Harvard Grey Book

The Harvard Grey Book is a wonderfully sane document and good reading for those of us in the maelstrom of real research.

http://www.fas.harvard.edu/~research/greybook/toc.html

Dog Cortex Asymmetries Revealed by Tail-Wagging

here


Its about time someone looked at hyperbolic discounting in dogs versus cats!

Princeton Public Lectures

Fantastic public resource made available by Princeton. A set of talks given as public lectures including Susstein "Libertarian Paternalism is not an oxymoron" and lectures by Levitt and Antonio Damasio. The web is great!

http://www.princeton.edu/WebMedia/lectures/

ISNE Annual Conference

A call for papers is now available for the annual conference of the Irish Society of New Economists. This year's conference will take place on the 7th September in the UCD Geary Institute.

The Best Way to Start The Day

This article describes how a high-fat breakfast can make people more susceptible to stress throughout the day. This is something to consider in the roll-out of the DRM study.

Is the benefit of exercise a placebo effect?

The next time you're doing the housework, try donning a tracksuit, cranking up the Rocky sound-track and viewing the whole thing as an exercise session - doing so could have a positive effect on your health.

That's according to Alia Crum and Ellen Langer, who assessed the health of 84 female hotel cleaners, all of whom worked between 32 to 40 hours per week, cleaning approximately 15 rooms per day.

The researchers then told half the cleaners, via verbal presentations, handouts and posters, that the cleaning work they perform counts as exercise and means they effectively lead an active lifestyle, easily fulfilling government recommendations for daily exercise. The remaining cleaners acted as controls.

A month later the health of the cleaners was assessed again. Crucially, those who had been reminded how much exercise they engage in at work, showed health improvements in terms of weight, body mass index, body-fat, waist-to-hip ratio and blood pressure. The control cleaners showed no such improvements.

What caused this health boost? Those cleaners reminded that their work counted as exercise didn't change their smoking, drinking or eating habits over the month, nor did they start exercising more in their spare time. However, as intended, the intervention did lead them to perceive that they engaged in more exercise at work.

"These results support our hypothesis that increasing perceived exercise independently of actual exercise results in subsequent physiological improvements", the researchers said.

In the same way that some medicines work not because of any particular ingredient, but because of patients' belief in their healing power, the researchers concluded their findings show some of the benefits of exercise are also related to beliefs - otherwise known as the placebo effect.
____________________________________

Crum, A.J. & Langer, E.J. (2007). Mind-set matters. Exercise and the placebo
effect. Psychological Science, 18, 165-171.
http://dx.doi.org/10.1111/j.1467-9280.2007.01867.x

Are Risk Aversion and Impatience Related to Cognitive Ability?

Thomas Dohmen (IZA) , Armin Falk (IZA, University of Bonn and CEPR), David Huffman (IZA) , Uwe Sunde (IZA, University of Bonn and CEPR)

URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp2735&r=cbe
Is the way that people make risky choices, or tradeoffs over time, related to cognitive ability? This paper investigates whether there is a link between cognitive ability, risk aversion, and impatience, using a representative sample of the population and incentive compatible measures. We conduct choice experiments measuring risk aversion, and impatience over an annual time horizon, for a randomly drawn sample of roughly 1,000 German adults. Subjects also take part in two different tests of cognitive ability, which correspond to sub-modules of one of the most widely used IQ tests. Interviews are conducted in subjects' own homes. We find that lower cognitive ability is associated with significantly more impatient behavior in the experiments, and with greater risk aversion. This relationship is robust to controlling for personal characteristics, educational attainment, income, and measures of credit constraints.

Twenty Somethings and Their Need for Praise

College Journal released an article today titled, Most-Praised Generation Craves Kudos at Work, which discussed the way young adults today were brought up surrounded by constant praise and how that is playing a role now that they (we) are entering the work force. As far as I am concerned, this might be one of the saddest aspects of my generation. But I actually had to laugh at some parts of the article because it is just that funny.

Juding men to be too attractive: how women fear that a high-status AND good-looking partner will be less likely to say faithful

This paper looks at an interesting 'cross-categorisation': on the face if it, evolutionary psychology would have it that women should be more attracted to men who are both good-looking and possess high status than if they only possess one of these assets. This study does not find confirmation for this view, and argues that the evidence seems to point to women being afraid that a 'doubly attractive' male will be more likely to be unfaithful (presumably in terms of his capacity to attract other women, and to be more confident of success if he were to decide to flirt).

the land of baked-potato pushcart

I know this isnt technically relevant to the blog remit but given that we post so much from the NYT i thought i would put this up and it does have economics content. I am most curious though about what a "baked-potato pushcart" is. Apparently, Ireland used to be the land of them!

http://travel.nytimes.com/2007/04/22/travel/22hours.html?th&emc=th

What Goes Up Will Most Likely Come Up Again After Going Down

My last comment on the "Fin De Siecle" post suggested that less emphasis in the "valuation-literature" has been placed on the single biggest investment of most people's lives, where the single biggest investment of most people's lives was touted as the purchase of a home.

I still don't doubt the relatively lower level of emphasis in the literature, but further reflection on how I phrased "the single biggest investment of most people's lives", makes me think that this phrase may be somewhat disingenuous.

This is based on a perspective related to house prices that I have been talking about for a while now. The point is that home owners (as opposed to property investors) shouldn't panic too much if a major fall in house prices does happen to be imminent. Furthermore (and especially), home owners who have only recently taken out their mortgage should also not panic, even though they may enter into "negative equity" on their investment.

The logic here is that "What Goes Up Will Most Likely Come Up Again After Going Down". So even though one may enter into negative equity after a fall in house prices, house prices should eventually recover after the fall and resume their upward trend again. So what I'm really trying to get at here is a concept of "inter-temporal perceptions of equity".

If one's investment will eventually return to "positive equity" in the future, can one doubt (in a philosophical sense) that one's investment was ever in negative equity? What is negative equity, but a perception of value at a certain point in time, when mortgage repayments seem like they are being paid towards something that is worthless. However, if individuals can take a less myopic view of life-cycle investment, then they will realise and appreciate that their mortgage repayments on a "negative equity" investment will not be wasted. As time passes and the property market recovers, their mortgage repayments will turn out to be a much better investment.

If this message about "inter-temporal perceptions of equity" could be rolled out to the public then multiple benefits would arise. Firstly, the extent of a fall in house prices would be much smaller, as the initial correction would not trigger as much panic amongst all those who enter negative equity (upon the initial correction). Secondly, the banks would not have as many bad debts on their books as people realise that negative equity isn't the end of the world, simply a perception of how much value their investment has at a very particular point in time.

There is a nuance (and possibly several) to this perspective that I'm peddling. If one doesn't want to lose out by selling or emigrating upon the occurrence of negative equity, then one has to stay in the same location until one's property recovers in value. This has some severe implications for labour market flexibility and is a particular thorn in the side of my perspective (Thaks to Peter for pointing this out). However, until crowds can appreciate the nuances of inter-temporal perceptions of equity, I will be reluctant to call them wise.

ideosphere

There was an article in the New York Times about this world events betting market called ideosphere. they dont use real money so there may be a problem with people being able to lodge cheap predictions that they dont have to stand behind. its an interesting step in this direction. In terms of unearthing potential risks could such a mechanism be used? I suppose share prices, bond prices perform this function for most tradeable risk but i wonder are there other types of risk that such a mechanism would better reveal.

http://www.ideosphere.com/

http://www.randomhouse.com/features/wisdomofcrowds/

Some of this is a bit "last season" but this notion of average opinion being a good guide to future events is interesting. We should re-read the Wisdom of Crowds and have a look at how some simple aggregation mechanism for opinions would work. I could not find odds for a house price fall on some of the gambling websites. I think i will ring up tommorow (using my home phone!) and ask for a price from Paddy Power or someone and get what odds they are giving. I am sure there has already been a lot of papers done here and it would be interesting to look at them but i dont know off the top of my head the extent to which betting companies odds have been used as research devices in economics. As a sideline some of the current affairs bets going at the moment include who will take over from Pat Kenny (Ryan Tubridy is favourite at 6-1). Bertie is 4-7 on to be the next Taoiseach. The 24th and 31st May are both joint favourties at even money to be the next election day. This is very interesting. What odds would you get on different towns having the next cryptosporidium outbreak etc.,? Could these be used for prediction?

An argument for action research in the design of student fees policy

Peter Knight writes on how he got his predictions wrong on the impact of student fees on prospective students shopping around for better deals in education; although he does not say it explicitly, the beginning of his article is surely an invitation to consider action research (read 'stakeholder input', for those who like a different type of jargon) into the design of policy instruments.

Effectiveness of public health interventions

Ths paper has a strong message about the returns to public health interventions: it'd be good to hear how people with better quants skills than I think about it!

The following is an account of how a web-based screening tool has some early promise, (according to the authors) of screening for subclinical depression.

Free lecture notes!

This is a great site for sets of lecture notes.You need never write a new course again
http://www.econphd.net/notes.htm

Micro-lending by Internet

Kiva.org is a website that seeks to link people wishing to get inolved in microlending with those seeking funds. A microfinance institution can put profiles of entrepreneurs on the website, and then anyone with a credit card can then lend money to them. Money can be lent in multiples of $25, from $25 up to the full amount requested. The lender receives no interest, the entrepreneur pays 16% which is used to cover administration costs. According to Kiva, they have a 100% loan repayment record so far.


Recently the Economist published an article reporting how micro-finance has become so successful that it may now be attracting aid money that it no longer needs and which may be put to better use elsewhere. Will sites like kiva improve or exacerbate this situation? I'd imagine it can only help if it pushes the larger international institutions out of relatively "safe" micro-lending and into riskier areas.

Neural Basis for Dyscalculia

A recent article in the Daily Telegraph reports that scientists have used a powerful magnet to turn off the ability to carry out simple arithmetic for a fleeting instant in a study that sheds light on the cause of dyscalculia, the mathematical equivalent of dyslexia.

Dyscalculia was originally identified in patients who suffered damage to specific regions of the brain but apparently normal people - up to five per cent of the population, mostly male - can suffer this disability which affects a person's ability to understand, remember, and/or manipulate numbers.

This research is in the current edition of the journal Current Biology, where there is an article by researchers from University College London who successfully induced dyscalculia in subjects (who did not already have a maths learning difficulty) for the first time.

Health Risk and Probability Neglect

Breathing polluted city air may be worse for you than fallout from an atom bomb, according to a recent article in the Times newspaper.

Everyday hazards such as inhaling polluted city air or other people's cigarette smoke are potentially worse for your health than being exposed to the radioactive fallout of an atomic bomb, according to the research mentioned in the article.

A study of radiation exposure caused by the atomic bombs dropped on Japan in 1945 and the explosion at the Chernobyl nuclear power plant has suggested that they have posed similar or lower health risks to survivors than the more prevalent problems of air pollution, smoking and obesity.

Jesse Shapiro

Jesse Shapiro's work is very relevant to a lot of the stuff we have been talking about with regard to time preferences and behavioural economics. A selection of his papers is below. The daily discount rate paper is particularly useful with regard to some of the discussions we have been having. I really like the idea behind the prison paper. Them's is clever folks over there.



Who is "behavioral"? Cognitive ability and anomalous preferences. (with Daniel Benjamin)Draft, May 2006. [pdf] [appendix]
Does prison harden inmates? A discontinuity-based approach. (with Keith Chen)Draft, December 2006. [pdf]
Is there a daily discount rate? Evidence from the food stamp nutrition cycle.Journal of Public Economics, February 2005. [pdf] Link to published version here.
Media, education, and anti-Americanism in the Muslim world. (with Matthew Gentzkow)Journal of Economic Perspectives, Summer 2004. [pdf] Copyright 2004, American Economic Association.
Why have Americans become more obese? (with David Cutler and Edward Glaeser)Journal of Economic Perspectives, Summer 2003. [pdf] Copyright 2003, American Economic Association.

Whats in a name?

The Benefits of Being Economics Professor A (and not Z)

By:	C. Mirjam van Praag , Bernard M.S. van Praag
URL:	http://d.repec.org/n?u=RePEc:iza:izadps:dp2673&r=cbe
Alphabetic name ordering on multi-authored academic papers, which is the convention in the economics discipline and various other disciplines, is to the advantage of people whose last name initials are placed early in the alphabet. As it turns out, Professor A, who has been a first author more often than Professor Z, will have published more articles and experienced a faster growth rate over the course of her career as a result of reputation and visibility. Moreover, authors know that name ordering matters and indeed take ordering seriously: Several characteristics of an author group composition determine the decision to deviate from the default alphabetic name order to a significant extent.

Status, Happiness, and Relative Income

This may make you happiness types happy

By:	John Beath (University of St. Andrews) Felix FitzRoy (University of St. Andrews and IZA)
URL:	http://d.repec.org/n?u=RePEc:iza:izadps:dp2658&r=cbe
Models of status based on Frank’s (1985) count of the number of people with lower conspicuous consumption are inconsistent with the extensive empirical literature on happiness and well-being. The alternative approach to consumption interaction which uses some form of relative income has been developed in various contexts. These predict that a representative agent’s well-being will increase with real income or consumption. However, this is again inconsistent with the time-series evidence for advanced economies. In this paper we combine a simple model of relative income with a distribution of ability that correctly predicts both time series results of near constant utility, and the positive, concave crosssectional relation between income, working time and happiness.