Naturally Occurring Preferences and Exogenous Laboratory Experiments: A Case Study of Risk Aversion

Does individual behavior in a laboratory setting provide a reliable indicator of behavior in a naturally occurring setting? We consider this general methodological question in the context of eliciting risk attitudes. The controls that are typically employed in laboratory settings, such as the use of abstract lotteries, could lead subjects to employ behavioral rules that differ from the ones they employ in the field. Because it is field behavior that we are interested in understanding, those controls might be a confound in themselves if they result in differences in behavior. We find that the use of artificial monetary prizes provides a reliable measure of risk attitudes when the natural counterpart outcome has minimal uncertainty, but that it can provide an unreliable measure when the natural counterpart outcome has background risk. Behavior tended to be moderately risk averse when artificial monetary prizes were used or when there was minimal uncertainty in the natural nonmonetary outcome, but subjects drawn from the same population were much more risk averse when their attitudes were elicited using the natural nonmonetary outcome that had some background risk. These results are consistent with conventional expected utility theory for the effects of background risk on attitudes to risk.     

‘Environment’ Submissions in the UK's Research Excellence Framework 2014

There has been much debate about university research assessment exercises. In the UK, a major element of the 2014 Research Excellence Framework (REF2014) has been the research environment. Here we analyse 98 REF2014 ‘environment’ submissions in Business and Management Studies. We explore whether there are distinctive language‐related differences between submissions of high and low ranked universities and conclude that submission writers have a strong incentive to exaggerate strengths and conceal problems. In addition, innate biases such as the ‘halo’ and ‘velcro’ effects may distract the attention of assessors from a submission's strengths and weaknesses, since they are likely to influence their pre‐existing impressions. We propose several changes to improve how environment is evaluated. We also argue that the research environment would be more likely to be enhanced if the number of outputs submitted in future was an average of two and a maximum of four per academic, rather than the maximum of five currently being considered.     

Why are mediation effects so small?

Identifying mediators in variable chains as part of a causal mediation analysis can shed light on issues of causation, assessment, and intervention. However, coefficients and effect sizes in a causal mediation analysis are nearly always small. This can lead those less familiar with the approach to reject the results of causal mediation analysis. The current paper highlights five factors that contribute to small path coefficients in mediation research: loss of information when measuring relationships across time, controlling for prior levels of a predicted variable, adding control variables to the analysis, ignoring measurement error in one’s variables, and using multiple mediators. It is argued that these issues are best handled by increasing the statistical power of the analysis, identifying the optimal temporal interval between variables, using bootstrapped confidence intervals to analyze the results, and finding alternate ways of assessing the meaningfulness of the indirect effect.     

The More the Merrier? Multiple Parent‐Adult Child Relations

Although parent‐adult child ties are generally positive, most parents have multiple children whose relations may yield collective ambivalence combining higher and lower quality. Little research has investigated these multiple relations. NSFH respondents aged 50+ with adult children (N = 2,270) are used to assess patterns of quality and contact across multiple children in the same family. This illuminates mixed experiences, especially for lowest quality and contact across children, contributing to collective ambivalence in parent‐adult child relations within families. Having more children increases prevalence of both positive and negative relations. Stepchildren exhibit more negative relations than nonstepchildren, even in the same family. Mothers have more positive but not more negative relations than fathers, but mothers have more negative relations with stepchildren.     

An In-Depth Look at Family Cash-Flow Management Practices

Financial management researchers have typically used a checklist of recommended practices to examine the practices of family financial managers. These studies have shown only a minority use the recommended practices but have offered no insight into what is done. Using in-depth, semi-structured interviews of seven different families, it can be suggested that managers do develop an orderly cash-flow management process. The process is systematic, formalized, done in a regular manner and on a regular basis but not that recommended. The process adopted achieves the manager's objectives of paying the family's bills on time and avoiding overdrafts. The findings suggest that educators focus on developing easy, convenient short-term practices and tools that also would improve the family's long-term financial position.     

The geographic scale of Metropolitan racial segregation

This article addresses an aspect of racial residential segregation that has been largely ignored in prior work: the issue of geographic scale. In some metropolitan areas, racial groups are segregated over large regions, with predominately white regions, predominately black regions, and so on, whereas in other areas, the separation of racial groups occurs over much shorter distances. Here we develop an approach—featuring the segregation profile and the corresponding macro/micro segregation ratio—that offers a scale-sensitive alternative to standard methodological practice for describing segregation. Using this approach, we measure and describe the geographic scale of racial segregation in the 40 largest U.S. metropolitan areas in 2000. We find considerable heterogeneity in the geographic scale of segregation patterns across both metropolitan areas and racial groups, a heterogeneity that is not evident using conventional “aspatial” segregation measures. Moreover, because the geographic scale of segregation is only modestly correlated with the level of segregation in our sample, we argue that geographic scale represents a distinct dimension of residential segregation. We conclude with a brief discussion of the implications of our findings for investigating the patterns, causes, and consequences of residential segregation at different geographic scales.     

A NOTE ON PROCEDURES FOR TESTING THE QUALITY OF A CLUSTERING OF A SET OF OBJECTS

Despite the increased application of cluster analysis in decision sciences, few attempts have been made to derive hypothesis-testing procedures for the evaluation of clustering solutions. In fact, the present paper shows that at least one such attempt failed to specify a meaningful sampling distribution for the test procedure. An alternative index based on the concept of point-biserial correlation is proposed as a possible recovery measure. The index is subsequently used to form the basis of a valid statistical test for the existence of cluster structure.