Tuesday, September 5, 2017

Women are more compassionate than men, but that does not explain the gender gap in partisanship

Blinder, S. and Rolfe, M. (2017), Rethinking Compassion: Toward a Political Account of the Partisan Gender Gap in the United States. Political Psychology. doi:10.1111/pops.12447

Abstract: Scholarship on the political gender gap in the United States has attributed women's political views to their greater compassion, yet individual-level measures of compassion have almost never been used to directly examine such claims. We address this issue using the only nationally representative survey to include psychometrically validated measures of compassion alongside appropriate political variables. We show that ***even though women are more compassionate in the aggregate than men in some respects, this added compassion does not explain the gender gap in partisanship***. Female respondents report having more tender feelings towards the less fortunate, but these empathetic feelings are not associated with partisan identity. Women also show a slightly greater commitment to a principle of care, but this principle accounts for little of the partisan gap between men and women and has no significant relationship with partisanship after accounting for gender differences in egalitarian political values.
How Dodd-Frank Doubles Down on 'Too Big to Fail'
Two major flaws mean that the act doesn't address problems that led to the financial crisis of 2008.
By Charles W. Calomiris And Allan H. Meltzer
Feb. 12, 2014 6:44 p.m. ET
The Dodd-Frank Act, passed in 2010, mandated hundreds of major regulations to control bank risk-taking, with the aim of preventing a repeat of the taxpayer bailouts of "too big to fail" financial institutions. These regulations are on top of many rules adopted after the 2008 financial crisis to make banks more secure. Yet at a Senate hearing in January, Elizabeth Warren asked a bipartisan panel of four economists (including Allan Meltzer ) whether the Dodd-Frank Act would end the problem of too-big-to-fail banks. Every one answered no.
Dodd-Frank's approach to regulating bank risk has two major flaws. First, its standards and rules require regulatory enforcement instead of giving bankers strong incentives to maintain safety and soundness of their own institutions. Second, the regulatory framework attempts to prevent any individual bank from failing, instead of preventing the collapse of the payments and credit systems.
The principal danger to the banking system arises when fear and uncertainty about the value of bank assets induces the widespread refusal by banks to accept each other's short-term debts. Such refusals can lead to a collapse of the interbank payments system, a dramatic contraction of bank credit, and a general loss in confidence by consumers and businesses—all of which can have dire economic consequences. The proper goal is thus to make the banking system sufficiently resilient so that no single failure can result in a general collapse.
Part of the current confusion over regulatory means and ends reflects a mistaken understanding of the Lehman Brothers bankruptcy. The collapse of interbank credit in September 2008 was not the automatic consequence of Lehman's failure.
Rather, it resulted from a widespread market perception that many large banks were at significant risk of failing. This perception didn't develop overnight. It had evolved steadily and visibly over more than two years, while regulators and politicians did nothing.
Citigroup's equity-to-assets ratio, measured in market value—the best single comprehensive measure of a bank's financial strength—fell steadily from about 13% in April 2006 to about 3% by September 2008. And that low value reflected an even lower perception of fundamental asset worth, because the 3% market value included the value of an expected bailout. Lehman's collapse was simply the match in the tinder box. If other banks had been sufficiently safe and sound at the time of Lehman's demise, then the financial system would not have been brought to its knees by a single failure.

To ensure systemwide resiliency, most of Dodd-Frank's regulations should be replaced by measures requiring large, systemically important banks to increase their capacity to deal with losses. The first step would be to substantially raise the minimum ratio of the book value of their equity relative to the book value of their assets.

The Brown-Vitter bill now before Congress (the Terminating Bailouts for Taxpayer Fairness Act) would raise that minimum ratio to 15%, roughly a threefold increase from current levels. Although reasonable people can disagree about the optimal minimum ratio—one could argue that a 10% ratio would be adequate in the presence of additional safeguards—15% is not an arbitrary number.

At the onset of the Great Depression, large New York City banks all maintained more than 15% of their assets in equity, and none of them succumbed to the worst banking system shocks in U.S. history from 1929 to 1932. The losses suffered by major banks in the recent crisis would not have wiped out their equity if it had been equal to 15% of their assets.

Bankers and their supervisors often find it mutually convenient to understate expected loan losses and thereby overstate equity values. The problem is magnified when equity requirements are expressed relative to "risk-weighted assets," allowing regulators to permit banks' models to underestimate their risks.

This is not a hypothetical issue. In December 2008, when Citi was effectively insolvent, and the market's valuation of its equity correctly reflected that fact, the bank's accounts showed a risk-based capital ratio of 11.8% and a risk-based Tier 1 capital ratio (meant to include only high-quality, equity-like capital) of about 7%. Moreover, factors such as a drop in bank fee income can affect the actual value of a bank's equity, regardless of the riskiness of its loans.

For these reasons, large banks' book equity requirements need to be buttressed by other measures. One is a minimum requirement that banks maintain cash reserves (New York City banks during the Depression maintained cash reserves in excess of 25%). Cash held at the central bank provides protection against default risk similar to equity capital, but it has the advantage of being observable and incapable of being fudged by esoteric risk-modeling.

Several researchers have suggested a variety of ways to supplement simple equity and cash requirements with creative contractual devices that would give bankers strong incentives to make sure that they maintain adequate capital. In the Journal of Applied Corporate Finance (2013), Charles Calomiris and Richard Herring propose debt that converts to equity whenever the market value ratio of a bank's equity is below 9% for more than 90 days. Since the conversion would significantly dilute the value of the stock held by pre-existing shareholders, a bank CEO will have a big incentive to avoid it.

There is plenty of room to debate the details, but the essential reform is to place responsibility for absorbing a bank's losses on banks and their owners. Dodd-Frank institutionalizes too-big-to-fail protection by explicitly permitting bailouts via a "resolution authority" provision at the discretion of government authorities, financed by taxes on surviving banks—and by taxpayers should these bank taxes be insufficient. That provision should be repealed and replaced by clear rules that can't be gamed by bank managers.
 
Mr. Calomiris is the co-author (with Stephen Haber ) of "Fragile By Design: The Political Origins of Banking Crises and Scarce Credit" (Princeton, 2014). Mr. Meltzer is the author of "Why Capitalism?" (Oxford, 2012). They co-direct (with Kenneth Scott ) the new program on Regulation and the Rule of Law at the Hoover Institution.

Meritocracy Not Racial Discrimination Explains the Racial Income Gap: An Analysis of NLSY 1979

Kirkegaard, Emil O W. 2017. “Meritocracy Not Racial Discrimination Explains the Racial Income Gap: An Analysis of NLSY 1979”. PsyArXiv. September 5. https://psyarxiv.com/qty3n

Abstract: Socially defined racial groups usually differ in average incomes, though the causes of this are contested. Here the NLSY1979 (National Longitudinal Survey of Youth, n > 11k) was analyzed to examine the relative importance of cognitive ability, market-irrelevant racial discrimination and cultural self-identification for predicting long term income (average of 25 years). The use of both self- and other-perceived racial group plausibly allows one to distinguish between effects related to how others perceive one’s racial group vs. how individuals perceive themselves. Results indicated that other-perceived Black and Hispanic racial status was associated with either no difference or slightly higher incomes when cognitive ability was controlled for (betas 0.15 and 0.11, respectively), whereas self-perceived Black status was negatively negatively to income (beta = -0.24). Other self-perceived racial statuses has no clearly detectable effect.

Results were interpreted as being mainly congruent with meritocracy and inconsistent with market-irrelevant racial discrimination models.

Minimum wage increases increase the likelihood that low-skilled workers in automatable jobs become unemployed

People Versus Machines: The Impact of Minimum Wages on Automatable Jobs. Grace Lordan and David Neumark. NBER Working Paper, August 2017, http://www.nber.org/papers/w23667

Abstract: We study the effect of minimum wage increases on employment in automatable jobs – jobs in which employers may find it easier to substitute machines for people – focusing on low-skilled workers from whom such substitution may be spurred by minimum wage increases. Based on CPS data from 1980-2015, we find that ***increasing the minimum wage decreases significantly the share of automatable employment held by low-skilled workers, and increases the likelihood that low-skilled workers in automatable jobs become unemployed***. The average effects mask significant heterogeneity by industry and demographic group, including substantive adverse effects for older, low-skilled workers in manufacturing. The findings imply that ***groups often ignored in the minimum wage literature are in fact quite vulnerable to employment changes and job loss because of automation following a minimum wage increase.***

A corporate income tax cut can reduce the non-employment rate by up to 7pct

Corporate Income Tax, Legal Form of Organization, and Employment. Daphne Chen, Shi Shao Qi and Don Schlagenhauf. Federal Reserve Working Paper, July 2017, https://research.stlouisfed.org/wp/2014/2014-018.pdf

Abstract: A dynamic stochastic occupational choice model with heterogeneous agents is developed to evaluate the impact of a corporate income tax reduction on employment. In this framework, the key margin is the endogenous entrepreneurial choice of the legal form of organization (LFO). A reduction in the corporate income tax burden encourages adoption of the C corporation legal form, which reduces capital constraints on firms. Improved capital re-allocation increases overall productive efficiency in the economy and therefore expands the labor market. Relative to the benchmark economy, a corporate income tax cut can reduce the non-employment rate by up to 7 percent.


Studying the Effect of Hard and Soft News Exposure on Mental Well-Being Over Time

Studying the Effect of Hard and Soft News Exposure on Mental Well-Being Over Time. Mark Boukes and Rens Vliegenthart. Journal of Media Psychology (2017), 29, pp. 137-147. https://doi.org/10.1027/1864-1105/a000224.

Abstract. Following the news is generally understood to be crucial for democracy as it allows citizens to politically participate in an informed manner; yet, one may wonder about the unintended side effects it has for the mental well-being of citizens. With news focusing on the negative and worrisome events in the world, framing that evokes a sense of powerlessness, and lack of entertainment value, this study hypothesizes that news consumption decreases mental well-being via negative hedonic experiences; thereby, we differentiate between hard and soft news. Using a panel survey in combination with latent growth curve modeling (n = 2,767), we demonstrate that ***the consumption of hard news television programs has a negative effect on the development of mental well-being over time. Soft news consumption, by contrast, has a marginally positive impact on the trend in well-being***. This can be explained by the differential topic focus, framing and style of soft news vis-à-vis hard news. Investigating the effects of news consumption on mental well-being provides insight into the impact news exposure has on variables other than the political ones, which definitively are not less societally relevant.

Keywords: news consumption, mental well-being, hedonic experiences, negativity, hard versus soft news

Trash-talking: Competitive incivility motivates rivalry, performance, and unethical behavior

Trash-talking: Competitive incivility motivates rivalry, performance, and unethical behavior. Jeremy Yip, Maurice Schweitzer & Samir Nurmohamed. Organizational Behavior and Human Decision Processes, https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2737109

Abstract: Trash-talking increases the psychological stakes of competition and motivates targets to outperform their opponents. In Studies 1 and 2, participants in a competition who were targets of trash-talking outperformed participants who faced the same economic incentives, but were not targets of trash-talking. Perceptions of rivalry mediate the relationship between trash-talking and effort-based performance. In Study 3, we find that targets of trash-talking were particularly motivated to punish their opponents and see them lose. In Study 4, we identify a boundary condition, and show that trash-talking increases effort in competitive interactions, but incivility decreases effort in cooperative interactions. In Study 5, we find that targets of trash-talking were more likely to cheat in a competition than were participants who received neutral messages. In Study 6, we demonstrate that trash-talking harms performance when the performance task involves creativity. Taken together, our findings reveal that trash-talking is a common workplace behavior that can foster rivalry and motivate both constructive and destructive behavior.

Changes in the Subjectively Experienced Severity of Detention: Exploring Individual Differences

Changes in the Subjectively Experienced Severity of Detention: Exploring Individual Differences. Ellen A. C. Raaijmakers et al. The Prison Journal, https://doi.org/10.1177/0032885517728902

Abstract: A core assumption underlying deterrent sentencing and just deserts theory is that the severity of imprisonment is merely dependent upon its duration. However, empirical research examining how inmates’ subjectively experienced severity of detention (SESD) changes as a function of the length of confinement remains sparse. This study assesses changes in inmates’ SESD over the course of confinement and seeks to explain this process. Multilevel analyses revealed considerable change in the SESD over the course of confinement. Although individual characteristics are related to inmates’ initial SESD, they are not related to their pattern of change in SESD over the course of confinement.

---
"although the SESD (subjectively experienced severity of detention) increases during the first 3 months, it decreases thereafter, stabilizing after 9 months of confinement"

Monday, September 4, 2017

Revisiting the risk of automation

Revisiting the risk of automation. Melanie Arntz, Terry Gregory and Ulrich Zierahn. Economics Letters, Volume 159, October 2017, Pages 157-160, https://doi.org/10.1016/j.econlet.2017.07.001

Highlights
•    Occupation-level approaches significantly overestimate automation potentials.
•    Automation risk of US jobs drops from 38 to 9% when accounting for job-level tasks.
•    3 out of 4 jobs are less automatable compared to the median job of this occupation.
•    Workers apparently specialize in non-automatable niches within their profession.

Abstract: In light of rapid advances in the fields of Artificial Intelligence (AI) and robotics, many scientists discuss the potentials of new technologies to substitute for human labour. Fuelling the economic debate, various empirical assessments suggest that up to half of all jobs in western industrialized countries are at risk of automation in the next 10 to 20 years. This paper demonstrates that these scenarios are overestimating the share of automatable jobs by neglecting the substantial heterogeneity of tasks within occupations as well as the adaptability of jobs in the digital transformation. To demonstrate this, we use detailed task data and show that, when taking into accounting the spectrum of tasks within occupations, the automation risk of US jobs drops, ceteris paribus, from 38 % to 9 %.

Adult sex ratios and partner scarcity among hunter–gatherers: Implications for dispersal patterns and the evolution of human sociality

Adult sex ratios and partner scarcity among hunter–gatherers: Implications for dispersal patterns and the evolution of human sociality. Karen Kramer, Ryan Schacht and Adrian Bell. Philosophical Transactions of the Royal Society: Biological Sciences, Sept 19 2017, https://doi.org/10.1098/rstb.2016.0316

Abstract: Small populations are susceptible to high genetic loads and random fluctuations in birth and death rates. While these selective forces can adversely affect their viability, small populations persist across taxa. Here, we investigate the resilience of small groups to demographic uncertainty, and specifically to fluctuations in adult sex ratio (ASR), partner availability and dispersal patterns. Using 25 years of demographic data for two Savannah Pumé groups of South American hunter–gatherers, we show that in small human populations: (i) ASRs fluctuate substantially from year to year, but do not consistently trend in a sex-biased direction; (ii) the primary driver of local variation in partner availability is stochasticity in the sex ratio at maturity; and (iii) dispersal outside of the group is an important behavioural means to mediate locally constrained mating options. To then simulate conditions under which dispersal outside of the local group may have evolved, we develop two mathematical models. Model results predict that if the ASR is biased, the globally rarer sex should disperse. The model's utility is then evaluated by applying our empirical data to this central prediction. The results are consistent with the observed hunter–gatherer pattern of variation in the sex that disperses. Together, these findings offer an alternative explanation to resource provisioning for the evolution of traits central to human sociality (e.g. flexible dispersal, bilocal post-marital residence and cooperation across local groups). We argue that in small populations, looking outside of one's local group is necessary to find a mate and that, motivated by ASR imbalance, the alliances formed to facilitate the movement of partners are an important foundation for the human-typical pattern of network formation across local groups.

KEYWORDS: Savannah Pumé; adult sex ratio; dispersal; human evolution; hunter–gatherers; sexual selection

Languages in Drier Climates Use Fewer Vowels

Languages in Drier Climates Use Fewer Vowels. Caleb Everett. Frontiers in Psychology, July 2017, https://doi.org/10.3389/fpsyg.2017.01285

Abstract: This study offers evidence for an environmental effect on languages while relying on continuous linguistic and continuous ecological variables. Evidence is presented for a positive association between the typical ambient humidity of a language’s native locale and that language’s degree of reliance on vowels. The vowel-usage rates of over 4000 language varieties were obtained, and several methods were employed to test whether these usage rates are associated with ambient humidity. The results of these methods are generally consistent with the notion that reduced ambient humidity eventually yields a reduced reliance of languages on vowels, when compared to consonants. The analysis controls simultaneously for linguistic phylogeny and contact between languages. The results dovetail with previous work, based on binned data, suggesting that consonantal phonemes are more common in some ecologies. In addition to being based on continuous data and a larger data sample, however, these findings are tied to experimental research suggesting that dry air affects the behavior of the larynx by yielding increased phonatory effort. The results of this study are also consistent with previous work suggesting an interaction of aridity and tonality. The data presented here suggest that languages may evolve, like the communication systems of other species, in ways that are influenced subtly by ecological factors. It is stressed that more work is required, however, to explore this association and to establish a causal relationship between ambient air characteristics and the development of languages.

KEYWORDS: adaptation; environment; evolution; language; phonetics; psychological

Tennis grunts communicate acoustic cues to sex and contest outcome

Tennis grunts communicate acoustic cues to sex and contest outcome. Jordan Raine, Katarzyna Pisanski & David Reby. Animal Behaviour, Volume 130, August 2017, Pages 47-55, https://doi.org/10.1016/j.anbehav.2017.06.022

Abstract: Despite their ubiquity in human behaviour, the communicative functions of nonverbal vocalizations remain poorly understood. Here, we analysed the acoustic structure of tennis grunts, nonverbal vocalizations produced in a competitive context. We predicted that tennis grunts convey information about the vocalizer and context, similar to nonhuman vocal displays. Specifically, we tested whether the fundamental frequency (F0) of tennis grunts conveys static cues to a player's sex, height, weight, and age, and covaries dynamically with tennis shot type (a proxy of body posture) and the progress and outcome of male and female professional tennis contests. We also performed playback experiments (using natural and resynthesized stimuli) to assess the perceptual relevance of tennis grunts. The F0 of tennis grunts predicted player sex, but not age or body size. Serve grunts had higher F0 than forehand and backhand grunts, grunts produced later in contests had higher F0 than those produced earlier, and grunts produced during contests that players won had a lower F0 than those produced during lost contests. This difference in F0 between losses and wins emerged early in matches, and did not change in magnitude as the match progressed, suggesting a possible role of physiological and/or psychological factors manifesting early or even before matches. Playbacks revealed that listeners use grunt F0 to infer sex and contest outcome. These findings indicate that tennis grunts communicate information about both the vocalizer and contest, consistent with nonhuman mammal vocalizations.

The Perverse Effects of Subsidized Weather Insurance

Omri Ben-Shahar & Kyle D. Logue, "The Perverse Effects of Subsidized Weather Insurance," 68 Stanford Law Review 571 (2016).

Abstract. This Article explores the role of insurance as a substitute for direct regulation of risks posed by severe weather. In pricing the risk of human activity along the predicted path of storms, insurance can provide incentives for efficient location decisions as well as for cost-justified mitigation efforts in building construction and infrastructure. Currently, however, much insurance for severe-weather risks is provided and heavily subsidized by the government. This Article demonstrates two primary distortions arising from the government's dominance in these insurance markets. First, existing government subsidies are allocated differentially across households, resulting in a significant regressive redistribution favoring affluent homeowners in coastal communities. This Article provides some empirical measures of this effect. Second, existing government subsidies induce excessive development (and redevelopment) of storm-stricken and erosion-prone areas. While political efforts to scale back the insurance subsidies have so far failed, this Article contributes to a reevaluation of the social regulation of weather risk by exposing the unintended costs of government-subsidized insurance.

Correcting for Bias in Psychology: A Comparison of Meta-analytic Methods

Carter, Evan C, Felix D Schönbrodt, Will M Gervais, and Joseph Hilgard. 2017. “Correcting for Bias in Psychology: A Comparison of Meta-analytic Methods”. PsyArXiv. September 1. https://psyarxiv.com/9h3nu

Abstract: Publication bias and questionable research practices in primary research can lead to badly overestimated effects in meta-analysis. Methodologists have proposed a variety of statistical approaches to correcting for such overestimation. However, much of this work has not been tailored specifically to psychology, so it is not clear which methods work best for data typically seen in our field. Here, we present a comprehensive simulation study to examine how some of the most promising meta-analytic methods perform on data typical of psychological research. We tried to mimic realistic scenarios by simulating several levels of questionable research practices, publication bias, and heterogeneity, using study sample sizes empirically derived from the literature. Our results indicate that one method – the three-parameter selection model (Iyengar & Greenhouse, 1988; McShane, Böckenholt, & Hansen, 2016) – generally performs better than trim-and-fill, p-curve, p-uniform, PET, PEESE, or PET-PEESE, and that some of these other methods should typically not be used at all. However, it is unknown whether the success of the three-parameter selection model is due to the match between its assumptions and our modeling strategy, so future work is needed to further test its robustness. Despite this, we generally recommend that meta-analysts of data in psychology use the three-parameter selection model. Moreover, we strongly recommend that researchers in psychology continue their efforts on improving the primary literature and conducting large-scale, pre-registered replications.

Ovulatory Changes in Sexuality

Arslan, Ruben C, Katharina M Schilling, Tanja M Gerlach, and Lars Penke. 2017. “Ovulatory Changes in Sexuality”. PsyArXiv. September 4. https://psyarxiv.com/jp2ym/

Abstract: Previous research reported ovulatory changes in women’s appearance, mate preferences, extra- and in-pair sexual desire and behaviour, but has been criticised for small sample sizes, inappropriate designs, and undisclosed flexibility in analyses. In the present study, we sought to address these criticisms by preregistering our hypotheses and analysis plan and by collecting a large diary sample. We gathered over 26 thousand usable online self-reports in a diary format from 1043 women, of which 421 were naturally cycling. We inferred the fertile period from menstrual onset reports. We used hormonal contraceptive users as a quasi-control group, as they experience menstruation, but not ovulation. We probed our results for robustness to different approaches (including different fertility estimates, different exclusion criteria, adjusting for potential confounds, moderation by methodological factors). We found robust evidence supporting previously reported ovulatory increases in extra-pair desire and behaviour, in-pair desire, and self-perceived desirability, as well as no unexpected associations. Yet, we did not find predicted effects on partner mate retention behaviour, clothing choices, or narcissism. Contrary to some of the earlier literature, partners’ sexual attractiveness did not moderate the cycle shifts. Taken together, the replicability of the existing literature on ovulatory changes was mixed. We conclude with simulation-based recommendations for reading the past literature and for designing future large-scale preregistered within-subject studies to understand ovulatory cycle changes and the effects of hormonal contraception. Interindividual differences in the size of ovulatory changes emerge as an important area for further study.