Hey, I Know You!

Somebody versus nobody: An exploration of the role of celebrity status in an election

Lara Zwarun & Angela Torrey, Social Science Journal, forthcoming

Abstract: This study examines the role celebrity status may play in potential voters’ evaluation of a political candidate presented in a newspaper article. Participants indicated greater intention to vote for a candidate who was a recognizable Hollywood actor than an unknown candidate in a political race, regardless of how substantive the political information provided about the candidate was. This suggests that familiarity with a celebrity can act as a heuristic in peripheral processing. Younger people were more likely to vote for a celebrity candidate than older voters, but how liberal or conservative participants are was not a significant factor in the decision to vote for the celebrity. Nor did participants’ need for cognition or level of political involvement predict intention to vote for the celebrity, suggesting that celebrity status is meaningful to motivated and thoughtful voters as well as those who are less motivated and informed. The possibility is raised that this could be an indication of celebrity status being used as a component of deliberate political decision-making, and future research in this direction is suggested.

Two Words: MORAL. HAZARD.

RL in Toronto sends this article, and notes that someone should explain moral hazard to the researchers.

As KPC hero Gordon Tullock suggested, if you wanted to increase auto safety, you might do this:  

In other words, if players were safer, they would play more aggressively, and the net effect (that's a hockey goal joke!) would be close to zero. People choose their own level of risk. Safer equipment, more risk = no change injuries.

(pic credit to EconoBonus, even though he attributes the idea to Peltzman. EconoBonus's "Fact 2" is not a fact at all, I should say: deaths and injuries per mile have fallen, not risen. It's just an example, though. It's true Peltzman did good research on the subject...)



To be fair, both death rates and injury rates have actually fallen sharply for cars. The effect on pedestrians is ambiguous. I think the most you can say about the Peltzman effect is that the improvements in health that result from improvements in safety may be less than you expect. They do NOT appear to wash out completely. Safer cars and safer roads really do appear to have reduced injuries, by quite a bit.

Your Eurozone deathwatch update

1. The Greek government has replaced all the heads of their military branches with officers considered more friendly to the regime.

Wow! Given Greece's history, that is a stunner. The left fears a coup? This might get even uglier that I had imagined.

2. Italian bond yields are up to 6.4% and Berlusconi is coming to the G-20 Summit empty handed.

Italy's public debt is on the cusp of explosive dynamics, where the higher interest rate on new debt combined with a low economic growth rate causes the debt to GDP ratio to continually rise even if the Italian budget is in primary balance (spending net of interest payments = revenues).

People, the Euro as we know it is over. I say it's a coin flip to last until Christmas and maybe 15% to last until spring break.

Germany and France are asking Greece, "do you want to stay in or not?" and Greece is saying "what, are you guys deaf?".

I am not sure what Germany and France are up to. If Greece goes, Italy definitely goes and that's game, set & match.

If they want to keep the Euro together they need to take on Greek debt as their own and settle in for a long hard slog dealing with Italy.

"They are hoping that China will want to buy Europe"

I'd do anything for love but I won't do that

KPC friend David Tufte reports that his university (Southern Utah) is looking for faculty members willing to let students stay at their house for the rest of the semester!

I am not making this up.

Are there no navigable bodies of water nearby where the kids could stay on cruise ships for the semester like they are doing at St. Mary's college in Maryland?

I am not making that one up either.

Academics out there: what's the weirdest thing your university has asked you to do?

Marriage Proposal

Note the size of the rock on the ring at the end.  The LMM's reaction:  "If you had given me a ring like that, you could jumped off the roof, too."

Cheap Sex as a Collective Action Failure

I had Laura Sessions Step, author of UNHOOKED, in at Duke to give a talk a few years ago.  Her question, simplifying a bit, is why do young women make themselves so available, unmarried, to young men in hopes of making themselves, the young women happy?  (This clearly makes the young men happy, but that's beside the point).

Pileus has a simpler and cleaner explanation.

Excerpt:
This downward spiral that women have been caught in—the dwindling supply of available men induces women to make themselves even more sexually available than the next women in order to compete, thereby further dampening the supply of potential mates—seems impossible to break out of. At the heart of the problem is a classic, Olsonian collective action failure. All women would benefit if, collectively, women were to require more of men they had sex with. But every woman knows that her behavior, by itself, will not cause market prices to change, so she cheats—and by “cheats” I mean she cheats the female collective. The problem with this free riding behavior is that everyone faces the same incentives and there is not an effective punishment for cheating. The result: men get more sex and women can’t find mates. Such are the fruits of feminism.
Maybe the old (some would say sexist) adage that “good girls don’t” had something going for it after all.

Los Repartimientos

The EYM writes an interesting piece on "los repartimientos" over at EE.  Check it out.

Did Media Frenzy Contribute to Stock Collapse of Fiancial Institutions?

The Role of Media in the Credit Crunch: The Case of the Banking Sector

Tomasz Piotr Wisniewski & Brendan Lambe, Journal of Economic Behavior & Organization, forthcoming

Abstract: Using a Vector Autoregression framework, this paper investigates the dynamic relationship between the intensity of negative media speculation and the market performance of financial institutions. Evidence is provided that over the sub-prime crisis period pessimistic coverage Granger-caused the returns on banking indices, while causality in the opposite direction proved weaker. These findings may imply that journalists not only report on the state of economic reality, but also play an active role in creating it. Investors acting upon sentiment implicit in media reports would have been able to improve their investment performance, as measured by Sharpe ratios and Jensen's alphas.

.
(Nod to Kevin Lewis)

The Golden Rule

Tyler and I wrote a piece for Grantland.com on the NBA labor situation. The link is here.

Bill Simmons approached Tyler and he magnanimously cut me in on the deal.

Simmons also asked us to write an introductory paragraph about ourselves and our connection to basketball. This is what we wrote:

Tyler and Kevin are academic economists who share a love of basketball. For years they held Washington Bullets season tickets, trekking from suburban Virginia to the Cap Centre. Their all-time favorite Bullet is Rex Chapman. Now cruelly separated by geography, Kevin is an OKC Thunder ticket-holder, while Tyler anxiously awaits the return of a professional basketball franchise to the DC area.

Sadly, what ended up appearing in the article was this:

Tyler Cowen and Kevin Grier are both economists. They are also both basketball fans. Here's their take on the NBA lockout.


Sorry Rex!!!!