Archive for June, 2006

Women’s Progress & Unintended Consequences

Friday, June 16th, 2006

working

Prior to the 19th Century, only in a tiny number of very wealthy homes did servants free wives and mothers from the running of a household. Nursemaids were a supplement to the mother, not a replacement; before aspirin and antibiotics, women could expect to spend much of their time, wracked with anxiety, tending the sick.

From the early 19th century, paid employment outside the home became increasingly possible for educated women. Outside the middle classes, full-time work until marriage was the norm; and poor married women and widows supplemented family income out of necessity.

Today, about 13% of British women of working age can be classified as professionals, managers or employers, and nearly 70% of them are in full-time work. For non-professional women in this age group, the figure is just 35%.

In the recent past, a woman’s earnings over a lifetime were a fraction of her husband’s. This has ceased to be true for the educated but childless in the generation that is now middle-aged.

A female graduate born in 1970 who has two children can expect lifetime earnings that are 88% of her husband’s, whereas for those with middle-level qualifications the figure falls to 57%, and for those with no formal qualifications at all to only 34%. This gap mostly reflects part-time work and career breaks.

A majority of British law students and almost two-thirds of medical students are now female and, based on current trends, the majority of doctors will be women by 2012.

By the 17th and 18th centuries, upper- and middle-class women were educated, cultured and well-read, but they had no career open to them other than marriage.

In the 19th century, a network of schools for all classes developed. In 1851, the British census counted 42,000 schoolmistresses, plus 21,000 governesses, but not a single female physician or surgeon.

By the 1891 census, the “professional occupations” group contained a remarkable 313,000 women compared to 342,000 men. Among the women, 217,000 were teachers and 53,000 were nurses.

In the early 1990s, American girls scoring in the top academic decile were less than one-fifth as likely to become teachers as their 1964 counterparts had been.

About 30% of British graduate women born in the early 1960s entered their forties childless. For graduate women born in 1970 (a substantially larger group), the expected figure is 40%.

Among British women born in the late 1970s, almost half of those with no academic qualifications at all had their first child by the age of 20, compared to 1% of those with degrees. Only 20% of the first group, compared to 85% of the latter, were still childless by their late twenties.

There is plenty of evidence that the children of teenage and uneducated mothers are likely to be relatively unproductive future citizens, less skilled, and more likely to experience unemployment.

The average proportion of women bearing children, and the average number of children per mother, is pretty much the same for those born in 1910 and those born in 1970. What is different this time is that there is a very strong inverse relationship between education and childbearing.

Working girls, broken society,” by Alison Wolf

Angry Men

Thursday, June 15th, 2006

long tail

A study by two researchers at the University of Melbourne, in Australia, confirms that men are less sensitive to emotion than women, with one exception: men are acutely sensitive to the anger of other men.

People from all cultures agree on what six basic expressions of emotion look like. Whether the face before you is expressing anger, disgust, fear, joy, sadness or surprise seems to be recognised universally — which suggests that the expressions involved are innate, rather than learned.

Mark Williams and Jason Mattingley showed the participants in their study photographs of these emotional expressions in mixed sets of either four or eight. They asked the participants to look for a particular sort of expression, and measured the amount of time it took them to find it. The researchers found, in agreement with previous studies, that both men and women identified angry expressions most quickly. But they also found that anger was more quickly identified on a male face than a female one.

Most participants could find an angry face just as quickly when it was mixed in a group of eight photographs as when it was part of a group of four. That was in stark contrast to the other five sorts of expression, which took more time to find when they had to be sorted from a larger group. Men picked out the angry expressions faster than women did, even though women were usually quicker than men to recognise every other sort of facial expression.

Since anger is more likely to turn into lethal violence in men than in women, the ability to spot angry males quickly is particularly valuable.

As to why men are more sensitive to anger than women, it is presumably because they are far more likely to get killed by it. Most murders involve men killing other men — even today the context of homicide is usually a spontaneous dispute over status or sex.

This study also confirms a lesson learned by generations of bar-room tough guys and schoolyard bullies: if you want attention, get angry.

Anger management,” The Economist

The Long Tail

Wednesday, June 14th, 2006

long tail 

There is a new economic model for the media and entertainment industries. Unlimited selection is revealing truths about what consumers want and how they want to get it in service after service, from DVDs at Netflix to music videos on Yahoo! Launch to songs in the iTunes Music Store and Rhapsody. People are going deep into the catalog, down the long list of available titles, far past what’s available at Blockbuster Video, Tower Records, and Barnes & Noble.

For too long we’ve been suffering the tyranny of lowest-common-denominator fare, subjected to brain-dead summer blockbusters and manufactured pop. Why? Economics. Many of our assumptions about popular taste are actually artifacts of poor supply-and-demand matching — a market response to inefficient distribution.

The main problem, if that’s the word, is that we live in the physical world and, until recently, most of our entertainment media did, too. But that world puts two dramatic limitations on our entertainment.

The first is the need to find local audiences. An average movie theater will not show a film unless it can attract at least 1,500 people over a two-week run; that’s essentially the rent for a screen. An average record store needs to sell at least two copies of a CD per year to make it worth carrying; that’s the rent for a half inch of shelf space.

The other constraint of the physical world is physics itself. The radio spectrum can carry only so many stations, and a coaxial cable so many TV channels. And there are only 24 hours a day of programming.

Now, with online distribution and retail, we are entering a world of abundance.

Robbie Vann-Adib, the CEO of Ecast, a digital jukebox company whose barroom players offer more than 150,000 tracks — asks visitors a question that they invariably get wrong: “What percentage of the top 10,000 titles in any online media store (Netflix, iTunes, Amazon, or any other) will rent or sell at least once a month?”

Most people guess 20 percent. Only 20 percent of major studio films will be hits. Same for TV shows, games, and mass-market books. The odds are even worse for major label CDs, where fewer than 10% are profitable. But the right answer, says Vann-Adib, is 99 percent.

With no shelf space to pay for and, in the case of purely digital services like iTunes, no manufacturing costs and hardly any distribution fees, a miss sold is just another sale, with the same margins as a hit.

To get a sense of our true taste, unfiltered by the economics of scarcity, look at Rhapsody, a subscription-based streaming music service that currently offers more than 735,000 tracks.

Chart Rhapsody’s monthly statistics and you get a “power law” demand curve that looks much like any record store’s, with huge appeal for the top tracks, tailing off quickly for less popular ones. But an interesting thing happens once you dig below the top 40,000 tracks, which is about the amount of the fluid inventory (the albums carried that will eventually be sold) of the average real-world record store. Here, the Wal-Marts of the world go to zero.

The Rhapsody demand, however, keeps going. Not only is every one of Rhapsody’s top 100,000 tracks streamed at least once each month, the same is true for its top 200,000, top 300,000, and top 400,000.

This is the Long Tail.

The average Barnes & Noble carries 130,000 titles. Yet more than half of Amazon’s book sales come from outside its top 130,000 titles.

Google makes most of its money off small advertisers (the long tail of advertising), and eBay is mostly tail as well — niche and one-off products.

We’re seeing a blurring of the line between in and out of print. Amazon and other networks of used booksellers have made it almost as easy to find and buy a second-hand book as it is a new one. Combine that with the rapidly dropping costs of print-on-demand technologies and it’s clear why any book should always be available.

The Long Tail,” by Chris Anderson

Addicted to Love

Tuesday, June 13th, 2006

 

addicted

When prairie voles have sex, two hormones called oxytocin and vasopressin are released. If the release of these hormones is blocked, prairie-voles’ sex becomes a fleeting affair, like that normally enjoyed by their rakish montane cousins. Conversely, if prairie voles are given an injection of the hormones, but prevented from having sex, they will still form a preference for their chosen partner. When this magic juice is given to the montane vole it makes no difference. It turns out that the faithful prairie vole has receptors for oxytocin and vasopressin in brain regions associated with reward and reinforcement, whereas the montane vole does not.

As Larry Young explains, the brain has a reward system designed to make voles (and people and other animals) do what they ought to. Without it, they might forget to eat, drink and have sex — with disastrous results. That animals continue to do these things is because they make them feel good. And they feel good because of the release of a chemical called dopamine into the brain. When a female prairie vole mates, there is a 50% increase in the level of dopamine in the reward center of her brain.

Similarly, when a male rat has sex it feels good to him because of the dopamine. But, in contrast to the prairie vole, at no time do rats learn to associate sex with a particular female.

This is where the vasopressin and oxytocin come in. They are involved in parts of the brain that help to pick out the salient features used to identify individuals. If the gene for vasopressin or oxytocin is knocked out of a mouse before birth, that mouse will become a social amnesiac and have no memory of the other mice it meets.

Dr Young argues that prairie voles become addicted to each other through a process of sexual imprinting mediated by odour, and that the reward mechanism involved in this addiction has probably evolved in a similar way in other monogamous animals, humans included.

Sex stimulates the release of vasopressin and oxytocin in people, as well as voles, though the role of these hormones in the human brain is not yet well understood. Among those of Man’s fellow primates that have been studied, monogamous marmosets have higher levels of vasopressin bound in the reward centres of their brains than do non-monogamous rhesus macaques.

In 2000, Andreas Bartels and Semir Zeki located the areas of the brain activated by romantic love. They took students who said they were madly in love, put them into a brain scanner, and looked at their patterns of brain activity.

A relatively small area of the human brain is active in love, compared with that involved in, say, ordinary friendship. The brain areas active in love are different from the areas activated in other emotional states, such as fear and anger. Parts of the brain that are love-bitten include the one responsible for gut feelings, and the ones which generate the euphoria induced by drugs such as cocaine. So the brains of people deeply in love do not look like those of people experiencing strong emotions, but instead like those of people snorting coke. “We are literally addicted to love,” Dr Young observes.

The more receptors for vasopressin and oxytocin located in regions associated with reward, the more rewarding social interactions become.

Steven Phelps found great diversity in the distribution of vasopressin receptors between individual prairie voles and individual humans. He suggests that this variation contributes to individual differences in social behaviour — in other words, some will be more faithful than others.

Scientists can increase the expression of the relevant receptors in prairie voles, and thus strengthen the animals’ ability to attach to partners. In 1999, Dr Young took the prairie-vole receptor gene and inserted it into an ordinary (and therefore promiscuous) mouse. The transgenic mouse thus created was much more sociable to its mate.

Jim Pfaus says the aftermath of lustful sex is similar to the state induced by taking opiates. A heady mix of chemical changes occurs, including increases in the levels of serotonin, oxytocin, vasopressin and endogenous opioids (the body’s natural equivalent of heroin).

Researchers think humans develop a “love map” as they grow up — a blueprint that contains the many things that they have learnt are attractive. Research on the choices of partner made by identical twins suggests that the development of love maps takes time, and has a strong random component.

Dr Pfaus says that rats can be conditioned to prefer particular types of partner — for example by pairing sexual reward with some kind of cue, such as lemon-scented members of the opposite sex. Human fetishes develop early, and are almost impossible to change. The fetishist connects objects such as feet, shoes, stuffed toys and even balloons, that have a visual association with childhood sexual experiences, to sexual gratification.

Helen Fisher thinks that administering serotonin can help someone get over a bad love affair faster. She also suggests it is possible to trick the brain into feeling romantic love in a long-term relationship by doing novel things with your partner. Any arousing activity drives up the level of dopamine and can therefore trigger feelings of romance as a side effect. This is why holidays can rekindle passion.

I get a kick out of you,” The Economist

Economic Freedom

Monday, June 12th, 2006

The Indexes of Economic Freedom are several similar indexes released annually. One is published by The Wall Street Journal and the conservative think-tank Heritage Foundation. A different index is published by the Fraser Institute, and another by the World Economic Forum, their ”Global Competitiveness Report.”

Many peer-reviewed articles have used these indices and all agree that economic freedom is statistically correlated with a higher GDP/Capita, but correlation does not prove causation. ”The Benefits of Economic Freedom: A Survey,” by Niclas Berggren (pdf file here) provides an overview of the research. Most of the studies analyzed by Berggren suggest that economic freedom encourages economic growth.

index

More economic freedom correlates strongly with higher average income per person, higher income of the poorest 10%, higher life-expectancy, higher literacy, lower infant mortality, higher access to water sources and less corruption. (See “Economic Freedom of the World: 2004 Annual Report” – pdf file here.)

Despite the Heritage Foundation and Wall Street Journal’s laissez-faire economic and fiscal policy ideas, some of their index’s highest-ranking countries, for example Iceland (#5), Denmark (#8), Finland (#12) and Sweden (#19), have some of the world’s most extensive welfare states.

Index of Economic Freedom, Wikipedia

Optimism

Sunday, June 11th, 2006

Nine years ago a study group — 999 men and women aged 65 to 85 — completed a questionnaire on health, self-respect, morale, optimism and relationships. Since then, 397 of them have died.

Optimistic participants had a 55 percent lower risk of death from all causes and 23 percent lower risk of death from heart failure.

The work was led by Erik Giltay of the Psychiatric Center GGZ Delfland.

Optimism protected men and women equally against heart-related death among the study members. Heart disease is the number one killer of American women: One in three dies from it.

Study: Optimists Live Longer,” by Robert Roy Britt, Live Science, Health SciTech

Relative Wealth

Friday, June 9th, 2006

Between 1964 and 1973, as Johnson’s Great Society programs went into effect, the poverty rate fell from nineteen per cent of the population to 11.1 per cent. But, while the nation’s inflation-adjusted gross domestic product has virtually tripled since 1973, the poverty rate has hardly budged. In 2004, the most recent year for which figures are available, it stood at 12.7 per cent, a slight increase over the previous year, and in some regions the figure is much higher.

The persistence of endemic poverty raises questions about how poverty is measured. The poverty thresholds are based on pre-tax income, which means that they don’t take into account tax payments and income from anti-poverty programs, such as food stamps, housing subsidies, the Earned Income Tax Credit, and Medicaid, which cost taxpayers hundreds of billions of dollars a year.

The poverty figures fail to distinguish between temporary spells of hardship, like those caused by a job loss or a divorce, and long-term deprivation. Surveys show that as many as forty per cent of people who qualify as poor in any given year no longer do so the following year.

In 2001, ninety-one per cent of poor families owned color televisions; seventy-four per cent owned microwave ovens; fifty-five per cent owned VCRs; and forty-seven per cent owned dishwashers.

During the Second World War, Samuel A. Stouffer, a sociologist at the University of Chicago, and a team of researchers compared the levels of job satisfaction reported by members of the military police, a profession in which few people were promoted, and members of the Army Air Force, where there were frequent opportunities for advancement. To the researchers’ surprise, the policemen reported greater happiness in their jobs than the airmen. One possible explanation, the researchers speculated, is that the policemen tended to compare themselves with colleagues who hadn’t been promoted, whereas the “reference group” for the airmen was colleagues who had been promoted.

More recently, three economists at the University of Warwick published the results of a survey of sixteen thousand workers in a range of industries, in which they found that the workers’ reported levels of job satisfaction had less to do with their salaries than with how their salaries compared with those of co-workers.

Erzo Luttmer, recently found that people with rich neighbors tend to be less happy than people whose neighbors earn about as much money as they do.

In a famous study conducted between 1967 and 1977, a team of epidemiologists led by Sir Michael Marmot, monitored the health of more than seventeen thousand members of Britain’s Civil Service, a highly stratified bureaucracy. Marmot and his colleagues found that people who had been promoted to the top ranks — those who worked directly for cabinet ministers — lived longer than their colleagues in lower-ranking jobs. Mid-level civil servants were more likely than their bosses to develop a range of potentially deadly conditions, including heart disease, high blood pressure, lung cancer, and gastrointestinal ailments.

Amartya Sen has pointed out that African-Americans as a group have a smaller chance of reaching old age than Indians born in the impoverished state of Kerala, who are much poorer.

Subordination leads to stress, which damages the body’s immune system. In the animal kingdom there are bitter fights over relative status. The neurobiologist Robert Sapolsky has described how dominant baboons in troops on the African plains verbally and physically abuse their subordinates. When Sapolsky analyzed blood samples from low-ranking baboons, he found high levels of a hormone associated with stress. Other scientists have shown that dominant rhesus monkeys have lower rates of atherosclerosis (hardening of the arteries) than monkeys further down the social hierarchy, and when dominant female monkeys are relegated to a subordinate status their rate of heart disease goes up.

More than half of black men in inner cities fail to finish high school and, nationwide, almost three-quarters of black male high-school dropouts in their twenties are unemployed. “It doesn’t do a poor person any good to say ‘You are better off than you would have been thirty years ago,’” Victor Fuchs said. “The pathologies we associate with poverty — crime, drug use, family disintegration — we haven’t eliminated them at all.”

Between 1979 and 2000, the inflation-adjusted earnings of the poorest fifth of Americans increased just nine per cent; the earnings of the middle fifth rose fifteen per cent; and the earnings of the top fifth climbed sixty-eight per cent.

A recent long-term study of Head Start, which began in 1964, found that poor children who participated in the program were more likely to finish high school and less likely to be arrested for committing crimes than those who did not. And in another initiative, undertaken between 1976 and 1998, the city of Chicago relocated thousands of impoverished African-Americans from inner-city projects to subsidized housing in middle-class, predominantly white suburbs; researchers found that the adults who participated were more likely to be employed, and their children were more likely to graduate from high school, than their inner-city counterparts. A more recent experiment, in which the federal government gave vouchers to poor residents in a number of cities, enabling them to move to wealthier neighborhoods, has failed to produce similar gains. Many of the participants chose to live near one another, which researchers think may account for the disappointing results.

Relatively Deprived,” by John Cassidy

Man’s Health’s Best Friend

Thursday, June 8th, 2006

 

Numerous studies have shown that dogs — one of the earliest domesticated animals — can help lower blood pressure, ease the loneliness of the elderly in nursing homes, and help children overcome allergies.

Now there’s research suggesting the hormonal changes that occur when humans and dogs interact could help people cope with depression and certain stress-related disorders. Preliminary results from a study show that a few minutes of stroking our pet dog prompts a release of a number of “feel good” hormones in humans, including serotonin, prolactin and oxytocin.

In addition, petting our pooches results in decreased levels of the primary stress hormone cortisol, the adrenal chemical responsible for regulating appetite and cravings for carbohydrates.

“The notion that serotonin increased with their own dog is a very powerful thing. Could a dog help mediate serotonin levels in order to help depressed patients?” asks Dr. Rebecca Johnson, a nursing professor and associate director at the Center for Animal Wellness, Missouri University College of Veterinary Medicine.

Johnson’s study expanded on research conducted in 1999 by South African scientists who found that 15 minutes of quietly stroking a dog caused hormonal changes that were beneficial to both the dog and the human.

But the South African study was small, involving only 18 people and a few friendly dogs, and didn’t test for serotonin, the brain chemical strongly linked with depression. Increased levels of the neurotransmitter serotonin make us more mentally alert, improve sleep and can make us less sensitive to pain.

In the larger Missouri study, 50 dog owners and 50 non-dog owners over the age of 18 sat in a quiet room for 15 to 39 minutes with their own dog, a friendly but strange dog, and a robotic dog. The robotic dog was included because electronic pooches, such as Sony’s AIBO, are being studied as a possible resource for the elderly who can’t look after a live animal.

Each session involved calm stroking or petting. Researchers checked blood samples of both the humans and dogs at the beginning of each session and monitored their blood pressure every five minutes. The dogs’ blood pressure dropped as soon as they were petted. The humans’ blood pressure dropped by approximately 10 percent about 15 to 30 minutes after they began petting the animal, at which point blood was again drawn.

Johnson’s study found that serotonin levels increased when interacting with the human’s own dog, but not with the unfamiliar animal. And serotonin actually decreased when interacting with the robotic dog.

Dr. Alan Beck, director of the Center for the Human-Animal Bond at Purdue University, says the serotonin changes reveal the “mechanism” of how pets influence our health. “It shows that there is a physiological mechanism [to relaxing with a pet], that it really is comparable to other things we know cause relaxation, like eating chocolate.”

In other words, the warm feeling we get from our dogs and other pets isn’t just a learned behavior, Beck says, but something that’s hard-wired into humans.

It’s a theory that’s been gaining notable scientific support for some time:

In 1995, Erika Friedman at the University of Maryland Hospital conducted a study involving 392 people, which found that heart attack patients with dogs were eight times more likely to be alive a year later than people without dogs.

In 1999, Swedish researchers reported that children exposed to pets during the first year of life had fewer allergies and less asthma.

Recently, separate studies reported that walking a dog contributed to a person’s weight loss and that dog walking can be a catalyst for social interaction with other people, a benefit that can help improve our sense of well-being — or even help us meet a future spouse.

Puppy love — it’s better than you think,” by Jane Weaver

Entrepreneurship & Innovation

Wednesday, June 7th, 2006

Translated literally, entrepreneur means one who undertakes.

William Baumol, who holds positions at both Princeton and NYU, has been labouring for years to create more space for entrepreneurship and innovation in economic theory.

Most innovations are merely incremental improvements on something that already exists. A rare few represent discontinuous breakthroughs, such as the incandescent lamp, alternating electric current or the jet engine. All of the above were introduced not by the regimented R&D of established corporations, but by scrappy new firms, twin-born with the invention itself. Mr Baumol ventures that most breakthroughs arise this way — the offspring of independent minds not incumbent companies. He has two explanations for this. First, radical innovation is the only kind lone entrepreneurs can do; and, second, they are the only ones who want to do it.

The first explanation seems paradoxical. Breakthroughs are, by definition, more difficult than routine innovations. Surely, they should be beyond the meagre means of the independent entrepreneur? But as Mr Baumol points out, building the Kitty Hawk was much cheaper, and less complicated, than upgrading the Boeing 737 to the 747. Genuinely new ideas are often breathtakingly simple. They grow more elaborate as improvements and modifications are laid on top of them.

The second explanation is more intuitive. Revolution is a risky endeavour. Of 1,091 Canadian inventions surveyed in 2003 by Thomas Astebro (”The Return to Independent Invention“), of the University of Toronto, only 75 reached the market. Six of these earned returns above 1,400%, but 45 lost money. A rational manager will balk at such odds.

Searching for the invisible man,” The Economist

Libertarian Paternalism

Tuesday, June 6th, 2006

Behavioral economics blends psychology, economics and, increasingly, neuroscience to argue that emotion plays a huge role in how people make economic decisions.

Eldar Shafir’s behavioral economics primer is full of anomalies, including the popular “6 jam-vs.-24 jam” experiment. In an upscale grocery story, researchers set up a tasting booth first with 6 jars of jams, and later with 24 jars. In the first case, 40 percent of the customers stopped to taste and 30 percent bought; in the second, 60 percent tasted but only 3 percent bought. Too many options can flummox a consumer — and if 24 jars of jam pose a problem, imagine what 8,000 mutual funds can do. Standard economics would argue that people are better off with more options.

Save More Tomorrow (SMarT) is a savings plan designed by Richard H. Thaler (co-author of “Libertarian Paternalism Is Not An Oxymoron“), whereby employees pledge a share of their future salary increases to a retirement account. The plan has proved remarkably successful.

The SMarT plan takes advantage of behavioral economics’ basic tenets: “loss aversion” (people fear loss because it causes them far more pain than the pleasure they receive from gain; but since the SMarT plan covers a future raise, they never feel its loss); “status-quo bias” (since people are reluctant to change, the change can be made for them); and “mental accounting” (people have a pressing need to direct different streams of money into different “accounts”).

“There are two enormous travesties in the financial services industry,” says David I. Laibson, “One, people have too much of their own company’s stock, and two, mutual-fund management fees are too high.” His solution to the first problem: an automatic asset reallocation to keep an employee from holding more than 20 percent of his portfolio in company stock.

“People could opt out,” he said. “If you’re crazy enough to do that, fine, that’s your right, but we’d certainly push them down.” His solution to the second problem: warning labels about management fees, modeled after the surgeon general’s cigarette warning.

Behaviorists at the Gate,” by Stephen J. Dubner