Graduate Programmes in Economics and Psychology

The International Association for Research in Economic Psychology is maintaining a website devoted to graduate programmes in behavioural economics and economic psychology. Please email Ofer Azar (address at the link below) if you know of other programmes in this area

http://www.iarep.org/graduateprograms.htm

Reminder: Book Club

A quick reminder that we'll be discussing 'A Theory of Justice' (1971) by John Rawls at the next round of the book club. The meeting will take place in 'The Duke' pub off Grafton St., at 7.30 pm on Tuesday 4th November.

It is not possible to get the book for free online, but you can read extracts (though not print) thanks to Google and Oxford Press: here

Some Background Information:

John Rawls (February 21, 1921 – November 24, 2002) was an American philosopher, a professor of political philosophy at Harvard University and author of A Theory of Justice (1971), revised in 1975 and 1999. Rawls was a recipient of the Schock Prize for Logic and Philosophy and the National Humanities Medal in 1999, the latter presented by President Bill Clinton, in recognition of how Rawls's thought "helped a whole generation of learned Americans revive their faith in democracy itself."

Behavioural Economics and Financial Regulation

The Nudge blog pointed me to a new paper on behavioural economics and financial regulation by Shafir, Barr and Mullainathan

http://www.newamerica.net/files/naf_behavioral_v5.pdf

Reminder: Economics and Psychology Conference Maynooth

A one-day conference on Economics and Psychology will take place in NUIM on November 7th. The purpose of this event is to provide a forum for the discussion of work at the interface of economics, psychology and cognate disciplines such as neuroscience. The event is co-organized by the Department of Economics, Finance and Accounting in Maynooth and the UCD Geary Institute. The International Association for Research in Economic Psychology (IAREP) is the relevant international body and we would encourage attendees to consider joining this group. All are welcome and there is no registration fee. Please contact Liam Delaney ( Liam.Delaney@ucd.ie) to confirm attendance. The event will take place in the Physics Hall in Maynooth, which is on the South Campus. The Physics Theatre is number 8 on the map provided below.

http://www.nuim.ie/location/maps/south.shtml

Further details are available below

http://geary.ucd.ie/behaviour/index.php/Home/One-Day-Symposium.html

Working With Missing Data in Survey Analysis

A new working paper from NUIM Economics addresses the issue of missing data in probit estimation: "An Efficient Estimator for Dealing with Missing Data on Explanatory Variables in a Probit Choice Model", (Denis Conniffe and Donal O’Neill). According to the authors, a common approach to dealing with missing data in econometrics is to estimate the model on the common subset of data, thereby throwing away potentially useful data. The authors wish to avoid case-deletion --- in the particular context of a probit model with missing data on the explanatory variables; so they develop a new estimator. Their simulation results show that the new estimator performs well when compared to popular alternatives, such as complete case analysis and multiple imputation.

A few of us have been discussing missing data and how to address it (mostly with multiple imputation) recently. Below is a list of some resources we have found. If anyone else is aware of other missing data lecture-notes, multiple imputation software packages or relevant econometric estimators, I suggest that we build up a list in the comments on this post.

(i) The NBER econometrics video (and lecture-notes) on missing values - this is done by Woolridge: http://www.nber.org/WNE/lect_12_missing.pdf

(ii) The Gary King lecture-notes on missing values: http://gking.harvard.edu/g2001syl/files/eviltlkP.pdf These notes mention the software package developed by Gary King to implement multiple imputation of missing values. The package is called Amelia and there is a comprehensive guide to it made available by King here: http://gking.harvard.edu/amelia/

(In general, the King site has some great notes - available here)

(iii) A political science lecturer from UCD called Jos Elkink has some lecture-notes on missing values: http://jaeweb.cantr.net/aqm_2008_lecture_missing.pdf

(iv) The multiple imputation FAQ page: http://www.stat.psu.edu/~jls/mifaq.html#ref

(v) http://www.multiple-imputation.com/

(vi) Stephen Soldz's resources for missing data: http://www.soldzresearch.com/statisticsresources.htm#MissingData

(vii) The Southampton CASS course on missing values: http://www.s3ri.soton.ac.uk/cass/showcourse.php?id=71

(viii) The course from the Cambridge Biostatistics Unit (Patrick Royston is one of the lecturers here): http://www.mrc-bsu.cam.ac.uk/MIcourse/index.shtml

(ix) The ICE software package in STATA: http://www.ats.ucla.edu/stat/Stata/library/ice.htm

(x) The Hotdeck module in STATA: http://ideas.repec.org/c/boc/bocode/s366901.html

(xi) David Howell's notes on working with missing data:
http://www.uvm.edu/~dhowell/StatPages/More_Stuff/Missing_Data/Missing.html

(xii) Joe Schafer's notes on missing data in longitudinal studies:
http://www.stat.psu.edu/~jls/aaps_schafer.pdf

(xiii) Richard Williams' notes on missing data (including traditional approaches in STATA): http://www.nd.edu/~rwilliam/stats2/l12.pdf

(xiv) A book on missing data by Patrick E McKnight et al., made partially available by Googlebooks here

The Short- and Long-Term Career Effects of Graduating in a Recession

In keeping with the recent theme on this blog of papers related to recession, I thought some readers may be interested in a NBER paper from 2006 entitled "The Short- and Long-Term Career Effects of Graduating in a Recession" (Oreopoulos, von Wachter and Heisz). One hypothesis is that labour market shocks (such as those occurring during a recession) can have persistent effects on individuals' future earnings.

The authors analyse the long-term effects of graduating in a recession on earnings and job mobility. The data they use is a large sample of Canadian college graduates and matched university-employer-employee data from 1982 to 1999. They find that young graduates entering the labor market in a recession suffer significant initial earnings losses --- that eventually fade, but only after 8 to 10 years. They also document that there are individual differences in how recession affects post-graduation labour market circumstances.

The Oreopoulos, von Wachter and Heisz paper brings to mind another NBER paper (from last year) by Oyer; it was entitled "The Making of an Investment Banker: Macroeconomic Shocks, Career Choice, and Lifetime Income". It used a survey of Stanford MBAs from the classes of 1960 to 1997 to analyse the relationship between the state of the stock market at graduation, initial job placement, and long-term labor market outcomes. We discussed it on the blog here.

identity, values, coping styles and economic downturn

A further aspect of the link between declines in economic status and psychological well-being is the extent to which psychological constructs can provide ways of thinking about who suffers worse for a given level of economic decline.

A number of attempts have occurred in recent years to incorporate identity into economic analysis including work by Akerlof and Kranton. Viewing business failure and unemployment as identity threats is clearly one route to trying to explain the very large effects on well-being and, in particular, why they seem to be independent of income losses.

One psychological construct that is particularly relevant to this is the idea of "contingencies of self-worth". The review by Crocker and Knight below is a good overview of the concept

"Abstract—We argue that the importance of self-esteem lies in what people believe they need to be or do to have worth as a person. These contingencies of self-worth are both sources of motivation and areas of psychological vulnerability. In domains of contingent self-worth, people pursue self-esteem by attempting to validate their abilities and qualities. This pursuit of self-esteem, we argue, has costs to learning, relationships, autonomy, self-regulation, and mental and physical health. We suggest alternatives to this costly pursuit of self-esteem."

http://www3.interscience.wiley.com/journal/118706337/abstract

As well as identity, a number of papers have shown that political values can moderate the relationship between socio-economic status and self-esteem

http://www3.interscience.wiley.com/journal/118502361/abstract?CRETRY=1&SRETRY=0

To my knowledge, there is not a wide literature on how values and identity condition the psychological response to deterioration in economic circumstances. I have been looking through some papers on the role of coping styles in moderating the effect of unemployment on psychological distress such as the paper below.

http://ideas.repec.org/a/eee/joepsy/v22y2001i4p461-482.html

The Feudal Society in Today's University

I draw your attention to this paper without comment.
The Feudal Society in Today's University
Houck, James P.

URL: http://d.repec.org/n?u=RePEc:ags:umaemp:8443&r=edu

Few institutions puzzle outsiders as much as the modern university. Even insiders may not grasp the primal essence of its life and behavior. The sheer size and diversity of many universities defeats orderly consideration. We adopt crude simplifications or, worse, numbing obfuscation. This is entirely unnecessary. The core of university life can be illuminated clearly through the prism of a rich and beguiling metaphor. This metaphor requires only that we see today's university as a thinly disguised feudal society such as existed in Europe during the 11th or 12th century A.D. In this medieval context, many otherwise baffling modern mysteries in academe become transparent.

hedonistic paradox

A recent paper in Journal of Public Economics explores the idea that more altruistic people are happier than people who are greedy. Using evidence from combining well-being measures, psychometric markers and information on play in dictator games they find evidence for personality traits leading people toward greater levels of both giving and happiness. The authors conclude that "The results of this and other studies raise the question of whether greater attention should be paid to the potential benefits (beyond solely the material ones) of policies that promote charitable donations, volunteerism, service education, and, more generally, community involvement, political action, and social institutions that foster psychological well-being." Perhaps the 1 per cent levy imposed here in Ireland to finance the recent budget will cheer everyone up!

Konow, James & Earley, Joseph, 2008. "The Hedonistic Paradox: Is homo economicus happier," Journal of Public Economics, Elsevier, vol. 92(1-2), pages 1-33, February. [Downloadable!] (restricted)

Psychological Costs of Unsustainable Housing Commitments

Most of the articles I have posted on the blog about psychological impacts of adverse economic circumstances have focused on unemployment and this, in my reading, is the area where the most rigorous econometric work has been conducted. Another aspect of the recent economic situation has been the growing discussion of people who are overcommitted in terms of housing commitments. A paper in Psychological Medicine last year finds substantial negative psychological effects of housing payment problems on psychological distress. In particular, they find "For male heads of households housing payment problems and entering arrears have significant detrimental effects on mental well-being and for female heads of households longer-term housing payment problems and arrears have significant detrimental effects on mental well-being." Similar findings are shown, using the same data-set, in the Brown et al paper below.

Psychological Consequences of Unsustainable Housing Commitments

Brown, Sarah & Taylor, Karl & Wheatley Price, Stephen, 2005. "Debt and distress: Evaluating the psychological cost of credit," Journal of Economic Psychology, Elsevier, vol. 26(5), pages 642-663, October. [Downloadable!] (restricted)

hopkins and king - improving vignettes

a new paper linked below (from the Harvard website) examines some improvements to the practice of vignettes

http://gking.harvard.edu/files/implement.pdf

Religion and Recession

In a paper a few years back, Clarke and Lelkes tested the idea that religiosity offered insurance against the stress of shocks such as recession. As well as being generally happier, more religious people are also less affected by losing their job. The authors even speculate that this might influence the type of state systems that people choose and argue that the religion as insurance concept might explain the lower safety nets in some European countries.

Religion as Insurance

The role of other non-monetary forms of insurance against losing your economic status during a recession have also been widely discussed. The role of networks of social interactions bound up in the concept of "social capital" is discussed in several papers. Social capital can directly affect our monetary position through offering access to informal credit and labour market networks. It may also buffer people against psychological isolation experienced during the course of a transition from the labour market.

The other aspect examined frequently in the literature is the role of the "set-point", a fixed level of well-being that we carry with us as a disposition. The idea being that no matter how bleak the economic environment becomes, some people have a cheerful and optimistic disposition that will carry them through any circumstances. The extent to which the set-point is a good description of well-being is one of the big topics in this literature. Those who believe it a good description point to the famous Brickman et al paper that showed remarkable returns to baseline happiness among people who had been paralysed and people who won the lottery. However, several papers including the one below have found that life satisfaction can be adjusted permanently by stressful life events. The second paper is particularly strong on the idea that we adapt to many things but that unemployment, particularly for men, is genuinely life altering in a negative sense.

Clark, Andrew E & Georgellis, Yannis & Sanfey, Peter, 2001. "Scarring: The Psychological Impact of Past Unemployment," Economica, London School of Economics and Political Science, vol. 68(270), pages 221-41, Ma

AndrewE. Clark & Ed Diener & Yannis Georgellis & RichardE. Lucas, 2008. "Lags And Leads in Life Satisfaction: a Test of the Baseline Hypothesis," Economic Journal, Royal Economic Society, vol. 118(529), pages F222-F243, 06.

Rani Spiegler on Neuroeconomics

Below is a short article by Rani Spiegler on neuroeconomics. Some interesting criticisms of neuroecon including the use of small samples, the over-interpretation of correlations of decisions with brain activity, heavy statistical assumptions needed for fmri and so on. he argues that neuroeconomics may perform an important metaphorical role in motivating developments in economic theory and makes some other points (but the article is below so I wont spoil the rest for you!)

"In this short note I speculate about the various ways in which the study of neurological aspects of decision making could be fruitful for economic modelling."

http://www.homepages.ucl.ac.uk/~uctprsp/neuro.pdf

Ireland's woes

How things change so quickly. Just last year, the BBC painted a picture of a land divided by the large riches that had been heaped upon its innocent shoulders.

http://news.bbc.co.uk/2/hi/europe/6638711.stm

http://gearybehaviourcenter.blogspot.com/2007/05/begorrah.html

"But has this prosperity come at a price?" they wondered. Apparently so, particularly for the farmers, experimental rock musicians and returning emigrant from Mexico (who was particularly worried about all the immigrants in Ireland!) the journalist interviewed. Ireland, it seemed had lost its soul.

Contrast this with the latest assessment of Ireland from a bbc journalist. Our "house of cards" has come tumbling down apparently. The folks at Smithson's diner in Drogheda are racked with worry. The article notes about the area: "During the unprecedented boom years, the population here grew by a third. Now, it is an unemployment black-spot - ringed by new developments with empty, unsold houses."

Its a pity that the farmer, experimental rock musician and returning Mexican emigrant from the last article weren't reinterviewed as whatever problems seemed like last year, I doubt this is going to be an improvement. I should be fair to them as none of them specifically blamed prosperity but the moral of the article to me seemed to that prosperity had reduced welfare and I argued then that more thought needed to be given to what had improved, in particular the positive effect of reduced unemployment.

http://news.bbc.co.uk/2/hi/europe/7689789.stm

For obvious reasons, the debate about the role of economic progress in wider well-being has been on my mind a lot recently. There is some evidence (particularly from the suicide rate) that the Celtic Tiger prosperity was not unambiguously positive. However, it looks like we will now get a chance to see what the other side is like. I've posted evidence before that some aspects of health may improve if there is to be a recession and it may also be the case that people's focus on wealth and consumerism as a source of status may be undermined, which may be good depending on what you read. However, the literature on the negative effect of unemployment, farm failure, business failure, home repossession and other negative features of recession on psychological outcomes seems too overwhelming to me to think of this slowdown as anything but a bad thing. In some sense, this may be one the challenges of the next few years - to break the link between economic slowdown and the psychological trauma experienced by people who lose their jobs and status.

Suicide and Well-Being

Mary Daly and Daniel Wilson have written a number of papers about the economics of suicide. If you look at Figure 1 in their paper below "Happiness, Unhappiness and suicide: An empirical assessment" it confirms the idea that time trends in suicide and overall well-being are apparently unconnected. I have talked about this in several seminars for Ireland and have raised it as a puzzle but am frequently told that this is unsurprising. The paper below finds that the determinants of suicide at the micro level are very similar to the determinants of well-being and thus, they argue that suicide should still be viewed as a strong measure of utility. I am still curious though as to why this relationship does not hold at time series level.

paper link

Economic Recessions and Well-Being

I mentioned in an earlier post some literature that argued that recessions might have some beneficial health effects in areas such as heart attacks, traffic accidents etc.,

I have been looking through the literature for papers that specifically deal with the effect of recessions on well-being. i am working on various projects this weekend and will post sporadically on these topics.

The review below by Blanchflower and several other papers point to a negative effect of unemployment on well-being both at individual and aggregate level.The paper by Wolfers below shows that both unemployment and inflation lower well-being and also finds an effect of volatility with more volatility independently lowering well-being. In general, I have not come across papers that argue against a causal effect of unemployment on well-being but would be interested to read any if I have missed them.

Wolfers, Justin, 2003. "Is Business Cycle Volatility Costly? Evidence from Surveys of Subjective Well-Being," International Finance, Blackwell Publishing, vol. 6(1), pages 1-26, Spring. [Downloadable!] (restricted)

David G. Blanchflower, 2008. "International evidence on well-being," NBER Working Papers 14318, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)

In terms of the effects of economic fluctuations, the relationship between gdp and well-being is still being debated strongly. Recent papers by Wolfers have argued against the Easterlin paradox, which claimed to demonstrate that economic progress beyond a certain point did not raise well-being.

Betsey Stevenson & Justin Wolfers, 2008. "Economic Growth and Subjective Well-Being: Reassessing the Easterlin Paradox," NBER Working Papers 14282, National Bureau of Economic Research

While the debate might be shifting toward the side of gdp being a positive influence on well-being, the literature on suicide and gdp, in my opinion, is certainly not conclusive. In the Irish case, one only has to look at the last 20 years to know that suicide need not reduce during dramatic economic improvements and was, in fact, increasing at its highest rate in Ireland at the time of the most dramatic improvements in economic conditions we had witnessed. This is something that needs to be explained further.

Do you ever wonder what proportion of email is spam?

Do you ever get frustrated having to delete spam?

A new IZA working paper by Caliendo, Clement, Papies and Scheel-Kopeinig reports that more than 70% of global e-mail traffic consists of unsolicited and commercial direct marketing (also known as "spam"). From an economic point of view, the authors point out that dealing with spam incurs high costs for organisations. The logical response? To reduce spam-related costs by installing spam filters.

Caliendo et al are interested in the selection bias associated with installing a spam filter. Using data from a German university, they measure the (time use) costs associated with spam, and the costs savings of spam filters. Their findings indicate that central IT costs are of little relevance since the majority of spam costs stem from employees who spend working time identifying and deleting spam. Also, the working time lost due to spam is approximately 1,200 minutes per employee per year. Caliendo et al suggest that these costs could be reduced by roughly 35% through the installation of a spam filter mechanism.

As another alternative, people could switch to email providers with inbuilt spam filters (automatic filtering perhaps...). I never get spam in my Gmail inbox; and emails that I want to receive there are never blocked.

The truth about Joe the plumber

Anyone following the American presidential debates will know of McCains example of 'Joe the plumber'. Joe Wurzelbacher, an Ohio plumber, has recently risen to fame as a result of McCains misaimed atttempt at stirring up criticism towards Obama's tax policies and arousing sympathy for hard working tradesmen such as plumbers. Some of these guys, according to McCain have been fixing pipes for decades to lever themselves into a position where they're pumping in over 200,000 dollars a year only to have it sadly drained away by Obama.. Joe won't be immediately affected because now, like most Ohio plumbers he earns enough to get by but someday he hopes to earn a quarter of a million bucks a year in which case Obama as president might make him a slight bit less well off than under McCain. Poor Joe. For more:

The Real Plumbers of Ohio

'Joe the Plumber' says he has no plumbing license

The Effects of Weather on Daily Mood

An interesting study from this months issue of 'Emotion' examines the effects of six weather parameters (temperature, wind power, sunlight, precipitation, air pressure, and photoperiod) on mood (positive affect, negative affect, and tiredness).

Using a multi-level approach they find "Sunlight had a main effect on tiredness and mediated the effects of precipitation and air pressure on tiredness. These individual differences in weather sensitivity could not be explained by the Five Factor Model personality traits, gender, or age."

A bit more meat than your €1 sandwich

McDonald's Net Rises on Dollar Menu
(Thanks to Paul for the story)

By Chris Burritt

Oct. 22 (Bloomberg) -- McDonald's Corp., the world's largest restaurant company, said third-quarter profit rose 11 percent as consumers stretched by higher food costs bought $1 double cheeseburgers... ``McDonald's is one of those great plays at this point in time,'' Keith Wirtz, the chief investment officer at Fifth Third Asset Management, told Bloomberg Television. Customer visits to restaurants are slowing ``with one exception, and that's in the fast-food category.''

To contact the reporter on this story: Chris Burritt in Greensboro, North Carolina, at +1-336-808 1348 or cburritt@bloomberg.net.

The Fed Discusses Behavioural Economics

The Wall Street Journal Marketwatch recently mentioned a special section in the new issue of the Richmond Fed's 'Region Focus'. This section "explores how... debate among economists is livelier than ever... Have Economists Abandoned the Real World? ...Are People Really Rational? ...Are Blogs Making Economics More Accessible?". The current edition of the Richmond Fed's 'Region Focus' is available here.

Irish SHARE

The Irish SHARE website is revamped and will be developing throughout the year

http://geary.ucd.ie/share/index.php

The website above has links to the first results of the Irish study as well as an article written about them in the Sunday Tribune. Some highlights of the results include the chronic illness distributions, early retirement data and many other findings. Various researchers will be following up on this over the next few years

nobel website interview with Fogel

the nobel website is also now posting interviews with past winners. This is a fascinating one with Robert Fogel

http://nobelprize.org/mediaplayer/index.php?id=689&view=3

Anchoring Vignettes - Calm Down Dearest

As Liam has mentioned recently, anchoring vignettes are an important part of modern survey work and they feature regularly as a topic of discussion on this blog (here, here, here).

The examination of individuals’ satisfaction with their job, how they rate their health, or any similar question - is measured through the subjective interpretation of a survey question. This is the context for why “anchoring vignettes” are important - they make self-reported levels of satisfaction, or health, comparable across different individuals. Self-reported levels of satisfaction are not usually comparable because individuals interpret survey questions differently and report levels of satisfaction subjectively. The anchoring vignettes technique is used to:

(i) measure incomparability by asking respondents to assess hypothetical scenarios described in short vignettes
(ii) correcting the incomparability through re-coding or the use of a statistical model

A typical example that is used to illustrate the comparability problem is self-rated health. Individuals who receive better healthcare may rate their health to be lower than individuals who receive worse healthcare. The assumed reason is that individuals who receive better healthcare have 'higher standards' for what constitutes 'good health'. This link leads to Gary King's website on anchoring vignettes. It includes academic papers, vignette examples, links to software, a FAQ, and much more besides about anchoring vignettes. There are also links to two of King's path-leading papers on the method:

Gary King, Christopher J.L. Murray, Joshua A. Salomon, and Ajay Tandon. "Enhancing the Validity and Cross-cultural Comparability of Survey Research," American Political Science Review, 97, 4 (December, 2003); reprinted with printing errors corrected, February, 2004.

Gary King and Jonathan Wand. Comparing Incomparable Survey Responses: New Tools for Anchoring Vignettes, Political Analysis, 15, 1 (Winter, 2007): Pp. 46-66.

A scenario demonstrating the usefulness of vignettes came to mind before when I was listening to "Calm Down Dearest", a song written by Jamie T, a performer from Wimbledon in South London. He defeated Jarvis Cocker and Thom Yorke to win the Best Solo Artist at the 2007 Shockwave NME Awards, and his debut album (the aptly titled 'Panic Prevention') was shortlisted as one of the 12 nominees for the Mercury Prize.

"Calm Down Dearest" documents Jamie's attempts to uncover the true self-rated health of his friend, given that his friend has a consuming cocaine habit. This may just be the interpretation of somebody who has read too much about anchoring vignettes, but you can listen for yourself using the video below. The chorus documents Jamie's frustration with the self-report problem:

"Its heavy, its on my mind; that you say you feel just fine.
Racking and stacking your lines, I said calm down dearest"

Potential Positive Health Effects of Recessions

Three papers by Christopher Ruhm and a colleague have argued in the past that recessions might have some hidden positive consequences. This is the first recession in Ireland that people of my cohort will have experienced as adults. If Professor Ruhm's papers are correct, we should use any spare capacity that comes available to us to become more healthy.

Gerdtham, Ulf-G. & Ruhm, Christopher J., 2006. "Deaths rise in good economic times: Evidence from the OECD," Economics and Human Biology, Elsevier, vol. 4(3), pages 298-316, December. [Downloadable!] (restricted)

Christopher J. Ruhm, 2000. "Are Recessions Good For Your Health?," The Quarterly Journal of Economics, MIT Press, vol. 115(2), pages 617-650, May. [Downloadable!] (restricted)

Ruhm, Christopher J., 2005. "Healthy living in hard times," Journal of Health Economics, Elsevier, vol. 24(2), pages 341-363, March. [Downloadable!] (restricted)


Healthy Living in Hard Times
Using microdata for adults from 1987 to 2000 years of the Behavioral Risk Factor Surveillance System (BRFSS), I show that smoking and excess weight decline during temporary economic downturns while leisure-time physical activity rises. The drop in tobacco use occurs disproportionately among heavy smokers, the fall in body weight among the severely obese and the increase in exercise among those who were completely inactive. Declining work hours may provide one reason why behaviors become healthier, possibly by increasing the non-market time available for lifestyle investments. Conversely, there is little evidence of an important role for income reductions. The overall conclusion is that changes in behaviors supply one mechanism for the procyclical variation in mortality and morbidity observed in recent research.

Irish SHARE results

Newspaper article about the results of the SHARE study in Ireland. I will post more about this over the week.

here

Alternative Methods for Evaluation - Costas-Dias and Blundell

Thanks to Christian for pointing out that an updated version of this excellent review is available online.

http://www.fep.up.pt/investigacao/cete/papers/DP0805.pdf

Health Ratings

RateMyHospital.ie was mentioned on this blog before. It is an Irish site that intends to produce a 'snapshot' of patient opinion at a given time on the level of hospital service that patients were offered. An American firm, HealthGrades, takes a different approach. Medical centers get one, three or five stars based on how many patients develop complications and die after receiving treatment. One star represents a poor performance. Three stars stands for "as expected." Five stars goes to the very best performers. Read more in the Chicago Tribune here. Some interesting details below.

The rankings are based on three years of data from Medicare and are adjusted to account for how sick the hospital's patients are... Consumers can look up the HealthGrade rankings by state and by condition.... Overall, HealthGrades says patients have a 70 percent lower chance of dying in a five-star hospital compared with a hospital with a one-star ranking.

Online Social Networks, Again

Imagine are a creative marketing agency based in the centre of Dublin. In the current edition of the Imagine newsletter, there's a useful reference to a New York Times article about Facebook and it's impact on social interaction. Apparently social scientists have a name for incessant online contact; "they call it “ambient awareness.” It is, they say, very much like being physically near someone and picking up on his mood through the little things he does — body language, sighs, stray comments — out of the corner of your eye." An extract from the article (below) mentions some data-collection tools that people might find interesting.

One of the most popular new tools is Twitter, a ... messaging service that allows its ... users to broadcast to their friends haiku-length updates — limited to 140 characters... — on what they’re doing. There are other services for reporting where you’re traveling (Dopplr)... And there are even tools that give your location. When the new iPhone, with built-in tracking, was introduced in July, one million people began using Loopt, a piece of software that automatically tells all your friends exactly where you are.

Can PhD Graduate Labour Supply Create Its Own Demand?

"Mapping the PhDs in the Private Sector" is the title of a new literature review by Susanna Stén, who is based at the Research Institute of the Finnish Economy. The review maps out the labour market situation of PhDs employed in the private sector. According to the author, the potential benefits of companies employing PhDs can be divided into productivity and innovation effects as well as knowledge contributions from networking, and external effects. The Finnish literature shows that the private sector employs only about 15% of all PhDs in the Finnish labour market.

Apparently the rapid increase in graduating PhDs in recent years indicates that the employment patterns of PhDs might be changing. "Further research is needed to answer questions like: How has the increased supply changed the labour market situation of PhDs? Has the role of the private sector as an employer of PhDs changed? And is the allocation of PhDs between fields of study efficient?" Similar issues were placed in the Irish context last year by myself, Liam and Colm - in this B&F article: "Building Up The PhDs".

Apparently Ireland's R&D manpower, in terms of full time equivalent (FTE) researchers per 10,000 labour force (49), is below the EU-15 average. This is according to the Singapore Agency for Science, Technology and Research. Information is available here and in the diagram below. Ireland's position is third from the right hand-side. The position of the EU-15 average is at the far right-hand side.




A question arises - what kind of R&D manpower does Ireland need outside the academic and public sector? One approach is to estimate the need for PhD graduates in the private sector via a survey of employers. Some things we do know (from research conducted by Eamonn O'Raghallaigh at Life Science Recruitment) are that:

(i) employment in the pharmaceutical/chemical sector has increased by 56% over the last 10 years, and there is currently over 24,500 employees within the sector.
(ii) In the medical devices/biotechnology sector, some 140 companies employ over 26,000 employees.
(iii) exports in the pharmaceutical/chemical sector totalled €43.5 billion in 2007; this represents 49% of total Irish exports
(iv) the medical devices/biotechnology sector saw a slight downturn in 2007, with exports falling by 2% to €3 billion

A leading education economist (Anna Vignoles) argued last year (here) that universities should set student tuition fees according to how much a degree subject is valued by employers. An interesting first step might be to see if such information can be gathered from employers. If it was subsequently estimated that there is not much need for more PhD graduates in the private sector, then one implication might be to consider ways of stimulating demand for R&D manpower. But the first step is to get the demand-side information.

Review of Nudge

An even handed review of Nudge in the Irish Times. Many of the other reviews I have read of Nudge have been extreme. In the US, it seems to get lots of fanfare whereas UK critics tend to treat it with deep suspicion to the point where many of the UK reviewers didnt seem to see anything of interest in the book. Below is closer to the truth - fascinating ideas from behavioural economics but you dont have to sign up to libertarian paternalism to enjoy them


here

Krugman wins Nobel

Just in case you have been in a cave or something!!

Irish Undergraduate Journal

For the undergraduates in Irish institutions who read this blog, you should seriously consider submitting good essays or projects that you have received high grades on to this new journal. Things like this are good for your CV and are a good opportunity to talk about your work.

http://www.iuawards.ie/site/

What's the placebo effect worth?

Earlier this year a study in the BMJ examining pain relief from analgesics showed that just informing people that a codeine product they were taking (actually a placebo) was worth $2.50rather than 10 cents increased the proportion of people who reported pain relief from 61% to 85.4%.So reducing the "price" of the placebo may have reduced the pain relief induced.

Waber RL, Shiv B, Carmon Z, Ariely D. Commercial features of placebo and therapeutic efficacy. JAMA 2008;299:1016-7.

A second more recent study by Kaptchuk et al. (2008)has shown a 'dose dependence' of placebo effects on pain relief dependent on if the patient was assigned to a waiting list (observation), placebo acupuncture alone ("limited"), or placebo acupuncture with a patient-practitioner relationship augmented by warmth, attention, and confidence ("augmented"). The proportion of patients reporting adequate relief were 28% on waiting list, 44% in limited group, and 62% in augmented group (P<0.001 for trend).

So it does appear that the placebo effect is still with us despite calls for it's demise though separating the effects of therapeutic rituals, patient-practitioner interaction, observation/assessment (or the “Hawthorne effect”, initially describing “an increase in worker productivity produced by the psychological stimulus of being singled out and made to feel important”) or investment in ones health, an explanation which seems plausible from the Ariely study.

Criminal Prosecution and HIV-related Risky Behavior

There has been a serious debate in the UK about whether the transmission of HIV should be a prosecutable offence. This is especially the case after a couple of high profile cases resulted in prosecution, in Scotland in '01 for 'reckless injury' and soon after in England and Wales for 'reckless transmission'. This has led to a lot of speculation in the UK about what the public health consequences of taking a stringent or lenient view of HIV transmission may be. The main concern being that taking a hard line may discourage both disclosure to partners and also people coming forward for testing or voicing their potential concerns to GP's and psychologists.

Delavande,Goldman and Sood (2008) are the first to empirically investigate the potential consequences of prosecutions for HIV transmission. They use U.S. inter-state variation in prosecution rate, from a limited sample of just 316 prosecutions for this crime and categorise states into those with 'strict' or 'non-strict' enforcement of laws which would permit prosecution. They then use a nationally representative survey of the sexual risk behaviours of 1,400 people with HIV to see is there a relationship between state type and risk behaviour. Interestingly, they find that in 'strict' states safe sex is practiced more often by those with HIV as is abstinence. They go on to claim that transmission rates should be 'responsive to agressive prosecution' and if the prosectution rate for HIV is doubled then the number of new infections will be reduced by a third in 10 years.

Looking at the figures I don't think it can control fully for the effects of the 'elephant in the room' in this paper which is that those in stict states are more likely to visit prostitutes and more than twice as likely not to disclose their HIV status to any of their last 5 partners. It is very difficult to know the extent of the knock on effects this can have on new infections and it may indeed wipe out the potential effects of more safe sex and more abstinence, the latter which probably shouldn't be the goal for a HIV intervention anyway. However, we have to be very careful before advocating criminalisation in the case of HIV transmission and framing the argument in term of a welfare enhancing 'tax on risky behaviour' could have some dangerous consequences down the line both in terms of the welfare of those with HIV and the number of new infections criminalisation may cause. Because criminalisation may disincentivise testing it is also difficult to separate this effect from the potential effect it may have on reducing new infections. More work on this is definitely needed but it is worth noting that WHO and European Commission guidelines going back three decades have stated that it is an ethical obligation on the part of those with HIV to disclose to potential or existing partners, but that this should not translate into a legal obligation as such legislation would be 'inappropriate ad impractical'.

Anticipated Regret, Commitment Devices and the Email "Breathalyser"

Gmail are launching a new Labs feature called "Mail Goggles". It is designed to check that one is really sure about "that late night Friday email". The feature makes one solve a few simple math problems after clicking "send". This is intended to verify that one is "in the right state of mind".

Read more here on the Gmail blog.

Economic Correlates of Suicide

A very recent working Paper of KOF Swiss Economic Institute investigates how economic conditions are associated with age-sex group specific suicide rates in a panel of 28 OECD countries over the period 1980-2002. They consider the trend and cyclical components of income, unemployment, income inequality, inflation, as well as various socio-demographic control variables. 

Estimating models in first diferences, and noting that their results depend on whether stationarity properties are adequately accommodated or not, they find that the cyclical component of income is negatively associated with suicide rates of men, while unemployment primarily affects suicide rates of women. Moreover, their estimations show that the effects of the cyclical component of income and unemployment are most pronounced in OECD countries with low public social security spending.

 

The paper can be found @ http://www.kof.ethz.ch/publications/science/pdf/wp_207.pdf

forecastingprinciples.com

The Forecasting Principles website summarises useful knowledge about forecasting so that it can be used by researchers, practitioners, and educators. There are a number of of special interest groups, including public policy and health.

Book Club: A Theory of Justice, by John Rawls

It is my turn to organise the next round of the book club. We'll be discussing 'A Theory of Justice' (1971) by John Rawls. The meeting will take place in 'The Duke' pub off Grafton St., at 7.30 pm on Tuesday 4th November.

It is not possible to get the book for free online, at least to the best of my knowledge (I've looked all over the place). Given this, let's just forget about the fact that there are two revised editions (1975 and 1999). Whatever people get their hands on will have to do. Bear in mind that this is not a bad tome to have on your bookshelf - it's often referred to as the best work in political philosophy of the last century (at least that's what I have been reading about it this evening). For those reluctant to splash out, you can read extracts (though not print) thanks to Google and Oxford Press: here

Some Background Information:

John Rawls (February 21, 1921 – November 24, 2002) was an American philosopher, a professor of political philosophy at Harvard University and author of A Theory of Justice (1971), revised in 1975 and 1999. Rawls was a recipient of the Schock Prize for Logic and Philosophy and the National Humanities Medal in 1999, the latter presented by President Bill Clinton, in recognition of how Rawls's thought "helped a whole generation of learned Americans revive their faith in democracy itself."

According to Robert Cavalier (Carnegie Mellon) and Charles Ess (Drury College), "Rawls's theory of justice revolves around the adaptation of two fundamental principles of justice which would, in turn, guarantee a just and morally acceptable society. The first principle guarantees the right of each person to have the most extensive basic liberty compatible with the liberty of others. The second principle states that social and economic positions are to be (a) to everyone's advantage and (b) open to all.

A key problem for Rawls is to show how such principles would be universally adopted... He introduces a theoretical "veil of ignorance" in which all the "players" in the social game would be placed in a situation which is called the "original position." Having only a general knowledge about the facts of "life and society," each player is to make a "rationally prudential choice" concerning the kind of social institution they would enter into contract with. By denying the players any specific information about themselves it forces them to adopt a generalized point of view that bears a strong resemblance to the moral point of view."

EdLabs

The Education Innovation Laboratory at Harvard University (“EdLabs”), headed by Dr. Roland Fryer and housed administratively at IQSS, was recently described by former President Clinton as one of three recent initiatives most important to improving the global problems of health and poverty. "The EdLabs program was specifically designed to both evaluate the impact of current educational practices on student achievement and to address the problems of our nation’s school system by offering solid empirical data, research-driven solutions, and practical results", according to the IQSS website .

A time allocation study of university faculty

An article in the current issue of Economics of Education Review examines the time allocation of university faculty. Albert N. Linka, Christopher A. Swanna and Barry Bozemanb report the following in their abstract:

...This paper investigates the at-work allocation of time among teaching, research, grant writing and service by science and engineering faculty at top US research universities. We focus on the relationship between tenure (and promotion) and time allocation, and we find that tenure and promotion do affect the allocation of time. The specific trade-offs are related to particular career paths. For example, full professors spend increasing time on service at the expense of teaching and research while longer-term associate professors who have not been promoted to full professor spend significantly more time teaching at the expense of research time. Finally, our results suggest that women, on average, allocate more hours to university service and less time to research than do men.

Mostly Harmless Econometrics

DON'T PANIC! The core methods in today's econometric toolkit are linear regression for statistical control, instrumental variables methods for the analysis of natural experiments, and differences-in-differences methods that exploit policy changes.

This is the refrain of Joshua Angrist and Steve Pischke in the preface to their new book: "Mostly Harmless Econometrics". A preview is available here. My econometrics professor, Paul Devereux, tells me that there are many references throughout to the Hitchhikers Guide to the Galaxy. There is also a range of "Mostly Harmless" t-shirts for sale; see below for a sample!

Wordle

Stephen Kinsella mentioned Wordle on his blog today. According to the folks behind this offering, Wordle "is a toy for generating “word clouds” from text that you provide. The clouds give greater prominence to words that appear more frequently in the source text." Here is a word cloud generated from this blog today.

Does Cortisol Help Us To Regulate Our Emotions?

Low levels of the stress hormone cortisol could be linked to antisocial behaviour in adolescent boys, UK researchers say...

An increase in cortisol levels is thought to make people behave more cautiously, and help them to regulate their emotions, particularly their temper and violent impulses.

But (the) Cambridge university study found this did not happen in boys with a history of severe antisocial behaviour.

Read comments from lead researcher Dr. Graeme Fairchild on MedIndia.com here.

Happiness for Beginners

A few of my students asked for some references on the well-being economics literature so here follows a whistle-stop tour. The usual caveat about this being incomplete holds and feel free to suggest some more.

The IDEAS/REPEC pages of the following people is a good place to begin (others in Economics include Bruno Frey, Robert Frank, Gary Becker, Bernard Van Praag, Arie Kapteyn and you will find their homepages easily with the assistance of Google or IDEAS).

Alois Stuzer

David Blanchflower

Daniel Kahneman

Andrew Clark

Andrew Oswald

Economics of Happiness is a sub-classification also on the New Economic Papers and these are well worth consulting for whats currently happening in the field.

http://ideas.repec.org/n/nep-hap/

Some books that are worth consulting include (abbreviated titles)

Diener: Culture and Subjective Well-Being

Kahenman et al: Foundations of Hedonic Psychology

Richard Layard Happiness

Frey and Stutzer: Economics and Happiness

Farewell to Bubbles? For Now...

The recent era of the speculative investment bubbles may be at an end, says one of the world's pre-eminent bubble-watchers.

Robert Shiller, who predicted both the tech and housing flameouts with near-perfect accuracy, says it may be a generation before the world sees another major bubble -- such is the damage wrought by the U. S. housing bust.

Psychology, the key ingredient that drives all bubbles, simply will not be upbeat enough to foster a new mania.

More available here in the Financial Post.

Blogging about blogging

'The Economist' recently drew attention to researchblogging.org, a meta-blog which is designed as a one stop shop for the latest developments in scientific research.