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Wednesday, April 23, 2014

Trading up

Wisdom of Crowds: The Value of Stock Opinions Transmitted Through Social Media

Hailiang Chen et al.
Review of Financial Studies, May 2014, Pages 1367-1403

Abstract:
Social media has become a popular venue for individuals to share the results of their own analysis on financial securities. This paper investigates the extent to which investor opinions transmitted through social media predict future stock returns and earnings surprises. We conduct textual analysis of articles published on one of the most popular social media platforms for investors in the United States. We also consider the readers' perspective as inferred via commentaries written in response to these articles. We find that the views expressed in both articles and commentaries predict future stock returns and earnings surprises.

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Exuberance Out of Left Field: Do Sports Results Cause Investors to Take Their Eyes Off the Ball?

Christos Pantzalis & Jung Chul Park
Journal of Economic Behavior & Organization, forthcoming

Abstract:
This study investigates whether stock price performance contains a sizeable component that emanates from local sports sentiment. We measure sports sentiment by the performance of sports teams from the four major professional sports leagues (NFL, MLB, NBA, and NHL) that are based nearby firms’ headquarters. We find that concurrent stock returns and sports performances associated with the same locality are highly correlated. Consistent with the notion that mispricing is indeed caused by sports sentiment, we also determine that sentiment is related to a subsequent gradual return reversal, which occurs over the following three year period. In addition, we confirm that local comovement is more pronounced in the presence of sports sentiment in support of the notion that local stock preference of relatively less sophisticated retail investors can be driven by factors that are not information-based. Finally, we devise investment strategies based on recent past observations of sports sentiment and find that they generate sizable abnormal returns, especially in cases of firms located in areas where fan base support appears to be stronger.

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Did Regulation Fair Disclosure, SOX, and Other Analyst Regulations Reduce Security Mispricing?

Edward Lee, Norman Strong & Zhenmei (Judy) Zhu
Journal of Accounting Research, forthcoming

Abstract:
Between 2000 and 2003 a series of disclosure and analyst regulations curbing abusive financial reporting and analyst behavior were enacted to strengthen the information environment of U.S. capital markets. We investigate whether these regulations reduced security mispricing and increased stock market efficiency. After the regulations, we find a significant reduction in short-term stock price continuation following analyst forecast revisions and earnings announcements. The effect was more pronounced among higher information uncertainty firms, where we expect security valuation to be most sensitive to regulation. Analyst forecast accuracy also improved in these firms, consistent with reduced mispricing being due to an improved corporate information environment following the regulations. Our findings are robust to controls for time trends, trading activity, the financial crisis, analyst coverage, delistings, and changes in information uncertainty proxies. We find no concurrent effect among European firms and a regression discontinuity design supports our identification of a regulatory effect.

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Attracting Investor Attention through Advertising

Dong Lou
Review of Financial Studies, forthcoming

Abstract:
This paper provides evidence that managers adjust firm advertising, in part, to attract investor attention and influence short-term stock returns. First, I show that increased advertising spending is associated with a contemporaneous rise in retail buying and abnormal stock returns, and is followed by lower future returns. Second, I document a significant increase in advertising spending prior to insider sales and a significant decrease in the subsequent year. Additional analyses suggest that the inverted V-shaped pattern in advertising spending around insider sales is most consistent with managers' opportunistically adjusting firm advertising to exploit the temporary return effect to their own benefit.

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Rating Agencies

Harold Cole & Thomas Cooley
NBER Working Paper, March 2014

Abstract:
For decades credit rating agencies were viewed as trusted arbiters of creditworthiness and their ratings as important tools for managing risk. The common narrative is that the value of ratings was compromised by the evolution of the industry to a form where issuers pay for ratings. In this paper we show how credit ratings have value in equilibrium and how reputation insures that, in equilibrium, ratings will reflect sound assessments of credit worthiness. There will always be an information distortion because of the fact that purchasers of ratings need not reveal them. We argue that regulatory reliance on ratings and the increasing importance of risk-weighted capital in prudential regulation have more likely contributed to distorted ratings than the matter of who pays for them. In this respect, much of the regulatory obsession with the conflict created by issuers paying for ratings is a distraction.

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Have Rating Agencies Become More Conservative? Implications for Capital Structure and Debt Pricing

Ramin Baghai, Henri Servaes & Ane Tamayo
Journal of Finance, forthcoming

Abstract:
Rating agencies have become more conservative in assigning corporate credit ratings over the period 1985 to 2009; holding firm characteristics constant, average ratings have dropped by three notches. This change does not appear to be fully warranted because defaults have declined over this period. Firms affected more by conservatism issue less debt, have lower leverage, hold more cash, are less likely to obtain a debt rating, and experience lower growth. Their debt spreads are lower than those of unaffected firms with the same rating, which implies that the market partly undoes the impact of conservatism on debt prices. This evidence suggests that firms and capital markets do not perceive the increase in conservatism to be fully warranted.

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Predicting anomaly performance with politics, the weather, global warming, sunspots, and the stars

Robert Novy-Marx
Journal of Financial Economics, May 2014, Pages 137–146

Abstract:
Predictive regressions find that the party of the US president, the weather in Manhattan, global warming, the El Niño phenomenon, sunspots, and the conjunctions of the planets all have significant power predicting the performance of popular anomalies. The interpretation of these results has important implications for the asset pricing literature.

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Market-based Credit Ratings

Drew Creal, Robert Gramacy & Ruey Tsay
Journal of Business & Economic Statistics, forthcoming

Abstract:
We present a methodology for rating in real-time the creditworthiness of public companies in the U.S. from the prices of traded assets. Our approach uses asset pricing data to impute a term structure of risk neutral survival functions or default probabilities. Firms are then clustered into ratings categories based on their survival functions using a functional clustering algorithm. This allows all public firms whose assets are traded to be directly rated by market participants. For firms whose assets are not traded, we show how they can be indirectly rated by matching them to firms that are traded based on observable characteristics. We also show how the resulting ratings can be used to construct loss distributions for portfolios of bonds. Finally, we compare our ratings to Standard & Poors and find that, over the period 2005 to 2011, our ratings lead theirs for firms that ultimately default.

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The Long-Run Role of the Media: Evidence from Initial Public Offerings

Laura Xiaolei Liu, Ann Sherman & Yong Zhang
Management Science, forthcoming

Abstract:
The unique characteristics of the U.S. initial public offering (IPO) process, particularly the strict quiet period regulations, allow us to explore the effects of media coverage when the coverage does not contain genuine news (i.e., hard information that was previously unknown). We show that a simple, objective measure of pre-IPO media coverage is positively related to the stock's long-term value, liquidity, analyst coverage, and institutional investor ownership. Our results are robust to additional controls for size, to using abnormal or excess media, and to an instrumental variable approach. We also find that pre-IPO media coverage is negatively related to future expected returns, measured by the implied cost of capital. In all, we find a long-term role for media coverage, consistent with Merton's attention or investor recognition hypothesis.

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Leverage and Beliefs: Personal Experience and Risk Taking in Margin Lending

Peter Koudijs & Hans-Joachim Voth
NBER Working Paper, March 2014

Abstract:
What determines risk-bearing capacity and the amount of leverage in financial markets? Using unique archival data on collateralized lending, we show that personal experience can affect individual risk-taking and aggregate leverage. When an investor syndicate speculating in Amsterdam in 1772 went bankrupt, many lenders were exposed. In the end, none of them actually lost money. Nonetheless, only those at risk of losing money changed their behavior markedly – they lent with much higher haircuts. The rest continued as before. The differential change is remarkable since the distress was public knowledge. Overall leverage in the Amsterdam stock market declined as a result.

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Equity Analyst Recommendations: A Case for Affirmative Disclosure?

William Baker & Gregory Dumont
Journal of Consumer Affairs, Spring 2014, Pages 96–123

Abstract:
The financial well-being of retail investors is impacted by the quality of their investment decisions. Inaccurate or misleading financial information that is misconstrued by investors to be reliable can compromise decision making. This research reports on the results of three studies that show despite the fact that equities with “buy” ratings significantly underperform equities with “hold” ratings, retail investors rely on them when making investment decisions. It also shows analysts' guidance remains inaccurate in the aggregate despite the passage of Sarbanes-Oxley and related legislation/regulation. This article begins a conversation on the implications of this dilemma, specifically the value of affirmative disclosure as a remedy.

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Short Sellers and Innovation: Evidence from a Quasi-Natural Experiment

Jie He & Xuan Tian
University of Georgia Working Paper, January 2014

Abstract:
We examine the causal effect of short selling on innovation. Using exogenous variation in short-selling costs generated by a quasi-natural experiment, Regulation SHO, which randomly assigns a subsample of the Russell 3000 index firms into a pilot program, we show that short selling has a positive, causal effect on firm innovation. The positive effect of short selling on innovation is more pronounced when firms are subject to greater agency problems between shareholders and managers and a higher degree of information asymmetry. Our evidence is consistent with the hypothesis that short sellers encourage innovation both by disciplining managers through their active trading and monitoring and by mitigating information asymmetry through their information production activities about firm fundamentals. Our paper provides new insights into the real effects of short selling and has important policy implications for security laws and regulations that aim to encourage innovation.

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Does Short Selling Amplify Price Declines or Align Stocks with Their Fundamental Values?

Asher Curtis & Neil Fargher
Management Science, forthcoming

Abstract:
Critics of short selling argue that short sellers amplify price declines by targeting firms with falling prices in an unwarranted manner. Contrary to this viewpoint, we find that increases in short interest for firms following a price decline are associated with measures of overpricing based on financial statement analysis. Our results extend to short-selling activity following marketwide declines. We also find evidence consistent with the profitability of short selling following price declines being driven by valuation-based positions. Overall, our findings suggest short sellers primarily undertake valuation-based strategies following price declines and have implications for regulators. Limiting short selling following price declines is likely to impede efficient price discovery.

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Connected Stocks

Miguel Antón & Christopher Polk
Journal of Finance, forthcoming

Abstract:
We connect stocks through their common active mutual fund owners. We show that the degree of shared ownership forecasts cross-sectional variation in return correlation, controlling for exposure to systematic return factors, style and sector similarity, and many other pair characteristics. We argue that shared ownership causes this excess comovement based on evidence from a natural experiment — the 2003 mutual fund trading scandal. These results motivate a novel cross-stock-reversal trading strategy exploiting information in ownership connections. We show that long-short hedge fund index returns covary negatively with this strategy, suggesting these funds may exacerbate this excess comovement.

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Scale and Skill in Active Management

Lubos Pastor, Robert Stambaugh & Lucian Taylor
NBER Working Paper, February 2014

Abstract:
We empirically analyze the nature of returns to scale in active mutual fund management. We find strong evidence of decreasing returns at the industry level: As the size of the active mutual fund industry increases, a fund's ability to outperform passive benchmarks declines. At the fund level, all methods considered indicate decreasing returns, but estimates that avoid econometric biases are insignificant. We also find that the active management industry has become more skilled over time. This upward trend in skill coincides with industry growth, which precludes the skill improvement from boosting fund performance. Finally, we find that performance deteriorates over a typical fund's lifetime. This result can also be explained by industry-level decreasing returns to scale.

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Winners in the spotlight: Media coverage of fund holdings as a driver of flows

David Solomon, Eugene Soltes & Denis Sosyura
Journal of Financial Economics, forthcoming

Abstract:
We show that media coverage of mutual fund holdings affects how investors allocate money across funds. Fund holdings with high past returns attract extra flows, but only if these stocks were recently featured in the media. In contrast, holdings that were not covered in major newspapers do not affect flows. We present evidence that media coverage tends to contribute to investors’ chasing of past returns rather than facilitate the processing of useful information in fund portfolios. Our evidence suggests that media coverage can exacerbate investor biases and that it is the primary mechanism that makes fund window dressing effective.

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Investing in a Global World

Jeffrey Busse, Amit Goyal & Sunil Wahal
Review of Finance, April 2014, Pages 561-590

Abstract:
We examine active retail mutual funds and institutional products with a mandate to invest in global equity markets. We find little reliable evidence of alphas in the aggregate or on average. The right tail of the distribution contains some large alphas. Decomposing stock selection from country selection, we find some evidence of superior stock picking abilities in the extreme right tail. However, simulations suggest that they are produced just as likely by luck as by skill. Persistence tests show little evidence of continuation in superior performance.

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Do Security Analysts Speak in Two Tongues?

Ulrike Malmendier & Devin Shanthikumar
Review of Financial Studies, May 2014, Pages 1287-1322

Abstract:
Why do security analysts issue overly positive recommendations? We propose a novel approach to distinguish strategic motives (e.g., generating small-investor purchases and pleasing management) from nonstrategic motives (genuine overoptimism). We argue that nonstrategic distorters tend to issue both positive recommendations and optimistic forecasts, while strategic distorters “speak in two tongues,” issuing overly positive recommendations but less optimistic forecasts. We show that the incidence of strategic distortion is large and systematically related to proxies for incentive misalignment. Our “two-tongues metric” reveals strategic distortion beyond those indicators and provides a new tool for detecting incentives to distort that are hard to identify otherwise.

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Analyst herding and investor protection: A cross-country study

A.G. Kerl & T. Pauls
Applied Financial Economics, Spring 2014, Pages 533-542

Abstract:
Using a multi-national data set, we investigate the herding behaviour of financial analysts. Our results across a range of different countries suggest that analysts consistently deviate from their true forecasts and issue earnings forecasts that are biased by anti-herding. Furthermore, the level of bias (i.e. anti-herding) seems to be systematically higher for forecasts on companies from European countries compared to the US or Japan. We argue that such differences might stem from diverse levels of investor protection and corporate governance as analysts deviate less from true forecasts when the overall information environment is more transparent and company disclosures are of higher quality. Thereby, we proxy investor protection based on the company-level share of institutional ownership as well as on country-level investor protection measures. Our results show that increasing levels of investor protection and corporate governance mitigate the anti-herding behaviour. Especially, when companies that are located in high investor protection countries are held by an increasing number of institutional investors, analysts are most reluctant to issue biased forecasts.

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How Constraining Are Limits to Arbitrage? Evidence from a Recent Financial Innovation

Alexander Ljungqvist & Wenlan Qian
NBER Working Paper, January 2014

Abstract:
Limits to arbitrage play a central role in behavioral finance. They are thought to interfere with arbitrage processes so that security prices can deviate from true values for extended periods of time. We describe a recent financial innovation that allows limits to arbitrage to be sidestepped, and overvaluation thereby to be corrected, even in settings characterized by extreme costs of information discovery and severe short-sale constraints. We report evidence of shallow-pocketed “arbitrageurs” expending considerable resources to identify overvalued companies and profitably correcting overpricing. The innovation that allows the arbitrageurs to sidestep limits to arbitrage involves credibly revealing their information to the market, in an effort to induce long investors to sell so that prices fall. This simple but apparently effective way around the limits suggests that limits to arbitrage may not always be as constraining as sometimes assumed.

By KEVIN LEWIS | 09:00:00 AM

Tuesday, April 22, 2014

Buzz feed

Did Liberalising Bar Hours Decrease Traffic Accidents?

Colin Green, John Heywood & Maria Navarro
Journal of Health Economics, May 2014, Pages 189–198

Abstract:
Legal bar closing times in England and Wales have historically been early and uniform. Recent legislation liberalised closing times with the object of reducing social problems thought associated with drinking to “beat the clock.” Indeed, using both difference in difference and synthetic control approaches we show that one consequence of this liberalisation was a decrease in traffic accidents. This decrease is heavily concentrated among younger drivers. Moreover, we provide evidence that the effect was most pronounced in the hours of the week directly affected by the liberalisation; late nights and early mornings on weekends. This evidence survives a series of robustness checks and suggests at least one socially positive consequence of extending bar hours.

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Relative Deprivation and Risky Behaviors

Ana Balsa, Michael French & Tracy Regan
Journal of Human Resources, Spring 2014, Pages 446-471

Abstract:
Relative deprivation has been associated with lower social and job satisfaction as well as adverse health outcomes. Using Add Health data, we examine whether a student’s relative socioeconomic status (SES) has a direct effect on substance use. We advance the existing literature by addressing selection and simultaneity bias and by focusing on a reference group likely to exert the most influence on the respondents. We find that relative deprivation is positively associated with alcohol consumption, drinking to intoxication, and smoking for adolescent males, but not for females. Alternative variable definitions and robustness checks confirm these findings.

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The Impact of State Medical Marijuana Legislation on Adolescent Marijuana Use

Esther Choo et al.
Journal of Adolescent Health, forthcoming

Purpose: The state-level legalization of medical marijuana has raised concerns about increased accessibility and appeal of the drug to youth. The objective of this study was to assess the impact of medical marijuana legalization across the United States by comparing trends in adolescent marijuana use between states with and without legalization of medical marijuana.

Methods: The study utilized data from the Youth Risk Behavioral Surveillance Survey between 1991 and 2011. States with a medical marijuana law for which at least two cycles of Youth Risk Behavioral Surveillance data were available before and after the implementation of the law were selected for analysis. Each of these states was paired with a state in geographic proximity that had not implemented the law. Chi-squared analysis was used to compare characteristics between states with and without medical marijuana use policies. A difference-in-difference regression was performed to control for time-invariant factors relating to drug use in each state, isolating the policy effect, and then calculated the marginal probabilities of policy change on the binary dependent variable.

Results: The estimation sample was 11,703,100 students. Across years and states, past-month marijuana use was common (20.9%, 95% confidence interval 20.3–21.4). There were no statistically significant differences in marijuana use before and after policy change for any state pairing. In the regression analysis, we did not find an overall increased probability of marijuana use related to the policy change (marginal probability .007, 95% confidence interval −.007, .02).

Conclusions: This study did not find increases in adolescent marijuana use related to legalization of medical marijuana.

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Does Liberalizing Cannabis Laws Increase Cannabis Use?

Jenny Williams & Anne Line Bretteville-Jensen
Journal of Health Economics, July 2014, Pages 20–32

Abstract:
A key question in the ongoing policy debate over cannabis’ legal status is whether liberalizing cannabis laws leads to an increase in cannabis use. This paper provides new evidence on the impact of a specific type of liberalization, decriminalization, on initiation into cannabis use. Our identification strategy exploits variation in the timing of cannabis policy reforms and our estimation framework marries a difference-in-difference approach with a discrete time duration model. Our results reveal evidence of both heterogeneity and dynamics in the response of cannabis uptake to decriminalization. Overall, we find that the impact of decriminalization is concentrated amongst minors, who have a higher rate of uptake in the first five years following its introduction.

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Witnessing a Violent Death and Smoking, Alcohol Consumption, and Marijuana Use among Adolescents

Roman Pabayo, Beth Molnar & Ichiro Kawachi
Journal of Urban Health, April 2014, Pages 335-354

Abstract:
Witnessing violence has been linked to maladaptive coping behaviors such as smoking, alcohol consumption, and marijuana use. However, more research is required to identify mechanisms in which witnessing violence leads to these behaviors. The objectives of this investigation were to examine the association between witnessing a violent death and smoking, alcohol consumption, and marijuana use among adolescents, to identify whether exhibiting depressive symptoms was a mediator within this relationship, and to determine if those who had adult support in school were less likely to engage in risky health behaviors. Data were collected from a sample of 1,878 urban students, from 18 public high schools participating in the 2008 Boston Youth Survey. In 2012, we used multilevel log-binomial regression models and propensity score matching to estimate the association between witnessing a violent death and smoking, alcohol consumption, and marijuana use. Analyses indicated that girls who witnessed a violent death were more likely to use marijuana (relative risk (RR) = 1.09, 95 % confidence interval (CI) = 1.02, 1.17), and tended towards a higher likelihood to smoke (RR = 1.06, 95 % CI = 1.00, 1.13) and consume alcohol (RR = 1.07, 95 % CI = 0.97, 1.18). Among boys, those who witnessed a violent death were significantly more likely to smoke (RR = 1.20, 95 % CI = 1.11, 1.29), consume alcohol (RR = 1.30, 95 % CI = 1.17, 1.45) and use marijuana (RR = 1.33, 95 % CI = 1.21, 1.46). When exhibiting depressive symptoms was included, estimates were not attenuated. However, among girls who witnessed a violent death, having an adult at school for support was protective against alcohol consumption. When we used propensity score matching, findings were consistent with the main analyses among boys only. This study adds insight into how witnessing violence can lead to adoption of adverse health behaviors.

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The Effect of Medical Marijuana Laws on Crime: Evidence from State Panel Data, 1990-2006

Robert Morris et al.
PLoS ONE, March 2014

Background: Debate has surrounded the legalization of marijuana for medical purposes for decades. Some have argued medical marijuana legalization (MML) poses a threat to public health and safety, perhaps also affecting crime rates. In recent years, some U.S. states have legalized marijuana for medical purposes, reigniting political and public interest in the impact of marijuana legalization on a range of outcomes.

Methods: Relying on U.S. state panel data, we analyzed the association between state MML and state crime rates for all Part I offenses collected by the FBI.

Findings: Results did not indicate a crime exacerbating effect of MML on any of the Part I offenses. Alternatively, state MML may be correlated with a reduction in homicide and assault rates, net of other covariates.

Conclusions: These findings run counter to arguments suggesting the legalization of marijuana for medical purposes poses a danger to public health in terms of exposure to violent crime and property crimes.

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Social Drinking versus Administering Alcohol

Björn Frank, Justus Haucap & Annika Herr
Economic Inquiry, forthcoming

Abstract:
Alcohol consumption tends to make some people (unwillingly) tell the truth, hence social drinking can serve as a signal in social contact games. We provide empirical evidence which shows that social drinking can serve as a trust facilitating mechanism. Liver cirrhosis mortality and the rate of abstainers are used to construct a novel index of moderate alcohol consumption, which correlates with trust levels in a cross-country analysis.

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Positive peer pressure: Priming member prototypicality can decrease undergraduate drinking

Chris Goode, Rhonda Balzarini & Heather Smith
Journal of Applied Social Psychology, forthcoming

Abstract:
In two field experiments, we manipulated the extent to which sorority members viewed themselves as prototypical group members before they learned social norm information. In Study 1 (n = 109), participants who learned that they closely matched the ideal group member's personality intended to drink less alcohol after reading about related group norms. In Study 2 (n = 155), participants primed to think of themselves as ideal group members reported drinking less alcohol in comparison to participants primed to think of themselves as unique individuals. Participants who heard a descriptive norm presentation reported drinking less alcohol in comparison to participants who heard injunctive or combined norm presentations. If speakers prime group member prototypicality before delivering normative information, their message can be more effective.

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Modulation of smoking and decision-making behaviors with transcranial direct current stimulation in tobacco smokers: A preliminary study

Shirley Fecteau et al.
Drug and Alcohol Dependence, forthcoming

Background: Most tobacco smokers who wish to quit fail to reach their goal. One important, insufficiently emphasized aspect of addiction relates to the decision-making system, often characterized by dysfunctional cognitive control and a powerful drive for reward. Recent proof-of-principle studies indicate that transcranial direct current stimulation (tDCS) over the dorsolateral prefrontal cortex (DLPFC) can transiently modulate processes involved in decision-making, and reduce substance intake and craving for various addictions. We previously proposed that this beneficial effect of stimulation for reducing addictive behaviors is in part mediated by more reflective decision-making. The goal of this study was to test whether nicotine intake and decision-making behaviors are modulated by tDCS over the DLPFC in tobacco smokers who wished to quit smoking

Methods: Subjects received two five-day tDCS regimens (active or sham). Stimulation was delivered over the right DLPFC at a 2 mA during 30 minutes. Nicotine cravings, cigarette consumption and decision-making were assessed before and after each session

Results: Main findings include a significant decrease in the number of cigarettes smoked when participants received active as compared to sham stimulation. This effect lasted up to four days after the end of the stimulation regimen. In regards to decision-making, smokers rejected more often offers of cigarettes, but not offers of money, after they received active as compared to sham stimulation at the Ultimatum Game. No significant change was observed at the Risk Task with cigarettes or money as rewards.

Conclusion: Overall, these findings suggest that tDCS over the DLPFC may be beneficial for smoking reduction and induce reward sensitive effects.

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Rising Opioid Prescribing in Adult U.S. Emergency Department Visits: 2001–2010

Maryann Mazer-Amirshahi et al.
Academic Emergency Medicine, March 2014, Pages 236–243

Objectives: The objective was to describe trends in opioid and nonopioid analgesia prescribing for adults in U.S. emergency departments (EDs) over the past decade.

Methods: Data from the National Hospital Ambulatory Medical Care Survey (NHAMCS) 2001 through 2010 were analyzed. ED visits for adult patients (≥18 years of age) during which an analgesic was prescribed were included. Trends in the use of six commonly prescribed opioids, stratified by Drug Enforcement Agency (DEA) schedule, as well as nonopioid analgesics were explored, along with the frequency of pain-related ED visits. For 2005 through 2010, data were further divided by whether the opioid was administered in the ED versus prescribed at discharge.

Results: Between 2001 and 2010, the percentage of overall ED visits (pain-related and non–pain-related) where any opioid analgesic was prescribed increased from 20.8% to 31.0%, an absolute increase of 10.2% (95% confidence interval [CI] = 7.0% to 13.4%) and a relative increase of 49.0%. Use of DEA schedule II analgesics increased from 7.6% in 2001 to 14.5% in 2010, an absolute increase of 6.9% (95% CI = 5.2% to 8.5%) and a relative increase of 90.8%. Use of schedule III through V agents increased from 12.6% in 2001 to 15.6% in 2010, an absolute increase of 3.0% (95% CI = 2.0% to 5.7%) and a relative increase of 23.8%. Prescribing of hydrocodone, hydromorphone, morphine, and oxycodone all increased significantly, while codeine and meperidine use declined. Prescribing of nonopioid analgesics was unchanged, 26.2% in 2001 and 27.3% in 2010 (95% CI = –1.0% to 3.4%). Hydromorphone and oxycodone had the greatest increase in ED administration between 2005 and 2010, while oxycodone and hydrocodone had the greatest increases in discharge prescriptions. There was no difference in discharge prescriptions for nonopioid analgesics. The percentage of visits for painful conditions during the period increased from 47.1% in 2001 to 51.1% in 2010, an absolute increase of 4.0% (95% CI = 2.3% to 5.8%).

Conclusions: There has been a dramatic increase in prescribing of opioid analgesics in U.S. EDs in the past decade, coupled with a modest increase in pain-related complaints. Prescribing of nonopioid analgesics did not significantly change.

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Neurocognition in college-aged daily marijuana users

Mary Becker, Paul Collins & Monica Luciana
Journal of Clinical and Experimental Neuropsychology, forthcoming

Background: Marijuana is the most commonly used illicit substance in the United States. Use, particularly when it occurs early, has been associated with cognitive impairments in executive functioning, learning, and memory.

Method: This study comprehensively measured cognitive ability as well as comorbid psychopathology and substance use history to determine the neurocognitive profile associated with young adult marijuana use. College-aged marijuana users who initiated use prior to age 17 (n = 35) were compared to demographically matched controls (n = 35).

Results: Marijuana users were high functioning, demonstrating comparable IQs to controls and relatively better processing speed. Marijuana users demonstrated relative cognitive impairments in verbal memory, spatial working memory, spatial planning, and motivated decision making. Comorbid use of alcohol, which was heavier in marijuana users, was unexpectedly found to be associated with better performance in some of these areas.

Conclusions: This study provides additional evidence of neurocognitive impairment in the context of adolescent and young adult marijuana use. Findings are discussed in relation to marijuana’s effects on intrinsic motivation and discrete aspects of cognition.

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Labor Market Impacts of Smoking Regulations on the Restaurant Industry

Tami Gurley-Calvez, George Hammond & Randall Childs
Contemporary Economic Policy, forthcoming

Abstract:
This paper examines the impact of smoking regulations on restaurant employment in West Virginia, a state with a high rate of smoking prevalence. Using a confidential establishment-level dataset, our results suggest that smoking bans reduced restaurant employment by between 0.7 and 1.5 workers, depending on model specification. We find that smoking restrictions have heterogeneous impacts across establishments, with the largest impacts on mid-sized establishments, defined as those with 10–29 employees. Our results also suggest that the impact of smoking restrictions was larger in counties with higher rates of smoking prevalence.

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Alcohol Availability and Crime: Lessons from Liberalized Weekend Sales Restrictions

Hans Grönqvist & Susan Niknami
Journal of Urban Economics, May 2014, Pages 77–84

Abstract:
We investigate a large-scale experimental scheme implemented in Sweden whereby the state in the year 2000 required all alcohol retail stores in selected areas to stay open on Saturdays. The purpose of the scheme was to evaluate possible social consequences of expanding access to alcohol during weekends. Using rich individual level data we show that this increase in alcohol availability raised both alcohol use and crime.

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Association Between Riding With an Impaired Driver and Driving While Impaired

Kaigang Li et al.
Pediatrics, April 2014, Pages 620-626

Objective: To examine the association between driving while alcohol/drug impaired (DWI) and the timing and amount of exposure to others’ alcohol/drug-impaired driving (riding while impaired [RWI]) and driving licensure timing among teenage drivers.

Methods: The data were from waves 1, 2, and 3 (W1, W2, and W3, respectively) of the NEXT Generation Study, with longitudinal assessment of a nationally representative sample of 10th graders starting in 2009–2010. Multivariate logistic regression was used for the analyses.

Results: Teenagers exposed to RWI at W1 (adjusted odds ratio [AOR] = 21.12, P < .001), W2 (AOR = 19.97, P < .001), and W3 (AOR = 30.52, P < .001) were substantially more likely to DWI compared with those reporting never RWI. Those who reported RWI at 1 wave (AOR = 10.89, P < .001), 2 waves (AOR = 34.34, P < .001), and all 3 waves (AOR = 127.43, P < .001) were more likely to DWI compared with those who never RWI. Teenagers who reported driving licensure at W1 were more likely to DWI compared with those who were licensed at W3 (AOR = 1.83, P < .05).

Conclusions: The experience of riding in a vehicle with an impaired driver increased the likelihood of future DWI among teenagers after licensure. There was a strong, positive dose-response association between RWI and DWI. Early licensure was an independent risk factor for DWI. The findings suggest that RWI and early licensure could be important prevention targets.

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Repeal of Prohibition: A Benefit-Cost Analysis

Donald Vitaliano
Contemporary Economic Policy, forthcoming

Abstract:
In spite of an estimated increase in annual alcohol-related motor vehicle costs of $2.767 billion (1947 dollars), the net social benefit of repeal of alcohol Prohibition amounts to $432 million per annum in 1934–1937, about 0.33% of gross domestic product. Total benefits of $3.25 billion consist primarily of increased consumer and producer surplus, tax revenues, and reduced criminal violence costs. A Monte Carlo simulation shows the probability of negative net benefits is 16%. The estimated price elasticity of demand for spirits, beer, and wine are –.60, −.56, and –.51 respectively, which is consistent with the modern literature.

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Individual and spousal unemployment as predictors of smoking and drinking behavior

Mariana Arcaya et al.
Social Science & Medicine, June 2014, Pages 89–95

Abstract:
The effects of unemployment on health behaviors, and substance use in particular, is still unclear despite substantial existing research. This study aimed to assess the effects of individual and spousal unemployment on smoking and alcohol consumption. The study was based on eight waves of geocoded Framingham Heart Study Offspring Cohort data (US) from 1971-2008 that contained social network information. We fit three series of models to assess whether lagged 1) unemployment, and 2) spousal unemployment predicted odds of being a current smoker or drinks consumed per week, adjusting for a range of socioeconomic and demographic covariates. Compared with employment, unemployment was associated with nearly twice the subsequent odds of smoking, and with increased cigarette consumption among male, but not female, smokers. In contrast, unemployment predicted a one drink reduction in weekly alcohol consumption, though effects varied according to intensity of consumption, and appeared stronger among women. While spousal unemployment had no effect on substance use behaviors among men, wives responded to husbands’ unemployment by reducing their alcohol consumption. We conclude that individual, and among women, spousal unemployment predicted changes in substance use behaviors, and that the direction of the change was substance-dependent. Complex interactions among employment status, sex, and intensity and type of consumption appear to be at play and should be investigated further.

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Prenatal Smoking and Genetic Risk: Examining the Childhood Origins of Externalizing Behavioral Problems

Melissa Petkovsek et al.
Social Science & Medicine, June 2014, Pages 17–24

Abstract:
An ever-growing body of research has begun to focus closely on the role of prenatal smoke exposure in the development of conduct problems in children. To this point, there appears to be a correlation between prenatal nicotine exposure and behavioral problems. We build on this prior research by examining the coalescence of prenatal smoke exposure and genetic risk factors in the prediction of behavior problems. Specifically, the current study analyzed data from a nationally representative sample of twin pairs collected during early childhood. Our findings suggested that an interaction existed between prenatal smoke exposure and genetic risk factors which corresponded to increased risk of behavior problems. These findings provide evidence of a gene-environment interaction, in that prenatal smoke exposure conditioned the influence of genetic risk factors in the prediction of aggressive behavior. Interestingly, the association between genetic risk and prenatal smoking was sex-specific, and only reached statistical significance in females. Given the nature of our findings, it may shed light on why heterogeneity exists concerning the relationship between prenatal smoke exposure and externalizing behavioral problems in children.

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‘Ecstasy’ as a social drug: MDMA preferentially affects responses to emotional stimuli with social content

Margaret Wardle, Matthew Kirkpatrick & Harriet de Wit
Social Cognitive and Affective Neuroscience, forthcoming

Abstract:
3,4-Methylenedioxymethamphetamine (MDMA, ‘ecstasy’) is used recreationally to improve mood and sociability, and has generated clinical interest as a possible adjunct to psychotherapy. One way that MDMA may produce positive ‘prosocial’ effects is by changing responses to emotional stimuli, especially stimuli with social content. Here, we examined for the first time how MDMA affects subjective responses to positive, negative and neutral emotional pictures with and without social content. We hypothesized that MDMA would dose-dependently increase reactivity to positive emotional stimuli and dampen reactivity to negative stimuli, and that these effects would be most pronounced for pictures with people in them. The data were obtained from two studies using similar designs with healthy occasional MDMA users (total N = 101). During each session, participants received MDMA (0, 0.75 and 1.5 mg/kg oral), and then rated their positive and negative responses to standardized positive, negative and neutral pictures with and without social content. MDMA increased positive ratings of positive social pictures, but reduced positive ratings of non-social positive pictures. We speculate this ‘socially selective’ effect contributes to the prosocial effects of MDMA by increasing the comparative value of social contact and closeness with others. This effect may also contribute to its attractiveness to recreational users.

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Cross-Border Health and Productivity Effects of Alcohol Policies

Per Johansson, Tuomas Pekkarinen & Jouko Verho
Journal of Health Economics, forthcoming

Abstract:
This paper studies the cross-border health and productivity effects of alcohol taxes. We estimate the effect of a large cut in the Finnish alcohol tax on mortality, alcohol-related illnesses and work absenteeism in Sweden. This tax cut led to large differences in the prices of alcoholic beverages between these two countries and to a considerable increase in cross-border shopping. The effect is identified using differences-in-differences strategy where changes in these outcomes in regions near the Finnish border are compared to changes in other parts of northern Sweden. We use register data where micro level data on deaths, hospitalisations and absenteeism is merged to population-wide micro data on demographics and labour market outcomes. Our results show that the Finnish tax cut did not have any clear effect on mortality or alcohol-related hospitalisations in Sweden. However, we find that workplace absenteeism increased by 9% for males and by 15% for females near the Finnish border as a result of the tax cut.

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Vaccine for Cocaine Dependence: A Randomized Double-Blind Placebo-Controlled Efficacy Trial

Thomas Kosten et al.
Drug and Alcohol Dependence, forthcoming

Aims: We evaluated the immunogenicity, efficacy, and safety of succinylnorcocaine conjugated to cholera toxin B protein as a vaccine for cocaine dependence.

Methods: This 6-site, 24 week Phase III randomized double-blind placebo-controlled trial assessed efficacy during weeks 8 to 16. We measured urine cocaine metabolites thrice weekly as the main outcome

Results: The 300 subjects (76% male, 72% African-American, mean age 46 years) had smoked cocaine on average for 13 days monthly at baseline. We hypothesized that retention might be better and positive urines lower for subjects with anti-cocaine IgG levels of ≥ 42 μg/mL (high IgG), which was attained by 67% of the 130 vaccine subjects receiving five vaccinations. Almost 3-times fewer high than low IgG subjects dropped out (7% vs 20%). Although for the full 16 weeks cocaine positive urine rates showed no significant difference between the three groups (placebo, high, low IgG), after week 8, more vaccinated than placebo subjects attained abstinence for at least two weeks of the trial (24% vs 18%), and the high IgG group had the most cocaine-free urines for the last 2 weeks of treatment (OR = 3.02), but neither were significant. Injection site reactions of induration and tenderness differed between placebo and active vaccine, and the 29 serious adverse events did not lead to treatment related withdrawals, or deaths

Conclusions: The vaccine was safe, but it only partially replicated the efficacy found in the previous study based on retention and attaining abstinence.

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Alcohol Dependence and Reproductive Timing in African and European Ancestry Women: Findings in a Midwestern Twin Cohort

Mary Waldron et al.
Journal of Studies on Alcohol and Drugs, March 2014, Pages 235-240

Objective: We examined associations between reproductive onset and history of alcohol dependence (AD) in 475 African ancestry (AA) and 2,865 European or other ancestry (EA) female twins.

Method: Participants were drawn from a U.S. midwestern birth cohort study of like-sex female twin pairs born between 1975 and 1985, ages 21–32 as of last completed assessment. Cox proportional hazards regression models were estimated predicting age at first childbirth from history of AD, separately by race/ethnicity, without and with adjustment for sociodemographic characteristics, body mass index, history of other substance involvement, psychopathology, and family and childhood risks.

Results: Among EA twins, AD predicted early childbearing through age 17 and delayed childbearing from age 25 onward; in adjusted models, AD was associated with overall delayed childbearing. Among AA twins, reproductive timing and AD were not significantly related in either unadjusted or adjusted models.

Conclusions: Findings for twins of European ancestry are consistent with well-documented links between early alcohol mis/use and teenage parenting as well as delays in childbearing associated with drinking-related reproductive and relationship difficulties. Extension of analyses to other racial/ethnic groups of sufficient sample size remains important.

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Can technology help to reduce underage drinking? Evidence from the false ID laws with scanner provision

Barış Yörük
Journal of Health Economics, July 2014, Pages 33–46

Abstract:
Underage drinkers often use false identification to purchase alcohol or gain access into bars. In recent years, several states have introduced laws that provide incentives to retailers and bar owners who use electronic scanners to ensure that the customer is 21 years or older and uses a valid identification to purchase alcohol. This paper is the first to investigate the effects of these laws using confidential data from the National Longitudinal Survey of Youth, 1997 Cohort (NLSY97). Using a difference-in-differences methodology, I find that the false ID laws with scanner provision significantly reduce underage drinking, including up to a 0.22 drink decrease in the average number of drinks consumed by underage youth per day. This effect is observed particularly in the short-run and more pronounced for non-college students and those who are relatively younger. These results are also robust under alternative model specifications. The findings of this paper highlight the importance of false ID laws in reducing alcohol consumption among underage youth.

By KEVIN LEWIS | 09:00:00 AM

Monday, April 21, 2014

Our money

State Adoption of Tax Policy: New Data and New Insights

Thomas Hayes & Christopher Dennis
American Politics Research, forthcoming

Abstract:
This article examines the factors that influence two important areas of state tax policy — the adoption of an income tax as well as whether a state permits deducting federal income taxes against state individual income taxes. We focus on a factor that has largely been unexplored, the flow of income going to the Top 1% of earners. Using data from two different time periods (1916-1937 and 1960-2003), we find that the share of income received by the richest 1% of taxpayers corresponds with both the likelihood states will adopt an income tax as well as whether states allow deductions of federal income tax against state individual income taxes.

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Tax Legislation in the Contemporary U.S. Congress

Michael Doran
Tax Law Review, forthcoming

Abstract:
This paper identifies and analyzes a recent trend toward “clean” federal tax legislation. Existing explanations of the tax-legislative process account for the regular, highly particularistic tax legislation prevalent during the 1980s and the early 1990s using legislator-motivation and traditional policy models. But a new tax-legislative process, characterized by alternating periods of tax gridlock and strikingly non-particularistic tax legislation, emerged during the late 1990s. This paper argues that tax gridlock and non-particularistic tax legislation are best understood as companion phenomena, and it examines three general determinants of recent tax-legislative outcomes. First, exogenous events, particularly macro-economic and macro-political developments, typically provide the central policy objective for any item of major tax legislation. Second, the voting behavior of individual legislators on tax legislation corresponds closely to generally accepted understandings of legislator motivations. Third and most importantly, several legislative-organizational developments within Congress – specifically, the emergence of sharp coalitional polarization and strong coalitional cohesion, the re-establishment of centralized chamber management, and the relaxation of restrictions on the federal budget – combined to produce the new tax-legislative process during the late 1990s and the 2000s. This paper does not offer a positive theory of the tax-legislative process or make predictions about tax-legislative outcomes. Rather, it builds on existing accounts to provide an updated and more nuanced explanation of the tax-legislative process in the contemporary Congress.

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Debt and Growth: Is There a Magic Threshold?

Andrea Pescatori, Damiano Sandri & John Simon
IMF Working Paper, February 2014

Abstract:
Using a novel empirical approach and an extensive dataset developed by the Fiscal Affairs Department of the IMF, we find no evidence of any particular debt threshold above which medium-term growth prospects are dramatically compromised. Furthermore, we find the debt trajectory can be as important as the debt level in understanding future growth prospects, since countries with high but declining debt appear to grow equally as fast as countries with lower debt. Notwithstanding this, we find some evidence that higher debt is associated with a higher degree of output volatility.

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Public debt and economic growth: Is there a causal effect?

Ugo Panizza & Andrea Presbitero
Journal of Macroeconomics, forthcoming

Abstract:
This paper uses an instrumental variable approach to study whether public debt has a causal effect on economic growth in a sample of OECD countries. The results are consistent with the existing literature that has found a negative correlation between debt and growth. However, the link between debt and growth disappears once we correct for endogeneity. We conduct a battery of robustness tests and show that our results are not affected by weak instrument problems and are robust to relaxing our exclusion restriction. Our finding that there is no evidence that public debt has a causal effect on economic growth is important in the light of the fact that the negative correlation between debt and growth is sometimes used to justify policies that assume that debt has a negative causal effect on economic growth.

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Stylised fact or situated messiness? The diverse effects of increasing debt on national economic growth

Andrew Bell, Ron Johnston & Kelvyn Jones
Journal of Economic Geography, forthcoming

Abstract:
This article reanalyses data used by Reinhart and Rogoff (2010c, American Economic Review, 100: 573–78—RR), and later Herndon et al. (2013, Cambridge Journal of Economics, online, doi: 10.1093/cje/bet075) to consider the relationship between growth and debt in developed countries. The consistency over countries and the causal direction of RR’s so called ‘stylised fact’ is considered. Using multilevel models, we find that when the effect of debt on growth is allowed to vary, and linear time trends are fully controlled for, the average effect of debt on growth disappears, whilst country-specific debt relations vary significantly. Additionally, countries with high debt levels appear more volatile in their growth rates. Regarding causality, we develop a new method extending distributed lag models to multilevel situations. These models suggest the causal direction is predominantly growth-to-debt, and is consistent (with some exceptions) across countries. We argue that RR’s findings are too simplistic, with limited policy relevance, whilst demonstrating how multilevel models can explicate realistically complex scenarios.

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Taxes, Incentives, and Economic Growth: Assessing the Impact of Pro-business Taxes on U.S. State Economies

Soledad Artiz Prillaman & Kenneth Meier
Journal of Politics, April 2014, Pages 364-379

Abstract:
State fiscal policy frequently focuses on stimulating a healthy business environment with the assumption that this is linked with long-term economic growth. The conventional wisdom is that a state’s tax rates are negatively correlated with economic development, prompting states to decrease business-targeted taxes to stimulate the economy. Surprisingly, however, very few studies have documented the long-term effects of these tax policies on different facets of the state economy and overall business atmosphere. In short, we do not know how the level of business taxation actually affects the economies of states. Using panel data for all 50 U.S. states from 1977 to 2005, this article examines the impact of state business taxes on the overall economic position of the state, specifically looking at their effect on economic development and business growth. With an elaborate set of controls, the article finds that state business tax cuts have little to no positive impact on gross state product, job creation, personal income, poverty rates, and business establishments.

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Cheating on Their Taxes: When are Tax Limitations Effective at Limiting State Taxes, Expenditures, and Budgets?

Colin McCubbins & Mathew McCubbins
Stanford Working Paper, March 2014

Abstract:
Tax limitations (TLs) represent a class of lawmaking that often pits voters against the incentives of their elected representatives. Thus, are voter backed TLs successful in changing state government fiscal behavior? Using agency theory, we discuss how TLs will likely be ineffective at their stated goals in the face of hostile legislative interests. We test the effectiveness of these measures through use of the Synthetic Control Method presented by Abadie, Diamond, and Hainmueller (2010), which allows us to analyze the passage of TLs in each state individually by comparing them to constructed counterfactuals that estimate what constant-level taxes would have been in each state had its TL never been passed. Using this approach, we show that these TLs are almost always ineffective at reducing taxes or expenditures. This result is consistent with recent studies that highlight the ineffectiveness of initiatives. We will argue that the ineffectiveness of TLs is also true generally, for the same reasons that initiatives are typically ineffective in that there is no means for the people to implement, oversee, or enforce the limits and legislatures will often be unwilling to enforce these limitations themselves.

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Do State-funded Property Tax Exemptions Actually Provide Tax Relief? Georgia’s HTRG Program

Spencer Brien & David Sjoquist
Public Finance Review, forthcoming

Abstract:
We examine the effect of a state-funded property tax homestead exemptions on the burden of property taxes. This class of exemptions is characterized by a grant from the state to local governments that is intended to replace the reduction in property tax revenue due to the exemption. The median voter model predicts that part of the homestead exemption will be used to increase expenditures. In addition, fiscal illusion could reduce the effectiveness of this type of grant in lowering the tax burden. We test these predictions for the Georgia’s Homeowner’s Tax Relief Grant program by separately using panels of county-level data and school system data. We find that over one-third of funds transferred to counties through this program are used to increase revenues rather than provide tax relief. We find evidence of possible fiscal illusion for school systems.

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Tax Evasion, Human Capital, and Productivity-Induced Tax Rate Reduction

Max Gillman & Michal Kejak
Journal of Human Capital, Spring 2014, Pages 42-79

Abstract:
Growth in the human capital sector’s productivity explains in part how US postwar growth and welfare could have increased while US tax rates declined. Modeling tax evasion within an endogenous growth model with human capital, an upward trend in goods and human capital sectors gradually decreases tax evasion and allows for tax rate reduction. Using estimated goods and human capital sectoral productivities, the model explains 30 percent of the actual decline in a weighted average of postwar US top marginal personal and corporate tax rates. The productivity increases are asymmetric in a fashion related to that of McGrattan and Prescott.

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A Tale of an Unwanted Outcome: Transfers and Local Endowments of Trust and Cooperation

Antonio Accetturo, Guido de Blasio & Lorenzo Ricci
Journal of Economic Behavior & Organization, June 2014, Pages 74–89

Abstract:
Transfers can do good; however, they can also result in massive failures. This paper presents a model that highlights the ambiguous nature of the impact of transfers on local endowments of social capital. It then describes an empirical investigation that illustrates that the receipt of EU structural funds causes a deterioration of the endowments of trust and cooperation in the subsidized regions.

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Assessing the Impact of the Size and Scope of Government on Human Well-Being

Patrick Flavin, Alexander Pacek & Benjamin Radcliff
Social Forces, forthcoming

Abstract:
We examine how public policies affect life satisfaction across the industrial democracies. We consider as indicators of policy overall levels of government spending, the size and generosity of the welfare state, and the degree of labor market regulation. Using individual- and aggregate-level data for OECD countries from 1981 to 2007, we find robust evidence that citizens find life more satisfying as the degree of government intervention in the economy increases. We find, further, that this result is inelastic to changes in income; that is, high- and low-income citizens appear to find more “leftist” social policies equally conducive to their subjective well-being. We conclude with a discussion of the practical and theoretical implications of the results.

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State Intervention and Life Satisfaction Reconsidered: The Role of Governance Quality and Resource Misallocation

Alexander Jakubow
Politics & Policy, February 2014, Pages 3–36

Abstract:
To what extent does state intervention in the market condition how individuals subjectively experience the lives that they lead? Prevailing attempts to understand the relationship between state intervention and subjective well-being have yielded mixed empirical results. However, these differences result from omitted variable biases, not different methodological choices. Drawing on insights from the new social risk and quality of governance literatures, this article contends that the policy orientation and administrative quality of welfare state programs jointly condition the effect of state intervention on life satisfaction. State intervention exerts a strong positive effect on perceived satisfaction with life when the quality of administrative institutions is high and policy interventions focus on insuring individuals against newer, post-industrial forms of market risk. This main hypothesis is tested and confirmed against an empirical analysis of survey data taken from Wave 5 of the World Values Survey.

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Government Size, Nonprofit Sector Strength, and Corruption: A Cross-National Examination

Nuno Themudo
American Review of Public Administration, May 2014, Pages 309-323

Abstract:
Government should serve the public good. Yet critics argue that “big government” is a major cause of corruption. This article assesses the empirical validity of their argument through cross-national statistical analysis, addressing two of previous research’s key weaknesses: lack of controls for potential reverse causation and for the likely confounding impact of nonprofit sector size. Contrary to critics’ claims, the analysis presented here finds no evidence that a larger government generally contributes to higher corruption. Instead, both government and nonprofit sector size generally have an inverse relationship with the level of corruption. To combat corruption, therefore, public administrators should be skeptical of recommendations for sweeping government cuts and should instead consider policies that strengthen the public and the nonprofit sectors.

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Crowding Out and Crowding In of Private Donations and Government Grants

Garth Heutel
Public Finance Review, March 2014, Pages 143-175

Abstract:
A large literature examines the interaction of private and public funding of charities, much of it testing if public funding crowds out private funding. In this article, the author looks for two alternative phenomena using a large panel data set gathered from nonprofit organizations’ tax returns. First, the author looks for crowding out in the opposite direction: increased private funding may cause reduced public funding. Second, the author tests whether one type of funding acts as a signal of charity quality and thus crowds in other funding. The author finds evidence that government grants crowd in private donations. Crowding in is larger for younger charities. This is consistent with signaling, if donors know less about younger charities and the signal value is stronger. The author finds no evidence of an effect of private donations on government grants.

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The Metric System of State Income Taxes

Yair Listokin & Erik Stegemiller
Yale Working Paper, February 2014

Abstract:
The residents of six US states (Alabama, Iowa, Louisiana, Missouri, Montana, and Oregon) get to exclude or deduct all or part of their federal income taxes paid when they calculate their taxable income for state income tax purposes. Critics have called this deduction “costly and regressive.” The critics are probably right, but not for the reasons they think. The critics of the deduction overlook the fact that the states that allow deductibility of federal income tax for state tax purposes use a different state income “tax base” or “scale” than other states. Most state income tax regimes use a tax base that includes federal income taxes paid (we call it FTI), but the six states listed above use an income tax base that excludes federal income taxes (the FTE base). The two tax bases can translated from one to the other. Indeed, this paper provides original formulae for converting the FTE base into its FTI equivalent and vice verce. Because of this equivalence, one state income tax base is not a priori better than another. But when we convert FTE income tax bases into their FTI equivalents, we find a pervasive trend. States with FTE income tax regimes systematically have more regressive income tax regimes than states with FTI bases. We argue that taxpayers and legislators under-adjust relative to our translation formula when comparing FTE regimes to FTI regimes, causing the systematic regressive trend in states with FTE regimes.

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How Taxing is Tax Filing? Leaving Money on the Table Because of Compliance Costs

Youssef Benzarti
University of California Working Paper, March 2013

Abstract:
Every year more than 240 million taxpayers have to file income taxes, imposing a significant cost on the economy. How large is this cost and are taxpayers willing to forego large tax benefits to avoid it? To answer this question, I focus on the choice between itemizing deductions and claiming the standard deduction. I use a non-parametric approach along with administrative tax data to show that the cost of itemizing deductions exceeds $700 on average per household and that taxpayers are willing to forego large tax benefits to avoid it. I show that this cost is mostly driven by the time spent archiving receipts rather than filling-out forms. The cost also increases in income, consistent with the fact that the value of time of richer households is larger. I explain the magnitude of the cost using a model based on present-bias. I also argue that the results cannot be explained by lack of information nor audit probabilities.

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Can State and Local Revenue and Expenditure Enhance Economic Growth? A Cross-State Panel Study of Fiscal Activity

Stephen Miller & Christopher Clarke
University of Nevada Working Paper, February 2014

Abstract:
The slow economic recovery since the 2008 financial crisis and Great Recession requires state and local governments to continue to make difficult decisions concerning which taxes to raise and which expenditures to decrease in order to maintain a balanced budget. As expenditures usually raise economic growth and taxes generally hinder it, seeking the optimum combination of taxes and expenditures encourages prosperity in a state. In this paper, we study the effects of various expenditures and revenue combinations on growth in real state personal income per capita, using a sample of annual observations from 1977 to 2010 for 49 states and the District of Columbia. We find that state and local governments overfund education and parks, recreation, and natural resources while they underfund hospitals and health spending, once netted for charges and user fees. State and local governments also underutilize corporate income taxes as a source of revenue. Finally, we also estimate non-linear and short- and long-run specifications, which generally support prior findings.

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Machines, Buildings, and Optimal Dynamic Taxes

Ctirad Slavík & Hakki Yazici
Journal of Monetary Economics, forthcoming

Abstract:
The effective taxes on capital returns differ depending on capital type in the U.S. tax code. This paper uncovers a novel reason for the optimality of differential capital taxation. We set up a model with two types of capital - equipments and structures - and equipment-skill complementarity. Under a plausible assumption, we show that it is optimal to tax equipments at a higher rate than structures. In a calibrated model, the optimal tax differential rises from 27 to 40 percentage points over the transition to the new steady state. The welfare gains of optimal differential capital taxation can be as high as 0.4% of lifetime consumption.

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Shrouded Costs of Government: The Political Economy of State and Local Public Pensions

Edward Glaeser & Giacomo Ponzetto
Journal of Public Economics, forthcoming

Abstract:
Why do public-sector workers receive so much of their compensation in the form of pensions and other benefits? This paper presents a political economy model in which politicians compete for taxpayers’ and government employees’ votes by promising compensation packages, but some voters cannot evaluate every aspect of promised compensation. If pension packages are “shrouded,” so that public-sector workers better understand their value than ordinary taxpayers, then compensation will be highly back-loaded. In equilibrium, the welfare of public-sector workers could be improved, holding total public-sector costs constant, if they received higher wages and lower pensions. Centralizing pension determination has two offsetting effects on generosity: more state-level media attention helps taxpayers better understand pension costs, and that reduces pension generosity; but a larger share of public-sector workers will vote within the jurisdiction, which increases pension generosity. A short discussion of pensions in two decentralized states (California and Pennsylvania) and two centralized states (Massachusetts and Ohio) suggests that centralization appears to have modestly reduced pensions, but, as the model suggests, this is unlikely to be universal.

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Separate, Unequal, and Ignored? Interjurisdictional Competition and the Budgetary Choices of Poor and Affluent Municipalities

Benedict Jimenez
Public Administration Review, March/April 2014, Pages 246–257

Abstract:
The fundamental value underlying the design of a fragmented system of local governance is consumer sovereignty. This system functions as a market-like arrangement providing citizen-consumers a choice of jurisdictions that offer different bundles of public services and taxes. However, the same choice also can facilitate class-based population sorting, creating regions where fiscally wealthy jurisdictions coexist with impoverished ones. Some argue that the public market enhances the power of all consumers, whether poor or rich. Even if the poor are concentrated in some jurisdictions, they can exercise their voice to ensure that their government responds to their service needs. But does the voice of the poor matter as much as the voice of the rich in determining service levels in the local public market? Comparing the budgetary choices in poor and affluent municipalities, this article shows that in highly fragmented regions, some municipal services are provided the least in communities where they are needed the most.

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Follow the Leader? Evidence on European and US Tax Competition

Rosanne Altshuler & Timothy Goodspeed
Public Finance Review, forthcoming

Abstract:
This article breaks from the previous empirical literature that estimates Nash tax reaction functions of national governments competing with other national governments assuming that competitors play a Nash game and adjust to a Nash equilibrium in every year. We question this assumption and explore whether one country plays a leadership role in tax competition using data from 1968 to 2008. We test the leadership role of the United States, the United Kingdom, and Germany, and find support for a US leadership role. We also investigate whether countries react differently immediately after watershed tax reforms such as the 1986 US Tax Reform Act or the 1984 UK tax reform. We find some support for a different reaction to the United States following the 1986 US reform, but not for the United Kingdom or Germany.

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The Role of Retiree Health Insurance in the Early Retirement of Public Sector Employees

John Shoven & Sita Nataraj Slavov
Journal of Health Economics, forthcoming

Abstract:
Most government employees have access to retiree health coverage, which provides them with group health coverage even if they retire before Medicare eligibility. We study the impact of retiree health coverage on the labor supply of public sector workers between the ages of 55 and 64. We find that retiree health coverage raises the probability of stopping full time work by 4.3 percentage points (around 38 percent) over two years among public sector workers aged 55-59, and by 6.7 percentage points (around 26 percent) over two years among public sector workers aged 60-64. In the younger age group, retiree health insurance mostly seems to facilitate transitions to part-time work rather than full retirement. However, in the older age group, it increases the probability of stopping work entirely by 4.3 percentage points (around 22 percent).

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The Taxpayer Relief Act of 1997 and Homeownership: Is Smaller Now Better?

Amelia Biehl & William Hoyt
Economic Inquiry, April 2014, Pages 646–658

Abstract:
Prior to the Taxpayer Relief Act of 1997 (TRA97), the capital gain from the sale of a home was taxed differently for those over and under the age of 55. TRA97 eliminated this differential treatment. Using a difference-in-difference approach, we find that home sellers slightly under the age of 55 were 6.2% more likely to move for a less expensive house to maintain, 6.6% less likely to move for a larger place, and 5.2% more likely to reside in a condominium after TRA97's enactment, relative to those slightly over 55.

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Flypaper Nonprofits: The Impact of Federal Grant Structure on Nonprofit Expenditure Decisions

Jeremy Thornton
Public Finance Review, March 2014, Pages 176-198

Abstract:
This article examines the influence of federal grants on nonprofit expenditure decisions. The topic is of particular concern for governments who wish to stimulate private provision of public services. Recent research shows that grants may inadvertently reduce private sector provision by causing a reduction in fund-raising effort. This study extends line of inquiry by examining the influence of conditional versus lump-sum-style grants. The article draws detailed grant data from the Federal Assistance Award Data System (FAADS), which includes structural characteristics of the grant. FAADS grant information is combined with a panel of nonprofit financial data. Empirical results demonstrate that, though relatively uncommon in the data, conditional grants are particularly effective at stimulating both additional fund-raising activity and output of the firm. Block-Formula grants appear to significantly reduce both fund-raising and output decisions. The study implies that the use of conditional grants could mitigate crowd-out due to nonprofit management decisions.

By KEVIN LEWIS | 09:00:00 AM

Sunday, April 20, 2014

Regression to the mean

Casualties of Social Combat: School Networks of Peer Victimization and Their Consequences

Robert Faris & Diane Felmlee
American Sociological Review, April 2014, Pages 228-257

Abstract:
We point to group processes of status conflict and norm enforcement as fundamental elements in the development of school-based victimization. Socially vulnerable youth are frequently harassed for violating norms, but the logic of status competition implies they are not the only victims: to the extent that aggression is instrumental for social climbing, increases in status should increase risk — at least until the pinnacle of the hierarchy is reached. Victimization causes serious harm, and, we argue, at the margin these consequences will be magnified by status. We test these ideas using longitudinal network data on friendship and victimization from 19 schools. For most students, status increases the risk of victimization. However, youth at the uppermost extremes of the school hierarchy — students in the top 5 percent of centrality and those with cross-gender friendships where such friendships are rare — sit just above the fray, unlikely to fall victim to their peers. As expected, females and physically or socially vulnerable youth are victimized at particularly high rates. Victims experience psychological distress and social marginalization, and these adverse effects are magnified by status. For most students, gains in status increase the likelihood of victimization and the severity of its consequences.

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Biting versus Chewing: Eating Style and Social Aggression in Children

Brian Wansink et al.
Eating Behaviors, forthcoming

Abstract:
Does biting food lead to aggressive behavior? An experimental study is reported where children ages 6–10 (n = 12) were served chicken either on-the-bone or pre-cut in bite-size pieces. When children ate on-the-bone chicken, they exhibited more aggressive behavior than pre-cut, boneless chicken. For example, children were more likely to violate the counselor’s instructions by leaving the eating area after eating on-the-bone chicken compared to kids who ate pre-cut chicken. These findings suggest a connection between how children eat and how they behave. This could have implications for developmental psychologists as well as for educators and parents.

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Is Negative Attention Better Than No Attention? The Comparative Effects of Ostracism and Harassment at Work

Jane O'Reilly et al.
Organization Science, forthcoming

Abstract:
Ostracism has been recognized as conceptually and empirically distinct from harassment. Drawing from theory and research that suggests that employees have a strong need to belong in their organizations, we examine the comparative frequency and impact of ostracism and harassment in organizations across three field studies. Study 1 finds that a wide range of employees perceive ostracism, compared with harassment, to be more socially acceptable, less psychologically harmful, and less likely to be prohibited in their organization. Study 2 surveyed employees from a variety of organizations to test our theory that ostracism is actually a more harmful workplace experience than harassment. Supporting our predictions, compared with harassment, ostracism was more strongly and negatively related to a sense of belonging and to various measures of employee well-being and work-related attitudes. We also found that the effects of ostracism on well-being and work-related attitudes were at least partially mediated by a sense of belonging. Study 3 replicated the results of Study 2 with data collected from employees of a large organization and also investigated the comparative impact of ostracism and harassment on employee turnover. Ostracism, but not harassment, significantly predicted actual turnover three years after ostracism and harassment were assessed, and this was mediated by a sense of belonging (albeit at p < 0.10). Implications for theory, research, and practice are discussed.

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Effects of Avatar Race in Violent Video Games on Racial Attitudes and Aggression

Grace Yang et al.
Social Psychological and Personality Science, forthcoming

Abstract:
The media often link Black characters and violence. This is especially true in video games, in which Black male characters are virtually always violent. This research tested the effects of playing a violent game as a Black (vs. White) avatar on racial stereotypes and aggression. In Experiment 1, White participants (N = 126) who played a violent video game as a Black avatar displayed stronger implicit and explicit negative attitudes toward Blacks than did participants who played a violent video game as a White avatar or a nonviolent game as a Black or White avatar. In Experiment 2, White participants (N = 141) who played a violent video game as a Black (vs. White) avatar displayed stronger implicit attitudes linking Blacks to weapons. Implicit attitudes, in turn, related to subsequent aggression. Black violent video game avatars not only make players more aggressive than do White avatars, they also reinforce stereotypes that Blacks are violent.

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Testosterone Reactivity to Provocation Mediates the Effect of Early Intervention on Aggressive Behavior

Justin Carré et al.
Psychological Science, forthcoming

Abstract:
We tested the hypotheses that the Fast Track intervention program for high-risk children would reduce adult aggressive behavior and that this effect would be mediated by decreased testosterone responses to social provocation. Participants were a subsample of males from the full trial sample, who during kindergarten had been randomly assigned to the 10-year Fast Track intervention or to a control group. The Fast Track program attempted to develop children’s social competencies through child social-cognitive and emotional-coping skills training, peer-relations coaching, academic tutoring, and classroom management, as well as training for parents to manage their child’s behavior. At a mean age of 26 years, participants responded to laboratory provocations. Results indicated that, relative to control participants, men assigned to the intervention demonstrated reduced aggression and testosterone reactivity to social provocations. Moreover, reduced testosterone reactivity mediated the effect of intervention on aggressive behavior, which provides evidence for an enduring biological mechanism underlying the effect of early psychosocial intervention on aggressive behavior in adulthood.

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Low glucose relates to greater aggression in married couples

Brad Bushman et al.
Proceedings of the National Academy of Sciences, forthcoming

Abstract:
Intimate partner violence affects millions of people globally. One possible contributing factor is poor self-control. Self-control requires energy, part of which is provided by glucose. For 21 days, glucose levels were measured in 107 married couples. To measure aggressive impulses, each evening participants stuck between 0 and 51 pins into a voodoo doll that represented their spouse, depending how angry they were with their spouse. To measure aggression, participants competed against their spouse on a 25-trial task in which the winner blasted the loser with loud noise through headphones. As expected, the lower the level of glucose in the blood, the greater number of pins participants stuck into the voodoo doll, and the higher intensity and longer duration of noise participants set for their spouse.

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Can the FIFA World Cup Football (Soccer) Tournament Be Associated with an Increase in Domestic Abuse?

Stuart Kirby, Brian Francis & Rosalie O’Flaherty
Journal of Research in Crime and Delinquency, May 2014, Pages 259-276

Objectives: This study aims to establish whether empirical evidence exists to support the anecdotal view that the Fédération Internationale de Football Association world cup football (soccer) tournament can be associated with a rise in reported domestic abuse incidents, when viewed remotely via television.

Method: A quantitative analysis, using Poisson and negative binomial regression models looked at monthly and daily domestic abuse incidents reported to a police force in the North West of England across three separate tournaments (2002, 2006, and 2010).

Results: The study found two statistically significant trends. First, a match day trend showed the risk of domestic abuse rose by 26 percent when the English national team won or drew, and a 38 percent increase when the national team lost. Second, a tournament trend was apparent, as reported domestic abuse incidents increased in frequency with each new tournament.

Conclusion: Although this is a relatively small study, it has significant ramifications due to the global nature of televised football (soccer) tournaments. If replicated, it presents significant opportunities to identify and reduce incidents of domestic abuse associated with televised soccer games.

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Associations between childhood abuse and interpersonal aggression and suicide attempt among U.S. adults in a national study

Thomas Harford, Hsiao-ye Yi & Bridget Grant
Child Abuse & Neglect, forthcoming

Abstract:
The aim of this study is to examine associations among childhood physical, emotional, or sexual abuse and violence toward self (suicide attempts [SA]) and others (interpersonal aggression [IA]). Data were obtained from the National Epidemiologic Survey on Alcohol and Related Conditions Waves 1 and 2 (n = 34,653). Multinomial logistic regression examined associations between type of childhood abuse and violence categories, adjusting for demographic variables, other childhood adversity, and DSM-IV psychiatric disorders. The prevalence of reported childhood abuse was 4.60% for physical abuse, 7.83% for emotional abuse, and 10.20% for sexual abuse. Approximately 18% of adults reported some form of violent behavior, distributed as follows: IA, 13.37%; SA, 2.64%; and SA with IA, 1.85%. After adjusting for demographic variables, other childhood adversity, and psychiatric disorders, each type of childhood abuse was significantly related to increased risk for each violence category as compared with the no violence category. Furthermore, the odds ratio of childhood physical abuse was significantly higher for SA with IA when compared with IA, and the odds ratio of childhood sexual abuse was significantly higher for SA and SA with IA when compared with IA. Childhood physical, emotional, and sexual abuse is directly related to the risk for violent behaviors to self and others. Both internalizing and externalizing psychiatric disorders impact the association between childhood abuse and violence. The inclusion of suicidal behaviors and interpersonal aggression and internalizing/externalizing psychiatric disorders within an integrated conceptual framework will facilitate more effective interventions for long-lasting effects of child abuse.

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Heart Rate And Antisocial Behavior: The Mediating Role Of Impulsive Sensation Seeking

Jill Portnoy et al.
Criminology, forthcoming

Abstract:
Although a low resting heart rate is considered the best-replicated biological correlate of antisocial behavior, the mechanism underlying this relationship remains largely unknown. Sensation-seeking and fearlessness theories have been proposed to explain this relationship, although little empirical research has been conducted to test these theories. This study addressed this limitation by examining the relationship between heart rate and antisocial behavior in a community sample of 335 adolescent boys. Heart rate was measured during a series of cognitive, stress, and rest tasks. Participants also completed self-report measures of state fear, impulsive sensation seeking, and both aggressive and nonaggressive forms of antisocial behavior. As expected, increased levels of aggression and nonviolent delinquency were associated with a low heart rate. Impulsive sensation seeking, but not fearlessness, significantly mediated the association between heart rate and aggression. This study is the first to show that impulsive sensation seeking partly underlies the relationship between aggression and heart rate, and it is one of the few to examine the mechanism of action linking heart rate to antisocial behavior. Findings at a theoretical level highlight the role of impulsive sensation seeking in understanding antisocial behavior and at an intervention level suggest it as a potential target for behavioral change.

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The effects of passive leadership on workplace incivility

Crystal Harold & Brian Holtz
Journal of Organizational Behavior, forthcoming

Abstract:
In this article, we examine the effects of passive leadership on workplace incivility across two studies. Study 1 examines passive leadership–incivility relationships in a sample of employee–supervisor dyads, and Study 2 examines these relationships in a sample of employee–coworker dyads. Results from these studies suggest that passive leadership has a significant direct effect on behavioral incivility and an indirect effect through experienced incivility. Moreover, our results suggest that the relationship between experienced incivility and behavioral incivility is conditional on the level of passive leadership, such that the effect of experienced incivility on behavioral incivility is stronger at higher levels of passive leadership.

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Classroom-Level Predictors of the Social Status of Aggression: Friendship Centralization, Friendship Density, Teacher–Student Attunement, and Gender

Hai-Jeong Ahn & Philip Rodkin
Journal of Educational Psychology, forthcoming

Abstract:
This study investigated moderating effects of classroom friendship network structures (centralization and density), teacher–student attunement on aggression and popularity, and gender on changes in the social status of aggression over 1 school year. Longitudinal multilevel analyses with 2 time points (fall and spring) were conducted on a sample of 856 fourth and fifth graders from 45 classrooms. Aggressive boys lost social status over time in classrooms where friendship networks were egalitarian (not centralized) and dense (with many friendship ties) and where the teacher and students were attuned to (shared perceptions about) who in their classroom was aggressive and popular. There were no effects for girls. Educational implications and prospects for setting-level theory, measurement, and intervention are discussed.

By KEVIN LEWIS | 09:00:00 AM

Saturday, April 19, 2014

Mixed signals

Perceived Intelligence Is Associated with Measured Intelligence in Men but Not Women

Karel Kleisner, Veronika Chvátalová & Jaroslav Flegr
PLoS ONE, March 2014

Background: The ability to accurately assess the intelligence of other persons finds its place in everyday social interaction and should have important evolutionary consequences.

Methodology/Principal Findings: We used static facial photographs of 40 men and 40 women to test the relationship between measured IQ, perceived intelligence, and facial shape. Both men and women were able to accurately evaluate the intelligence of men by viewing facial photographs. In addition to general intelligence, figural and fluid intelligence showed a significant relationship with perceived intelligence, but again, only in men. No relationship between perceived intelligence and IQ was found for women. We used geometric morphometrics to determine which facial traits are associated with the perception of intelligence, as well as with intelligence as measured by IQ testing. Faces that are perceived as highly intelligent are rather prolonged with a broader distance between the eyes, a larger nose, a slight upturn to the corners of the mouth, and a sharper, pointing, less rounded chin. By contrast, the perception of lower intelligence is associated with broader, more rounded faces with eyes closer to each other, a shorter nose, declining corners of the mouth, and a rounded and massive chin. By contrast, we found no correlation between morphological traits and real intelligence measured with IQ test, either in men or women.

Conclusions: These results suggest that a perceiver can accurately gauge the real intelligence of men, but not women, by viewing their faces in photographs; however, this estimation is possibly not based on facial shape. Our study revealed no relation between intelligence and either attractiveness or face shape.

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Mood is linked to vowel type: The role of articulatory movements

Ralf Rummer et al.
Emotion, April 2014, Pages 246-250

Abstract:
This study investigates the relation between vowel identity and emotional state. In Experiment 1, (pseudo)words were invented and articulated in a positive or negative mood condition. Subjects in a positive mood produced more words containing /i:/, a vowel involving the same muscle that is used in smiling — the zygomaticus major muscle (ZMM). Subjects in a negative mood produced more words containing /o:/, involving an antagonist of the ZMM — the orbicularis orbis muscle (OOM). We argue that the link between mood and vowel identity is related to orofacial muscle activity, which provides articulatory feedback to speakers on their emotional state. Experiment 2 tests this hypothesis more specifically. Participants rated the funniness of cartoons while repeatedly articulating either /i:/ (ZMM) or /o:/ (OOM). In line with our hypothesis, the cartoons were rated as funnier by subjects articulating /i:/ than by those articulating /o:/.

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Automatic Decoding of Facial Movements Reveals Deceptive Pain Expressions

Marian Stewart Bartlett et al.
Current Biology, 31 March 2014, Pages 738–743

Abstract:
In highly social species such as humans, faces have evolved to convey rich information for social interaction, including expressions of emotions and pain. Two motor pathways control facial movement: a subcortical extrapyramidal motor system drives spontaneous facial expressions of felt emotions, and a cortical pyramidal motor system controls voluntary facial expressions. The pyramidal system enables humans to simulate facial expressions of emotions not actually experienced. Their simulation is so successful that they can deceive most observers. However, machine vision may be able to distinguish deceptive facial signals from genuine facial signals by identifying the subtle differences between pyramidally and extrapyramidally driven movements. Here, we show that human observers could not discriminate real expressions of pain from faked expressions of pain better than chance, and after training human observers, we improved accuracy to a modest 55%. However, a computer vision system that automatically measures facial movements and performs pattern recognition on those movements attained 85% accuracy. The machine system’s superiority is attributable to its ability to differentiate the dynamics of genuine expressions from faked expressions. Thus, by revealing the dynamics of facial action through machine vision systems, our approach has the potential to elucidate behavioral fingerprints of neural control systems involved in emotional signaling.

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The influence of banner advertisements on attention and memory: Human faces with averted gaze can enhance advertising effectiveness

Pitch Sajjacholapunt & Linden Ball
Frontiers in Psychology, March 2014

Abstract:
Research suggests that banner advertisements used in online marketing are often overlooked, especially when positioned horizontally on webpages. Such inattention invariably gives rise to an inability to remember advertising brands and messages, undermining the effectiveness of this marketing method. Recent interest has focused on whether human faces within banner advertisements can increase attention to the information they contain, since the gaze cues conveyed by faces can influence where observers look. We report an experiment that investigated the efficacy of faces located in banner advertisements to enhance the attentional processing and memorability of banner contents. We tracked participants' eye movements when they examined webpages containing either bottom-right vertical banners or bottom-center horizontal banners. We also manipulated facial information such that banners either contained no face, a face with mutual gaze or a face with averted gaze. We additionally assessed people's memories for brands and advertising messages. Results indicated that relative to other conditions, the condition involving faces with averted gaze increased attention to the banner overall, as well as to the advertising text and product. Memorability of the brand and advertising message was also enhanced. Conversely, in the condition involving faces with mutual gaze, the focus of attention was localized more on the face region rather than on the text or product, weakening any memory benefits for the brand and advertising message. This detrimental impact of mutual gaze on attention to advertised products was especially marked for vertical banners. These results demonstrate that the inclusion of human faces with averted gaze in banner advertisements provides a promising means for marketers to increase the attention paid to such adverts, thereby enhancing memory for advertising information.

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Blocking Mimicry Makes True and False Smiles Look the Same

Magdalena Rychlowska et al.
PLoS ONE, March 2014

Abstract:
Recent research suggests that facial mimicry underlies accurate interpretation of subtle facial expressions. In three experiments, we manipulated mimicry and tested its role in judgments of the genuineness of true and false smiles. Experiment 1 used facial EMG to show that a new mouthguard technique for blocking mimicry modifies both the amount and the time course of facial reactions. In Experiments 2 and 3, participants rated true and false smiles either while wearing mouthguards or when allowed to freely mimic the smiles with or without additional distraction, namely holding a squeeze ball or wearing a finger-cuff heart rate monitor. Results showed that blocking mimicry compromised the decoding of true and false smiles such that they were judged as equally genuine. Together the experiments highlight the role of facial mimicry in judging subtle meanings of facial expressions.

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Spatial orientation shrinks and expands psychological distance

Sam Maglio & Evan Polman
Psychological Science, forthcoming

Abstract:
Being objectively close to or far from a place changes where that place feels in a subjective, psychological sense. In this paper, we investigate whether people’s spatial orientation (defined as moving toward or away from someplace) will produce similar effects — by specifically influencing psychological closeness in each of its forms (viz. spatial, temporal, probabilistic, and social distance). In six studies, orientation influenced subjective spatial distance at various levels of objective distance (Study 1), irrespective of the direction people face (Study 2). In addition, when spatially oriented toward someplace, participants felt that events there had occurred more recently (Studies 3a and 3b) and that events there would be more likely to occur (Study 4). Finally, participants felt that persons spatially oriented toward them were more similar to themselves (Study 5). Our investigation broadens the study of psychological distance from static spatial locations to dynamically moving points in space.

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Negative affect improves the quality of memories: Trading capacity for precision in sensory and working memory

Philipp Spachtholz, Christof Kuhbandner & Reinhard Pekrun
Journal of Experimental Psychology: General, forthcoming

Abstract:
Research has shown that negative affect reduces working memory capacity. Commonly, this effect has been attributed to an allocation of resources to task-irrelevant thoughts, suggesting that negative affect has detrimental consequences for working memory performance. However, rather than simply being a detrimental effect, the affect-induced capacity reduction may reflect a trading of capacity for precision of stored representations. To test this hypothesis, we induced neutral or negative affect and concurrently measured the number and precision of representations stored in sensory and working memory. Compared with neutral affect, negative affect reduced the capacity of both sensory and working memory. However, in both memory systems, this decrease in capacity was accompanied by an increase in precision. These findings demonstrate that observers unintentionally trade capacity for precision as a function of affective state and indicate that negative affect can be beneficial for the quality of memories.

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Affective and cognitive reactions to subliminal flicker from fluorescent lighting

Igor Knez
Consciousness and Cognition, May 2014, Pages 97–104

Abstract:
This study renews the classical concept of subliminal perception (Peirce & Jastrow, 1884) by investigating the impact of subliminal flicker from fluorescent lighting on affect and cognitive performance. It was predicted that low compared to high frequency lighting (latter compared to former emits non-flickering light) would evoke larger changes in affective states and also impair cognitive performance. Subjects reported high rather than low frequency lighting to be more pleasant, which, in turn, enhanced their problem solving performance. This suggests that sensory processing can take place outside of conscious awareness resulting in conscious emotional consequences; indicating a role of affect in subliminal/implicit perception, and that positive affect may facilitate cognitive task performance.

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Effects of new light sources on task switching and mental rotation performance

F. Ferlazzo et al.
Journal of Environmental Psychology, forthcoming

Abstract:
Recent studies investigated the non-visual effects of light on cognitive processes and mood regulation and showed that light exposure has positive effects on circadian rhythms and alertness, vigilance and mood states and also increases work productivity. However, the effects of light exposure on visuo-spatial abilities and executive functions have only been partially explored. In this study, we aimed to investigate the effects of new LED light sources on healthy participants’ performance on some components of visuo-spatial abilities and executive functions in a specifically-designed and fully-controlled luminous environment. Participants had to mentally rotate 3-D objects and perform a switching task in which inhibitory processes and switch cost were measured. Results suggest that cooler light exposure improves the cognitive system’s capacity to deal with multiple task representations, which might remain active simultaneously without interfering with each other, and visuo-spatial ability, producing fewer errors in the mental rotation of 3-D objects.

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On the Other Hand: Nondominant Hand Use Increases Sense of Agency

Tom Damen & Ap Dijksterhuis
Social Psychological and Personality Science, forthcoming

Abstract:
In two studies, we investigated the influence of hand dominance on the sense of self-causation or agency. Participants alternately used their dominant or nondominant hand to cause the occurrence of an effect (a tone) in a task in which agency was made ambiguous. Participants were subsequently asked to indicate the degree to which they felt they had caused that tone to occur. Results showed that the sense of agency was increased when individuals used their nondominant hand prior to the onset of the tone, compared to when they used their dominant hand. Furthermore, the degree of experienced agency was moderated by perceived effort. The difference in agency levels occurred independently of experimentally induced or naturally occurring differences in response latencies and even occurred in the absence of (major) arm movement.

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Good Vibrations – Effects of Whole Body Vibration on Attention in Healthy Individuals and Individuals with ADHD

Anselm Fuermaier et al.
PLoS ONE, February 2014

Objectives: Most of the current treatment strategies of ADHD are associated with a number of disadvantages which strengthen the need for alternative or additional approaches for the treatment of ADHD. In this respect, Whole Body Vibration (WBV) might be interesting as it was found to have beneficial effects on a variety of physiological measures. The present study explored the effects of WBV on attention of healthy individuals and adults diagnosed with ADHD.

Methods: Eighty-three healthy individuals and seventeen adults diagnosed with ADHD participated in the study. WBV treatment was applied passively, while participants were sitting on a chair which was mounted on a vibrating platform. A repeated measure design was employed in order to explore potential effects of WBV treatment on attention within subjects. Attention (i.e. inhibitory control) was measured with a color-word interference paradigm.

Results: A period of two minutes of WBV treatment had significant beneficial effects of small to medium size on attention of both healthy individuals and adults with ADHD. The effect of WBV treatment on attention did not differ significantly between groups.

Conclusions: WBV was demonstrated to improve cognitive performance of healthy individuals as well as of individuals with ADHD. WBV treatment is relatively inexpensive and easy to apply and might therefore be of potential relevance for clinical use. The application of WBV treatment as a cognitive enhancement strategy and as a potential treatment of cognitive impairments is discussed.

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Individual Differences in Laughter Perception Reveal Roles for Mentalizing and Sensorimotor Systems in the Evaluation of Emotional Authenticity

C. McGettigan et al.
Cerebral Cortex, forthcoming

Abstract:
Humans express laughter differently depending on the context: polite titters of agreement are very different from explosions of mirth. Using functional MRI, we explored the neural responses during passive listening to authentic amusement laughter and controlled, voluntary laughter. We found greater activity in anterior medial prefrontal cortex (amPFC) to the deliberate, Emitted Laughs, suggesting an obligatory attempt to determine others' mental states when laughter is perceived as less genuine. In contrast, passive perception of authentic Evoked Laughs was associated with greater activity in bilateral superior temporal gyri. An individual differences analysis found that greater accuracy on a post hoc test of authenticity judgments of laughter predicted the magnitude of passive listening responses to laughter in amPFC, as well as several regions in sensorimotor cortex (in line with simulation accounts of emotion perception). These medial prefrontal and sensorimotor sites showed enhanced positive connectivity with cortical and subcortical regions during listening to involuntary laughter, indicating a complex set of interacting systems supporting the automatic emotional evaluation of heard vocalizations.

By KEVIN LEWIS | 09:00:00 AM

Friday, April 18, 2014

Divided governance

Birds of a feather: Value implications of political alignment between top management and directors

Jongsub Lee, Kwang Lee & Nandu Nagarajan
Journal of Financial Economics, May 2014, Pages 232–250

Abstract:
For 2,695 US corporations from 1996 to 2009, we find that alignment in political orientation between the chief executive officer (CEO) and independent directors is associated with lower firm valuations, lower operating profitability, and increased internal agency conflicts such as a reduced likelihood of dismissing poorly performing CEOs, a lower CEO pay-performance sensitivity, and a greater likelihood of accounting fraud. Importantly, we show that our results are driven neither by the effects associated with various measures of similarity and diversity within the board nor the effects of local director labor market and political conditions on board structure. We provide evidence that our measure of individual political orientation reflects the person's political beliefs rather than opportunistic attempts to seek political favor. Overall, our results suggest that diversity in political beliefs among corporate board members is valuable.

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Evasive Shareholder Meetings

Yuanzhi Li & David Yermack
NBER Working Paper, March 2014

Abstract:
We study the location and timing of annual shareholder meetings. When companies move their annual meetings a great distance from headquarters, they tend to announce disappointing earnings results and experience pronounced stock market underperformance in the months after the meeting. Companies appear to schedule meetings in remote locations when the managers have private, adverse information about future performance and wish to discourage scrutiny by shareholders, activists, and the media. However, shareholders do not appear to decode this signal, since the disclosure of meeting locations leads to little immediate stock price reaction. We find that voter participation drops when meetings are held at unusual hours, even though most voting is done electronically during a period of weeks before the meeting convenes.

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Evidence of a transnational capitalist class-for-itself: The determinants of PAC activity among foreign firms in the Global Fortune 500, 2000–2006

Joshua Murray
Global Networks, April 2014, Pages 230–250

Abstract:
Transnational capitalist class (TCC) theory is rooted in the claim that the globalization of the economy has led to a globalization of economic interests and of class formation. However, systematic evidence linking the indicators of transnational class formation with political behaviour is largely missing. In this article, I combine data on board of director interlocks among the 500 largest business firms in the world between 2000 and 2006 with data on the political donations to US elections of foreign corporations via the corporate political action committees (PACs) of their subsidiaries, divisions or affiliates. Controlling for the various interests of individual firms, I find that foreign firms that are highly central in the transnational intercorporate network contribute more money to US elections than do the less central foreign firms. Given prior research on board of director interlocks, this finding suggests that a segment of the transnational business community has emerged as a class-for-itself.

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Political Affiliation and Dividend Tax Avoidance: Evidence from the 2013 Fiscal Cliff

Urs Peyer & Theo Vermaelen
INSEAD Working Paper, March 2014

Abstract:
This paper uses the 2013 fiscal cliff as a natural experiment to examine how the political affiliation of the CEO affected a firm’s response to an expected increase in personal taxes on dividends. Firms could avoid such additional taxes by paying extra dividends and accelerating dividends in the last two months of 2012. These tax avoiders are compared with a sample that could have easily accelerated dividend payments, but did not. We find that the difference in behaviour between firms that avoid taxes and firms that do not, but could have, is explained by the CEO’s political sympathies: Republican CEOs are more likely to help their investors to save money on income taxes. However, other effects seem to be more significant, such as: the consequences for the CEO’s personal wealth as well as the percentage of insider holdings. Larger firms are also more reluctant to engage in avoiding taxes for “the rich”, possibly indication reputational concerns.

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Peer Effects and Corporate Corruption

Christopher Parsons, Johan Sulaeman & Sheridan Titman
University of California Working Paper, March 2014

Abstract:
We find evidence that financial misbehavior occurs in regionally concentrated waves: a firm’s tendency to engage in misconduct increases with the misconduct rates of neighboring firms. This effect appears to be the result of peer effects, rather than exogenous shocks like regional variation in enforcement. Further, local waves of financial misconduct are correlated with non-financial misconduct, such as political fraud. Both firm and city performance suffer in the wake of local corruption waves.

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Corporate Socially Responsible Investments: CEO Altruism, Reputation, and Shareholder Interests

Richard Borghesi, Joel Houston & Andy Naranjo
Journal of Corporate Finance, June 2014, Pages 164–181

Abstract:
Corporate managers often invest in activities that are deemed to be socially responsible. In some instances, these investments enhance shareholder value. However, in other cases, altruistic managers or managers who privately benefit from the positive attention arising from these activities may choose to make socially responsible investments even if they are not value enhancing. Given this backdrop, we investigate the various factors that motivate firm managers to make socially responsible investments. We find that larger firms, firms with greater free cash flow, and higher advertising outlays demonstrate higher levels of corporate social responsibility (CSR). We also find that companies with stronger institutional ownership are less likely to invest in CSR – which casts doubt on the argument that these investments are designed to promote shareholder value. Consistent with the literature that explores how CEO personal attributes influence corporate decision making, we find that female CEOs, younger CEOs, and managers who donate to both Republican and Democratic parties are significantly more likely to invest in CSR. This latter result suggests that CSR investments may not be driven solely for altruistic reasons, but instead may be part of a broader strategy to create goodwill and/or help maintain good political relations. Finally, we find a strong positive connection between the level of media scrutiny surrounding the firm and its CEO, and the level of CSR investment. This finding suggests that media attention helps induce firms to make socially responsible investments.

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The Impact of Corporate Social Responsibility on Investment Recommendations: Analysts’ Perceptions and Shifting Institutional Logics

Ioannis Ioannou & George Serafeim
Strategic Management Journal, forthcoming

Abstract:
We explore the impact of corporate social responsibility (CSR) ratings on sell-side analysts’ assessments of firms’ future financial performance. We suggest that when analysts perceive CSR as an agency cost they produce pessimistic recommendations for firms with high CSR ratings. Moreover, we theorize that over time, the emergence of a stakeholder focus shifts the analysts’ perceptions of CSR. Using a large sample of publicly traded U.S. firms over 15 years, we confirm that in the early 1990s, analysts issue more pessimistic recommendations for firms with high CSR ratings. However, analysts progressively assess these firms more optimistically over time. Furthermore, we find that analysts of highest status are the first to shift the relation between CSR ratings and investment recommendation optimism.

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Co-opted Boards

Jeffrey Coles, Naveen Daniel & Lalitha Naveen
Review of Financial Studies, forthcoming

Abstract:
We develop two measures of board composition to investigate whether directors appointed by the CEO have allegiance to the CEO and decrease their monitoring. Co-option is the fraction of the board comprised of directors appointed after the CEO assumed office. As Co-option increases, board monitoring decreases: turnover-performance sensitivity diminishes, pay increases (without commensurate increase in pay-performance sensitivity), and investment increases. Non-Co-opted Independence — the fraction of directors who are independent and were appointed before the CEO — has more explanatory power for monitoring effectiveness than the conventional measure of board independence. Our results suggest that not all independent directors are effective monitors.

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Governance in the Executive Suite and Board Independence

Han Kim & Yao Lu
University of Maryland Working Paper, January 2014

Abstract:
The overall independence of a firm’s governance system depends not only on the independence of its board of directors but also on CEO influence over the other top executives. We find that board independence and independence from CEO influence in the executive suite are inversely related. Difference-in-difference estimates using a regulatory shock reveal that strengthening board independence weakens executive suite independence, which is proxied by (the inverse of) the fraction of top executives appointed by a current CEO. We also find that the greater the increase in the fraction of the current CEO’s appointees in the executive suite, the lesser the improvement in monitoring CEO compensation and the lower the shareholder value enhancement in the aftermath of the regulation. These findings imply that one cannot infer overall independence based on board independence alone and that strengthening a specific governance mechanism by regulation can have undesirable spillover effects to a seemingly unrelated governing body.

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The Idealized Electoral College voting mechanism and shareholder power

Edward Van Wesep
Journal of Financial Economics, forthcoming

Abstract:
Increasing concern over corporate governance has led to calls for more shareholder influence over corporate decisions, but allowing shareholders to vote on more issues may not affect the quality of governance. We should expect instead that, under current rules, shareholder voting will implement the preferences of the majority of large shareholders and management. This is because majority rule offers little incentive for small shareholders to vote. I offer a potential remedy in the form of a new voting rule, the Idealized Electoral College (IEC), modeled on the American Electoral College, that significantly increases the expected impact that a given shareholder has on election. The benefit of the mechanism is that it induces greater turnout, but the cost is that it sometimes assigns a winner that is not preferred by a majority of voters. Therefore, for issues on which management and small shareholders are likely to disagree, the IEC is superior to majority rule.

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Corporate social responsibility and stock price crash risk

Yongtae Kim, Haidan Li & Siqi Li
Journal of Banking & Finance, June 2014, Pages 1–13

Abstract:
This study investigates whether corporate social responsibility (CSR) mitigates or contributes to stock price crash risk. Crash risk, defined as the conditional skewness of return distribution, captures asymmetry in risk and is important for investment decisions and risk management. If socially responsible firms commit to a high standard of transparency and engage in less bad news hoarding, they would have lower crash risk. However, if managers engage in CSR to cover up bad news and divert shareholder scrutiny, CSR would be associated with higher crash risk. Our findings support the mitigating effect of CSR on crash risk. We find that firms’ CSR performance is negatively associated with future crash risk after controlling for other predictors of crash risk. The result holds after we account for potential endogeneity. Moreover, the mitigating effect of CSR on crash risk is more pronounced when firms have less effective corporate governance or a lower level of institutional ownership. The results are consistent with the notion that firms that actively engage in CSR also refrain from bad news hoarding behavior and thus reducing crash risk. This role of CSR is particularly important when governance mechanisms, such as monitoring by boards or institutional investors, are weak.

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Takeover defenses, innovation, and value creation: Evidence from acquisition decisions

Mark Humphery-Jenner
Strategic Management Journal, May 2014, Pages 668–690

Abstract:
The desirability of antitakeover provisions (ATPs) is a contentious issue. ATPs might enable managerial empire building by insulating managers from disciplinary takeovers. However, some companies, such as “hard-to-value” (HTV) companies, might trade at a discount due to valuation difficulties, thereby exposing HTV companies to opportunistic takeovers and creating agency conflicts of managerial risk aversion. ATPs might ameliorate such managerial risk aversion by inhibiting opportunistic takeovers. This paper analyzes acquisitions made by HTV firms, focusing on whether the acquirer (not the target) is entrenched in order to examine the impact of entrenchment managerial decision making. The results show that HTV firms that are entrenched make acquisitions that generate more shareholder wealth and are more likely to increase corporate innovation, suggesting that ATPs can be beneficial in some firms.

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Commitment to Social Good and Insider Trading

Feng Gao, Ling Lei Lisic & Ivy Xiying Zhang
Journal of Accounting and Economics, forthcoming

Abstract:
A firm's investment in corporate social responsibility (CSR) builds a positive image of caring for social good and imposes additional costs on executives' informed trading, which is widely perceived self-serving. We thus expect executives of CSR-conscious firms to be more likely to refrain from informed trading. We find that executives of CSR-conscious firms profit significantly less from insider trades and are less likely to trade prior to future news than executives of non-CSR-conscious firms. The negative association between CSR and insider trading profits is more pronounced when executives' personal interests are more aligned with the interests of the firm.

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CEO Inside Debt Incentives and Corporate Tax Policy

Sabrina Chi, Shawn Huang & Juan Manuel Sanchez
Arizona State University Working Paper, March 2014

Abstract:
This paper examines the relation between CEO inside debt holdings (pension benefits and deferred compensation) and corporate tax avoidance. Because inside debt holdings are generally unsecured and unfunded liabilities of the firm, CEOs are exposed to risk similar to that faced by outside creditors. As such, theory suggests that inside debt holdings negatively impact CEO risk-appetite. To the extent that aggressive tax policies involve significant cash flow shortfalls, high cash flow volatility, and losses in firm and CEO reputation in the future, we expect that inside debt holdings will curb CEOs from engaging in risky tax strategies. Consistent with the prediction, we document a negative association between CEO inside debt holdings and tax avoidance. Overall, our results highlight the importance of investigating the implication of CEO debt-like compensation for firm tax policies.

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Knowledge, Compensation, and Firm Value: An Empirical Analysis of Firm Communication

Feng Li et al.
Stanford Working Paper, January 2014

Abstract:
Knowledge is central to managing an organization, but its presence in employees is difficult to measure directly. We hypothesize that external communication patterns reveal the location of knowledge within the management team. Using a large database of firm conference call transcripts, we find that CEOs speak less in settings where they are likely to be relatively less knowledgeable. CEOs who speak more are also paid more, and firms whose CEO pay is not commensurate with CEO speaking have a lower industry-adjusted Tobin’s Q. Communication thus appears to reveal knowledge.

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Market Efficiency, Managerial Compensation, and Real Efficiency

Rajdeep Singh & Vijay Yerramilli
Journal of Corporate Finance, forthcoming

Abstract:
We examine how an exogenous improvement in market efficiency, which allows the stock market to obtain more precise information about the firm’s intrinsic value, affects the shareholder-manager contracting problem, managerial incentives, and shareholder value. A key assumption in the model is that stock market investors do not observe the manager’s pay-performance sensitivity ex ante. We show that an increase in market efficiency weakens managerial incentives by making the firm’s stock price less sensitive to the firm’s current performance. The impact on real efficiency and shareholder value varies depending on the composition of the firm’s intrinsic value.

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Insider Purchases Amid Short Interest Spikes: A Semi-Pooling Equilibrium

Chattrin Laksanabunsong & Wei Wu
University of Chicago Working Paper, January 2014

Abstract:
We study corporate insiders’ purchase behavior amid short interest spikes. The cumulative abnormal returns associated with insider purchases amid short interest spikes increase in the short run but decrease significantly in the long run, which is in sharp contrast to those associated with typical insider purchases. Moreover, insider purchases amid short interest spikes are on average followed by negative rather than positive earnings surprises. Our results suggest corporate insiders, provided with the right incentive, can strategically use purchases to shape firm information environments, steer stock prices, and thus disrupt market efficiency.

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Looking in the Rear View Mirror: The Effect of Managers’ Professional Experience on Corporate Financial Policy

Amy Dittmar & Ran Duchin
University of Maryland Working Paper, January 2014

Abstract:
We track the employment history of over 9,000 managers to study the effects of professional experiences on corporate policies. Our identification strategy exploits exogenous CEO turnovers and employment in other firms, in non-CEO roles and early in their career. Firms run by CEOs who experienced distress issue less debt, save more cash, and invest less than other firms. Past experience affects both managerial appointments and corporate policies, with stronger effects in poorly governed firms. We find similar effects on debt and cash, but not investment, for CFOs. The results suggest that policies vary with managers’ experiences and throughout their careers.

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Service on a Stigmatized Board, Social Capital, and Change in Number of Directorships

Kurt Wurthmann
Journal of Management Studies, forthcoming

Abstract:
This article seeks to develop a nuanced understanding about the relationship between service on a stigmatized board and reduced opportunities for future directorships on other boards by examining the moderating effects of different dimensions of director social capital on this relationship. Evidence based on a unique sample of firms with boards that were viewed as being stigmatized by a group of corporate governance experts suggests that while serving on a stigmatized board is related to a reduction in future number of directorships held, this relationship is significantly mitigated for directors of upper-class origins. However, social capital related to affiliations with other elite institutions does not appear to mitigate reduction in future number of directorships held by outside directors who serve on a stigmatized board. Implications and future directions in research on class-based influence in the corporate community and stigmatization and devaluation of elites associated with corporate failures are discussed.

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Reputation Effects in the Market of Certifiers: Evidence from the Audit Industry

Áron Tóth
Economic Inquiry, April 2014, Pages 505–517

Abstract:
Certifiers verify unobserved product characteristics for buyers and thereby alleviate informational asymmetries and facilitate trade. When sellers pay for the certification, however, certifiers can be tempted to bias their opinion to favor sellers. Indeed, accounting scandals and inflated credit ratings suggest sellers may prefer to select dishonest certifiers. I test this proposition by estimating the effect of adverse quality signals on audit demand. Exploiting the natural experiment of Arthur Andersen's demise, I find that auditors with worse quality signals experience a fall in demand. This suggests that reputation effects are at work even in the presence of conflicts of interest.

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The Executive Turnover Risk Premium

Florian Peters & Alexander Wagner
Journal of Finance, forthcoming

Abstract:
We establish that CEOs of companies experiencing volatile industry conditions are more likely to be dismissed. At the same time, accounting for various other factors, industry risk is unlikely to be associated with CEO compensation other than through dismissal risk. Using this identification strategy, we document that CEO turnover risk is significantly positively associated with compensation. This finding is important because job-risk-compensating wage differentials arise naturally in competitive labor markets. By contrast, the evidence rejects an entrenchment model according to which powerful CEOs have lower job risk and at the same time secure higher compensation.

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Acquirer-target social ties and merger outcomes

Joy Ishii & Yuhai Xuan
Journal of Financial Economics, forthcoming

Abstract:
This article investigates the effect of social ties between acquirers and targets on merger performance. We find that the extent of cross-firm social connection between directors and senior executives at the acquiring and the target firms has a significantly negative effect on the abnormal returns to the acquirer and to the combined entity upon merger announcement. Moreover, acquirer-target social ties significantly increase the likelihood that the target firm's chief executive officer (CEO) and a larger fraction of the target firm's pre-acquisition board of directors remain on the board of the combined firm after the merger. In addition, we find that acquirer CEOs are more likely to receive bonuses and are more richly compensated for completing mergers with targets that are highly connected to the acquiring firms, that acquisitions are more likely to take place between two firms that are well connected to each other through social ties, and that such acquisitions are more likely to subsequently be divested for performance-related reasons. Taken together, our results suggest that social ties between the acquirer and the target lead to poorer decision making and lower value creation for shareholders overall.

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When is Human Capital a Valuable Resource? The Performance Effects of Ivy League Selection among Celebrated CEOs

Danny Miller, Xiaowei Xu & Vikas Mehrotra
Strategic Management Journal, forthcoming

Abstract:
We investigate whether and when highly trained human capital constitutes a rent-sustaining resource. Our study of 444 CEOs celebrated on the covers of major US business magazines found an advantage accruing to graduates of selective universities. Such CEOs led firms with higher and more sustained market valuations. The advantage was strongest for undergraduate programs as these related to the kinds of talent demanded of a CEO. The advantage also was greatest in smaller firms where CEO discretion might be highest and for younger CEOs who may benefit most from college and are less able to appropriate rents. Finally, the advantage accrued to graduates of more recent years, when selective schools had become less socially elitist and increasingly meritocratic, thus favoring human versus social capital.

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Management earnings forecasts, insider trading, and information asymmetry

Anastasia Kraft, Bong Soo Lee & Kerstin Lopatta
Journal of Corporate Finance, June 2014, Pages 96–123

Abstract:
We investigate whether senior officers use accrual-based earnings management to meet voluntary earnings disclosure (i.e., management earnings forecasts) before selling or buying their own shares when they have private information. This study is the first to use the differences in timing of trades by senior officers and other insiders (e.g., directors or large shareholders) to infer information asymmetry. We hypothesize that the timing of senior officers’ trades with no other insiders’ trades at the same time indicates opportunistic trades and asymmetric information between senior officers and other insiders. Our results show that senior officers’ exclusive sales are negatively associated with future returns, indicating that they tend to use insider information. Moreover, senior officers are more likely to meet their earnings forecasts when they plan to sell stocks.

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Advantageous Comparison and Rationalization of Earnings Management

Timothy Brown
Journal of Accounting Research, forthcoming

Abstract:
This paper proposes that psychological factors can change a manager's beliefs about earnings management when they choose to engage in it. I show that, under certain circumstances, engaging in a small amount of earnings management alters a manager's beliefs about the appropriateness of the act, which may increase the likelihood of further earnings management. Specifically, I predict and find in two experiments that participants who initially choose to manage earnings are motivated to rationalize their behavior. Participants who are exposed to an egregious example of earnings management (which are commonly the focus of enforcement actions and press reports) have the opportunity to rationalize their behavior through a mechanism called “advantageous comparison”, where participants compare their behavior against the egregious example and conclude that what they did was relatively innocuous and appropriate. My analysis also indicates that presenting participants with an example of earnings management which is similar to the initial decision they made mitigates advantageous comparison. These results have implications for academics interested in how earnings management, and perhaps fraud, can accrete over time and for regulators and practitioners who are interested in preventing it.

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Upper-Echelon Executive Human Capital And Compensation: Generalist Vs Specialist Skills

Sudip Datta & Mai Iskandar-Datta
Strategic Management Journal, forthcoming

Abstract:
This study extends current knowledge of upper echelon executive compensation beyond the CEO, specifically CFO compensation, based on whether they possess generalist or specialist skills. We find that ‘strategic’ CFOs with an elite MBA (generalist) consistently command a compensation premium, while ‘accounting’ CFOs (specialist) and CFOs with a non-MBA master's degree, even from an elite institution, do not. Further, scarce ‘strategic’ CFOs are awarded both higher salaries and higher equity-based compensation. Our findings support the view that unique complementarities between scarce CFOs and firms increase these executives’ bargaining power leading to pay premium. Our results are robust to post-hiring years, firm sizes, board characteristics, and CFO’s insider/outsider status. We contribute at the confluence of upper-echelon compensation, executive human capital, resource-based view, and assortative matching literatures.

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Substitutes or Complements? A Configurational Examination of Corporate Governance Mechanisms

Vilmos Misangyi & Abhijith Acharya
Academy of Management Journal, forthcoming

Abstract:
We examine the nature of the relationships among the bundle of governance mechanisms that have been theorized to effectively control the agency problem. To do so, we performed a qualitative comparative analysis using the fuzzy-set approach to study the combinations of governance mechanisms that yield high firm performance among the S&P 1500 firms. Our configurational approach allowed us to explore the complex interrelationships among the many different governance mechanisms and to elaborate theory on the many ways in which they combine. Our study shows that some type of CEO incentive mechanism and some type of monitoring mechanism are always present among firms that achieve high profitability, thereby suggesting that such mechanisms are complements. Our findings also highlight the simultaneity of substitution and complementarity among and across the various monitoring mechanisms. Finally, our findings suggest that the effectiveness of board independence and CEO non-duality, mechanisms widely held to resolve the agency problem, are a function of how they combine with the other mechanisms in the governance bundle.

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Outside Options and CEO Turnover: The Network Effect

Yun Liu
Journal of Corporate Finance, forthcoming

Abstract:
Most studies consider chief executive officer (CEO) turnover from the firm’s perspective. In this paper, I suggest that the labor market conditions for CEOs affect turnover outcomes. I use CEOs’ positions on corporate executive and director networks to assess their employment options. Controlling for performance, firm characteristics, and personal traits, I find that CEO connectedness significantly increases turnover probability, especially for poor performers. I also show that connectedness increases the likelihood of CEOs leaving for other full-time positions, or their retiring and taking part-time positions elsewhere, but does not have a significant effect on the likelihood that they will step down and remain with the firm in other capacities. The evidence supports the idea that a CEO’s connectedness expands outside options and thus increases turnover probability.

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The role of investment banker directors in M&A

Qianqian Huang et al.
Journal of Financial Economics, May 2014, Pages 269–286

Abstract:
We examine how directors with investment banking experience affect firms’ acquisition behavior. We find that firms with investment bankers on the board have a higher probability of making acquisitions. Furthermore, acquirers with investment banker directors experience higher announcement returns, pay lower takeover premiums and advisory fees, and exhibit superior long-run performance. Overall, our results suggest that directors with investment banking experience help firms make better acquisitions, both by identifying suitable targets and by reducing the cost of the deals.

By KEVIN LEWIS | 09:00:00 AM

Thursday, April 17, 2014

In living color

Black Mexicans, Conjunctural Ethnicity, and Operating Identities: Long-Term Ethnographic Analysis

Robert Courtney Smith
American Sociological Review, forthcoming

Abstract:
This article draws on more than 15 years of research to analyze “Black Mexicans,” phenotypically “Mexican-looking” youth who identified as Black during adolescence, used this identity to become upwardly mobile, and then abandoned it in early adulthood. Black Mexicans are potentially iconic cases among emerging varieties of U.S. ethnic and racial life, given Mexicans’ status as a key, usually negative, case in assimilation theory. Most such theory posits that assimilation into Black, inner-city culture leads to downward mobility. To explain how and why this did not happen for Black Mexicans, I propose a sensitizing framework using the concepts of conjunctural ethnicity, emphasizing analysis of racial and ethnic identity in local, historical, and life course contexts; and operating identity, which analyzes identities in interactions and can accommodate slippage in informants’ understanding or use of ethnic and racial categories. Some Mexicans used a Black culture of mobility to become upwardly mobile in the late-1990s and early-2000s in New York, adopting a socially advantaged operating identity that helped them in ways they felt Mexicanness could not in that historical conjuncture, especially given intra-ethnic competition between teen migrants and second-generation youth. This article uses case-based ethnographic analysis and net-effects analysis to explain why and how Blackness aided upward mobility among Black and non-Black Mexicans, but was left behind in early adulthood.

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Skin Tone Stratification among Black Americans, 2001–2003

Ellis Monk
Social Forces, forthcoming

Abstract:
In the past few decades, a dedicated collection of scholars have examined the matter of skin tone stratification within the black American population and found that complexion has significant net effects on a variety of stratification outcomes. These analyses relied heavily on data collected between 1950 and 1980. In particular, many scholars have utilized the National Survey of Black Americans (1979–1980). This leaves the question of whether or not the effect of skin tone on stratification outcomes remains decades later. Newly available data from the National Survey of American Life (2001–2003) are used to examine this question. I find that skin tone is significantly associated with Black Americans' educational attainment, household income, occupational status, and even the skin tone and educational attainment of their spouses. Consequently, this study demonstrates that skin tone stratification among Black Americans persists into the 21st century. I conclude by discussing the implications of these findings for the study of ethnoracial inequality in the United States and beyond.

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Partisanship, Structure, and Representation: The Puzzle of African American Education Politics

Kenneth Meier & Amanda Rutherford
American Political Science Review, forthcoming

Abstract:
The 1982 amendments to the Voting Rights Act targeted electoral structures as significant determinants of minority representation. The research regarding electoral structures and representation of constituents, however, has produced conflicting results, and the continued application of some of the provisions set forth in the Voting Rights Act is in doubt. This article addresses the impact of at-large elections on African American representation and reveals a striking and unanticipated finding: African Americans are now overrepresented on school boards that have at-large elections when African Americans are a minority of the population. Using the 1,800 largest school districts in the United States (based on original surveys conducted in 2001, 2004, and 2008), we find that partisanship changes the relationship between electoral structures and race to benefit African American representation.

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Does Race Matter in Government Funding of Nonprofit Human Service Organizations? The Interaction of Neighborhood Poverty and Race

Eve Garrow
Journal of Public Administration Research and Theory, April 2014, Pages 381-405

Abstract:
Salamon (Salamon, Lester. M. 1995. Partners in public service. Baltimore, MD: The John Hopkins Univ. Press) and others have argued that government and nonprofit human service organizations work in partnership to address poverty, with government funding the efforts of nonprofits that provide services to the poor. However, this approach does not consider how the racial composition of high-poverty neighborhoods might influence government’s willingness to support the nonprofit human service organizations that locate in them. Using data from a probability sample of nonprofit human service organizations in Los Angeles County that were surveyed in 2002, I estimate logit models predicting receipt of government funding. In neighborhoods with a low percentage of African Americans, I find that greater poverty increases the likelihood that the organization will receive government funding. As the percentage of African Americans increases, however, the relationship between government funding and poverty is reversed. Findings suggest that the influence of race on the government–nonprofit partnership in serving poor neighborhoods is an important, if overlooked, issue that should take its place in scholarship on government–nonprofit relations and policy analysis.

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Subprime lending over time: The role of race

Marvin Smith & Christy Chung Hevener
Journal of Economics and Finance, April 2014, Pages 321-344

Abstract:
In light of the increased scrutiny of the subprime market nationally and the concerns raised that low- and moderate-income and minority homeowners are targeted for high-cost loans, this paper examines the extent to which subprime lending occurs in selected states and the role that race plays in obtaining prime versus subprime loans. It focuses on explaining the gap in subprime rates between African–Americans and whites and estimating its change over time (1999 to 2006) for the study states. We use a unique data set comprised of data from several data sources, including loan-level information, which allows for better controls over factors correlated with race so that better inferences can be drawn. Also, an estimating procedure is employed that fine-tunes the influence of race in the allocation of mortgage capital between the prime and subprime markets. After taking into accounts various controls, the results suggest the possibility of bias in mortgage lending for the period studied.

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Direct evidence for positive selection of skin, hair, and eye pigmentation in Europeans during the last 5,000 y

Sandra Wilde et al.
Proceedings of the National Academy of Sciences, 1 April 2014, Pages 4832–4837

Abstract:
Pigmentation is a polygenic trait encompassing some of the most visible phenotypic variation observed in humans. Here we present direct estimates of selection acting on functional alleles in three key genes known to be involved in human pigmentation pathways — HERC2, SLC45A2, and TYR — using allele frequency estimates from Eneolithic, Bronze Age, and modern Eastern European samples and forward simulations. Neutrality was overwhelmingly rejected for all alleles studied, with point estimates of selection ranging from around 2–10% per generation. Our results provide direct evidence that strong selection favoring lighter skin, hair, and eye pigmentation has been operating in European populations over the last 5,000 y.

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Did southerners favor slavery? Inferences from an analysis of prices in New Orleans, 1805–1860

Jeffrey Grynaviski & Michael Munger
Public Choice, June 2014, Pages 341-361

Abstract:
During the years immediately following the American Revolution, it was common for Southern elites to express concerns about the morality or long-term viability of slavery. It is unclear, however, whether such expressions of anti-slavery sentiment were genuine, especially given the failure of so many slave owners to emancipate their slaves. In this paper, we show that there was a change in elite rhetoric about slavery, initiated by Whig politicians in the mid-1830s seeking a campaign issue in the South, in which anti-slavery rhetoric became linked to attempts by abolitionists to foment slave unrest, making anti-slavery an unsustainable position for the region’s politicians. Before that development, we contend that some planters believed that slavery might some day be abolished. After it, those concerns largely went away. We argue that the change in slave owners’ beliefs about the probability of abolition in the mid-1830s should have been reflected in slave prices at auction and test that claim using evidence from the New Orleans auction market.

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Declining Segregation through the Lens of Neighborhood Quality: Does Middle-Class and Affluent Status Bring Equality?

Samantha Friedman, Joseph Gibbons & Chris Galvan
Social Science Research, July 2014, Pages 155–168

Abstract:
Middle- and upper-class status along with suburban residence are together considered symbolic of the American dream. However, the question of whether they mean access to better quality residential environments has gone largely unexplored. This study relies on data from the 2009 panel of the American Housing Survey and focuses on a range of neighborhood conditions, including indicators of physical and social disorder as well as housing value and a neighborhood rating. Contrary to the tenets of the spatial assimilation model, we find that middle-class and affluent status do not consistently lead to superior conditions for all households. Neighborhood circumstances vary considerably based on householder race and ethnicity, with blacks and Hispanics experiencing the greatest disparities from whites. In addition, suburban residence does not attenuate such differences, and in some cases, well-to-do minorities do even worse than whites in neighborhood quality in suburbs.

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“Savages of Southern Sunshine”: Racial Realignment of the Seminoles in the Selling of Jim Crow Florida

Henry Knight
Journal of American Studies, February 2014, Pages 251-273

Abstract:
In the late nineteenth century, white land and tourism promoters invested in the selling of Florida to American migrants and winter visitors began to recast the Seminoles. From being feared and denigrated as mixed-race killers, associated with runaway slaves, who had defied earlier US attempts to remove them to the West, the Seminoles were “realigned” by boosters into praiseworthy specimens of moral and racial purity. According to promoters, the Seminoles were now human emblems of the Florida wilderness, but also pure-blood primitives. As such, they fitted much better with the Jim Crow ideals of benign racial separation. Although neither smooth nor complete, this process of racial realignment transformed the Seminoles from terrifying threat to marketable curiosity, easing the incorporation of the Seminoles into the selling of south Florida.

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Multiple Disadvantaged Statuses and Health: The Role of Multiple Forms of Discrimination

Eric Anthony Grollman
Journal of Health and Social Behavior, March 2014, Pages 3-19

Abstract:
The double disadvantage hypothesis predicts that adults who hold more than one disadvantaged status may experience worse health than their singly disadvantaged and privileged counterparts. Research that has tested this thesis has yielded mixed findings due partly to a failure to examine the role of discrimination. This article uses data from the National Survey of Midlife Development in the United States (N = 2,647) to investigate the relationship between multiple disadvantaged statuses and health, and whether multiple forms of interpersonal discrimination contribute to this association. The results suggest that multiply disadvantaged adults are more likely to experience major depression, poor physical health, and functional limitations than their singly disadvantaged and privileged counterparts. Further, multiple forms of discrimination partially mediate the relationship between multiple stigmatized statuses and health. Taken together, these findings suggest that multiply disadvantaged adults do face a “double disadvantage” in health, in part, because of their disproportionate exposure to discrimination.

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Neuroimaging Evidence for a Role of Neural Social Stress Processing in Ethnic Minority–Associated Environmental Risk

Ceren Akdeniz et al.
JAMA Psychiatry, forthcoming

Importance: Relative risk for the brain disorder schizophrenia is more than doubled in ethnic minorities, an effect that is evident across countries and linked to socially relevant cues such as skin color, making ethnic minority status a well-established social environmental risk factor. Pathoepidemiological models propose a role for chronic social stress and perceived discrimination for mental health risk in ethnic minorities, but the neurobiology is unexplored.

Objective: To study neural social stress processing, using functional magnetic resonance imaging, and associations with perceived discrimination in ethnic minority individuals.

Design, Setting, and Participants: Cross-sectional design in a university setting using 3 validated paradigms to challenge neural social stress processing and, to probe for specificity, emotional and cognitive brain functions. Healthy participants included those with German lineage (n = 40) and those of ethnic minority (n = 40) from different ethnic backgrounds matched for sociodemographic, psychological, and task performance characteristics. Control comparisons examined stress processing with matched ethnic background of investigators (23 Turkish vs 23 German participants) and basic emotional and cognitive tasks (24 Turkish vs 24 German participants).

Results: There were significant increases in heart rate (P < .001), subjective emotional response (self-related emotions, P < .001; subjective anxiety, P = .006), and salivary cortisol level (P = .004) during functional magnetic resonance imaging stress induction. Ethnic minority individuals had significantly higher perceived chronic stress levels (P = .02) as well as increased activation (family-wise error–corrected [FWE] P = .005, region of interest corrected) and increased functional connectivity (PFWE = .01, region of interest corrected) of perigenual anterior cingulate cortex (ACC). The effects were specific to stress and not explained by a social distance effect. Ethnic minority individuals had significant correlations between perceived group discrimination and activation in perigenual ACC (PFWE = .001, region of interest corrected) and ventral striatum (PFWE = .02, whole brain corrected) and mediation of the relationship between perceived discrimination and perigenual ACC–dorsal ACC connectivity by chronic stress (P < .05).

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Asian American cancer disparities: The potential effects of model minority health stereotypes

Alicia Yee Ibaraki, Gordon Nagayama Hall & Janice Sabin
Asian American Journal of Psychology, March 2014, Pages 75-81

Abstract:
Racial/ethnic disparities exist in health care that are not fully explained by differences in access to care, clinical appropriateness, or patient preferences (Smedley, Stith, & Nelson, 2002). An important health disparity that exists within the Asian American population is in preventive cancer screenings. The rates of physicians recommending cancer screening among Asian Americans are disproportionately lower than justified by the relatively small ethnic group differences in cancer and mortality rates (U.S. Cancer Statistics Working Group, 2012). Despite cancer being the leading cause of death for Asian Americans, (National Center for Health Statistics, 2011) screening rates for cervical and breast cancer in Asian American women, and colorectal cancer in Asian American women and men are well below those of any other ethnic group (King, 2012; U.S. Cancer Statistics Working Group, 2012). In this article, we present a conceptual model that seeks to explain a factor in these lower screening rates. We review and incorporate in our model established mechanisms in the literature including physician-patient communication, patient variables, and physician variables. We also propose a new mechanism that may be specific to the Asian American population — the impact of the model minority myth and how that may translate into positive health stereotypes. These positive implicit or explicit health stereotypes can interact with time pressure and limited information to influence physician decision making and cancer screening recommendations. Suggestions are offered for testing this model including using the Implicit Association Test and the Error Choice technique.

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Does perceived racial discrimination predict changes in psychological distress and substance use over time? An examination among black emerging adults

Noelle Hurd et al.
Developmental Psychology, forthcoming

Abstract:
We assessed whether perceived discrimination predicted changes in psychological distress and substance use over time and whether psychological distress and substance use predicted change in perceived discrimination over time. We also assessed whether associations between these constructs varied by gender. Our sample included 607 Black emerging adults (53% female) followed for 4 years. Participants reported the frequency with which they had experienced racial hassles during the past year, symptoms of anxiety and depression during the past week, and cigarette and alcohol use during the past 30 days. We estimated a series of latent growth models to test our study hypotheses. We found that the intercept of perceived discrimination predicted the linear slopes of anxiety symptoms, depressive symptoms, and alcohol use. We did not find any associations between the intercept factors of our mental health or substance use variables and the perceived discrimination linear slope factor. We found limited differences across paths by gender. Our findings suggest a temporal ordering in the associations among perceived racial discrimination, psychological distress, and alcohol use over time among emerging adults. Further, our findings suggest that perceived racial discrimination may be similarly harmful among men and women.

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Racial Prejudice, Partisanship, and White Turnout in Elections with Black Candidates

Yanna Krupnikov & Spencer Piston
Political Behavior, forthcoming

Abstract:
How does racial prejudice affect White turnout in elections with Black candidates? Previous research, which largely focuses on the relationship between prejudice and vote choice, rarely examines the relationship between prejudice and turnout, leading to an incomplete picture of the impact of prejudice on the fate of Black candidates. In this project, we examine a key condition under which partisanship and partisan strength moderate the effect of prejudice on electoral behavior. Specifically, we argue that when a prejudiced strong partisan shares the partisanship of a Black candidate, she is likely to experience a decision conflict — prejudice and partisanship point in opposing directions — increasing the likelihood that she stays home on Election Day. We test this argument through observational analyses of the 2008 presidential election. Our findings illuminate an additional barrier to Black electoral representation: racial prejudice undermines Black candidates’ efforts to mobilize strong partisans.

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Finding Common Ground? Indian Immigrants and Asian American Panethnicity

Ariela Schachter
Social Forces, forthcoming

Abstract:
The common political usage of the term Asian American includes Indians, but historical, religious, and phenotypic differences among Indians and East and Southeast Asians raise the question of how far the boundaries of Asian American identity extend. Using the National Asian American Survey, I examine whether the forces that propel Indian immigrants toward selecting a panethnic identification are similar to those of other Asian subgroups. I find that for Indian immigrants who live among large non-Indian Asian populations — the setting most likely to encourage panethnicity for other Asians — both immigrant integration and discrimination serve to discourage a panethnic Asian identification. My findings suggest that the boundaries of Asian American identity are not open for many Indian immigrants, and highlight the importance of group relations for understanding panethnic identification.

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Identity Isomorphism: Role Schemas and White Masculinity Formation

Matthew Hughey
Sociological Inquiry, forthcoming

Abstract:
This article explores a counterintuitive intersection of class, gender, and race within two politically antagonistic white movements — white nationalists and white antiracists. Ethnographic field-notes, in-depth interviews, and content analysis provide comprehensive data and triangulation for how implicit perceptions of class and gender are intertwined with the social construction of an ideal white, male, middle-class identity. While both organizations express antithetical political goals, they together reinforce broader discourses about whiteness and white supremacy. In so doing, these two organizations present an empirical and theoretical puzzle: How and why do two supposedly antithetical and divergent white male organizations simultaneously rationalize the inclusion and exclusion of women and the lower class from their ranks? Findings gesture toward tempering conceptual models of white male identity formation to further explore how cultural schemas are utilized toward the construction of both identity formation and interest protection.

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Divergence or Convergence in the U.S. and Brazil: Understanding Race Relations Through White Family Reactions to Black-White Interracial Couples

Chinyere Osuji
Qualitative Sociology, March 2014, Pages 93-115

Abstract:
Different approaches to race mixture in the U.S. and Brazil have led to the notion that they are polar opposites in terms of race relations. However, the end of de jure segregation in the U.S., the acknowledgement of racial inequality, and subsequent implementation of affirmative action in Brazil have called into question the extent to which these societies are vastly different. By examining race mixture as a lived reality, this study offers a novel approach to understanding racial boundaries in these two contexts. I analyze 87 interviews with individuals in black-white couples in Los Angeles and Rio de Janeiro to examine the cultural repertoires and discursive traditions they draw on to understand white families’ reactions to black spouses. I find that U.S. couples employ “color-blindness” to understand opposition to Blacks marrying into the family. Brazilian couples perceive overt racism and the use of humor from white family members. Nevertheless, couples with black males experienced more hostility in both sites. In addition, white male autonomy was related to the lower hostility that black female-white male couples experienced in both societies. By examining contemporary race mixture as a lived reality, this study complicates simplistic understandings of race relations as similar or different in these two societies. Furthermore, with the increase of multiracial families in both societies, it reveals the family as an important site for redrawing and policing racial boundaries.

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“Fix My Life”: Oprah, post-racial economic dispossession, and the Precious transfiguration of PUSH

Kim Hester Williams
Cultural Dynamics, March 2014, Pages 53-71

Abstract:
This article examines the critical interventions of Black feminist discourses that advocate for oppositional knowledges and a womanist ethics of care and communalism versus the media-driven hypervisible representation of Black racial subjects that promote neoliberal individualism. The article devotes particular attention to how the 1996 novel, PUSH, by Sapphire, foregrounds the racially oppressive neoliberal welfare reform policies of the 1980s and 1990s while Oprah Winfrey’s coproduction of the 2009 film adaptation of the novel, retitled Precious, functions in opposition to Sapphire’s feminist narrative. The article highlights the Oprah brand’s emphasis on neoliberal self-sufficiency and personal responsibility despite ongoing racial and economic dispossession and discusses, in relation, the promotion of Iyanla Vanzant’s Oprah Winfrey Network television program, Fix My Life, as further reinforcing the post-racial, neoliberal antiwelfare state.

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The Orientalized “Other” and Corrosive Femininity: Threats to White Masculinity in 300

David Oh & Doreen Kutufam
Journal of Communication Inquiry, April 2014, Pages 149-165

Abstract:
The film 300 tells a fictionalized account of 300 Spartans’ courageous stand against Xerxes’s Persian army that provided Greece a beacon of masculine strength, independence, and freedom. This study seeks to understand the racist and sexist ideologies represented in the film’s characterization of the Spartan and the Persian armies. To uncover ideologies in the film, we conducted a textual analysis focusing on the intersecting constructions of nation, race, and gender. Our findings suggest that the film advances ideological support for the duty of Whiteness and masculinity in the United States, specifically, and the West, generally, to protect itself from the external, invading forces of the Orientalized racial “other” and against the internal, corrosive forces of femininity.

By KEVIN LEWIS | 09:00:00 AM

Wednesday, April 16, 2014

Burned out

Kyoto and Carbon Leakage: An Empirical Analysis of the Carbon Content of Bilateral Trade

Rahel Aichele & Gabriel Felbermayr
Review of Economics and Statistics, forthcoming

Abstract:
Has the Kyoto Protocol induced carbon leakage? We conduct the first empirical ex-post evaluation of the Protocol. We derive a theoretical gravity equation for the CO2 content of trade, which accounts for intermediate inputs, both domestic and imported. The structure of our new panel database of the carbon content of sectoral bilateral trade flows allows controlling for the endogenous selection of countries into the Kyoto Protocol. Binding commitments under Kyoto have increased committed countries' embodied carbon imports from non-committed countries by around 8% and the emission intensity of their imports by about 3%. Hence, Kyoto has indeed led to leakage.

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Carbon Emissions from the Commercial Building Sector: The Role of Climate, Quality, and Incentives

Matthew Kahn, Nils Kok & John Quigley
Journal of Public Economics, May 2014, Pages 1–12

Abstract:
Commercial buildings play a major role in determining U.S. greenhouse gas emissions, yet surprisingly little is known about the environmental performance of different buildings at a point in time or how the same buildings perform over time. By exploiting a unique panel of commercial buildings from a major electric utility, we study the association between a building’s electricity consumption and the physical attributes of buildings, lease incentive terms, indicators of human capital, and climatic conditions. We find that buildings that are newer and of higher quality consume more electricity, contrasting evidence for the residential sector. However, using our panel data set, we document that newer buildings are most resilient when exposed to hotter weather. Those buildings that have a building manager on site and whose tenants face a positive marginal cost for electricity also demonstrate a better environmental performance.

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Are younger generations higher carbon emitters than their elders?: Inequalities, generations and CO2 emissions in France and in the USA

Lucas Chancel
Ecological Economics, April 2014, Pages 195–207

Abstract:
Proper understanding of the determinants of household CO2 emissions is essential for a shift to sustainable lifestyles. This paper explores the impacts of date of birth and income on household CO2 emissions in France and in the USA. Direct CO2 emissions of French and American households are computed from consumer budget surveys, over the 1980–2000 time period. Age Period Cohort estimators are used to isolate the generational effect on CO2 emissions — i.e. the specific effect of date of birth, independent of the age, the year and other control variables. The paper shows that French 1935–55 cohorts have a stronger tendency to emit CO2 than their predecessors and followers. The generational effect is explained by the fact that over their lifespan, French baby boomers are better off than other generations and live in energy and carbon inefficient dwellings. In the USA, the absence of a generational effect on CO2 emissions can be explained by the fact that intergenerational income inequalities are weaker than in France. Persistence of the generational effect once income and housing type is controlled for in France can be explained by the difficulty for French 1935–55 cohorts to adapt to sober energy consumption patterns.

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Extreme Weather and Civil War: Does Drought Fuel Conflict in Somalia through Livestock Price Shocks?

Jean-François Maystadt & Olivier Ecker
American Journal of Agricultural Economics, forthcoming

Abstract:
A growing body of evidence shows a causal relationship between extreme weather events and civil conflict incidence at the global level. We find that this causality is also valid for droughts and local violent conflicts in a within-country setting over a short time frame in the case of Somalia. We estimate that a one standard deviation increase in drought intensity and length raises the likelihood of conflict by 62%. We also find that drought affects conflict through livestock price changes, establishing livestock markets as the primary channel of transmission in Somalia.

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Scientific uncertainty and climate change: Part I. Uncertainty and unabated emissions

Stephan Lewandowsky et al.
Climatic Change, forthcoming

Abstract:
Uncertainty forms an integral part of climate science, and it is often used to argue against mitigative action. This article presents an analysis of uncertainty in climate sensitivity that is robust to a range of assumptions. We show that increasing uncertainty is necessarily associated with greater expected damages from warming, provided the function relating warming to damages is convex. This constraint is unaffected by subjective or cultural risk-perception factors, it is unlikely to be overcome by the discount rate, and it is independent of the presumed magnitude of climate sensitivity. The analysis also extends to “second-order” uncertainty; that is, situations in which experts disagree. Greater disagreement among experts increases the likelihood that the risk of exceeding a global temperature threshold is greater. Likewise, increasing uncertainty requires increasingly greater protective measures against sea level rise. This constraint derives directly from the statistical properties of extreme values. We conclude that any appeal to uncertainty compels a stronger, rather than weaker, concern about unabated warming than in the absence of uncertainty.

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Unilateral Climate Policy: Harmful or Even Disastrous?

Hendrik Ritter & Mark Schopf
Environmental and Resource Economics, May 2014, Pages 155-178

Abstract:
This paper deals with possible foreign reactions to unilateral carbon demand reducing policies. It differentiates between demand side and supply side reactions as well as between intra- and inter-temporal shifts in greenhouse gas emissions. In our model, we integrate a stock-dependent marginal physical cost of extracting fossil fuels into Eichner and Pethig’s (Int Econ Rev 52(3):767–805, 2011) general equilibrium carbon leakage model. The results are as follows: Under similar but somewhat tighter conditions than those derived by Eichner and Pethig (Int Econ Rev 52(3):767–805, 2011), a weak green paradox arises. Furthermore, a strong green paradox can arise in our model under supplementary constraints. That means a “green” policy measure might not only lead to a harmful acceleration of fossil fuel extraction but to an increase in the cumulative climate damages at the same time. In some of these cases there is even a cumulative extraction expansion, which we consider disastrous.

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Nitrate assimilation is inhibited by elevated CO2 in field-grown wheat

Arnold Bloom et al.
Nature Climate Change, forthcoming

Abstract:
Total protein and nitrogen concentrations in plants generally decline under elevated CO2 atmospheres. Explanations for this decline include that plants under elevated CO2 grow larger, diluting the protein within their tissues; that carbohydrates accumulate within leaves, downregulating the amount of the most prevalent protein Rubisco; that carbon enrichment of the rhizosphere leads to progressively greater limitations of the nitrogen available to plants; and that elevated CO2 directly inhibits plant nitrogen metabolism, especially the assimilation of nitrate into proteins in leaves of C3 plants. Recently, several meta-analyses have indicated that CO2 inhibition of nitrate assimilation is the explanation most consistent with observations. Here, we present the first direct field test of this explanation. We analysed wheat (Triticum aestivum L.) grown under elevated and ambient CO2 concentrations in the free-air CO2 enrichment experiment at Maricopa, Arizona. In leaf tissue, the ratio of nitrate to total nitrogen concentration and the stable isotope ratios of organic nitrogen and free nitrate showed that nitrate assimilation was slower under elevated than ambient CO2. These findings imply that food quality will suffer under the CO2 levels anticipated during this century unless more sophisticated approaches to nitrogen fertilization are employed.

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Toward a better understanding and quantification of methane emissions from shale gas development

Dana Caulton et al.
Proceedings of the National Academy of Sciences, forthcoming

Abstract:
The identification and quantification of methane emissions from natural gas production has become increasingly important owing to the increase in the natural gas component of the energy sector. An instrumented aircraft platform was used to identify large sources of methane and quantify emission rates in southwestern PA in June 2012. A large regional flux, 2.0–14 g CH4 s−1 km−2, was quantified for a ∼2,800-km2 area, which did not differ statistically from a bottom-up inventory, 2.3–4.6 g CH4 s−1 km−2. Large emissions averaging 34 g CH4/s per well were observed from seven well pads determined to be in the drilling phase, 2 to 3 orders of magnitude greater than US Environmental Protection Agency estimates for this operational phase. The emissions from these well pads, representing ∼1% of the total number of wells, account for 4–30% of the observed regional flux. More work is needed to determine all of the sources of methane emissions from natural gas production, to ascertain why these emissions occur and to evaluate their climate and atmospheric chemistry impacts.

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Incentives for Methane Mitigation and Energy-Efficiency Improvements in the Case of Ukraine's Natural Gas Transmission System

Volha Roshchanka & Meredydd Evans
Earth's Future, forthcoming

Abstract:
Reducing methane losses is a concern for climate change policy and energy policy. The energy sector is the major source of anthropogenic methane emissions into the atmosphere in Ukraine. Reducing methane emissions and avoiding combustion can be very cost-effective, but various barriers prevent such energy-efficiency measures from taking place. To date, few examples of industry-wide improvements exist. One example of substantial investments into upgrading natural gas transmission system comes from Ukraine's natural gas transmission company, Ukrtransgaz. The company's investments into system upgrades, along with a 34 percent fall in throughput, resulted in reduction of Ukrtransgaz system's own consumption of natural gas by 68 percent in 2011 compared to the level in 2005. Evaluating reductions in methane emissions is challenging because of lack of accurate data and gaps in accounting methodologies. At the same time, Ukraine's transmission system has undergone improvements that, at the very least, have contained methane emissions, if not substantially reduced them. In this paper, we describe recent developments in Ukraine's natural gas transmission system and analyze the incentives that forced the sector to pay close attention to its methane losses. Ukraine is one of the most energy-intensive countries, among the largest natural gas consumers in the world, and a significant emitter of methane. The country is also dependent on imports of natural gas. A combination of several factors has created conditions for successful reductions in methane emissions and combustion. These factors include: an eightfold increase in the price of imported natural gas; comprehensive domestic environmental and energy policies, such as the Laws of Ukraine on Protecting the Natural Environment and on Air Protection; policies aimed at integration with European Union's energy market and accession to the Energy Community Treaty; and the country's participation in international cooperation on environment, such as through the Joint Implementation mechanism and the voluntary Global Methane Initiative. Learning about such case studies can help policymakers and sustainability professionals design better policies elsewhere.

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Loss of cultural world heritage and currently inhabited places to sea-level rise

Ben Marzeion & Anders Levermann
Environmental Research Letters, March 2014

Abstract:
The world population is concentrated near the coasts, as are a large number of Cultural World Heritage sites, defined by the UNESCO. Using spatially explicit sea-level estimates for the next 2000 years and high-resolution topography data, we compute which current cultural heritage sites will be affected by sea-level rise at different levels of sustained future warming. As indicators for the pressure on future cultural heritage we estimate the percentage of each country's area loss, and the percentage of current population living in regions that will be permanently below sea level, for different temperature levels. If the current global mean temperature was sustained for the next two millennia, about 6% (40 sites) of the UNESCO sites will be affected, and 0.7% of global land area will be below mean sea level. These numbers increase to 19% (136 sites) and 1.1% for a warming of 3 K. At this warming level, 3–12 countries will experience a loss of more than half of their current land surface, 25–36 countries lose at least 10% of their territory, and 7% of the global population currently lives in regions that will be below local sea level. Given the millennial scale lifetime of carbon dioxide in the atmosphere, our results indicate that fundamental decisions with regard to mankind's cultural heritage are required.

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Assessing the effects of anthropogenic aerosols on Pacific storm track using a multiscale global climate model

Yuan Wang et al.
Proceedings of the National Academy of Sciences, forthcoming

Abstract:
Atmospheric aerosols affect weather and global general circulation by modifying cloud and precipitation processes, but the magnitude of cloud adjustment by aerosols remains poorly quantified and represents the largest uncertainty in estimated forcing of climate change. Here we assess the effects of anthropogenic aerosols on the Pacific storm track, using a multiscale global aerosol–climate model (GCM). Simulations of two aerosol scenarios corresponding to the present day and preindustrial conditions reveal long-range transport of anthropogenic aerosols across the north Pacific and large resulting changes in the aerosol optical depth, cloud droplet number concentration, and cloud and ice water paths. Shortwave and longwave cloud radiative forcing at the top of atmosphere are changed by −2.5 and +1.3 W m−2, respectively, by emission changes from preindustrial to present day, and an increased cloud top height indicates invigorated midlatitude cyclones. The overall increased precipitation and poleward heat transport reflect intensification of the Pacific storm track by anthropogenic aerosols. Hence, this work provides, for the first time to the authors’ knowledge, a global perspective of the effects of Asian pollution outflows from GCMs. Furthermore, our results suggest that the multiscale modeling framework is essential in producing the aerosol invigoration effect of deep convective clouds on a global scale.

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Vulnerability to the mortality effects of warm temperature in the districts of England and Wales

James Bennett et al.
Nature Climate Change, April 2014, Pages 269–273

Abstract:
Warm temperatures adversely affect disease occurrence and death, in extreme conditions as well as when the temperature changes are more modest1, 2. Therefore climate change, which is expected to affect both average temperatures and temperature variability, is likely to impact health even in temperate climates. Climate change risk assessment is enriched if there is information on vulnerability and resilience to effects of temperature. Some studies have analysed socio-demographic characteristics that make individuals vulnerable to adverse effects of temperature1, 2, 3, 4. Less is known about community-level vulnerability. We used geo-coded mortality and environmental data and Bayesian spatial methods to conduct a national small-area analysis of the mortality effects of warm temperature for all 376 districts in England and Wales. In the most vulnerable districts, those in London and south/southeast England, odds of dying from cardiorespiratory causes increased by more than 10% for 1 °C warmer temperature, compared with virtually no effect in the most resilient districts, which were in the far north. A 2 °C warmer summer may result in 1,552 (95% credible interval 1,307–1,762) additional deaths, about one-half of which would occur in 95 districts. The findings enable risk and adaptation analyses to incorporate local vulnerability to warm temperature and to quantify inequality in its effects.

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Global warming and 21st century drying

Benjamin Cook et al.
Climate Dynamics, forthcoming

Abstract:
Global warming is expected to increase the frequency and intensity of droughts in the twenty-first century, but the relative contributions from changes in moisture supply (precipitation) versus evaporative demand (potential evapotranspiration; PET) have not been comprehensively assessed. Using output from a suite of general circulation model (GCM) simulations from phase 5 of the Coupled Model Intercomparison Project, projected twenty-first century drying and wetting trends are investigated using two offline indices of surface moisture balance: the Palmer Drought Severity Index (PDSI) and the Standardized Precipitation Evapotranspiration Index (SPEI). PDSI and SPEI projections using precipitation and Penman-Monteith based PET changes from the GCMs generally agree, showing robust cross-model drying in western North America, Central America, the Mediterranean, southern Africa, and the Amazon and robust wetting occurring in the Northern Hemisphere high latitudes and east Africa (PDSI only). The SPEI is more sensitive to PET changes than the PDSI, especially in arid regions such as the Sahara and Middle East. Regional drying and wetting patterns largely mirror the spatially heterogeneous response of precipitation in the models, although drying in the PDSI and SPEI calculations extends beyond the regions of reduced precipitation. This expansion of drying areas is attributed to globally widespread increases in PET, caused by increases in surface net radiation and the vapor pressure deficit. Increased PET not only intensifies drying in areas where precipitation is already reduced, it also drives areas into drought that would otherwise experience little drying or even wetting from precipitation trends alone. This PET amplification effect is largest in the Northern Hemisphere mid-latitudes, and is especially pronounced in western North America, Europe, and southeast China. Compared to PDSI projections using precipitation changes only, the projections incorporating both precipitation and PET changes increase the percentage of global land area projected to experience at least moderate drying (PDSI standard deviation of ≤−1) by the end of the twenty-first century from 12 to 30 %. PET induced moderate drying is even more severe in the SPEI projections (SPEI standard deviation of ≤−1; 11 to 44 %), although this is likely less meaningful because much of the PET induced drying in the SPEI occurs in the aforementioned arid regions. Integrated accounting of both the supply and demand sides of the surface moisture balance is therefore critical for characterizing the full range of projected drought risks tied to increasing greenhouse gases and associated warming of the climate system.

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Methanogenic burst in the end-Permian carbon cycle

Daniel Rothman et al.
Proceedings of the National Academy of Sciences, 15 April 2014, Pages 5462–5467

Abstract:
The end-Permian extinction is associated with a mysterious disruption to Earth’s carbon cycle. Here we identify causal mechanisms via three observations. First, we show that geochemical signals indicate superexponential growth of the marine inorganic carbon reservoir, coincident with the extinction and consistent with the expansion of a new microbial metabolic pathway. Second, we show that the efficient acetoclastic pathway in Methanosarcina emerged at a time statistically indistinguishable from the extinction. Finally, we show that nickel concentrations in South China sediments increased sharply at the extinction, probably as a consequence of massive Siberian volcanism, enabling a methanogenic expansion by removal of nickel limitation. Collectively, these results are consistent with the instigation of Earth’s greatest mass extinction by a specific microbial innovation.

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Sustained mass loss of the northeast Greenland ice sheet triggered by regional warming

Shfaqat Khan et al.
Nature Climate Change, April 2014, Pages 292–299

Abstract:
The Greenland ice sheet has been one of the largest contributors to global sea-level rise over the past 20 years, accounting for 0.5 mm yr−1 of a total of 3.2 mm yr−1. A significant portion of this contribution is associated with the speed-up of an increased number of glaciers in southeast and northwest Greenland. Here, we show that the northeast Greenland ice stream, which extends more than 600 km into the interior of the ice sheet, is now undergoing sustained dynamic thinning, linked to regional warming, after more than a quarter of a century of stability. This sector of the Greenland ice sheet is of particular interest, because the drainage basin area covers 16% of the ice sheet (twice that of Jakobshavn Isbræ) and numerical model predictions suggest no significant mass loss for this sector, leading to an under-estimation of future global sea-level rise. The geometry of the bedrock and monotonic trend in glacier speed-up and mass loss suggests that dynamic drawdown of ice in this region will continue in the near future.

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Sustained increase in ice discharge from the Amundsen Sea Embayment, West Antarctica, from 1973 to 2013

J. Mouginot, E. Rignot & B. Scheuchl
Geophysical Research Letters, 16 March 2014, Pages 1576–1584

Abstract:
We combine measurements of ice velocity from Landsat feature tracking and satellite radar interferometry, and ice thickness from existing compilations to document 41 years of mass flux from the Amundsen Sea Embayment (ASE) of West Antarctica. The total ice discharge has increased by 77% since 1973. Half of the increase occurred between 2003 and 2009. Grounding-line ice speeds of Pine Island Glacier stabilized between 2009 and 2013, following a decade of rapid acceleration, but that acceleration reached far inland and occurred at a rate faster than predicted by advective processes. Flow speeds across Thwaites Glacier increased rapidly after 2006, following a decade of near-stability, leading to a 33% increase in flux between 2006 and 2013. Haynes, Smith, Pope, and Kohler Glaciers all accelerated during the entire study period. The sustained increase in ice discharge is a possible indicator of the development of a marine ice sheet instability in this part of Antarctica.

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Global crop yield response to extreme heat stress under multiple climate change futures

Delphine Deryng et al.
Environmental Research Letters, March 2014

Abstract:
Extreme heat stress during the crop reproductive period can be critical for crop productivity. Projected changes in the frequency and severity of extreme climatic events are expected to negatively impact crop yields and global food production. This study applies the global crop model PEGASUS to quantify, for the first time at the global scale, impacts of extreme heat stress on maize, spring wheat and soybean yields resulting from 72 climate change scenarios for the 21st century. Our results project maize to face progressively worse impacts under a range of RCPs but spring wheat and soybean to improve globally through to the 2080s due to CO2 fertilization effects, even though parts of the tropic and sub-tropic regions could face substantial yield declines. We find extreme heat stress at anthesis (HSA) by the 2080s (relative to the 1980s) under RCP 8.5, taking into account CO2 fertilization effects, could double global losses of maize yield (ΔY = −12.8 ± 6.7% versus − 7.0 ± 5.3% without HSA), reduce projected gains in spring wheat yield by half (ΔY = 34.3 ± 13.5% versus 72.0 ± 10.9% without HSA) and in soybean yield by a quarter (ΔY = 15.3 ± 26.5% versus 20.4 ± 22.1% without HSA). The range reflects uncertainty due to differences between climate model scenarios; soybean exhibits both positive and negative impacts, maize is generally negative and spring wheat generally positive. Furthermore, when assuming CO2 fertilization effects to be negligible, we observe drastic climate mitigation policy as in RCP 2.6 could avoid more than 80% of the global average yield losses otherwise expected by the 2080s under RCP 8.5. We show large disparities in climate impacts across regions and find extreme heat stress adversely affects major producing regions and lower income countries.

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Greater ecosystem carbon in the Mojave Desert after ten years exposure to elevated CO2

R.D. Evans et al.
Nature Climate Change, forthcoming

Abstract:
Carbon dioxide is the main greenhouse gas inducing climate change. Increased global CO2 emissions, estimated at 8.4 Pg C yr−1 at present, have accelerated from 1% yr−1 during 1990–1999 to 2.5% yr−1 during 2000–2009. The carbon balance of terrestrial ecosystems is the greatest unknown in the global C budget because the actual magnitude, location and causes of terrestrial sinks are uncertain; estimates of terrestrial C uptake, therefore, are often based on the residuals between direct measurements of the atmospheric sink and well-constrained models of ocean uptake of CO2. Here we report significant terrestrial C accumulation caused by CO2 enhancement to net ecosystem productivity in an intact, undisturbed arid ecosystem following ten years of exposure to elevated atmospheric CO2. Results provide direct evidence that CO2 fertilization substantially increases ecosystem C storage and that arid ecosystems are significant, previously unrecognized, sinks for atmospheric CO2 that must be accounted for in efforts to constrain terrestrial and global C cycles.

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Potential Effects of Climate Change on the Productivity of U.S. Dairies

Nigel Key & Stacy Sneeringer
American Journal of Agricultural Economics, forthcoming

Abstract:
In the United States, climate change is likely to increase average daily temperatures and the frequency of heat waves, which can reduce meat and milk production in animals. Methods that livestock producers use to mitigate thermal stress — including modifications to animal management or housing — tend to increase production costs. We use operation-level economic data coupled with finely-scaled climate data to estimate how the local thermal environment affects the technical efficiency of dairies across the United States. We then use this information to estimate the possible decline in milk production in 2030 resulting from climate change-induced heat stress under the simplifying assumptions that the production technology, location of production, and other factors are held constant. For four climate model scenarios, the results indicate modest heat-stress-related production declines by 2030, with the largest declines occurring in the southern states.

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Distinct effects of anthropogenic aerosols on tropical cyclones

Yuan Wang et al.
Nature Climate Change, forthcoming

Abstract:
Long-term observations have revealed large amplitude fluctuations in the frequency and intensity of tropical cyclones (TCs), but the anthropogenic impacts, including greenhouse gases and particulate matter pollution, remain to be elucidated. Here, we show distinct aerosol effects on the development of TCs: the coupled microphysical and radiative effects of anthropogenic aerosols result in delayed development, weakened intensity and early dissipation, but an enlarged rainband and increased precipitation under polluted conditions. Our results imply that anthropogenic aerosols probably exhibit an opposite effect to that of greenhouse gases, highlighting the necessity of incorporating a realistic microphysical–radiative interaction of aerosols for accurate forecasting and climatic prediction of TCs in atmospheric models.

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The European climate under a 2 °C global warming

Robert Vautard et al.
Environmental Research Letters, March 2014

Abstract:
A global warming of 2 °C relative to pre-industrial climate has been considered as a threshold which society should endeavor to remain below, in order to limit the dangerous effects of anthropogenic climate change. The possible changes in regional climate under this target level of global warming have so far not been investigated in detail. Using an ensemble of 15 regional climate simulations downscaling six transient global climate simulations, we identify the respective time periods corresponding to 2 °C global warming, describe the range of projected changes for the European climate for this level of global warming, and investigate the uncertainty across the multi-model ensemble. Robust changes in mean and extreme temperature, precipitation, winds and surface energy budgets are found based on the ensemble of simulations. The results indicate that most of Europe will experience higher warming than the global average. They also reveal strong distributional patterns across Europe, which will be important in subsequent impact assessments and adaptation responses in different countries and regions. For instance, a North–South (West–East) warming gradient is found for summer (winter) along with a general increase in heavy precipitation and summer extreme temperatures. Tying the ensemble analysis to time periods with a prescribed global temperature change rather than fixed time periods allows for the identification of more robust regional patterns of temperature changes due to removal of some of the uncertainty related to the global models' climate sensitivity.

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Cessation of deep convection in the open Southern Ocean under anthropogenic climate change

Casimir de Lavergne et al.
Nature Climate Change, April 2014, Pages 278–282

Abstract:
In 1974, newly available satellite observations unveiled the presence of a giant ice-free area, or polynya, within the Antarctic ice pack of the Weddell Sea, which persisted during the two following winters. Subsequent research showed that deep convective overturning had opened a conduit between the surface and the abyssal ocean, and had maintained the polynya through the massive release of heat from the deep sea. Although the polynya has aroused continued interest, the presence of a fresh surface layer has prevented the recurrence of deep convection there since 1976, and it is now largely viewed as a naturally rare event. Here, we present a new analysis of historical observations and model simulations that suggest deep convection in the Weddell Sea was more active in the past, and has been weakened by anthropogenic forcing. The observations show that surface freshening of the southern polar ocean since the 1950s has considerably enhanced the salinity stratification. Meanwhile, among the present generation of global climate models, deep convection is common in the Southern Ocean under pre-industrial conditions, but weakens and ceases under a climate change scenario owing to surface freshening. A decline of open-ocean convection would reduce the production rate of Antarctic Bottom Waters, with important implications for ocean heat and carbon storage, and may have played a role in recent Antarctic climate change.

By KEVIN LEWIS | 09:00:00 AM

Tuesday, April 15, 2014

Caretaker

My Mother and Me: Why Tiger Mothers Motivate Asian Americans But Not European Americans

Alyssa Fu & Hazel Rose Markus
Personality and Social Psychology Bulletin, forthcoming

Abstract:
“Tiger Mother” Amy Chua provoked a culture clash with her claim that controlling parenting in Asian American (AA) contexts produces more successful children than permissive parenting in European American (EA) contexts. At the heart of this controversy is a difference in the normative models of self that guide behavior. Ideas and practices prevalent in AA contexts emphasize that the person is and should be interdependent with one’s close others, especially one’s mother. In contrast, EA contexts emphasize the person as independent, even from one’s mother. We find that AA compared with EA high school students experience more interdependence with their mothers and pressure from them, but that the pressure does not strain their relationship with their mothers. Furthermore, following failure, AAs compared with EAs are more motivated by their mothers, and AAs are particularly motivated by pressure from their mothers when it conveys interdependence.

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A Not-So-Grim Tale: How Childhood Family Structure Influences Reproductive and Risk-Taking Outcomes in a Historical U.S. Population

Paula Sheppard, Justin Garcia & Rebecca Sear
PLoS ONE, March 2014

Abstract:
Childhood family structure has been shown to play an important role in shaping a child's life course development, especially in industrialised societies. One hypothesis which could explain such findings is that parental investment is likely to be diluted in families without both natural parents. Most empirical studies have examined the influence of only one type of family disruption or composition (e.g. father absence) making it difficult to simultaneously compare the effects of different kinds of family structure on children's future outcomes. Here we use a large, rich data source (n = 16,207) collected by Alfred Kinsey and colleagues in the United States from 1938 to 1963, to examine the effects of particular childhood family compositions and compare between them. The dataset further allows us to look at the effects of family structure on an array of traits relating to sexual maturity, reproduction, and risk-taking. Our results show that, for both sexes, living with a single mother or mother and stepfather during childhood was often associated with faster progression to life history events and greater propensity for risk-taking behaviours. However, living with a single father or father and stepmother was typically not significantly different to having both natural parents for these outcomes. Our results withstand adjustment for socioeconomic status, age, ethnicity, age at puberty (where applicable), and sibling configuration. While these results support the hypothesis that early family environment influences subsequent reproductive strategy, the different responses to the presence or absence of different parental figures in the household rearing environment suggests that particular family constructions exert independent influences on childhood outcomes. Our results suggest that father-absent households (i.e. single mothers or mothers and stepfathers) are most highly associated with subsequent fast life history progressions, compared with mother-absent households, and those with two natural parents.

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Are Television and Video Games Really Harmful for Kids?

Makiko Nakamuro et al.
Contemporary Economic Policy, forthcoming

Abstract:
Are watching television (TV) and playing video games really harmful for children's development? By using a unique longitudinal dataset with detailed information on children's development and health, we examined the causal effect of hours of TV watched or of video games played on school-aged children's problem behavior, orientation to school, and obesity. The results suggested that the answer to the question is yes, but the magnitude of the effect is sufficiently small to be considered as negligible. The results were robust to within-twin-fixed effects.

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Parenthood as a Terror Management Mechanism: The Moderating Role of Attachment Orientations

Erez Yaakobi, Mario Mikulincer & Phillip Shaver
Personality and Social Psychology Bulletin, forthcoming

Abstract:
Six studies examined the hypothesis that parenthood serves a terror management function, with effects that are moderated by attachment orientations. In Studies 1 and 2, mortality salience, as compared with control conditions, increased the self-reported vividness and implicit accessibility of parenthood-related cognitions. In Studies 3 and 4, activating parenthood-related thoughts reduced death-thought accessibility and romantic intimacy following mortality salience. In Study 5, heightening the salience of parenthood-related obstacles increased death-thought accessibility. Across the five studies, the effects were significant mainly among participants who scored relatively low on avoidant attachment. In Study 6, avoidant people also reacted to mortality salience with more positive parenthood-related cognitions following an experimental manipulation that made parenthood compatible with their core strivings. Overall, the findings suggest that parenthood can have an anxiety-buffering effect that is moderated by attachment-related avoidance.

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Social Mobility in the Context of Fathering: The intergenerational link in parenting among co-resident fathers

Christina Diaz
Social Science Research, September 2014, Pages 1–15

Abstract:
Intergenerational transmissions extend across a number of family-related behaviors, including marriage timing, fertility, and divorce. Surprisingly, few studies investigate the link between the fathering men experience and the fathering they ultimately engage in. I use data on the grandfathers and fathers of the 2001 U.S. birth cohort - measured in the Early Childhood Longitudinal Study (N=4,050) - to test whether men’s perception of the parenting they received influences their subsequent paternal self-assessments and behaviors. I find a nonlinear association between experiencing warm fathering and men’s self-assessed parenting quality and stress. Men with particularly warm fathers are more likely to report being good fathers themselves. Those who report having the harshest fathers also exhibit better paternal self-perceptions and lower stress. Perceptions of paternal warmth show similar associations with men’s fathering engagement. This research sheds light on the significance of family dynamics and how a legacy of fathering may contribute to inequality.

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College Women Miss the Mark When Estimating the Impact of Full-Time Maternal Employment on Children’s Achievement and Behavior

Wendy Goldberg & Rachel Lucas-Thompson
Psychology of Women Quarterly, forthcoming

Abstract:
The goals of the current study were to apply the construct of stereotype accuracy to the domain of college women’s perceptions of the effects of full-time maternal employment on children. Both accuracy/inaccuracy and positive/negative direction were examined. Participants were 1,259 college women who provided stereotyped projections about the effects of full-time employment on children’s IQ scores, formal achievement tests, school grades, and internalizing and externalizing behavior problems. Their stereotype effect sizes were compared to meta-analytic effect sizes used to estimate the “actual” effects of maternal employment on children. Individual differences in these stereotypes were also examined. Results indicate that, on average, college women overestimated the negative effects of full-time maternal employment on child outcomes, especially behavior problems. Significant variability in the direction and accuracy of the stereotypes was explained by individual characteristics such as gender ideology, extrinsic work values, and beliefs about the costs of maternal employment. Concerns are that college-educated young women may retreat from the labor force due to stereotypes about the effects of their future employment on children. Efforts by researchers, practitioners, and policy makers should be directed toward disseminating accurate information and dispelling myths about the likely impact of maternal employment on children’s development.

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The Effect of Early Head Start on Child Welfare System Involvement: A First Look at Longitudinal Child Maltreatment Outcomes

Beth Green et al.
Children and Youth Services Review, forthcoming

Abstract:
The high societal and personal costs of child maltreatment make identification of effective early prevention programs a high research priority. Early Head Start (EHS), a dual generational program serving low-income families with children prenatally through age three years, is one of the largest federally funded programs for infants and toddlers in the United States. A national randomized trial found EHS to be effective in improving parent and child outcomes, but its effectiveness in reducing child maltreatment was not assessed. The current study used administrative data from state child welfare agencies to examine the impact of EHS on documented abuse and neglect among children from seven of the original seventeen programs in the national EHS randomized controlled trial. Results indicated that children in EHS had significantly fewer child welfare encounters between the ages of five and nine years than did children in the control group, and that EHS slowed the rate of subsequent encounters. Additionally, compared to children in the control group, children in EHS were less likely to have a substantiated report of physical or sexual abuse, but more likely to have a substantiated report of neglect. These findings suggest that EHS may be effective in reducing child maltreatment among low-income children, in particular, physical and sexual abuse.

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Objective and subjective socioeconomic gradients exist for sleep in children and adolescents

Denise Jarrin, Jennifer McGrath & Elizabeth Quon
Health Psychology, March 2014, Pages 301-305

Objective: Socioeconomic position (SEP) is inversely associated with many health outcomes, yielding a socioeconomic gradient in health. In adults, low SEP is associated with short sleep duration, poorer sleep quality, and difficulty initiating and maintaining sleep. Relatively little is known about this relation in youth. The aim of the present study was to examine whether socioeconomic gradients exist for various sleep indices among a healthy sample of children and adolescents.

Method: Participants took part in the larger Healthy Heart Project and included 239 youth (69.6% Caucasian; 45.6% female), aged 8–17 years (M = 12.6, SD = 1.9). Parental income and education were used to measure objective SEP. The Subjective Social Status Scale-Youth Version was used to measure subjective SEP. Sleep duration, sleep quality, daytime sleepiness, and sleep disturbances were assessed through self- and parent-report.

Results: In children, objective SEP was related with sleep duration (β = .35, p < .01), although subjective SEP was related with daytime sleepiness (βavg = .33, p < .01) and parent-reported sleep duration (β = .23, p < .05). In adolescents, subjective SEP was related with sleep quality (β = .28, p < .01) and parent-reported sleep duration (β = −.18, p < .05), even after controlling for objective SEP.

Conclusions: Socioeconomic gradients were observed for multiple sleep measures in youth. Objective parental SEP was related with sleep complaints (e.g., sleep disturbances), and subjective SEP was related with sleep quality and daytime sleepiness. Findings suggest sleep may be one pathway underlying the socioeconomic gradient in health. Future research should aim to elucidate how distinct sleep constructs may explain how socioeconomic status “gets under the skin” to affect health.

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Media and technology use predicts ill-being among children, preteens and teenagers independent of the negative health impacts of exercise and eating habits

L.D. Rosen et al.
Computers in Human Behavior, June 2014, Pages 364–375

Abstract:
The American Academy of Pediatrics recommends no screen time for children under the age of 2 and limited screen time for all children. However, no such guidelines have been proposed for preteens and teenagers. Further, research shows that children, preteens, and teenagers are using massive amounts of media and those with more screen time have been shown to have increased obesity, reduced physical activity, and decreased health. This study examined the impact of technology on four areas of ill-being — psychological issues, behavior problems, attention problems and physical health — among children (aged 4–8), preteens (9–12), and teenagers (13–18) by having 1030 parents complete an online, anonymous survey about their own and their child’s behaviors. Measures included daily technology use, daily food consumption, daily exercise, and health. Hypothesis 1, which posited that unhealthy eating would predict impaired ill-being, was partially supported, particularly for children and preteens. Hypothesis 2, which posited that reduced physical activity would predict diminished health levels, was partially supported for preteens and supported for teenagers. Hypothesis 3, that increased daily technology use would predict ill-being after factoring out eating habits and physical activity, was supported. For children and preteens, total media consumption predicted ill-being while for preteens specific technology uses, including video gaming and electronic communication, predicted ill-being. For teenagers, nearly every type of technological activity predicted poor health. Practical implications were discussed in terms of setting limits and boundaries on technology use and encouraging healthy eating and physical activity at home and at school.

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Mothers’ unresolved trauma blunts amygdala response to infant distress

Sohye Kim et al.
Social Neuroscience, forthcoming

Abstract:
While the neurobiology of post-traumatic stress disorder has been extensively researched, much less attention has been paid to the neural mechanisms underlying more covert but pervasive types of trauma (e.g., those involving disrupted relationships and insecure attachment). Here, we report on a neurobiological study documenting that mothers’ attachment-related trauma, when unresolved, undermines her optimal brain response to her infant’s distress. We examined the amygdala blood oxygenation level-dependent response in 42 first-time mothers as they underwent functional magnetic resonance imaging scanning, viewing happy- and sad-face images of their own infant, along with those of a matched unknown infant. Whereas mothers with no trauma demonstrated greater amygdala responses to the sad faces of their own infant as compared to their happy faces, mothers who were classified as having unresolved trauma in the Adult Attachment Interview (Dynamic Maturational Model) displayed blunted amygdala responses when cued by their own infants’ sadness as compared to happiness. Unknown infant faces did not elicit differential amygdala responses between the mother groups. The blunting of the amygdala response in traumatized mothers is discussed as a neural indication of mothers’ possible disengagement from infant distress, which may be part of a process linking maternal unresolved trauma and disrupted maternal caregiving.

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Opting Out, Scaling Back, or Business-as-Usual? An Occupational Assessment of Women's Employment

Liana Christin Landivar
Sociological Forum, March 2014, Pages 189–214

Abstract:
After decades of growth, women's labor force participation stagnated in the 2000s, prompting widespread interest in work–family balance and opting out. However, much of the research and media attention is limited to small samples of women in managerial and professional occupations. Using data from the 2009 American Community Survey, this article examines mothers' labor force participation and work hours across 92 occupations to assess whether mothers in nonmanagerial and nonprofessional occupations exhibit similar work patterns. I find that mothers in managerial and professional occupations are the least likely to remain out of the labor force but most likely to work reduced hours. The results indicate that there is significant occupational variation in women's work–family strategies, and these comparisons provide insight into the differential structures of disadvantage that encourage different work–family outcomes.

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Kinship and Nonrelative Foster Care: The Effect of Placement Type on Child Well-Being

Sarah Font
Child Development, forthcoming

Abstract:
This study uses a national sample of 1,215 children, ages 6–17, who spent some time in formal kinship or nonrelative foster care to identify the effect of placement type on academic achievement, behavior, and health. Several identification strategies are used to reduce selection bias, including ordinary least squares, change score models, propensity score weighting, and instrumental variables regression. The results consistently estimate a negative effect of kin placements on reading scores, but kin placements appear to have no effect on child health, and findings on children's math and cognitive skills test scores and behavioral problems are mixed. Estimated declines in both academic achievement and behavioral problems are concentrated among children who are lower functioning at baseline.

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The development of children’s inhibition: Does parenting matter?

Isabelle Roskam et al.
Journal of Experimental Child Psychology, June 2014, Pages 166–182

Abstract:
Whereas a large body of research has investigated the maturation of inhibition in relation to the prefrontal cortex, far less research has been devoted to environmental factors that could contribute to inhibition improvement. The aim of the current study was to test whether and to what extent parenting matters for inhibition development from 2 to 8 years of age. Data were collected from 421 families, with 348 mother–child dyads and 342 father–child dyads participating. Children’s inhibition capacities and parenting behaviors were assessed in a three-wave longitudinal data collection. The main analyses examined the impact of parenting on the development of children’s inhibition capacities. They were conducted using a multilevel modeling (MLM) framework. The results lead to the conclusion that both mothers and fathers contribute through their child-rearing behavior to their children’s executive functioning, even when controlling for age-related improvement (maturation) and important covariates such as gender, verbal IQ, and place of enrollment. More significant relations between children’s inhibition development and parenting were displayed for mothers than for fathers. More precisely, parenting behaviors that involve higher monitoring, lower discipline, inconsistency and negative controlling, and a positive parenting style are associated with good development of inhibition capacities in children.

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Genetic imaging of the association of oxytocin receptor gene (OXTR) polymorphisms with positive maternal parenting

Kalina Michalska et al.
Frontiers in Behavioral Neuroscience, February 2014

Background: Well-validated models of maternal behavior in small-brain mammals posit a central role of oxytocin in parenting, by reducing stress and enhancing the reward value of social interactions with offspring. In contrast, human studies are only beginning to gain insights into how oxytocin modulates maternal behavior and affiliation.

Methods: To explore associations between oxytocin receptor genes and maternal parenting behavior in humans, we conducted a genetic imaging study of women selected to exhibit a wide range of observed parenting when their children were 4–6 years old.

Results: In response to child stimuli during functional magnetic resonance imaging (fMRI), hemodynamic responses in brain regions that mediate affect, reward, and social behavior were significantly correlated with observed positive parenting. Furthermore, single nucleotide polymorphisms (SNPs) (rs53576 and rs1042778) in the gene encoding the oxytocin receptor were significantly associated with both positive parenting and hemodynamic responses to child stimuli in orbitofrontal cortex (OFC), anterior cingulate cortex (ACC), and hippocampus.

Conclusions: These findings contribute to the emerging literature on the role of oxytocin in human social behavior and support the feasibility of tracing biological pathways from genes to neural regions to positive maternal parenting behaviors in humans using genetic imaging methods.

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Parental Death During Childhood and Subsequent School Performance

Lisa Berg et al.
Pediatrics, April 2014, Pages 682-689

Objectives: Parental death during childhood has been linked to increased mortality and mental health problems in adulthood. School failure may be an important mediator in this trajectory. We investigated the association between parental death before age 15 years and school performance at age 15 to 16 years, taking into account potentially contributing factors such as family socioeconomic position (SEP) and parental substance abuse, mental health problems, and criminality.

Methods: This was a register-based national cohort study of 772 117 subjects born in Sweden between 1973 and 1981. Linear and logistic regression models were used to analyze school performance as mean grades (scale: 1–5; SD: 0.70) and school failure (finished school with incomplete grades). Results are presented as β-coefficients and odds ratios (ORs) with 95% confidence intervals (CIs).

Results: Parental death was associated with lower grades (ORs: –0.21 [95% CI: –0.23 to –0.20] and –0.17 [95% CI: –0.19 to –0.15]) for paternal and maternal deaths, respectively. Adjustment for SEP and parental psychosocial factors weakened the associations, but the results remained statistically significant. Unadjusted ORs of school failure were 2.04 (95% CI: 1.92 to 2.17) and 1.51 (95% CI: 1.35 to 1.69) for paternal and maternal deaths. In fully adjusted models, ORs were 1.40 (95% CI: 1.31 to 1.49) and 1.18 (95% CI: 1.05 to 1.32). The higher crude impact of death due to external causes (ie, accident, violence, suicide) (OR: –0.27 [90% CI: –0.28 to –0.26]), compared with natural deaths (OR: –0.16 [95% CI: –0.17 to –0.15]), was not seen after adjustment for SEP and psychosocial situation of the family.

Conclusions: Parental death during childhood was associated with lower grades and school failure. Much of the effect, especially for deaths by external causes, was associated with socially adverse childhood exposures.

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Genetics of parenting: The power of the dark side

Bonamy Oliver, Maciej Trzaskowski & Robert Plomin
Developmental Psychology, April 2014, Pages 1233-1240

Abstract:
Reviews of behavioral genetic studies note that “control” aspects of parenting yield low estimates of heritability, while “affective” aspects (parental feelings) yield moderate estimates. Research to date has not specifically considered whether positive and negative aspects of parenting — for both feelings and control — may explain these etiological distinctions. We addressed this issue using parent reports of parenting in a large twin sample in the United Kingdom, at ages 9 (N = 2,260 twin pairs), 12 (N = 3,850 twin pairs) and 14 (N = 2,293 twin pairs) years. Our findings supported previous work indicating that parental feelings show greater heritability (h2) than control (across all ages, mean h2 feelings = .42, control = .13). Of specific interest is our novel finding that for control as well as for feelings, the heritability for negative aspects of parenting was greater than for positive aspects (e.g., across all ages, mean h2 total negativity = .44; total positivity = .12). Results across the 3 ages using common pathway models for all scales further endorsed our hypotheses. Previous research has shown that children’s genetically driven characteristics elicit parenting; our pattern of our results suggests that what is critical is the “dark” side of these characteristics for eliciting negativity from parents, whether feelings toward the child or control strategies are considered. Improving understanding of how the environment is shaped by the dark side is important theoretically and, ultimately, for targeting intervention.

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The Consequences of Paternal Incarceration for Maternal Neglect and Harsh Parenting

Kristin Turney
Social Forces, forthcoming

Abstract:
The rise in mass incarceration, as well as its unequal distribution across the population, may widen inequalities among individuals and families. In this manuscript, I use data from the Fragile Families and Child Wellbeing Study, a data source uniquely situated to understand the collateral consequences of incarceration, to consider the consequences of paternal incarceration for an overlooked aspect of family life: maternal parenting (measured by neglect, psychological aggression, and physical aggression). Results show that, among parents living together prior to paternal incarceration, confinement has modest, positive associations with maternal neglect and physical aggression, and that changes in family life (including relationship characteristics, economic insecurity, and mental health) following incarceration explain some of these associations. Additionally, there is some evidence that the consequences of paternal incarceration for neglect are strongest among mothers with a low propensity for sharing a child with a recently incarcerated father. Taken together, these results suggest that incarceration — given its concentration among disadvantaged families and, at least in one domain, its most consequential effects for the most advantaged of these disadvantaged families — has complicated and countervailing implications for inequalities in family life.

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Cumulative Risks of Foster Care Placement by Age 18 for U.S. Children, 2000–2011

Christopher Wildeman & Natalia Emanuel
PLoS ONE, March 2014

Abstract:
Foster care placement is among the most tragic events a child can experience because it more often than not implies that a child has experienced or is at very high risk of experiencing abuse or neglect serious enough to warrant state intervention. Yet it is unclear how many children will experience foster care placement at some point between birth and age 18. Using synthetic cohort life tables and data from the Adoption and Foster Care Analysis and Reporting System (AFCARS), we estimated how many U.S. children were placed in foster care between birth and age 18, finding support for three conclusions. First, up to 5.91% of all U.S. children were ever placed in foster care between their birth and age 18. Second, Native American (up to 15.44%) and Black (up to 11.53%) children were at far higher risk of placement. Foster care is thus quite common in the U.S., especially for historically disadvantaged racial/ethnic groups. Third, differences in foster care placement were minimal between the sexes, indicating that the high risks of foster care placement are shared almost equally by boys and girls.

By KEVIN LEWIS | 09:00:00 AM

Monday, April 14, 2014

Acto de amor

Causal effect of intergroup contact on exclusionary attitudes

Ryan Enos
Proceedings of the National Academy of Sciences, 11 March 2014, Pages 3699–3704

Abstract:
The effect of intergroup contact has long been a question central to social scientists. As political and technological changes bring increased international migration, understanding intergroup contact is increasingly important to scientific and policy debates. Unfortunately, limitations in causal inference using observational data and the practical inability to experimentally manipulate demographic diversity has limited scholars’ ability to address the effects of intergroup contact. Here, I report the results of a randomized controlled trial testing the causal effects of repeated intergroup contact, in which Spanish-speaking confederates were randomly assigned to be inserted, for a period of days, into the daily routines of unknowing Anglo-whites living in homogeneous communities in the United States, thus simulating the conditions of demographic change. The result of this experiment is a significant shift toward exclusionary attitudes among treated subjects. This experiment demonstrates that even very minor demographic change causes strong exclusionary reactions. Developed nations and politically liberal subnational units are expected to experience a politically conservative shift as international migration brings increased intergroup contact.

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Crossing the Border and Migration Duration

Michael Quinn
Contemporary Economic Policy, forthcoming

Abstract:
Policies to deter illegal entry and reduce the number of undocumented immigrants have a complex impact on migration patterns, border crossings, and duration. However, studies generally assume the method of crossing into the United States is exogenous with respect to migration duration. Using data from the Mexican Migration Project, this paper finds that the migrant's decision to hire a coyote (smuggler) to cross the border is endogenous with respect to duration. Instrumental variable estimates provide evidence that migrants who incur the cost of hiring a coyote have longer migration durations as they need to work longer in the United States. The migrants most likely to hire coyotes have less education, little migration experience, and/or come from rural communities. Results suggest that continuing to increase guest worker programs could actually decrease the number of Mexican immigrants in the United States by eliminating the need for coyotes which would reduce migration durations. This would better utilize the immigrant population in the United States by encouraging immigrants to stay while employed and to migrate home when unemployed, with the knowledge they can later return. Reducing coyote use would also reduce income flowing to Mexican cartels which have profited from human smuggling.

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The Labor Market Effects of Reducing Undocumented Immigrants

Andri Chassamboulli & Giovanni Peri
NBER Working Paper, February 2014

Abstract:
A key controversy in US immigration reforms is how to deal with undocumented workers. Some policies aimed at reducing them, such as increased border security or deportation will reduce illegal immigrants as well as total immigrants. Other policies, such as legalization would decrease the illegal population but increase the legal one. These policies have different effects on job creation as they affect the firm profits from creating a new job. Economists have never analyzed this issue. We set up and simulate a novel and general model of labor markets, with search and legal/illegal migration between two countries. We then calibrate it to the US and Mexico labor markets and migration. We find that policies increasing deportation rates have the largest negative effect on employment opportunities of natives. Legalization, instead has a positive employment effect for natives. This is because repatriations are disruptive of job matches and they reduce job-creation by US firms. Legalization instead stimulates firms' job creation by increasing the total number of immigrants and stimulating firms to post more vacancies some of which are filled by natives.

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Policy Climates, Enforcement Rates, and Migrant Behavior: Is Self-Deportation a Viable Immigration Policy?

Rene Rocha et al.
Policy Studies Journal, February 2014, Pages 79–100

Abstract:
U.S. immigration policy has been the subject of considerable debate in recent years. Previous research has focused on how temporal variation in federal policy has altered the migratory behavior of immigrants. The effect of spatial variation in enforcement remains untested. Relying on the criminological distinction between general and specific deterrence, we argue that high rates of enforcement are unlikely to encourage undocumented immigrants to self-deport. We also examine the effects of cultural and economic immigration policies adopted by the states. Previous research suggests that migrants will choose to remain in states with favorable environments, but this claim has not been directly tested. We draw on data from the Mexican Migration Project (MMP) to address these gaps. MMP data are supplemented with government data on federal enforcement obtained from Immigration and Customs Enforcement (ICE) and measures of state policy. Our findings suggest that higher rates of enforcement and the establishment of negative policy environments do not encourage undocumented immigrants to leave the United States at a higher rate than their documented counterparts do. Rather, high enforcement contexts exaggerate the differences between documented and undocumented migrant behavior, with undocumented migrants staying longer. Liberal state policies have no discernible effect.

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How Do E-Verify Mandates Affect Unauthorized Immigrant Workers?

Pia Orrenius & Madeline Zavodny
Federal Reserve Working Paper, February 2014

Abstract:
A number of states have adopted laws that require employers to use the federal government's E-Verify program to check workers' eligibility to work legally in the United States. Using data from the Current Population Survey, this study examines whether such laws affect labor market outcomes among Mexican immigrants who are likely to be unauthorized. We find evidence that E-Verify mandates reduce average hourly earnings among likely unauthorized male Mexican immigrants while increasing labor force participation and employment among likely unauthorized female Mexican immigrants. In contrast, the mandates appear to lead to better labor market outcomes among workers likely to compete with unauthorized immigrants. Employment and earnings rise among male Mexican immigrants who are naturalized citizens in states that adopt E-Verify mandates, and earnings rise among U.S.-born Hispanic men.

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Employment Verification Mandates and the Labor Market Outcomes of Likely Unauthorized and Native Workers

Catalina Amuedo-Dorantes & Cynthia Bansak
Contemporary Economic Policy, forthcoming

Abstract:
As recent efforts to reform immigration policy at the federal level have failed, states have started to take immigration matters into their own hands and researchers have been paying closer attention to state dynamics surrounding immigration policy. Yet, to this date, there is not a clear understanding of the consequences of enforcing E-Verify on likely unauthorized immigrants or on natives across the United States. This study aims to fill in that gap by analyzing the impact that the enactment of various types of E-Verify mandates may have on the employment and wages of these groups. We find that the enactment of employment verification mandates reduces the employment likelihood of likely unauthorized workers. Additionally, it raises the hourly wages of likely unauthorized women. None of these impacts are observed among a similarly skilled sample of naturalized Hispanic immigrants. Finally, the enactment of E-Verify mandates appears to raise the employment likelihood of alike non-Hispanic natives, while raising the hourly wage of native-born male employees, alluding to the potential substitutability of unauthorized immigrants and non-Hispanic natives.

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A Global View of Cross-Border Migration

Julian di Giovanni, Andrei Levchenko & Francesc Ortega
NBER Working Paper, March 2014

Abstract:
This paper evaluates the global welfare impact of observed levels of migration using a quantitative multi-sector model of the world economy calibrated to aggregate and firm-level data. Our framework features cross-country labor productivity differences, international trade, remittances, and a heterogeneous workforce. We compare welfare under the observed levels of migration to a no-migration counterfactual. In the long run, natives in countries that received a lot of migration – such as Canada or Australia – are better off due to greater product variety available in consumption and as intermediate inputs. In the short run the impact of migration on average welfare in these countries is close to zero, while the skilled and unskilled natives tend to experience welfare changes of opposite signs. The remaining natives in countries with large emigration flows – such as Jamaica or El Salvador – are also better off due to migration, but for a different reason: remittances. The welfare impact of observed levels of migration is substantial, at about 5 to 10% for the main receiving countries and about 10% in countries with large incoming remittances. Our results are robust to accounting for imperfect transferability of skills, selection into migration, and imperfect substitution between natives and immigrants.

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Investigating Whether and When English Learners Are Reclassified Into Mainstream Classrooms in the United States: A Discrete-Time Survival Analysis

Rachel Slama
American Educational Research Journal, April 2014, Pages 220-252

Abstract:
Using eight waves of longitudinal data on a statewide kindergarten cohort of English learners (ELs), I examined ELs’ tenure in language-learning programs and their academic performance following reclassification as fluent English proficient. I employed discrete-time survival analysis to estimate the average time to and grade of reclassification with and without controlling for socioeconomic status and home language. The average EL exited 3 years after school entry or in second grade; however, the odds that a non-Spanish-speaking EL was reclassified were nearly twice that of their Spanish-speaking EL classmates after controlling for income. Despite reclassification in the early elementary grades, large percentages of the kindergarten cohort experienced later academic difficulties and 22% of the sample was retained in grade.

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Estimating Labor Trafficking among Unauthorized Migrant Workers in San Diego

Sheldon Zhang et al.
ANNALS of the American Academy of Political and Social Science, May 2014, Pages 65-86

Abstract:
Research on labor trafficking faces many methodological challenges, which make it difficult to provide reliable estimates of the problem. In this research, we applied respondent-driven sampling and unique access to migrant communities in San Diego County, California, to estimate the extent of trafficking violations in one of America’s largest Spanish-speaking immigrant destinations. We found that 30 percent of undocumented migrant laborers were victims of labor trafficking, 55 percent were victims of other labor abuses, and about half of these victimization experiences occurred within the past 12 months. The rate of trafficking violations varied markedly across business sectors that typically hire unauthorized migrant workers. Construction and janitorial services had the most reported trafficking violations and labor abuses. Findings in this study also suggest that the illegal status in the country is likely the most significant factor contributing to vulnerability to trafficking violations.

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The Employment Effects of Immigration: Evidence from the Mass Arrival of German Expellees in Postwar Germany

Sebastian Braun & Toman Omar Mahmoud
Journal of Economic History, March 2014, Pages 69-108

Abstract:
This article studies the employment effects of one of the largest forced population movements in history, the influx of millions of German expellees to West Germany after World War II. This episode of forced mass migration provides a unique setting to study the causal effects of immigration. Expellees were not selected on the basis of skills or labor market prospects and, as ethnic Germans, were close substitutes to native West Germans. Expellee inflows substantially reduced native employment. The displacement effect was, however, highly nonlinear and limited to labor market segments with very high inflow rates.

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German-Jewish Emigres and U.S. Invention

Petra Moser, Alessandra Voena & Fabian Waldinger
NBER Working Paper, March 2014

Abstract:
Historical accounts suggest that Jewish émigrés from Nazi Germany revolutionized U.S. science. To analyze the émigrés’ effects on chemical innovation in the U.S. we compare changes in patenting by U.S. inventors in research fields of émigrés with fields of other German chemists. Patenting by U.S. inventors increased by 31 percent in émigré fields. Regressions that instrument for émigré fields with pre-1933 fields of dismissed German chemists confirm a substantial increase in U.S. invention. Inventor-level data indicate that émigrés encouraged innovation by attracting new researchers to their fields, rather than by increasing the productivity of incumbent inventors.

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My Child Will Be a Citizen: Intergenerational Motives for Naturalization

Alex Street
World Politics, April 2014, Pages 264-292

Abstract:
A reform of German citizenship law in 2000 was expected to greatly increase the number of foreign residents becoming German citizens. In fact, the naturalization rate fell and has remained low ever since. This outcome cannot be explained either by existing research on citizenship laws or by scholarship on individual incentives to naturalize. Instead, this article argues that the family context shapes decision making about citizenship, with distinctive behavioral implications. Parents have an incentive to naturalize and thereby extend their new citizenship status to their children. The introduction of a right to citizenship for many children born in Germany to immigrant parents removed this incentive for the parents to naturalize. The author tests the predictions of this argument against both qualitative and quantitative evidence. The article concludes with a discussion of other domains in which it may be possible to gain analytic leverage by studying political decisions in the family context.

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Beyond English Proficiency: Rethinking Immigrant Integration

Ilana Redstone Akresh, Douglas Massey & Reanne Frank
Social Science Research, May 2014, Pages 200–210

Abstract:
We develop and test a conceptual model of English language acquisition and the strength of the latter in predicting social and cultural assimilation. We present evidence that the path to English proficiency begins with exposure to English in the home country and on prior U.S. trips. English proficiency, then, has direct links to the intermediate migration outcomes of occupational status in the U.S., the amount of time in the U.S. since the most recent trip, and the co-ethnic residential context in the U.S. In turn, pre-migration characteristics and the intermediate characteristics work in tandem with English proficiency to determine social assimilation in the U.S., while cultural assimilation is primarily determined by pre-migration habits. A shift in focus to English use is desirable in studies of immigrant integration.

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Subsidizing Migration? Mexican Agricultural Policies and Migration to the United States

Jeronimo Cortina
Policy Studies Journal, February 2014, Pages 101–121

Abstract:
Migration theories often ignore the role that states play in stimulating migration through public assistance policies. Using the case of Mexico, this article explores the role of the state as a migrant-producing actor by examining the relationship between migration and social assistance policies in the form of monetary cash transfers. It argues that direct, unconditional cash transfers, like those provided by agricultural programs such as Procampo, rather than providing the incentives needed to retain individuals in their home country, may instead be providing the resources needed to migrate, particularly if the amount of the transfer is insufficient to spur investment. Instead of discouraging migration by enhancing economic opportunities and reducing poverty, such policies can actually make it easier and more appealing for its beneficiaries to migrate.

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Discrimination against students with foreign backgrounds: Evidence from grading in Swedish public high schools

Bjorn Tyrefors Hinnerich, Erik Höglin & Magnus Johannesson
Education Economics, forthcoming

Abstract:
We rigorously test for discrimination against students with foreign backgrounds in high school grading in Sweden. We analyse a random sample of national tests in the Swedish language graded both non-blindly by the student's own teacher and blindly without any identifying information. The increase in the test score due to non-blind grading is significantly higher for students with a Swedish background. This discrimination effect is sizeable, about 10% of the mean or 20% of the standard deviation of the blind test score.

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Gender inequality and emigration: Push factor or selection process?

Thierry Baudassé & Rémi Bazillier
International Economics, forthcoming

Abstract:
Our objective in this research is to provide empirical evidence relating to the linkages between gender equality and international emigration. Two theoretical hypotheses can be made for the purpose of analyzing such linkages. The first is that gender inequality in origin countries could be a push factor for women. The second one is that gender inequality may create a “gender bias” in the selection of migrants within a household or a community. An improvement of gender equality would then increase female migration. We build several original indices of gender equality using principal component analysis. Our empirical results show that the push factor hypothesis is clearly rejected. All else held constant, improving gender equality in the labour market is positively correlated with the migration of women, especially of the high-skilled. We observe the opposite effect for low-skilled men. This result is robust to several specifications and to various measurements of gender equality.

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The Effect of Minority/Majority Origins on Immigrants' Integration

Elyakim Kislev
Social Forces, forthcoming

Abstract:
This paper develops an inexplicably understudied variable with far-reaching implications for immigrants' experience: whether an immigrant was a member of a minority group in his or her country of origin. I investigate three groups of Israeli-born immigrants in the United States: Israeli Palestinians, ultra-Orthodox Jews, and the Jewish majority. Using the US censuses and American Community Surveys, I show that each group possesses different socioeconomic and demographic characteristics as well as different cultural and economic trajectories. Ultra-Orthodox Jews display processes of separation; the Jewish majority displays processes of integration; and Israeli Palestinians display processes of accelerated integration. In addition, analysis of these three groups' background and self-selection mechanisms, utilizing data from the Israeli Social Survey, provides a better understanding of these profound differences.

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Undocumented Migration and the Residential Segregation of Mexicans in New Destinations

Matthew Hall & Jonathan Stringfield
Social Science Research, forthcoming

Abstract:
This study uses data from the 2000 Census and 2005-2009 American Community Survey to examine the impact of undocumented Mexican migration to new destinations on residential segregation between Mexican immigrants and native-born whites and native-born blacks. We find that Mexican-white and Mexican-black segregation is higher in new Mexican gateways than in established areas and that, for Mexican-immigrant segregation from whites, this heightened level of residential segregation in new destinations can be explained by the high presence of unauthorized Mexican immigrants living there which tends to bolster segregation between the two groups. By contrast, Mexican-immigrant segregation from native-born blacks tends to be lower in areas with larger undocumented populations, a pattern that is especially true in new destinations. Neither of these opposing effects of legal status on Mexican-immigrant segregation can be explained by compositional differences in assimilation (English ability and earnings) between documented and undocumented immigrants nor by structural variation in metropolitan areas, suggesting a unique association between legal status and segregation.

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The Ideological and Electoral Determinants of Laws Targeting Undocumented Migrants in the U.S. States

Joshua Zingher
State Politics & Policy Quarterly, March 2014, Pages 90-117

Abstract:
State legislatures have been extremely active in passing legislation relating to all facets of immigration policy over the last several years. In this article, I develop a framework that explains how party ideology, party control of the legislature, and electoral conditions affect the likelihood that a state legislature will adopt policies that increase immigration enforcement. I test my arguments using state immigration policy adoption data that span from 2005 to 2011. I find that conservative Republican state parties are more likely to pass legislation enhancing immigration enforcement — on the condition that the Republican Party controls the state’s legislative institutions. However, the willingness of Republican-controlled legislatures to pass immigration reform is often tempered by electoral concerns. Republican-controlled legislatures in states where Latinos make up a large proportion of the electorate are significantly less likely to adopt new legislation that targets undocumented migrants. I argue that Republican support for increasing sanctions on undocumented migrants is eroded by the potential for an electoral backlash from Latino voters. Democratic-controlled legislatures are unlikely to pass legislation under any conditions. Ultimately, the observed pattern of policy adoption is the product of the trade-off between the state parties’ ideologically driven policy goals and the electoral consequences associated with actually implementing immigration policies.

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The “Nature” of American Immigration Restrictionism

John Hultgren
New Political Science, Winter 2014, Pages 52-75

Abstract:
How do commitments to nature factor into the American immigration restrictionist movement? This question initially appears odd; in contemporary American politics, environmentalism is generally assumed to be a value of the political left, and restrictionism of the right. Through an in-depth analysis of the American “environmental restrictionist” logic, this article suggests that the reality is more complicated. First, the historical trajectory of the relationship between nature and restrictionism is outlined, demonstrating that commitments to particular conceptions of nature have long intersected with American restrictionism. Second, textual analysis, semi-structured interviews, and content analysis are employed in analyzing how contemporary activists making the environmental argument against immigration conceptualize nature and relate it to foundational ideals of political community, political economy, and governance. Three discourses of environmental restrictionism are identified, and the role that nature plays in each is detailed. The article concludes by reflecting on the resonance of these “natures” with mainstream American greens, and offering several prescriptions for environmentalists concerned with inclusion and social justice.

By KEVIN LEWIS | 09:00:00 AM


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