Weekend Links

1. Referred to in our workshop yesterday, the Lothian Birth Cohort studies are very well worth checking out.

2. The Southampton Women's Study was also discussed yesterday

3. New ABS journal list which assigns a quality rating to journals in business & related areas

4. Andrew Gelman on the psychology journal that has banned significance tests

5. Vacancies: Post-Doctoral Research Fellows in Economics at ESRI 

6. Karl Whelan's presentation from last Wednesday on Economics after the crisis.

7. New paper by Michael Daly and colleagues on physical activity and executive function

8. Will Increased Freedoms for British Pension Holders Lead to Bad Decisions?

9. New England Journal of Medicine health insurance piece authored by centre faculty member David Comerford & colleagues

10. Richard Thaler's Misbehaving: The Making of Behavioral Economics

11. Cass Sunstein "Fifty Shades of Manipulation"

A statement or action can be said to be manipulative if it does not sufficiently engage or appeal to people’s capacity for reflective and deliberative choice. One problem with manipulation, thus understood, is that it fails to respect people’s autonomy and is an affront to their dignity. Another problem is that if they are products of manipulation, people’s choices might fail to promote their own welfare, and might instead promote the welfare of the manipulator. To that extent, the central objection to manipulation is rooted in a version of Mill’s Harm Principle: People know what is in their best interests and should have a (manipulation-free) opportunity to make that decision. On welfarist grounds, the norm against manipulation can be seen as a kind of heuristic, one that generally works well, but that can also lead to serious errors, at least when the manipulator is both informed and genuinely interested in the welfare of the chooser.

For the legal system, a pervasive puzzle is why manipulation is rarely policed. The simplest answer is that manipulation has so many shades, and in a social order that values free markets and is committed to freedom of expression, it is exceptionally difficult to regulate manipulation as such. But as the manipulator’s motives become more self-interested or venal, and as efforts to bypass people’s deliberative capacities becomes more successful, the ethical objections to manipulation become very forceful, and the argument for a legal response is fortified. The analysis of manipulation bears on emerging first amendment issues raised by compelled speech, especially in the context of graphic health warnings. Importantly, it can also help orient the regulation of financial products, where manipulation of consumer choices is an evident but rarely explicit concern.

How to make a Maltese cross – insights from facebook

See below from PhD researcher here and lecturer at University of Malta Marie Briguglio. Intended to stimulate some ideas for a future study and not intended as a scientific study in itself. 

How to make a Maltese cross – insights from facebook

A question posted on a facebook status for two consecutive periods of 24 hours asked volunteers to “Think of your typical day. What instances reduce your well-being? “ and in a subsequent separate status to “Think of your typical day. What instances improve your well-being?" Responses (360 comments) were coded and aggregated. The exact comments were fed into Tagxedo (www.tagxedo.com) to generate the word maps below. Over 95 percent of comments were received from respondents in Malta. No personal data was requested or used. Obvious biases pertaining to this data includes the fact that the participants are limited to people who are active in social media, able to read English and able to write. The responses themselves are likely skewed by social desirability bias and limited to contributions that respondents feel they can talk of publicly. Although participants were asked to “think of your answer before reading others” some social influence may have occurred. 

Within the limitations, key insights that emerge are:

· Social interactions (other people) are the key factor responsible both for stimulating well-being and for suppressing it. Over 30% of the comments received were of this nature;

· Pollution (litter, noise) and traffic is a key factor that suppresses well being, while the sun, the sea and the Maltese environment in general received strong mention as positive influences (18%),

· In a typical day, family and children are both a cause of well-being and a source of its reduction (14% of responses),

· Bad food, lack of exercise, sickness and pain as well as sedentary lifestyles, together with good food and exercise, together made up 9% of the contributions. Other influences mentions include the news, institutions and order.

· The influencers of well-being were similar in the negative and positive frame, albeit different words may be used (notably “kids” versus “children”);

Queries: marie.briguglio@gmail.com

Word Map 1 (blue): In a typical day, what instances reduce your well-being?

Word Map 2 (red): In a typical day, what instances improve your well-being?

Q&A between Peter Ubel and Richard Thaler on nudging

Full article available at Forbes

On the definition of nudge:

"Ubel: You say I am wrong about what constitutes a nudge. Can you elaborate?

Thaler: Sunstein and I define a “good” nudge as something that will affect Humans but not Econs and will be in their best interest.

Ubel: By Econs, you mean those hypothetical, perfectly rational decision makers with unlimited willpower and cognitive processing ability who underlie neoclassical economic theory. Right?

Thaler: Yes. Econs don’t need nudges, because they do what is in their best interests anyways. But Humans often need nudges."

On the proliferation of the term 'behavioural economics':

"Ubel: I have reviewed grant proposals for agencies that have requested projects using behavioral economics. I have discovered that many researchers submitting proposals to these agencies equate the idea of a “nudge” with behavioral economics. In other words, if they can improve people’s behaviors while leaving them free to act, they have nudged those people. Therefore, they conclude they are doing behavioral economics. Who is confused here: me or them?

Thaler: Everyone is confused. This is partly because, as you note in your post, some people have decided to call themselves behavioral economists for strategic reasons, perhaps because it is now trendy, or perceived to have higher status than (say) professor of marketing, and this sort of behavior can lead journalists to be confused. Many now think Robert Cialdini is a behavioral economist, a notion that Bob would find quite funny. It is true that I am one of the co-authors of Nudge and I am a behavioral economist but it does not mean that everything we write about in that book is behavioral economics, nor does it mean that my co-author, the distinguished legal scholar Cass Sunstein, is a behavioral economist."

Measurement and Subjective Measures

Incorporating subjective and psychometric measures into economics: issues and applications

Professor Liam Delaney

Overview

The use of subjective and psychometric scales is becoming increasingly common in economics and offers a key point of intersection between economics and psychology. Such measures can be used in many different designs, including studies that seek to explain an important variable measured by self-report (such as health or well-being) or studies that seek to use self-reported variables as explanatory variables. This course outlines a number of key features that need to be taken into account when using self-reported or subjective measures in economic applications. 

Firstly, we examine survey design and the principles for sound construction of survey measures. Secondly, we examine basic linear and non-linear econometric methods for the analysis of survey data. Thirdly, we examine the use of subjective measures as dependent variables in standard regression designs. In particular, we consider the problem of differential item function, namely what happens when respondents to survey questions use different criteria for judging what the question means (King et al., 2004). We consider the use of anchoring vignettes and hierarchical regression models to take into account these errors. Finally, we examine the incorporation of self-reported and subjective measures in economic studies as explanatory variables explaining outcomes such as health and education. 

A recent literature (e.g. Borghans, Heckman, Duckworth and ter Weel, 2008) has examined how to integrate constructs from psychology into understanding economic outcomes. This literature is rapidly becoming one of the major areas in fields such as health economics and education economics. However, there are many issues with using variables such as personality in econometric functions. We examine new statistical designs for incorporating such measures.

Readings

1. Survey Design and Economics

(i) Butz & Torrey (2006), Some frontiers in social science, Science

(ii) Tourangeau, Rips, & Rasinski (2000), The Psychology of Survey Response, Cambridge University Press.

2. Econometric Methods

(i) Baltagi (2008), Econometric Analysis of Panel Data

(ii) Wooldridge (2010), Econometric Analysis of Cross Section and Panel Data

3. Subjective Measures as Dependent Variables

(i) Daly, Delaney, Doran, Harmon & MacLachlan (2010), Naturalistic monitoring of the affect-heart rate relationship: A Day Reconstruction Study, Health Psychology

(ii) Ferrer-i-Carbonel & Frijters (2004), How important is methodology for the estimates of the determinants of happiness, Economic Journal

(iii) Frijters & Aydogan (2008), Robustness in health research: do differences in health measures, techniques, and time frame matter?, Journal of Health Economics

(iv) Hsee, Hastie & Chen (2008), Hedonomics:Bridging decision research with happiness research, Perspectives on Psychological Science

(v) Hsee, & Hastie (2006), Decision and experience: Why don't we choose what makes us happy?, Trends in Cognitive Sciences

(vi) Kahneman, Krueger, Schkade, Schwarz & Stone (2004), Would you be happier if you were richer?, Science

(vii) Kahneman, Krueger, Schkade, Schwarz & Stone (2006), Day Reconstruction Method, Science

4. Differential Item Functioning

(i) Bago d’Uva, Van Doorslaer, Lindeboom & O’Donnell (2008), Does reporting heterogeneity bias the measurement of health disparities?, Health Economics

(ii) Bago d’Uva, O O'Donnell, & van Doorslaer (2008), Differential health reporting by education level and its impact on the measurement of health inequalities among older Europeans, International Journal of Epidemiology

(iii) Lindeboom & van Doorslaer (2004), Cut-point shift and index shift in self reported health, Journal of Health Economics

(iv) Kapteyn, Smith & Van Soest (2007), Vignettes and self-reported work disability in the US and the Netherlands, American Economic Review

(v) King, Murray, Salomon & Tandon (2004), Enhancing the Validity and Cross-cultural Comparability of Measurement in Survey Research, American Political Science Review

(vi) Van Soest,  Delaney, Harmon, Kapteyn & Smith (2011), Validating the use of anchoring vignettes for the correction of response scale differences in subjective questions, Journal of the Royal Statistical Society

5. Subjective Measures as Independent Variables

(i) Borghans, Duckworth, Heckman, & ter Weel (2008), The Economics and Psychology of Personality Traits, Journal of Human Resources

(ii) Cunha, Heckman, & Schennach (2010), Estimating the Technology of Cognitive and Noncognitive Skill Formation, Econometrica

(iii) Daly, Delaney & Harmon (2009), Psychological and Biological Foundations of Time Preference, Journal of the European Economic Association

(iv) Dohmen, Falk, Huffman & Sunde (2010), Are Risk Aversion and Impatience Related to Cognitive Ability?, American Economic Review

(v) Dohmen, Falk, Huffman, Sunde, Schupp & Wagner (2011), Individual Risk Attitudes: Measurement, Determinants, And Behavioral Consequences, Journal of the European Economic Association

(vi) Heckman (2012), The developmental origins of health, Health Economics

A bidirectional relationship between physical activity and executive function in older adults

New paper by centre faculty member Michael Daly and colleagues published in Frontiers of Human Neuroscience 

A bidirectional relationship between physical activity and executive function in older adults 

Michael Daly^1*, David McMinn² and Julia L. Allan³

• 1Behavioural Science Centre, Stirling Management School, University of Stirling, Stirling, UK
• 2School of Medicine and Dentistry, Rowett Institute of Nutrition and Health, University of Aberdeen, Aberdeen, UK
• 3Health Psychology, Institute of Applied Health Sciences, University of Aberdeen, Aberdeen, UK

Physically active lifestyles contribute to better executive function. However, it is unclear whether high levels of executive function lead people to be more active. This study uses a large sample and multi-wave data to identify whether a reciprocal association exists between physical activity and executive function. Participants were 4555 older adults tracked across four waves of the English Longitudinal Study of Aging. In each wave executive function was assessed using a verbal fluency test and a letter cancelation task and participants reported their physical activity levels. Fixed effects regressions showed that changes in executive function corresponded with changes in physical activity. In longitudinal multilevel models low levels of physical activity led to subsequent declines in executive function. Importantly, poor executive function predicted reductions in physical activity over time. This association was found to be over 50% larger in magnitude than the contribution of physical activity to changes in executive function. This is the first study to identify evidence for a robust bidirectional link between executive function and physical activity in a large sample of older adults tracked over time.

Measurement Talks and Links

I am giving some talks on measurement in the context of applied micro/behavioural and intervention work in the next few weeks and was asked to post some details. The somewhat heroically broad abstract for one of them is below.

The last ten years have seen a dramatic increase in the active testing of theories in Economics and Behavioural Science informed policy through field trials and specially designed surveys. Along with this has come an appreciation of the difficulties of directly measuring economic concepts. In this presentation, I draw from work at Stirling and the wider literature to illustrate some of the key challenges for measurement in economic and evaluation contexts, including: how do we account for the fact that people have different standards and expectations when interpreting self-report questions?; how do we measure well-being and what are the implications of different determinants of alternative well-being measures?; how do we measure risk, time and ambiguity preferences and why might these measures be useful in the context of field trials?; how do we link economic preferences to psychometric measures of personality and self-control?; what problems arise when we measure expenditure, consumption and other "objective" economic indicators and how might these be addressed?; what role should biomarkers play in studies of decisions and health?; how might day reconstruction methods aid in the process of understanding mechanisms of action in field trials and other contexts? On a more basic level, the presentation will also address some fundamental measurement problems such as the potential for measurement to change behaviour; the possibility of publication bias arising from multiple measures being employed; and the wider consequences of measurement responding to agency pressures rather than priorities of truth and importance. The presentation aims to give a broad overview of key measurement contexts and to point to potentially useful material for people grappling with these issues.

 Also here are some other links I promised to send various people. I am thinking and researching a lot in this broad area at the moment and welcome opportunities to discuss this with people online and offline.

1. Details of our ESRC Seminar series on Behavioural Science and Measurement are available on this link. We have run sessions on well-being, cohort studies, personality/preferences and novel data collections methods. We will run one this coming Friday (27th February 2015) on biomarkers in social science. We are also in the process of writing various follow-ups to the grant that funded this series and welcome suggestions for collaboration.

2. Here is a detailed reading list on measurement from a previous session I ran on this a few years ago. This includes readings on topics such as: threshold effects in self-reporting; measuring personality and economic preferences; measuring subjective well-being and health; and a variety of other topics that might be of interest.

Upcoming (Please email if you want further details).

ESRC/Stirling Workshop on Biomarkers in Behavioural Science Friday 27th February.

Stirling MSc Group: Tuesday 3rd March 11am

Stirling MSc Group: Tuesday 10th March 11am

BIT lunchtime session Friday 20th March

Sydney Economics Department (x 2) in May. Dates TBA.

Weekend Links 21st February 2015

1. "Healthcare.gov 3.0 — Behavioral Economics and Insurance Exchanges": New England Journal of Medicine piece by Peter Ubel, our own David Comerford and Eric Johnson

2. Interesting and lengthy comment thread on reddit discussing recent paper on unemployment and personality change in Journal of Applied Psychology.

3. Vacancy for researcher on the Scottish Longitudinal Study of Aging. This is part of a global family of aging studies and is a great opportunity.

4. Andy Haldane is one of the most interesting people on the link between behavioural economics and financial regulation. His recent Bank of England speech "Growing Fast and Slow" is very well worth reading.

5. The Behavioural Exchange website is now live. Many of the leading figures in behavioural economics and related areas will present.

6. Vacancy for post-doctoral fellowships at ESRI Dublin including in Behavioural Economics

7. Two lectureships in health psychology at Stirling University

8. Acceptability of financial incentives and penalties for encouraging uptake of healthy behaviours: focus groups

9. Franco et al recent Science paper Publication bias in the social sciences: Unlocking the file drawer

We studied publication bias in the social sciences by analyzing a known population of conducted studies—221 in total—in which there is a full accounting of what is published and unpublished. We leveraged Time-sharing Experiments in the Social Sciences (TESS), a National Science Foundation–sponsored program in which researchers propose survey-based experiments to be run on representative samples of American adults. Because TESS proposals undergo rigorous peer review, the studies in the sample all exceed a substantial quality threshold. Strong results are 40 percentage points more likely to be published than are null results and 60 percentage points more likely to be written up. We provide direct evidence of publication bias and identify the stage of research production at which publication bias occurs: Authors do not write up and submit null findings.

10. Finkelstein and Taubman Science paper: Randomize evaluations to improve health care delivery