Is there anything that economists can't (or perhaps won't) turn their hands to? Apparently not if Spousonomics: using economics to master love, marriage and dirty dishes by P. Szuchman & J. Anderson is anything to go by.
Naturally, you can come to me with your relationship problems too. For a modest fee, that is, but mainly for a heartless laugh.
Monday, January 31, 2011
Fiscal responsibility and the consideration of future consequences
Fiscal responsibility and the consideration of future consequences
Jeff Joireman, David E. Sprott and Eric R. Spangenberg
Abstract:
Three studies examined the relationship between individual differences in the consideration of future consequences (CFC; Strathman, Gleicher, Boninger, & Edwards, 1994) and fiscal responsibility. In Studies 1 and 2, low levels of CFC were associated with high levels of self-reported impulsive buying tendencies (Verplanken & Herabadi, 2001) and temporal discounting (Kirby, Petry, & Bickel, 1999). In Study 3, participants allocated a monetary windfall among four options (credit card debt, savings, purchase, trip) under low and high debt levels. Results revealed that those faced with high levels of debt and low in CFC directed money away from options maximizing long-term interests toward more short-term purchase alternatives; debt level did not have a significant effect on the way people high in CFC allocated their windfall.
Jeff Joireman, David E. Sprott and Eric R. Spangenberg
Abstract:
Three studies examined the relationship between individual differences in the consideration of future consequences (CFC; Strathman, Gleicher, Boninger, & Edwards, 1994) and fiscal responsibility. In Studies 1 and 2, low levels of CFC were associated with high levels of self-reported impulsive buying tendencies (Verplanken & Herabadi, 2001) and temporal discounting (Kirby, Petry, & Bickel, 1999). In Study 3, participants allocated a monetary windfall among four options (credit card debt, savings, purchase, trip) under low and high debt levels. Results revealed that those faced with high levels of debt and low in CFC directed money away from options maximizing long-term interests toward more short-term purchase alternatives; debt level did not have a significant effect on the way people high in CFC allocated their windfall.
The Grand Challenges of Personality and Individual Differences for Social, Behavioral and Economic Science
Written on behalf of the Association for Research in Personality. Document available here: NSF Grand Challenge.
Abstract. Individuals respond differently to social situations, economic circumstances, and physical environments, with important consequences for physical and mental health, occupational attainment, economic well‐being, community involvement, and mortality itself. The key questions in the psychological study of personality and individual differences are: What are the primary dimensions of personality and ability how can they best be measured? What are the origins of these individual differences? What are the psychological processes that underlie individual differences in personality? To what degree and in what ways is personality stable, variable, and changeable across the lifespan? What are the behavioral implications of personality and how do these implications vary with situational circumstances? What are the long‐term implications of personality for important life outcomes and how do these implications vary according to the nature of physical, social and cultural environment? Personality psychology is a “hub” discipline that stands at the crossroads of social psychology and economics, and also cognitive science, developmental psychology, health psychology, and biology. The key questions of personality psychology thus are both foundational and potentially transformative of broad areas of social science.
Abstract. Individuals respond differently to social situations, economic circumstances, and physical environments, with important consequences for physical and mental health, occupational attainment, economic well‐being, community involvement, and mortality itself. The key questions in the psychological study of personality and individual differences are: What are the primary dimensions of personality and ability how can they best be measured? What are the origins of these individual differences? What are the psychological processes that underlie individual differences in personality? To what degree and in what ways is personality stable, variable, and changeable across the lifespan? What are the behavioral implications of personality and how do these implications vary with situational circumstances? What are the long‐term implications of personality for important life outcomes and how do these implications vary according to the nature of physical, social and cultural environment? Personality psychology is a “hub” discipline that stands at the crossroads of social psychology and economics, and also cognitive science, developmental psychology, health psychology, and biology. The key questions of personality psychology thus are both foundational and potentially transformative of broad areas of social science.
Do parental cash transfers weaken performance in college?
Do parental cash transfers weaken performance in college?
Örn B. Bodvarsson and Rosemary L. Walker
Abstract:
When parents support children in college, does this undermine the incentive to do well? The authors test the hypothesis that parental cash transfers induce college students to commit moral hazard in their studies on a sample of nearly 1300 undergraduates at two Midwestern universities. After controlling for a wide variety of factors influencing college performance, it was found that those students receiving at least partial coverage from their parents for tuition and books: (1) failed their courses more often than self-financed students; (2) were at higher risk of being placed on academic probation; and (3) earned lower GPAs.
Örn B. Bodvarsson and Rosemary L. Walker
Abstract:
When parents support children in college, does this undermine the incentive to do well? The authors test the hypothesis that parental cash transfers induce college students to commit moral hazard in their studies on a sample of nearly 1300 undergraduates at two Midwestern universities. After controlling for a wide variety of factors influencing college performance, it was found that those students receiving at least partial coverage from their parents for tuition and books: (1) failed their courses more often than self-financed students; (2) were at higher risk of being placed on academic probation; and (3) earned lower GPAs.
Friday, January 28, 2011
Weekend Links
1. NBER Working Paper by Schulhofer-Wohl providing probit regression evidence that negative equity does not reduce worker mobility and may even increase it. This is for the US market so we should be careful not to generalise to Europe where bankruptcy and foreclosure laws and norms are very different.
2. My podcast on RABO website on financial decision making
3. John Bruton's open letter to EU Commission is worth reading (via Kevin O'Rourke on irisheconomy). One of the best contributions from the Irish perspective so far.
4. The comments on the irisheconomy.ie post about Denis Coniffe's passing give a sense of how highly he is regarded. A class act in every way.
5. My slides from last year on the mental health effects of the Irish recession.
6. Caplin et al neuroeconomic QJE paper on measuring beliefs and rewards.
7. Bushong et al AER paper on Pavlovian processes in consumer choice.
2. My podcast on RABO website on financial decision making
3. John Bruton's open letter to EU Commission is worth reading (via Kevin O'Rourke on irisheconomy). One of the best contributions from the Irish perspective so far.
4. The comments on the irisheconomy.ie post about Denis Coniffe's passing give a sense of how highly he is regarded. A class act in every way.
5. My slides from last year on the mental health effects of the Irish recession.
6. Caplin et al neuroeconomic QJE paper on measuring beliefs and rewards.
7. Bushong et al AER paper on Pavlovian processes in consumer choice.
Is There Anything Good About Men?
People probably differ sharply about the answer to this question but for a scholarly treatment this book by Roy Baumeister looks fascinating.
Is There Anything Good About Men?: How Cultures Flourish by exploiting men
In Is There Anything Good About Men?, Roy Baumeister offers provocative answers to these and many other questions about the current state of manhood in America. Baumeister argues that relations between men and women are now and have always been more cooperative than antagonistic, that men and women are different in basic ways, and that successful cultures capitalize on these differences to outperform rival cultures. Amongst our ancestors---as with many other species--only the alpha males were able to reproduce, leading them to take more risks and to exhibit more aggressive and protective behaviors than women, whose evolutionary strategies required a different set of behaviors. Whereas women favor and excel at one-to-one intimate relationships, men compete with one another and build larger organizations and social networks from which culture grows. But cultures in turn exploit men by insisting that their role is to achieve and produce, to provide for others, and if necessary to sacrifice themselves. Baumeister shows that while men have greatly benefited from the culture they have created, they have also suffered because of it. Men may dominate the upper echelons of business and politics, but far more men than women die in work-related accidents, are incarcerated, or are killed in battle--facts nearly always left out of current gender debates.
Is There Anything Good About Men?: How Cultures Flourish by exploiting men
In Is There Anything Good About Men?, Roy Baumeister offers provocative answers to these and many other questions about the current state of manhood in America. Baumeister argues that relations between men and women are now and have always been more cooperative than antagonistic, that men and women are different in basic ways, and that successful cultures capitalize on these differences to outperform rival cultures. Amongst our ancestors---as with many other species--only the alpha males were able to reproduce, leading them to take more risks and to exhibit more aggressive and protective behaviors than women, whose evolutionary strategies required a different set of behaviors. Whereas women favor and excel at one-to-one intimate relationships, men compete with one another and build larger organizations and social networks from which culture grows. But cultures in turn exploit men by insisting that their role is to achieve and produce, to provide for others, and if necessary to sacrifice themselves. Baumeister shows that while men have greatly benefited from the culture they have created, they have also suffered because of it. Men may dominate the upper echelons of business and politics, but far more men than women die in work-related accidents, are incarcerated, or are killed in battle--facts nearly always left out of current gender debates.
Coffee anyone?
If a meeting becomes stressful, does it help, or make things worse, if team members drink lots of coffee? A study by Lindsay St. Claire and colleagues that set out to answer this question has uncovered an unexpected sex difference. For two men collaborating or negotiating under stressful circumstances, caffeine consumption was bad news, undermining their performance and confidence. By contrast, for pairs of women, drinking caffeine often had a beneficial effect on these same factors. The researchers can't be sure, but they think the differential effect of caffeine on men and women may have to do with the fact that women tend to respond to stress in a collaborative, mutually protective style (known as 'tend and befriend') whereas men usually exhibit a fight or flight response.
The study involved 64 male and female participants (coffee drinkers at the University of Bristol with an average age of 22) completing various construction puzzles, negotiation and collaborative memory tasks in same-sex pairs. They did this after drinking decaffeinated coffee, which either had or hadn't been spiked covertly with caffeine (the equivalent of about three cups' worth of coffee). Stress was elevated for some of the pairs by telling them they would shortly have to give a public presentation, and by warning them that their participation fee would be performance dependent.
How large were the caffeine effects? The men's memory performance under stressful conditions with caffeine was described by the researchers as 'greatly impaired' whereas caffeine didn't affect women in the same situation. For the construction puzzles, caffeine under high stress conditions led men to take an average of twenty seconds longer (compared with no caffeine) whereas it led women to solve the puzzles 100 seconds faster.
St. Claire, L., Hayward, R., and Rogers, P. (2010). Interactive Effects of Caffeine Consumption and Stressful Circumstances on Components of Stress: Caffeine Makes Men Less, But Women More Effective as Partners Under Stress. Journal of Applied Social Psychology, 40 (12), 3106-3129 http://dx.doi.org/10.1111/j.1559-1816.2010.00693.x
From BPS Research Digest, issue 182
Thursday, January 27, 2011
Emotional health of undergraduates
This article from the New York Times reports "The emotional health of college freshmen — who feel buffeted by the recession and stressed by the pressures of high school — has declined to the lowest level since an annual survey of incoming students started collecting data 25 years ago".
Mani, Hoddinott and Strauss: Long Term Effects of Early Schooling
Long-term impact of investments in early schooling
Mani, Subha
Hoddinott, John
Strauss, John
Abstract
This paper identifies the cumulative impact of early schooling investments on later schooling outcomes in the context of a developing country, using enrollment status and relative grade attainment (RGA) as short- and long-run measures of schooling. Using a child-level longitudinal dataset from rural Ethiopia, we estimate a dynamic conditional schooling demand function where the coefficient estimate on the lagged dependent variable captures the impact of all previous periods’ schooling inputs and resources. We find that this lagged dependent variable indicates a strong positive association between current and lagged schooling. Past history matters more for girls than boys and for children from higher-income households compared with the poor.
Mani, Subha
Hoddinott, John
Strauss, John
Abstract
This paper identifies the cumulative impact of early schooling investments on later schooling outcomes in the context of a developing country, using enrollment status and relative grade attainment (RGA) as short- and long-run measures of schooling. Using a child-level longitudinal dataset from rural Ethiopia, we estimate a dynamic conditional schooling demand function where the coefficient estimate on the lagged dependent variable captures the impact of all previous periods’ schooling inputs and resources. We find that this lagged dependent variable indicates a strong positive association between current and lagged schooling. Past history matters more for girls than boys and for children from higher-income households compared with the poor.
Tuesday, January 25, 2011
EUA launches new study on Tracking Students' and Graduates' Progression Paths (TRACKIT!)
The European University Association (EUA) has announced the launch of TRACKIT!: a two-year project which will undertake a comparative study that focuses on tracking procedures applied by institutions, national agencies and researchers regarding students’ and graduates’ progression paths during studies and in transition into the labour market. In particular, it will consider the impact and relevance of tracking on institutional strategic aims.
The study ultimately aims to:
• enhance institutional reflection on how to ensure high quality student-centred learning and training
• improve the understanding of the articulation between degrees and employability
• underpin ongoing educational reforms and deliver an important contribution to the realisation of a Europe of knowledge.
It will consist of background data and literature collection, qualitative research based on site visits to institutions and a final report containing a provisional impact assessment of tracking measures for institutional enhancement.
TRACKIT! is being implemented by EUA, in a consortium with the Hochschul-Informations-System GmbH (HIS), Hanne Smidt Consulting, the University of the Peloponnese, the Danish School of Education, Aarhus University and the Irish Universities Association. It is supported by the Lifelong Learning Programme and will be completed in September 2012.
The study ultimately aims to:
• enhance institutional reflection on how to ensure high quality student-centred learning and training
• improve the understanding of the articulation between degrees and employability
• underpin ongoing educational reforms and deliver an important contribution to the realisation of a Europe of knowledge.
It will consist of background data and literature collection, qualitative research based on site visits to institutions and a final report containing a provisional impact assessment of tracking measures for institutional enhancement.
TRACKIT! is being implemented by EUA, in a consortium with the Hochschul-Informations-System GmbH (HIS), Hanne Smidt Consulting, the University of the Peloponnese, the Danish School of Education, Aarhus University and the Irish Universities Association. It is supported by the Lifelong Learning Programme and will be completed in September 2012.
Psychology Health and Medicine Conference
Via Email from the Organisers
Dear Colleague,
We are delighted to announce our hosting of the 8th Annual Psychology, Health and Medicine One-Day Conference on 4th April 2011 here at National University of Ireland, Galway. Our keynote speakers this year include Prof. Derek Johnson from University of Aberdeen, Dr. Valerie Morrison from Bangor University and Dr. Catherine Woods from Dublin City University.
Our final date for submission of abstracts has been extended to Friday 11th February 2011. Abstract submission and conference registration details are available on our website, which can be accessed by clicking on the link below.
http://phm2011.wordpress.com
Please see the attached document for details on conference fees. If you have any queries regarding the conference, please do not hesitate to email us at
PHMconference2011@gmail.com
Please forward this announcement to interested colleagues.
Looking forward to welcoming you to Galway in April,
Molly Byrne and Jane Walsh,
On behalf of the Conference Organising Committee.
Dear Colleague,
We are delighted to announce our hosting of the 8th Annual Psychology, Health and Medicine One-Day Conference on 4th April 2011 here at National University of Ireland, Galway. Our keynote speakers this year include Prof. Derek Johnson from University of Aberdeen, Dr. Valerie Morrison from Bangor University and Dr. Catherine Woods from Dublin City University.
Our final date for submission of abstracts has been extended to Friday 11th February 2011. Abstract submission and conference registration details are available on our website, which can be accessed by clicking on the link below.
http://phm2011.wordpress.com
Please see the attached document for details on conference fees. If you have any queries regarding the conference, please do not hesitate to email us at
PHMconference2011@gmail.com
Please forward this announcement to interested colleagues.
Looking forward to welcoming you to Galway in April,
Molly Byrne and Jane Walsh,
On behalf of the Conference Organising Committee.
Savelyev - Conscientiousness, Education and the Longevity of High-Ability Individuals
Working Paper from December 2010 - available on following webpage
Summary
This paper investigates whether post-high school educational investments causally affect longevity. The answer to this question is unclear in the literature, largely because not enough is known about possible confounding factors and because it is hard to find instrumental variables for post-compulsory education. I examine whether there are confounding factors among early cognitive and noncognitive traits that causally affect both education and longevity, inducing spurious correlation between them.
I represent noncognitive traits by three personality traits widely recognized in personality psychology—Conscientiousness, Openness, and Extraversion—and find that only Conscientiousness has strong effects on both education and longevity. I estimate a model which uses Conscientiousness and education as arguments of a production function for longevity. The model accounts for the endogeneity of education, measurement error in the proxies for Conscientiousness, age-dependence in the effect of education on longevity, and the interaction between education and Conscientiousness in producing longevity. I estimate the model using the 1922-1991 Terman life cycle data of children with high ability, a prospective study with unique life cycle information including detailed background characteristics, early health measures, personality ratings, IQ, and mortality observations.
My results show that Conscientiousness and education both causally increase longevity for males. However, the effect of Conscientiousness on longevity is only strong at low levels of education, and the effect of education on longevity is especially strong at low levels of Conscientiousness. In addition, I show that a failure to account for Conscientiousness leads to a generally upward bias in the estimate of the effect of education on longevity. The bias from omitting Conscientiousness is comparable to the bias from omitting all other control variables in my model. For females, the effects of education and Conscientiousness are generally not precisely determined.
Summary
This paper investigates whether post-high school educational investments causally affect longevity. The answer to this question is unclear in the literature, largely because not enough is known about possible confounding factors and because it is hard to find instrumental variables for post-compulsory education. I examine whether there are confounding factors among early cognitive and noncognitive traits that causally affect both education and longevity, inducing spurious correlation between them.
I represent noncognitive traits by three personality traits widely recognized in personality psychology—Conscientiousness, Openness, and Extraversion—and find that only Conscientiousness has strong effects on both education and longevity. I estimate a model which uses Conscientiousness and education as arguments of a production function for longevity. The model accounts for the endogeneity of education, measurement error in the proxies for Conscientiousness, age-dependence in the effect of education on longevity, and the interaction between education and Conscientiousness in producing longevity. I estimate the model using the 1922-1991 Terman life cycle data of children with high ability, a prospective study with unique life cycle information including detailed background characteristics, early health measures, personality ratings, IQ, and mortality observations.
My results show that Conscientiousness and education both causally increase longevity for males. However, the effect of Conscientiousness on longevity is only strong at low levels of education, and the effect of education on longevity is especially strong at low levels of Conscientiousness. In addition, I show that a failure to account for Conscientiousness leads to a generally upward bias in the estimate of the effect of education on longevity. The bias from omitting Conscientiousness is comparable to the bias from omitting all other control variables in my model. For females, the effects of education and Conscientiousness are generally not precisely determined.
Monday, January 24, 2011
Behavioural Economics and Organisations
Colin Camerer (Caltech) and Ulrike Malmendier (Berkeley) have written an interesting chapter on the Behavioral Economics of Organizations in 'Behavioral Economics and Its Applications', Princeton University Press, March 2007 (edited by P. Diamond and H. Vartiainen). The authors view this chapter as more of a research agenda than a review of what is known about how behavioural economics works in organisations. A rough summary of some of the issues in the chapter is as follows. Workers' perception of fairness in organisations is potentially very important (for effort disutility, reservation wages). Psychological influences on judgments of causality are also important; these include: hindsight bias, assymetric distribution (taking credit but avoiding blame), and overconfidence about skill. Overconfidence is also discussed in relation to managerial performance.
Camerer and Malmendier's chapter is more about the interal workings of organisations (particularly the management of human resources), rather than their strategic behaviour. A useful reference for the latter is the Economics of Strategy by Besanko, Dranove, Shanley and Shaefer. The Besanko et al. textbook covers four main areas: firm boundaries, market analysis, strategic position and internal organisation. Of course, the research agenda outlined by Camerer and Malmendier is relevant to future developments in the field of strategy economics, in particular internal organisation.
Behavioural economics has been applied to organisations in practice by Gallup Consulting. They provide a free-to-download document on their website, describing the process of "applying behavioral economics to drive growth and profitability":
Camerer and Malmendier's chapter is more about the interal workings of organisations (particularly the management of human resources), rather than their strategic behaviour. A useful reference for the latter is the Economics of Strategy by Besanko, Dranove, Shanley and Shaefer. The Besanko et al. textbook covers four main areas: firm boundaries, market analysis, strategic position and internal organisation. Of course, the research agenda outlined by Camerer and Malmendier is relevant to future developments in the field of strategy economics, in particular internal organisation.
Behavioural economics has been applied to organisations in practice by Gallup Consulting. They provide a free-to-download document on their website, describing the process of "applying behavioral economics to drive growth and profitability":
Gallup research revealed that a study group of 10 companies that applied these principles outperformed peers by 85% in sales growth and more than 25% in gross margin during a recent one-year period. The key to achieving this kind of financial performance is for leaders to accept and work with human nature rather than against it... Mastery of... applied behavioral economics holds the promise of realizing breakthrough improvements in employee productivity, customer retention, and real growth and profitability.John Fleming, Chief Scientist for Gallup's Customer Engagement elaborates further on the application of behavioural economics to organisations in this Harvard Business Review article: "Manage Your Human Sigma" (with Curt Coffman and James Harter). Human Sigma is a version of Six Sigma inspired by behavioural economics. Fleming has also written a book called Human Sigma with Jim Asplund.
Friday, January 21, 2011
Denis Conniffe RIP
Denis Conniffe, a member of the UCD School of Economics (& previously at NUIM and the ESRI) passed away yesterday. Denis made many contributions to statistics, econometrics and applied economics. He was, above all, an exceptionally nice guy.
Savage Eye on Why the Irish are so unhealthy
Pete had a clip on an earlier post. The full recent episode is available on the RTE website here. Hilarious and very insightful in places. Includes a few scenes with adult humour.
Going to America
Best wishes to Liam for his impending research visit to the Center for Health and Wellbeing at Princeton University. See you back here at the end of the summer Liam; and looking forward to discussing research with you on this blog in the meantime.
ESRI and Social Inclusion Conference on Financial Exclusion
Advance Notice for Conference:
Financial Exclusion and Over-indebtedness: Challenges and Policy Responses
Tuesday, 8th March, 2011
ESRI, Dublin
A chara,
The Social Inclusion Division along with the Economic and Social Research Institute, The Policy Institute at Trinity College and the Social Finance Foundation, are organising a conference on financial exclusion and over-indebtedness: challenges and policy responses.
The aims of the conference are to examine recent findings from national research on financial exclusion and over-indebtedness in Ireland and to examine policy responses to these issues based on European and national experience.
In particular the conference will present a new study by the Economic and Social Research Institute on the nature and extent of financial exclusion and over-indebtedness in Ireland, based on the CSO Survey on Income and Living Conditions in 2008.
The conference will feature inputs from Irish and European experts and panel discussions with key stakeholders on the way forward. The opening address will be given by Pat Carey, TD, Minister for Community, Equality and Gaeltacht Affairs.
Further information on the conference, including a detailed programme and booking arrangements, will be circulated in the next few weeks.
Is mise le meas,
Deirdre Bodkin
Social Inclusion Division
Department of Community, Equality and Gaeltacht Affairs
Financial Exclusion and Over-indebtedness: Challenges and Policy Responses
Tuesday, 8th March, 2011
ESRI, Dublin
A chara,
The Social Inclusion Division along with the Economic and Social Research Institute, The Policy Institute at Trinity College and the Social Finance Foundation, are organising a conference on financial exclusion and over-indebtedness: challenges and policy responses.
The aims of the conference are to examine recent findings from national research on financial exclusion and over-indebtedness in Ireland and to examine policy responses to these issues based on European and national experience.
In particular the conference will present a new study by the Economic and Social Research Institute on the nature and extent of financial exclusion and over-indebtedness in Ireland, based on the CSO Survey on Income and Living Conditions in 2008.
The conference will feature inputs from Irish and European experts and panel discussions with key stakeholders on the way forward. The opening address will be given by Pat Carey, TD, Minister for Community, Equality and Gaeltacht Affairs.
Further information on the conference, including a detailed programme and booking arrangements, will be circulated in the next few weeks.
Is mise le meas,
Deirdre Bodkin
Social Inclusion Division
Department of Community, Equality and Gaeltacht Affairs
Thursday, January 20, 2011
Wednesday, January 19, 2011
Are More Conscientious Entrepreneurs More Likely to Fail?
Which Big-Five personality traits drive entrepreneurial failure in highly innovative firms?
Sebastian Wilfling
Friedrich Schiller University Jena, Department of Economics
Uwe Cantner
Friedrich Schiller University Jena, Department of Economics
Rainer K. Silbereisen
Friedrich Schiller University Jena, Institute of Psychology
Abstract:
The relation between the comprehensive personality of highly innovative entrepreneurs and their disposition to fail is still strongly underinvestigated. Therefore in this paper a dataset consisting of 423 entrepreneurs from the German federal state of Thuringia is employed in order to examine the relationship between the Big-Five personality traits (conscientiousness, extraversion, agreeableness, openness, neuroticism) and entrepreneurial failure in highly innovative industries. Correspondingly, we identify seemingly successful discontinuances as far as possible with the help of a credit rating. We find evidence that higher agreeable entrepreneurs have a lower probability to fail at all ages, while a higher level of conscientiousness increases the hazard rate at the time of entry, even if this effect diminishes over time. In contrast, neuroticism, openness, and extraversion are seemingly not related to the hazard of entrepreneurial failure.
Sebastian Wilfling
Friedrich Schiller University Jena, Department of Economics
Uwe Cantner
Friedrich Schiller University Jena, Department of Economics
Rainer K. Silbereisen
Friedrich Schiller University Jena, Institute of Psychology
Abstract:
The relation between the comprehensive personality of highly innovative entrepreneurs and their disposition to fail is still strongly underinvestigated. Therefore in this paper a dataset consisting of 423 entrepreneurs from the German federal state of Thuringia is employed in order to examine the relationship between the Big-Five personality traits (conscientiousness, extraversion, agreeableness, openness, neuroticism) and entrepreneurial failure in highly innovative industries. Correspondingly, we identify seemingly successful discontinuances as far as possible with the help of a credit rating. We find evidence that higher agreeable entrepreneurs have a lower probability to fail at all ages, while a higher level of conscientiousness increases the hazard rate at the time of entry, even if this effect diminishes over time. In contrast, neuroticism, openness, and extraversion are seemingly not related to the hazard of entrepreneurial failure.
Tuesday, January 18, 2011
The Determinants of Risk Attitudes in Ireland and the United Kingdom
An Analysis of the Determinants of Risk Attitudes in Ireland and the United KingdomThis paper (linked above) uses a measure of attitude to risk in the financial domain. Attitude to risk is elicited using a six-point Likert scale; the information in this variable is transformed into a binary indicator which is the regressand in a probit model. The results show that people from ethnic backgrounds appear to be more risk averse, while married people and males seem to have a significant preference for risk. It also appears that the greater the degree of population density, the greater the preference for risk. It is suggested that improving educational attainment within the population can increase preferences for risk. It is also suggested that risk preferences are a significant determinant of an individuals ability to accumulate wealth.
- by Kieran McQuinn and Nuala O’Donnell
Irish Central Bank Research Paper, May 2010
The Savage Eye on Hospital Consultants
Advisory: Explicit lyrics
Comparative data on renumeration for Irish hospital consultants are difficult to find.
The most recent official OECD data (2007) suggest that Ireland's 'Specialists' earned approximately 3.6 times the average wage. Though other countries (including UK) had larger ratios to average earnings, none of these other countries, except Luxembourg, had the average wage levels of Ireland during 2007. Undoubtedly the situation differs somewhat now.
The Irish nurse/doctor ratio is also available in these same data; Ireland, has an OECD average number of doctors; though significantly we have the highest numbers of foreign-trained doctors. With the second highest numbers of nurses per 1,000 population at 15.5, Ireland ranks second in OECD on the practicing nurse/doctor ratio: five (5.1) registered nurses for every registered doctor (though 'registered doctor' in this ratio will include GPs also).
OECD Health Data, 2009
Monday, January 17, 2011
Student Demand for Streaming Lecture Video: Empirical Evidence from Undergraduate Economics Classes
This is the title of a recent paper by Nicholas Flores and Scott J. Savage in the International Review of Economics Education. The abstract is below. For context, one should note that 4.6 million students in the United States (1 out of every 4) took a college-level online course at the start of the 2008/9 academic year. That figure has risen to 5.6 million students in 2009/10, according to the (recent) eighth annual Sloan Survey of Online Learning, a report which uses data from more than 2,500 colleges and universities in the United States.
The importance of face-to-face lectures for students’ academic achievement has been demonstrated in previous economics studies such as Schmidt (1983); Romer (1993); Durden and Ellis (1995); Dolton, Marcenaro and Navarro (2003); Martins and Walker (2006) and Cohn and Johnson (2006). It should be an immediate priority to establish how online lectures compare; as some amount of online learning may be inevitable in the future. Finally, another possibility is that the availability of online materials may discourage attendance. According to the results of a MIT survey, the penalty to not going to a lecture is reduced by the presence of online learning materials (Clay and Breslow, 2006).
The importance of face-to-face lectures for students’ academic achievement has been demonstrated in previous economics studies such as Schmidt (1983); Romer (1993); Durden and Ellis (1995); Dolton, Marcenaro and Navarro (2003); Martins and Walker (2006) and Cohn and Johnson (2006). It should be an immediate priority to establish how online lectures compare; as some amount of online learning may be inevitable in the future. Finally, another possibility is that the availability of online materials may discourage attendance. According to the results of a MIT survey, the penalty to not going to a lecture is reduced by the presence of online learning materials (Clay and Breslow, 2006).
Abstract from Flores and Savage Paper: Real-time lectures recorded on video and streamed over the Internet are a useful supplement to non-classroom learning. However, because recording confines the instructor to the podium, the classroom experience is diminished when there is less social interaction. This study uses choice experiment data to estimate economics students’ willingness to pay for streaming lecture video and instructor movement away from the podium. Results show a divide between students who like the flexibility of catching up on missed classes with video and students who do not. For this former group, video enhances the learning experience and students are willing to pay an additional $90 per course for video. An important source of streaming lecture video’s value to students is its impact on performance. Knowledge equation estimates show a positive correlation between students’ use of video and their cumulative final grade.
ESRI: Profiling Long-Term Unemployment Risk
A Statistical Profiling Model of Long-Term Unemployment Risk in Ireland
Author info | Abstract | Publisher info | Download info | Related research | Statistics
Author Info
O'Connell, Philip J.
McGuinness, Seamus
Kelly, Elish
Abstract
This paper develops a statistical profiling model of long-term unemployment risk in Ireland using a combination of administrative data and information gathered from a unique questionnaire that was issued to all jobseekers making a social welfare claim between September and December 2006 who were then tracked for eighteen months. We find that factors such as a recent history of long-term unemployment, advanced age, number of children, relatively low levels of education, literacy/numeracy problems, location in urban areas, lack of personal transport, low rates of recent labour market engagement, spousal earnings and geographic location all significantly impact the likelihood of remaining unemployed for 12 months or more. While the predicted probability distribution for males was found to be relatively normal, the female distribution was bimodal, indicating that larger proportions of females were at risk of falling into long-term unemployment. We find evidence that community based employment schemes for combating long-term unemployment have little effect as participants re-entering the register typically experience extended durations. Finally, we argue that the adoption of an unemployment profiling system will result in both equity and efficiency gains to Public Employment Services.
Author info | Abstract | Publisher info | Download info | Related research | Statistics
Author Info
O'Connell, Philip J.
McGuinness, Seamus
Kelly, Elish
Abstract
This paper develops a statistical profiling model of long-term unemployment risk in Ireland using a combination of administrative data and information gathered from a unique questionnaire that was issued to all jobseekers making a social welfare claim between September and December 2006 who were then tracked for eighteen months. We find that factors such as a recent history of long-term unemployment, advanced age, number of children, relatively low levels of education, literacy/numeracy problems, location in urban areas, lack of personal transport, low rates of recent labour market engagement, spousal earnings and geographic location all significantly impact the likelihood of remaining unemployed for 12 months or more. While the predicted probability distribution for males was found to be relatively normal, the female distribution was bimodal, indicating that larger proportions of females were at risk of falling into long-term unemployment. We find evidence that community based employment schemes for combating long-term unemployment have little effect as participants re-entering the register typically experience extended durations. Finally, we argue that the adoption of an unemployment profiling system will result in both equity and efficiency gains to Public Employment Services.
Wednesday, January 12, 2011
Journal of Personality and Social Psychology ESP Paper
This one has been discussed for a few months online but, to be honest, psi phenomena were not high on my reading list toward the end of last year. The Journal of Personality and Social Psychology is an extremely good psychology journal by most sensible metrics, and so its decision to publish a paper on ESP has set the cat among the pigeons. The NYT gives an account of this here. A large amount of the internet comment on this centres around the limitations of classical hypothesis testing as well as publication bias in psychology journals. Bem discusses these issues in the conclusion, acknowledging some elements of the "file-drawer" problem though not problems, in his opinion, sufficient to generate the results. He also discusses some problems that might arise in replication. The paper reports statistically significant evidence in 8 out of 9 experiments looking at four types of "psi" phenomena - precognitive approach to erotic stimuli and precognitive avoidance of negative stimuli; retroactive priming; retroactive habituation; and retroactive facilitation of recall. The NYT article above gives some flavour of the reactions to this paper.
Homer Simpson-When I Was 17
Apropos Martin's post below, further evidence on under-age drinking amongst top American students.
Does Drinking in College Affect Students' Grades?
I recently discussed on the blog new evidence pointing towards a positive relationship between students' grades in college and their later-life health outcomes. A recent economics paper adds a new dimension in this area by producing findings on the effect of preceding health-risk behaviour on subsequent academic performance. The paper is by Scott E. Carrell, Mark Hoekstra, and James E. West; and is called "Does Drinking Impair College Performance? Evidence from a Regression Discontinuity Approach". Abstract: here. Paper: here. Discussion on the Freakonomics Blog: here.
The paper exploits a discontinuity in drinking at age 21 at a college in which the minimum legal drinking age is strictly enforced. A comparison is made between the grades of students who turned 21 before final exams to those who turned 21 just afterward. The authors find that drinking causes causes statistically and economically meaningful reductions in academic performance, particularly for the highest-performing students. The authors suggest that concern regarding the harmful effects of drinking in U.S. colleges is reflected by the Amethyst Initiative - in which 135 university presidents and chancellors argue that current policy has resulted in binge-drinking by students.
The paper exploits a discontinuity in drinking at age 21 at a college in which the minimum legal drinking age is strictly enforced. A comparison is made between the grades of students who turned 21 before final exams to those who turned 21 just afterward. The authors find that drinking causes causes statistically and economically meaningful reductions in academic performance, particularly for the highest-performing students. The authors suggest that concern regarding the harmful effects of drinking in U.S. colleges is reflected by the Amethyst Initiative - in which 135 university presidents and chancellors argue that current policy has resulted in binge-drinking by students.
Lunn and Lyons ESRI: Behavioural Economics and Vulnerable Consumers
Behavioural Economics and "Vulnerable Consumers": A Summary of Evidence
Author(s):
Lunn, Pete / Lyons, Seán
Publisher
Communications Consumer Panel UK
Place of Publication
London
Publication Date
09/12/10
Downloads
Download full text
Abstract
Key findings
• The relevant behavioural biases exist across all groups of consumers, but there is variation in their relative strength across groups.
• Evidence from experiments and surveys, which is indicative rather than conclusive, suggests that some groups of consumers are more prone than others to decision-making that deviates systematically from traditional economic assumptions of rational behaviour.
• The strongest evidence concerns people in lower socio-economic groups, who are more inclined towards some biases and tend to score lower on tests of general decision-making competence.
• There is some evidence that older people may also be more prone to certain biases.
• There is too little evidence regarding disabled consumers to draw any conclusions.
• In the market, these differences between groups may be amplified. Consumers who have the same tendency towards a given bias may produce different decisions because the bias interacts with their situation. For instance, older people and people in lower socio-economic groups may receive less marketing information and be more isolated from helpful social networks, making them more likely to fall back on biased rules of thumb.
• The overall impact on consumer welfare may well be detrimental
• More evidence is needed, but especially research examining the influence of behavioural biases that is specific to the communications sector.
Author(s):
Lunn, Pete / Lyons, Seán
Publisher
Communications Consumer Panel UK
Place of Publication
London
Publication Date
09/12/10
Downloads
Download full text
Abstract
Key findings
• The relevant behavioural biases exist across all groups of consumers, but there is variation in their relative strength across groups.
• Evidence from experiments and surveys, which is indicative rather than conclusive, suggests that some groups of consumers are more prone than others to decision-making that deviates systematically from traditional economic assumptions of rational behaviour.
• The strongest evidence concerns people in lower socio-economic groups, who are more inclined towards some biases and tend to score lower on tests of general decision-making competence.
• There is some evidence that older people may also be more prone to certain biases.
• There is too little evidence regarding disabled consumers to draw any conclusions.
• In the market, these differences between groups may be amplified. Consumers who have the same tendency towards a given bias may produce different decisions because the bias interacts with their situation. For instance, older people and people in lower socio-economic groups may receive less marketing information and be more isolated from helpful social networks, making them more likely to fall back on biased rules of thumb.
• The overall impact on consumer welfare may well be detrimental
• More evidence is needed, but especially research examining the influence of behavioural biases that is specific to the communications sector.
Tuesday, January 11, 2011
Grattan Institute Event on Well-Being
Thanks to Colm for sending a link to the details of a recent event on well-being held by the Grattan Insitute in Melbourne.
Around the world governments are recognising that there is more to life – and government – than GDP. The Australian Government Treasury has developed a “wellbeing” framework for evaluating policy and outcomes, and the Australian Bureau of Statistics has developed a project named “Measures of Australia’s Progress”. Both aim to broaden the objectives and measures of government beyond purely economic indicators.
These developments, and how public policy in Australia might change as a result, was discussed by Dr Ken Henry, Secretary to the Treasury, Don Henry, CEO, Australian Conservation Foundation and Gemma Van Halderen, Social Data Integration and Analysis Branch, Australian Bureau of Statistics.
This is the last in a series of three seminars about social and environmental measures for public policy. The panel discussed how wellbeing frameworks are already being used in Practice in Australia, how they might develop, and how they might influence the future development of public policy.
This seminar was presented by Grattan Institute, in conjunction with the McCaughey Centre, the Centre for Public Policy of the University of Melbourne and Trinity College.
Ireland's PISA results: myth and reality
The recent results from the PISA surveys have got a lot of attention. In somewhat apocalyptic terms, the Irish Times referred to “2010: the year Irish education fell to earth” and invited reader’s opinions on Ireland’s “Falling literacy levels” though the Irish Independent did carry a more balanced assessment. A careful analysis of the data reveals a more complex picture.
Firstly, these assessments do not show in absolute terms how well or badly our students are doing since in each wave the data are normed to have a mean of 500 and a standard deviation of 100. Comparing the results for 2000 and 2009 will not tell us whether our current 15 year olds know more or less than the equivalent cohort 9 years earlier. It just shows where they are relative to students in other countries. So even if our current 15 year olds have slipped in the rankings, they might actually be better academically than the earlier Irish cohort but have simply been leap-frogged by other countries. Let us not forget that results in public exams have been trending up. Maybe it's grade inflation, maybe not.
Of course rankings do matter, for example foreign investors may only care about the relative skills of countries’ workforce. However when our rankings fall, as they have recently, there may be a tendency to use this as a stick to beat the education system. But it can hardly be to blame if our students are actually learning more but other countries simply got better.
Secondly, PISA includes a diverse range of countries including, for example, Liechtenstein, Kyrgyzstan and Macau. With no disrespect to these, should we really care where we stand relative to them? Does it not make more sense to pay much more attention to countries which are more relevant to us economically and/or are simply bigger?
Thirdly, PISA has changed significantly since it started. In 2000, there were 32, largely OECD countries. This grew to 41 in 2003 and in 2006, which focused on science there were 57 countries. The latest wave has 64 countries - some are actually territories. So when you look at a ranking, you are counting how far you are from the top. But one could equally look at how far one is from the bottom. Now as other countries join, it’s likely some will come in above us and some below. So the ranking can be misleading. Looking at how far we are from the bottom might tell a different story. A fairer comparison over time would just compare us with those countries that were in with us from the beginning and indeed some commentators have looked at our rankings just with the OECD.
To look closer at this consider the reading results. In 2000, PISA put our students between 3rd and 9th (out of 32). For statistical reasons, they didn’t give exact rankings but let’s take 6th place as an average. That puts us in about the top 20% of countries. By 2009 our ranking had slipped to 21st. That may seem a precipitous decline but there are twice as many countries in the frame: we are now only in about the top one third. So while it is nothing to be happy about, it’s not quite the disaster it appears at first blush. Mathematical skills are often seen as being particularly important, so where do we stand? In 2000 we were ranked between 16th and 19th , in around the top 55% of countries. In 2009 that had fallen to 20th but given that there are more countries we are just about in the top half: arguably this is an improvement. Looking at the science results tells a similar story.
So the point is that one has to be careful to jumping to conclusions about how our students and schools are doing from simplistic comparisons. When one studies the detailed reports produced by the OECD it becomes obvious that there is far more information than hits the headlines. The research is particularly informative on issues of socio-economic disadvantage. In all countries, those students from a better-off background do better but the extent to which this is the case differs markedly. In a fascinating analysis, the OECD considers what it defines as “resilient” students, these are students who are in the bottom quarter on the socio-economic scale but who perform in the top quarter in the assessments. It is a good summary of the extent to which young people are not held back by their background. So who tops this particular league table? It is dominated by the Far East, the top 7 are (in order) Shanghai, Hong Kong, Korea, Macau, Singapore, Finland and Japan. And us ? Ireland is pretty average, ahead of the US, the UK and many European countries though not by much. That we are way ahead of Kazakhstan, Panama or Dubai in this respect seems scant consolation.
Anger, we have been advised, does not constitute a policy. Neither do simplistic statistics or headlines. Ireland faces particular challenges in adapting its educational system to changing needs and technologies, a changing international economy and a much less favourable fiscal situation. It is imperative then that we carefully monitor the extent to which educational resources produces results, how we fare relative to our competitors and the extent to which our schools mitigate or reproduce social inequities.
Monday, January 10, 2011
Economics for Business Studies: Does it Matter?
Does the Performance on Principles of Economics Courses Affect the Overall Academic Success of Undergraduate Business Majors?
Rupert G. Rhodd, Sandra M. Schrouder and Marcus T. Allen
Rupert G. Rhodd, Sandra M. Schrouder and Marcus T. Allen
Abstract: Using a sample of 1,339 graduates from an accredited business school and the maximum likelihood technique, this paper explores the relationship between overall academic success and performance on the Principles of Economics courses. The estimated model, which also includes some demographic variables, shows that the rank of professors teaching the course, age of students, and the number of credits earned do not influence business majors’ overall academic success. However, the grades earned on the Principles of Economics courses, gender, ethnicity, the major in which the student is enrolled, the number of years the student takes to graduate, as well as whether or not the student is completing a minor significantly affect the overall academic success or the final GPA of business majors.
Sunday, January 09, 2011
Economists' ethics
"The executive committee of the American Economic Association voted unanimously on Thursday to create a committee to consider the association's existing disclosure and other ethical standards and potential extensions to those standards" according to an article in the Chronicle of Higher Education. This issue arose after Gerald Epstein criticized a number of US economists for possible conflicts of interest (arising from memberships of boards or positions as consultants) in their policy pronoucements along with a failure to disclose such possible conflicts.
It would be interesting to know the extent to which this is an issue for Irish economists.
It would be interesting to know the extent to which this is an issue for Irish economists.
Subscribe to:
Comments (Atom)