Showing papers by "London School of Economics and Political Science published in 2014"

Explaining job polarization: Routine-biased technological change and offshoring

Abstract: This paper documents the pervasiveness of job polarization in 16 Western European countries over the period 1993-2010. It then develops and estimates a framework to explain job polarization using routine-biased technological change and offshoring. This model can explain much of both total job polarization and the split into within- industry and between-industry components.

Costs of Autism Spectrum Disorders in the United Kingdom and the United States

Abstract: RESULTS The cost of supporting an individual with an ASD and intellectual disability during his or her lifespan was $2.4 million in the United States and £1.5 million (US $2.2 million) in the United Kingdom. The cost of supporting an individual with an ASD without intellectual disability was $1.4 million in the United States and £0.92 million (US $1.4 million) in the United Kingdom. The largest cost components for children were special education services and parental productivity loss. During adulthood, residential care or supportive living accommodation and individual productivity loss contributed the highest costs. Medical costs were much higher for adults than for children. CONCLUSIONS AND RELEVANCE The substantial direct and indirect economic effect of ASDs emphasizes the need to continue to search for effective interventions that make best use of scarce societal resources. The distribution of economic effect across many different service systems raises questions about coordination of services and sectors. The enormous effect on families also warrants policy attention.

Fluctuations in Uncertainty

Abstract: This review article tries to answer four questions: (i) what are the stylized facts about uncertainty over time; (ii) why does uncertainty vary; (iii) do fluctuations in uncertainty matter; and (iv) did higher uncertainty worsen the Great Recession of 2007-2009? On the first question both macro and micro uncertainty appears to rise sharply in recessions. On the second question the types of exogenous shocks like wars, financial panics and oil price jumps that cause recessions appear to directly increase uncertainty, and uncertainty also appears to endogenously rise further during recessions. On the third question, the evidence suggests uncertainty is damaging for short-run investment and hiring, but there is some evidence it may stimulate longer-run innovation. Finally, in terms of the Great Recession, the large jump in uncertainty in 2008 potentially accounted for about one third of the drop in GDP.

Investigating variation in replicability: A “Many Labs” replication project

Abstract: Although replication is a central tenet of science, direct replications are rare in psychology. This research tested variation in the replicability of 13 classic and contemporary effects across 36 independent samples totaling 6,344 participants. In the aggregate, 10 effects replicated consistently. One effect – imagined contact reducing prejudice – showed weak support for replicability. And two effects – flag priming influencing conservatism and currency priming influencing system justification – did not replicate. We compared whether the conditions such as lab versus online or US versus international sample predicted effect magnitudes. By and large they did not. The results of this small sample of effects suggest that replicability is more dependent on the effect itself than on the sample and setting used to investigate the effect.

Capital is Back: Wealth-Income Ratios in Rich Countries, 1700-2010

Abstract: How do aggregate wealth-to-income ratios evolve in the long run and why? We address this question using 1970–2010 national balance sheets recently compiled in the top eight developed economies. For the United States, United Kingdom, Germany, and France, we are able to extend our analysis as far back as 1700. We find in every country a gradual rise‘ of wealth-income ratios in recent decades, from about 200–300% in 1970 to 400–600% in 2010. In effect, today’s ratios appear to be returning to the high values observed in Europe in the eighteenth and nineteenth centuries (600–700%). This can be explained by a long-run asset price recovery (itself driven by changes in capital policies since the world wars) and by the slowdown of productivity and population growth, in line with the �¼ s g Harrod-Domar-Solow formula. That is, for a given net saving

Economic analysis for ecosystem service assessments

Abstract: The paper seeks to contribute to the expanding literature on ecosystem service assessment by considering its integration with economic analyses of such services. Focussing upon analyses for future orientated policy and decision making, we initially consider a single period during which ecological stocks are maintained at sustainable levels. The flow of ecosystems services and their contribution to welfare bearing goods is considered and methods for valuing resultant benefits are reviewed and illustrated via a case study of land use change. We then broaden our time horizon to discuss the treatment of future costs and benefits. Finally we relax our sustainability assumption and consider economic approaches to the incorporation of depleting ecological assets with a particular focus upon stocks which exhibit thresholds below which restoration is compromised.

Global crop yield response to extreme heat stress under multiple climate change futures

Abstract: Extreme heat stress during the crop reproductive period can be critical for crop productivity. Projected changes in the frequency and severity of extreme climatic events are expected to negatively impact crop yields and global food production. This study applies the global crop model PEGASUS to quantify, for the first time at the global scale, impacts of extreme heat stress on maize, spring wheat and soybean yields resulting from 72 climate change scenarios for the 21st century. Our results project maize to face progressively worse impacts under a range of RCPs but spring wheat and soybean to improve globally through to the 2080s due to CO2 fertilization effects, even though parts of the tropic and sub-tropic regions could face substantial yield declines. We find extreme heat stress at anthesis (HSA) by the 2080s (relative to the 1980s) under RCP 8.5, taking into account CO2 fertilization effects, could double global losses of maize yield (ΔY = −12.8 ± 6.7% versus − 7.0 ± 5.3% without HSA), reduce projected gains in spring wheat yield by half (ΔY = 34.3 ± 13.5% versus 72.0 ± 10.9% without HSA) and in soybean yield by a quarter (ΔY = 15.3 ± 26.5% versus 20.4 ± 22.1% without HSA). The range reflects uncertainty due to differences between climate model scenarios; soybean exhibits both positive and negative impacts, maize is generally negative and spring wheat generally positive. Furthermore, when assuming CO2 fertilization effects to be negligible, we observe drastic climate mitigation policy as in RCP 2.6 could avoid more than 80% of the global average yield losses otherwise expected by the 2080s under RCP 8.5. We show large disparities in climate impacts across regions and find extreme heat stress adversely affects major producing regions and lower income countries.

Wild binary segmentation for multiple change-point detection

Abstract: We propose a new technique, called wild binary segmentation (WBS), for consistent estimation of the number and locations of multiple change-points in data. We assume that the number of change-points can increase to infinity with the sample size. Due to a certain random localisation mechanism, WBS works even for very short spacings between the change-points and/or very small jump magnitudes, unlike standard binary segmentation. On the other hand, despite its use of localisation, WBS does not require the choice of a window or span parameter, and does not lead to a significant increase in computational complexity. WBS is also easy to code. We propose two stopping criteria for WBS: one based on thresholding and the other based on what we term the ‘strengthened Schwarz information criterion’. We provide default recommended values of the parameters of the procedure and show that it offers very good practical performance in comparison with the state of the art. The WBS methodology is implemented in the R package wbs, available on CRAN. In addition, we provide a new proof of consistency of binary segmentation with improved rates of convergence, as well as a corresponding result for WBS.

Why Do Developing Countries Tax So Little

Abstract: The power to tax is taken for granted in a great deal of mainstream public finance. In considering limits to taxation, traditional research in the field focuses on limits imposed by incentive constraints, which are tied to asymmetric information or to politics and political institutions. The limits to taxation are rarely tied to the administrative capacity of the state. But incentive constraints alone cannot explain the vast differences in the levels of taxation that we see across the world and across time. Low-income countries typically collect taxes of between 10 to 20 percent of GDP, while the average for high-income countries is more like 40 percent. In essence, our view on these patterns is similar to that taken by Joseph Schumpeter (1918) almost a century ago, when he noted: “The fiscal history of a people is above all an essential part of its general history. An enormous influence on the fate of nations emanates from the economic bleeding which the needs of the state necessitates, and from the use to which the results are put.” In order to understand taxation, economic development, and the relationships between them, we need to think about the forces that drive the development process. Poor countries

Taxing across Borders: Tracking Personal Wealth and Corporate Profits

Abstract: Globalization is making it increasingly easy for corporations to shift profits to low-tax countries. Modern technology has also made it simpler for wealthy individuals to move funds to undeclared bank accounts in offshore tax havens. Both issues have featured prominently in the news and global economic debates since the financial crisis, but the arguments tend to be based on relatively little empirical evidence. Measuring the costs of tax havens to foreign governments is fraught with difficulties. However, balance of payments data and corporate filings show that US companies are shifting profits to Bermuda, Luxembourg, and similar countries on a large and growing scale. About 20 percent of all US corporate profits are now booked in such havens, a tenfold increase since the 1980s. This profit-shifting is typically done within the letter of the law and thus would be best described as tax avoidance rather than fraud. I attempt to quantify its cost for government coffers by taking a fresh look at the most recent macroeconomic evidence and combining it in a systematic manner. Over the last 15 years, the effective corporate tax rate of US companies has declined from 30 to 20 percent, and about two-thirds of this decline can be attributed to increased profit-shifting to low-tax jurisdictions. Wealthy individuals, too, use tax havens, sometimes legally—to benefit from banking services not available in their home country—and sometimes illegally—to evade taxes. A number of changes have sought, with some success, to curb that form of tax evasion over the last years. Yet the available evidence from Switzerland and

Keeping It Simple: Financial Literacy and Rules of Thumb

Abstract: Micro-entrepreneurs often lack the financial literacy required to make important financial decisions. We conducted a randomized evaluation with a bank in the Dominican Republic to compare the impact of two distinct programs: standard accounting training versus a simplified, rule-of-thumb training that taught basic financial heuristics. The rule-of-thumb training significantly improved firms’ financial practices, objective reporting quality, and revenues. For micro-entrepreneurs with lower skills or poor initial financial practices, the impact of the rule-of-thumb training was significantly larger than that of the standard accounting training, suggesting that simplifying training programs might improve their effectiveness for less sophisticated individuals. (

Market Size, Competition, and the Product Mix of Exporters

Abstract: We build a theoretical model of multi-product firms that highlights how competition across market destinations affects both a firm's exported product range and product mix. We show how tougher competition in an export market induces a firm to skew its export sales towards its best performing products. We find very strong confirmation of this competitive effect for French exporters across export market destinations. Theoretically, this within firm change in product mix driven by the trading environment has important repercussions on firm productivity. A calibrated fit to our theoretical model reveals that these productivity effects are potentially quite large.

Debates—The future of hydrological sciences: A (common) path forward? A call to action aimed at understanding velocities, celerities and residence time distributions of the headwater hydrograph

Abstract: Debates-The future of hydrological sciences : A (common) path forward? A call to action aimed at understanding velocities, celerities and residence time distributions of the headwater hydrograph

Attracting investor attention through advertising

Abstract: This paper provides empirical evidence that managers adjust rm advertising expenditures to inuence investor behavior and short-term stock prices. First, this paper shows that increased

Estimating the harms of nicotine-containing products using the MCDA approach.

Abstract: Background: An international expert panel convened by the Independent Scientific Committee on Drugs developed a multi-criteria decision analysis model of the relative importance of different types of harm related to the use of nicotine-containing products. Method: The group defined 12 products and 14 harm criteria. Seven criteria represented harms to the user, and the other seven indicated harms to others. The group scored all the products on each criterion for their average harm worldwide using a scale with 100 defined as the most harmful product on a given criterion, and a score of zero defined as no harm. The group also assessed relative weights for all the criteria to indicate their relative importance. Findings: Weighted averages of the scores provided a single, overall score for each product. Cigarettes (overall weighted score of 100) emerged as the most harmful product, with small cigars in second place (overall weighted score of 64). After a substantial gap to the third-place product, pipes (scoring 21), all remaining products scored 15 points or less. Interpretation: Cigarettes are the nicotine product causing by far the most harm to users and others in the world today. Attempts to switch to non-combusted sources of nicotine should be encouraged as the harms from these products are much lower.

Completeness and usability of ethnicity data in UK-based primary care and hospital databases

Abstract: Background Ethnicity recording across the National Health Service (NHS) has improved dramatically over the past decade. This study profiles the completeness, consistency and representativeness of routinely collected ethnicity data in both primary care and hospital settings. Methods Completeness and consistency of ethnicity recording was examined in the Clinical Practice Research Datalink (CPRD) and Hospital Episode Statistics (HES), and the ethnic breakdown of the CPRD was compared with that of the 2011 UK censuses. Results 27.1% of all patients in the CPRD (1990‐2012) have ethnicity recorded. This proportion rises to 78.3% for patients registered since April 2006. The ethnic breakdown of the CPRD is comparable to the UK censuses. 79.4% of HES inpatients, 46.8% of outpatients and 26.8% of A&E patients had their ethnicity recorded. Amongst those with ethnicity recorded on .1 occasion, consistency was over 90% in all data sets except for HES inpatients. Combining CPRD and HES increased completeness to 97%, with 85% of patients having the same ethnicity recorded in both databases. Conclusions Using CPRD ethnicity from 2006 onwards maximizes completeness and comparability with the UK population. High concordance within and across NHS sources suggests these data are of high value when examining the continuum of care. Poor completeness and consistency of A&E and outpatient data render these sources unreliable.

Underinvestment in a Profitable Technology: The Case of Seasonal Migration in Bangladesh

Abstract: Hunger during pre-harvest lean seasons is widespread in the agrarian areas of Asia and Sub-Saharan Africa. We randomly assign an $8.50 incentive to households in rural Bangladesh to temporarily out-migrate during the lean season. The incentive induces 22% of households to send a seasonal migrant, their consumption at the origin increases significantly, and treated households are 8–10 percentage points more likely to re-migrate 1 and 3 years after the incentive is removed. These facts can be explained qualitatively by a model in which migration is risky, mitigating risk requires individual-specific learning, and some migrants are sufficiently close to subsistence that failed migration is very costly. We document evidence consistent with this model using heterogeneity analysis and additional experimental variation, but calibrations with forward-looking households that can save up to migrate suggest that it is difficult for the model to quantitatively match the data. We conclude with extensions to the model that could provide a better quantitative accounting of the behavior.

Political Connections and SEC Enforcement

Abstract: In this study, I examine whether firms and executives with long-term political connections through contributions and lobbying incur lower costs from the enforcement actions by the Securities and Exchange Commission (SEC). I find that politically connected firms on average are less likely to be involved in SEC enforcement actions and face lower penalties if they are prosecuted by the SEC. Contributions to politicians in a strong position to put pressure on the SEC are more effective than others at reducing the probability of enforcement and penalties imposed by an enforcement action. Moreover, the amounts paid to lobbyists with prior employment links to the SEC, and the amounts spent on lobbying the SEC directly, are more effective than other lobbying expenditures at reducing enforcement costs faced by firms.

Cohort Profile: UK Millennium Cohort Study (MCS)

Abstract: The UK Millennium Cohort Study (MCS) is an observational, multidisciplinary cohort study that was set up to follow the lives of children born at the turn of the new century. The MCS is nationally representative and 18 552 families (18 827 children) were recruited to the cohort in the first sweep. There have currently been five main sweeps of data collection, at ages 9 months and 3, 5, 7 and 11 years. A further sweep of data collection is planned for age 14 years. A range of health-related data have been collected as well as measures concerning child development, cognitive ability and educational attainment. The data also include a wealth of information describing the social, economic and demographic characteristics of the cohort members and their families. In addition, the MCS data have been linked to administrative data resources including health records. The MCS provides a unique and valuable resource for the analysis of health outcomes and health inequalities. The MCS data are freely available to bona fide researchers under standard access conditions via the UK Data Service (http://ukdataservice.ac.uk) and the MCS website provides detailed information on the study (http://www.cls.ioe.ac.uk/mcs).

Signalling theory and equilibrium in strategic management research: an assessment and a research agenda

Abstract: Actors within organizations commonly must make choices armed with incomplete and asymmetrically distributed information. Signalling theory seeks to explain how individuals are able to do so. This theory's primary predictive mechanism is ‘separating equilibrium’, which occurs when a signal's expectations are confirmed through experience. A content analysis finds that most strategic management signalling theory studies have not fully leveraged separating equilibrium. This presents two possible paths for future research. First, some researchers may wish to incorporate separating equilibrium. We illustrate how doing so can uncover new relationships, generate novel insights, and fortify the theory's application. Others who want to theorize about signals, but not examine separating equilibrium, could integrate ideas from signalling theory with other information perspectives. Here a signal becomes one stimulus among many that corporate actors interpret and act upon. We provide research agendas so strategy scholars can apply signalling theory most effectively to meet their research objectives.

Transnational Business Governance Interactions: Conceptualization and Framework for Analysis

Abstract: This special issue demonstrates the importance of interactions in transnational business governance. The number of schemes applying non-state authority to govern business conduct across borders has vastly expanded in numerous issue areas. As these initiatives proliferate, they increasingly interact with one another and with state-based regimes. The key challenge is to understand the implications of these interactions for regulatory capacity and performance, and ultimately for social and environmental impact. In this introduction, we propose an analytical framework for the study of transnational business governance interactions. The framework disaggregates the regulatory process to identify potential points of interaction, and suggests analytical questions that probe the key features of interactions at each point.

What Happens When Evaluation Goes Online? Exploring Apparatuses of Valuation in the Travel Sector

Abstract: Our research focuses on the fast-changing landscape of contemporary social media where user-generated content is increasingly being used to evaluate a wide range of products and services. The move to online valuations is raising important questions about how valuations change when they are produced online by consumers and what outcomes they generate for the organizations being evaluated. To address these questions, we investigate two prominent hotel valuation schemes currently at work in the hospitality industry, and we identify significant differences in their valuation practices and outcomes. We develop a practice-based lens for examining the materiality of valuations, providing a way of understanding the differences we observed in terms of performativity. This lens explains both how valuations are actively produced in ongoing practice and how their production is significantly reconfiguring everyday practices of the organizations being evaluated. We conclude by considering the implications of our findin...

Annual Research Review: Harms experienced by child users of online and mobile technologies: the nature, prevalence and management of sexual and aggressive risks in the digital age

Abstract: AIMS AND SCOPE: The usage of mobile phones and the internet by young people has increased rapidly in the past decade, approaching saturation by middle childhood in developed countries. Besides many benefits, online content, contact or conduct can be associated with risk of harm; most research has examined whether aggressive or sexual harms result from this. We examine the nature and prevalence of such risks, and evaluate the evidence regarding the factors that increase or protect against harm resulting from such risks, so as to inform the academic and practitioner knowledge base. We also identify the conceptual and methodological challenges encountered in this relatively new body of research, and highlight the pressing research gaps. METHODS: Given the pace of change in the market for communication technologies, we review research published since 2008. Following a thorough bibliographic search of literature from the key disciplines (psychology, sociology, education, media studies and computing sciences), the review concentrates on recent, high quality empirical studies, contextualizing these within an overview of the field. FINDINGS: Risks of cyberbullying, contact with strangers, sexual messaging ('sexting') and pornography generally affect fewer than one in five adolescents. Prevalence estimates vary according to definition and measurement, but do not appear to be rising substantially with increasing access to mobile and online technologies, possibly because these technologies pose no additional risk to offline behaviour, or because any risks are offset by a commensurate growth in safety awareness and initiatives. While not all online risks result in self-reported harm, a range of adverse emotional and psychosocial consequences is revealed by longitudinal studies. Useful for identifying which children are more vulnerable than others, evidence reveals several risk factors: personality factors (sensation-seeking, low self-esteem, psychological difficulties), social factors (lack of parental support, peer norms) and digital factors (online practices, digital skills, specific online sites). CONCLUSIONS: Mobile and online risks are increasingly intertwined with pre-existing (offline) risks in children's lives. Research gaps, as well as implications for practitioners, are identified. The challenge is now to examine the relations among different risks, and to build on the risk and protective factors identified to design effective interventions. Language: en

Patient complaints in healthcare systems: a systematic review and coding taxonomy

Abstract: Background Patient complaints have been identified as a valuable resource for monitoring and improving patient safety. This article critically reviews the literature on patient complaints, and synthesises the research findings to develop a coding taxonomy for analysing patient complaints. Methods The PubMed, Science Direct and Medline databases were systematically investigated to identify patient complaint research studies. Publications were included if they reported primary quantitative data on the content of patient-initiated complaints. Data were extracted and synthesised on (1) basic study characteristics; (2) methodological details; and (3) the issues patients complained about. Results 59 studies, reporting 88 069 patient complaints, were included. Patient complaint coding methodologies varied considerably (eg, in attributing single or multiple causes to complaints). In total, 113 551 issues were found to underlie the patient complaints. These were analysed using 205 different analytical codes which when combined represented 29 subcategories of complaint issue. The most common issues complained about were ‘treatment’ (15.6%) and ‘communication’ (13.7%). To develop a patient complaint coding taxonomy, the subcategories were thematically grouped into seven categories, and then three conceptually distinct domains. The first domain related to complaints on the safety and quality of clinical care (representing 33.7% of complaint issues), the second to the management of healthcare organisations (35.1%) and the third to problems in healthcare staff–patient relationships (29.1%). Conclusions Rigorous analyses of patient complaints will help to identify problems in patient safety. To achieve this, it is necessary to standardise how patient complaints are analysed and interpreted. Through synthesising data from 59 patient complaint studies, we propose a coding taxonomy for supporting future research and practice in the analysis of patient complaint data.

Popular legitimacy and the exercise of legal authority: motivating compliance, cooperation and engagement

Abstract: The traditional goal of legal authorities has been to obtain widespread public compliance with the law. Empirical research findings have shown that legitimacy—typically operationalized as the perceived obligation to obey and trust and confidence in the relevant institutions—plays an important role in achieving such compliance. But over time the goals of legal authorities have broadened in 2 ways. First, they increasingly include the desire to motivate willing cooperation, with legal authorities and members of the public working together to produce social order. Second, conceptions of the goals of the legal system have broadened to include the importance of promoting public engagement in communities in efforts to build social, political and economic vitality. Drawing on these broader goals—and building upon recent conceptual advances in the meaning of legitimacy—we report findings from a major new national survey of U.S. citizens. We examine the role that legitimacy plays in achieving each of these goals of law and in defining the policies and practices of the police and courts which influence legitimacy. Importantly, we also consider whether a focus on achieving this broader set of goals leads to a need to reexamine the traditional theoretical conception of legitimacy. Our findings support the utility of a multidimensional conception of legitimacy that differentiates between consent to authority and normative justifiability of power. (PsycINFO Database Record (c) 2014 APA, all rights reserved)

Digitisation, Big Data and the transformation of accounting information

Abstract: Developments in digitisation, software and processing power and the accompanying data explosion create significant alterations, dilemmas and possibilities for enterprises and their finance function. The article discusses a model for understanding data, information and knowledge relationships. We apply the model to examine developments in strategy, organisational and cost structures, digitisation, business analytics, outsourcing, offshoring and cloud computing. We argue that organisations need to be sensitised to different types of knowledge, the challenges in creating and applying that knowledge, and be more circumspect about what can be achieved through advances in information-based technologies and software. We point to both the potential of and the complexities presented by Big Data in relation to the finance function generally and to management accounting information provision specifically. We suggest that ‘Big Data’ and data analysis techniques enable executives to act on structured and unstructured ...