooperation and political inequality that emerged relatively recently in human history, after the advent of farming.

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“Do the Right Thing:” The Effects of Moral Suasion on Cooperation

Ernesto Dal Bó & Pedro Dal Bó
Journal of Public Economics, September 2014, Pages 28–38

Abstract:
The use of moral appeals to affect the behavior of others is pervasive (from the pulpit to ethics classes) but little is known about the effects of moral suasion on behavior. In a series of experiments we study whether moral suasion affects behavior in voluntary contribution games and the mechanisms by which behavior is altered. We find that observing a message with a moral standard according to the golden rule or, alternatively, utilitarian philosophy, results in a significant but transitory increase in contributions above the levels observed for subjects that did not receive a message or received a message that advised them to contribute without a moral rationale. When players have the option of punishing each other after the contribution stage, the effect of the moral messages on contributions becomes persistent: punishments and moral messages interact to sustain cooperation. We also investigate the mechanisms through which moral suasion operates and find it affects both expectations and preferences.

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Raising the Price of Talk: An Experimental Analysis of Transparent Leadership

Daniel Houser et al.
Journal of Economic Behavior & Organization, forthcoming

Abstract:
Does transparent leadership promote cooperative groups? We address this issue using a public goods experiment with exogenously selected leaders who are able to send non-binding contribution suggestions to the group. To investigate the effect of transparency in this setting we vary the ease with which a leader's actions are known by the group. We find leaders’ suggestions encourage cooperation in all treatments, but that both leaders and their group members are more likely to follow leaders’ recommendations when institutions are transparent so that non-leaders can easily see what the leader does. Consequently, transparency leads to significantly more cooperation, higher group earnings and reduced variation in contributions among group members.

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Physical Attractiveness and Cooperation in a Prisoner’s Dilemma Game

Mizuho Shinada & Toshio Yamagishi
Evolution and Human Behavior, forthcoming

Abstract:
The modulating role of age on the relationship between physical attractiveness and cooperativeness in a prisoner’s dilemma game (PDG) was investigated. Previous studies have shown that physical attractiveness is negatively related to cooperative choices among young men but not young women. Following the argument that the negative relationship between physical attractiveness and cooperation is a product of short-term mating strategies among attractive men, we predicted that this relationship is unique to young men and absent among women and older men. We tested this hypothesis with 175 participants (aged 22–69 years). The results showed that physical attractiveness was negatively related to cooperative behavior among young men but not among women or older men. We further observed that the negative relationship between physical attractiveness and cooperation among young men was particularly strong when attractiveness was judged by women.

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The temporal course of the influence of anxiety on fairness considerations

Yi Luo et al.
Psychophysiology, forthcoming

Abstract:
This study investigated the potential causes of anxious people's social avoidance. The classic ultimatum game was utilized in concert with electroencephalogram recording. Participants were divided into two groups according to levels of trait anxiety as identified by a self-report scale. The behavioral results indicate that high-anxious participants were more prone to reject human-proposed than computer-proposed unequal offers compared to their low-anxious counterparts. The event-related potential results indicate that the high-anxious group showed a larger feedback-related negativity when receiving unequal monetary offers than equal ones, and a larger P3 when receiving human-proposed offers than computer-proposed ones, but these effects were absent in the low-anxious group. We suggest anxious people's social avoidance results from hypersensitivity to unequal distributions during interpersonal interactions.

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Social learning in cooperative dilemmas

Shakti Lamba
Proceedings of the Royal Society: Biological Sciences, 22 July 2014

Abstract:
Helping is a cornerstone of social organization and commonplace in human societies. A major challenge for the evolutionary sciences is to explain how cooperation is maintained in large populations with high levels of migration, conditions under which cooperators can be exploited by selfish individuals. Cultural group selection models posit that such large-scale cooperation evolves via selection acting on populations among which behavioural variation is maintained by the cultural transmission of cooperative norms. These models assume that individuals acquire cooperative strategies via social learning. This assumption remains empirically untested. Here, I test this by investigating whether individuals employ conformist or payoff-biased learning in public goods games conducted in 14 villages of a forager–horticulturist society, the Pahari Korwa of India. Individuals did not show a clear tendency to conform or to be payoff-biased and are highly variable in their use of social learning. This variation is partly explained by both individual and village characteristics. The tendency to conform decreases and to be payoff-biased increases as the value of the modal contribution increases. These findings suggest that the use of social learning in cooperative dilemmas is contingent on individuals' circumstances and environments, and question the existence of stably transmitted cultural norms of cooperation.

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Strategic Social Learning And The Population Dynamics Of Human Behavior: The Game Of Go

Bret Alexander Beheim, Calvin Thigpen & Richard Mcelreath
Evolution and Human Behavior, forthcoming

Abstract:
Human culture is widely believed to undergo evolution, via mechanisms rooted in the nature of human cognition. A number of theories predict the kinds of human learning strategies, as well as the population dynamics that result from their action. There is little work, however, that quantitatively examines the evidence for these strategies and resulting cultural evolution within human populations. One of the obstacles is the lack of individual-level data with which to link transmission events to larger cultural dynamics. Here, we address this problem with a rich quantitative database from the East Asian board game known as Go. We draw from a large archive of Go games spanning the last six decades of professional play, and find evidence that the evolutionary dynamics of particular cultural variants are driven by a mix of individual and social learning processes. Particular players vary dramatically in their sensitivity to population knowledge, which also varies by age and nationality. The dynamic patterns of opening Go moves are consistent with an ancient, ongoing arms race within the game itself.

By KEVIN LEWIS | 09:00:00 AM


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