Variation in risk seeking behavior in a natural experiment following a large negative wealth shock induced by a natural disaster

An ongoing challenge in behavioral economics is to understand the variations observed in risk attitudes as a function of their environmental context. Of particular interest is the effect of wealth on risk attitudes. The research in this area has however faced two constraints: the difficulty to study the causal effects of large changes in wealth, and the causal effects of losses on risk behavior. The present paper address this double limitation by providing evidence of the variation of risk attitude after large losses using a natural disaster (Brisbane floods) as the setting for a natural experiment.

A distributional analysis of the native-immigrant wage gap : the importance of employment discrimination

It is well documented that immigrants earn less than natives in the United States, and various attempts have been made to determine whether these earnings differentials reflect underlying differences in skill or ethnic discrimination in the labor market. The earnings of immigrants and ethnic minorities is an extensively studied area focusing on the economic integration of immigrants (e.g., Chiswick (1978), Lalonde and Topel (1993), Borjas (1995)). Yet, the role of occupational segregation as a mechanism for discrimination is yet to be addressed (to our knowledge). Discrimination can be effective at either of two stages in the earnings process – in the assignment of earnings to people within occupational groups (henceforth referred to as wage discrimination) or in the allocation of people to occupations (henceforth referred to as employment discrimination). While it would be premature to attribute the underlying cause to discriminatory hiring policies of employers, it would be of social-political and economic interest to investigate the possibility.

The effect of alcohol and drug consumption on academic performance : a treatment effect evaluation

It is often argued that consumption of alcohol, tobacco and drugs is detrimental to the cognitive abilities of teenagers. In order to disentangle a possible causal effect of these substances use from a self-selection bias, we control for pupils previous performance and for their previous rate of progression applying a DiDiD strategy. Using the NELS 1988 panel dataset, we find that the effects of alcohol and tobacco on test scores disappear once the selection bias is controlled for (this does not preclude long term detrimental effects). However, we find reliable evidence that heavy use of drugs (marijuana and cocaine) has direct detrimental effects on educational achievements. Hence, our results may have significant policy implications.

Economic growth and inequality patterns in the presence of costly technology adoption and uncertainty

We develop a stochastic endogenous growth model to explain the diversity in growth and inequality patterns and the non-convergence of incomes in transitional economies where an underdeveloped financial sector imposes an implicit, fixed cost on the diversification of idiosyncratic risk. In the model endogenous growth occurs through physical and human capital deepening, with the latter being the more dominant element. We interpret the fixed cost as a ‘learning by doing’ cost for entrepreneurs who undertake risk in the absence of well developed financial markets and institutions that help diversify such risk. As such, this cost may be interpreted as the implicit returns foregone due to the lack of diversification opportunities that would otherwise have been available, had such institutions been present. The analytical and numerical results of the model suggest three growth outcomes depending on the productivity differences between the projects and the fixed cost associated with the more productive project. We label these outcomes as poverty trap, dual economy and balanced growth. Further analysis of these three outcomes highlights the existence of a diversity within diversity. Specifically, within the ‘poverty trap��� and ‘dual economy’ scenarios growth and inequality patterns differ, depending on the initial conditions. This additional diversity allows the model to capture a richer range of outcomes that are consistent with the empirical experience of several transitional economies.

Politicians as experts, electoral control, and fiscal restraints

We establish an argument for fiscal restraints which is based on the idea that politicians are experts in the meaning of the credence good literature. A budget maximizing politician is better informed than the electorate about the necessary spending to ensure the states ability to provide services for the economy. Voters, being able to observe the budget but not the necessary level of spending, attenuate the government’s spending level via electoral control. A fiscal restraint limits the maximum spending a government will choose if the level of spending ensuring the politicians reelection is not sufficient to ensure the state’s ability to provide services to the economy. We determine when such a fiscal restraint improves voter welfare and discuss the role of the opposition in situations where very high levels of spending are required.

Heart beats and economic decisions : Observing mental stress in the ultimatum bargaining game

One aim of experimental economics is to try to better understand human economic decision making. Early research of the ultimatum bargaining game (Gueth et al., 1982) revealed that other motives than pure monetary reward play a role. Neuroeconomic research has introduced the recording of physiological observations as signals of emotional responses. In this study, we apply heart rate variability (HRV) measuring technology to explore the behaviour and physiological reactions of proposers and responders in the ultimatum bargaining game. Since this technology is small and non-intrusive, we are able to run the experiment in a standard experimental economic setup. We show that low o�ers by a proposer cause signs of mental stress in both the proposer and the responder, as both exhibit high ratios of low to high frequency activity in the HRV spectrum.

Political selection and the relative age effect

In this paper we present substantial evidence for the existence of a bias in the distribution of births of leading US politicians in favor of those that have been the oldest in their cohort at school. This “relative age effect” has been proven to influence performance at school and in sports,but evidence on its impact on people’s vocational success has been rare. We find a marked break in the density of birthdate of politicians using a maximum likelihood test and McCrary’s (2008) nonparametric test. We conjecture that being relatively old in a peer group may create long term advantages which can create a significant role in the ability to succeed in a highly competitive environment like the race for top political offices in the USA. The magnitude of the effect we estimate is larger than what most other studies on the relative age effect for a broader (adult) population find, but is in general in line with studies that look at populations in high-competition environments.

The determinants of hiring older workers in Britain revisited: an analysis using WERS 2004

This article reexamines the role of specific human capital and back loading of compensation as deterrents to hiring older workers. We utilize the framework initially suggested by Hutchens (1986) and more recently implemented by Daniel and Heywood (2007). This approach identifies the extent to which firms hire older workers at a rate less than full replacement would imply. Using the 2004 British Workplace Employment Relations Survey, we examine whether a more favourable climate including a much tighter UK labour market combined with the abandonment of defined benefit pension schemes has increased the tendency to hire older workers. We also examine the impact of private health insurance.

Changing lanes

The purpose of Changing Lanes was to question the identity of Brisbane laneways through the collaboration of local stakeholders by promoting design. Community partners provided design briefs for student work from Architecture and Interior Design to be included in a design competition. Shortlisted student projects were featured in the Changing Lanes event during which the winners were announced. In addition to student work from Architecture and Interior Design, the five other disciplines from QUT's School of Design also exhibited samples of student work. The engagement of local stakeholders; architectural practice, interior designers, engineers, and a media and publication agency was fundamental to the success of this event. The design work on display provided creative expression for the potential of Brisbane Laneways to bring communities together through the language of design. An underutilised area of Fortitude Valley was activated through a combination of media including drawings, videos, street furniture, and music.

Does legal heritage affect obesity? The channel of motor vehicle dependence

We find a robust relationship between motor vehicle ownership, its interaction with legal heritage and obesity in OECD countries. Our estimates indicate that an increase of 100 motor vehicles per thousand residents is associated with about a 6% point increase in obesity in common law countries, whereas it has a much smaller or insignificant impact in civil law countries. These relations hold whether we examine trend data and simple correlations, or conduct cross-section or panel data regression analysis. Our results suggest that obesity rises with motor vehicle ownership in countries following a common law tradition where individual liberty is encouraged, whereas the link is small or statistically non-existent in countries with a civil law background where the rights of the individual tend to be circumscribed by the power of the state.

Characteristics of culturally and linguistically diverse mental health clients

The present study examined Queensland Transcultural Mental Health Centre (QTMHC) client characteristics in order to provide a better understanding for development of future health service delivery models. Archived data that was collected for 1499 clients over two years period (2007-2009) was analysed using descriptive statistics and Chi squares. The results indicated that clients were referred from a range of sources and were generally adults. There were more women than men, who sought services. At least half of the clients had language barriers and relied on bilingual workers. Most frequently expressed mental health issues were mood disorder symptoms, followed by symptoms of schizophrenia and psychosis and anxiety. Acculturation strains and stressors were described as the most common psychosocial issues. Mental health and psychosocial issues differed for age, gender and world regions from which the CALD clients originated. The findings provided an understanding of clients who seek services at QTMHC. Various ways in which transcultural services and data bases can be further improved are discussed.

Academic wage structure by gender : the roles of peer review, performance, and market forces

We focus on understanding the role of productivity in determining wage structure differences between men and women in academia. The data arise from a pay-equity study carried out in a single Midwestern U.S. university over the 1996–7 academic year. Econometric results confirm that external market forces exert influence over both male and female salary. But peer review ratings play a significant role in male but not female earnings determination, with similar results for objective measures of research, teaching and service.

Private health insurance status and utilisation of dental services in Australia

This article focuses on the relationship between private insurance status and dental service utilisation in Australia using data between 1995 and 2001. This article employs joint maximum likelihood to estimate models of time since last dental visit treating private ancillary health insurance (PAHI) as endogenous. The sensitivity of results to the choice between two different but related types of instrumental variables is examined. We find robust evidence in both 1995 and 2001 that individuals with a PAHI policy make significantly more frequent dental consultations relative to those without such coverage. A comparison of the 1995 and 2001 results, however, suggests that there has been an increasing role of PAHI in terms of the frequency of dental consultations over time. This seems intuitive given the trends in the price of unsubsidised private dental consultations. In terms of policy, our results suggest that while government measures to increase private health insurance coverage in Australia has been successful to a significant degree, it may have come at some cost in terms of socio-economic inequality as the privately insured are provided much better access to care and financial protection.

Reducing alcohol-related driving on China's roads : Traffic police officers' perceptions and practice

Alcohol-related driving is a longstanding, serious problem in China (Li, Xie, Nie, & Zhang, 2012). On 1st May, 2011 a national law was introduced to criminalize drunk driving, and imposed serious penalties including jail for driving with a blood alcohol level of above 80mg/100ml. This pilot study, undertaken a year after introduction of the law, sought traffic police officers’ perceptions of drink driving and the practice of breath alcohol testing (BAT) in a large city in Guangdong Province, southern China. A questionnaire survey and semi-structured interviews were used to gain an in-depth understanding of issues relevant to alcohol-related driving. Fifty-five traffic police officers were recruited for the survey and six traffic police officers with a variety of working experience including roadside alcohol breath testing, traffic crash investigation and police resourcing were interviewed individually. The officers were recruited by the first author with the assistance of the staff from Guangdong Institute of Public Health, Centre for Disease Control and Prevention (CDC). Interview participants reported three primary reasons why people drink and drive: 1) being prepared to take the chance of not being apprehended by police; 2) the strong traditional Chinese drinking culture; and 3) insufficient public awareness about the harmfulness of drink driving. Problems associated with the process of breath alcohol testing (BAT) were described and fit broadly into two categories: resourcing and avoiding detection. It was reported that there were insufficient traffic police officers to conduct routine traffic policing, including alcohol testing. Police BAT equipment was considered sufficient for routine traffic situations but not highway traffic operations. Local media and posters are used by the Public Security Bureau which is responsible for education about safe driving but participants thought that the education campaigns are limited in scope. Participants also described detection avoidance strategies used by drivers including: changing route; ignoring a police instruction to stop; staying inside the vehicle with windows and doors locked to avoid being tested; intentionally not performing breath tests correctly; and arguing with officers. This pilot study provided important insights from traffic police in one Chinese city which suggest there may be potential unintended effects of introducing more severe penalties including a range of strategies reportedly used by drivers to avoid detection. Recommendations for future research include a larger study to confirm these findings and examine the training and education of drivers; the focus and reach of publicity; and possible resource needs to support police enforcement.