A unified framework for measuring preferences for schools and neighborhoods

This paper develops a framework for estimating household preferences for school and neighborhood attributes in the presence of sorting. It embeds a boundary discontinuity design in a heterogeneous residential choice model, addressing the endogeneity of school and neighborhood characteristics. The model is estimated using restricted-access Census data from a large metropolitan area, yielding a number of new results. First, households are willing to pay less than 1 percent more in house prices - substantially lower than previous estimates - when the average performance of the local school increases by 5 percent. Second, much of the apparent willingness to pay for more educated and wealthier neighbors is explained by the correlation of these sociodemographic measures with unobserved neighborhood quality. Third, neighborhood race is not capitalized directly into housing prices; instead, the negative correlation of neighborhood percent black and housing prices is due entirely to the fact that blacks live in unobservably lower-quality neighborhoods. Finally, there is considerable heterogeneity in preferences for schools and neighbors, with households preferring to self-segregate on the basis of both race and education. © 2007 by The University of Chicago. All rights reserved.

Migration and hedonic valuation: The case of air quality

Conventional hedonic techniques for estimating the value of local amenities rely on the assumption that households move freely among locations. We show that when moving is costly, the variation in housing prices and wages across locations may no longer reflect the value of differences in local amenities. We develop an alternative discrete-choice approach that models the household location decision directly, and we apply it to the case of air quality in US metro areas in 1990 and 2000. Because air pollution is likely to be correlated with unobservable local characteristics such as economic activity, we instrument for air quality using the contribution of distant sources to local pollution-excluding emissions from local sources, which are most likely to be correlated with local conditions. Our model yields an estimated elasticity of willingness to pay with respect to air quality of 0.34-0.42. These estimates imply that the median household would pay $149-$185 (in constant 1982-1984 dollars) for a one-unit reduction in average ambient concentrations of particulate matter. These estimates are three times greater than the marginal willingness to pay estimated by a conventional hedonic model using the same data. Our results are robust to a range of covariates, instrumenting strategies, and functional form assumptions. The findings also confirm the importance of instrumenting for local air pollution. © 2009 Elsevier Inc. All rights reserved.

Trust and efficiency

Agency problems within the firm are a significant hindrance to efficiency. We propose trust between coworkers as a superior alternative to the standard tools used to mitigate agency problems: increased monitoring and incentive-based pay. We model trust as mutual, reciprocal altruism between pairs of coworkers and show how it induces employees to work harder, relative to those at firms that use the standard tools. In addition, we show that employees at trusting firms have higher job satisfaction, and that these firms enjoy lower labor cost and higher profits. We conclude by discussing how trust may also be easier to use within the firm than the standard agency-mitigation tools. © 2002 Elsevier Science B.V. All rights reserved.

Knowledge and perceptions among overweight and obese employees about lifestyle-related health benefit changes.

We investigated perceptions among overweight and obese state employees about changes to health insurance that were designed to reduce the scope of health benefits for employees who are obese or who smoke. Before implementation of health benefit plan changes, 658 state employees who were overweight (ie, those with a body mass index [BMI] of 25-29.9) or obese (ie, those with a BMI of > or = 30) enrolled in a weight-loss intervention study were asked about their attitudes and beliefs concerning the new benefit plan changes. Thirty-one percent of employees with a measured BMI of 40 or greater self-reported a BMI of less than 40, suggesting they were unaware that their current BMI would place them in a higher-risk benefit plan. More than half of all respondents reported that the new benefit changes would motivate them to make behavioral changes, but fewer than half felt confident in their ability to make changes. Respondents with a BMI of 40 or greater were more likely than respondents in lower BMI categories to oppose the new changes focused on obesity (P < .001). Current smokers were more likely than former smokers and nonsmokers to oppose the new benefit changes focused on tobacco use (P < .01). Participants represented a sample of employees enrolled in a weight-loss study, limiting generalizability to the larger population of state employees. Benefit plan changes that require employees who are obese and smoke to pay more for health care may motivate some, but not all, individuals to change their behaviors. Since confidence to lose weight was lowest among individuals in the highest BMI categories, more-intense intervention options may be needed to achieve desired health behavior changes.

The reminiscence bump in the temporal distribution of the best football players of all time: Pelé, Cruijff or Maradona?

The reminiscence bump is the tendency to recall more autobiographical memories from adolescence and early adulthood than from adjacent lifetime periods. In this online study, the robustness of the reminiscence bump was examined by looking at participants' judgements about the quality of football players. Dutch participants (N = 619) were asked who they thought the five best players of all time were. The participants could select the names from a list or enter the names when their favourite players were not on the list. Johan Cruijff, Pelé, and Diego Maradona were the three most often mentioned players. Participants frequently named football players who reached the midpoint of their career when the participants were adolescents (mode = 17). The results indicate that the reminiscence bump can also be identified outside the autobiographical memory domain.

Cost-effectiveness analysis of the diagnosis of meniscus tears.

BACKGROUND: Diagnostic imaging represents the fastest growing segment of costs in the US health system. This study investigated the cost-effectiveness of alternative diagnostic approaches to meniscus tears of the knee, a highly prevalent disease that traditionally relies on MRI as part of the diagnostic strategy. PURPOSE: To identify the most efficient strategy for the diagnosis of meniscus tears. STUDY DESIGN: Economic and decision analysis; Level of evidence, 1. METHODS: A simple-decision model run as a cost-utility analysis was constructed to assess the value added by MRI in various combinations with patient history and physical examination (H&P). The model examined traumatic and degenerative tears in 2 distinct settings: primary care and orthopaedic sports medicine clinic. Strategies were compared using the incremental cost-effectiveness ratio (ICER). RESULTS: In both practice settings, H&P alone was widely preferred for degenerative meniscus tears. Performing MRI to confirm a positive H&P was preferred for traumatic tears in both practice settings, with a willingness to pay of less than US$50,000 per quality-adjusted life-year. Performing an MRI for all patients was not preferred in any reasonable clinical scenario. The prevalence of a meniscus tear in a clinician's patient population was influential. For traumatic tears, MRI to confirm a positive H&P was preferred when prevalence was less than 46.7%, with H&P preferred above that. For degenerative tears, H&P was preferred until the prevalence reaches 74.2%, and then MRI to confirm a negative was the preferred strategy. In both settings, MRI to confirm positive physical examination led to more than a 10-fold lower rate of unnecessary surgeries than did any other strategy, while MRI to confirm negative physical examination led to a 2.08 and 2.26 higher rate than H&P alone in primary care and orthopaedic clinics, respectively. CONCLUSION: For all practitioners, H&P is the preferred strategy for the suspected degenerative meniscus tear. An MRI to confirm a positive H&P is preferred for traumatic tears for all practitioners. Consideration should be given to implementing alternative diagnostic strategies as well as enhancing provider education in physical examination skills to improve the reliability of H&P as a diagnostic test. CLINICAL RELEVANCE: Alternative diagnostic strategies that do not include the use of MRI may result in decreased health care costs without harm to the patient and could possibly reduce unnecessary procedures.

All my children: The roles of semantic category and phonetic similarity in the misnaming of familiar individuals.

Despite knowing a familiar individual (such as a daughter) well, anecdotal evidence suggests that naming errors can occur among very familiar individuals. Here, we investigate the conditions surrounding these types of errors, or misnamings, in which a person (the misnamer) incorrectly calls a familiar individual (the misnamed) by someone else's name (the named). Across 5 studies including over 1,700 participants, we investigated the prevalence of the phenomenon of misnaming, identified factors underlying why it may occur, and tested potential mechanisms. We included undergraduates and MTurk workers and asked questions of both the misnamed and the misnamer. We find that familiar individuals are often misnamed with the name of another member of the same semantic category; family members are misnamed with another family member's name and friends are misnamed with another friend's name. Phonetic similarity between names also leads to misnamings; however, the size of this effect was smaller than that of the semantic category effect. Overall, the misnaming of familiar individuals is driven by the relationship between the misnamer, misnamed, and named; phonetic similarity between the incorrect name used by the misnamer and the correct name also plays a role in misnaming.