Estimating historic population data for small geographies using census housing information

Historical population data for small geographies (e.g. blocks, block-groups, and census tracts) are not available for periods earlier than 1980. In this research note, we propose a geographically-constrained housing unit method (GHUM) to estimate historic population for small geographies using housing age data available in the 1980–2000 censuses. The GHUM is a two-stage method. The first stage follows a traditional housing unit method and provides initial household and group quarter population estimates for small geographies. The second stage takes advantage of the availability of historic data for larger geographies (e.g. counties, states) to adjust the first stage estimates and to provide final estimates. The GHUM is used to estimate 1940–1990 county population and census tract population in Kentucky. The quality of the population estimates is assessed. A two-sample Kolmogorov–Smirnov test indicates that these estimates are statistically reliable at the 10 % significance level.     

Ambiguity framed

In his exposition of subjective expected utility theory, Savage (1954) proposed that the Allais paradox could be reduced if it were recast into a format which made the appeal of the independence axiom of expected utility theory more transparent. Recent studies consistently find support for this prediction. We consider a salience-based choice model which explains this frame-dependence of the Allais paradox. We then derive the novel prediction that the presentation format responsible for reductions in Allais-style violations of expected utility theory will also reduce Ellsberg-style violations of subjective expected utility theory. This format makes the appeal of Savage’s “sure thing principle” more transparent. We design an experiment to test this prediction and find strong support for such frame-dependence of ambiguity aversion in Ellsberg-style choices. In particular, we observe markedly less ambiguity-averse behavior in Savage’s matrix format than in a more standard “prospect” format. This finding poses a new challenge for the leading models of ambiguity aversion.     

Understanding high school student leaders, i: Predicting teacher ratings of leader behavior

We describe the first stage of a longitudinal research program concerned with the prediction, understanding, and durability of early displays of leadership behavior. The predictability of teachers' ratings of leadership behavior for 242 high school students was explored with respect to predictors from the following construct domains: personality, interests, motivation, behavior, self-rated skills, and academic ability. Results revealed that variables from each construct domain significantly and consistently predicted leadership ratings for as long as 12 months after the collection of the predictor data. In addition, the linear combination of predictors from different domains yielded strong prediction of leadership, with R²s in the .40 range. Evidence also showed that both academic ability and the other measured constructs contributed unique variance to the prediction of leadership behaviors as reported by the teachers. These exploratory findings are discussed in light of a continuing research program designed to develop a more comprehensive understanding of the origin, development, and emergence of adult leadership behavior.     

Income Inequality and its Consequences for Life Satisfaction: What Role do Social Cognitions Play?

While it is generally agreed that income inequality affects an individual’s well-being, researchers disagree on whether people living in areas of high income disparity report more or less happiness than those in more equal environments, thereby indicating the need to study how and why income inequality matters to the individual’s well-being. Findings on group-specific reaction patterns to income inequality further fuel this need. Alesina et al. (2004) argue that a preference for inequality and the perception of the possibility of social mobility account for the indistinct relationship between income inequality and subjective well-being. Combining this hypothesis with previous research on social cognition and drawing on social justice theory, this paper aims to demonstrate the mediating nature of perceptions of income inequality. It argues that the perceived legitimacy of distributive outcomes and procedures contributes to how income inequalities affect individuals and their sense of well-being. The empirical analysis is based on data from the International Social Justice Project, developed from face-to-face interviews with a representative sample of the German population. Using structural equation modeling, the paper finds structural biases in the perception of income inequality. The paper concludes that subjective well-being is a product of the individual’s perception and legitimating processes. The results indicate that social cognition is a useful tool for studies of income inequality and subjective well-being.     

Geburten aus geplanten und ungeplanten Schwangerschaften – Die Relevanz von Bildung,Arbeitslosigkeit und PartnerschaftChildren from Planned and Unplanned Pregnancies: The Importance of Education,Unemployment and Partnership

Micro theories on fertility such as the economic theory of family frame fertility behaviour in industrialized countries as a decision. Predictions of these theories have been tested in numerous empirical studies. This research widely ignores that childbirth may also result from unintended pregnancies. We discuss how education, educational and labour market participation as well as partnership status influence unplanned and planned pregnancy in Germany. To test our hypotheses, we use data from the Socio-Economic Panel Study, collected between 2001 and 2013. The focus is on the planning status of pregnancies leading to a first or third birth. Data on women are analysed with event history models for competing risks. Contrary to arguments of high opportunity costs, graduates show an above-average probability of planned pregnancies. Unemployed women, who should have lower opportunity costs, do not have an increased probability of planned pregnancies; instead their first children are more often unplanned. Consensual unions, which are less serious but offer the same opportunities for sexual activity as marriages, have the highest rate of unplanned pregnancies. The overall findings make clear that future surveys and empirical research might benefit from taking intentions into account, which would enable more rigorous testing of fertility theories.     

Pricing and upper price bounds of relax certificates

Relax certificates are written on multiple underlying stocks. Their payoff depends on a barrier condition and is thus path-dependent. As long as none of the underlying assets crosses a lower barrier, the investor receives the payoff of a coupon bond. Otherwise, there is a cash settlement at maturity which depends on the lowest stock return. Thus, the products consist of a knock-out coupon bond and a knock-in claim on the minimum of the stock prices. In a Black-Scholes model setup, the price of the knock-out part can be given in closed (or semi-closed) form in the case of one or two underlyings only. With the exception of the trivial case of one underlying, the price of the knock-in minimum claim always has to be calculated numerically. Hence, we derive semi-closed form upper price bounds. These bounds are the lowest upper price bounds which can be calculated without the use of numerical methods. In addition, the bounds are especially tight for the vast majority of relax certificates which are traded at a discount relative to the corresponding coupon bond. This is also illustrated with market data.