1. Interventional policies and practices needed to prevent bullying and its harm

    May 13, 2016 by Ashley

    From the National Academy of Sciences media release:

    school_bullyBullying is a serious public health problem, with significant short- and long-term psychological consequences for both the targets and perpetrators of such behavior, and requires a commitment to developing preventive and interventional policies and practices that could make a tangible difference in the lives of many children, says a new report from the National Academies of Sciences, Engineering, and Medicine.

    The programs that appear most effective are those that promote a positive school environment and combine social and emotional skill-building for all students, with targeted interventions for those at greatest risk for being involved in bullying. There is emerging research that widely used zero-tolerance policies — those that impose automatic suspension or expulsion of students from school after one bullying incident — are not effective at curbing bullying or making schools safer and should be discontinued. Instead, resources should be directed to evidence-based policies and programs for bullying prevention in the United States.

    Until recently, most bullying typically occurred at school or other places where children play or congregate, but an abundance of new technologies has led to cyberbullying, through chat rooms, social media, and other forms of digital communication.

    Although it is difficult to determine the extent of bullying due to definitional and measurement inconsistencies, bullying likely affects between 18 percent and 31 percent of children and youth, and the prevalence of cyberbullying ranges from 7 percent to 15 percent. Estimates are even higher for subgroups who are particularly vulnerable, such as individuals who have disabilities, are obese, or are LGBT. In addition, children with fewer same-ethnicity peers at school appear to be at greater risk for being targets of bullying.

    Adolescents who are bullied experience a range of physical problems, including sleep disturbances, gastrointestinal concerns, and headaches. Although the full consequences of bullying on the brain are not yet understood entirely, there are changes in the stress response systems associated with being bullied that increase the risk of mental health problems, including cognitive function and self-regulation of emotions. Being bullied during childhood and adolescence has been linked to psychological effects such as depression, anxiety, and alcohol and drug abuse into adulthood.

    Youth who bully others are more likely to be depressed, engage in high-risk activities such as theft and vandalism, and have adverse outcomes later in life compared with those who do not bully, the report says. In addition, individuals who bully others and are themselves bullied appear to be at greatest risk for poor psychological and social outcomes. Children involved in bullying as perpetrators, targets, or both are also significantly more likely to contemplate or attempt suicide. However, there is not enough evidence to conclude that bullying is a causal factor in youth suicides. The committee that conducted the study and wrote the report also examined the relationship between bullying and school shootings, concluding that the data are unclear on the role of bullying as a precipitating cause of these shootings.

    Zero-tolerance policies may lead to underreporting of bullying incidents because the consequence is perceived as too harsh, the committee found. The effects of school-based programs that involve all students regardless of their risk for bullying or being bullied — such as counselors or teachers presenting strategies for responding to bullying — appear to be relatively modest. Multi-component programs that combine elements of these programs along with more targeted interventions for youth at risk of bullying or being bullied — for example, teaching more intensive social-emotional skills or de-escalation approaches — appear to be most effective at reducing bullying.

    Families play a critical role in bullying prevention by providing emotional support to encourage disclosure of bullying incidents and by fostering coping skills in their children, the report says. However, the role of peers in bullying prevention as bystanders and as intervention program leaders needs further research to determine the extent to which peer-led programs are effective.

    Laws and policies have the potential to strengthen state and local efforts to prevent, identify, and respond to bullying, the report says. Over the past 15 years, all 50 states and the District of Columbia have adopted or revised laws to address bullying, and all except Alaska include cyberbullying in their statutes. The U.S. Department of Education’s Office of Civil Rights, the state attorneys general, and local education agencies should partner with researchers to collect data on an ongoing basis on the efficacy and implementation of anti-bullying laws and policies, in order to guide legislators who may amend existing laws or create new ones.

    Given the varying use of the terms “bullying” and “peer victimization” in research and practice, for this report, the committee used the current Centers for Disease Control and Prevention definition: Bullying is any unwanted aggressive behavior(s) by another youth or group of youths who are not siblings or current dating partners that involves an observed or perceived power imbalance and is repeated multiple times or is highly likely to be repeated, and bullying may inflict harm or distress on the targeted youth including physical, psychological, social, or educational harm. The departments of Education, Health and Human Services, Justice, Agriculture, and Defense, and the Federal Trade Commission, which are engaged in the Federal Partners in Bullying Prevention (FPBP) interagency group, should foster use of a consistent definition of bullying, the report says.

    The committee also recommended federal agencies work with relevant stakeholders to sponsor the development, implementation, and evaluation of evidence-based programs to address bullying behavior and bullying prevention training for professionals and volunteers who work directly with children and adolescents on a regular basis. In addition, social media companies should partner with the FPBP Steering Committee to adopt, implement, and evaluate on an ongoing basis policies and programs for preventing, identifying, and responding to bullying on their platforms and should publish their anti-bullying policies on their websites.

    The agencies engaged in the FPBP interagency group should gather longitudinal surveillance data on the prevalence of all forms of bullying, including physical, verbal, relational, property, cyber, and bias-based bullying, and the numbers of individuals involved in bullying, including targets, perpetrators, and bystanders, in order to have more uniform and accurate estimates of prevalence.

    Bullying has long been tolerated as a rite of passage among children and adolescents, but it has lasting negative consequences and cannot simply be ignored,” said committee chair Frederick Rivara, Seattle Children’s Hospital Guild Endowed Chair in Pediatric Research and professor of pediatrics and epidemiology at the University of Washington. “This is a pivotal time for bullying prevention, and while there is not a quick fix or one-size-fits-all solution, the evidence clearly supports preventive and interventional policy and practice.”


  2. Paranormal beliefs can increase number of dé jà vu experiences

    May 2, 2016 by Ashley

    From the British Psychological Society (BPS) media release:

    thinkingA belief in the paranormal can mean an individual experiences more déjà vu moments in their life.

    This is one of the findings of a study by 3rd year undergraduate student Chloe Pickles and Dr Mark Moss, of Northumbria University, who will present their poster today, Thursday 28 April 2016, at the British Psychological Society’s annual conference in Nottingham. Over 100 participants completed surveys relating to perceived stress, belief in paranormal experiences and beliefs about déjà vu. Analysis of the results showed a strong link between belief in paranormal experiences and the frequency, pleasantness and intensity of déjà vu experiences. Stress was linked significantly to intensity and duration only.

    Chloe Pickles said: “Our study calls in to question whether stress increases the number of déjà vu moments for an individual. Previous research had not considered the impact of belief when experiencing the feeling that this moment has happened before. Déjà vu might be a normal experience for those more open to it as well as (or instead of) a consequence of a negative life events.”


  3. Gates of serotonin: Cracking the workings of a notorious receptor

    April 25, 2016 by Ashley

    From the Ecole Polytechnique Fédérale de Lausanne media release:

    brain scanEPFL scientists have elucidated for the first time how a notoriously elusive serotonin receptor functions with atom-level detail. The receptor transmits electrical signals in neurons and is involved in various disorders, meaning that the discovery opens the way for new treatments.

    Serotonin is a major neurotransmitter, regulating mood, appetite, sleep, memory, learning, and other functions by binding to dedicated receptor proteins. Serotonin receptors have been researched for decades, but details about their structure and function are hard to come by. EPFL scientists have now made the first ever computer simulation of a notoriously elusive serotonin receptor that is involved in fast signal transmission in neurons and plays a central role in disorders such as schizophrenia, chemotherapy nausea, irritable bowel syndrome, anxiety, and seizures. The work is published in the journal Structure.

    The 5-HT3 receptor (5-HT stands for 5-hydroxytryptamine, the technical name of serotonin) is the third member of a family of serotonin receptors. It is made up of five proteins that form a tube-like channel through the cell membrane. When serotonin binds to the receptor, a gate opens up and allows positively charged ions of sodium, potassium or calcium to flow through the channel. This changes the electrical balance between the inside and outside of the neuron, and an electrical signal is transmitted across the cell membrane.

    In our central and peripheral nervous system such “neurotransmitter-gated” receptors with ion channels like 5-HT3 are critical for signaling between neurons. However they have been notoriously difficult to study with traditional tools of structural biology. But in a 2014 Nature paper, the lab of Horst Vogel at EPFL published the first ever, high-resolution and complete 3D structure of the 5-HT3 receptor.

    Now, Vogel’s lab has followed up with a complete computer simulation of 5-HT3 that reveals the motions of each atom across microseconds and at atomic, sub-nanometer resolution. This so-called “molecular dynamics simulation” uses the structure of 5-HT3 receptor that Vogel’s lab uncovered in 2014 to accurately depict the structural changes that 5-HT3 undergoes inside a cell membrane after serotonin binds and activates it to open its ion channel. To make sure that they were not looking at random structural changes of the receptor itself, the researchers also ran simulations of the receptor without the ligand.

    “Our 2014 paper delivered the architecture of the 5-HT3 neuroreceptor with atomic detail,” says Horst Vogel. “But that was a static structure that did not explain how the receptor functions as a gated transmembrane ion channel to transmit electrical signals across the cell membrane.”

    Specifically, Vogel’s team wanted to know how a ligand, e.g. serotonin, that binds to the part of 5-HT3 outside of the cell, can open the ion channel’s gate, which is buried inside the cell’s membrane six nanometers away — a considerable distance in the world of molecules.

    With this degree of accuracy, the researchers feel confident that the simulation delivers a realistic description of how the 5-HT3 receptor works. Beyond that, it also acts as a blueprint for the function of neurotransmitter-gated, ion-channel receptors in general.

    The data can help us understand how neuronal signals are transmitted at an atomic scale,” says Vogel. “This would hold enormous potential for future drug development and treatment of disorders linked to these receptors, including schizophrenia, anxiety, nausea, and others.”


  4. Spending that fits personality can boost well-being

    April 14, 2016 by Ashley

    From the Association for Psychological Science media release:

    Shopping4Money could buy happiness if your purchases fit your personality, according to a new study that examines nearly 77,000 actual UK bank spending transactions.

    The study, published in Psychological Science, a journal of the Association for Psychological Science, revealed that people who spent more money on purchases that aligned with their personality traits reported greater life satisfaction. Spending-personality fit was more strongly associated with life satisfaction than were either total income or total spending.

    The study was conducted by researchers at Cambridge Judge Business School and the Psychology Department of Cambridge University in collaboration with a UK-based multinational bank. Customers were asked whether they would complete a standard personality and life satisfaction questionnaire, and to consent to their responses being matched anonymously for research purposes with their bank transaction data.

    The final study was based on 76,863 transactions of 625 participants–none of whose names is known to the authors. The study whittled down 112 spending categories automatically grouped by the bank into 59 categories that had at least 500 transactions over a six-month period.

    The study matched spending categories on the widely recognized “Big Five” personality traits–openness to experience (artistic versus traditional), conscientiousness (self-controlled vs easygoing), extraversion (outgoing vs reserved), agreeableness (compassionate vs competitive), and neuroticism (prone to stress vs stable).

    For example, “eating out in pubs” was rated as an extroverted and low conscientiousness (impulsive) spending category, whereas “charities” and “pets” were rated as agreeable spending categories. Further examples can be found below.

    The researchers then compared the participants’ actual purchases to their personalities using this scale, and found that people generally spent more money on products that match their personality. For example, a highly extroverted person spent approximately £52 more each year on “pub nights” than an introverted person. Similarly, a highly conscientiousness person spent £124 more annually on “health and fitness” than a person low in conscientiousness.

    And the data showed that those who bought products that more closely matched their personalities reported higher satisfaction with their lives, and this effect was stronger than that of their total income or total spending.

    The study was authored by Sandra Matz, a PhD candidate in the Psychology Department of the University of Cambridge; Joe Gladstone, a Research Associate at Cambridge Judge Business School; and David Stillwell, University Lecturer in Big Data Analytics & Quantitative Social Science at Cambridge Judge Business School.

    “Historically, studies had found a weak relationship between money and overall well-being,” says Joe Gladstone. “Our study breaks new ground by mining actual bank-transaction data and demonstrating that spending can increase our happiness when it is spent on goods and services that fit our personalities and so meet our psychological needs.”

    The researchers believe the findings hold widespread implications, including for Internet merchants using search-based recommendation engines. Companies can use this information to recommend products and services that don’t just increase clicks, but will actually improve the well-being of their customers–allowing companies to forge better relationships with customers based on what makes them happier.

    The researchers also backed up their findings by running a second experiment, where they gave people a voucher to spend in either a bookshop or at a bar. Extroverts who were forced to spend at a bar were happier than introverts forced to spend at a bar, while introverts forced to spend at a bookshop were happier than extroverts forced to spend at a bookshop. This follow-up experiment overcomes the limitations of correlational data by demonstrating that spending money on things that match a person’s personality can cause an increase in happiness.

    “Our findings suggest that spending money on products that help us express who we are as individuals could turn out to be as important to our well-being as finding the right job, the right neighborhood or even the right friends and partners,” says Sandra Matz. “By developing a more nuanced understanding of the links between spending and happiness, we hope to be able to provide more personalized advice on how to find happiness through the little consumption choices we make every day.”


  5. Race biases teachers’ expectations for students

    March 31, 2016 by Ashley

    From the Johns Hopkins University media release:

    teens schoolWhen evaluating the same black student, white teachers expect significantly less academic success than black teachers, a new study concludes. This is especially true for black boys.

    When a black teacher and a white teacher evaluate the same black student, the white teacher is about 30 percent less likely to predict the student will complete a four-year college degree, the study found. White teachers are also 12 percent less likely to expect their black students will graduate high school.

    What we find is that white teachers and black teachers systematically disagree about the exact same student,” said co-author Nicholas Papageorge, an economist in the Krieger School of Arts and Sciences at the Johns Hopkins University. “One of them has to be wrong.”

    The study, forthcoming in the journal Economics of Education Review, and now available online, suggests that the more modest expectations of some teachers could become self-fulfilling prophecies. These low expectations could affect the performance of students, particularly disadvantaged ones who lack access to role models who could counteract a teacher’s low expectations, Papageorge said.

    “If I’m a teacher and decide that a student isn’t any good, I may be communicating that to the student,” Papageorge said. “A teacher telling a student they’re not smart will weigh heavily on how that student feels about their future and perhaps the effort they put into doing well in school.”

    The findings also likely apply beyond the education system, the researchers say — leading to racial biases in the workplace, the service industry and the criminal justice system.

    The researchers analyzed data from the Educational Longitudinal Study of 2002, an ongoing study following 8,400 10th grade public school students. That survey asked two different teachers, who each taught a particular student in either math or reading, to predict how far that one student would go in school. With white students, the ratings from both teachers tended to be the same. But with black students, boys in particular, there were big differences — the white teachers had much lower expectations than black teachers for how far the black students would go in school.

    The study found:

    • White and other non-black teachers were 12 percent more likely than black teachers to predict black students wouldn’t finish high school.
    • Non-black teachers were 12 percent less likely to expect black students to complete a four-year college degree. Expectations dropped further for non-black teachers of a different gender than the student. The drop increased even more for black boys, especially when their math teacher was making the assessment.
    • Non-black teachers were 5 percent more likely to predict their black boy students wouldn’t graduate high school than their black girls.
    • Black female teachers are significantly more optimistic about the ability of black boys to complete high school than teachers of any other demographic group. They were 20 percent less likely than white teachers to predict their student wouldn’t graduate high school, and 30 percent less likely to say that then black male teachers.
    • White male teachers are 10 to 20 percent more likely to have low expectations for black female students.
    • Math teachers were significantly more likely to have low expectations for female students.
    • For black students, particularly black boys, having a non-black teacher in a 10th grade subject made them much less likely to pursue that subject by enrolling in similar classes. This suggests biased expectations by teachers have long-term effects on student outcomes, the researchers said.

    Papageorge’s co-authors are Seth Gershenson, an assistant professor of public policy at American University, and Stephen B. Holt, a doctoral student at American University.

    “While the evidence of systematic racial bias in teachers’ expectations uncovered in the current study are certainly troubling and provocative, they also raise a host of related policy-relevant questions that our research team plans to address in the near future,” Gershenson said. “For example, we are currently studying the impact of these biased expectations on students’ long-run outcomes, such as educational attainment, labor market success and interaction with the criminal justice system.”


  6. CEO personality traits play role in incentive pay, compensation

    March 28, 2016 by Ashley

    From the University of Texas at Dallas media release:

    manager/bossCompanies appear to structure compensation contracts and incentive pay based on a manager’s personality traits, and not just firm characteristics, according to a new study from The University of Texas at Dallas.

    Dr. Vikram Nanda, O.P. Jindal Distinguished Chair of finance and managerial economics in the Naveen Jindal School of Management, said there are divergent views on the use of options and stock in CEO compensation contracts: do they appropriately incentivize managers and enhance shareholder value, and if so, why is there much variation in their use across firms?

    The study, published recently in the Journal of Financial Economics, found that companies offer incentive-heavy compensation contracts to overconfident CEOs to “exploit” their positively biased views of the firms’ prospects. The notion is that if managers and shareholders — represented by the board — have a different take on a firm’s prospects and CEO talent, there will be greater use of incentive pay that the managers value highly, but the board regards as less costly.

    When you think about incentive contracts, you don’t usually think about the personality of the individual being a factor in the contract,” Nanda said. “You don’t usually hear about how two profit-sharing agreements are going to look different because the personalities and the beliefs of the individuals are coming into play.”

    Using the compensation data of CEOs between 1992 and 2011, the researchers identified managers who were exhibiting behavior that was overconfident compared to other CEOs. They conducted empirical tests to explore the relationship between CEO overconfidence and incentive compensation.

    The study shows that incentive compensation for CEOs is driven by individual traits and not merely firm-level characteristics.

    “Are CEOs being given these contracts because they are serving an incentive function — incentive contracts are supposed to say you’ll get paid more if you do the right thing or work really hard — or are they just being paid more because these CEOs value these contracts more?” Nanda said. “If a CEO believes the firm is going to do very well, maybe he will take a lot of his compensation in options and stock.”

    The researchers found that:

    • CEO overconfidence increases the proportions of total compensation that comes from both option grants and equity grants, compared to other executives.
    • Overconfident CEOs receive even greater option and equity intensity in innovative and risky firms.
    • Overconfident non-CEO executives also receive higher levels of options and equity.

    “Incentive contracts are sometimes designed to be sensitive to these individual preferences,” Nanda said. “Even at the same firm, I wouldn’t necessarily give one manager the same contract that I would give to another manager who has a different belief about what’s going on in the firm. Basically, one size doesn’t fit all.”

    Dr. Mark Humphery-Jenner of UNSW Australia, Dr. Ling Lei Lisic of George Mason University, and Dr. Sabatino Dino Silveri of the University of Memphis are co-authors of the paper.

    Defining an Overconfident CEO

    Overconfident CEOs are prone to overestimate returns to investments and underestimate risks, Dr. Vikram Nanda said. They may use extremely positive words in the media or tend to invest more than a typical manager in the industry.

    “It’s good to have your enthusiasm and your confidence,” Nanda said. “The question is, if it’s too strong, is there something the firm can do — such as giving you incentive contracts, or monitoring your behavior, or constricting what you can do — to bring out the good side and constrain the bad aspects?”


  7. Blending therapies improves treatment of severe anxiety

    March 22, 2016 by Ashley

    From the York University media release:

    psychotherapy discussionMotivating willingness to change is important in treating a person with severe worry. For this, integrating motivational interviewing (MI) techniques into the commonly practised cognitive behavioral therapy (CBT) is the ideal option, a study led by a York University researcher reveals.

    Our research shows that therapists need to have two sets of skills — to help people become ready for change, and then to help them accomplish that change,” says Dr. Henny Westra, a psychology professor in the Faculty of Health at York U. “The study results suggest that integrating motivational interviewing (MI) with CBT is more effective than CBT alone for long-term improvement.”

    It is normal to feel conflicted about change, and motivational interviewing is an approach that therapists can use to help patients understand and validate the fear of change. It offers a patient-centered way of helping individuals work through their conflicting feelings in order to enhance motivation for change.

    “Because MI is focused on listening and drawing out client ideas, patients feel more confidence in coping with issues facing them even after therapy ends in contrast to having to rely on the therapist’s expertise,” says Dr. Westra, who led the study with Ryerson University Professor Dr. Martin Antony and Professor Dr. Michael Constantino, University of Massachusetts Amherst.

    The five-year study was conducted with grant support from the Canadian Institutes of Health Research. During the randomized clinical trial, 85 participants underwent treatment for severe generalized anxiety disorder (GAD). Cognitive behavioral therapy alone was given to 43 participants and the rest received a combination of CBT and MI from therapists trained in both.

    Although the participants responded well to both the motivationally enhanced CBT and standard CBT during the 15-week treatment phase, those who received the motivationally enhanced treatment continued to improve, the results indicate. Those in the MI-CBT were five times more likely to be free of the diagnosis of generalized anxiety one year after treatment ended.

    According to Dr. Antony, “this study highlights the importance of studying the long term impact of our treatments, as the enhanced improvements seen in people who received the integrated MI and CBT treatment were greatest sometime after treatment had ended.”

    The study titled Integrating Motivational Interviewing with Cognitive-Behavioral Therapy for Severe Generalized Anxiety Disorder: An Allegiance-Controlled Randomized Clinical Trial is published online in the Journal of Consulting and Clinical Psychology.


  8. Depression, obesity common among bipolar patients with exhausted stress system

    March 15, 2016 by Ashley

    From the Umeå universitet media release:

    Depressed seniorNew observations show that older bipolar patients often have decreased activity in the hormone system responsible for the secretion of the stress hormone cortisol.

    Low levels of cortisol in bipolar patients were also associated with depression, low quality of life, obesity, dyslipidaemia and metabolic syndrome. These discoveries could provide important clues as to how treatment strategies for depression and bipolar disorder can be improved, according to a dissertation at Umeå University in Sweden.

    Martin Maripuu, doctoral student at the Department of Clinical Sciences, Division of Psychiatry, has studied the correlation between low cortisol levels, so-called hypocortisolism, and poor psychiatric and somatic health in patients with recurrent depressions or bipolar disorder. Poor physical health in the form of obesity, metabolic syndrome and dyslipidaemia, i.e. high levels of fat in the blood, was considerably more common in patients with low cortisol levels in comparison to patients with normal or high cortisol levels.

    People with bipolar disorder with either high or low cortisol levels were also depressed to a near on double extent than people with normal stress regulation. Low quality of life was between four and six times more common in groups with low or high activity in the stress regulation system. In people with recurrent depressions, a correlation could also be found between low cortisol levels and short telomeres. This is interesting since short telomeres are considered an indication of premature aging and a high accumulation of stress.

    “High cortisol levels have previously been shown to be associated with poor health in people with depressions or bipolar disorder. What’s interesting about our results is that also low cortisol levels were associated with a considerable increase in negative health consequences,” says Martin Maripuu.

    Recurring depressions occur in approximately eight per cent of the population and bipolar disorder, which is characterised by both recurring depressions and hypomanic/manic episodes, occurs in approximately one per cent of the population. People with these illnesses live with depressive or manic symptoms for about 50 per cent of the time, experience a decreased quality of life and have an expected life span of 10-15 years shorter than that of the general population. The main reasons for this shortened expected life span is the high prevalence of suicide and cardiovascular mortality.

    Stress is one of many risk factors for depression and also a risk factor for cardiovascular disorders. Stress normally contributes to an increased activity in the hormone system regulating the secretion of cortisol. Hyperactivity in the hormone system with high cortisol levels, a condition called hypercortisolism, is common in patients with depression. At the other end of the spectrum, there are examples showing that high levels of stress can lead to hypocortisolism in the long term.

    It is possible that recurring depressive and/or manic episodes with a high accumulation of stress with time will lead to an exhaustion of the hormone system. Support for this hypothesis was seen in the group with bipolar patients where older patients exhibited lower cortisol levels especially among patients that throughout life had been without prophylactic mood stabilizing treatment. On the other hand, no increase could be seen in the proportion of hypocortisolism among bipolar patients who had been treated with the mood stabilizer lithium during a large part of their lives. According to Martin Maripuu, the positive effects that early and continuous lithium treatment has on the course of the illness might partly be explained by the finding that lithium helps prevent the development of hypocortisolism.

    See the dissertation at: http://umu.diva-portal.org/smash/record.jsf?pid=diva2%3A882795&dswid=-7530

     


  9. Spending on public higher education overlooks net benefits as investment in state’s future

    March 14, 2016 by Ashley

    From the University of Illinois at Urbana-Champaign media release:

    school busIn spite of the overwhelming evidence of a skills deficit, a depressed middle class and growing inequality, the state of Illinois continues to underinvest in public higher education. But considering higher education funding as an investment that lowers state welfare and prison costs, generates tax revenues and leads to economic growth in the future — and not as mere consumption spending — could reframe the debate, according to an article by a University of Illinois expert in the economics of education.

    In the face of recent dramatic examples, including the $300 million in cuts to the University of Wisconsin budget and, in Illinois, the failure to fund public universities and MAP grants for 2016 together with the governor’s proposed cuts for 2017, the investment-versus-spending distinction is a vital one, said Walter W. McMahon, an emeritus professor of economics and of educational organization and leadership at the University of Illinois.

    “Since this curtailed investment in human capital would otherwise contribute heavily not only to a state’s economic growth and development but also in ways estimated in the article — to higher state tax revenue and lower Medicaid, child care, welfare and criminal justice system costs — it’s disheartening to see this disinvestment trend by our public officials,” said McMahon, also the author of “Higher Learning, Greater Good: The Private & Social Benefits of Higher Education,” published by Johns Hopkins University Press.

    Published in the Journal of Education Finance, the article develops the total return of public education relative to the full costs to the state of Illinois, the key criteria for determining whether there is under- or over-investment for the most efficient statewide development.

    McMahon concluded that public education in Illinois contributes to investment returns of 9.5 percent for K-12; 15.3 percent for community college; and 13.4 percent for university, respectively, for every dollar that’s spent — returns that are well above the 7.2 percent the money would have earned if invested in an index fund that tracked returns of the S&P 500, McMahon noted.

    (Updated calculations based on the newest earnings data at each education level, corrected for dropouts and other factors, show returns relative to costs of 12.9 percent at two-year institutions and 12.3 percent at the four-year institutions.)

    “These earnings-based and total social rates of return both show that higher education is economically very efficient — in fact, more efficient than the average corporation in the S&P 500,” McMahon said.

    This measure of efficiency trumps any possible overspending on administrative costs cited by critics, so it’s not surprising that U.S. higher education is widely regarded as the best in the world, according to McMahon.

    The effects are not just on better-paying jobs but are also on many outcomes beyond earnings, from better health and child development to political stability and lower criminal justice costs,” he said. “Furthermore, the returns last for the 65 years or so remaining in the typical graduate’s lifecycle.

    “All told, the state of Illinois’ education investment pays for itself every 2.3 years in state budget savings alone.”

    The return to the state is considerably larger if nonmonetary outcomes are considered.

    “A major opportunity being missed is estimating the effects of higher education on state tax revenues and on budgeted state tax costs for health care, welfare, child support and the criminal justice system,” McMahon said. “Beyond these state budget savings, I also found about a 30 percent total return that includes these wider health and other benefits to statewide development.”

    The paper’s implications for the state’s fiscal health and human capital ought to be of immediate concern to Illinois legislators and policymakers.

    The disconnect with objective benefit-cost analysis suggests the need for a new strategy in making decisions about public education financing,” McMahon said. “Legislators are often focused on infrastructure issues like bridges and roads, to the extent that public education gets short shrift. Nobody likes taxes, which, if the funds are invested in education where there is a future return, are a form of forced saving. But this type of saving and investment has a huge payoff. And if done thoughtfully, it is crucial to the state’s growth, development and fiscal health.”

    Another way of looking at the issue is that “one can also look at the same numbers as estimating the damage to the state from cuts, if they are not restored,” McMahon said.

    “In Illinois, what is happening is not just a disaster for higher education but also a growing disaster for the state budget, as time passes,” he said. “It’s a disaster for economic growth and the business climate, and a disaster for broader development and well-being of the state. Allowing Chicago State to close and not funding MAP grants, which forces students to drop out of school without the necessary skills to succeed in the working world — all of that will have serious implications for the state of Illinois that should be fairly obvious.”


  10. Lenient return policies lead to increased purchases

    January 25, 2016 by Ashley

    From the University of Texas at Dallas media release:

    Shopping4In 2014, product returns totaled about $280 million across all U.S. retailers. New research from UT Dallas examined existing studies on return policies to quantify the policies’ effect on consumers’ purchase and return behavior.

    UT Dallas doctoral candidate Ryan Freling, who is studying marketing in the Naveen Jindal School of Management, conducted the meta-analysis with UT Arlington associate professor of marketing Dr. Narayan Janakiraman and doctoral candidate Holly Syrdal. The study recently was published online in the Journal of Retailing.

    The meta-analysis is the first attempt to understand the return policy literature quantitatively and prove that lenient policies positively affect purchase and return decisions, Freling said.

    “In general, firms use return policies to increase purchases but don’t want to increase returns, which are costly. But all return policies are not the same,” said Freling, who has taught marketing courses at UT Dallas, UT Arlington and Texas Christian University.

    The researchers collected and sifted through dozens of research papers that examined purchases, returns or both. They eventually focused on 21 papers from fields including economics, marketing, decision science, consumer psychology and operations research.

    The study challenges the underlying assumption that all return policies affect purchases and returns in a similar manner. It suggests that this is not the case, as retailers tend to impose restrictions to dissuade returns or offer leniency to encourage purchases by manipulating five return policy elements: time, money, effort, scope and exchange.

    Overall, lenient return policies led to increased purchases, the study found. The researchers also found a positive effect — smaller, but still significant — of policy leniency on returns.

    For example, leniency in scope increased returns.

    “In the pre-purchase stage, consumers might think about the costs and benefits of making a purchase,” Freling said. “If the return policy is lenient in scope — if a sale item can be returned — a consumer might say, ‘Oh this is on sale. It seems like a good value. I’ll buy it, and if it’s not the right color or fit, I’ll return it.’

    Freling said the study shows that return policy leniency should depend on the retailer’s objectives. If a retailer wants to stimulate purchases, offering more lenient monetary policies and low-effort policies may be effective.

    If a retailer wishes to curb returns, longer deadlines to make a return would be more effective. The study found that leniency in time reduced return rates. Freling said a possible explanation is the endowment effect, which suggests that the longer consumers possess a product, the more attached to it they become and less likely they are to return it.

    “The cost of dealing with returns affects the bottom line,” he said. “You want to look at the different dimensions of a return policy, because you may be able to manipulate the policy to achieve your goals.”

    With online sales becoming a more important aspect of the retail industry — it totaled $2.72 billion on Black Friday last year, up 14 percent from 2014 — Freling said future research should investigate the impact of return policies on e-commerce.

    Return Policy Factors

    The researchers classify return policy leniency as varying along five elements.

    • Time: Retailers commonly specify deadlines in their return policies (e.g., a 30-day policy, a 90-day policy). Policies that provide a longer length of time to return products are more lenient.
    • Monetary: Lenient return policies allow for a full refund of the amount paid for the product, while strict policies allow for only a portion of the purchase price to be refunded.
    • Effort: Some retailers create “hassles” for customers returning products (e.g., requiring the original receipt, tags or product packaging be retained). Return policies requiring less effort from consumers are more lenient.
    • Scope: Stores limit items they consider “return-worthy.” For example, products purchased on sale may not be eligible for return. Policies with a greater scope of “return-worthy” items are more lenient.
    • Exchange: While some retailers offer cash refunds, others offer store credit or product exchange for the returned item. Return policies that allow cash refunds are more lenient.