RISK AVERSION RELATES TO COGNITIVE ABILITY: PREFERENCES OR NOISE?

Recent experimental studies suggest that risk aversion is negatively related to cognitive ability. In this paper we report evidence that this relation may be spurious. We recruit a large subject pool drawn from the general Danish population for our experiment. By presenting subjects with choice tasks that vary the bias induced by random choices, we are able to generate both negative and positive correlations between risk aversion and cognitive ability. Our results suggest that cognitive ability is related to random decision making rather than to risk preferences. (JEL: C81, C91, D12, D81)     

PREDICTING LOTTO NUMBERS: A NATURAL EXPERIMENT ON THE GAMBLER'S FALLACY AND THE HOT‐HAND FALLACY

We investigate the “law of small numbers” using a data set on lotto gambling that allows us to measure players' reactions to draws. While most players pick the same set of numbers week after week, we find that those who do change, react on average as predicted by the law of small numbers as formalized in recent behavioral theory. In particular, players tend to bet less on numbers that have been drawn in the preceding week, as suggested by the “gambler's fallacy”, and bet more on a number if it was frequently drawn in the recent past, consistent with the “hot‐hand fallacy”.     

Welfare to Well-Being Transition

Welfare to well-being leads to better qualityof life for families and communities. Around the world, societies are experimenting and shifting policies that address welfare to well-being for families and communities. In the U.S., the greatest shift in several decades has occurred with thewelfare reform policies. These shifts haveplaced at issue the extent to which individualsand families and governments contribute toself-sufficiency and sustainability of theirmembers and the collective whole in society. The paper addresses: a framework for thinkingabout sustaining well-being in the context ofmaking transitions from welfare for the few towell-being for the many; a researchillustration of focus group findings on themeaning of self-sufficiency for families whoare currently receiving one type of welfare(food stamps); and the opportunities emergingin the context of the interaction of the familyand society at the community, state, nationaland global level that allows for a wholisticresponse to issues around well-being andquality of life studies.     

Biographical sketches of elderly African-American women in later life

The research concerning the African-American elderly is limited, since this group is made up of less than eight percent of the entire U.S. population. Due to discriminatory practices in the U.S., based on race and gender, the African-American elderly woman has some unique issues facing her in old age. This paper will present three qualitative interviews of African-American women from age 65 to 100. These biographical sketches will report how these women dealt with family traditions, lifestyle changes, and growing old in their lives. Their perceptions of personal joys and frustrations, plus attitudes about how race, not gender, was a significant factor in their lives, will be reported. Education and religion were life-long strengths in their lifestyle.     

The impact of high-calorie-expenditure exercise on quality of life in older adults with coronary heart disease

The acceptability of a high-calorie-expenditure (HCE) exercise program in older coronary heart disease patients participating in a behavioral weight-control program was evaluated. Seventy-four overweight patients (median age 63 yr) were randomly assigned to a 5-mo intervention of HCE exercise (3,000-3,500 kcal/wk daily walking) or standard cardiac-rehabilitation (CR) exercise (700-800 kcal/wk). Both groups received counseling to achieve a dietary caloric deficit of 3,500 kcal/ wk. Assessments at baseline and 5 mo included self-reported measures of quality of life and psychosocial variables. The HCE group experienced significantly greater weight loss (8.2 ± 4 vs. 3.7 ± 5 kg, p < .001). Changes from baseline to 5 mo on scores of physical, emotional, and social functioning were greater for the HCE than CR group (p < .05). HCE exercise also resulted in greater positive change in exercise enjoyment (p = .05), which was mediated by weight change. Even high-risk older adults can be successful in an HCE exercise program and experience no adverse physical or emotional changes.     

A Note on “Sourcing Decisions with Stochastic Supplier Reliability and Stochastic Demand”

This note complements the study of Burke, Carillo, and Vakharia ( 2009 hereafter “BCV”) which analyzes a class of single‐product multisourcing problems under stochastic demand and random yields. The purpose is twofold. First, we prove that the objective function used by these authors is only a lower bound for the expected profit for which we provide the correct expression. Second, we show on some of the numerical instances provided in BCV's study that the structure and the performance of the BCV ordering policy may be substantially different from the optimal ordering policy. We conclude by giving general qualitative insights characterizing suboptimality of the BCV solution.     

Hungary in transition: a computable general equilibrium model comparison with Austria

We approach the problem of Hungary's transformation from a partially centrally planned to a market-oriented economy with a cross-country comparison using two computable general equilibrium (CGE) models of Hungary, 1977 and 1986, and one of Austria, 1976. These three models represent a continuum of small open economies and allow a “quasidynamic” analysis using static CGE models. We examine two types of transformation issues: external (trade liberalization, import price reductions, and redirection of foreign trade; “Dutch Disease reversal”) and internal (decreases in subsidy levels). Overall, it is clear that with Hungary's borrowing constraints, liberalization should not be pursued in isolation; a change in the tax structure is necessary at the same time. The results for Austria indicate that liberalization brings smaller welfare improvements accompanied by smaller increases in the current account and government deficits.     

Social Workers' Responses to Experiences of Fear

Correspondence to Martin Smith, EDT c/o Social Services Department, Easton Street, High Wycombe, Buckinghamshire, HP11 1NH. E-mail: msmith{at}buckscc.gov.uk Summary This paper follows on from the paper ‘Social workers’experiences of fear’, written by the same authors, reportingon a research study that showed how social workers interviewedexperienced fears of assault, death, losing control and rejectionfrom their seniors during their working hours. Now, from thesame study, examples are given that illustrate ways in whichparticipants were affected by, and responded to, these fears.Substantive quotations from in-depth interviews are providedshowing effects of fears as being physical, cognitive and emotionaland as manifesting themselves differently with the passing oftime. Also given are examples of what it was that participantsfound to be helpful, or unhelpful, when attempting to deal withtheir fears and particular attention is paid to supervisionin this respect. The paper argues that drama therapy literaturehas much relevance to the management of fear as participantsoften reported different parts of themselves performing roleswhen affected by and responding to fears. Implications for socialwork training are considered in this light. Generally, it isclaimed that the more social workers can learn about fear andits manifestations and implications in their work, the betterthey will be able to respond to it and deal with it.