Politics,Public Opinion,and Privatization: A Test of Competing Theories in Great Britain

Reforms known collectively as the new public management (NPM) are sweeping governments worldwide. For a movement espousing customer-based service orientations, there is a curious paucity of research on citizens' attitudes toward these reforms. We know little about how citizens feel about them, how they arrive at their conclusions, and how durable their attitudes are likely to be. Using citizen attitudes culled from the 1987--1992 British General Election Panel Survey, we apply multiple regression analysis to begin exploring these issues in one critical area of NPM reform: privatization of state-owned enterprises. We find that the overall predictive power of the five theoretical perspectives culled from public opinion research and operationalized in our model is quite respectable, but that evaluations are too complex for any single explanation of public opinion formation to capture. We also find that British attitudes toward privatization were most associated with cue-taking from leaders and parties, ideological moorings associated with individualism, and income. From these findings we offer a set of hypotheses suitable for testing in future research—most especially, a disparate impact hypothesis—that have important implications for practice and theory-building regarding public opinion and market-based administrative reforms worldwide.     

Environmental Tobacco Smoke Revisited: The Reliability of the Data Used for Risk Assessment

Several epidemiological studies have found a weak, but consistent association between lung cancer in nonsmokers and exposure to environmental tobacco smoke (ETS). In addition, a purported link between such exposure and coronary heart disease (CHD) has been of major concern. Although it is biologically plausible that ETS has a contributory role in the induction of lung cancer in nonsmoking individuals, dose-response extrapolation-supported by the more solid database for active smokers-gives an additional risk for lung cancer risk that is more than one order of magnitude lower than that indicated by major positive epidemiological studies. The discrepancy between available epidemiological data and dosimetric estimates seems, to a major part, to reflect certain systematic biases in the former that are difficult to control by statistical analysis when dealing with risks of such low magnitudes. These include, most importantly, misclassification of smoking status, followed by inappropriate selection of controls, as well as certain confounding factors mainly related to lifestyle, and possibly also hereditary disposition. A significant part of an association between lung cancer and exposure to ETS would disappear, if, on the average, 1 patient out of 20 nonsmoking cases had failed to tell the interviewer that he had, in fact, recently stopped smoking. In the large International Agency for Research on Cancer (IARC) multicenter study even lower misclassification rates would abolish the weak, statistically nonsignificant associations that were found. In the former study an apparent significant protective effect from exposure to ETS in childhood with respect to lung cancer later in life was reported, a most surprising finding. The fact that the mutation spectrum of the p53 tumor suppressor gene in lung tumors of ETS-exposed nonsmokers generally differs from that found in tumors of active smokers lends additional support to the notion that the majority of tumors found in ETS-exposed nonsmokers have nothing to do with tobacco smoke. The one-sided preoccupation with ETS as a causative factor of lung cancer in nonsmokers may seriously hinder the elucidation of the multifactorial etiology of these tumors. Due to the high prevalence of cardiovascular disease in the population, even a modest causal association with ETS would, if valid, constitute a serious public health problem. By pooling data from 20 published studies on ETS and heart disease, some of which reported higher risks than is known to be caused by active smoking, a statistically significant association with spousal smoking is obtained. However, in most of these studies, many of the most common confounding risk factors were ignored and there appears to be insufficient evidence to support an association between exposure to ETS and CHD. Further, it seems highly improbable that exposure to a concentration of tobacco smoke at a level that is generally much less than 1% of that inhaled by a smoker could result in an excess risk for CHD that-as has been claimed-is some 30% to 50% of that found in active smokers. There are certainly valid reasons to limit exposure to ETS as well as to other air pollutants in places such as offices and homes in order to improve indoor air quality. This goal can be achieved, however, without the introduction of an extremist legislation based on a negligible risk of lung cancer as well as an unsupported and highly hypothetical risk for CHD.     

An Efficient and Robust Design for Transshipment Networks

Transshipment, the sharing of inventory among parties at the same echelon level of a supply chain, can be used to reduce costs. The effectiveness of transshipment is in part determined by the configuration of the transshipment network. We introduce chain configurations in transshipment settings, where every party is linked in one connected loop. Under simplifying assumptions we show analytically that the chain configuration is superior to configurations suggested in the literature. In addition, we demonstrate the efficiency and robustness of chain configurations for more general scenarios and provide managerial insights regarding preferred configurations for different problem parameters.     

A Structural Evaluation of a Large‐Scale Quasi‐Experimental Microfinance Initiative

This paper uses a structural model to understand, predict, and evaluate the impact of an exogenous microcredit intervention program, the Thai Million Baht Village Fund program. We model household decisions in the face of borrowing constraints, income uncertainty, and high‐yield indivisible investment opportunities. After estimation of parameters using preprogram data, we evaluate the model's ability to predict and interpret the impact of the village fund intervention. Simulations from the model mirror the data in yielding a greater increase in consumption than credit, which is interpreted as evidence of credit constraints. A cost–benefit analysis using the model indicates that some households value the program much more than its per household cost, but overall the program costs 30 percent more than the sum of these benefits.     

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”.     

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)     

Backward Induction Foundations of the Shapley Value

We present a noncooperative game model of coalitional bargaining, closely based on that of Gul (1989) but solvable by backward induction. In this game, Gul's condition of “value additivity” does not suffice to ensure the existence of a subgame perfect Nash equilibrium that supports the Shapley value, but a related condition—“no positive value‐externalities”—does. Multiple equilibria can arise only in the event of ties, and with a mild restriction on tie‐break rules these equilibria all support the Shapley value.     

Optimal block sequences for blocked fractional factorial split-plot designs

It is known that for blocked 2^n-k$2^{n-k}$ designs a judicious sequencing of blocks may allow one to obtain early and insightful results regarding influential parameters in the experiment. Such findings may justify the early termination of the experiment thereby producing cost and time savings. This paper introduces an approach for selecting the optimal sequence of blocks for regular two-level blocked fractional factorial split-plot screening experiments. An optimality criterion is developed so as to give priority to the early estimation of low-order factorial effects. This criterion is then applied to the minimum aberration blocked fractional factorial split-plot designs tabled in McLeod and Brewster [2004. The design of blocked fractional factorial split-plot experiments. Technometrics 46, 135–146]. We provide a catalog of optimal block sequences for 16 and 32-run minimum aberration blocked fractional factorial split-plot designs run in either 4 or 8 blocks.     

Multivariate spatial U-quantiles: A Bahadur–Kiefer representation,a Theil–Sen estimator for multiple regression,and a robust dispersion estimator

A leading multivariate extension of the univariate quantiles is the so-called “spatial” or “geometric” notion, for which sample versions are highly robust and conveniently satisfy a Bahadur–Kiefer representation. Another extension of univariate quantiles has been to univariate U-quantiles, on the basis of which, for example, the well-known Hodges–Lehmann location estimator has a natural formulation. Generalizing both extensions, we introduce multivariate spatial U-quantiles and develop a corresponding Bahadur–Kiefer representation. New statistics based on spatial U-quantiles are presented for nonparametric estimation of multiple regression coefficients, extending the classical Theil–Sen nonparametric simple linear regression slope estimator, and for robust estimation of multivariate dispersion. Some other applications are mentioned as well.