Progress Daily

Once someone owns something, he places a higher value on it than he did when he acquired it. “The endowment effect” has been seen in hundreds of experiments, the most famous of which found that students were surprisingly reluctant to trade a coffee mug they had been given for a bar of chocolate, even though they did not prefer coffee mugs to chocolate when given a straight choice between the two.

The effect is not universally observed. Whereas coffee mugs generate an endowment effect, tokens that can be exchanged for coffee mugs do not.

Owen Jones and Sarah Brosnan suspect that, in the evolutionary past, giving things up, even when an apparently fair exchange seemed to be on offer, was just too risky. To test their theory, they have been training chimpanzees to trade (see “Law, Biology, and Property” — pdf file here).

When presented with a choice between peanut butter and frozen juice bars, 60% of the chimps preferred peanut butter to juice. However, when they were endowed with peanut butter, 80% of them chose to keep it instead of exchanging it for juice. And an opposite endowment effect was observed when the chimps were given juice.

Before they started work Jones & Brosnan predicted that the strength of the effect would vary with the evolutionary salience of the item in question. As predicted, when they tried the same experiments using bone and rope toys, no endowment effect was seen. Food is vital. Toys are not.

“The endowment effect,” The Economist

About one in 20 children have a group of symptoms that has come to be known as attention-deficit hyperactivity disorder (ADHD). About 60% of them carry those symptoms into adulthood. ADHD is believed to be genetic, and is associated with particular variants of receptor molecules for neurotransmitters (chemicals that carry messages between nerve cells) in the brain. In the case of ADHD, the neurotransmitter is often dopamine, which controls feelings of reward and pleasure. People with ADHD apparently receive positive neurological feedback for “inappropriate” behaviour.

ADHD sufferers are impulsive. They have trouble concentrating on any task unless they receive constant feedback, stimulation and reward. They tend to perform poorly in modern society and are prone to addictive and compulsive behaviour.

Dan Eisenberg speculated that such behavior may be advantageous for people who lead a peripatetic life. Since today’s sedentary city dwellers are recently descended from such people, natural selection may not have had time to purge the genes that cause it.

Eisenberg tested this by studying the Ariaal, a group of pastoral nomads who live in Kenya. The receptor Mr Eisenberg looked at was the 7R variant of a protein called DRD4, a variant is associated with novelty-seeking, food- and drug-cravings, and ADHD. (See “Dopamine receptor genetic polymorphisms and body composition in undernourished pastoralists.”)

The researchers looked for 7R in two groups of Ariaal. One was still pastoral and nomadic. The other had recently settled down. They found that about a fifth of the population of both groups had the 7R version of DRD4. However, the consequences of this were very different. Among the nomads, who wander around northern Kenya herding cattle, camels, sheep and goats, those with 7R were better nourished than those without. Among their settled relations, those with 7R were worse nourished than those without it.

This discovery fits past findings that 7R and a set of similar variants of DRD4 (the “long alleles”) are more common in migratory populations.

There remains the question of why 7R is found in only a fifth of the Ariaal population. One possibility is that its effects are beneficial only when they are not universal, and some sort of equilibrium between variants emerges.

“The misfits,” The Economist

According to research by Kerwin Kofi Charles, Erik Hurst and Nikolai Roussanov (”Conspicuous Consumption and Race“), conspicuous consumption serves less to establish the owner’s positive status as affluent than to fend off the negative perception that the owner is poor. The richer a society or peer group, the less important visible spending becomes.

An African American family with the same income, family size, and other demographics as a white family will spend about 25% more of its income on jewelry, cars, personal care, and apparel. For the average black family, making about $40,000 a year, that amounts to $1,900 more a year than for a comparable white family. To make up the difference, African Americans spend much less on education, health care, entertainment, and home furnishings. (The same is true of Latinos.)

The researchers hypothesized that visible consumption lets individuals show strangers they aren’t poor. Since strangers tend to lump people together by race, the lower your racial group’s income, the more valuable it is to demonstrate your personal buying power.

To test this idea, the researchers compared the spending patterns of people of the same race in different states — say, blacks in Alabama versus blacks in Massachusetts, or whites in South Carolina versus whites in California. They found that, all else being equal (including one’s own income), an individual spent more of his income on visible goods as his racial group’s income went down. In places where blacks in general have more money, individual black people feel less pressure to prove their wealth.

The same is true for whites. Controlling for differences in housing costs, an increase of $10,000 in the mean income for white households — about like going from South Carolina to California – leads to a 13% decrease in spending on visible goods.

This suggests why emerging economies like Russia and China, despite their low average incomes, are such hot luxury markets today.

Conspicuous consumption, then, is not a universal phenomenon. It’s a development phase that declines as countries, regions, or distinct groups get richer.

In The Middle-Class Millionaire, Russ Alan Prince and Lewis Schiff analyzed the spending habits of the 8.4 million American households whose wealth is self-made and whose net worth, including their home equity, is between $1 million and $10 million. Aside from a penchant for fancy cars, these millionaires devote their luxury dollars mostly to goods and services outsiders can’t see: concierge health care, home renovations, all sorts of personal coaches, and expensive family vacations.

“Inconspicuous Consumption,” by Virginia Postrel

A new study by Luigi Guiso, Paola Sapienza, et al. (”Culture, Gender, and Math“), took data from the 2003 OECD Programme for International Student Assessment (in which some 280K 15-year-olds from 40 countries took the same math and reading tests) and compared the results, by country, with each-other and with various measures of social sexual equality (such as the World Economic Forum’s gender-gap index).

On average, girls’ maths scores were lower than those of boys. The gap was largest in countries (such as Turkey) with the least equality between the sexes, & vanished in countries with the most equality — except for geometry scores, which had no relation to sexual equality. The researchers did some additional statistical checks to ensure the correlation was material, and not generated by another, third variable that is correlated with sexual equality, such as GDP per person.

The gap in reading scores not only remained, but got bigger as the sexes became more equal. Average reading scores were higher for girls than for boys in all countries. But in more equal societies, not only were the girls as good at math as the boys, their advantage in reading had increased.

This may explain why, despite girls’ rise to mathematical equality in some countries, women in those countries have not invaded math-heavy professions, such as engineering. Economic optimization is about comparative advantage. The rise in female reading scores alongside their math scores suggests that female comparative advantage in this area has not changed.

“Vital statistics,” The Economist

Women constitute only about 1/5 of US engineers, 1/3 of chemists, and 1/4 of computer and math professionals.

Joshua Rosenbloom surveyed hundreds of professionals in information technology, a career in which women are significantly underrepresented (”Why are there so few women in Information Technology?”; pdf file here). He also surveyed hundreds in comparable careers more evenly balanced between men and women.

The lower numbers of women in IT careers weren’t explained by work-family pressures, since computer careers made no greater time demands than those in the control group. Ability wasn’t the reason, since the women in both groups had substantial math backgrounds.

Using a standard personality-inventory test, Rosenbloom found that men and women who enjoyed the manipulation of tools or machines were more likely to choose IT careers - and it was mostly men who scored high in this area. Meanwhile, people who enjoyed working with others were less likely to choose IT careers. And, on this, women scored higher, on average.

The researchers calculated that preference accounted for about two-thirds of the gender imbalance in the IT field.

According to Susan Pinker  (in The Sexual Paradox), the countries that offer women the most financial stability and legal protections in job choice, have the greatest gender split in careers. For example, in countries with less economic opportunity, like the Philippines, Thailand, and Russia, the number of women in physics is about 30%, versus 5% in Canada, Japan, and Germany.

“The freedom to say ‘no’,” by Elaine McArdle

If you take Wikipedia as a unit — every page, edit, talk page, & line of code, in every language — that represents something like the cumulation of 100 million hours of human thought (according to Clay Shirkyon & Martin Wattenberg).

Television-watching represents about two hundred billion hours, in the US alone, every year. That’s 2,000 Wikipedia projects a year. Americans spend 100 million hours every weekend just watching the ads.

Imagine that people replace only 1% of the their TV time with the production & sharing of online content. The Internet-connected population watches roughly a trillion hours of TV a year. One per cent of that is 100 Wikipedia projects per year worth of participation.

“Gin, Television, and Social Surplus,” by Clay Shirkyon

 

Using selective breeding, researchers can make rats, bees and flies a lot better at learning. Animals that are better learners should over time come to dominate a population. Yet improved learning ability does not get selected amongst these animals in the wild. Tadeusz Kawecki may have discovered why.

Kawecki gave flies two different fruits as egg laying sites. One of these was laced with a bitter additive that could be detected only on contact. The flies were then given the same fruit but without an additive. Flies that avoided the fruit which had been bitter were deemed to have learned from their experience. Their offspring were reared and the experiment was run again.

After repeating the experiment for 30 generations, the offspring of the learned flies were compared with normal flies. Learning ability was bred into the flies, but it shortened their lives by 15%. And when flies were bread to live abnormally long lives, they learned less well than even average flies.

“Critical thinking,” The Economist

Katherine Kinzler has demonstrated that preverbal infants as young as 5-6 months of age “prefer” their own native speakers. She found that American infants look longer at someone speaking with an American accent than someone with a French accent, and the opposite pattern occurs with French infants. And when two adults simultaneously offer a 10-month-old the same toy, the baby usually reaches for the one being given to them by the native speaker.

In the ancestral past, neighboring communities were often at war with each other, and the most reliable marker of an out-group member wasn’t what they looked like but how they sounded.

“Babies Don’t Like Foreigners,” by Jesse Bering

Richard Sosis analyzed two hundred 19th-century US communes: 88 religious and 112 secular. He found that communes whose ideology was secular were up to four times as likely as religious ones to dissolve in any given year.

In a follow-up study, Sosis focused on 83 of these communes (30 religious, 53 secular) to see if the amount of time they survived correlated with the strictures and expectations they imposed on the behaviour of their members.

He found that the more constraints a religious commune placed on its members, the longer it lasted (one is still going, after 149 years). But the same did not hold true of secular communes, where the oldest was 40.

Ara Norenzayan has conducted experiments using what is known as the “dictator game,” a test used to gauge altruistic behaviour. Participants receive a sum of money — $10,in this case — and are asked if they would like to share it with another player.

Norenzayan and Azim Shariff primed half of their volunteers to think about religion by getting them to unscramble sentences containing religious words such as God, spirit, divine, sacred and prophet. Those thus primed left an average of $4.22, while the unprimed left $1.84.

An experiment by Jesse Bering subjected a bunch of undergraduates to a quiz. His volunteers were told that the best performer among them would receive a $50 prize. They were also told that the computer program that presented the questions had a bug in it, which sometimes caused the answer to appear on the screen before the question. The volunteers were therefore instructed to hit the space bar immediately if the word “Answer” appeared on the screen. That would remove the answer and ensure the test results were fair.

The volunteers were then divided into three groups. Two began by reading a note dedicating the test to a recently deceased graduate student. One did not see the note. Of the two groups shown the note, one was told by the experimenter that the student’s ghost had sometimes been seen in the room. The other group was not given this suggestion.

The so-called glitch occurred five times for each student. Bering measured the amount of time it took to press the space bar on each occasion. He discarded the first result as likely to be unreliable and then averaged the other four. Those who had been told the ghost story pressed the space bar in an average of 4.3 seconds. That compared with 6.3 seconds for those who had only read the note about the student’s death and 7.2 for those who had not heard any of the story concerning the dead student.

“Where angels no longer fear to tread,” The Economist

According to “Marketing actions can modulate neural representations of experienced pleasantness,” by Antonio Rangel, Hilke Plassmann, & Baba Shiv, if people are told a wine is expensive while they are drinking it, they think it tastes nicer than a cheap one.

The researchers used fmri (functional magnetic-resonance imaging) to scan the brains of 20 volunteers while giving them sips of wine.

Dr Rangel gave his volunteers sips of what he said were 5 different wines made from cabernet sauvignon grapes, priced at between $5 and $90 a bottle. He told each of them the price of the wine in question as he did so. But he lied. He actually used only 3 wines, and served two of them twice at different prices.

The scanner showed that the activity of the medial orbitofrontal cortices (an area of the brain responsible for registering pleasant experiences) of the volunteers increased in line with the stated price of the wine. When one of the wines was said to cost $10 a bottle it was rated less than half as good as when people were told it cost $90 a bottle, its true retail price. When the team carried out a follow-up blind tasting without price information they got different results. The volunteers reported differences between the three “real” wines but not between the same wines when served twice.

Nor was the effect confined to everyday drinkers. When Dr Rangel repeated the experiment on members of the Stanford University wine club he got similar results.

This research suggests that a successful marketing campaign can not only make people more interested in a product, but also make them enjoy it more.

“Hitting the spot,” The Economist