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Half of the Facts You Know Are Probably Wrong – via Reason.com – In the past half century, all of the foregoing facts have turned out to be wrong (except perhaps the one about inflation rates). We’ll revisit the ten biggest cities question below. In the modern world facts change all of the time, according to Samuel Arbesman, author of The Half-Life of Facts: Why Everything We Know Has an Expiration Date.
More Evidence that Envy Trumps Greed – via falkenblog.blogspot.com – Needless to say, they find that “envy dominates the results as the utility generally decreases when the peer group earns more and it increases when the peer group loses more than the subject.” It’s relative wealth that matters more than absolute wealth.
The iEconomy: Apple and Technology Manufacturing – via NYTimes.com – Articles in this series examine challenges posed by increasingly globalized high-tech industries.
Healthy Habits: The Connection Between Diet, Exercise, & Locus of Control – via Institute for the Study of Labor – This paper analyzes the relationship between individuals’ locus of control and their decisions to exercise regularly, eat well, drink moderately, and avoid tobacco. Our primary goal is to assess the relative importance of the alternative pathways that potentially link locus of control to healthy habits. We find that individuals with an internal locus of control are more likely to eat well and exercise regularly. This link cannot be explained by the extent to which they are future-orientated and value their health, however. There are important gender differences in explaining the link between perceptions of control and healthy habits. Men with an internal locus of control expect to have higher health returns to their investments in diet and exercise. In contrast, women with an internal locus of control maintain healthy habits because they derive greater satisfaction from those activities than women with external control tendencies.
The Science of a Lonely Brain – via Guest Blog, Scientific American Blog Network – Humans are born to a longer period of total dependence than any other animal we know of, and we also know that mistreatment or neglect during this time often leads to social, emotional, cognitive and mental health problems in later life. It’s not hard to imagine how a lack of proper stimulation in our earliest years – everything from rich sensory experiences and language exposure to love and care – might adversely affect our development, but scientists have only recently started to pull back the curtain on the genetic, molecular and cellular mechanisms that might explain how these effects arise in the brain.
Inside the Obama Campaign’s Hard Drive – via Mother Jones – Over the last year and a half at the campaign’s Chicago headquarters, a team of almost 100 data scientists, developers, engineers, analysts, and old-school hackers have been transforming the way politicians acquire data—and what they do with it. They’re building a new kind of Chicago machine, one aimed at processing unprecedented amounts of information and leveraging it to generate money, volunteers, and, ultimately, votes.
Don’t Judge a Book by Its Cover :The Perceived Traits and Values of Attractive Women – via pss.sagepub.com – Research has documented a robust stereotype regarding personality attributes related to physical attractiveness (the “what is beautiful is good” stereotype). But do physically attractive women indeed possess particularly attractive inner attributes? Studying traits and values, we investigated two complementary questions: how perceived attractiveness relates to perceived personality, and how it relates to actual personality. First, 118 women reported their traits and values and were videotaped reading the weather forecast. Then, 118 judges rated the traits, values, and attractiveness of the women. As hypothesized, attractiveness correlated with attribution of desirable traits, but not with attribution of values. By contrast, attractiveness correlated with actual values, but not actual traits: Attractiveness correlated with tradition and conformity values (which were contrasted with self-direction values) and with self-enhancement values (which were contrasted with universalism values). Thus, despite the widely accepted “what is beautiful is good” stereotype, our findings suggest that the beautiful strive for conformity rather than independence and for self-promotion rather than tolerance.
Paternalism can be kind, just not to present-you – via you – More intuitively: it’s easier to stick to a commitment to help a friend stay on their diet, than it is to stay to our diet ourselves. We don’t enjoy seeing our friends go without ice cream, but we like to see them reach their and our idealised goals even more. As La Rochefoucauld observed, “We all have strength enough to bear the misfortunes of others.” You could add that we all have strength enough to bear the delayed gratification of others.
Correlation does not imply causation: How the Internet fell in love with a stats-class cliché. – via Slate Magazine – Not everyone found the news believable. “Facepalm. Correlation doesn’t imply causation,” wrote one unhappy Internet user. “That’s pretty much how I read this too… correlation is NOT causation,” agreed a Huffington Post superuser, seemingly distraught. “I was surprised not to find a discussion of correlation vs. causation,” cried someone at Hacker News. “Correlation does not mean causation,” a reader moaned at Slashdot. “There are so many variables here that it isn’t funny.”
Simpson’s Paradox: A Cautionary Tale in Advanced Analytics and Data Mining – via Significance Magazine – Analytics projects often present us with situations in which common sense tells us one thing, while the numbers seem to tell us something much different. Such situations are often opportunities to learn something new by taking a deeper look at the data. Failure to perform a sufficiently nuanced analysis, however, can lead to misunderstandings and decision traps. To illustrate this danger, we present several instances of Simpson’s Paradox in business and non-business environments. As we demonstrate below, statistical tests and analysis can be confounded by a simple misunderstanding of the data. Often taught in elementary probability classes, Simpson’s Paradox refers to situations in which a trend or relationship that is observed within multiple groups reverses when the groups are combined. Our first example describes how Simpson’s Paradox accounts for a highly surprising observation in a healthcare study. Our second example involves an apparent violation of the law of supply and demand: we describe a situation in which price changes seem to bear no relationship with quantity purchased. This counterintuitive relationship, however, disappears once we break the data into finer time periods. Our final example illustrates how a naive analysis of marginal profit improvements resulting from a price optimization project can potentially mislead senior business management, leading to incorrect conclusions and inappropriate decisions. Mathematically, Simpson’s Paradox is a fairly simple—if counterintuitive—arithmetic phenomenon. Yet its significance for business analytics is quite far-reaching. Simpson’s Paradox vividly illustrates why business analytics must not be viewed as a purely technical subject appropriate for mechanization or automation. Tacit knowledge, domain expertise, common sense, and above all critical thinking, are necessary if analytics projects are to reliably lead to appropriate evidence-based decision making
Statistics Is The Sexy In Science - via Learn Science at Scitable – Statistics transcends all disciplines of science. It is a science and a tool which other disciplines rely on for their investigations. It is science’s way of finding the truth. So, in essence, statistics carries the purity of the sciences on its shoulders. In more compelling terms, statistics is what makes science sexy.
Daniel Kahneman – challenges psychologists to clean up their act : Nature News & Comment – via www.nature.com – Nobel prize-winner Daniel Kahneman has issued a strongly worded call to one group of psychologists to restore the credibility of their field by creating a replication ring to check each others’ results.
Walter Lewin: For the Love of Physics – via www.valueinvestingworld.com – On May 16, 2011, Professor of Physics Emeritus Walter Lewin returned to MIT lecture hall 26-100 for a physics talk and book signing, complete with some of his most famous physics demonstrations to celebrate the publication of his new book: For The Love Of Physics: From the End of the Rainbow to the Edge Of Time – A Journey Through the Wonders of Physics, written with Warren Goldstein.
Eight of the World’s Top Young Economists Discuss Where Their Field Is Going (via Big Think) – via therearefreelunches.blogspot.com – To get the pulse of a field in flux, I asked eight of the world’s top young economists to identify the biggest unanswered questions in economics and predict what breakthroughs will define it a decade or two hence.
Ted Talk – Your body language shapes who you are – via Video on TED.com – Body language affects how others see us, but it may also change how we see ourselves. Social psychologist Amy Cuddy shows how “power posing” — standing in a posture of confidence, even when we don’t feel confident — can affect testosterone and cortisol levels in the brain, and might even have an impact on our chances for success.
A brief history of hyperinflations – By Merryn Somerset Webb – via www.valueinvestingworld.com – This week, the collapse of the Iranian rial hit the mainstream news. It has been falling since the US and the EU imposed sanctions in 2010 but in the past few weeks that fall has accelerated and the usual side effects of rampant inflation have been reported. Consumers are stockpiling food; suppliers are holding back inventories to keep ahead of price rises; high value items are quoted in dollars; and angry citizens are protesting in the streets.
Ted Talk – Shimon Schocken: The self-organizing computer course – via Video on TED.com – Shimon Schocken and Noam Nisan developed a curriculum for their students to build a computer, piece by piece. When they put the course online — giving away the tools, simulators, chip specifications and other building blocks — they were surprised that thousands jumped at the opportunity to learn, working independently as well as organizing their own classes in the first Massive Open Online Course (MOOC). A call to forget about grades and tap into the self-motivation to learn.
Cultural Technology and the Making of K – via Pop : The New Yorker – Three music agencies dominate the K-pop industry. S.M. Entertainment is the largest, followed by J.Y.P. Entertainment and Y.G. Entertainment. (The initials stand for the names of the agencies’ founders, all of whom are former musicians or dancers: Lee Soo-man, Park Jin-young, and Yang “Goon” Hyun-suk, respectively.) The agencies act as manager, agent, and promoter, controlling every aspect of an idol’s career: record sales, concerts, publishing, endorsements, and TV appearances. S.M. and J.Y.P. are in Gangnam, and there are always groups of young girls, many of them Japanese, in the streets outside, hoping for a glimpse of an idol or two (even though the idols generally move anonymously through the city, in minivans with tinted windows). Both sets of offices are surprisingly shabby inside, with cramped studios and worn-looking décor. Y.G., across the river, has much more lavish facilities, including around a dozen state-of-the-art recording studios and a staff of sixteen in-house producers, among them Teddy Park, who wrote “Fantastic Baby,” for BIGBANG, and most of the music for 2NE1, Y.G.’s two most popular groups.
Top 1% Got 93% of Income Growth as Rich-Poor Gap Widened – via Bloomberg – “Income inequality of the scale we have today is destroying our democracy,” retired American Airlines CEO Bob Crandall said in an interview. Crandall, 76, says he became so frustrated at what he sees as selfishness among his peers that he started writing a blog on his Lenovo laptop. “Anyone else willing?” he titled his first entry in August 2011, which argued that people should pay higher taxes.
The Situation of the 53 Percent « The Situationist – via thesituationist.wordpress.com – What the researchers found was striking. Among high-SES children, genes were strongly predictive of age-related increases in cognitive ability. In other words, children from relatively well-to-do families performed better or worse depending on their genes. These kids developed up to their intrinsic potential. Yet at the lowest levels of SES, genetic variation wasn’t related to cognitive development at all. This means that, if you’re poor, even having the right stuff doesn’t guarantee good developmental outcomes.This research indicates that poor environments limit children’s opportunity to develop aptitudes that they are, in a sense, genetically “destined” to acquire. Like a good seed planted in poor soil, even the best equipped of us cannot be expected to thrive in impoverished circumstances. This, in a nutshell, is Mr. Obama’s theory of success.
When Do Voters Win? The Voter’s Blunt Tool - via papers.ssrn.com – When do voters win? Democracies have appealing properties, but failures of democracies to produce policies that benefit the voter abound. What conditions determine the success of the unorganized voter who only possess a blunt tool – the vote – versus an organized special interest group or firm? In this paper we derive with minimal assumptions conditions under which a democracy will produce policies that favor the voter. The model predictions are consistent with Besley, Persson and Sturm (2010), who show that increasing political competition leads to policies that benefit the voter. In addition, we show that increasing office holding benefits, decreasing potential rents to firms and increasing the salience of policy also leads to policies that benefit the voter. We find a positive interaction between the effect of political competition and office holding benefits. We support the model with data from the United States and find empirical evidence that increasing governors’ salary decreased taxes paid by individuals through income tax relative to corporate tax, and increasing Governor salary increased minimum wages.
Unrest Drags Spain Towars Buried Unpleasant Truths - via BBC- Economics journalists have learned, (thanks to the work of the FT’s Gillian Tett), to ask a very brutal and searching question as we parachute into the latest theatre of crisis: look for the social silence. What is staring you in the face but nobody wants to talk about it?
Why Do America’s Super Rich Feel Victimized by Obama- via The New Yorker – In the letter, Cooperman argued that Obama has needlessly antagonized the rich by making comments that are hostile to economic success. The prose, rife with compound metaphors and righteous indignation, is a good reflection of Cooperman’s table talk. “The divisive, polarizing tone of your rhetoric is cleaving a widening gulf, at this point as much visceral as philosophical, between the downtrodden and those best positioned to help them,” Cooperman wrote. “It is a gulf that is at once counterproductive and freighted with dangerous historical precedents.”
Inequality and Its Perils – via NationalJournal.com – At a salon dinner in Washington recently, the subject was inequality. An economist took the floor. Economic inequality, he said, is not a problem. Poverty is a problem, certainly. Unemployment, yes. Slow growth, yes. But he had never yet seen a good reason to believe that inequality, as such—the widening gap between top and bottom, as distinct from poverty or stagnation—is harmful to the economy.
Let’s Get Real Clawbacks From the Banks – via Bloomberg – Of course, some executives experienced the ultimate clawback: losing their jobs and watching their unvested stock and unexercised stock options vanish to bankruptcy, creditors or worthlessness. But as for all the cash bonuses and stock that have already been paid out for illusory earnings and revenue based on valueless investments, little or nothing has been recouped.
“£1m isn’t rich anymore”: the rise and fall of investment banking – via www.newstatesman.com – From Barings and Barclays to Schroders, Chase and Goldmans, Alex Preston charts the history of the rise and fall of the investment bank in the US and Britain.
Visualizing Patent wars – via flowingdata.com – As you’ve probably heard, Apple and Samsung have been in a bit of a kerfuffle over the past few months. We own that patent for that thing. No, we have this patent for that. The state of technology patents is all over the place. The New York Times takes a closer look. Also, don’t miss the video and side-by-side comparisons.
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