Competition Time

A recent post on the Freakonomics blog links to a competition organised by the Fraser Institute which seeks proposals on what economic or public policy issues should be measured. First prize (sponsored by the R.J. Addington Center for the Study of Measurement) is $1,000 and there are five runners-up prizes of $500. (The closing date is May 15th).

Also, a recent article in the Irish Independent describes how an Irish firm is offering €10,000 for a good business idea. The firm is iQ Content, and they are offering the iQ Prize for the country’s best new tech idea. The idea can be anything that’s internet-based; more details are available from www.iqprize.ie (no strings attached). There are 15 entries so far and 42 days to go.

And don't forget, this Friday is the closing date for the HEA/Irish Independent competition for research students --- to win one of two €2,500 travel awards. What needs to be done? Your research - what difference does it make?

True Economics

True Economics is the blog by Dr. Constantin Gurdgiev, adjunct Lecturer in Finance, Trinity College, Dublin, and director of Business & Finance magazine. He links to a recent WSJ interview with Nobel prize winner and University of Chicago economist Gary Becker. On the subject of the Chicago School, this five-minute video is very produced (there's something akin to Tubular Bells being played at times) but there are some memorable quotes, such as:

"People were interested in ideas and argument, not in making sure that you didn't ruffle anybody's feathers"

"There wasn't that much fighting in the lunches; they were pretty cordial!"

Behavioural Finance at the University of Crete

Since 2006, the Department of Economics at the University of Crete has been running its Advanced Summer School in Economics and Econometrics (sponsored by the European Commission, the Hellenic Ministry of Education and Religious Affairs and the University of Crete). This year, August 2-9, 2009, the specialised topic is "Behavioural Finance". Professor Hersh Shefrin (Santa Clara University, Leavey School of Business) will be the Distinguished Guest Professor. More details are available here.

The Psychology of Taxation

An article in the Journal of Economic Psychology (A Behavioural Laffer curve: Emergence of a social norm of fairness in a real effort experiment, Levy-Garboua, Masclet and Montmarquette, 2008) raises concerns about the impact of marginal tax rates which are viewed as unfair. Pairs of players participated in their experiment, the first being the tax payer, the second the tax setter. Player A performed a series of tasks for reward, but “taxed” at a particular rate, with the proceeds going to player B. In the endogenous condition player B chose a tax rate, while in the exogenous condition rates were randomly assigned.


The authors find that participants in their experiment reacted to “punish” tax setters who set rates too high (>50%) by reducing their effort. They develop a model where social norms promote productive efficiency in the long run.

Animating the Credit Crisis

Thanks to my friend Alan (a visual communications enthusiast) for sending on this animation about the credit crisis. It's also worth watching Part 2. The whole thing is ten minutes long; nothing in the content may be new for economists but it's a useful summary. And for those trying to get to grips with understanding the crisis, this should be a valuable tool.

Econ-Optimist

A blog for people who want to here good news about the Irish Economy - i really like some of the motivational posters on the side. Would be interesting to see an Econ-nihilist blog posting reminders of how its all futile anyway.

http://econ-optimist.blogspot.com/

Neurofinance

A non-technical overview of Neurofinance is provided by Sapra and Zak below - the extent to which findings from neuroeconomics should influence financial regulation as well as financial education is an interesting question for debate.

http://ssrn.com/abstract=1323051

HTML Code and URL's

On a practical note, I've been getting frustrated recently with URL's getting broken in the comments section of the blog. I noticed that Michael was using html to circumvent the problem and it is easily done. Just follow the template below.


You need to have the "http" included and to paste in the URL twice - once in the quotation marks, and then again separately. Some more tips and a template to copy are available here.

While we're on the topic of URL's, I've noticed recently that Steve has been using a truncation service. The two most popular that I've seen are:

(i) http://www.tinyurl.ie/
(ii) http://url.ie/

These truncation services basically generate a short URL in lieu of a long one; people who click on the new one get automatically forwarded to the original URL. This is quite handy for a lot of Web 2.0 platforms, or for email without html where it's not possible to insert a hyperlink. Does anyone know though - how long the truncated URL's generally last for?

Internationalization of U.S. Doctorate Education

This isn't a new story, but John Bound, Sarah Turner and Patrick Walsh flesh out the history of this trend in a recent NBER working paper.

Economy Watch

For anyone looking for a concise summary of the projections made for Irish economic performance over the coming years, Paul Johnson has pointed me in the direction of Economy Watch, published by DKM.

This month’s issue focuses on the deteriorating domestic situation, the challenges to be faced in the forthcoming April Budget, and the difficulties in the banking system, and is available for free to those who register online at www.dkm.ie.

Interdisciplinary Maps of Science generated by Click Data

Nerds among our readers will love this paper - really cool pictures of interdisciplinary networks gleaned from looking at click patterns in large scale journal repositories. Figure 5 is the best graph ive seen in a while. They should turn it into a poster!

http://www.plosone.org/article/info:doi/10.1371/journal.pone.0004803

9th Level Ireland

Not sure what the 9th refers to but so far this is a good new blog that posts even more frequently than we do. Some very useful links on the sidebar.

http://9thlevelireland.wordpress.com/

Seconds Out!: Easterlin Paradox Debate Next Round

We talked a lot about the Stevenson and Wolfers paper that showed a strong relationship between income and happiness even at high levels of income, casting into doubt the Easterlin hypothesis. A new paper by Easterlin and Angelescu argues that the Easterlin view is still alive and well, in the sense that long-run time series changes in income do not lead to long-run time series changes in well-being.

Students in my Economics/Psychology class will relate to the line below.

Put simply, the argument is that people adapt hedonically to an increase in income from a given initial level, their aspirations tending to rise commensurately with income. But aspirations are much less flexible downward. Once people have attained a given level of income, they cling to this reference point -- the well-known “endowment effect” (Kahneman, Knetsch, and Thaler 1991). Hence, if income falls they feel deprived, and their subjective well-being declines. In turn, a recovery in income that returns them toward the reference level increases subjective well- being. Readers will note that the kink in the broken line at point 1 of Figure 2 is analogous to that in diagrams of loss aversion (Kahneman, Knetsch, and Thaler, p. 200)


http://ftp.iza.org/dp4060.pdf

We will do a journal club here in the next couple of weeks contrasting the Stevenson/Wolfers paper with the current paper.

Alesina and Giuliano - Preferences for Redistribution

Preferences for Redistribution (From IZA)

This paper discusses what determines the preferences of individuals for redistribution. We review the theoretical literature and provide a framework to incorporate various effects previously studied separately in the literature. We then examine empirical evidence for the US, using the General Social Survey, and for a large set of countries, using the World Values Survey. The paper reviews previously found results and provides several new ones. We emphasize, in particular, the role of historical experiences, cultural factors and personal history as determinants of preferences for equality or tolerance for inequality.

Estimation of Quantile Treatment Effects with STATA

Thanks for Colm for sending this on - i havent worked with this but at first glance it is looks like a very strong resource.

http://en.scientificcommons.org/36388434

NIH Economic Recovery Fund Research

It is well worth looking through the list of themes funded under the Stimulus plan by the NIH. Reading the topics alone gives a very interesting insight into the drivers of high level health research in the US. There are several projects themes that will be of interest to people working in behavioural economics.

http://www.nih.gov/recovery/index.htm

The Time Value of Exchequer Funding, and the Fees Debate

In an article in today's Irish Times, Sean Flynn reports that parents will get a discount of about 20 per cent for those who pay upfront – in order to generate funds for the exchequer in the short term. This is in the context an "income-contingent loan scheme" for financing higher education, a being considered by Minister for Education Batt O’Keeffe.

"At present, the State pays €350 million to the third-level system in lieu of fees each year. Sources say the plan to offer a discount of about 20 per cent for upfront payments could yield €70 million."

The article doesn't say, but I assume that 'paying upfront' means paying fees at the start of each academic year, rather than paying fees for an entire course at the start of the course. A question that parents with cash may ask themselves at the start of each academic year is "Can I earn 20 percent (risk-free) on this lump-sum over the next year?". I would be very surprised if anyone answered yes to this question (even in boom times), so it seems like a highly-loaded incentive scheme, in relation to the time value of exchequer funding.

In relation to the wider debate on the financing of higher education, Richard Layte, Selina McCoy and Philip J O'Connell (from the ESRI) have an article in last Friday's Irish Independent which argues that college fees are a minor part of the story (if the objective is to increase participation by low-income students). They mention the importance of investment in early childhood education (as discussed by Prof. James Heckman in the lecture linked below), the eligibility of and level of maintenance grants (mentioned recently on the blog here) and the need for quality Access programmes at third-level (which relates to one of Geary's evaluation projects).

Prof. James Heckman Ulysses Lecture

In advance of Prof. James Heckman's keynote lecture at the IEA on the 26th April, it's worth noting that the following MP4 podcast lecture is available on the Geary website. Its from 7th June 2006 and was given by Prof. Heckman to mark the awarding of his UCD Ulysses Medal and his appointment as UCD Professor of Science and Society. The lecture is entitled ‘The Economics of Child Development’; Prof. Heckman talks about the importance of measuring non-cognitive ability (as discussed in a recent blog-post) at the beginning.

What Do You Do With a B.A. in English?

Following on my last blog-post on skills-matching, below is an excerpt from the song "What do you with a B.A. in English? and it Sucks to be Me" from the 2004 Tony winner of Best Musical, Avenue Q. Thanks to Sarah M for pointing this out to me, and don't forget, there are lots of things to do with a B.A. in English, including teaching and journalism.

Do smoking bans work?

CHANGES IN U.S. HOSPITALIZATION AND MORTALITY RATES FOLLOWING
SMOKING BANS Kanaka D. Shetty et al Working Paper 14790 NBER

This is a really interesting paper, brought to my attention by Ian Irvine. The authors say " In contrast with smaller regional studies, we find that workplace bans are not associated with statistically significant short-term declines in mortality or hospital admissions for myocardial infarction or other diseases. An analysis simulating smaller studies using subsamples reveals that large short-term increases in myocardial infarction incidence following a workplace ban are as common as the large decreases reported in the published literature." They also make the intriguing suggestions that " publication bias could plausibly explain why dramatic short‐term public health improvements were seen in prior studies of smoking bans."

Has any one looked at the Irish case? Daily or weekly data on hospitalization with some break-down by cause might be sufficient.

Activation Policies in Ireland

Courtesy of OECD via IDEAS

Link Here

In Ireland the placement function of the Public Employment Service (PES) is primarily within FÁS, the Training and Employment Authority, which is supervised by the Department of Enterprise, Trade and Employment (DETE). But employment counselling services are also provided by the “Local Employment Service” (which has partly-separate funding and management arrangements); Facilitators within the Department of Social and Family Affairs (who implement an “Activation Programme”, which however lacks participation requirements); and the “Services to the Unemployed” activity within the Local Development Social Inclusion Programme (which is managed through a third Department). The number of staff in FÁS Employment Services and the Local Employment Service, relative to the number of wage and salary earners in the economy, appears to be relatively low, about half the average level of staffing of institutions responsible for the placement function in Australia and Northern and Western Europe (countries which also have high benefit coverage rates for unemployment).

healthstat

The HSE "healthstat" system has been in the news throughout the day. I have not given this a thorough look yet but its worth thinking about whether this could be used to provide some baby-steps in measuring the effect of inputs into better healthcare in Irish hospitals. In general, the structure of Irish hospital data makes publishing in academic journals and building up a science around health policy very difficult. At first glance, this looks like a potential improvement.

I would strongly encourage the people working on it to make the data available in a standard analytical form and to get some people to start analysing it. At present, the charts are available for each hospital so its clearly not the case that there is a major issue with sensitivity of this data.

Looking at how some of these measures react to inputs into the hospitals would be good. For example, Mayo has been hauled through the press as the worst hospital in terms of scores. But is this correcting for resources? In general, it would be really interesting for someone to do some simple regressions on these output metrics on things like scale, staff-size, staff composition and so on.

http://www.hse.ie/eng/Healthstat/about/

Missing Values

Further to a thread started a few months ago about working with missing values in survey data, some recent insights on whether or not to use multiple imputation are summarised below. There is an important distinction to be made between MCAR and MNAR, which is explained.

According to Howell (2007), using dummy variables to code for missing observations was popularized in the behavioral sciences by Cohen and Cohen (1983). However, the approach does not produce unbiased parameter estimates (Jones, 1996), and is no longer to be recommended in light of the availability of software to handle multiple imputation approaches.

However, there is a further complication in that there are several reasons why data may be missing. Data may be missing completely at random (MCAR) because equipment malfunctioned, the weather was terrible, or people got sick, or the data were not entered correctly. When data are MCAR, the probability that an observation (Xi) is missing is unrelated to the value of Xi or to the value of any other variables. Thus data on family income would not be considered MCAR if people with low incomes were less likely to report their family income than people with higher incomes.

According to Howell (2007), the only way to obtain an unbiased estimate of parameters when data are missing not at random (MNAR) is to model the missingness. Essentially, one needs to write a model that accounts for the missing data. That model could then be incorporated into a more complex model for estimating missing values. According to Howell (2007), this is not a task one would take on lightly, but he references Dunning and Freedman (2008) for an example. (Sadly, Professor Freedman passed away on 17 October 2008. His webpage is worth looking at.)

In the event that data are MNAR, it is better to use dummy variables to code for missing observations, rather than to use multiple imputation. However, it should be remembered that this will not produce unbiased parameter estimates (Jones, 1996).

"Buying your way into college.Private tuition and the transition into higher education in Ireland "

This paper by Emer Smyth from the ESRI was recently published in the Oxford Review of Education. The research looks into whether participation in "shadow education"; private education outside of the schooling system results in enhanced leaving certificate performance. An initial simple cross tabulation indicates fairly significant benefits from shadow education. However, after controlling for selection into this group (by gender, social class, parental education), previous ability (junior certificate results), educational aspirations and homework hours this paper finds the surprising result that there is no advantage to shadow education.

http://www.informaworld.com/smpp/content~content=a791325290~db=all~order=page

University Quality and Graduate Wages in the UK

In a new IZA working paper, Iftikhar Hussain, Sandra McNally and Shqiponja Telhaj examine the links between various measures of university quality and graduate earnings in the United Kingdom. They explore the implications of using different measures of quality and combining them into an aggregate measure. Their findings suggest a positive return to university quality with an average earnings differential of about 6 percent for a one standard deviation rise in university quality. However, the relationship between university quality and wages is highly non-linear, with a much higher return at the top of the distribution. There is some indication that returns may be increasing over time.

http://ftp.iza.org/dp4043.pdf

A snag with Increased taxes on cigarettes

Jim Power’s recent report on behalf of the Irish Cancer Society, ASH and the Irish Heart Foundation, according to media reports, argued for a sharp increase in taxes on cigarettes. See

http://www.irishheart.ie/iopen24/calls-increase-price-cigarettes-n-200.html

This has generated a great deal of comment including some criticism by columnist Noel Whelan pointing out the obvious problem of increased cross-border shopping/smuggling. The argument for such taxes is simple: cigarettes are price responsive so a tax on them, by reducing demand, should lead to better health outcomes and generate some much needed tax revenue. A win-win situation then? Not necessarily since advocates of the tax increase miss an essential point. A little behavioural economics (not to mention common sense) goes a long way here. Leaving side the cross border shopping issue a deeper problem is that while the number of cigarettes smoked may be responsive to price (& hence tax) so too is smokers’ behaviour. In particular there is good evidence that in response to increased excise taxes, smokers will smoke more intensively thereby extracting more nicotine from cigarettes. Evidence from epidemiology suggests that smokers can regulate the amount of nicotine extracted from a given cigarette by varying the number of puffs and the degree and length of inhalation. Smoking a cigarette more intensively, up to the filter, leads an individual to be exposed to more dangerous chemicals. Moreover not all cigarettes are the same and there is also good evidence that smokers respond to increased taxes by switching to brands with higher tar and nicotine yields.

The idea that smokers compensate for higher prices by extracting more nicotine is not simply a theoretical possibility but has been shown in an important study by Adda and Cornaglia in the American Economic Review (2006). When individuals inhale nicotine it is metabolized into cotinine which can be measured in saliva samples. Using US data, they find that in response to tax increases, smokers fully compensate for consuming fewer cigarettes with increased smoking intensity thereby keep nicotine levels constant. While their estimates may be at the pessimistic end of the scale the basic point is uncontroversial: it is not sufficient to simply look at the number of cigarettes smoked. Ian Irvine’s paper ( http://ideas.repec.org/p/ucd/wpaper/200818.html ) has a somewhat different take on this.
Of course if taxes cause individuals to stop smoking then there will be a reduction in nicotine although this will reduce tax revenues not increase them. In short, the prospects for such tax increases to lead to better health outcomes and more tax revenue are far from clear.

Would You Like to Win One of Two €2,500 Travel Grants to Help with Your Research?

The Higher Education Authority and the Irish Independent are inviting research students in any discipline to make a short submission on the difference that their research makes to a particular aspect of Irish life, to the country as a whole or indeed, internationally.

The six researchers, who in the opinion of an independent adjudication panel, have put forward the most innovative or challenging ideas will be invited to present how their research is making an impact at a public event at The Helix at Dublin City University on Thursday 23rd April. They will have a maximum of ten minutes to make the presentation, followed by a brief question and answer session with an expert panel.

Two awards of €2,500 sponsored by the Irish Independent will be made at the end of the evening, one by the expert panel and the other by a vote of second level students who will form part of the audience.

If you would like to enter this competition, then before 5pm on Friday 3rd of April, make your submission to -

"Making An Impact",
Higher Education Authority,
Brooklawn House,
Shelbourne Road,
Dublin 4

or impact@hea.ie

More details are available here.

"Bart, Don't Make Fun of Grad. Students, They Just Made a Terrible Life Choice"

Thanks to the Organizations and Markets Blog for pointing out this clip from the Simpsons where Bart explains graduate school. I can think of a few Matt Groening fans in Geary who should get a kick out of this. Another take on grad school by Groening is available here. While all of this may seem quite entertaining in cartoon sketches, we should bear in mind that there are some very serious aspects to Ph.D. graduates' skills-matching and the non-cognitive aspects of Ph.D. student persistence. These have been discussed on this blog before (follow the links). Also related is Lex Borghan's and Bart Golsteyn's (not Simpson!) work on "Skill Transferability, Regret and Mobility".

Using Measures of Non-Cognitive Ability in Economics

Cognitive ability (as measured by test scores) only determines part of a person's success in the labour market. This came into sharp focus in the economics profession at the 2001 meeting of the American Economics Association. At this meeting a number of papers were presented about the importance of non-cognitive ability (also referred to by some authors as 'non-cognitive skills'). An example is Heckman and Rubinstein (2001) who mention non-cognitive skills such as "persistence, reliability and self-discipline". Most often though, the phrasing of "non-cognitive ability" is used, for example: Heckman, Stixrud and Urzua (JLE, 2006): "The Effects of Cognitive and Noncognitive Abilities on Labour Market Outcomes and Social Behavior."

Heckman and Rubinstein (2001) identified the importance of non-cognitive abilities with their observation that high school equivalency recipients earn less than high school graduates despite the fact that the high school equivalency recipients are smarter. They attribute this to the negative non-cognitive attributes of equivalency recipients originally dropping out. Their conclusion is that individuals with higher amounts of persistence and self-discipline may be more likely to attain academic qualifications.

In relation to further evidence, Heckman, Stixrud and Urzua (2006) model the influence of young individuals' cognitive and non-cognitive abilities on schooling and earnings. They find that better non-cognitive abilities lead to more schooling, but also have an earnings return over and above this. Kern and Friedman (2008) de-compose (overall) conscientiousness into a range of non-cognitive abilities, including persistence, industriousness, organisation and discipline (read previous blog discussion on this here).

The trait of conscientiousness is taken from the "Big Five" set of personality characteristics. Kyllonen, Walters and Kaufman (2005) review the literature on noncognitive constructs (such as the "Big Five"), and conclude with a discussion of how non-cognitive constructs (or personality factors) might be used in admissions and guidance applications for graduate education (read previous blog discussion on this here).

Braakmann (2009) has used the German Socio-Economic Panel to show that differences in various non-cognitive traits, specifically the Big Five, contribute to gender inequalities in wages and employment (this was previously mentioned on the blog here). Mueller and Plug (2004) shows that the labour market values conscientiousness and openness to experience for women (previous discussion on the blog here --- in relation to non-cognitive personality, education and earnings).

Kyllonen (2008) is perhaps the most detailed assessment of how to measure non-cognitive abilities; he associates the non-cognitive abilities shown below with the "Big Five" personality traits. Kyllonen is based at the Princeton Educational Testing Service (ETS) and put forward the framework below ("Enhancing Noncognitive Skills to Boost Academic Achievement") at a 2008 Washington conference entitled 'Educational Testing in America: State Assessments, Achievement Gaps, National Policy and Innovations'.

kabat zinn on mindfulness

Cool lecture by Kabat-Zinn on Mindfulness originally presented to Google staff. Worth looking through the Google lectures channel. Michael has talked a lot about mindfulness here and we have even examined its relation to economic discounting. How peace of mind and ability to control one's thoughts interacts with the type of economic fluctuations we are seeing at the moment is something we should talk more about here.

http://www.youtube.com/watch?v=3nwwKbM_vJc

The Highwaymen - a celebration of people with high risk preferences

Even if you dont buy my interpretation of the song, its worth listening to anyway!

http://www.youtube.com/watch?v=uw1bHaUk1CM

Shanghai Expo

The Shanghai Expo (world fair) site is linked below. Next to the Olympics and the World Cup, wiki informs me that these are the third largest world events. The Shanghai round is themed on quality of life and cities and is expecting about 70 million visitors. We will be looking at this closely here as the interface between urban design and modern well-being and behavioural economics is a fascinating one.

http://en.expo2010china.com/

NESC Report

Ideas from behavioural and related modern microeconomics appear to have had no effect on the debate in Ireland. I think this is a fundamental imbalance. The recent NESC report Ireland’s "Five-Part Crisis: An Integrated National Response" contains much of value in terms of highlighting the magnitude of the Irish economic situation and the need for something to be done but the fact that irish policy-makers still think of economics solely as macroeconomic stabilisation is harming debate in Ireland to a huge extent.

Until we start seeing policies in terms of principles such as specific meaningful targets, accountable decision makers, experimental methods, proper cost-effectiveness appraisals (which respect causal reasoning) then public sector service delivery is not going to be meaningfully considered as part of the solution to irish economic recovery.

http://www.nesc.ie/dynamic/docs/NESC-Report-No-118.pdf

The Personality Project

The personality project is a cooperative endeavour for and by all interested in the study of personality. Issues of personality appeal to everyone and there are many interesting web sites that can be visited both inside and outside of academia. For more dtails, follow this link.

Also, William Revelle from the Department of Psychology at Northwestern University has made the following course on psychometric theory (with applications in R) freely available: http://personality-project.org/r/book/

The only way is up?

Developments in the last day highlight the power/effectiveness(?) of the optimistic central bank forecasting.

http://www.rte.ie/business/reports/marketupdate.html

I sincerely hope he's right and the market seems to have confidence in his projections. Like Tricet in another recent post I feel he has very little to lose and a lot to gain by making optimistic projections.

However, I cautiously note that Bernanke also said the following at Milton Friedman's 90th conference in 2002:

"Let me end my talk by abusing slightly my status as an official representative of the Federal Reserve. I would like to say to Milton and Anna: Regarding the Great Depression. You're right, we did it. We're very sorry. But thanks to you, we won't do it again."

http://www.irishcentral.com

The Taoiseach launched the the first-ever global Irish website in New York yesterday. Read more about the website in the Irish Independent here. And click here to visit.

Are we the PITS?

Bruno Frey has some provocative insights on the current "publish-or-perish" system used in academic economics. He claims we exist in a Publication Impossibility Theory System, where the chances of publishing in A-list journals are so low that the range of ideas studied, people studying them and location of researchers are far narrower than the socially optimum. He finishes by offering some alternative solutions, which all come with their own flaws.

http://d.repec.org/n?u=RePEc:zur:iewwpx:406&r=cbe

Thaler on Nudge

Interesting article and interview about Nudge from the UK Times

here

Childhood Obesity and the Internet

I gave a presentation to a Dail group charged with implementing the Obesity taskforce this week.

The topic of the presentation was on the role of the Internet in childhood obesity. I made the point that internet advertising broadly defined was changing fundamentally the task for those interested in controlling the messages being delivered to children and adolescents in the area of diet and physical activity.

There are strong reasons to begin to look at the role of the internet in childhood obesity. As well as advertising, the increasing amount of time spent by children online is itself contributing to sedentarism.

Even a brief google search for this topic will reveal to you a whole ecology of food-related websites, ranging from bebo pages for popular foods like Skittles to things like "McWorld" where kids can play video games.

The extent to which online social networks condition diet and physical activity is something for which there is little evidence. Also, we know very little about the nature and type of messages that children glean from the web about diet and physical activity and how this alters their risk perception, forms their identity and conditions their self-control.

It is clear however that companies are experimenting vigorously with the use of the net and are working all the available channels and the connections between them. This is changing fundamentally the relevance of existing advertising restrictions and needs to be thought about actively in a way that has not yet been done.

This is an area for which policy needs to emerge and develop. At the very least, a new set of social norms needs to emerge quickly about what companies should and should not do with respect to online activities. Also, government agencies as well as parents and voluntary groups need to think about using technologies such as adsense and related technologies to counteract the messages being beamed to kids by marketers and by other kids.

For example, if you do a basic google search for things like bulimia you will find a string of advertisements for treatments. It raises the question as to whether government agencies should be trying to actively intervene in these messages through their own advertising.

I wrote a report a few years ago about the scope of volunteering in Irish sport. One form that volunteering may need to take on is to attempt to turn the web into something that promotes or at least is neutral toward physical activity. This may mean those who believe in physical activity and healthy eating as positive forces for children actively blogging and pointing out behaviour of groups who are using the web in ways that flout social norms about how we should persuade children.

Rejection letter

This parody of a rejection letter is funny.

http://econjeff.blogspot.com/2009/03/ancient-rejection-letter.html

Greene - Discrete Choice

A really good resource below, and in general Greene's website has fantastic links to his courses

http://pages.stern.nyu.edu/~wgreene/DiscreteChoice/Readings/OrderedChoiceSurvey.pdf

Advertising Works - According to Yahoo! Research

We have discussed the possibility of evaluating adevertising campaigns on this blog before (here and here). So it is interesting to read that Yahoo! Research is measuring the effects of advertising on sales through a controlled experiment (more details available here). Researcher David Reiley has recently collaborated with Yahoo!’s Marketing Insights team in their ongoing efforts to help advertisers evaluate the effectiveness of their advertising campaigns.

Reiley joined Yahoo! Research because of his longstanding interest in field experiments and he points out a potential weakness of a study reported in a recent Harvard Business Review article, which measured large increases in sales due to online advertising. The study used large quantities of data from comScore, a key online information provider that logs the Internet browsing behaviour of two million users worldwide. By comparing the purchases of those who saw a given online ad with the purchases of those who do did not see it, the study concluded that there are large positive effects of online advertising.

However, "the population of people who sees a particular ad may be very different from the population who does not see the same ad,” says Reiley. Reiley's research made use of a database match between Yahoo! and a nationwide retailer by identifying users who registered the same email address with both companies. After finding over one million matched users, the researchers randomly assigned them to treatment and control groups for one of the retailer’s online advertising campaigns.

The project then tracked sales each week at the retailer, both online and in stores. In a paper co-authored with summer intern and MIT PhD student Randall Lewis, Reiley found that the online display advertising increased total revenues by approximately 5% for those users exposed to the ads, with 93% of the total effect happening in offline sales. They also observed online ads to have a large impact on sales even when the ads are not clicked: 78% of the increase in sales came from those who viewed, but did not click, the ads.

Could this have implications for the "pay-per-click" model in online advertising?

Correlation is not Causation

This cartoon is too good not to put up here aswell. Thanks to Aleks Jakulin from the Columbia Statistics Blog for sharing it. For a discussion on the issue, follow this link to the Columbia Statistics Blog.

Can chimps plan?

Daniel Gilbert and others have earmarked planning and experiencing the future as the abilities that separate humans from animals. The idea is that unlike primates we have a fine-tuned capacity to simulate and "pre-feel" what events in the future will be like. We can then use this information to guide our plans and act in accordance with long-term goals. We already know chimpanzee's can do all sorts of intelligent things when needs be like using the rocks to crack open nuts and potentially even sign language. Now, Santino a chimpanzee at Sweden's Furuvik Zoo is doing his utmost to try to show that yes primates can plan too! Santino thoroughly dislikes visitors. So much so that in line with some contemporary attitudes on how to treat young children he stockpiles rocks to fling at them every day. This behaviour may be a random classically conditioned act he's built up. Like the horse 'clever Hans' who people thought was extremely brainy (he even knew algebra) he may be in reality just responding to a simple prompt from the environment (noverbal cues from his owner in this case). But more interestingly, Santino's rock hoarding may mean he is using his powers of foresight to anticipate the thrill he gets from putting the run on tourists. He may be mentally preparing himself to meet his goal of some peace and quiet. Only time and methodically planned, controlled experiments with random assignment will tell!

OECD RSS feeds

I came across a very useful list of RSS feeds you can select from the OECD website. You can choose the country you are interested in or the topic. Some relevant topics for the Geary researchers might include: Economics and growth, health, education, social and welfare issues etc.

http://www.oecd.org/document/0,3343,en_2649_201185_36240225_1_1_1_1,00.html

Light at the end of the tunnel?

Light at the end of the tunnel? Jean-Claude Trichet suggests the global economy may be bottoming out. Expansionary elements of the economy he mentions include interest rate cuts, government stimulus packages and falling commodity and oil prices. Trichet claims that the financial markets are currently underpricing the upside potential in the market. He does, of course have an incentive to state this opinion, because confidence will be one of the main drivers of the economic recovery; "He said a return of confidence was the key to getting the economy back on its feet". However, he also has to retain credibility so overall I think this is an optimistic sign for economic recovery.

http://www.financialpost.com/story.html?id=1370084

Noncognitive Constructs and Their Assessment in Graduate Education

Some insights on how non-cognitive personality constructs apply to graduate education are provided in the Educational Assessmnet Journal (2005) by Patrick Kyllonen, Alyssa Walters and James Kaufman from the Princeton Educational Testing Service and Department of Psychology, California State University at San Bernardino. The authors review the literature on noncognitive constructs, as well as personality as it specifically relates to graduate education.

In the first section, they review measures typically used in studies of graduate school outcomes, such as attrition and time to degree. They also review which student qualities faculty and administrators said they desired and cultivated in graduate programs. (They noted that there are many qualities faculty ranked high in desirability but which could only imperfectly be gleaned from sources such as letters of recommendation and personal statements).

In the second section, they review general personality factors (such as the “Big Five”), and conclude with a discussion of how personality factors might be used in admissions and guidance applications for graduate education.

Gerard O'Neill Psychology of Recession and Recovery

Gerard O'Neill gave a superb talk on the current economic climate in the Geary Institute last Monday.

Full details of his talk are available below. From a research perspective, it reinforced to me the need to more fully understand whats happening with consumption. The view among many in the audience is that precautionary saving and some form of ricardian equivalence (saving now for future tax increases) were driving increased saving even among those with secure public sector positions. Others argued that perhaps no jobs feel secure now. Another potential reason for increased saving among those who have not seen an income decrease is reference effects, with the need to purchase conspicuous items being a lot lower and perhaps even seen as gaudy among the economically secure given the trouble that others are in.

Of huge importance to Gerard's talk was the role of optimism in conditioning economic recovery. This is a theme recurring across many different strands of Irish thinking at present. Whether such optimism can be harnessed to generate self-fulfilling improvement is a big question.

http://www.turbulenceahead.com/2009/03/psychological-recovery.html

George Eliot's Hypothesis for DRM

"In bed our yesterdays are too oppressive: if a man can only get up, though it be but to whistle or to smoke, he has a present which offers some resistence to the past - sensations which assert themselves against tyrranous memories. And if there were such a thing as taking averages of feeling, it would certainly be found that in the hunting and shooting seasons regret, self-reproach, and mortified pride, weigh lighter on country gentlemen than in late spring and summer." (Ch 29 "The Next Morning", Adam Bede, 1859)

National Accounts of Well-being

A recent report published by the Centre for Well-being at the New Economics Foundation in London documents how national accounts of well-being can produce a meaningful measure of 'that which makes life worthwhile'.

They have a very nice interactive website that's well worth a look. It presents the European Social Surey data in a format that allows interested browsers to explore country level well-being data with ease.

Working Group on Statistical Learning

Colm sent on an interesting link about the UCD Working Group on Statistical Learning. This is a forum to promote research and collaboration rather than to present a public lecture on finished work. The working group sessions involve the presenter giving a 25 minute talk which is followed by 25 minutes of discussion.

If anyone is interested in presenting, they can contact Brendan Murphy (brendan.murphy@ucd.ie) or Claire Gormley (claire.gormley@ucd.ie). Professor Murphy is a principal investigator with the CLIQUE research cluster that was mentioned on the blog earlier this week (here). The website of the CLIQUE research cluster is available to view here.

After They Graduate

This report (by Jolly, Yu and Orazem) provides a descriptive overview of the Iowa State University Alumni Survey. In late 2007, 25,000 Iowa State University alumni who received bachelor's degree between 1982 and 2006 were surveyed to obtain information on their career paths, employment status, further education, entrepreneurial activities, community engagement and current income. The on-line and written survey resulted in approximately 5,500 valid returns.

Ideas Campaign

An online ideas forum is currently being disseminated at the moment under the title of "ideas campaign". You can read about it on the website below.

http://www.ideascampaign.ie/

The Text Tax

It has been suggested by the Green Party that a 1c tax on text messages would raise some much needed funds for the public purse, in the current economic crisis. This has been referred to as as “unfair and injust” by Tommy McCabe, director of the Irish Cellular Industry Association (ICIA) - see story here.

How much revenue do we think this would generate? According to the Irish Examiner, a record two billion text messages were sent by Irish mobile phone users in the final three months of last year. Say we assume that this is a steady state level of texting, and that a 1c tax would not deter anyone to send a text. With these assumptions made, then the 1c text tax would produce 8 billion cents in revenue per annum, or an annual sum of 80 million euro.

This is all well and good, but I would like to know more about how this tax would be collected. What I have been able to find is a news story from 2006 which suggests that European Union lawmakers have already considered tax on e-mails and text messages as a way to fund the 25-member bloc in the future. Also, a text message tax was introduced in Sacramento, California last December (see story here). The city sent out letters to telecommunications companies to instruct them to levy the tax on customers' bills.

This is an interesting development in the economics of information. While I don't yet have any fears about negative consequences for the widespread distribution of information, comminication taxes could be undesirable if they prevent useful information exchange. Especially in the so-called Information Economy. On a related note, it was announced yesterday that UCD won SFI strategic research cluster funding of €3.56 million - which will be focused on "data analytics".

Repugnant Preferences

Harvard economist Alvin Roth again asks 'how much for a kidney?', at his talk at the American Enterprise Institute in Washington. Well, we do have two kidneys, so that makes a surplus of one. And imagine what you could buy with 33,000 dollars (the legal price of a kidney in Singapore- a kidney for your troubles). But that's pretty unsavoury right?

The New York times overviews the commentary after the talk. Paul Bloom voices "The problem is not that economists are unreasonable people, it’s that they’re evil people,”. “They work in a different moral universe. The burden of proof is on someone who wants to include” a transaction in the marketplace.

Michael Novak, Steven Pinker, John Haidt and others point out that disgust is a useful heuristic and guide for decision-making. It tells us to pay attention, there's something untoward going on here. The problem is this rapid response can be hijacked. Psychologists can induce feelings of disgust via hypnosis and this can tip the balance in what we endorse as morally acceptable or reprehensible.

Many of our preferences may be rough and ready guides based on accumulated experience. We give money to animal causes based on how cuddly we judge them to be and we find it off-putting to see these animals traded for consumption. It seems our empathy and our disgust are not always guided by ethical principles. But I still believe it is very easy to put a price on a kidney but a lot harder for someone to understand the decision they are making to sell one!

This transaction feels very exploitative. And this is for many reasons, mainly the information asymmetries tied in and the lack of an incentive for the buyer to provide details to address these. It is also questionable as to whether the seller has the capacity to imagine the lifelong consequences of his/her decision. Even if a fully informed decision could be made the emotive consequences of such a trade could be fuel for social unrest amongst those who feel strongly about what they deem socio-economic and 1st to 2nd/3rd world exploitation.

Open Innovation

Moses Ma asks 'how open should innovation be?'

On a more micro level Charles Leadbeater author of 'We Think: Mass innovation, not mass production' claims 'we are what we share' in the web 2.0 world.

Signalling, Cognitive Reflection and the Movie Business

What does a "cold opening" mean in the movie business? According to Colin Camerer and colleagues (here), "Usually, the movies that are not shown in advance are below-average movies as ultimately rated by both critics and moviegoers... but there is a 15 percent increase in box office revenue from not first showing the movie." This is a "cold opening".

So why does it work? Camerer thinks it has to do with people who don't think strategically--who don't have high strategic IQs. "We think it means you can fool some of the people some of the time," he says. "Specifically, you can fool the people who don't pay attention to reviews and who also don't realize that not wanting to show a movie to critics is a bad sign."