Don’t like the food? Try paying more

Restaurateurs take note — by cutting your prices, you may be cutting how much people will like your food.Researchers in nutrition, economics and consumer behavior often assume that taste is a given — a person naturally either likes or dislikes a food. But a new study suggests taste perception, as well as feelings of overeating and guilt, can be manipulated by price alone.”We were fascinated to find that pricing has little impact on how much one eats, but a huge impact on how you interpret the experience,” said Brian Wansink, Ph.D., a professor at the Dyson School of Applied Economics and Management at Cornell University who oversaw the research. “Simply cutting the price of food at a restaurant dramatically affects how customers evaluate and appreciate the food.”The researchers teamed up with a high-quality Italian buffet in upstate New York to study how pricing affects customers’ perceptions. They presented 139 diners with a menu that offered an all-you-can-eat buffet priced at either $4 or $8. Customers were then asked to evaluate the food and the restaurant and rate their first, middle and last taste of the food on a nine-point scale.Those who paid $8 for the buffet reported enjoying their food on average 11 percent more than those who paid $4, though the two groups ate the same amount of food overall. People who paid the lower price also more often reported feeling like they had overeaten, felt more guilt about the meal, and reported liking the food less and less throughout the course of the meal.”We were surprised by the striking pattern we saw,” said Ozge Sigirci, a researcher at Cornell University Food and Brand Lab who conducted the study. “If the food is there, you are going to eat it, but the pricing very much affects how you are going to feel about your meal and how you will evaluate the restaurant.”Public health researchers and health advocates have focused on how all-you-can-eat buffets influence people’s eating habits. On the theory that such restaurants foster overeating and contribute to obesity, some advocates have proposed imposing special taxes on buffet consumers or restaurant owners.The study did not directly address the public health implications of all-you-can-eat buffets, but the researchers said the results could offer lessons about how to optimize a restaurant experience. “If you’re a consumer and want to eat at a buffet, the best thing to do is eat at the most expensive buffet you can afford. You won’t eat more, but you’ll have a better experience overall,” said Wansink.The study fits within a constellation of other work by Wansink and others offering insights about how health behaviors can be manipulated by small changes, such as putting the most healthful foods first in a display or using a smaller dinner plate.”This is an example of how a really small change can transform how a person interacts with food in a way that doesn’t entail dieting,” said Wansink, who is author of Slim by Design: Mindless Eating Solutions for Everyday Life, an upcoming book about how design choices influence eating behavior.Ozge Sigirci presented the findings during the Experimental Biology 2014 meeting on Tuesday, April 29.

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Link between selling, leasing market prices for cars studied

Changes in the selling prices of cars can be used to improve calculations for how much people should be paying to lease a vehicle, according to a new study.Researchers from Norwich Business School at the University of East Anglia (UEA) and Athens University of Economics and Business (AUEB) have for the first time modelled the relationship between variations in leasing and selling market prices, using almost 10 years of data from the US, the world’s largest automobile market. They suggest that in order to determine more accurately the monthly payments agreed in leasing contracts, firms need to take into account the prevailing selling, also known as cash, price of vehicles.For households in developed countries the car is typically the second largest asset purchased after a house, and in the US a third of all cars sold are financed via leasing. The study, published this week in the Journal of Banking and Finance, finds that when selling prices go up in one month leasing rates tend to go down in the following months.Despite its importance, the link between leasing and selling markets for vehicles is not yet fully understood and the standard way companies calculate leasing rates ignores any interactions between the two. The researchers say this could lead to customers paying significantly more or less a month, while the firms could be incurring losses rather than making a profit. To address this problem they have developed a new pricing approach for lease vehicles, which allows changes in the selling market prices to have an effect on leasing market prices and vehicle values at the end of the contract.They use the example of a car worth $30,000 (USD) in the cash market which is leased for six months with a monthly finance rate of 1% and has a value of $25,000 at the end of the contract. Using actual market selling prices for a particular month, the traditional way of calculating the monthly instalment would result in the leasing firm undercharging by more than 40% per cent, or $466, a month. This is because selling prices increased significantly by over 1.5% that month and then leasing prices dropped, in line with the findings in the study, by a total of 2.61% over the next six months.Using the new model the study predicts a 1.77% decrease in lease prices over the six months and a lease payment calculation which is much closer to the fair price, since the difference is less than 5% or $73 a month. Although in this example consumers may seem to be better off, this is not the case when cash prices drop rather than increase, which is equally likely. Leasing firms may try to deal with the uncertainty in leasing rates and their profits by charging higher monthly instalments.Raphael Markellos, professor of finance at Norwich Business School, said: “The results suggest that we can make more accurate predictions about car leasing rates and residual values on the basis of cash prices. If the companies ignore this relationship, mistakes are more likely and sometimes these will benefit the consumer at the expense of the leasing firms, sometimes it will be the other way round. …

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First large-scale study of stock market volatility, mental disorders

Falling stock prices lead to increased hospitalizations for mental disorders, according to new research published today in the journal Health Policy and Planning.Researchers assessed the relationship between stock price movements and mental disorders using data on daily hospitalizations for mental disorders in Taiwan over 4,000 days between 1998 and 2009. They found that a 1000-point fall in the Taiwan Stock Exchange Capitalisation Weighted Stock Index (TAIEX) coincided with a 4.71% daily increase in hospitalizations for mental disorders.A downward daily change in stock price index coincided with significantly increased hospitalizations for mental disorders — when the stock price index decreased by 1% in a single day there was a 0.36% increase in hospitalizations for mental disorders on that same day. The researchers also found that falls in stock price index on consecutive days were associated with a 0.32% daily increase in mental disorders hospitalizations — when the stock price index falls consecutively for 5 days there was a 1.6% increase in the number of mental disorder hospitalizations on the fifth day.These effects were found to be significant for both genders, with daily and consecutive changes in stock price index having a greater impact on men’s mental health. Low stock price index and daily change in stock price index had a significant effect on hospitalizations for the 35-54 age groups while consecutive change affected the 45-54 age groups.The research, led by Dr Chung-Liang Lin at Dong Hwa University and Dr Chin-Shyan Chen and Dr Tsai-Ching Liu at Taipei University, is the first of its kind to investigate a potential relationship between stock market volatility and nationwide prevalence of mental disorders. The results suggest that the mental health of middle-aged males may be critically influenced by the stock market — when the stock price index is low, hospitalizations for mental illness are relatively high.Previous research has suggested that mental disorders are more likely to affect disadvantaged members of society, with financial hardship having a negative impact on psychological health. The global financial crisis led to a decline in wealth for many and subsequent research has looked at the links between national economic conditions and the general health of the public. Data have also shown that economic recession has an exacerbating effect on the use of mental health services and decline in reported happiness. Most research on economic recession looks at involuntary job loss; few studies have looked at the effects of a fluctuating stock market on population health outcomes.The researchers used stock market movements as a proxy for changes in economic conditions and assessed the relationship with mental disorders using data from the National Health Insurance Research Dataset published by the National Health Research Institute of Taiwan.Dr Lin, Assistant Professor of Economics, said: “The stock market became the most watched indicator for much of the economic recession. Drops in the value of stocks can, and often do, announce a reduction in wealth and the multiplication of business failures with consequential pay cuts or layoffs. Indeed, it is reasonable enough for people to have dire fears about the future, and those fears are heavily reinforced by media coverage. …

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Foods and moods: Considering the future may help people make better food choices

Emotional eating is something we’re all familiar with. Maybe you had had a rough week at work and all you want on Friday night is to plop down and watch a movie with a giant bowl of buttery popcorn. Maybe you’re a student stressed about a big exam and you’re munching on candy as you study. Or maybe your child’s birthday party is coming up and you’ve bought an ice cream cake to serve a small army to celebrate. Happy or sad, up or down, there’s a plethora of media in the world that tells us our moods often dictate the foods we choose to eat.More recent studies, though, have shown that negative moods and positive moods may actually lead to preferences for different kinds of foods. For example, if given the choice between grapes or chocolate candies, someone in a good mood may be more inclined to choose the former while someone in a bad mood may be more likely to choose the latter.But what if we could make better choices in any emotional state?A forthcoming article by University of Delaware associate professor Meryl Gardner finds that there’s more to stress eating than simply emotion and in fact, thinking about the future may help people make better food choices.”We were interested in the ‘why,'” said Gardner. “Why when someone is in a bad mood will they choose to eat junk food and why when someone is in a good mood will they make healthier food choices?”Gardner, a faculty member in UD’s Lerner College of Business and Economics, with co-authors Brian Wansink of Cornell University, Junyong Kim of Hanyang University ERICA and Se-Bum Park of Yonsei University, found that a lot depends on our perspective of time.”In an evolutionary sense, it makes sense that when we feel uncomfortable or are in a bad mood, we know something is wrong and focus on what is close to us physically and what is close in time, in the here and now,” said Gardner. “We’re seeing the trees and not the forest, or how to do things and not why to do things.”To get at the “why,” the researchers married the theories of affective regulation (how people react to their moods and emotions) and temporal construal (the perspective of time) to explain food choice.They conducted four laboratory experiments to examine whether people in a positive mood would prefer healthy food to indulgent food for long-term health and well-being benefits and those in a negative mood would prefer indulgent foods to healthy foods for immediate, hedonistic mood management benefits.In the first study, the researchers investigated the effect of a positive mood on evaluations of indulgent and health foods by examining 211 individuals from local parent-teacher associations (PTAs).The findings indicated individuals in a positive mood, compared to control group participants in a relatively neutral mood, evaluated healthy foods more favorably than indulgent foods.”We expect this is possibly because they put more weight on abstract, higher-level benefits like health and future well-being,” said Gardner. “The remaining question was whether individuals in a negative mood would act differently.”Testing that question in a second study using 315 undergraduate students recruited from a large Midwestern university, the researchers found further support for their hypothesis that individuals in a negative mood liked indulgent foods more than healthy foods.According to Gardner, the finding that people in a positive mood liked the more nutritious options and also liked the idea of staying healthy in their old age is consistent with the hypothesis that time construal is important.”It suggests that positive mood makes people think about the future, and thinking about the future makes us think more abstractly,” said Gardner.The researchers were then left to eliminate goal achievement as an alternative explanation.”Our manipulations of mood in the first two studies involved having participants read positive, negative or neutral articles,” said Gardner. “As it turned out, the positive articles involved someone who had a great life and achieved lots of goals, and the negative articles involved someone who had a sad life and did not achieve goals. …

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Difficult dairy policy debate: It’s not over yet

Andrew Novakovic is a professor in Cornell University’s College of Agriculture and Life Science’s Dyson School of Applied Economics and Management, whose research focuses on the U.S. dairy industry and federal policy related to dairy, other agriculture and food. He explains the complex new dairy policy, which the Senate is expected to vote on early this week.Novakovic says:”In the final days of negotiating between House and Senate versions of the farm bill, the dairy section was often reported as an especially difficult sticking point. Although both versions contained a very similar objective of replacing existing safety net programs with a new ‘margin insurance’ program, the House bill did not include a further companion program that would have penalized farmers for production deemed excessive in periods when insurance payments were being made. The House opposition proved to be vigorous and obstinate. The result was a new margin insurance program plus a heretofore-unexpected plan to increase USDA donations to food assistance programs when dairy farm market conditions are especially severe.”The new margin program expands access to larger scale farmers and redefines financial stress according to returns over feed costs instead of just the price of milk. Both of these changes are in reaction to the severe dairy farm stress that was revealed by the Great Recession and the explosion in feed prices over the last few years. The Margin Protection Program for Dairy Producers (MPP) is a voluntary program that pays participating farmers an indemnity when a national benchmark for milk income over feed costs falls below an insured level. Coverage is available to all farmers, on a percentage of their historical production, at increasing premium costs beginning with a margin that is at catastrophically low levels and rising to near average market returns.”The Dairy Product Donation Program (DPDP) is a program that requires the Secretary of Agriculture to immediately procure and distribute certain dairy products when the new national benchmark margin falls below the lowest margin level specified for the MPP. These products would be targeted for use in domestic, low-income family, food assistance programs, such as, but not limited to, The Emergency Food Assistance Program. …

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Cool heads likely won’t prevail in a hotter, wetter world

Aug. 1, 2013 — Should climate change trigger the upsurge in heat and rainfall that scientists predict, people may face a threat just as perilous and volatile as extreme weather — each other.Researchers from Princeton University and the University of California-Berkeley report in the journal Science that even slight spikes in temperature and precipitation have greatly increased the risk of personal violence and social upheaval throughout human history. Projected onto an Earth that is expected to warm by 2 degrees Celsius by 2050, the authors suggest that more human conflict is a likely outcome of climate change.The researchers analyzed 60 studies from a number of disciplines — including archaeology, criminology, economics and psychology — that have explored the connection between weather and violence in various parts of the world from about 10,000 BCE to the present day. During an 18-month period, the Princeton-Berkeley researchers reviewed those studies’ data — and often re-crunched raw numbers — to calculate the risk that violence would rise under hotter and wetter conditions.They found that while climate is not the sole or primary cause of violence, it undeniably exacerbates existing social and interpersonal tension in all societies, regardless of wealth or stability. They found that 1 standard-deviation shift — the amount of change from the local norm — in heat or rainfall boosts the risk of a riot, civil war or ethnic conflict by an average of 14 percent. There is a 4 percent chance of a similarly sized upward creep in heat or rain sparking person-on-person violence such as rape, murder and assault. The researchers report that climate-change models predict an average of 2 to 4 standard-deviation shifts in global climate conditions by 2050.Establishing a correlation between violence and climate change now allows policymakers and researchers to examine what causes it and how to intervene, said lead author Solomon Hsiang, who conducted the work as a postdoctoral research associate in the Program in Science, Technology and Environmental Policy in Princeton’s Woodrow Wilson School of Public and International Affairs.”We think that by collecting all the research together now, we’re pretty clearly establishing that there is a causal relationship between the climate and human conflict,” Hsiang said. “People have been skeptical up to now of an individual study here or there. But considering the body of work together, we can now show that these patterns are extremely general. It’s more of the rule than the exception.”Whether there is a relationship between climate and conflict is not the question anymore. …

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Innovative study estimates extent to which air pollution in China shortens human lives

July 8, 2013 — A high level of air pollution, in the form of particulates produced by burning coal, significantly shortens the lives of people exposed to it, according to a unique new study of China co-authored by an MIT economist.The research is based on long-term data compiled for the first time, and projects that the 500 million Chinese who live north of the Huai River are set to lose an aggregate 2.5 billion years of life expectancy due to the extensive use of coal to power boilers for heating throughout the region. Using a quasi-experimental method, the researchers found very different life-expectancy figures for an otherwise similar population south of the Huai River, where government policies were less supportive of coal-powered heating.”We can now say with more confidence that long-run exposure to pollution, especially particulates, has dramatic consequences for life expectancy,” says Michael Greenstone, the 3M Professor of Environmental Economics at MIT, who conducted the research with colleagues in China and Israel.The paper, published today in the Proceedings of the National Academy of Sciences, also contains a generalized metric that can apply to any country’s environment: Every additional 100 micrograms of particulate matter per cubic meter in the atmosphere lowers life expectancy at birth by three years.In China, particulate-matter levels were more than 400 micrograms per cubic meter between 1981 and 2001, according to Chinese government agencies; state media have reported even higher levels recently, with cities including Beijing recording levels of more than 700 micrograms per cubic meter in January. (By comparison, total suspended particulates in the United States were about 45 micrograms per cubic meter in the 1990s.)Air pollution has become an increasingly charged political issue in China, spurring public protests; last month, China’s government announced its intent to adopt a series of measures to limit air pollution.”Everyone understands it’s unpleasant to be in a polluted place,” Greenstone says. “But to be able to say with some precision what the health costs are, and what the loss of life expectancy is, puts a finer point on the importance of finding policies that balance growth with environmental quality.”A river runs through itThe research stems from a policy China implemented during its era of central planning, prior to 1980. The Chinese government provided free coal for fuel boilers for all people living north of the Huai River, which has long been used as a rough dividing line between north and south in China.The free-coal policy means people in the north stay warm in winter — but at the cost of notably worse environmental conditions. Using data covering an unusually long timespan — from 1981 through 2000 — the researchers found that air pollution, as measured by total suspended particulates, was about 55 percent higher north of the river than south of it, for a difference of around 184 micrograms of particulate matter per cubic meter.Linking the Chinese pollution data to mortality statistics from 1991 to 2000, the researchers found a sharp difference in mortality rates on either side of the border formed by the Huai River. They also found the variation to be attributable to cardiorespiratory illness, and not to other causes of death.”It’s not that the Chinese government set out to cause this,” Greenstone says. “This was the unintended consequence of a policy that must have appeared quite sensible.” He notes that China has not generally required installation of equipment to abate air pollution from coal use in homes.Nonetheless, he observes, by seizing on the policy’s arbitrary use of the Huai River as a boundary, the researchers could approximate a scientific experiment.”We will never, thank goodness, have a randomized controlled trial where we expose some people to more pollution and other people to less pollution over the course of their lifetimes,” Greenstone says. For that reason, conducting a “quasi-experiment” using existing data is the most precise way to assess such issues.In their paper, the researchers address some other potential caveats. For instance, extensive mobility in a population might make it hard to draw cause-and-effect conclusions about the health effects of regional pollution. …

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Extent to which air pollution in China shortens human lives

July 8, 2013 — A high level of air pollution, in the form of particulates produced by burning coal, significantly shortens the lives of people exposed to it, according to a unique new study of China co-authored by an MIT economist.The research is based on long-term data compiled for the first time, and projects that the 500 million Chinese who live north of the Huai River are set to lose an aggregate 2.5 billion years of life expectancy due to the extensive use of coal to power boilers for heating throughout the region. Using a quasi-experimental method, the researchers found very different life-expectancy figures for an otherwise similar population south of the Huai River, where government policies were less supportive of coal-powered heating.”We can now say with more confidence that long-run exposure to pollution, especially particulates, has dramatic consequences for life expectancy,” says Michael Greenstone, the 3M Professor of Environmental Economics at MIT, who conducted the research with colleagues in China and Israel.The paper, published today in the Proceedings of the National Academy of Sciences, also contains a generalized metric that can apply to any country’s environment: Every additional 100 micrograms of particulate matter per cubic meter in the atmosphere lowers life expectancy at birth by three years.In China, particulate-matter levels were more than 400 micrograms per cubic meter between 1981 and 2001, according to Chinese government agencies; state media have reported even higher levels recently, with cities including Beijing recording levels of more than 700 micrograms per cubic meter in January. (By comparison, total suspended particulates in the United States were about 45 micrograms per cubic meter in the 1990s.)Air pollution has become an increasingly charged political issue in China, spurring public protests; last month, China’s government announced its intent to adopt a series of measures to limit air pollution.”Everyone understands it’s unpleasant to be in a polluted place,” Greenstone says. “But to be able to say with some precision what the health costs are, and what the loss of life expectancy is, puts a finer point on the importance of finding policies that balance growth with environmental quality.”A river runs through itThe research stems from a policy China implemented during its era of central planning, prior to 1980. The Chinese government provided free coal for fuel boilers for all people living north of the Huai River, which has long been used as a rough dividing line between north and south in China.The free-coal policy means people in the north stay warm in winter — but at the cost of notably worse environmental conditions. Using data covering an unusually long timespan — from 1981 through 2000 — the researchers found that air pollution, as measured by total suspended particulates, was about 55 percent higher north of the river than south of it, for a difference of around 184 micrograms of particulate matter per cubic meter.Linking the Chinese pollution data to mortality statistics from 1991 to 2000, the researchers found a sharp difference in mortality rates on either side of the border formed by the Huai River. They also found the variation to be attributable to cardiorespiratory illness, and not to other causes of death.”It’s not that the Chinese government set out to cause this,” Greenstone says. “This was the unintended consequence of a policy that must have appeared quite sensible.” He notes that China has not generally required installation of equipment to abate air pollution from coal use in homes.Nonetheless, he observes, by seizing on the policy’s arbitrary use of the Huai River as a boundary, the researchers could approximate a scientific experiment.”We will never, thank goodness, have a randomized controlled trial where we expose some people to more pollution and other people to less pollution over the course of their lifetimes,” Greenstone says. For that reason, conducting a “quasi-experiment” using existing data is the most precise way to assess such issues.In their paper, the researchers address some other potential caveats. For instance, extensive mobility in a population might make it hard to draw cause-and-effect conclusions about the health effects of regional pollution. …

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Scientists identify emotions based on brain activity

June 19, 2013 — For the first time, scientists at Carnegie Mellon University have identified which emotion a person is experiencing based on brain activity.The study, published in the June 19 issue of PLOS ONE, combines functional magnetic resonance imaging (fMRI) and machine learning to measure brain signals to accurately read emotions in individuals. Led by researchers in CMU’s Dietrich College of Humanities and Social Sciences, the findings illustrate how the brain categorizes feelings, giving researchers the first reliable process to analyze emotions. Until now, research on emotions has been long stymied by the lack of reliable methods to evaluate them, mostly because people are often reluctant to honestly report their feelings. Further complicating matters is that many emotional responses may not be consciously experienced.Identifying emotions based on neural activity builds on previous discoveries by CMU’s Marcel Just and Tom M. Mitchell, which used similar techniques to create a computational model that identifies individuals’ thoughts of concrete objects, often dubbed “mind reading.””This research introduces a new method with potential to identify emotions without relying on people’s ability to self-report,” said Karim Kassam, assistant professor of social and decision sciences and lead author of the study. “It could be used to assess an individual’s emotional response to almost any kind of stimulus, for example, a flag, a brand name or a political candidate.”One challenge for the research team was find a way to repeatedly and reliably evoke different emotional states from the participants. Traditional approaches, such as showing subjects emotion-inducing film clips, would likely have been unsuccessful because the impact of film clips diminishes with repeated display. The researchers solved the problem by recruiting actors from CMU’s School of Drama.”Our big breakthrough was my colleague Karim Kassam’s idea of testing actors, who are experienced at cycling through emotional states. We were fortunate, in that respect, that CMU has a superb drama school,” said George Loewenstein, the Herbert A. Simon University Professor of Economics and Psychology.For the study, 10 actors were scanned at CMU’s Scientific Imaging & Brain Research Center while viewing the words of nine emotions: anger, disgust, envy, fear, happiness, lust, pride, sadness and shame. …

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Simplified solutions to deforestation ineffective in long run

May 29, 2013 — Deforestation is the second largest source of CO2 emissions after consumption of fossil fuels. So-called PES programmes, where landowners are paid to replant or protect forests, have been promoted as a way to reduce deforestation. However, the effectiveness of the programmes has been questioned, and new research from the School of Business, Economics and Law at the University of Gothenburg, Sweden, points to potential negative long-term effects and a need for broader guidelines and policies.

PES programmes have been promoted as a cost-effective tool to combat climate change. However, the rather limited documentation on the effectiveness of the programmes is discouraging.

‘Human behaviour is not always predictable, and short-term positive effects may turn to negative effects in the long term,’ says Anna Nordén, economics researcher at the School of Business, Economics and Law, University of Gothenburg.

In her recently presented doctoral thesis titled Essays on Behavioral Economics and Policies for Provision of Ecosystem Services, Nordén explores the weaknesses of PES programmes and the importance of complementing them with additional measures.

The established climate targets make the measurability of PES programmes appealing — it is tempting to point to results by quantifying forests that would probably have been cut down in the absence of PES programmes. Paying landowners for abstaining from deforestation is considered the most effective programme design. However, this strategy implies that those who are already maintaining their forests are not rewarded. Nordén conducted experiments to identify the consequences of such programmes, and found that those who are already displaying the desired behaviour tend to eventually lose their willingness to protect their forests.

‘The net effect of these programmes may be negligible, meaning that the money spent may not do much to reduce emissions and combat climate change,’ says Nordén, who calls for better awareness of the effects of different reward systems.

Nordén also studied what motivates landowners to participate in PES programmes and how they react to the size and type of the payments they receive. In a study in Costa Rica, landowners were offered either cash or education.

‘Both payment types stimulated participation, but when we looked at long-term participation — more than five years — cash had a greater effect. And the more cash the landowners were offered, the more motivated they were to participate in the programme. They did not respond the same to more education.’

Yet cash payments can also have negative effects on the climate. Nordén gives an example:

‘When a poor landowner is paid in cash, he may become able to pay somebody to cut down his forest.’

Nordén is critical to the narrow focus of climate negotiations on PES programmes.

‘It seems naive to believe that just one policy will reduce deforestation. My research points to the importance of complementing the programmes with other tools and measures, and of paying better attention to long-term effects.’

The thesis was presented on 24 May 2013 Thesis title: Essays on Behavioral Economics and Policies for Provision of Ecosystem Services

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For pundits, it’s better to be confident than correct

May 28, 2013 — It would be nice to think the pundits we see yelling on TV and squawking on Twitter are right all the time. It turns out they’re wrong more often than they are right.

Now two Washington State University economics students have demonstrated that it simply doesn’t pay as much for a pundit to be accurate as it does to be confident. It’s one thing to be a good pundit, but another to be popular.

“In a perfect world, you want to be accurate and confident,” says Jadrian Wooten. “If you had to pick, being confident will get you more followers, get you more demand.”

Wooten made his discovery with Ben Smith, a fellow doctoral candidate in economics. Smith originally wanted to test the accuracy and confidence of stock market pundits, taking inspiration from stock watcher and CNBC host Jim Cramer, whom Wooten describes as “the yelling genius that he thinks he is.”

But stock predictions rarely come with a date at which one could say a pundit was right or wrong. Sporting events do, so Smith made a software program to sort through more than 1 billion tweets for predictions of the 2012 baseball playoffs and World Series and the 2013 Super Bowl.

The program pulled out tweets with team names, nicknames and expressions commonly associated with predictions, like “beat.” Where they might rate the confidence of a television pundit by how loudly he or she yelled, a scale of word strength pegged words like “vanquish,” “destroy” and “annihilate” as expressions of confidence.

Their hypothesis: Pundits have a false sense of confidence because that’s what the public, seeking to avoid the stress of uncertainty, craves.

“They’re trading away some of their accuracy to be a Jim Cramer,” says Wooten. “‘I might not be right all the time but I can yell louder than this other guy.'”

Wooten and Smith looked at both professional pundits — celebrities with verified Twitter accounts — and amateurs claiming some sports expertise. Both were worse at predicting than the 50-50 odds of a coin toss. Professionals were right 47 percent of the time, a hair better than the 45 percent accuracy of amateurs. But the professionals were more confident, scoring a .480 confidence rating to the amateurs’ .313.

And confidence pays — far better than accuracy.

If a professional pundit accurately predicted every game of the baseball playoffs and series, Wooten and Smith estimated his or her Twitter following would increase 3.4 percent. An amateur would get 7.3 percent more followers.

But a professional whose confidence knows no bounds would increase his or her following by nearly 17 percent and an amateur would see a nearly 20 percent rise in followers.

The outlier of the field could be Nate Silver, the statistician and New York Times political blogger. He’s both cautious and accurate. But owing in large part to his correctly calling all 50 states in the recent presidential election, he’s popular.

By and large, say Smith and Wooten, pundits get a better audience through confidence and the excitement it generates.

“There is some psychological literature on the idea that people hate uncertainty,” says Smith. “The fact that people don’t like uncertainty would suggest that they don’t like the idea of a Nate Silver sort of person standing up there and saying, ‘I’m only 90 percent sure.'”

“I like to think of it like a roulette wheel,” says Wooten.” If you have somebody just placing bets, that person is kind of boring. But if you have someone going, ‘Oh, yeah! It’s red!’ and they are confident, that’s the person that you are interested in.”

Smith and Wooten outlined their findings earlier this year at the 50th Annual Meeting of the Academy of Economics and Finance. They plan to publish a paper on their method in an open-source journal, helping researchers, business people and others pose all sorts of questions to the vast amounts of data on the Internet.

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