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Research: Migration restrictions limit long-term economic growth

SMU economist and colleagues use model to predict East Asia and sub-Saharan Africa will become global productivity leaders

 DALLAS (SMU) – Relaxing migration restrictions globally could deliver a threefold increase in global GDP, according to prize-winning research by SMU economist Klaus Desmet. In contrast, areas like the United States and Europe that restrict migration will see productivity decline over the long term, according to a new economic model developed by Desmet and research colleagues.

“What we find is that the population-dense places, by virtue of having dense and large markets, will eventually start innovating. Once their productivity takes off, they will enter in a virtuous circle of innovation and density,” says Desmet, the Ruth and Kent Altshuler Centennial Interdisciplinary Professor of Economics.

“Many of today’s population-dense places are in East Asia and sub-Saharan Africa. With current migration restrictions prohibiting movement elsewhere, these will remain the densest places. Hence, eventually they will take off, and in the very long run, several centuries from now, they will become the world’s productivity leaders.

“This is already happening in some areas, such as China,” Desmet says. “In contrast, the U.S. and Europe will lose out. They can stop this reversal of fortune from happening by adopting freer migration policies.”

Desmet, David Krisztian Nagy and Esteban Rossi-Hansberg received the Robert E. Lucas Jr. Prize for this research, “The Geography of Development,” published in the Journal of Political Economy. The Lucas Prize is awarded biannually for the most interesting paper published in the Journal of Political Economy.

Most existing research has focused on the short-run effects of liberalizing migration restrictions, Desmet says.

“Our research is taking into account the long-run effects,” Desmet says. “Initially, when migrants arrive, there are adjustment and integration costs, and the benefits may be elusive. In the longer run, however, migrants contribute tremendously to productivity and innovation. Unfortunately, the current debate on migration is hopelessly focused on very short-run issues, and completely fails to take into account its long-run importance.”

The costs of limiting migration will be difficult to see over the next ten to 20 years, Desmet says. “But the world is slowly moving in the direction of a productivity reversal.”

To conduct the migration research, the team developed an economic model that looks at economic growth on a global scale, but at a fine level of geographic resolution, using income, population, land-use, roads, railroads, rivers and ocean data for the entire globe, Desmet says.

“What is innovative about the model is that it gives predictions, not just for the localities directly impacted by a particular shock, but also for the rest of the world.”

The researchers tested the model by running it backwards, 150 years in the past, then compared the predictions to actual data. They found the model compared well with actual events, lending credibility to its ability to predict the future.

For the migration study, the model predicted several centuries into the future, critical for studying migration in particular, Desmet says.

About SMU

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DACA led to improved educational outcomes, lower teenage birthrate for young immigrant community

SMU professor available to discuss working paper’s analysis of controversial ‘dreamer’ population.

The Deferred Action for Childhood Arrivals program (DACA) increased high school graduation rates by 15 percent, reduced teenage birth rates by 45 percent, and led to a 25 percent increase in college enrollment among Hispanic women, according to a working paper co-authored by SMU economist Elira Kuka for the National Bureau of Economic Research.

The results have significant bearing for the direction of future immigration policy, the paper concludes.

“Our research shows that when we give undocumented youth a large incentive to invest in education, such as participation in DACA and access to the labor opportunities it opens if they stay in school, they respond to these opportunities,” says Kuka, an assistant professor in the SMU Department of Economics. “Giving immigrants a work permit and relief from deportation makes them more likely to invest in education, work more, and have less (teenage) fertility.”

The study also found that individuals who acquire more schooling work more at the same time, countering the typically held belief that work and school are mutually exclusive, and indicating DACA generated a large boost in productivity.

“You can think about our research in two ways: If you just care about immigration policy, it’s important because we show that DACA really improves these peoples’ lives and the type of immigrant workforce we have in the U.S., which is currently missing from the policy debate about the costs and benefits of the program,” Kuka says. “More generally, our research tells us something about the education choices of low-income Americans. Why don’t they invest in education despite its large wage premium? Do they not respond to incentives or do they lack the right incentives to go to school? Our results suggest the second.”

Co-authors are Na’ama Shenhav, an economics professor at Dartmouth College, and Kevin Shih, an economics professor at the Rensselaer Polytechnic Institute. The working paper, “Do Human Capital Decisions Respond to the Returns to Education? Evidence from DACA,” was released in February by the National Bureau of Economic Research.

“To complete this research, we used data from the American Community Surveys, which is a yearly survey that collects demographic, educational, and employment information for a 1 percent representative sample of the U.S. population,” Kuka explains. “We then identified who in the survey was likely to be a DACA recipient based on nation of origin, when they arrived in the country, and other factors, identified control groups that resembled the likely DACA recipients, then charted outcomes for both groups before and after DACA went into effect. We saw a divergence in trajectories where people eligible for DACA got this big bump in educational attainment, a big drop in fertility, and so on.” — Kenny Ryan, SMU

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Inside Higher Ed: Study Finds Deferred Action for Childhood Arrivals Increased Educational Attainment

It also cut teen pregnancy.

Journalist Elizabeth Redden with the website Inside Higher Ed covered the research of SMU government policy expert Elira Kuka. Her working paper, “Do Human Capital Decisions Respond to the Returns to Education? Evidence from DACA,” was released in February by the National Bureau of Economic Research.

Kuka, an assistant professor in the SMU Department of Economics, and her colleagues found that the Deferred Action for Childhood Arrivals program under fire by the Trump Administration has significantly changed the lives of young people who came to the United States illegally as children.

Kuka’s research focus is on understanding how government policy effects individual behavior and well-being, the extent to which it provides social insurance during times of need, and its effectiveness in alleviation of poverty and inequality.

Her current research topics include the potential benefits of the Unemployment Insurance (UI) program, the protective power of the U.S. safety net during recessions and various issues in academic achievement.

Read the full story.

EXCERPT:

By Elizabeth Redden
Inside Higher Ed
A new working paper released by the National Bureau of Economic Research argues that the Deferred Action for Childhood Arrivals program had a “significant impact” on the educational and life decisions of undocumented immigrant youth, resulting in a 45 percent decrease in teen birth rates, a 15 percent increase in high school graduation rates and a 20 percent increase in college enrollment rates. The researchers found differential effects by gender, with most of the gains in college enrollment concentrated among women. For men alone, the effect of DACA on college enrollment was not statistically significant.

DACA, which was established by former president Obama in 2012, gave certain undocumented immigrant students who were brought to the U.S. illegally as children temporary protection from deportation and authorization to work in the U.S. DACA recipients have faced uncertainty over their future since September, when President Trump announced plans to end the program after six months.

“Our main conclusion from this paper is that future labor market opportunities or just opportunities in general really matter,” said Elira Kuka, one of the authors of the paper, titled “Do Human Capital Decisions Respond to the Returns to Education? Evidence From DACA,” and an assistant professor of economics at Southern Methodist University.

“People are worried, ‘Why are there some populations that are not going to high school and not investing in education?’” Kuka said. “Maybe the reason is they don’t see improved opportunities — but if they see improved labor outcomes they will actually invest in their education.”

Read the full story.

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Market Watch: Why ‘Dreamers’ are less likely to drop out of high school

New study suggests DACA pushed students to stay in school.

Journalist Jillian Berman with the website Market Watch covered the research of SMU government policy expert Elira Kuka. Kuka’s working paper, “Do Human Capital Decisions Respond to the Returns to Education? Evidence from DACA,” was released in February by the National Bureau of Economic Research.

An assistant professor in the SMU Department of Economics, Kuka and her colleagues found that the Deferred Action for Childhood Arrivals program under fire by the Trump Administration has significantly changed the lives of young people who came to the United States illegally as children.

Kuka’s research focus is on understanding how government policy effects individual behavior and well-being, the extent to which it provides social insurance during times of need, and its effectiveness in alleviation of poverty and inequality.

Her current research topics include the potential benefits of the Unemployment Insurance (UI) program, the protective power of the U.S. safety net during recessions and various issues in academic achievement.

Read the full story.

EXCERPT:

By Jillian Berman
Market Watch
If students believe they’re education will pay off, they may be more likely to continue with it.

Enacting Deferred Action for Childhood Arrivals, or DACA, increased high school graduation rates among undocumented immigrants by 15% and college enrollment rates by 20%. That’s according to a study by economists at Dartmouth College, Southern Methodist University and Rensselaer Polytechnic Institute distributed by the National Bureau of Economic Research on Monday.

DACA provides work authorization and deferral of deportation for undocumented immigrants brought to the U.S. as children. In addition to eligibility requirements surrounding the age at which undocumented immigrants came to the U.S., DACA also has an education requirement — that immigrants be in school, completed high school or a GED program (unless they’re a veteran).

“You’ve given them a huge carrot to stay in school,” said Na’ama Shenhav, an economics professor at Dartmouth and one of the authors of the study. The opportunity for protection from deportation allows students to envision a possible return on their education that wasn’t available before. “For a population that previously was experiencing very low incentives to stay in school, this could have substantially re-oriented their perception of opportunities,” Shenhav said.

Read the full story.

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Vox: DACA boosted immigrants’ education, labor force participation, productivity

It also cut teen pregnancy.

Journalist Matthew Yglesias with the website Vox covered the research of SMU government policy expert Elira Kuka. Her working paper, “Do Human Capital Decisions Respond to the Returns to Education? Evidence from DACA,” was released in February by the National Bureau of Economic Research.

Kuka, an assistant professor in the SMU Department of Economics, and her colleagues found that the Deferred Action for Childhood Arrivals program under fire by the Trump Administration has significantly changed the lives of young people who came to the United States illegally as children.

Kuka’s research focus is on understanding how government policy effects individual behavior and well-being, the extent to which it provides social insurance during times of need, and its effectiveness in alleviation of poverty and inequality.

Her current research topics include the potential benefits of the Unemployment Insurance (UI) program, the protective power of the U.S. safety net during recessions and various issues in academic achievement.

Read the full story.

EXCERPT:

By Matthew Yglesias
Vox
The Deferred Action for Childhood Arrivals program changed the lives of young people who came to the United States illegally as children in incredible ways — boosting high school graduation rates and college enrollment, while slashing teen births by a staggering 45 percent.

That’s according to timely new research from Elira Kuka, Na’ama Shenhav, and Kevin Shih that uses the program to study a larger question that’s of interest to economists — when education becomes more available, do people go get more of it? The DACA results suggest that the answer is yes, at least when there’s a clear upside. The program itself, in other words, was a smashing success in terms of bringing people out of the shadows and letting them contribute more to American society.

Oscar Hernandez, a DACA recipient, explained to Vox’s Dara Lind how things changed.

”The discussion in my house was, ‘You don’t get noticed. Because if you do something awesome and great, you might get noticed, and if you do get noticed, they might find out that we’re here undocumented, and if they find we out we could get separated.’ It was never a discussion we had, but that was the unwritten rule for our house. You don’t do bad things, but you also don’t do good things. You stay under the radar, you work, and that’s it.”

DACA changed that. Suddenly, recipients got to experience what US citizens take for granted — that to excel is good.

Canceling DACA almost certainly won’t reduce the overall size of the unauthorized population living in the United States, but it will meaningfully reduce the educational attainment and economic productivity of the undocumented population. That’s bad for the DREAMers, but also America as a whole.

DACA eligibility led to a lot more schooling
One of DACA’s provisions was that to qualify, you had to get a high school degree if you were old enough. That’s an unusual incentive to stay in school, and using a difference-in-differences design to compare the eligible to non-eligible population over time (you can do this because you had to have arrived within a specific time and age window to qualify) they show that DACA-eligibility increased high school graduation rates by 15 percent and brought teen births down by 45 percent.

Read the full story.

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Female students exposed briefly to charismatic career women are inspired to pursue male-dominated field

Easy, inexpensive experiment briefly sent inspiring female role models into intro to econ classes and sharply increased college female interest in the male-dominated, well-paying field of economics.

A low-budget field experiment to tackle the lack of women in the male-dominated field of economics has been surprisingly effective, says the study’s author, an economist at Southern Methodist University, Dallas.

Top female college students were inspired to pursue a major in economics when exposed very briefly to charismatic, successful women in the field, according to SMU economist Danila Serra.

The results suggest that exposing young women to an inspiring female role model succeeds due to the mix of both information and pure inspiration, Serra said.

“The specific women who came and talked to the students were key to the success of the intervention,” she said. “It was a factor of how charismatic and enthusiastic they were about their careers and of how interesting their jobs looked to young women.”

Given the simplicity and low-cost of the intervention, similar experiments could be easily conducted in other male-dominated or female-dominated fields of study to enhance gender diversity.

Serra’s results showed that among female students exposed to the enthusiastic mentors there was a 12-percentage point increase in the percentage of female students enrolling in the upper-level Intermediate Microeconomics course the following year — a 100% increase, or doubling, for that demographic.

Not surprisingly, given that the intervention was targeted to female students, Serra found that the role model visits had no impact on male students.

But astonishingly it had the greatest impact on high-achieving female students.

“If we restrict the analysis to the top female students, the students with a GPA of 3.7 or higher, the impact is remarkable — it is a 26 percentage points increase,” Serra said. “So this intervention was especially impactful on the top female students who perhaps were not thinking about majoring in economics.”

The results were very surprising to Serra, an assistant professor in the SMU Department of Economics in Dedman College who teaches the upper-level class Behavioral and Experimental Economics. Serra’s research relies on laboratory and field experiments, a relatively new methodology in the field of economics. She launched and is co-leader of the Laboratory for Research in Experimental Economics at SMU.

“I didn’t think such limited exposure would have such a large impact,” Serra said. “So this is telling me that one of the reasons we see so few women in certain fields is that these fields have been male-dominated for so long. This implies that it is very difficult for a young woman to come into contact with a woman in the field who has an interesting job in the eyes of young women and is enthusiastic about her major and her work. Young men, on the other hand, have these interactions all the time because there are so many male economics majors out there.”

Co-author on the research is Catherine Porter, associate professor of economics at Heriot-Watt University, Edinburgh, Scotland, and Serra’s former Ph.D. classmate at the University of Oxford.

“The gender imbalance in economics has been in the news a lot lately, and much of the discussion has been very negative,” said Porter. “This study offers something positive: a cheap way of improving the gender balance. The results can hopefully be used by other schools in order to redress the low numbers of women that major in economics – women have a lot to offer and should consider economics as a subject that is interesting and varied for a career.”

Serra reported the findings, “Gender differences in the choice of major: The importance of female role models,” on Jan. 6 in Philadelphia at the 2018 annual meeting of the Allied Social Sciences Association. Hers is one of many findings on gender and gender differences in economics presented at a session organized by the Committee for the Status of Women in the Economics Profession.

Inspiring the individual is the best tool to recruit and retain
Serra launched the study after SMU was one of 20 U.S. universities randomly chosen by Harvard economics professor Claudia Goldin for the Undergraduate Women in Economics Challenge. The project awarded each university a $12,500 grant to develop a program freely chosen by the universities to test the effectiveness of a deliberate intervention strategy to recruit and retain female majors.

Nationally, there’s only about one woman for every three men majoring in economics. SMU has a large number of economics majors for a school of its size, with 160 a year. The gender imbalance, however, is greater at SMU than the national average, with only one woman to every four men.

Serra developed her intervention based on her own experience as a Ph.D. student at the University of Oxford several years ago.

“I started thinking about role models from my personal experience,” Serra said. “As a student, I had met many female professors in the past, but my own experience taught me that inspiration is not about meeting any female professor — it’s about meeting that one person that has a huge charisma and who is highly inspiring and speaks to you specifically.”

Serra said that’s what she experienced as a graduate researcher when she first met Professor Abigail Barr, who later became her Ph.D. advisor.

“I know for a fact that that is why I decided to do a Ph.D. in economics, because I was greatly inspired by this person, her experiences and her research,” she said. “So I thought it would be interesting to see whether the same could work for a general student population.”

Two inspiring women role models, 15 minutes, four classrooms
Serra asked two of her department’s top undergraduate female economics students to take the lead in choosing the role models.

The students, Tracy Nelson and Emily Towler, sorted through rosters of SMU economics alums and shortlisted 18 men and women that they thought were working in interesting fields – which purposely excluded stereotypical jobs in banking and finance – and then carried out scripted interviews with a subset of who agreed to be interviewed via Skype to get additional information about their career path and to assess their charisma.

The students ultimately found two alumnae, Julie Lutz and Courtney Thompson, to be the most inspiring. Lutz, a 2008 graduate, started her career in management consulting but, shortly after, decided to completely change her career path by going to work for an international NGO in Nicaragua, and then as a director of operations at a toy company based in Honduras. Lutz now works in Operations at a fast-growing candy retail company. Courtney Thompson, class of 1991, has had a stellar career in marketing, becoming the senior director of North American Marketing and Information Technology at a large international communications company, with the unique claim of being not only a female econ major at a time when that was exceedingly rare, but also African American in a white dominated field.

Serra invited each woman to speak during the Spring 2016 semester for 10 to 15 minutes to four Principals of Economics classes that she had randomly selected from a set of 10. The Principles classes are very popular, with about 700 students total from a variety of desired majors, and are typically gender balanced. The imbalance, said Serra, starts the following year with Intermediate Microeconomics, which is a requirement for upper-level economics courses and so is a good indicator of a desire to major in economics.

Serra offered each role model an honorarium for speaking, but each woman declined and indicated they were happy to be back on campus sharing with students. Serra told the speakers nothing of the purpose of the research project, but encouraged each one to explain to the class why they majored in economics and to be very engaging. She directed them to approach the students with the following question in mind: “If you had to convince a student to major in economics, what would you say?”

Thompson, Serra said, during her college days played SMU’s costumed Peruna mascot, and today retains a “bubbly, big personality, that makes her extremely engaging.” In her classroom visits, Thompson described her experience working and being extremely successful in marketing with an economics degree, while being surrounded by business majors. Lutz, being still in her 20s, was very easy for the young women in the classrooms to identify with, and her experience working in the non-profit and in developing countries may have been especially appealing to them.

Young women judge best who will inspire them
Serra believes that a key to the success of the intervention was the fact her two female economics students actively participated in the selection of the role models.

“The most important thing about the project was that I realized I needed current female students to choose the role models,” Serra said. “I’m not that young anymore, so I’m probably not the best person to recognize what is inspiring to young women. I think young female students are in the best position to tell us what is most inspiring to them.”

In November the directors and officers of the International Foundation for Research in Experimental Economics honored Serra as the inaugural recipient of the $50,000 Vernon L. Smith Ascending Scholar Prize. The Smith Prize is described by the foundation as a “budding genius” award.

For her highly cited corruption research, Serra uses lab experiments to study bribery, governance and accountability, questioning long-standing assumptions. Some of her findings are that corruption declines as perpetrators take into account social costs of their illegal activities, and as victims share information about specific bribery exchanges through online reporting. Serra’s current research agenda also includes experimental work on gender differences in preferences, behaviors and outcomes. — Margaret Allen, SMU

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SMU economist wins $50,000 “budding genius” prize with highly cited corruption research

Serra questioned long-standing assumptions; found corruption declines as perpetrators take into account social costs of their illegal activities, and as victims share information about specific bribery exchanges through online reporting systems.

Guilt and shame play a role in reducing bribery, according to research by economist Danila Serra, Southern Methodist University, Dallas.

As an economist who has studied bribery behavior extensively, Serra has discovered that bribery declines if potentially corrupt agents are made aware of the negative effects of corruption, and when victims can share specific information about bribe demands through online reporting systems.

An assistant professor in the SMU Department of Economics, Serra’s research methodology is unique — relying on lab experiments in which players gain and lose real money. Her work is frequently cited by other researchers studying the field of bribery.

In November the directors and officers of the International Foundation for Research in Experimental Economics honored Serra as the inaugural recipient of the $50,000 Vernon L. Smith Ascending Scholar Prize. The Smith Prize is described by the foundation as a “budding genius” award.

“Dr. Serra’s accomplishments have marked her as an ascending scholar, teacher, mentor and colleague of exceptional promise,” said a statement from the foundation.

The prize is named for Nobel Laureate Vernon L. Smith, considered the father of experimental economics. It aims to build on his legacy and inspire recipients, early on in their careers, to set the loftiest possible goals for themselves as social-science theorists, practitioners, colleagues, mentors and truth seekers, the foundation said.

Serra’s interest in understanding bribery transformed in 2005 when she became frustrated by measurement problems and the difficulty of finding good data. Her goal was to identify and understand the causes of corruption, and in particular whether non-monetary motivations, social norms and culture play any role in corruption decision-making. During her Ph.D. work at the University of Oxford, economist Abigail Barr exposed Serra to lab experiments, a relatively new methodology for the field of economics.

“I was always interested in corruption. As soon as I discovered the field of experimental economics I decided to design and implement bribery experiments,” Serra said. “I recreate the situation I want to study in a laboratory setting, employing real monetary incentives, which we provide, and with scenarios where the subjects can make corruption decisions that increase their money at the expense of other players. The play is anonymous and they get to bring home the money they earn in the experimental setting.”

Corruption isn’t purely about money
The focus of Serra’s research sharpened further when she began to question the root assumption that guilt and shame don’t play a role in bribery. She found in laboratory experiments that the intrinsic costs of guilt and shame do matter, and that corruption isn’t purely a matter of money.

She found that corruption declines when potentially corrupt agents are made aware of the negative impact of their actions, and when bottom-up anti-corruption mechanisms are in place, such as victims sharing specific information about bribe demands. Serra also found evidence of a significant relationship between corruption and culture.

“In one of my early studies, I employed a sample of international students at the University of Oxford and found among undergraduate students that the level of corruption in their home country predicts their propensity to engage in corruption in my bribery experiment,” she said.

“This is what we’d expect, they have internalized corrupt norms,” Serra said. “But the surprising result is that this wasn’t true for graduate students. We concluded that graduate students do not conform to the prevailing social norms of their home countries and, possibly, they want to distance themselves from such norms.”

Serra’s research has produced 12 papers on bribery and she has edited a book about experimental research on corruption. Her work on corruption has been cited hundreds of times by other researchers in the field. She has also investigated issues related to governance, public service provision and bottom-up accountability in developing countries. More recently, she has embarked on new research exploring gender differences in behaviors and outcomes in a variety of contexts, including students’ choices of major.

Serra launched and is co-leader of the Laboratory for Research in Experimental Economics at SMU’s Economics Department in the Dedman College of Humanities & Sciences.

The Vernon L. Smith Ascending Prize for Serra is a major professional recognition of the profound impact of her pioneering research in the area of experimental public economics and in particular on the understanding of corruption and other forms of rule breaking, said SMU economist Santanu Roy, chair of the SMU Department of Economics and University Distinguished Professor.

“She is one of the most cited economists of her generation,” Roy said. “The prize comes with a $50,000 award which, as far as I know, is the largest amount awarded as a prize for young economists. The fact that Dr. Serra was chosen to receive the inaugural prize named for the father of experimental economics tells us about the high expectations that her peers have about her future research productivity.”

Economics as an empirical discipline
The Smith Prize seeks to inspire early-career scholars to emulate Smith’s joyous zeal for scientific discovery. It may be used flexibly to advance social science in whatever manner a recipient chooses, the foundation said.

The prize is made possible through the Rasmuson Foundation and other contributors.

As a social scientist, Smith was committed to exploring theoretical foundations in economics, social science, and science generally; achievement in the form of quantifiable impacts in transforming economics into an experimental and more empirical discipline; collegiality in funding, mentoring, and collaborating with fellow scholars; and curiosity in looking beyond traditional disciplinary boundaries in search of truth.

“The International Foundation for Research in Experimental Economics heartily congratulates Dr. Serra and looks forward to following her career in the years to come,” the statement said. — Margaret Allen, SMU

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Commerce Department selects scientific team to conduct independent abundance estimate of red snapper in Gulf of Mexico

The initiative addresses one of the most pressing issues currently facing U.S. Gulf of Mexico fisheries management, as the iconic red snapper supports one of the most economically valuable finfish fisheries in the Gulf.

An expert team of university and government scientists will determine the abundance of red snapper in the U.S. waters of the Gulf of Mexico, as availability of the fish is vital to the region’s economy.

“Red snapper have great economic value to all the gulf states,” said SMU statistician Lynne Stokes, a member of the team. “Maintaining the health of the species is vitally important, so it’s necessary to ensure species are fished at the right level.”

As an expert in surveys, polls and sampling, Stokes’ role in the project is to help design ways to sample the vast expanse of the gulf efficiently so that good estimates of abundance can be produced.

“The gulf is very diverse, and different sampling methods are needed for different habitats, which makes the sample design problem interesting,” said Stokes, a professor in the SMU Department of Statistical Science. “The cheapest way to collect data about the health of a marine fish species is by asking a sample of anglers about their catch. However, if fish are present in places where anglers are not, other methods are needed. There is some uncertainty about all the places red snapper exist in the gulf, so it is not known if catch-based methods provide accurate estimates of abundance.”

The project will obtain angler-independent data about red snapper abundance by sampling their potential habitat, Stokes said. The team will collect data on red snapper numbers by direct observation of a sample of transects on the sea bottom and structures on the sea floor, using remotely controlled video cameras. Stokes will help determine how extensive the observation must be.

The team of scientists was selected by an expert review panel convened by the Mississippi-Alabama Sea Grant Consortium to conduct the independent study.

“American communities across the Gulf of Mexico depend on their access to, as well as the long term sustainability of, red snapper,” said U.S. Secretary of Commerce Wilbur Ross. “I look forward to the insights this project will provide as we study and manage this valuable resource.”

Recreational anglers and commercial fishers will play a key role
The research team, made up of 21 scientists from 12 institutions of higher learning, a state agency and a federal agency, was awarded $9.5 million in federal funds for the project through a competitive research grant process. With matching funds from the universities, the project will total $12 million.

“We’ve assembled some of the best red snapper scientists around for this study,” said Greg Stunz, the project leader and a professor at the Harte Research Institute for Gulf of Mexico Studies at Texas A&M University – Corpus Christi. “The team members assembled through this process are ready to address this challenging research question. There are lots of constituents who want an independent abundance estimate that will be anxiously awaiting our findings.”

Recreational anglers and commercial fishers will be invited to play a key role in collecting data by tagging fish, reporting tags and working directly with scientists onboard their vessels.

“The local knowledge fishermen bring to this process is very valuable and meaningfully informs our study,” Stunz said.

Some stakeholder groups have expressed concerns that there are more red snapper in the Gulf than currently accounted for in the stock assessment. The team of scientists on this project will spend two years studying the issue.

In 2016, Congress directed the National Sea Grant College Program and NOAA Fisheries to fund independent red snapper data collections, surveys and assessments, including the use of tagging and advanced sampling technologies. Sea Grant and NOAA Fisheries worked collaboratively to transfer federal funds to Mississippi-Alabama Sea Grant to administer the competitive research grant process and manage this independent abundance estimate.

“Today’s announcement is welcome news for all red snapper anglers in the Gulf of Mexico,” said Sen. Richard Shelby of Alabama. “As Chairman of the U.S. Senate Appropriations Subcommittee on Commerce, Justice, Science and Related Agencies, I was proud to author and secure federal funding to address the need for better data, which is a fundamental issue plaguing the fishery. The management of red snapper must be grounded in sound science if we want to provide fair access and more days on the water for our anglers. It is my hope that these independent scientists will be able to accurately determine the abundance of red snapper in the Gulf of Mexico once and for all.”

Project team will determine abundance and distribution of red snapper
The research will be driven largely by university-based scientists with partners from state and federal agencies, Stunz said.

The funding will allow the scientists to carry out an abundance estimate using multiple sampling methods with a focus on advanced technologies and tagging for various habitat types, he said.

“I’m pleased to see that the independent estimate is moving forward and including the expertise of recreational fishermen,” said Rep. John Culberson of Texas. “I will continue to work with Texas fishermen and NOAA to address the inadequate access to red snapper.”

The project team will determine abundance and distribution of red snapper on artificial, natural and unknown bottom habitat across the northern Gulf of Mexico.

As a statistician chosen for the team, SMU’s Stokes is also an expert in non-sampling survey errors, such as errors by interviewers and respondents. She recently conducted research on evaluating the accuracy of contest judges and on improving estimates of marine fishery yields by the National Oceanic and Atmospheric Administration.

Stokes also contributes to the National Assessment of Educational Progress, or “Nation’s Report Card,” examining the way schools and students are selected for the large study.

Besides SMU, others on the team include Texas A&M University, University of Florida, University of South Alabama, Louisiana State University, Florida International University, NOAA Fisheries, Auburn University, Mississippi State University, Louisiana Department of Wildlife and Fisheries, College of William and Mary, University of Southern Mississippi, and the University of South Florida. — Mississippi-Alabama Sea Grant and Southern Methodist University

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Elira Kuka, SMU economics professor, appointed to prestigious national research organization

SMU economics professor wins prestigious appointment to nation’s premier organization for impartial economic research, the National Bureau of Economic Research.

The National Bureau of Economic Research, the nation’s leading nonprofit economic research organization, has appointed SMU Assistant Professor Elira Kuka a faculty research fellow.

Kuka is in the SMU Department of Economics. She will be a fellow in the NBER’s research program on children, a key policy area.

NBER, founded in 1920, is a private, non-profit, non-partisan organization dedicated to conducting economic research and to disseminating research findings among academics, public policy makers and business professionals.

The National Bureau of Economic Research (NBER) is the most prestigious and active research organization in economic policy and empirical analysis in the U.S., said University Distinguished Professor Santanu Roy, chair of the SMU Department of Economics. Several Nobel laureates and Chairs of the Council of Economic Advisers (to the White House) have been fellows of the NBER, Roy said.

“To be appointed a Faculty Research Fellow at the NBER is a tremendous recognition for a young scholar like Elira Kuka, who is just completing her second year as assistant professor after her Ph.D. It is a major boost to the SMU Economics Department’s research profile and visibility,” Roy said. “Elira’s work on several important public policy issues related to children’s health, unemployment insurance and education have started appearing in the very top journals of the profession. She is on a firm trajectory to be a star in her research field.”

NBER-affiliated researchers study a wide range of topics and they employ many different methods in their work. Key focus areas include developing new statistical measurements, estimating quantitative models of economic behavior and analyzing the effects of public policies while remaining impartial and foregoing recommendations.

Over the years the NBER’s research agenda has encompassed a wide variety of issues that confront our society. Twenty-six Nobel Prize winners in Economics and 13 past chairs of the President’s Council of Economic Advisers have held NBER affiliations.

The more than 1,400 professors of economics and business now teaching at colleges and universities in North America who are NBER researchers are the leading scholars in their fields.

Kuka joined SMU in 2015. She received an undergraduate degree from Wellesley College, Mass., and her Ph.D. in economics from the University of California at Davis. Her research focuses on understanding how government policy affects individual behavior and wellbeing, the extent to which it provides social insurance during times of need, and its effectiveness in alleviation of poverty and inequality.

Her current research topics include the potential benefits of the federal Unemployment Insurance program, the protective power of the U.S. safety net during recessions and various issues in academic achievement.

Kuka’s appointment was effective May 1, 2017.

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Dallas Fed, SMU and consortium to establish new Federal Statistical Research Data Center

The center will advance scientific knowledge, improve data quality and inform policy in fields ranging from the social, behavioral and economic sciences to health professions, urban planning and engineering.

A consortium of institutions led by the Federal Reserve Bank of Dallas and the University of Texas at Dallas will partner with the U.S. Census Bureau to establish the Dallas-Fort Worth Federal Statistical Research Data Center.

The DFW center is the result of an extensive grant application process involving contributions from each consortium member and a review by the National Science Foundation and the U.S. Census Bureau. One of several planned Federal Statistical Research Data Center locations across the country, the center will be housed at the Dallas Fed and will provide approved researchers with secure access to restricted micro-level data.

“The establishment of this center is the culmination of two years’ worth of effort on the part of the Bank and consortium to bring this important new research facility to North Texas,” said Dallas Fed President Rob Kaplan. “Our role in this project aligns well with the Bank’s strategic priorities of serving as a thought leader in policy-related research and being a leading citizen in the communities we serve.”

The center will advance scientific knowledge, improve data quality and inform policy in fields spanning the social, behavioral and economic sciences and the health professions, and extending to urban planning, and engineering. The cutting-edge research opportunities afforded by the center will raise the profile of participating institutions and assist in attracting and retaining top research talent to the region.

“This is a very positive demonstration of how the major universities and institutions in the DFW area, along with West Texas, can work together to both increase quality research as well as strengthen the ties between consortium members,” said Kurt Beron, professor of economics at UT Dallas, who played a leading role in the grant application process and will help coordinate the consortium.

In addition to the Dallas Fed and UT Dallas, the consortium includes UT Arlington, UT Southwestern Medical Center, Southern Methodist University, Texas Tech University, University of North Texas, Texas Christian University and the Dallas-Fort Worth Hospital Council Foundation.

The DFW center is expected to open in early 2018. Wenhua Di, senior research economist at the Dallas Fed, will serve as executive director of the center.

“There is significant demand in the region for this center,” said Di. “Since researchers need to be physically present to access the data, housing the center at the Dallas Fed will provide excellent security, easy accessibility and collaboration opportunities to a large research community.”

The new data center will encourage greater use of federal statistical data among faculty, researchers and graduate students in the many diverse research institutions in the DFW area, including traditional universities and health institutions. It will also provide access to West Texas and the Panhandle, as well as parts of Oklahoma. In addition, two major airports in the area provide convenient gateways for researchers in the region as well as nationally.

The research data center program is administered by the Census Bureau’s Center for Economic Studies. More information about the FSRDCs is available at https://www.census.gov/fsrdc. — Federal Reserve Bank of Dallas

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Nation’s electric grid — a complex mathematical system — is dramatically changing

Deregulation of the U.S. electric markets, the emergence of renewable sources of energy and new technologies means there are large risks to the grid.

Our nation’s electric grid is changing dramatically due to deregulation of electric markets, the introduction of renewable sources of energy such as solar and wind power, and the emergence of new technologies such as the smart grid and electric cars, according to Barry Lee, an associate professor in the Department of Mathematics at Southern Methodist University, Dallas.

“Such changes can lead to large risks in the grid, which are not very well understood,” said Lee, whose research addresses the issue.

The electric power grid is a complex mathematical system. In fact, some components of the emergent grid (for example, faster than real-time analysis of enormous amounts of collected data) have yet to be mathematically formulated, according to Lee in a report to the National Science Foundation. Collaboration between power grid engineers and mathematicians/statisticians will be beneficial for the design of low-risk, highly resilient systems.

Lee’s research goal is to mathematically analyze the stability and the effects of stochasticity — randomness created by renewable energy and new technologies — in the emerging power grid.

“I’m analyzing the mathematical equations governing the power grid, and modifications to them to handle the emerging grid, and developing computational algorithms to permit fast and accurate numerical simulations,” he said.

Lee collaborates on a grant project at the non-profit Argonne National Laboratory, Multifaceted Mathematics for Complex Energy Systems, which is funded by the U.S. Department of Energy’s Office of Advanced Scientific Computing Research. Argonne is operated by the University of Chicago for the DOE.

He and other mathematics researchers presented in February at the University of Wisconsin about the progress they’ve made over the past four years to address the power grid challenge.

“One of the problems in modeling power grids is the large number of equations that must be solved, and solved almost at real time, to react quickly enough to ameliorate instabilities of the power flow,” said Lee, who co-authored a 2014 DOE IEEE paper On the Configuration of the US Western Interconnection Voltage Stability Boundary.

To tackle that job, the Department of Energy is drawing on a broad range of research scientists from three Department of Energy labs and numerous universities, including SMU’s Lee.

His DOE presentation in February focused on model-reduction.

“The goal is to mathematically analyze and develop mathematical algorithms for solving power grid problems,” Lee said. “The idea is to take these large systems of equations, which model the physics, and reduce them to a much smaller size, for example from 10,000 equations to 500, but to do this in a systematic way in order to retain the physics in the smaller system. I presented a mathematical way to systematically derive these reduced models, based on stability conditions that must be preserved.”

Collaboration will be beneficial
Changes in the grid will affect the quality of delivered electric power to the consumer and will pose new risks and alter the resiliency of the power grid system. To understand and mitigate these risks and to strengthen the resiliency, mathematical and statistical techniques will be invaluable, according to National Science Foundation officials. The NSF brought together mathematicians and statisticians in 2015 for a workshop on the challenges to the electric grid.

Lee co-organized a 2015 NSF workshop and accompanying report on the issue: Risk and Resiliency of the Electric Power Grid: Mathematical and Statistical Challenges.

“Collaboration between power grid engineers and mathematicians/statisticians will be beneficial for the design of low-risk, highly resilient systems,” Lee and his co-author concluded.

Lee collaborates with mathematicians, engineers and physicists at the Lawrence Livermore, Pacific Northwest, and Argonne National Laboratories. For the past 15 years he has been affiliated with several Department of Energy national laboratories.

His research focuses on the mathematical modeling, numerical algorithmic development and scientific computing of large-scale industrial and laboratory applications. The NSF has featured Lee in an article about NSF-funded research on the grid:

Lee realizes that the power grid of today and the emerging grid of the future will be far different from those in 1965, and with those changes come new vulnerabilities. “One of the biggest vulnerabilities arises from instability of the grid. Moreover, a more recent vulnerability is cybersecurity because the power grid is online,” he said. […]

[…] Lee’s NSF-funded mathematical research develops models that include large systems of equations describing the angles and voltage magnitudes in the flow of electricity. By introducing cutting-edge mathematics and new algorithms to collaborating power engineers, he’s able to help them better prepare for potential surges and system ruptures and maintain a stable power grid.
Click to read the full NSF article.

Central to Lee’s research is development of schemes that deliver optimal computational efficiency on serial and large-scale parallel computer platforms. Thus, an essential component of his research is computational linear algebra, particularly scalable multigrid and multilevel methods.

His current research interests include efficient methods for the Boltzmann transport equation (neutron/photon transport), Maxwell equations (fusion), equations of elasticity (structural designs), general coupled systems of elliptic partial differential equations (multi-physics and uncertainty quantification), and large systems of algebraic-differential equations (electric power grid networks).

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Quartz: When diverse groups interact, everybody ends up smarter and healthier

“…although individuals may feel antagonism towards other groups in society, that prejudice is less strong if they interact with these groups in their daily lives.” — Desmet, Gomes and Ortuño-Ortín

Quartz internet news magazine covered the research of SMU Economics Professor Klaus Desmet and colleagues. The article reported that the new study by Desmet and two other economists found that after examining data from nearly every country in the world, they find that when diverse groups interact, it leads to better outcomes in terms of health, education and public infrastructure.

“Chalk one up for contact theory,” wrote San Francisco-based reporter Dan Kopf, who covers economics and markets and has a Masters in Economics from the London School of Economics.

Desmet, who has his degree from Stanford University, is Ruth and Kenneth Altshuler Centennial Interdisciplinary Professor. His research interests include international trade, regional and urban economics, macroeconomics and political economy.

Desmet’s work is likely to be of profound significance for actual policy makers, according to Santanu Roy, University Distinguished Professor and Chair of the SMU Department of Economics.

“Klaus Desmet is engaged in truly path breaking research in undestanding the spatial, cultural and genetic dimensions of the global economy and the deep long run determinants of economic change,” said Roy. “Over the last few years, his work has been published in the very top journals in economics such as the American Economic Review and the Journal of Political Economy, a major boost to the reputation and visibility of the SMU economics department.”

The Quartz article, “When diverse groups interact, everybody ends up smarter and healthier,” published March 24, 2017.

Read the full story.

EXCERPT:

By Dan Kopf
Quartz
A striking fact about the tide of nationalism sweeping through the West is that it is strongest in places with the least diversity. Supporters of Donald Trump, and his “America first” policies, generally come from areas of the US least touched by immigration. The parts of the UK that opted to “take back control” by voting for Brexit also clustered in areas with fewer foreign-born residents.

But as a group of economists note, “although individuals may feel antagonism towards other groups in society, that prejudice is less strong if they interact with these groups in their daily lives.”

In recently released research (pdf), Klaus Desmet, Joseph Gomes, and Ignacio Ortuño-Ortín go well beyond examining the demographics of Trump and Brexit voters. Their research explores whether contact theory, the belief that increased interaction leads to better relations between groups, or conflict theory, that interaction leads to more prejudice, is a better way to describe the current state of the world. They examined data from nearly every country in the world, and find that when diverse groups interact, it leads to better outcomes in terms of health, education, and public infrastructure. Chalk one up for contact theory.

A vast body of earlier research has found, however, that ethnic and linguistic diversity tends to reduce spending on public goods. This is usually explained as a preference not to share with people perceived to be different. For example, Sweden’s high government spending versus the US might be down to Sweden’s relative lack of diversity.

This suggests that diversity is not helpful if groups mainly keep to themselves. To test this assumption, Desmet, Gomes, and Ortuño-Ortín divided the world into a grid of five-square-kilometer cells and estimated the number of people who speak different languages in each. Using this data and country-level estimates of diversity, the researchers calculated two numbers:

1) Country diversity: The probability that within a country two randomly chosen people speak the same language. A higher score means greater diversity in languages spoken.

Read the full story.

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Huffington Post: A New Physics Discovery Could Make You A Faster Runner

It’s all about the force

Reporter Sarah DiGiullo with the online news magazine The Huffington Post covered the research of Peter Weyand and the SMU Locomotor Laboratory. Weyand, who is Glenn Simmons Professor of Applied Physiology and professor of biomechanics in the Department of Applied Physiology and Wellness in SMU’s Annette Caldwell Simmons School of Education and Human Development, is the director of the Locomotor Lab.

Other authors on the study were Laurence Ryan, a physicist and research engineer in the lab, and
Kenneth Clark , previously with the lab and now an assistant professor in the Department of Kinesiology at West Chester University in West Chester, Penn.

The three have developed a concise approach to understanding the mechanics of human running. The research has immediate application for running performance, injury prevention, rehab and the individualized design of running shoes, orthotics and prostheses. The work integrates classic physics and human anatomy to link the motion of individual runners to their patterns of force application on the ground — during jogging, sprinting and at all speeds in between.

The Huffington Post article, “Researchers reveal the mechanics of running is simpler than thought – and it could revolutionize shoe design,” published Feb. 13, 2017.

Read the full story.

EXCERPT:

By Sarah DiGiullo
The Huffington Post
When it comes to race day, runners may have favorite moisture-wicking gear, a stopwatch and tunes to help get that coveted personal record.

But physicists say running at your top speed may actually be a lot simpler. It all comes down to the force of your foot striking the ground ― and that’s about it.

After studying the physics behind some of the world’s fastest runners, researchers came up with a new model they say could make anyone faster. It may help injured runners recover faster, too.

The researchers developed an equation that calculates two forces: The total force of the shin, ankle and foot striking the ground, and the total force of the rest of the body striking the ground. The method, which they detailed in an article published recently in the Journal of Experimental Biology, can predict how fast an athlete will run.

“We’ve known for quite some time that fast people are fast because they’re able to hit the ground harder in relation to how much they weigh,” explained the study’s co-author, Peter Weyand, director of the Locomotor Performance Laboratory at Southern Methodist University in Dallas.

But Weyand and his team were looking to better understand why it was that some people are able to hit the ground harder than others. The new equation makes the answer a lot clearer, with fewer measurements than previous models.

Read the full story.

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Daily Mail: Researchers reveal the mechanics of running is simpler than thought – and it could revolutionise shoe design

New study: Pattern of force on the ground is due to the motion of two parts of the body

Reporter Stacy Liberatore with London’s Daily Mail newspaper covered the research of Peter Weyand and the SMU Locomotor Laboratory. Weyand, who is Glenn Simmons Professor of Applied Physiology and professor of biomechanics in the Department of Applied Physiology and Wellness in SMU’s Annette Caldwell Simmons School of Education and Human Development, is the director of the Locomotor Lab.

Other authors on the study were Laurence Ryan, a physicist and research engineer in the lab, and
Kenneth Clark , previously with the lab and now an assistant professor in the Department of Kinesiology at West Chester University in West Chester, Penn.

The three have developed a concise approach to understanding the mechanics of human running. The research has immediate application for running performance, injury prevention, rehab and the individualized design of running shoes, orthotics and prostheses. The work integrates classic physics and human anatomy to link the motion of individual runners to their patterns of force application on the ground — during jogging, sprinting and at all speeds in between.

The Daily Mail article, “Researchers reveal the mechanics of running is simpler than thought – and it could revolutionise shoe design,” published Jan. 31, 2017.

Read the full story.

EXCERPT:

By Stacy Liberatore
Daily Mail
A study has found a new explanation for the basic mechanics of human running.

While observing Olympic-caliber sprinters, researchers discovered that a runner’s pattern of force application on the ground is due to the motion of just two parts of the body: the contacting leg and the rest of the body.

The new approach could help create new patterns to optimize the design of running shoes, orthoses and prosthetics, as experts are able to see exactly how a person runs.

The Southern Methodist University (SMU) researchers explained that the basic concept of their ‘two-mass model’ is relatively simple — a runner’s pattern of force application on the ground is due to the motion of two parts of the body: the lower portion of the leg that is contacting the ground, and the sum total of the rest of the body.

The force contributions of the two body parts are each predicted from their largely independent motions when they have foot-ground contact.

And then combined to predict the overall pattern.

The final prediction relies only upon classical physics and a characteristic link between the force and motion for the two body parts.

‘Our model inputs are limited to contact time on the ground, time in the air, and the motion of the ankle or lower limb.

‘From three basic stride variables we are able to predict the full pattern of ground-force application,’ said Laurence Ryan, who is a physicist and research engineer at SMU’s Locomotor Performance Laboratory.

‘The approach opens up inexpensive ways to predict the ground reaction forces and tissue loading rates.’

Read the full story.

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New York Observer: Is Bigger Always More? How U.S. Museums Fared in 2016

The New York Observer newspaper relied on the expertise of Zannie Voss, director of SMU’s National Center for Arts Research (NCAR), for an article about how museums are faring at a time with tighter budgets, less revenue and an evolution in museum-going behavior.

Voss is chair and professor of arts management and arts entrepreneurship in the Meadows School of the Arts and the Cox School of Business at SMU. She has a worked as consultant on projects for the Irvine Foundation, the League of American Orchestras, Theatre Development Fund and Theatre Communications Group, co-authoring TCG’s Theatre Facts since 1998. She has published over a dozen articles in academic and practitioner journals on research examining the strategic factors that influence organizational performance in the arts using multiple stakeholder measures.

The Observer article, “Is Bigger Always More? How U.S. Museums Fared in 2016,” published Dec. 26, 2016.

Read the full story.

EXCERPT:

By Daniel Grant
Observer
It was the best of times, it was the worst of times? The Metropolitan Museum of Art set a new attendance record in fiscal year 2016, bringing in 6.7 million visitors, the fifth year in a row that more than six million people have come through the doors in a given year. However, the institution reported a $10 million general operating deficit, requiring it to institute a hiring freeze, lay off dozens of staffers and put on hold an addition to the Lila Acheson Wallace Wing.

This might be just an oddity, but other art museums have experienced financial troubles as well. The Museum of Modern Art has offered early retirement buy-outs for its older employees in order to trim its budget, and a $3 million deficit has compelled the Brooklyn Museum to offer its staff early retirement packages. The San Diego Museum of Contemporary Art, which is planning an expansion that will triple its exhibition space, is eliminating eight full-time and 20 part-time employees, and the Cincinnati Museum Center has cut 60 jobs in order to stem the flow of red ink while it prepares its own expansion.

“Museums are in a period of transition, as they are spending more on marketing … and attracting more people through new educational, digital and other programming while garnering less revenue per person who attends,” said Zannie Voss, director of the National Center for Arts Research at Southern Methodist University in Dallas. Spending by the average visitor has declined from $25.81 in 2012 to $17.52 in 2015, according to data from DataArts, one of NCAR’s partners, for more than 100 art museums around the country. Meanwhile, those same institutions have increased their programming by 67 percent, raising their costs while earning less per visitor.

“Museums are striving for larger and more diverse audiences, looking to increase accessibility and remove the economic barriers to visiting, and they are creating new programs to engage people,” Voss said. Program revenues and fundraising have not been keeping up, though, she said, noting that the costs of running the sampled museums have risen 10 percent above inflation and only trustee giving, at nine percent, has kept pace. Growth in the other principal sources of raising funds— through individuals, foundations, corporations and government grants—“have not been as robust and, in the case of individual giving, represent a decrease of seven percent in absolute dollars.”

Read the full story.

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Research: Women hit harder by the pressures of elite academic science

“We find that the fixed view of the ideal scientist has a significant impact on the ability of both women and men to stay in and succeed in academic science.” — Lincoln, Ecklund

Work life in academia might sound like a dream: summers off, year-long sabbaticals, the opportunity to switch between classroom teaching and research. Yet, when it comes to the sciences, life at the top U.S. research universities is hardly idyllic.

Based on surveys of over 2,000 junior and senior scientists, both male and female, as well as in-depth interviews, “Failing Families, Failing Science” examines how the rigors of a career in academic science makes it especially difficult to balance family and work.

SMU sociologist Anne Lincoln and Rice University sociologist Elaine Howard Ecklund paint a nuanced picture that illuminates how gender, individual choices, and university and science infrastructures all play a role in shaping science careers, and how science careers, in turn, shape family life. They argue that both men and women face difficulties, though differently, in managing career and family.

“We spoke with graduate students and postdoctoral fellows about their professional and personal aspirations — their thoughts about entering academic science, as well as the struggles they face in trying to obtain an academic science position while starting a family,” write the authors. “We spoke with those who have ‘made it’ in science by obtaining positions as professors, asking them about the hardships they face as they try to balance devotion to work and family, and what kinds of strategies they use to overcome the difficulties. We also examined their potential to change the institutional infrastructure of science. Through our interviews, we were able to dig into some deeper issues.”

Numerous women the authors interviewed indicated they had to hide the fact they had children until they were confirmed for tenure, said the authors.

But they also found that family issues had an impact on career, and were a cause of concern, for men also.

” … many of those who are parents noted that their family commitments often negatively affect their opportunities for career advancement,” write the authors. “They say senior male scientists subtly and overtly sanction them for devoting themselves too much to their families — for example, criticizing them for not being fully devoted to their work when they take time off after the birth of a child.”

While women are hit harder by the pressures of elite academic science, the institution of science—and academic science, in particular—is not accommodating, possibly not even compatible, for either women or men who want to raise families.

Perhaps most importantly, their research reveals that early career academic scientists struggle considerably with balancing their work and family lives. This struggle may prevent these young scientists from pursuing positions at top research universities—or further pursuing academic science at all — a circumstance that comes at great cost to our national science infrastructure. — NYU Press

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Times Higher Education: How work and family life conflict in the modern university

Academic science still operates on assumptions that have failed to catch up with the realities of today’s family lives, argue scholars

Times Higher Education covered the new book of SMU sociologist Anne Lincoln in a Sept. 29 article “How work and family life conflict in the modern university.”

The book, Failing Families, Failing Science (NYU Press, 2016), is based on research Lincoln conducted with Elaine Howard Ecklund of Rice University. They examined how scientists face a conflict between work and family. The research is based on a survey of faculty members at the 20 top-ranked graduate programs in both physics and biology. The survey of 3,500 biologists and physicists included 184 in-depth interviews.

The study was funded under a grant of the Research on Science and Engineering program of the National Science Foundation to understand the lack of gender diversity in academic science.

Read the full story.

EXCERPT

By Matthew Reisz
Times Higher Education

A new book explores how to “expand the family-friendliness of academic science”.

Failing Families, Failing Science: Work-Family Conflict in Academic Science is based on a survey of close to 3,500 biologists and physicists in top American universities, followed up by 184 in-depth interviews.

“We started out the project interested in women’s experiences, and thought of men as just a comparison group,” says Elaine Howard Ecklund, professor of sociology at Rice University, who co-wrote the book with Anne E. Lincoln, assistant professor of sociology at Southern Methodist University. “We weren’t that interested in studying men. And we were completely wrong!”

Although she points out that “there is much more of a ‘motherhood penalty’ than a ‘fatherhood penalty’” for those forging academic careers, today’s “young men are a lot more like women than older men in the importance they place on family life and the tensions they felt in combining it with a research career”.

Unfortunately, the book suggests, academic science (and particularly male-dominated disciplines such as physics) is still in thrall to the image of “the ideal scientist” – in essence an utterly single-minded “man with a supportive wife who takes care of all his personal matters” – and the notion that, as a source of “ultimate objective truth”, science is “the sort of activity that is worth putting everything else on hold to pursue”.
Failing Families, Failing Science includes many striking testimonies of what this means for individuals.

Read the full story.

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NPR: How Domestic Violence In One Home Affects Every Child In A Class

Kids who witness domestic violence are more likely to get in trouble at school and have behavioral problems, including being aggressive and bullying their classmates.

NPR journalist Gabrielle Emanuel covered the research of SMU government policy expert Elira Kuka for an All Things Considered segment on NPR as part of its series on “The Mental Health Crisis In Our Schools.” The segment examined the impact on an entire school classroom when one student is victimized by domestic violence at home.

Kuka, an assistant professor in the SMU Department of Economics, and her colleagues found that new data shows violence in the home hinders the academic performance not only of the student who is abused, but also of their classmates, too.

Kuka’s research focus is on understanding how government policy effects individual behavior and well-being, the extent to which it provides social insurance during times of need, and its effectiveness in alleviation of poverty and inequality.

Her current research topics include the potential benefits of the Unemployment Insurance (UI) program, the protective power of the U.S. safety net during recessions and various issues in academic achievement.

Read the full story.

EXCERPT:

By Gabrielle Emanuel
NPR
Every Monday morning at Harvie Elementary School, in Henrico County, Va., Brett Welch stands outside her office door as kids file in.

“The first thing I’m looking for are the faces,” says Welch, a school counselor. She’s searching for hints of fear, pain or anger.

“Maybe there was a domestic incident at the house that weekend,” says Welch. “That’s reality for a lot of our kids.”

And a reality for a lot of kids in the U.S. While it’s difficult to get an exact number, researchers estimate that between 10 and 20 percent of children are exposed to domestic violence each year.

New data quantifies what many teachers and school counselors already know: While such violence often takes place outside of school, its repercussions resonate in the classroom.

It hurts not only the kids who witness the violence, but also their classmates. The harm is evident in lower test scores as well as lower rates of college attendance and completion. And the impact extends past graduation — it can be seen in lower earnings later in life.

“It’s a sad story,” says Scott Carrell, economist at the University of California, Davis, who has studied this for over a decade.

But, he says, there’s one thing he and his colleagues — economists Mark Hoekstra and Elira Kuka — found that can improve the situation “not only for that family but for all the child’s classmates.” What was it? Reporting domestic violence when it happens.

Read the full story.

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SMU Research Day 2016: Students present their research to the SMU and Dallas community

Day of presenting in Hughes-Trigg Student Center allows students to discuss their research, identify potential collaborators, discover other perspectives.

SMU graduate and undergraduate students presented their research to the SMU community at the University’s Research Day 2016 on Feb. 10.

Sponsored by the SMU Office of Research and Graduate Studies, the research spanned more than 20 different fields from schools across campus.

The annual Research Day event fosters communication between students in different disciplines, gives students the opportunity to present their work in a professional setting, and allows students to share with their peers and industry professionals from the greater Dallas community the outstanding research conducted at SMU.

A cash prize of $250 was awarded to the best poster from each department or judging group.

View the list of student winners whose research was awarded a cash prize.

View highlights of the presentations.

Some highlights of the research:

  • Faris Altamimi, a student of Dr. Sevinc Sengor in Lyle School‘s Civil and Environmental Engineering Department, presented a study investigating experimental and modeling approaches for enhanced methane generation from municipal solid waste, while providing science-based solutions for cleaner, renewable sources of energy for the future.
  • Yongqiang Li and Xiaogai Li, students of Dr. Xin-Lin Gao in Lyle School’s Mechanical Engineering Department, are addressing the serious blunt trauma injury that soldiers on the battlefield suffer from ballistics impact to their helmets. The study simulated the ballistic performance of the Advanced Combat Helmet.
  • Audrey Reeves, Sara Merrikhihaghi and Kevin Bruemmer, students of Dr. Alexander Lippert, in the Chemistry Department of Dedman College, presented research on cell-permeable fluorescent probes in the imaging of enzymatic pathways in living cells, specifically the gaseous signaling molecule nitroxyl. Their research better understands nitroxyl’s role as an inhibitor of an enzyme that is key in the conversion of acetaldehyde to acetic acid.
  • Rose Ashraf, a student of Dr. George Holden in the Psychology Department of Dedman College, presented her research on harsh verbal discipline in the home and its prediction of child compliance. It was found permissive parents are least likely to elicit prolonged compliance.
  • Nicole Vu and Caitlin Rancher, students of Dr. Ernest N. Jouriles and Dr. Renee McDonald in the Psychology Department of Dedman College, presented research on children’s threat appraisals of interparental conflict and it’s relationship to child anxiety.

See the full catalog of participants and their abstracts.

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Charity, social justice and earth-friendly activism replace big houses, diamond rings and ostentatious living for status seekers

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Keeping up with the Joneses has taken on a whole new meaning, according to new research by a professor in the Cox School of Business at Southern Methodist University, Dallas.

Rich people traditionally flaunted their wealth with ostentatious living, designer clothing, big houses, fast cars and grand parties. But times have changed says Ryan Murphy, a research assistant professor in Cox’s O’Neil Center for Global Markets and Freedom.

In a review of the research literature on modern conspicuous consumption, Murphy found that flashing a lavish lifestyle to signal one’s high-income status is losing favor.

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In his briefing, “The New Aristocrats: A cultural and economic analysis of the new status signaling,” Murphy says “conspicuous consumption” has become outmoded.

Taking its place is a new-found interest in high-profile gestures by the social elite, who on the surface pursue moral aims but in reality signal status, he says.

“I still believe the rich are signaling status, but doing so in ways that are on the surface moral, especially ways that demonstrate a rejection of globalization and capitalism,” Murphy says. “But the social and intellectual elite who once bought fast cars and oversized houses to demonstrate where they are in the social pecking order are now buying Priuses.”

The briefing paper was published by Adam Smith Institute. The U.K.-based policy institute, dedicated to free market policies, noted that the paper describes “Why nobody’s keeping up with the Joneses anymore.”

“Signaling status” is a common exercise for the wealthy, but today’s “new aristocrats” focus their energies on signaling their virtue and avoiding simple crass consumerism, Murphy says.

This new class of high-dollar do-gooders differentiate themselves from classic aristocrats of the past who acquired useless skills, such as fencing, and from those described as having old-money, who made ostentatious displays of frivolous spending.

Instead the trend is toward “conspicuous conservation,” as wealthy people attempt to signal a lack of interest in status games.

This may mean they are also less amenable to policies such as luxury taxes, Murphy says, as the relationship between status goods and raw financial cost is much weaker than it once was.

Murphy, in SMU’s O’Neil Center for Global Markets and Freedom, is an expert in institutional economics, public policy and macroeconomics.

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SMU is a nationally ranked private university in Dallas founded 100 years ago. Today, SMU enrolls nearly 11,000 students who benefit from the academic opportunities and international reach of seven degree-granting schools. For more information see www.smu.edu.

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SMU 2015 research efforts broadly noted in a variety of ways for world-changing impact

SMU scientists and their research have a global reach that is frequently noted, beyond peer publications and media mentions.

By Margaret Allen
SMU News & Communications
It was a good year for SMU faculty and student research efforts. Here is a small sampling of public and published acknowledgements during 2015:

Simmons, Diego Roman, SMU, education

Hot topic merits open access
Taylor & Francis, publisher of the online journal Environmental Education Research, lifted its subscription-only requirement to meet demand for an article on how climate change is taught to middle-schoolers in California.

Co-author of the research was Diego Román, assistant professor in the Department of Teaching and Learning, Annette Caldwell Simmons School of Education and Human Development.

Román’s research revealed that California textbooks are teaching sixth graders that climate change is a controversial debate stemming from differing opinions, rather than a scientific conclusion based on rigorous scientific evidence.

The article, “Textbooks of doubt: Using systemic functional analysis to explore the framing of climate change in middle-school science textbooks,” published in September. The finding generated such strong interest that Taylor & Francis opened access to the article.

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Research makes the cover of Biochemistry
Drugs important in the battle against cancer were tested in a virtual lab by SMU biology professors to see how they would behave in the human cell.

A computer-generated composite image of the simulation made the Dec. 15 cover of the journal Biochemistry.

Scientific articles about discoveries from the simulation were also published in the peer review journals Biochemistry and in Pharmacology Research & Perspectives.

The researchers tested the drugs by simulating their interaction in a computer-generated model of one of the cell’s key molecular pumps — the protein P-glycoprotein, or P-gp. Outcomes of interest were then tested in the Wise-Vogel wet lab.

The ongoing research is the work of biochemists John Wise, associate professor, and Pia Vogel, professor and director of the SMU Center for Drug Discovery, Design and Delivery in Dedman College. Assisting them were a team of SMU graduate and undergraduate students.

The researchers developed the model to overcome the problem of relying on traditional static images for the structure of P-gp. The simulation makes it possible for researchers to dock nearly any drug in the protein and see how it behaves, then test those of interest in an actual lab.

To date, the researchers have run millions of compounds through the pump and have discovered some that are promising for development into pharmaceutical drugs to battle cancer.

Click here to read more about the research.

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Strong interest in research on sexual victimization
Teen girls were less likely to report being sexually victimized after learning to assertively resist unwanted sexual overtures and after practicing resistance in a realistic virtual environment, according to three professors from the SMU Department of Psychology.

The finding was reported in Behavior Therapy. The article was one of the psychology journal’s most heavily shared and mentioned articles across social media, blogs and news outlets during 2015, the publisher announced.

The study was the work of Dedman College faculty Lorelei Simpson Rowe, associate professor and Psychology Department graduate program co-director; Ernest Jouriles, professor; and Renee McDonald, SMU associate dean for research and academic affairs.

The journal’s publisher, Elsevier, temporarily has lifted its subscription requirement on the article, “Reducing Sexual Victimization Among Adolescent Girls: A Randomized Controlled Pilot Trial of My Voice, My Choice,” and has opened it to free access for three months.

Click here to read more about the research.

Consumers assume bigger price equals better quality
Even when competing firms can credibly disclose the positive attributes of their products to buyers, they may not do so.

Instead, they find it more lucrative to “signal” quality through the prices they charge, typically working on the assumption that shoppers think a high price indicates high quality. The resulting high prices hurt buyers, and may create a case for mandatory disclosure of quality through public policy.

That was a finding of the research of Dedman College’s Santanu Roy, professor, Department of Economics. Roy’s article about the research was published in February in one of the blue-ribbon journals, and the oldest, in the field, The Economic Journal.

Published by the U.K.’s Royal Economic Society, The Economic Journal is one of the founding journals of modern economics. The journal issued a media briefing about the paper, “Competition, Disclosure and Signaling,” typically reserved for academic papers of broad public interest.

The Journal of Physical Chemistry A

Chemistry research group edits special issue
Chemistry professors Dieter Cremer and Elfi Kraka, who lead SMU’s Computational and Theoretical Chemistry Group, were guest editors of a special issue of the prestigious Journal of Physical Chemistry. The issue published in March.

The Computational and Theoretical research group, called CATCO for short, is a union of computational and theoretical chemistry scientists at SMU. Their focus is research in computational chemistry, educating and training graduate and undergraduate students, disseminating and explaining results of their research to the broader public, and programming computers for the calculation of molecules and molecular aggregates.

The special issue of Physical Chemistry included 40 contributions from participants of a four-day conference in Dallas in March 2014 that was hosted by CATCO. The 25th Austin Symposium drew 108 participants from 22 different countries who, combined, presented eight plenary talks, 60 lectures and about 40 posters.

CATCO presented its research with contributions from Cremer and Kraka, as well as Marek Freindorf, research assistant professor; Wenli Zou, visiting professor; Robert Kalescky, post-doctoral fellow; and graduate students Alan Humason, Thomas Sexton, Dani Setlawan and Vytor Oliveira.

There have been more than 75 graduate students and research associates working in the CATCO group, which originally was formed at the University of Cologne, Germany, before moving to SMU in 2009.

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Vertebrate paleontology recognized with proclamation
Dallas Mayor Mike Rawlings proclaimed Oct. 11-17, 2015 Vertebrate Paleontology week in Dallas on behalf of the Dallas City Council.

The proclamation honored the 75th Annual Meeting of the Society of Vertebrate Paleontology, which was jointly hosted by SMU’s Roy M. Huffington Department of Earth Sciences in Dedman College and the Perot Museum of Science and Nature. The conference drew to Dallas some 1,200 scientists from around the world.

Making research presentations or presenting research posters were: faculty members Bonnie Jacobs, Louis Jacobs, Michael Polcyn, Neil Tabor and Dale Winkler; adjunct research assistant professor Alisa Winkler; research staff member Kurt Ferguson; post-doctoral researchers T. Scott Myers and Lauren Michael; and graduate students Matthew Clemens, John Graf, Gary Johnson and Kate Andrzejewski.

The host committee co-chairs were Anthony Fiorillo, adjunct research professor; and Louis Jacobs, professor. Committee members included Polcyn; Christopher Strganac, graduate student; Diana Vineyard, research associate; and research professor Dale Winkler.

KERA radio reporter Kat Chow filed a report from the conference, explaining to listeners the science of vertebrate paleontology, which exposes the past, present and future of life on earth by studying fossils of animals that had backbones.

SMU earthquake scientists rock scientific journal

Modelled pressure changes caused by injection and production. (Nature Communications/SMU)
Modelled pressure changes caused by injection and production. (Nature Communications/SMU)

Findings by the SMU earthquake team reverberated across the nation with publication of their scientific article in the prestigious British interdisciplinary journal Nature, ranked as one of the world’s most cited scientific journals.

The article reported that the SMU-led seismology team found that high volumes of wastewater injection combined with saltwater extraction from natural gas wells is the most likely cause of unusually frequent earthquakes occurring in the Dallas-Fort Worth area near the small community of Azle.

The research was the work of Dedman College faculty Matthew Hornbach, associate professor of geophysics; Heather DeShon, associate professor of geophysics; Brian Stump, SMU Albritton Chair in Earth Sciences; Chris Hayward, research staff and director geophysics research program; and Beatrice Magnani, associate professor of geophysics.

The article, “Causal factors for seismicity near Azle, Texas,” published online in late April. Already the article has been downloaded nearly 6,000 times, and heavily shared on both social and conventional media. The article has achieved a ranking of 270, which puts it in the 99th percentile of 144,972 tracked articles of a similar age in all journals, and 98th percentile of 626 tracked articles of a similar age in Nature.

“It has a very high impact factor for an article of its age,” said Robert Gregory, professor and chair, SMU Earth Sciences Department.

The scientific article also was entered into the record for public hearings both at the Texas Railroad Commission and the Texas House Subcommittee on Seismic Activity.

Researchers settle long-debated heritage question of “The Ancient One”

The skull of Kennewick Man and a sculpted bust by StudioEIS based on forensic facial reconstruction by sculptor Amanda Danning. (Credit: Brittany Tatchell)
The skull of Kennewick Man and a sculpted bust by StudioEIS based on forensic facial reconstruction by sculptor Amanda Danning. (Credit: Brittany Tatchell)

The research of Dedman College anthropologist and Henderson-Morrison Professor of Prehistory David Meltzer played a role in settling the long-debated and highly controversial heritage of “Kennewick Man.”

Also known as “The Ancient One,” the 8,400-year-old male skeleton discovered in Washington state has been the subject of debate for nearly two decades. Argument over his ancestry has gained him notoriety in high-profile newspaper and magazine articles, as well as making him the subject of intense scholarly study.

Officially the jurisdiction of the U.S. Army Corps of Engineers, Kennewick Man was discovered in 1996 and radiocarbon dated to 8500 years ago.

Because of his cranial shape and size he was declared not Native American but instead ‘Caucasoid,’ implying a very different population had once been in the Americas, one that was unrelated to contemporary Native Americans.

But Native Americans long have claimed Kennewick Man as theirs and had asked for repatriation of his remains for burial according to their customs.

Meltzer, collaborating with his geneticist colleague Eske Willerslev and his team at the Centre for GeoGenetics at the University of Copenhagen, in June reported the results of their analysis of the DNA of Kennewick in the prestigious British journal Nature in the scientific paper “The ancestry and affiliations of Kennewick Man.”

The results were announced at a news conference, settling the question based on first-ever DNA evidence: Kennewick Man is Native American.

The announcement garnered national and international media attention, and propelled a new push to return the skeleton to a coalition of Columbia Basin tribes. Sen. Patty Murray (D-WA) introduced the Bring the Ancient One Home Act of 2015 and Washington Gov. Jay Inslee has offered state assistance for returning the remains to Native Tribes.

Science named the Kennewick work one of its nine runners-up in the highly esteemed magazine’s annual “Breakthrough of the Year” competition.

The research article has been viewed more than 60,000 times. It has achieved a ranking of 665, which puts it in the 99th percentile of 169,466 tracked articles of a similar age in all journals, and in the 94th percentile of 958 tracked articles of a similar age in Nature.

In “Kennewick Man: coming to closure,” an article in the December issue of Antiquity, a journal of Cambridge University Press, Meltzer noted that the DNA merely confirmed what the tribes had known all along: “We are him, he is us,” said one tribal spokesman. Meltzer concludes: “We presented the DNA evidence. The tribal members gave it meaning.”

Click here to read more about the research.

Prehistoric vacuum cleaner captures singular award

Paleontologists Louis L. Jacobs, SMU, and Anthony Fiorillo, Perot Museum, have identified a new species of marine mammal from bones recovered from Unalaska, an Aleutian island in the North Pacific. (Hillsman Jackson, SMU)
Paleontologists Louis L. Jacobs, SMU, and Anthony Fiorillo, Perot Museum, have identified a new species of marine mammal from bones recovered from Unalaska, an Aleutian island in the North Pacific. (Hillsman Jackson, SMU)

Science writer Laura Geggel with Live Science named a new species of extinct marine mammal identified by two SMU paleontologists among “The 10 Strangest Animal Discoveries of 2015.”

The new species, dubbed a prehistoric hoover by London’s Daily Mail online news site, was identified by SMU paleontologist Louis L. Jacobs, a professor in the Roy M. Huffington Department of Earth Sciences, Dedman College of Humanities and Sciences, and paleontologist and SMU adjunct research professor Anthony Fiorillo, vice president of research and collections and chief curator at the Perot Museum of Nature and Science.

Jacobs and Fiorillo co-authored a study about the identification of new fossils from the oddball creature Desmostylia, discovered in the same waters where the popular “Deadliest Catch” TV show is filmed. The hippo-like creature ate like a vacuum cleaner and is a new genus and species of the only order of marine mammals ever to go extinct — surviving a mere 23 million years.

Desmostylians, every single species combined, lived in an interval between 33 million and 10 million years ago. Their strange columnar teeth and odd style of eating don’t occur in any other animal, Jacobs said.

SMU campus hosted the world’s premier physicists

The SMU Department of Physics hosted the “23rd International Workshop on Deep Inelastic Scattering and Related Subjects” from April 27-May 1, 2015. Deep Inelastic Scattering is the process of probing the quantum particles that make up our universe.

As noted by the CERN Courier — the news magazine of the CERN Laboratory in Geneva, which hosts the Large Hadron Collider, the world’s largest science experiment — more than 250 scientists from 30 countries presented more than 200 talks on a multitude of subjects relevant to experimental and theoretical research. SMU physicists presented at the conference.

The SMU organizing committee was led by Fred Olness, professor and chair of the SMU Department of Physics in Dedman College, who also gave opening and closing remarks at the conference. The committee consisted of other SMU faculty, including Jodi Cooley, associate professor; Simon Dalley, senior lecturer; Robert Kehoe, professor; Pavel Nadolsky, associate professor, who also presented progress on experiments at CERN’s Large Hadron Collider; Randy Scalise, senior lecturer; and Stephen Sekula, associate professor.

Sekula also organized a series of short talks for the public about physics and the big questions that face us as we try to understand our universe.

Click here to read more about the research.

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Survey finds executive cybersecurity decisions are evolving from compliance to proactive cyber-risk management

SMU Darwin Deason Institute for Cyber Security releases new study on how financial, retail, healthcare and government sectors manage cyber risks

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A new research study from SMU’s Darwin Deason Institute for Cyber Security finds that executives are changing the way they manage and invest in cybersecurity, moving away from limited, reactive approaches and adopting systemic risk management frameworks that combine hardware, software and operations protocols to mitigate cyber risk.

The study, Identifying How Firms Manage Cybersecurity Investment, was sponsored by IBM Security and based on a semi-structured survey of 40 executives across financial, retail, healthcare and government sectors. Participants, most of whom were chief information security officers (CISOs), were selected primarily from large firms.

The study revealed several signs of increasing support for cybersecurity programs, including:

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  • More than 80 percent of those interviewed reported broad and increasing support among senior-level management and corporate boards for their cybersecurity efforts.
  • Eighty-eight percent of respondents reported that their security budgets have increased.
  • The majority of respondents cited news coverage of large and harmful security breaches as the driver of that support.
  • In an interesting twist of perception, while 46 percent of interview subjects believe their organization is spending the right amount of money on cybersecurity, 64 percent reported that their peers were spending too little.

While most of those surveyed said getting funding for their cybersecurity efforts is not a hurdle, many executives talked about the difficulty they experience in finding and hiring skilled cybersecurity personnel. And while findings were similar across most of those interviewed from the private sector, the relatively small number of government executives surveyed noted that the lengthy budgeting processes they must work through make it difficult to react quickly to the emergence of new threats.

“Cybersecurity is more than a technology challenge,” said Fred Chang, director of the Deason Institute in SMU’s Bobby B. Lyle School of Engineering. “Dealing with the landscape as it exists today means making decisions within specific management cultures and understanding what drives the decision-making process. By explaining the move from compliance to risk-based cybersecurity programs we see in many C-suites, this report connects the dots for people making important decisions about what it takes to maintain privacy, financial security and operating capability — all of which are vulnerable.”

The widespread use of security frameworks shows a general maturation of cyber risk management, the study notes.

“Companies are realizing that simply checking the box for compliance requirements is no longer a sufficient security strategy,” said Bob Kalka, Vice President, IBM Security. “Hackers are becoming increasingly sophisticated in the battle for corporate data, and the survey results show that companies are evolving their security to keep pace. The increasing use of strategic, risk-based frameworks is a huge step forward in protecting these organizations’ most critical assets.”

“This report is powerful information for anyone guiding cybersecurity decisions today,” Chang said. “And it’s a good example of the kind of interdisciplinary focus the Deason Institute brings to the table.”

Chang joined SMU’s Lyle School of Engineering in September 2013 with the goal of creating a cybersecurity program that takes an interdisciplinary approach to what is frequently perceived as a strictly technical issue. The Deason Institute, launched in January 2014, provides SMU and the Lyle School with the critical resources to advance that goal. Chang’s career spans service in the private sector and in government, including as the former Director of Research at the National Security Agency.

The research team for this study also included Deason Institute Principal Investigator Tyler Moore and Scott Dynes, a visiting scholar at the Institute. Moore’s research focuses on the economics of information security, the study of electronic crime and the development of policy for strengthening security. Dynes’ research addresses how firms identify and manage cyber risks at the firm and sector levels, and he is well published on topics related to incentives for firms to invest in information security, as well as the economic consequences of information security failures.

Interviews with the 40 executives cited in the survey were conducted in person or by phone with one or two researchers, and lasted from 30 minutes to an hour. The interviews were semi-structured in that researchers worked from a list of common questions in every interview, but allowed the answers to those questions to serve as a launching point for follow-ups. Of the participants, 33 represented U.S. organizations and the remaining seven were international.

Interview questions included:

  • What methods and inputs do you use to prioritize cyber investment?
  • Do you feel you have adequate information in managing overall cyber risk?
  • Is your management supportive? Do you have sufficient budget?
  • What factors are driving cybersecurity investment at your firm?
  • How do you decide among offerings in the marketplace?

A key study finding was the central role that frameworks now play in defining how executives perceive risk, and how much money they are willing to spend to mitigate that risk. “Using these frameworks provides a platform for CISOs to make an understandable, compelling case for specific cybersecurity products and operations,” Moore said. Or as one interviewed executive put it, “Security has to be able to have a basis to argue its point of view in a compelling story with some thought behind it, rather than ‘I want to get these things because it’s the next cool security thing that’s out there.’”

Worth noting, Moore added, is that the lack of qualified, available cybersecurity professionals creates its own set of problems. “In some cases, CISOs say their senior management wants to fund cybersecurity measures more quickly than they can staff them,” Moore said. “In other cases, senior management is hesitant to fully fund proposed cybersecurity projects because they fear the CISO doesn’t have the personnel available to implement them.”

The interviews were conducted between February and October 2015 and participants were assured anonymity for themselves and their firms. The authors note that the advantage of the semi-structured interview methodology is that it enables the researcher to glean detailed contextual information that would not be possible under a more structured interview scenario. The disadvantage, they note, is that the contextual findings do not generalize to the profession as a whole.

The findings described in the report, Identifying How Firms Manage Cybersecurity Investment, are not to be construed as an endorsement of any person, product or company by the Darwin Deason Institute for Cyber Security at SMU. Note that the respondent opinions presented in the report do not necessarily reflect the opinions of the study authors or the study sponsor, IBM. The study’s objective is to relay as accurately as possible the statements of the interview subjects.

Read an independent analysis based on the Deason Institute report by sponsor IBM Security at this link. — Kim Cobb

The mission of the Darwin Deason Institute for Cyber Security in SMU’s Bobby B. Lyle School of Engineering is to advance the science, policy, application and education of cyber security through basic and problem-driven, interdisciplinary research. The Lyle School, founded in 1925, is one of the oldest engineering schools in the Southwest. The school offers eight undergraduate and 28 graduate programs, including masters and doctoral degrees.

SMU is a nationally ranked private university in Dallas founded 100 years ago. Today, SMU enrolls approximately 11,000 students who benefit from the academic opportunities and international reach of seven degree-granting schools.

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SMU Tower Center, Latino Center for Leadership Development create new strategic policy program

New center will be hub for social-scientific issues, with research that will inform policymaking locally and nationally

SMU’s John G. Tower Center for Political Studies and the Dallas-based Latino Center for Leadership Development announced a strategic new academic policy institute at SMU Sept. 15. Speakers were, from left, Thomas DiPiero, dean of SMU’s Dedman College of Humanities and Sciences; Jorge Baldor, Latino Center founder and SMU alumnus; Joshua Rovner, acting director of SMU’s Tower Center; and Miguel Solis, Latino Center.
SMU’s John G. Tower Center for Political Studies and the Dallas-based Latino Center for Leadership Development announced a strategic new academic policy institute at SMU Sept. 15. Speakers were, from left, Thomas DiPiero, dean of SMU’s Dedman College of Humanities and Sciences; Jorge Baldor, Latino Center founder and SMU alumnus; Joshua Rovner, acting director of SMU’s Tower Center; and Miguel Solis, Latino Center. (Hillsman Jackson)

SMU’s John Goodwin Tower Center for Political Studies has formed a strategic academic partnership with the Latino Center for Leadership Development, Latino CLD.

The new Latino CLD-SMU Tower Center Policy Program will identify and implement policy-focused solutions to the Latino community’s most pressing concerns, from educational and economic opportunities, to voting rights and immigration reform, to the under-representation of Latinos in elected and appointed roles at the federal, state and local levels, as well as corporate boards.

As part of the unique partnership, the Latino CLD will provide SMU’s Tower Center with $900,000 over five years. The funding will allow the new policy program to attract and engage scholars and thought leaders in an interdisciplinary think-tank, creating a framework to analyze and develop policy priorities, provide public forums and outreach, and support greater understanding and influence for the Latino community.

“America is in the midst of a fundamental, Latino-driven demographic shift,” said Latino CLD founder and SMU alumnus Jorge Baldor, citing Pew Research Center reports that Latinos will represent about 30 percent of the U.S. population by 2060.

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“With the growing number of Latinos comes a reciprocal responsibility to lead,” Baldor said. “Latino CLD is focused on developing the next generation of those leaders.”

Dallas Mayor Mike Rawlings said research from the institute will inform policymaking locally and nationwide.

“I’m pleased the Latino Center for Leadership Development and SMU are joining forces for a premier Latino policy program,” Rawlings said. “The research it produces will be an asset for policy makers, allowing for in-depth analysis and creation of policies that will improve the lives of people across Texas and throughout the nation.”

SMU is becoming a major presence in Latino-focused research and education, said Thomas DiPiero, dean of Dedman College.

“It’s also a propitious moment to bring new expertise and scholarship to bear both nationally and locally,” DiPiero said, noting the Dallas-Fort Worth region, with 7 million people, is the nation’s fourth-largest population center, and growing rapidly.

“Looking ahead, the success of this program will allow SMU and the Latino CLD to contribute vital public policy research while based in DFW — a U.S. political and economic center of gravity with strong global connections,” DiPiero said.

The Latino CLD-SMU Tower Center Policy Program will work in three major areas:

  • Provide influential voices and data to support research on policy issues
  • Offer two-year appointments for postdoctoral scholars who will research and publish their findings on public policy issues
  • Provide research grants and public seminars to promote stronger community understanding and dialogue about key societal issues

The relationship between the new SMU policy program and Latino CLD also will allow promising leaders, such as those within the Latino CLD’s new Leadership Academy, “to develop as individuals and hone network skills necessary to assume positions of influence” while focused on policy and politics to help people from all spectrums of society, Baldor said.

“The Latino CLD-SMU Tower Center Policy Program will provide an excellent opportunity to combine our expertise to focus on contemporary policy matters of major interest to this country’s diverse, growing Latino community,” said Joshua Rovner, director of studies at the Tower Center in SMU’s Dedman College of Humanities and Sciences.

“As a hub for social-scientific issues, we will play a major role in cutting through the cacophony of numbers related to the Latino community, letting us take big issues and quickly drill down to ideas for thoughtful solutions and policy implementation,” Rovner said.

The announcement of the new policy program came on the first day of National Hispanic Heritage Month and follows on the heels of the Tower Center’s Sept. 8 launch of its new Texas-Mexico Program during Texas Gov. Greg Abbott’s historic visit to Mexico. — Denise Gee

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SMU is a nationally ranked private university in Dallas founded 100 years ago. Today, SMU enrolls nearly 11,000 students who benefit from the academic opportunities and international reach of seven degree-granting schools. For more information see www.smu.edu.

In the spirit of John Tower’s commitment to educate and inspire a new generation of thoughtful leaders, the Tower Center seeks to bridge the gap between the world of ideas, scholarship and teaching, as well as the practice of politics. The primary mission of the Tower Center is to promote the study of politics and international affairs and to stimulate an interest in ethical public service among undergraduates. The Tower Center is an academic center where all parties and views are heard in a marketplace of ideas, and the Center pursues its mission in a non-partisan manner.

Latino CLD is a privately funded foundation with a vision of developing future leaders with an understanding of Latino-focused policies and actionable items for solutions resulting from such partnerships as the Latino CLD–SMU Tower Center Policy Institute.

SMU has an uplink facility located on campus for live TV, radio, or online interviews. To speak with an SMU expert or book an SMU guest in the studio, call SMU News & Communications at 214-768-7650.

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Why firms prefer not to disclose product quality — and how regulators might respond

“This is a really exciting area of research where game theory based models can provide direct insights into behavior of market participants.” — Roy

SMU, Santanu Roy, Economic Journal, price signaling, regulation

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Rather than explicitly revealing information about the quality of their products and services, many firms prefer to signal quality through the prices they charge, typically working on the assumption that a high price indicates high quality.

New research by Maarten Janssen, University of Vienna, and Southern Methodist University economist Santanu Roy provides a new explanation for why firms choose not to disclose quality directly – and explains how prices that are set to signal quality can distort actual buying decisions.

Their study, “Competition, Disclosure and Signalling,” which is published in the February 2015 issue of the Economic Journal, shows that when firms compete on price, not disclosing product quality voluntarily can soften competition and boost profits.

“We often use prices to form ideas about product quality. Firms understand this,” said Roy, a professor in SMU’s Department of Economics in Dedman College of Humanities & Sciences. “As a result, their strategic decisions about pricing and direct disclosure of product characteristics become intricately linked. Our research explains why firms may prefer not to disclose quality attributes of their products and instead induce buyers to try to infer quality from prices: it allows firms to sustain high prices despite strong competition.”

Finding may be a case for imposing mandatory disclosure regulation
The finding has an important policy implication for regulators: even if consumers infer all relevant product information from prices (or other actions by firms), there may be a case for imposing mandatory disclosure regulation. Such regulation can reduce market power and the price and consumption distortions resulting from firms’ use of prices to signal product quality.

“If you regulate and force firms to directly disclose quality attributes, prices may fall and lead to better market outcomes,” Roy said. “This is a really exciting area of research where game theory based models can provide direct insights into behavior of market participants. Our current research studies some related issues such as the case for ‘truth in advertising’ regulation and penalizing false advertising of product attributes.”

The researchers begin by noting that in a large number of markets, ranging from educational and health services to consumer goods and financial assets, sellers have important information about the quality of their products. Quality attributes include satisfaction from consuming the product, durability, safety and potential health hazards as well as ethical and environmental attributes.

Information about these quality attributes is not always publicly available to potential buyers or competitors. In many of these markets, firms have the option of voluntarily disclosing product information in a credible and verifiable manner – for example, through independent certification, rating agencies or regulated advertising.

Without hard, credible information about products, buyers associate higher prices with better quality
But in practice, firms do not disclose product quality very often, even when there are relatively cost-effective mechanisms for credible disclosure and even when the product quality itself is not bad.

For example, empirical studies find that hospitals often do not disclose risk-adjusted mortality; schools often do not report standardized test scores; restaurants almost never disclose hygiene inspection reports; and so on.

In fact, the reluctance of firms to disclose voluntarily may discourage the emergence of rating agencies and certification intermediaries in many industries. This study provides a new explanation for why firms do not wish to disclose quality.

The researchers’ explanation is based on the commonplace observation that even when there is no hard and credible information about products on the market, buyers often associate higher prices with better quality and cheap products with low quality.

Such beliefs held by buyers are rational in markets where firms anticipate this and choose their actions (such as prices) to convey the hidden information. Economists call this “signaling”: it is an alternative way of communicating private information by firms.

The researchers argue that firms may not disclose product attributes voluntarily because they find it more profitable to signal their information indirectly.

Excessively high price makes it credible to buyers that product could not be low quality
This is somewhat paradoxical at first glance. Economists have long maintained that signalling is costly for firms. For example, to signal high quality through high prices, a firm may have to charge a much higher price than in a situation where product quality was observed or disclosed, leading to loss of sales and profit. The excessively high price is needed to make it credible to buyers that this could not be a low quality product as the producer of such a product would have lower costs and therefore prefer to sell high volume at low price.

Why then would a firm prefer to signal rather than disclose? The answer lies in the strategic behavior of firms and market competition. The researchers show that when firms compete on price, not disclosing product quality voluntarily, competing under a “veil of incomplete information” can soften competition, leading to higher profits and a more collusive outcome.

Firms’ incentives to lower prices to steal business from their rivals are disciplined by the fact that buyers may associate lower prices with lower quality. The resulting market outcome can be one with higher profits for the nondisclosing firm. The strategic incentive for nondisclosure may be strong even when a firm has a strong competitive advantage in the market.

Absence of voluntary disclosure does not mean that consumers make uninformed decisions
In contrast with previous research on this issue, the new explanation of nondisclosure is not based on disclosure being too costly or imperfect. The researchers show that no firm may disclose product quality (including the ones with the best product quality), even if the mechanism for voluntary disclosure is almost costless and frictionless.

The researchers’ analysis indicates that the absence of voluntary disclosure does not mean that consumers make uninformed decisions; nondisclosure arises precisely when buyers infer quality from the market behavior of firms.

But markets may well be inefficient as the prices that are set to signal quality distort actual buying decisions. This leads to the important policy implication that there may be a case for imposing mandatory disclosure regulation on firms. — Royal Economic Society and Southern Methodist University

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SMU is a nationally ranked private university in Dallas founded 100 years ago. Today, SMU enrolls nearly 11,000 students who benefit from the academic opportunities and international reach of seven degree-granting schools. For more information see www.smu.edu.

SMU has an uplink facility located on campus for live TV, radio, or online interviews. To speak with an SMU expert or book an SMU guest in the studio, call SMU News & Communications at 214-768-7650.

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CoinDesk: Research — Over $11 Million Lost in Bitcoin Scams Since 2011

The researchers painstakingly read forum threads post by post, even translating messages written in languages other than English.

Bitcoin, SMU, scammers, $11 million, Moore, Vasek

With the cryptocurrency Bitcoin increasingly popular for digital transactions, the digital currency news site CoinDesk covered the research of SMU Bitcoin experts Marie Vasek, lead researcher on the study, and Tyler W. Moore, both in SMU’s Computer Science and Engineering Department in the Lyle School of Engineering.

The study by Vasek and Moore, “There’s no free lunch, even using bitcoin: Tracking the popularity and profits of virtual currency scams,” found that fraudulent schemes have scammed at least $11 million in Bitcoin deposits from unsuspecting cyber customers over the past four years.

Book a live interview

bitcoin, fraud, SMU, scams, VasekTo book a live or taped interview with Marie Vasek or Dr. Tyler Moore in the SMU Broadcast Studio call SMU News at 214-768-7650 or email news@smu.edu.

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    • Bitcoin is the digital world’s most popular virtual currency, with millions in circulation.

    The study is the first empirical study of its kind. Vasek and Moore found that hucksters used four different types of schemes through authentic-looking web-based investment and banking outlets to lure customers and heist deposits.

    Vasek explained to CoinDesk journalist Joon Ian Wong how the researchers extracted Bitcoin addresses linked to the frauds, enabling them to look at transactions from victims to fraudsters recorded on the transaction addresses.

    The CoinDesk article, Research: Over $11 Million Lost in Bitcoin Scams Since 2011, published Jan. 29, 2015.

    Read the full story.

    EXCERPT:

    By Joon Ian Wong
    CoinDesk
    Scams promising bitcoin riches have netted swindlers at least $11m in the last four years, researchers have found.

    Some 13,000 victims handed over their money unwittingly in 42 different scams over that time period, their data suggests.

    However, the total amount of funds cheated from victims over this period is almost certainly higher than the estimated $11m the research identified.

    A co-author of the research, Marie Vasek, said:

    “There are a lot of scams that we couldn’t measure at all. There were scams we couldn’t find or verify … We think presenting our findings as they are, a lower bound, makes a lot of room for us and others to further quantify scams in this space.”

    Vasek, who researches computer security at Southern Methodist University, co-wrote the paper with Tyler Moore, an assistant professor in computer science at the same institution.

    Painstaking search
    The paper, titled There’s No Free Lunch, Even Using Bitcoin: Tracking the Popularity and Profits of Virtual Currency Scams, has been presented at the Financial Cryptography and Data Security conference taking place in Puerto Rico this week.

    Vasek and Moore combed online repositories of scam accusations, including a mega-thread of scams, hacks and heists on the Bitcointalk forum that has been maintained since 2012, as well as the subreddit r/bitcoin, BadBitcoin.org and CryptoHYIPs.com.

    This process required the researchers to painstakingly go through forum threads post by post, even translating messages that were written in languages other then English, as well as visiting the websites that scammers created to publicise themselves.

    “We went through every single post to determine if the scheme was a scam, any associated bitcoin addresses with the scheme, and any associated scams,” Vasek said.

    Using this method they found 349 scams, which were then whittled down to 192 deceptions after excluding phishing, malware and pay-for-click websites, which fall outside the scope of the study.

    Read the full story.

    Follow SMUResearch.com on twitter at @smuresearch.

    SMU is a nationally ranked private university in Dallas founded 100 years ago. Today, SMU enrolls nearly 11,000 students who benefit from the academic opportunities and international reach of seven degree-granting schools. For more information see www.smu.edu.

    SMU has an uplink facility located on campus for live TV, radio, or online interviews. To speak with an SMU expert or book an SMU guest in the studio, call SMU News & Communications at 214-768-7650.

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    Data-driven assessment ranks U.S. Metropolitan Areas by arts and cultural assets

    NCAR, SMU’s National Center for Arts Research, creates index to measure arts vibrancy of U.S. Metropolitan Areas

    NCAR, SMU’s National Center for Arts Research, today released its first annual Arts Vibrancy Index.

    The index ranks more than 900 communities across the country. Vibrancy is measured as the level of supply, demand and government support for arts and culture on a per capita basis. The report highlights the top 20 large markets and top 20 medium and small markets. NCAR provides rank scores on all measures for every U.S. county on the interactive heat map.

    “The numbers are only the start of the story, not the end. Each city in our report is unique in what makes it a vibrant community for the arts,” said Zannie Giraud Voss, director of NCAR and chair and professor of arts management and arts entrepreneurship in SMU’s Meadows School of the Arts and Cox School of Business. “Our intention in developing this report is to stimulate conversation about what makes a city vibrant in the arts and how arts vibrancy varies across cities.”

    The overall index is composed of three dimensions.

    Supply is assessed by the total number of arts providers in the community, including the number of independent artists, arts, culture and entertainment employees, and arts organizations.

    Demand is gauged by the total nonprofit arts dollars in the community, including program revenue, contributed revenue, total expenses and total compensation.

    Level of government support is based on state arts dollars and grants and federal arts dollars and grants.

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    To book a live or taped interview with Dr. Zannie Giraud Voss in the SMU News Broadcast Studio call SMU News at 214-768-7650 or email news@smu.edu.

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    Geographically, the rankings utilize Metropolitan Statistical Areas (MSAs), which are delineated geographic areas consisting of one or more counties that have high social and economic integration with an urban core as defined by the Office of Management and Budget. By focusing on MSAs, the index captures the network of suburbs that rise up around a city or town rather than considering them separately.

    Among cities with populations of 1 million or more, the five most vibrant arts communities are as follows:

    Washington-Arlington-Alexandria, D.C.-Virginia-Maryland-West Virginia
    Nashville-Davidson-Murfreesboro-Franklin, Tennessee
    New York-Jersey City-White Plains, New York-New Jersey
    Boston, Massachusetts
    San Francisco-Redwood City-South San Francisco, California

    For medium and small cities, with population under 1 million, the top five cities are all in the West:

    Glenwood Springs, Colorado
    Santa Fe, New Mexico
    Jackson, Wyoming-Idaho
    Breckenridge, Colorado
    Edwards, Colorado

    The full top-20 lists are available on the NCAR Arts Vibrancy Index, including scores on each of the three dimensions of supply, demand and government support.

    Beyond the specific rankings, select key findings in the Arts Vibrancy Index include:

    No region has cornered the market on arts vibrancy. Cities large and small from every region appear in the top 40 cities, although there is high representation from Western communities in the set of Medium-Small cities.

    Arts vibrancy takes many shapes and forms. Some cities have impressive financial resources invested in nonprofit arts and cultural institutions, others are filled with many smaller organizations and venues, some are tourist destinations and still others are artist colonies. Some cities are strong in numerous arts sectors while others are capitals of a particular art form.

    There are interesting differences across very large Metropolitan Statistical Areas (MSAs). Those that made the list tend either to have a strong concentration of arts vibrancy in an urban core and less going on in surrounding communities, or they are vibrant throughout the greater metropolitan area, and less so in the city center.

    The majority of arts vibrant cities have a population either under 300,000 or between 1,000,000 and 3,000,000.

    In 2012, Meadows and Cox launched NCAR, the first of its kind in the nation. NCAR analyzes the largest database of arts research ever assembled, investigates important issues in arts management and patronage, and makes its findings available to arts leaders, funders, policymakers, researchers and the general public.

    With data from the Cultural Data Project (CDP) and other national and government sources such as the Theatre Communications Group, the National Endowment for the Arts, the Census Bureau and the National Center for Charitable Statistics, NCAR is creating the most complete picture of the health of the arts sector in the U.S.

    The project’s indices and dashboard were created in partnership with IBM, TRG Arts and Nonprofit Finance Fund. The Center also partnered with the Boston Consulting Group to develop its mission, vision and long-term strategies.

    NCAR is led by Zannie Voss and Glenn Voss, Endowed Professor of Marketing at Cox.

    Meadows, one of the foremost arts education institutions in the United States, offers undergraduate and graduate degrees in advertising, art, art history, arts management and arts entrepreneurship, communication studies, creative computation, dance, film and media arts, journalism, music and theatre.

    Cox offers a full range of undergraduate and graduate business education programs.

    Follow SMUResearch.com on twitter at @smuresearch.

    SMU is a nationally ranked private university in Dallas founded 100 years ago. Today, SMU enrolls nearly 11,000 students who benefit from the academic opportunities and international reach of seven degree-granting schools. For more information see www.smu.edu.

    SMU has an uplink facility located on campus for live TV, radio, or online interviews. To speak with an SMU expert or book an SMU guest in the studio, call SMU News & Communications at 214-768-7650.

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    Bitcoin scams steal at least $11 million in virtual deposits from unsuspecting customers

    First empirical study of its kind identifies fraud on seemingly legitimate web sites purposely designed to steal customers’ funds

    bitcoin, moore, smu, fraud

    Fraudulent schemes have scammed at least $11 million in Bitcoin deposits from unsuspecting cyber customers over the past four years, according to new cyber security research from Southern Methodist University, Dallas.

    Bitcoin is the digital world’s most popular virtual currency, with millions in circulation.

    In the first empirical study of its kind, SMU researchers found that hucksters used four different types of schemes through authentic-looking web-based investment and banking outlets to lure customers and heist deposits, said computer security expert Marie Vasek, lead researcher on the study.

    Book a live interview

    bitcoin, fraud, SMU, scams, VasekTo book a live or taped interview with Marie Vasek or Dr. Tyler Moore in the SMU Broadcast Studio call SMU News at 214-768-7650 or email news@smu.edu.

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  • Tyler W. Moore
  • 2015 19th International Financial Cryptography and Data Security Conference: “There’s no free lunch, even using bitcoin: Tracking the popularity and profits of virtual currency scams”
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    • “Our calculation of $11 million is almost certainly at the low-end,” said Vasek. “The amount of Bitcoin that depositors have lost to these scams is probably many millions more.”

    Typically the scams succeed by exploiting not only people’s greed, but also the urge to “get rich quick,” coupled with the inability to judge the legitimacy of web services to decide which financial sites are good or bad, said Bitcoin and cyber security expert Tyler W. Moore, co-researcher on the study.

    “Because the complete history of Bitcoin transactions are made public, we have been able to inspect, for the first time, the money flowing in and out of fraudulent schemes in great detail. It’s like having access to all of Bernie Madoff’s books for many of these scams,” said Moore, director of the Economics and Social Sciences program of the Darwin Deason Institute for Cyber Security in SMU’s Lyle School of Engineering.

    13,000 victims and counting in four different kinds of scams
    The researchers identified 41 scams occurring between 2011 and 2014, in which fraudulent sites stole Bitcoin from at least 13,000 victims, and most certainly more.

    “We found that the most successful scams draw the vast majority of their revenue from a few victims,” Vasek said.

    The researchers were only able to track revenues for about 21 percent of the scams, which would indicate that the amount of Bitcoin actually stolen most likely far exceeds $11 million.

    The findings emerged when the researchers ran a Structured Query Language database dump of all relevant Bitcoin transactions, then analyzed Bitcoin addresses (the account numbers) of both victims and the siphoning transactions of scammers.

    The researchers presented the findings, “There’s no free lunch, even using bitcoin: Tracking the popularity and profits of virtual currency scams,” at the 2015 19th International Financial Cryptography and Data Security Conference, Jan. 26-30, in San Juan, Puerto Rico. Vasek is a graduate student in the Lyle School’s Computer Science and Engineering Department. Moore is assistant professor in the Lyle School’s Computer Science and Engineering Department.

    “The amount of fraud being attracted by Bitcoin is a testament to the fact the virtual currency is gaining in legitimacy,” said Moore. “But scams that successfully hijack funds from depositors may end up scaring away consumers who will fear using Bitcoin for their legitimate digital transactions.”

    There are 13.7 million Bitcoin in circulation, according to blockchain.info. The number of Bitcoin transactions exceeds 100,000 per day.

    The research was partially funded by the U.S. Department of Homeland Security’s Science and Technology Directorate, Cyber Security Division, and the Government of Australia and SPAWAR Systems Center Pacific.

    Four scams, each with varying lifespans, strategies and success
    Vasek and Moore identified four common scams by tracking forum discussions, where scams are often initially advertised and later exposed, and by tracking web sites.

    High-yield investment programs, otherwise known as online Ponzi schemes, which promise investors outlandish interest rates on deposits. The scammers lure both unsuspecting victims as well as those fully aware it’s a Ponzi scheme who hope to cash out in time. Of all the scams, this type has taken in the lion’s share of money from victims. The biggest of these scammers was Bitcoin Savings & Trust, formerly First Pirate Savings & Trust. When such schemes collapse, as they eventually do, and often within about 37 days, they’re replaced with a new program, often run by the same criminals, say the researchers. These scammers consistently pay out to their investors far less than they take in.

    Mining investment scams are classic advanced-fee fraud, taking orders and money from customers but never delivering any mining equipment — specialized computer processors and electronic devices for mining Bitcoin. These retailers typically endure for 145 days, much longer than Ponzi schemes. Vasek and Moore looked at Labcoin, Active Mining Corp., AsicMiningEuipment.com and Dragon-Miner.com.

    Victims make deposits into scam wallets under the promise the service offers greater transaction anonymity. If the deposit is small, scammers leave the money, but if it rises above a threshold, scammers move the money into their wallet. Services such as Onion Wallet, Easy Coin and Bitcoinwallet.in each surfaced with transfers from victims siphoned to one address held by a scammer.

    Exchange scams, such as BTC Promo, CoinOpend and Ubitex, offer PayPal and credit card processing, but at a better exchange rate than competitors. Customers soon find out, however, they never get Bitcoin or cash after making payment. Longer-lived exchange scams survived about three months. Wallet and exchange scams exploit the difficulty in judging the legitimacy of web services.

    The study is not a comprehensive review, the researchers note, as they were limited to those scams for which they could determine a minimum estimate of the prevalence and criminal profits of the scams after analyzing the public ledger of all Bitcoin transactions ever executed.

    The researchers conservatively estimate that $11 million has been taken by scams, while only $4 million has ever been returned. Most of the successful scams catch a few “big fish,” say the researchers, who pay the bulk of the money into the scam.

    “Bitcoin scams pose a problem for more than the victims who directly lose money,” Moore said. “They threaten to undermine trust in this promising technology, and cast a chilling effect on those interested in trying out new services. By mining the public record for fraudulent transactions, we hope to deter would-be scammers and assist law enforcement in cracking down on the bad actors.” — Margaret Allen

    Follow SMUResearch.com on twitter at @smuresearch.

    SMU is a nationally ranked private university in Dallas founded 100 years ago. Today, SMU enrolls nearly 11,000 students who benefit from the academic opportunities and international reach of seven degree-granting schools. For more information see www.smu.edu.

    SMU has an uplink facility located on campus for live TV, radio, or online interviews. To speak with an SMU expert or book an SMU guest in the studio, call SMU News & Communications at 214-768-7650.

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    KERA: Bitcoin — Behind The Cryptocurrency Curtain

    “It’s like any other digital commodity in that it finds its value in the people who use it…” — Tyler Moore

    Bitcoin, KERA, Tyler Moore, SMU, ponzi scheme

    KERA Public Radio journalist Justin Martin tapped the expertise of SMU Bitcoin and cybersecurity expert Tyler W. Moore, an assistant professor of computer science in the Lyle School of Engineering.

    An expert on the digital currency Bitcoin, Moore’s expertise draws in part on his research surrounding Bitcoin, the exchanges that trade in the currency and patterns of online usage. One of Moore’s studies found that online money exchanges that trade hard currency for the rapidly emerging cyber money have a 45 percent chance of failing — often taking their customers’ money with them.

    The finding is from a computer science study in which Moore applied survival analysis to examine the factors that prompt Bitcoin currency exchanges to close.

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    Tyler Moore, SMU BitcoinTo book a live or taped interview with Dr. Tyler Moore in the SMU Broadcast Studio call News and Communications at 214-768-7650 or email news@smu.edu.

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    • KERA’s interview with Moore, “Bitcoin: Behind The Cryptocurrency Curtain,” was published online Nov. 17.

    Listen to the interview.

    EXCERPT:

    By Justin Martin
    KERA
    Fans of bitcoin tout the digital currency as secure, anonymous and efficient. But wildly fluctuating exchange rates and charges recently in an alleged bitcoin Ponzi scheme in North Texas have put a spotlight on bitcoin’s risks.

    Tyler Moore is an assistant professor of computer science and engineering at Southern Methodist University and he joins KERA’s Justin Martin for a conversation on bitcoin.

    Interview Highlights: Tyler Moore …

    … On bitcoin and cryptocurrency:

    “Bitcoin is a currency just like dollars or euros or pounds, but it’s completely digital so there’s no paper equivalent. To do that, you need to have some rules in place so that people can’t willy-nilly copy the bits and steal each other’s bitcoins – so that’s where the crypto comes in – you have some cryptography to protect against double spending and sort of enforce the rules of the system.”

    … On how to acquire bitcoin:

    “So there’s two main ways – the more esoteric way is to mine bitcoins, but if you’re new to bitcoin the most common way is to go to a currency exchange, just like you would when you enter a new country, go the airport, go to the exchange, and provide your dollars and get whatever currency you’d like. You can get to an online currency exchange and pay your dollars and whatever the current market rate is they’ll give you the equivalent in bitcoin.”

    … On bitcoin’s value:

    “It’s like any other digital commodity in that it finds its value in the people who use it. Which is one reason we see these huge fluctuations in that there can be wildly differing demands for the currency at a given time.”

    Listen to the interview.

    Follow SMUResearch.com on twitter at @smuresearch.

    SMU is a nationally ranked private university in Dallas founded 100 years ago. Today, SMU enrolls nearly 11,000 students who benefit from the academic opportunities and international reach of seven degree-granting schools. For more information see www.smu.edu.

    SMU has an uplink facility located on campus for live TV, radio, or online interviews. To speak with an SMU expert or book an SMU guest in the studio, call SMU News & Communications at 214-768-7650.

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    Culture, Society & Family Economics & Statistics Researcher news SMU In The News

    The Economist: Goldilocks nationalism

    The size and homogeneity of a country’s population has a big bearing on its economic policies

    Economist, SMU, Economics, Klaus Desmet

    The Economist’s “Free Exchange” column covered the research of SMU economist Klaus Desmet as part of a larger examination of the ideal size of nations from an economic perspective and within the context of Scotland’s recent vote on the question of independence.

    The article, “Goldilocks nationalism,” published Sept. 27.

    Book a live interview

    Desmet, SMU, Economics

    To book a live or taped interview with Dr. Klaus Desmet in the SMU News Broadcast Studio call SMU News at 214-768-7650 or email news@smu.edu.

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    Desmet is an expert in international trade, regional and urban economics, macroeconomics and political economy. He is the Ruth and Kenneth Altshuler Centennial Interdisciplinary Professor in Economics.

    Desmet’s research published in the Journal of Development Economics, “The political economy of linguistic cleavages,” and looked at the genealogical relationships between the world’s 6,912 languages.

    The data revealed which linguistic cleavages are most relevant for a range of political economy outcomes.

    Desmet and his co-authors on the study found “that deep cleavages, originating thousands of years ago, lead to better predictors of civil conflict and redistribution. The opposite pattern emerges when it comes to the impact of linguistic diversity on growth and public goods provision, where finer distinctions between languages matter.”

    Read the full story.

    EXCERPT:

    The Economist
    WHEN Scotland turned down independence, it was bucking a trend. Since 1946 the number of sovereign states has soared, from 76 to 197. The steady shrinking of the world’s political units raises the question of what the ideal size would be from an economic perspective. Separatists from Catalonia to the southern Philippines should be aware that a country’s population, economists believe, has a big impact on all sorts of policies, from the level of government spending to its openness to trade.

    Separatists eyeing the exit have many motivations, but economics typically plays a big role in the choice to stay or go. In their book “The Size of Nations”, Alberto Alesina and Enrico Spolaore lay out the costs and benefits of going it alone.* Scale has its advantages: bigger countries are easier to defend from foreign aggressors, for instance. When barriers to trade are high, a bigger domestic market allows for more internal specialisation. A 19th-century British prime minister is reported to have complained to a French ambassador, “If you were not such persistent protectionists, you would not find us so keen to annex territories!” America’s size allowed it to develop new and highly productive forms of industry in the late 1800s, which Europe’s smaller countries could not match until tariffs fell in the 20th century.

    Yet the bigger a country grows the more multitudes it contains. Larger populations are not always more diverse than smaller ones—Japan is both much larger and more homogenous than Belgium—but in larger countries there are generally more politically distinct subgroups. As the voting public becomes more heterogenous, the scope for intractable disputes over government policies grows.

    Messrs Alesina and Spolaore reckon falling barriers to trade have reduced the cost of being a small state and boosted interest in separatism. Ironically, the European Union has made breaking up especially attractive. Catalan nationalists, for instance, assume that if Catalonia parted ways with Spain, which it currently subsidises by paying more in taxes than it receives in government spending, it would nonetheless remain within the single market. That makes independence a much easier sell.

    Read the full story.

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    SMU is a nationally ranked private university in Dallas founded 100 years ago. Today, SMU enrolls nearly 11,000 students who benefit from the academic opportunities and international reach of seven degree-granting schools. For more information see www.smu.edu.

    SMU has an uplink facility located on campus for live TV, radio, or online interviews. To speak with an SMU expert or book an SMU guest in the studio, call SMU News & Communications at 214-768-7650.

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    Culture, Society & Family Earth & Climate Economics & Statistics Researcher news SMU In The News

    The Atlantic: Can a Nation’s Soil Explain Its Economic Fortunes?

    If your ancestors could grow crops easily—and thus get proof that patience pays off—you’re more likely to value distant payoffs, argue two economists in a new paper.

    Omer Ozak, SMU, agriculture, soil, economics

    Journalist Joe Pinsker with The Atlantic covered the research of SMU economist Ömer Özak about the association between cultures that value long-term payoffs and their ancient history of successful crop yields. Pinsker’s story, “Can a Nation’s Soil Explain Its Economic Fortunes?” published Sept. 17. Özak’s co-author on the study was economist Oded Galor, Brown University.

    Özak, an assistant professor in the SMU Department of Economics, is an expert in technological change and economic growth, macroeconomics and monetary economics and international economics. For more about Özak’s research and teaching philosophy, see his web site at ÖmerÖzak.com.

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    Omer Ozak, SMU, economics, agriculture, The Atlantic

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    Özak’s research focuses on technological change and economic growth, macroeconomics and monetary economics and international economics.

    In particular, Özak’s research explores the role of geography, technology and culture on contemporaneous economic development. He additionally has explored the relationship between market imperfections and technological innovation and adoption. His research also examines the dynamics of economies with heterogeneous interacting agents. Özak has published books and articles on economic growth, mathematics, game theory, monetary theory and the history of economic thought.

    Read The Atlantic story.

    EXCERPT:

    By Joe Pinsker
    The Atlantic
    Jared Diamond argued, in his 1997 book Guns, Germs, and Steel, that geography is fate. One thread of his theory sought to explain why societies in Eurasia developed more quickly than in the Americas and Africa. Because Eurasia is oriented horizontally, he argued, all of its ancient inhabitants were at roughly similar latitudes, which meant that they worked with roughly similar environments and climates. Thus, a particularly valuable crop or domesticated animal could be put to use just about anywhere on the continent, and one group’s best practices could easily be adopted by other groups—not the case in vertical Africa. Hence, different rates of development.

    Two economics researchers, Brown’s Oded Galor and Southern Methodist University’s Ömer Özak, recently published an ambitious paper reminiscent of Diamond’s work. Like Diamond, they make an argument that is so simple and intuitive that it at first glance appears reductive: People whose ancestors come from places with richer harvests are more likely to appreciate the benefits of long-term thinking. Essentially, the theory suggests that because people who lived in especially fertile areas had more reason to believe that patience pays off, they came to create cultures that are okay with delaying gratification.

    Galor and Özak’s thinking, while data-driven, mostly yields abstract conclusions: The higher the crop yield, the more patient people will be, and the more patient people are, the more dependably their economies will grow. However, the pair’s findings are occasionally quite concrete: Modern-day countries that, roughly 500 years ago, had crop yields one standard deviation higher than average build roughly one year of extra schooling into their education systems. In other words, if wheat was really shooting up for your ancestors 500 years ago, then you’re more likely to have had 12 years of schooling instead of 11.

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    SMU is a nationally ranked private university in Dallas founded 100 years ago. Today, SMU enrolls nearly 11,000 students who benefit from the academic opportunities and international reach of seven degree-granting schools. For more information see www.smu.edu.

    SMU has an uplink facility located on campus for live TV, radio, or online interviews. To speak with an SMU expert or book an SMU guest in the studio, call SMU News & Communications at 214-768-7650.

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    Culture, Society & Family Economics & Statistics Researcher news SMU In The News

    Dallas Morning News: Until bitcoin has oversight, it’s a volatile uncertainty

    “The bitcoin ecosystem is in need of regulatory oversight and reform.” — bitcoin expert Tyler Moore, SMU assistant professor

    Journalist Will Deener with The Dallas Morning News tapped the expertise of SMU Bitcoin and cybersecurity expert Tyler W. Moore, an assistant professor of computer science in the Lyle School of Engineering.

    Moore’s expertise draws in part on his research that found that online money exchanges that trade hard currency for the rapidly emerging cyber money known as Bitcoin have a 45 percent chance of failing — often taking their customers’ money with them.

    The finding is from a computer science study in which Moore applied survival analysis to examine the factors that prompt Bitcoin currency exchanges to close.

    Tyler Moore, SMU Bitcoin

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    Moore is an expert in security economics, cyber security, cyber crime and critical infrastructure protection. His most recent research studies are The Ghosts of Banking Past: Empirical Analysis of Closed Bank Websites and Empirical Analysis of Denial-of-Service Attacks in the Bitcoin Ecosystem.

    The papers were presented earlier in March at the co-located conferences, 18th International Annual Financial Cryptography and Data Security Conference and the 1st Workshop on Bitcoin Research.

    Bitcoin writer Garrick Hileman also covers Moore’s research at the conference in “Pirate Treasure Resurfaces at Bitcoin’s First Academic Workshop” on the digital currency news blog CoinDesk.

    Read the full story.

    EXCERPT:

    By Will Deener
    Dallas Morning News
    Bitcoin was a dream come true for computer geeks, libertarians and big government paranoids.

    Just imagine a digital currency untethered from government regulators, existing only in the virtual world of computer code and cheaper to use than credit cards.

    But the recent collapse of a leading bitcoin exchange, Mt. Gox, has raised concerns about the legitimacy of this virtual currency.

    A $470 million digital heist last month at the Tokyo-based exchange pushed the company into bankruptcy and left many bitcoin investors empty-handed with little recourse.

    Mt. Gox chief executive Mark Karpeles offered some hollow condolences during a late February press conference in Tokyo. He basically said, oops, there was a bug in the bitcoin software, which allowed thieves to hack their way into the system and fraudulently withdraw bit coin.

    And to think this was supposedly the precursor to a digital Utopia.

    Investors in traditional currencies — U.S. dollar, Japanese yen or Swiss franc — need a cast iron stomach, a savvy trading strategy and a fat wallet because big losses are inevitable.

    Breaking news in these markets is like waving a biscuit at a mad dog. It comes fast, and it ain’t pretty.

    But at least sovereign governments and regulatory authorities stand behind and monitor traditional currencies. While Bitcoin’s exchange rate is even more volatile than traditional currencies, there is no oversight from the FDIC, Federal Reserve or U.S. Treasury.

    Tyler Moore, an SMU assistant professor in computer science and engineering, said he doesn’t believe the Mt. Gox fiasco will spell the demise of bitcoin, but regulatory safeguards are needed. Moore co-authored a research report last year in which he examined the risks of investing in bit coin.

    “The bitcoin ecosystem is in need of regulatory oversight and reform,” he wrote in an email response to my questions. “Bitcoin currency exchanges act like de facto banks. Many customers leave the bitcoins in accounts at the exchanges, but there are no capital requirements as there are for traditional banks.”

    Read the full story.

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    SMU is a nationally ranked private university in Dallas founded 100 years ago. Today, SMU enrolls nearly 11,000 students who benefit from the academic opportunities and international reach of seven degree-granting schools. For more information see www.smu.edu.

    SMU has an uplink facility located on campus for live TV, radio, or online interviews. To speak with an SMU expert or book an SMU guest in the studio, call SMU News & Communications at 214-768-7650.

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    Culture, Society & Family Economics & Statistics

    Women have made strides for equality in society, but gender gap still exists in art museum directorships

    New study examines the current and historical factors of the gender gap in art museum directorships, particularly at large museums

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    Zannie Giraud Voss, SMU, Cox, Meadows

    To book a live or taped interview with Dr. Zannie Giraud Voss in the SMU News Broadcast Studio call SMU News at 214-768-7650 or email news@smu.edu.

    Book a live interview

    Ann Marie Gan, SMU, Cox, Meadows, Gender Gap

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    The Association of Art Museum Directors, AAMD, and the National Center for Arts Research, NCAR, at Southern Methodist University have released findings from a research study designed to understand the gender gap in art museum directorships and to explore potential factors to help AAMD member institutions advance toward greater gender equality.

    Through a combination of quantitative analysis and interviews, NCAR and AAMD researchers — led by Zannie Giraud Voss, director of SMU NCAR, and Christine Anagnos, executive director of AAMD — examined the current and historical factors of the gender gap in art museum directorships.

    The study, The Gender Gap in Art Museum Directorships, found that women hold fewer than 50 percent of directorships and that the average female director’s salary lags behind that of the average male director — with overall disparities driven by mostly the largest museums. Lead author was Ann Marie Gan, a student in the MA/MBA in Arts Management in SMU’s Cox School of Business and Meadows School of the Arts.

    In 2013, AAMD conducted a survey of its members, with 211 responding, or 97 percent. The data collected included each institution’s operating budget, endowment, the director’s or top official’s salary and the director’s gender. Additional research was collected on each director’s tenure in his or her current position and on the position held prior to his or her current directorship. Previous position data was found for 193 of the 211 directors.

    Study looked at current state of women in art museum directorships and factors driving any gender gap
    The study sought to answer two main questions: What is the current state of women in art museum directorships? What are some factors that may drive the gender gap? The NCAR and AAMD study had several key findings:

    — Out of the 211 directors included in the AAMD survey, 90 directors were female; women held 42.6 percent of art museum directorships.​

    — On average, female directors earned $.79 cents for $1 that male directors earned. In 2013, the U.S. Bureau of Labor Statistics reported that the median pay of women nationwide is 82 percent of that of men.

    — Segmented by operating budget, these gender disparities are concentrated in museums with a budget of over $15 million roughly the top quarter of museums. In this segment of museums, there are fewer female directors than male directors, and female directors earn less on average than their male counterparts — $.71 cents for $1 a male earns.

    — At museums with budgets under $15 million, the number of female directors is nearly equal to the number of male directors, and, on average, the women earn slightly more — $1.02 for every $1 a male director earns.

    Directors promoted internally suffer salary disadantage compared to peers hired from the outside
    Other factors besides gender that may have influenced the salary and representation differentials noted above were examined through qualitative analysis and interviews with executive search consultants who work with art museums. The study found that a position a director held before entering his or her current position had an effect on average salary: if the person attained the position through internal promotion, he or she was at a salary disadvantage compared to peers hired from other institutions.

    Directors who previously held a non-director job were also at a salary disadvantage when compared to their peers who had previously held the top position at another institution. These observations are true for both men and women, but the number of women who have become directors through internal promotion is greater, and these factors may have contributed in part to salary disparities.

    A visual summary of the study can be found online at the National Center for Arts Research. In addition to Voss and Anagnos, co-authors of the study are Anne Marie Gan, SMU MA/MBA Class of 2015, and Alison D. Wade, Chief Administrator, Association of Art Museum Directors.

    The Association of Art Museum Directors represents 236 art museum directors in the U.S., Canada, and Mexico. It promotes the vital role of art museums throughout North America and advances the profession by cultivating leadership and communicating standards of excellence in museum practice.

    The Meadows School of the Arts is one of the foremost U.S. arts education institutions. It offers undergraduate and graduate degrees in advertising, art, art history, arts management and arts entrepreneurship, communication studies, creative computation, dance, film and media arts, journalism, music and theatre. It shares with the Cox School of Business at SMU the dual-degree MA/MBA in arts management. For more information, visit www.smu.edu/meadows.

    SMU’s Cox School of Business offers a full range of undergraduate and graduate business education programs. — SMU Meadows

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    SMU is a nationally ranked private university in Dallas founded 100 years ago. Today, SMU enrolls nearly 11,000 students who benefit from the academic opportunities and international reach of seven degree-granting schools. For more information see www.smu.edu.

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    Wall Street’s short sellers wrongly maligned — detected red flags ahead of US financial crisis

    Short sellers were first to react to impending crisis among the financial intermediaries examined, including equity analysts, ratings agencies and auditors.

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    Hemang Desai, Cox, SMUTo book a live or taped interview with Dr. Hemang Desai in the SMU Broadcast Studio call News and Communications at 214-768-7650 or email news@smu.edu.

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    Numerous banks in the United States failed during the recent financial crisis — and more would have, absent governmental intervention, writes short-selling expert Hemang Desai, a professor at Southern Methodist University.

    Subsequently, a substantial contraction of credit occurred and the effect on the economy was devastating for businesses and households. In new research, Desai and co-authors provide evidence that short sellers were sensitive to the leading indicators of the crisis from banks’ financial statements. They were first to react to the impending crisis among the financial intermediaries examined, including equity analysts, ratings agencies and auditors, according to Desai, an accounting professor in the SMU Cox School of Business and nationally recognized researcher on mergers and acquisitions, corporate restructuring, short selling and financial reporting.

    Even from the highest levels of leadership in the financial sector, the suggestion was that academia, regulators and the Federal Reserve “missed” the warning signs of the banking and financial crisis. Did financial statements of the banks provide an early warning of their upcoming distress? Commentators have argued that transparency was lacking in banks’ financial statements. And, why did few observers foresee impending problems at banks? The United States has the most developed financial system in the world with arguably the most sophisticated information intermediaries.

    “The notion that everybody missed it is just not true,” states Desai. “This is not the first time we have had a wave of overvaluation — or that banks have failed. We have seen overvaluation in other sectors, like the technology bubble in the late 1990s.” In this case, there was a bubble in the housing market and the financial sector was overheated. Prior work finds that short sellers are sensitive to indicators of overvaluation; it follows that they would have been sensitive to indicators of overvaluation in the housing or the financial sector.

    Short sellers saw warning signs of bank distress
    The research indicates that short sellers were sensitive to the warnings signs of bank distress in the banks’ financials.

    “We looked at the financial statement indicators of bank distress,” says Desai. “We find that these indicators are correlated with the short interest in banks, which suggests that the information set of short sellers was correlated with information in banks’ financials.” Short interest is a market-sentiment indicator that tells whether investors think a stock’s price is likely to fall.

    “Short sellers consider a company’s business model,” explains Desai, “and if the model is conflicted and the firm’s valuation is not justified, then such stocks invite scrutiny and are shorted.” When the firm’s fundamentals, prospects and performance are not in alignment, that’s likely to catch the attention of short sellers.

    A number of factors played into the perfect storm that became the financial and economic crises. From 1997 to mid-2006, housing and other real estate prices rose sharply before the crisis, which drove growth in the overall economy. Real estate represents the biggest asset class not only in the United States but also on banks’ balance sheets, dominating both loans and securities. In early 2004 to mid-2007, just before the crisis, the cost of debt capital fell and market liquidity rose sharply. Leverage was very high throughout the economy. Some banks relied on cheap but hot short-term funding to maintain their spreads.

    Other signs began to manifest. Modest but growing levels of early payment defaults and repurchase requests began to be reported for subprime home equity mortgages in late-2005 and for subprime mortgages in early- to mid-2006. In November 2006, the Case-Schiller National House Price Index reported that house prices fell from June to September 2006. The subprime crisis began in February 2007.

    That crisis was primarily a housing or real-estate driven crisis, Desai observes. “Home prices were going up but income levels were not. While the number of subprime loans originated and securitized by banks was increasing dramatically, the quality of the loans was deteriorating,” he says. “This information was likely observed by the short sellers.”

    The majority of the subprime loans were designed to either default or be refinanced, explained Desai. “Thus, given the dramatic growth in these loans in the years prior to the crisis, there was either going to be a wave of refinancing or defaults. Additionally, the refinancing was predicated on a continued increase in housing prices. Once the housing prices peaked, we had a massive default.” It appears that short sellers were sensitive to the developments in the housing market and were targeting banks due to their exposure to the housing market, Desai offers.

    “These guys were smart enough — I do not know how everyone ‘missed it,'” notes Desai. That the short interest was higher for banks that failed subsequently provides further evidence to support the authors’ conclusion that short sellers were sensitive to the warnings indicators.

    The evidence shows short sellers were the first to react
    In the study, four types of intermediaries’ responses to the unraveling situation were analyzed: short-sellers, equity analysts, Standard & Poor’s credit ratings and auditors. The authors examined the actions of the intermediaries well in advance of the onset of the crisis. Banks’ financial statements did reflect, at least partially, the risks that were building up prior to 2008. They find that the indicators from the fourth quarter of 2007 are associated with bank failures over the period 2008-2010. In terms of the actions of the intermediaries, their research indicates that there is a dramatic increase in the level of “abnormal” short interest from March 2005 to March 2007 and a further increase in March 2008.

    Thus, short sellers apparently recognized that the banks’ valuation and performance could not be sustained — well before the crisis unfolded. Short sellers were the first to react, followed by equity analysts. Credit ratings were sluggish in responding to information about bank distress.

    The trigger point for short sellers to act was the drop in housing prices — the bubble burst. When home prices declined, homeowners could not refinance, and a huge wave of defaults occurred. The banks also had implicit guarantees embedded in the securitization transactions, holding riskier tranches.

    Shorts sellers unfairly maligned, instead they can provide market oversight
    “Our evidence suggests that the financial statements did reflect some footprints of the crisis,” says Desai. “The short sellers were sensitive to it. Thus, financial statements were not as uninformative as some have claimed.”

    Short sellers have been unfairly maligned. “There is value in tracking their actions, which are informative,” Desai relays. “As the banks have become bigger and more complex, the regulators are looking to capital markets to provide discipline and to supplement their own oversight. Our evidence suggests that the short sellers potentially provided this discipline.”

    From society’s point of view, over-valuation is not desirable. Desai explains, “If growth expectations are overblown, it results in overinvestment and misallocation of resources and this destroys value in the long run. The actions of short sellers have the potential to keep firms’ valuations in check. This is an important role that short sellers play in the economy.”

    Capital markets function best when the optimists and the pessimists have an opportunity to reflect their views through trading, according to Desai. “Pessimists do play an important role because it is their business to ferret out adverse information; they are instrumental in identifying firms that should not be valued so highly and therefore should not be investing more.” Desai suggests that there can be misallocation in the financial sector in particular. For example, with banks, it is difficult to know what their portfolios contain. Short sellers provide oversight that can be helpful to regulators, directing them toward the banks they should pay attention to.

    The results suggest that the proposed restrictions on short selling by politicians, regulators and CEOs need to be tempered in light of the evidence reported in this study. Short sellers were sensitive to red flags of upcoming bank distress, and their actions provided a timely warning about the fragility of the banking system.

    The paper, “Were the Information Intermediaries Sensitive to the Financial Statement Based Leading Indicators of Bank Distress Prior to the Financial Crisis?” by Desai; Shiva Rajgopal, Goizueta Business School, Emory University; and Jeff Jiewei Yu, SMU Cox, is under review.

    Desai, the Robert B. Cullum Professor of Accounting in Cox School of Business since 2007, is often quoted in publications such as The Wall Street Journal, Barron’s and The New York Times, among others. — by Jennifer Warren

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    SMU is a nationally ranked private university in Dallas founded 100 years ago. Today, SMU enrolls nearly 11,000 students who benefit from the academic opportunities and international reach of seven degree-granting schools. For more information see www.smu.edu.

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    USA Today: Bitcoin tumbles after China crackdown

    “The currency that is supposedly beyond state control is actually still within the grip of governments …” — Tyler Moore

    Journalists Alistair Barr and Kim Hjelmgaard with USA Today tapped the expertise of SMU Bitcoin and cybersecurity expert Tyler W. Moore, an assistant professor of computer science in the Lyle School of Engineering.

    Moore’s expertise draws in part on his research that found that online money exchanges that trade hard currency for the rapidly emerging cyber money known as Bitcoin have a 45 percent chance of failing — often taking their customers’ money with them.

    The finding is from a computer science study in which Moore applied survival analysis to examine the factors that prompt Bitcoin currency exchanges to close.

    Tyler Moore, SMU Bitcoin
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    To book a live or taped interview with Dr. Tyler Moore in the SMU Broadcast Studio call News and Communications at 214-768-7650 or email news@smu.edu.

     

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    Moore carried out the research with Nicolas Christin, with the Information Networking Institute and Carnegie Mellon CyLab at Carnegie Mellon University.

    USA Today’s coverage, “Bitcoin tumbles after China crackdown,” was published online Dec. 18.

    Read the full story.

    EXCERPT:

    By Alistair Barr
    and Kim Hjelmgaard
    USA Today
    Bitcoin was supposed to be beyond the reach of governments, but investors in the virtual currency are realizing that is not the case.

    The price of a Bitcoin slumped Wednesday after China’s largest exchange for the virtual currency said it would stop accepting deposits in yuan — China’s local currency.

    The much-ballyhooed Bitcoin currency has lost more than half its value since hitting records above $1,100 at the end of November. On Wednesday, the price of a Bitcoin fell 18% to $558 and traded as low as $422.50 earlier in the day, according to an index run by CoinDesk, a website focused on digital currencies.

    The exchange, BTC China, had to “temporarily stop its yuan account recharging functions,” according to comments it made on Weibo, a popular Chinese micro-blogging service similar to Twitter.

    “Bitcoin is inherently volatile, but the decision by this large exchange has played a role,” said Tyler Moore, a Southern Methodist University assistant professor in computer science who has studied Bitcoin. “Stopping new deposits prevents new Chinese investors from piling more yuan into Bitcoin, eliminating some of the demand.”

    Bitcoin is a digital currency and payment method that is not regulated by any government. Instead, software controls how many Bitcoins are produced, leaving it less prone to the whims of central banks, some of which have caused inflation in the past by printing too much paper currency.

    The Bitcoin software first emerged in 2009 via a person or group using the name Satoshi Nakamoto. Since then, many other developers have jumped on board to support the currency and make it more accessible to consumers and investors.

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    A director’s skills, experiences and workload drive their compensation, study finds

    The average director is 61 years old; 15 percent are female, 68 percent have an undergraduate degree, 50 percent have an advanced degree, 27 percent have an MBA.

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    Mystique shrouds the activities surrounding the board of directors. Today directors serving on boards are paid quite handsomely. But what functions do they perform for their rewards? In a first-of-its-kind paper, SMU Cox Distinguished Finance Professor James Linck, with Viktar Fedaseyeu and Hannes Wagner, analyze directors — who they are, what they do and how much they are paid.

    Many believed that the board of directors was an ‘old boys network.’ As far back as the early ’90s, research indicated the ‘appearance’ of an old boys network, notes Linck. This earlier research indicated that directors were largely paid the same and rarely received equity as compensation as is common today.

    “But at some point in the ’90s, this started to change,” says Linck. “Regulation was not the only culprit. For example, the Sarbanes-Oxley regulations and contemporary changes to the rules on the major stock exchanges were what some institutions were also trying to push companies to do. In general, it seems as though the importance of, and certainly the focus on, the board of directors has increased over time.”

    In the past, there was a perception that outside directors are paid little and all paid the same, but this is no longer true. The authors find that “compensation of outside board members is substantial and varies significantly across board members, even within the same firm.”

    The average compensation for a directorship rose from $70,000 in 1995, to $164,300 in 2006 and $188,600 in 2010.

    In 2006, the SEC adopted Rule 33-8732a, which required public companies to disclose compensation of outside board members similar to the disclosure requirements for executive compensation.

    “After the shocks to the financial system and post-Sarbanes Oxley (SOX) regulation, directors were being sued more,” Linck says. “Firms were relying on their boards more than in the past — holding them responsible and accountable.” Linck suggests that this inspired numerous research undertakings to understand what directors do, and what drives board structure.

    What they found
    The researchers put together a data set of more than 57,000 board positions from 2006 to 2010. Directors in their sample hold an average 1.2 outside directorships in S&P 1,500 firms.

    The average compensation that a director receives for all his/her outside directorships in S&P 1,500 firms is $220,600 per year; average compensation per directorship is about $180,000.

    Variation across individual directors is high, even within the same firm. Within the same board, the difference between the highest and lowest paid director on a board averages $186,000.

    The research unpacks the characteristics of directors
    The average director in the sample is 61 years old, and 15 percent are female, according to findings. Sixty-eight percent of the directors in the sample have an undergraduate degree, 50 percent have an advanced degree, 27 percent of which have an MBA.

    The following types of expertise were found among directors in the sample:

    • 53 percent have finance experience and 8 percent are CPAs;
    • Those with military experience hold 6 percent of directorships;
    • Individuals with political experience hold 4 percent of directorships;
    • Academics secured 11 percent of board seats;
    • Those with legal or consulting experience hold 15 percent of positions;
    • Individuals with executive experience, including past or present executive positions, and current and retired CEOs, hold 28 percent of directorships.

    Certain types of connections may be perceived as influencing the choice of directors. However, the influence of personal relationships — such as an Ivy League connection, grey director status and family connections — were not significant.

    Contrary to expectations, political experience was not associated with higher compensation, on average.

    Drivers of compensation
    Research findings suggest that a director’s skills, experiences and workload are the primary drivers of their compensation.

    “Workload is a key driver of director compensation. For example, it’s a particularly large amount of work to chair an audit committee, specific expertise is required to hold that position, and directors serving that role receive significantly higher compensation, Linck says. “The variance of workload driven by the various role’s board members hold contributes to the variance in compensation across directors.”

    Supply and demand should determine director compensation. The supply of directors should be based on the workload associated with being a director, and the value of a director’s experience and qualifications. The demand for directors depends on the firm’s needs for monitoring and advising top management.

    The authors found that director qualifications also increase compensation. For example, those with legal and consulting experience have 8 percent higher compensation, while those with executive experience receive 11 percent more. Other qualifications such as having academic or finance experience also increase compensation.

    In earlier work, Linck documented that larger and more complex firms have larger boards. Hence, size and complexity should increase the demand for outside directors.

    “Google needs a different board of directors than ExxonMobil or Citi,” Linck mentions. He notes that firm size always matters in finance. There is also ‘evidence that top directors are attracted to largest firms,’ as noted in earlier research. These directors are therefore paid more.

    Serving on a board is more demanding than in times past.

    “The directors serving on boards today work, are often ‘on call’” states Linck. The potential liability placed with directors today has elevated the demands and risks of the role — and corresponding to the workload —increased compensation as well.

    The paper “The Determinants of Director Compensation” by James Linck of Cox School of Business, Southern Methodist University, and Viktar Fedaseyeu and Hannes F. Wagner of Bocconi University is under review. It has been published in the working papers series by the Social Science Research Network. — Jennifer Warren

    SMU is a nationally ranked private university in Dallas founded 100 years ago. Today, SMU enrolls nearly 11,000 students who benefit from the academic opportunities and international reach of seven degree-granting schools. For more information see www.smu.edu.

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    Prevention: Is Organic Food Really Better For You?

    What you need to know about the safety and health of your food

    Prevention Bauer Chhabra organic fruit fly

    Health and science reporter Richard Laliberte with Prevention Magazine has covered research carried out in the fruit fly lab of SMU biologist Johannes H. Bauer. The research by Plano, Texas high school student Ria Chhabra is featured in the article, “Is Organic Food Really Better For You?,” published Aug. 21.

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    Bauer, an assistant professor in SMU’s Department of Biological Sciences, mentored Chhabra in her research to examine whether there would be health differences to fruit flies fed an organic diet or a nonorganic diet. Chhabra’s study found that flies fed an organic diet fared better on important health tests, particularly fertility and longevity.

    Read the article.

    EXCERPT:

    By Richard Laliberte
    Prevention Magazine
    The Chhabra household of Plano, TX, couldn’t resolve a family dispute. “My husband and I are vegetarian,” says Babita Jain Chhabra. “Our family already eats more fruits and vegetables than most people, and they’re expensive.” Her husband wanted to buy cheap produce at Walmart. Babita said no—the family should buy organic products because their two children needed the healthiest food possible.

    “She just assumed organic was healthier,” says Babita’s 16-year-old daughter, Ria, channeling her father’s skepticism. “That’s what sparked my interest.”

    Ria, who was only 13 when the organic debate broke out at her dinner table, decided to settle it. She launched a middle school science fair project that bloomed into more than 2 years of research and eventually involved two Southern Methodist University researchers, Santharam Kolli and Johannes H. Bauer. This year, their study, which found that fruit flies that ate organic foods did better in almost every health measure the researchers tracked (living longer, laying more eggs, resisting stress better, and acting livelier) than those that ate conventionally grown food, was published in PLOS One, an online peer-reviewed scientific journal.

    For the Chhabras, it was case closed. They are now buying organic. “Because of Ria’s experiment, we know that in the long run, organic food will be better for us than anything else,” Babita says.

    Most Americans are dabbling in organics—81% of families buy organic at least some of the time, according to a 2013 survey by the Organic Trade Association. And there are plenty of experts who think everyone should be as decisive as the Chhabras. One of them is Charles Benbrook, PhD, a research professor at Washington State University’s Center for Sustaining Agriculture and Natural Resources.

    Last year, when a widely publicized Stanford University study analyzing more than 200 research papers comparing the benefits of eating organic versus conventionally grown food concluded that organic food isn’t any healthier, Dr. Benbrook corrected their math. Utilizing government data on pesticide toxicity, he countered with his own findings that there’s a full 94% reduction in health risks if you eat organic rather than conventional foods. The Stanford researchers had looked at nine old studies about pesticide residue on produce and noted that organics have 30% fewer toxins than conventional crops—but failed to calculate the health benefits based upon the most recent USDA data on actual residues in food.

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    Money News: In Search of ‘Perfect Money’ — Hackers Switch to New Digital Currency

    Tyler Moore, SMU, Perfect Monety, bitcoin

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    The financial news web site MoneyNews published a Reuters article that covers the Bitcoin research of SMU cybersecurity expert Tyler W. Moore, an assistant professor of computer science in the Lyle School of Engineering.

    Moore’s research found that online exchanges that trade hard currency for the rapidly emerging cyber money known as Bitcoin have a 45 percent chance of failing — often taking their customers’ money with them.

    The finding is from a new computer science study that applied survival analysis to examine the factors that prompt Bitcoin currency exchanges to close.

    Moore carried out the research with Nicolas Christin, with the Information Networking Institute and Carnegie Mellon CyLab at Carnegie Mellon University.

    Reuters’s coverage, “In Search of ‘Perfect Money’: Hackers Switch to New Digital Currency,” was published online Aug. 9.

    Read the full story.

    EXCERPT:

    Reuters
    Money News
    Three months after a team of international law enforcement officials raided the digital currency firm Liberty Reserve, cyber experts say criminals are increasingly turning to another online currency called Perfect Money.
    Idan Aharoni, the head of cyber intelligence at EMC Corp.’s RSA security division, said that some online scam artists and thieves are using Perfect Money’s digital currency to launder money and conceal profits in much the same way they allegedly did with Liberty Reserve’s currency.

    On behalf of their clients, which include major financial institutions, Aharoni and his team monitor Internet forums that hackers use to sell stolen credit card information. After Liberty Reserve was taken down in May, activity on these forums initially slowed and then picked up again, with some hackers saying they would accept Perfect Money for payments, he said.

    “We expected a large migration to another e-currency, and that has happened,” said Aharoni, whose RSA unit sells security services to 30,000 corporations and government agencies, including the popular Secure ID tokens that protect access to computer systems.

    Perfect Money, which has been in operation since at least 2007, could not be reached for comment. A request submitted through its website failed to elicit a response, and the company does not list a phone number for its offices or identify any management or employees. [ … ]

    [ … ] A Reuters review of postings on Internet message boards for digital currencies found hackers offering to sell stolen credit cards are open about accepting Perfect Money as payment.

    “If it was expected at first that the Liberty Reserve takedown would have a long-lasting, substantial effect on the level of fraud, that’s not true,” Aharoni said.

    Tyler Moore, an assistant professor at Southern Methodist University, said a 2011 study he conducted with two other academics found that Liberty Reserve and Perfect Money were two of the most widely accepted digital currencies for online Ponzi schemes. Of 1,000 websites that linked to Perfect Money, they found 70 percent that were Ponzi schemes.

    “Perfect Money seems to be a very popular choice among this subculture,” Moore said.

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    Analysis: Corporate America’s cash pile-up a reaction to refinancing risk

    Cash is a hedge for firms in case they cannot raise the funds they may need if credit conditions are tight or another type of shock hits

    man_BusinessHoardingMoney.150.tn

    OB-MR637_reynol_D_20110222162515

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    Why has corporate America been awash in record levels of cash? Numerous theories are offered as to why firms amass: Firms themselves are riskier, volatile, pessimistic and have record profits, to name a few.

    But an overlooked reason, according to new research by SMU Cox Rauscher Chair William Maxwell and co-authors Jarrad Harford and Sandy Klasa, is that firms are holding more cash on their balance sheets because of refinancing risk. Cash is a hedge for firms in case they cannot raise the funds they may need if credit conditions are tight or another type of shock hits.

    The authors’ paper “Refinancing Risk and Cash Holdings” is forthcoming in the Journal of Finance.

    U.S. firms’ long-term debt maturities have shortened. The authors indicate that the typical firm in 2008 with long-term debt had 66.3 percent more long-term debt due within three years than the same firm in 1980, the period of the study. In other words, firms are needing to roll over their debt sooner than in previous decades, which presents the risk that they cannot access capital markets to finance their activities. Numerous firms experienced exactly that phenomenon post-financial crisis.

    According to Maxwell, firms are holding more cash because of the way in which they access capital. “If you are a B credit-rated firm, you can get a 10-year note or loan, versus an A-rated firm receiving a 20- to 30-year note. In finance, when a balloon loan or bond is coming due, it is called a bullet,” Maxwell explains. “In 10 years time, when the ‘bullet’ is coming due, what happens if you cannot refinance? If capital markets turn against you, you’re done. The A-rated firm rolls over its debt regularly. The smaller, B-rated firm does not have this capacity.” This is how refinancing risk manifests.

    Today bank loans and notes to firms have shorter maturities, which offer more potential for refinancing risk. So firms have been changing their policies on cash to manage this risk. They stash. “If a firm gets caught in a bad cycle or shock, it is not the face amounts or percentage of debt you have outstanding that matters, it is a function of when the repayment is coming due,” says Maxwell. Average bond maturities for U.S. corporations during the time period 1985 to 1989 was 16.6 years, reducing to 11.3 years from 2005 to 2008. Similarly, the average bank loan or note maturity over the same periods went from 5 years to 3.8 years. The demand and supply-side of money are all intertwined, notes Maxwell.

    Market is watching
    According to the research, the market rewards the firm holding ample cash with shorter maturity debt through higher valuation, particularly when credit markets are tight. The firm that invests wisely also gets market approval. Firms have to hold cash for the right reasons though. According to Standard & Poor’s Capital IQ, 202 firms of the S&P 500-stock index have $1 billion or more in cash. There are record levels of firms in this billionaires club and record amounts amassed versus decades past.

    There are good and bad reasons for holding cash, says Maxwell. For example, what if there is an economic downturn, and a firm needs to make a $1 billion capital investment every year. The BB-rated firm may not be able to access capital markets during or after an economic shock. Consider the case of two firms. One has cash because it refinanced a year before a shock; one does not. The firm with liquidity can make investments. Maxwell alludes to an analogy of the internationally competitive bicycle race the Tour de France: “When do competitors separate themselves? When they are peddling uphill. Firms also use headwinds or hard times to separate themselves from the pack.”

    Getting Wisdom
    Firms did wise up since the last crisis by amassing cash. However some investors are pushing back. “The practice has become extreme in cases like Apple, with excessive cash on the balance sheet,” says Maxwell. “They do not need so much cash to fund their operations and invest in opportunities.” The financial crisis impacted firms’ psyches similar to individuals’ psyches and pocketbooks. “We all think differently than we did before the financial crisis,” he says. “Everyone is putting more cash away.”

    Given that firms are more flush these days, how and when should they spend it? To this question Maxwell responds: “Cash should be used as a hedge in a rainy day. Most firms did learn this lesson from the recent financial crisis. You do not go bankrupt because your net income is negative; you head for bankruptcy when you cannot pay your bills. Liquidity helps pay the bills and allows firms to take advantage of opportunities. If some calamity hits — and in general they do every 5 years to 7 years — the firm can weather the headwinds.”

    Maxwell describes current credit conditions as never-before loose. “If you can raise money now, do it,” he concludes. “It is ridiculously cheap money. The QE (quantitative easing) programs are like a huge binge — with firms drinking shot after shot of cheap money. It is not like a glass of wine with dinner; these are tequila shots.” It may feel great when you are doing it, but then tomorrow comes.

    Co-author Jarrad Harford is at the University of Washington and Sandy Klasa is at the University of Arizona. — Jennifer Warren

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    Dallas Morning News: Study: Mild winter, wet spring to blame for Dallas County’s deadly West Nile outbreak

    A plane flew over central Dallas as part of aerial spraying efforts last summer to combat mosquitoes carrying the West Nile virus. (Credit: Dallas Morning News)
    A plane flew over central Dallas as part of aerial spraying efforts last summer to combat mosquitoes carrying the West Nile virus. (Credit: Dallas Morning News)

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    The Dallas Morning News covered the research of SMU economist Thomas B. Fomby and SMU Dedman College Distinguished Alumnus Robert W. Haley, who co-authored a new study on West Nile Virus.

    Fomby and Haley, along with other researchers, analyzed a decade of data related to West Nile Virus and, in particular, the 2012 West Nile epidemic in Dallas County. The analysis allowed them to identify important precursors of West Nile Virus outbreaks that allow for early and effective intervention.

    Fomby, a data modeling expert, is a professor of Economics and director of the Richard B. Johnson Center for Economic Studies at SMU.

    Haley is chief of Epidemiology and professor of Internal Medicine at UT Southwestern. Other authors of the study were physician Wendy Chung, chief epidemiologist, and her associates Christen Buseman, Sibeso Joyner and Sonya Hughes, all of Dallas County Health and Human Services; and James Luby, professor of internal medicine in the Division of Infectious Diseases at UT Southwestern.

    They reported the findings in the July 17 issue of The Journal of the American Medical Association.

    Their analysis of the West Nile data, along with weather and housing data, found that the epidemics begin early, after unusually warm winters; are often in similar geographical locations; and are predicted by an index based on an estimate of the average number of West Nile virus-infected mosquitoes collected per trap-night, called the Mosquito Vector Index.

    As a result of their data analysis, the researchers recommend the use of a vector-index rating system to identify the best timing and location of early interventions.

    Read the full story.

    EXCERPT:
    By Sherry Jacobson
    Dallas Morning News

    An in-depth study of last year’s West Nile epidemic in Dallas County blames a mild winter, wet spring and an abundance of mosquitoes for spreading the sometimes-fatal virus.

    But local officials did not realize how quickly the mosquito-borne outbreak was unfolding. If they had recognized the signs earlier, 110 severe human infections might have been prevented and a dozen lives saved, the study said.

    “It’s a very optimistic estimate and might not be totally realistic,” said Dr. Robert Haley, one of the authors of the study published Wednesday in the Journal of the American Medical Association.

    His estimate was based on the possibility that officials could have resorted to aerial spraying of insecticides in early July, instead of a month later. It also supposed that spraying could have halted the West Nile outbreak.

    The study suggested a deadly equation was at work: Five percent of the Culex mosquitoes were carrying the West Nile virus by late June. At that point, the disease was spreading quickly, but no one knew it.

    While the conclusions are purely hindsight, the study could provide valuable information to help prevent future West Nile outbreaks, said Haley, chief epidemiologist at UT Southwestern Medical Center.

    “This could be a breakthrough for how to track a West Nile outbreak,” he said. “For a small amount of data, this study is remarkably strong.”

    The study grew out of the worst West Nile outbreak in Texas history. More than 400 Dallas County residents suffered mild to severe symptoms of the neuroinvasive disease and 20 died.

    All were bitten by infected mosquitoes despite widespread warnings and ground spraying of insecticide. But no one could explain why it happened.

    Dr. Wendy Chung, the study’s lead author, said researchers looked for answers in a massive amount of West Nile data collected last year by government agencies.

    The study focused on infected mosquitoes and how quickly they passed the virus to humans. It also considered the locations where people were infected and if weather patterns might have accelerated the outbreak.

    “Weather that predisposes us to have a bad West Nile season is considered one of the soft indicators” of an impending outbreak, said Chung, chief epidemiologist for Dallas County Health and Human Services. “You can have bad weather and not have a bad season.”

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    Mosquito indexing system identifies best time to act against potential West Nile Virus outbreaks

    Study examines characteristics, features of West Nile virus outbreaks from Dallas County housing, hospital and weather data

    Larvae of Culex Mosquitoes make dense groups in standing water. (Credit: James Gathany, CDC)
    Larvae of Culex Mosquitoes make dense groups in standing water. (Credit: James Gathany, CDC)

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    Researchers who analyzed a decade of data related to West Nile Virus and, in particular, the 2012 West Nile epidemic in Dallas County, have identified important precursors of West Nile Virus outbreaks that allow for early and effective intervention.

    An analysis of the West Nile data, along with weather and housing data, found that the epidemics begin early, after unusually warm winters; are often in similar geographical locations; and are predicted by an index based on an estimate of the average number of West Nile virus-infected mosquitoes collected per trap-night, called the Mosquito Vector Index.

    As a result of their data analysis, the researchers recommend the use of a vector-index rating system to identify the best timing and location of early interventions.

    The researchers, from Southern Methodist University, UT Southwestern Medical Center and Dallas County Health and Human Services, reported the findings in the July 17 issue of The Journal of the American Medical Association.

    The analysis revealed a mosquito vector index rating of 0.5 in June or July as the best time to act to avoid an outbreak and stave off the resultant rise in human West Nile infections, which can cause long-term neurological damage and even death.

    “In years when the vector index didn’t start up until late July or August, impending outbreaks just sputtered — in late summer mosquito abundance declines and mosquitoes become less active and stop biting as much. When the vector index goes above .5 early — June or July — right then large numbers of people are silently getting infected, and this should be the best time to intervene,” said senior author Robert W. Haley, Chief of Epidemiology and Professor of Internal Medicine at UT Southwestern.

    “After the infecting mosquito bite, on average it takes a week for the first symptoms to develop, a week to see people turning up at hospitals, and a week for laboratory confirmation of the diagnosis and reporting to health officials,” Haley said. “That three weeks is critical. Acting early from the vector index rather than after human case reports and deaths mount up can nip an outbreak in the bud. However, if mosquito data are unavailable or consensus to intervene takes longer, later intervention may still be important to terminate the outbreak.”

    The analysis found also that less of a hard freeze during winter months and unusually warm spring temperatures contributed to epidemic years for West Nile, a major concern as global temperatures continue to warm, Haley said.

    A fourth critical finding in the paper related census track data to the 2012 outbreak, showing that areas of higher property values, higher housing density, and higher percentages of unoccupied homes were at higher risk. That’s likely due to fostering the types of environment and mosquitos most likely to transmit the disease, which is carried more by house mosquitoes than wooded mosquitoes. In Dallas County, the data showed year-after-year clustering in the Park Cities and North Dallas areas.

    Study authors supply instruction manual for other counties
    The analysis tools used in the study may be applicable elsewhere, but due to variations in weather, mosquito populations and other factors, each region or county will need to conduct its own analysis to identify the most appropriate vector index rating signaling when to act, Haley said. Along with the paper, the authors provide an instruction manual for other counties to calculate the vector index from their own mosquito infection surveillance data.

    “Given the leading character of this index, epidemiologists and government officials can implement, in a more timely manner, preventative measures to reduce the impact of future West Nile Virus outbreaks,” said data modeling expert Thomas B. Fomby, Professor of Economics and the Director of the Richard B. Johnson Center for Economic Studies at SMU.

    Fomby provided the time series expertise needed to analyze the leading nature of the vector index and determine that aerial spraying used during the epidemic did not have any significant adverse health effects on the general public.

    “Time Series Count modeling and Event Analysis are statistical methods that are frequently used in economic research but not so often used in medical research,” Fomby said. “Time Series Count modeling was used to investigate the leading nature of the vector index while Event Analysis was used to examine the impacts of aerial spraying. This is a prime example of where interdisciplinary tools can be useful in conducting scientific research.”

    Other authors of the study were physician Wendy Chung, Chief Epidemiologist, and her associates Christen Buseman, Sibeso Joyner and Sonya Hughes, all of Dallas County Health and Human Services; and James Luby, professor of internal medicine in the Division of Infectious Diseases at UT Southwestern.

    West Nile virus first identified in Dallas County in 2002
    “After declining over the prior 5 years, mosquito-borne West Nile virus infection resurged in 2012 throughout the United States, most substantially in Dallas County, Texas. Dallas has been a known focus of mosquito-borne encephalitis since 1966, when a large epidemic of St. Louis encephalitis (SLE) occurred there, necessitating aerial spraying of insecticide for control,” according to background information in the article.

    “With the introduction of West Nile virus into New York City in 1999 and its subsequent spread across the country, West Nile virus appears to have displaced SLE virus,” the authors wrote. “Dallas recognized its initial cases of West Nile virus encephalitis in 2002 and its first sizeable outbreak in 2006, followed by 5 years of low West Nile virus activity. In the 2012 nationwide West Nile virus resurgence, Dallas County experienced the most West Nile virus infections of any U.S. urban area, requiring intensified ground and aerial spraying of insecticides.”

    Study analyzed multitude of data, from infections to weather to geography
    The study examined the features associated with the West Nile virus epidemics to identify surveillance and control measures for minimizing future outbreaks.

    The researchers analyzed surveillance data from Dallas County (population, 2.4 million), which included the numbers of residents diagnosed with West Nile virus infection between May 30, 2012 and Dec. 3, 2012; mosquito trap results; weather data; and syndromic (pertaining to symptoms and syndromes) surveillance from area emergency departments.

    From May 30 through Dec. 3, 2012, patients with any West Nile virus-positive test result were reported to the health department; 615 met laboratory case criteria, and 398 cases of West Nile virus illness with 19 deaths were confirmed by clinical review in residents of Dallas County.

    The outbreak included 173 patients with West Nile neuroinvasive disease (WNND) and 225 with West Nile fever, and 17 West Nile virus-positive blood donors. Regarding patients with WNND, 96 percent were hospitalized; 35 percent required intensive care; 18 percent required assisted ventilation; and the case-fatality rate was 10 percent. The overall WNND incidence rate in Dallas County was 7.30 per 100,000 residents in 20l2, compared with 2.91 in 2006.

    The first West Nile virus-positive mosquito pool of 2012 was detected in late May, earlier than in typical seasons. Symptoms of the first 19 cases of WNND in 2012 began in June, a month earlier than in most prior seasons; thereafter, the number of new cases escalated rapidly. Sequential increases in the weekly vector index early in the 2012 season significantly predicted the number of patients with onset of symptoms of WNND in the subsequent l to 2 weeks.

    West Nile neuroinvasive disease clustered in neighborhoods with high housing density
    The 2012 epidemic year was distinguished from the preceding 10 years by the mildest winter, as indicated by absence of hard winter freezes, the most degree-days above daily normal temperature during the winter and spring and other features. During the 11 years since West Nile virus was first identified in Dallas, the researchers found that the annual prevalence of WNND was inversely associated with the number of days with low temperatures below 28 degrees Fahrenheit in December through February.

    “Although initially widely distributed, WNND cases soon clustered in neighborhoods with high housing density in the north central area of the county, reflecting higher vector indices and following geospatial patterns of West Nile virus in prior years,” the authors write.

    Aerial insecticide spraying was not associated with increases in emergency department visits for respiratory symptoms or skin rash.

    “This report identifies several distinguishing features of a large urban West Nile virus outbreak that may assist future prevention and control efforts for vector-borne infections,” the authors write. “Consideration of weather patterns and historical geographical hot spots and acting on the vector index may help prevent West Nile virus-associated illness.” — UT Southwestern, JAMA, SMU

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    SMU is a nationally ranked private university in Dallas founded 100 years ago. Today, SMU enrolls nearly 11,000 students who benefit from the academic opportunities and international reach of seven degree-granting schools. For more information see www.smu.edu.

    SMU has an uplink facility located on campus for live TV, radio, or online interviews. To speak with an SMU expert or book an SMU guest in the studio, call SMU News & Communications at 214-768-7650.

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    StarTribune: Bitcoin has more staying power than other digital currencies

    Said one Minnesota fan of the digital money:  “Right now I wouldn’t call it investing, I would call it gambling.”

    ows_137064299212409

    Business writer Jennifer Bjorhus with the Minneapolis Star Tribune newspaper covered the Bitcoin research of SMU cybersecurity expert Tyler W. Moore, an assistant professor of computer science in the Lyle School of Engineering.

    Moore’s research found that online exchanges that trade hard currency for the rapidly emerging cyber money known as Bitcoin have a 45 percent chance of failing — often taking their customers’ money with them.

    The finding is from a new computer science study that applied survival analysis to examine the factors that prompt Bitcoin currency exchanges to close. Moore carried out the research with Nicolas Christin, with the Information Networking Institute and Carnegie Mellon CyLab at Carnegie Mellon University.

    Book a live interview

    Tyler Moore, SMU, Lyle School, BitcoinTo book a live or taped interview with Dr. Tyler Moore in the SMU Broadcast Studio call News and Communications at 214-768-7650 or email news@smu.edu.

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    The coverage by Bjorhus, “Bitcoin has more staying power than other digital currencies,” was published online June 8.

    Read the full story.

    EXCERPT:

    Jennifer Bjorhus
    StarTribune
    Bitcoin has shot up and crashed at least twice now.

    Exchanges where the fast-rising new digital currency trades have been hacked, and so have individual accounts. It’s been linked to illegal activity in underground cyber haunts such as Silk Road, and sparked a move by the U.S. government to halt unregulated use.

    And Bitcoin persists.

    Heck, CNBC has a Bitcoin ticker on its website.

    In its fourth year of circulation now, the decentralized online-only form of money has evolved from a libertarian-styled geek curiosity to a contender for becoming the first digital currency to go truly mainstream. There are now more than 11 million “coins” created worth more than $1 billion. Lumpy and volatile as it is, the math-based cash is one of the fastest rising alternative currencies in a world filled with them.

    Tyler Moore, who studies alternative currencies, said he still isn’t sure why.

    “It’s one part luck, one part decentralization and one part this design that carries appeal for people that don’t like inflation,” said Moore, an assistant professor of computer science and engineering at Southern Methodist University in Dallas. “The timing of it was really good.”

    Bitcoin slipped onto the scene in 2009, as trust in established banks crumbled and inflation fears rose. It’s not managed by anyone. There’s no central bank. It’s based on open-source encryption technology.

    In fact, the digital cash can be created by anyone with the hefty computer power required to solve specified algorithms that secure the network. Bitcoins are rewards for effort. The system takes banks out of the picture completely as individuals pay each other directly. Transactions are private but because there’s a public ledger of them it’s unlikely they are perfectly anonymous.

    Read the full story.

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    For more information, www.smuresearch.com.

    SMU is a nationally ranked private university in Dallas founded 100 years ago. Today, SMU enrolls nearly 11,000 students who benefit from the academic opportunities and international reach of seven degree-granting schools. For more information see www.smu.edu.

    SMU has an uplink facility located on campus for live TV, radio, or online interviews. To speak with an SMU expert or book an SMU guest in the studio, call SMU News & Communications at 214-768-7650.

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    Russia awards SMU’s Weber $3 million for research lab to study diversity, social interactions

    Grant will establish first-of-its-kind research laboratory at Moscow’s New Economic School to focus on many types of societal diversity

    Kremlin wall and Moskva river in early morning

    Book a live interview

    To book a live or taped interview with Shlomo Weber in the SMU News Broadcast Studio call News and Communications at 214-768-7650 or email news@smu.edu. (Photo: Octavio Mateus)

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    A $3 million grant to SMU economics professor Shlomo Weber will fund the establishment of a first-of-its-kind research laboratory to study diversity and social interactions.

    The new center at Moscow’s New Economic School will focus on research into the many different types of societal diversity, including economic, historical, geographical, linguistic and ethnic. Researchers at the center will assess the impact of societal diversity on economic, political and social development, said Weber, who is the Robert H. and Nancy Dedman Trustee Professor of Economics in the SMU Department of Economics.

    Weber is a PINE Foundation Visiting Professor of Economics at the New Economic School, where President Obama delivered the 2009 commencement address and declared a reset on Russian-American relations.

    “This kind of support is quite unique in the world,” he said. “Our team of Russian and foreign scholars will do their best to contribute to the study of Russia’s social and economic development in the past, present and future.”

    Grant supports theoretical and empirical aspects of research into diversity
    Ranked the best economics institution in the former communist countries, NES is a private graduate school in economics. Its mission is to benefit Russia’s private and public sectors through excellence in economics education and research. Faculty-in-residence include economists with doctoral degrees in economics and finance from the world’s leading universities.

    Members of the SMU economics faculty will have a chance to participate in research at the laboratory, especially in studies of social and trade networks and development, Weber said. SMU economics doctoral students will have opportunities for internships.

    Every year, 15 to 20 graduates of the NES Master’s program join the top doctoral economics programs in the United States. Many leading economics and finance departments have NES alumni on their faculty. SMU Assistant Professor Anna Kormlitzina, in SMU’s Department of Economics, is a graduate of NES.

    “The award of this grant is remarkable evidence of NES’s progress over the 20 years of its existence,” Weber said. “I’m grateful to the government of the Russian Federation for the decision to support theoretical and empirical aspects of diversity and social interactions, focused but not limited to Russian economy and society.”

    Research will examine how diversity impacts social interactions, trust, emergence of social networks
    The grant is part of an annual program by the Russian Federation that supports research supervised by the world’s leading scholars. Weber was one of 700 applicants, 42 of whom were awarded funding.

    The research will be conducted on theoretical, empirical and experimental grounds and will examine how diversity impacts social interactions, trust and emergence of various types of social networks and on the quality and functioning of public and private institutions.

    Weber’s grant was the only one awarded within the discipline of “Economics and Business.” Grants were awarded on the basis of the scientist’s scientific achievements, research experience and research prospects of the project; sponsoring organization; and leadership potential of the research laboratory being established.

    The grant carries a possible two-year extension. Winners of the competition personally lead the laboratory for a minimum of four months each calendar year.

    Grant will bring together the world’s leading scholars on diversity
    “This grant will help to bring together the world’s leading scholars, including Nobel winners Robet Aumann, from Hebrew University, and Eric Maskin, from Harvard, and leading authorities in their respective fields — Stephen Durlauf, Wisconsin, and Matt Jackson, Stanford — as well as young scholars and students,” Weber said. “The decision to award this grant recognizes the success of NES in implementing its mission to benefit Russia’s private and public sectors through excellence in economics education and research. It also provides support for further development of the school’s research capacity.”

    Weber’s expertise includes consulting in Eastern and Western Europe and in Central and Southeast Asia. He currently coordinates an Open Society Institute development project at the National University of Mongolia.

    Weber’s recent book, with economist Victor Ginsburgh, “How Many Languages Do We Need? Economics of Linguistic Diversity” (2011, Princeton University Press), will be followed later this year by a volume edited with economist Michael Alexeev, “The Oxford Handbook of Russian Economy.”

    Weber earned his doctoral degree in mathematical economics from Hebrew University, Jerusalem, and his bachelor’s and master’s degrees in mathematics from Moscow State University.

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    For more information, www.smuresearch.com.

    SMU is a nationally ranked private university in Dallas founded 100 years ago. Today, SMU enrolls nearly 11,000 students who benefit from the academic opportunities and international reach of seven degree-granting schools. For more information see www.smu.edu.

    SMU has an uplink facility located on campus for live TV, radio, or online interviews. To speak with an SMU expert or book an SMU guest in the studio, call SMU News & Communications at 214-768-7650.

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    Business Insider: Bitcoin Is Sacrificing Its Soul To Survive

    bitcoin

    Technology reporter Matt Twomey with Business Insider covered the Bitcoin research of SMU cybersecurity expert Tyler W. Moore, an assistant professor of computer science in the Lyle School of Engineering.

    Moore’s research found that online exchanges that trade hard currency for the rapidly emerging cyber money known as Bitcoin have a 45 percent chance of failing — often taking their customers’ money with them.

    The finding is from a new computer science study that applied survival analysis to examine the factors that prompt Bitcoin currency exchanges to close.

    Book a live interview

    Tyler Moore, SMU, Lyle School, BitcoinTo book a live or taped interview with Dr. Tyler Moore in the SMU Broadcast Studio call News and Communications at 214-768-7650 or email news@smu.edu.

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    Moore carried out the research with Nicolas Christin, with the Information Networking Institute and Carnegie Mellon CyLab at Carnegie Mellon University.

    Twomey’s coverage, “Bitcoin Is Sacrificing Its Soul To Survive,” was published online June 2.

    Read the full story.

    EXCERPT:

    Matt Twomey
    Business Insider
    It’s been a wild couple months for digital currencies. This past week saw the bust of Liberty Reserve for its alleged role in billions of dollars of illicit transactions, and two days later the largest bitcoin exchange said it would now require all accounts to be verified.

    For the digital currency to survive, must it sacrifice its soul? Can it thrive if it does?

    To be sure, there are important differences between bitcoin and Liberty Reserve. Where Liberty was effectively a black box for transactions, controlled by a single entity, bitcoins are traded on a peer-to-peer network independent of any central authority. (Bitcoin did have its own law-enforcement episode on May 17, when the Department of Homeland Security froze the accounts of two U.S.-based bitcoin processors. The alleged misdeed: failing to properly register.)

    In the Liberty Reserve case, the illegalities were brash, according to U.S. officials. One million users across the world—one-fifth of them Americans—made 55 million transactions over seven years to the tune of $6 billion, with few questions asked while Costa Rica-based Liberty collected 1 percent, investigators said. The network is thought to have been employed in the $45 million ATM heist for which eight people were arrested in May.

    Chicago-based investment fraud attorney Andrew Stoltmann said bitcoin holders should be spooked, because the digital exchanges have been used by criminals for money laundering as well.

    But Peter Vessenes, chairman and executive director of the Bitcoin Foundation, was unfazed by the Liberty Reserve crackdown.

    “The U.S. put out guidance recently through the Financial Crimes Enforcement Network, and we’ve been following up on that guidance and crushing bad actors,” he said in an interview with CNBC Asia. “We’re seeing a bit of a sweep right now,” he said.

    “There’s nothing to indicate that good players who are working hard to stay regulated have anything to worry about.”

    And there’s the rub: The techno-libertarian fantasy of an unfettered digital currency is losing its veil of anonymity and is dependent upon ensuring the appeasement of government regulators. It’s enough to make a cryptotarian anarchist blanch.

    Read the full story.

    Follow SMUResearch.com on Twitter.

    For more information, www.smuresearch.com.

    SMU is a nationally ranked private university in Dallas founded 100 years ago. Today, SMU enrolls nearly 11,000 students who benefit from the academic opportunities and international reach of seven degree-granting schools. For more information see www.smu.edu.

    SMU has an uplink facility located on campus for live TV, radio, or online interviews. To speak with an SMU expert or book an SMU guest in the studio, call SMU News & Communications at 214-768-7650.

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    Yahoo! News: Study shows 45% of Bitcoin exchanges end up failing

    bitcoins-si

    Technology reporter Brad Reed with BGR News covered the Bitcoin research of SMU cybersecurity expert Tyler W. Moore, an assistant professor of computer science in the Lyle School of Engineering.

    Moore’s research found that online exchanges that trade hard currency for the rapidly emerging cyber money known as Bitcoin have a 45 percent chance of failing — often taking their customers’ money with them.

    The finding is from a new computer science study that applied survival analysis to examine the factors that prompt Bitcoin currency exchanges to close.

    Book a live interview

    Tyler Moore, SMU, Lyle School, BitcoinTo book a live or taped interview with Dr. Tyler Moore in the SMU Broadcast Studio call News and Communications at 214-768-7650 or email news@smu.edu.

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    Moore carried out the research with Nicolas Christin, with the Information Networking Institute and Carnegie Mellon CyLab at Carnegie Mellon University.

    Reed’s coverage, “ Study shows 45% of Bitcoin exchanges end up failing,” was published online April 26.

    Read the full story.

    EXCERPT:

    Brad Reed
    Yahoo! News
    Imagine a world where the Nasdaq, the Nikkei and the FTSE all failed within the span of a week and you have an idea how crazy the world of virtual currency trading has become. Wired reports that a new study from computer scientists Tyler Moore of the Southern Methodist University in Dallas and Nicolas Christin of Carnegie Mellon University has found that 45% of Bitcoin exchanges end up shutting their virtual doors while leaving their users’ money in limbo. However, this doesn’t mean that the Bitcoin exchanges that have survived so far are safe havens, since the study also shows that they’re under constant assault from cybercriminals who are working around the clock to hack users’ transactions.

    Read the full story.

    Follow SMUResearch.com on Twitter.

    For more information, www.smuresearch.com.

    SMU is a nationally ranked private university in Dallas founded 100 years ago. Today, SMU enrolls nearly 11,000 students who benefit from the academic opportunities and international reach of seven degree-granting schools. For more information see www.smu.edu.

    SMU has an uplink facility located on campus for live TV, radio, or online interviews. To speak with an SMU expert or book an SMU guest in the studio, call SMU News & Communications at 214-768-7650.

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    Wired: Study — 45 percent of Bitcoin exchanges end up closing

    Wired Bitcoin Tyler W Moore SMU

    Technology writer Ian Steadman with Wired in the United Kingdom covered the Bitcoin research of SMU cybersecurity expert Tyler W. Moore, an assistant professor of computer science in the Lyle School of Engineering.

    Moore’s research found that online exchanges that trade hard currency for the rapidly emerging cyber money known as Bitcoin have a 45 percent chance of failing — often taking their customers’ money with them.

    The finding is from a new computer science study that applied survival analysis to examine the factors that prompt Bitcoin currency exchanges to close.

    Book a live interview

    Tyler Moore, SMU, Lyle School, BitcoinTo book a live or taped interview with Dr. Tyler Moore in the SMU Broadcast Studio call News and Communications at 214-768-7650 or email news@smu.edu.

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    Moore carried out the research with Nicolas Christin, with the Information Networking Institute and Carnegie Mellon CyLab at Carnegie Mellon University.

    Steadman’s coverage, “Study: 45 percent of Bitcoin exchanges end up closing,” was published online April 26.

    Read the full story.

    EXCERPT:

    Ian Steadman
    Wired
    A study of the Bitcoin exchange industry has found that 45 percent of exchanges fail, taking their users’ money with them. Those that survive are the ones that handle the most traffic — but they are also the exchanges that suffer the greatest number of cyber attacks.

    Computer scientists Tyler Moore (from the Southern Methodist University, Dallas) and Nicolas Christin (of Carnegie Mellon University) found 40 exchanges on the web which offered a service of changing bitcoins into other fiat currencies or back again. Of those 40, 18 have gone out of business — 13 closing without warning, and five closing after suffering security breaches that forced them to close. Four other exchanges have suffered serious attacks but remain open.

    One of those is Mt Gox, the largest Bitcoin exchange, with Moore and Christin stating that at its peak it handles more than 40,000 Bitcoin transactions a day, compared to a mean average of 1,716. It has been the victim of a huge number of distributed denial-of-service (DDoS) attacks over the past month during the peak of the Bitcoin bubble (and its subsequent bursting — though the price now appears to be rising again). Its latest statement, dealing with the attack it suffered on 21 April, is long and comprehensive, seeking to assuage the fears of Bitcoin users who feel that Mt Gox is becoming a weak chain in Bitcoin’s infrastructure.

    Read the full story.

    Follow SMUResearch.com on Twitter.

    For more information, www.smuresearch.com.

    SMU is a nationally ranked private university in Dallas founded 100 years ago. Today, SMU enrolls nearly 11,000 students who benefit from the academic opportunities and international reach of seven degree-granting schools. For more information see www.smu.edu.

    SMU has an uplink facility located on campus for live TV, radio, or online interviews. To speak with an SMU expert or book an SMU guest in the studio, call SMU News & Communications at 214-768-7650.

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    redOrbit: Economists Question Bitcoin Stability Despite Meteoric Rise In Value

    Bitcoin_042513-617x416

    Technology reporter Peter Suciu with redOrbit covered the Bitcoin research of SMU cybersecurity expert Tyler W. Moore, an assistant professor of computer science in the Lyle School of Engineering.

    Moore’s research found that online exchanges that trade hard currency for the rapidly emerging cyber money known as Bitcoin have a 45 percent chance of failing — often taking their customers’ money with them.

    The finding is from a new computer science study that applied survival analysis to examine the factors that prompt Bitcoin currency exchanges to close.

    Book a live interview

    Tyler Moore, SMU, Lyle School, BitcoinTo book a live or taped interview with Dr. Tyler Moore in the SMU Broadcast Studio call News and Communications at 214-768-7650 or email news@smu.edu.

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    Moore carried out the research with Nicolas Christin, with the Information Networking Institute and Carnegie Mellon CyLab at Carnegie Mellon University.

    Suciu’s coverage, “Economists Question Bitcoin Stability Despite Meteoric Rise In Value,” was published online April 25.

    Read the full story.

    EXCERPT:

    Peter Suciu
    redOrbit
    The bank failures that resulted from the 1929 stock market crash took many people’s life savings with it, and some say the same thing could happen – a albeit on a much smaller scale at least – to those who invest heavily in Bitcoins.

    According to a new study from Southern Methodist University in Dallas and Carnegie Mellon University in Pittsburgh, the virtual cyber currency known as Bitcoin could have as much as a 45 percent chance of failing. This could occur if an exchange center that held the currency – much as a bank holds real money – closed, losing customers their Bitcoins and any hard money paid for them.

    Bitcoin received a boost in interest this week when PayPal president David Marcus noted that the online payment center would consider making Bitcoin a funding instrument. Many still believe that the sophisticated cyber currency still holds promise for becoming a major international medium of exchange.

    Moreover the SMU-CMU study also found that currency exchanges that buy and sell a higher volume of Bitcoins are less likely to shut down. That’s the good news. The bad news is that these transactions are more likely to suffer a security breach.

    The encrypted digital currency has been in the spotlight this week, as 87 percent of the nation’s top economists think that the Bitcoin only has “limited usefulness,” reported TechCrunch. This is according to a recent University of Chicago Initiative on Global Markets (IGM) poll of the 38 of the world’s top economists.

    “A bitcoin’s value derives solely from the belief that others will want to use it for trade, which implies that its purchasing power is likely to fluctuate over time to a degree that will limit its usefulness,” the IGM findings noted – a general statement that, though intended to downplay the stability of Bitcoin, is actually true of all forms of currency.

    Bitcoin exchanges work two ways. In the first, purchasers can go through an online exchange and pay for the virtual currency with hard currency, typically with a credit card. The exchange then transfers the purchased Bitcoins to the buyer’s account. The second way is for Bitcoins to be purchased from local dealers, where the parties meet in person and the buyer pays in cash.

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    Study: High-volume Bitcoin exchanges less likely to fail, but more likely to suffer breach

    Empirical computer science study finds consumers face risk of losing money on Bitcoin currency exchanges, many of which close

    Bitcoin accepted here

    Online exchanges that trade hard currency for the rapidly emerging cyber money known as Bitcoin have a 45 percent chance of failing — often taking their customers’ money with them.

    The finding is from a new computer science study that applied survival analysis to examine the factors that prompt Bitcoin currency exchanges to close.

    Results showed also that currency exchanges that buy and sell a higher volume of Bitcoins are less likely to shut down, but more likely to suffer a security breach.

    The study analyzed 40 exchanges that buy and sell the virtual Bitcoin to identify factors that trigger or stave off closure, said the study’s authors, computer scientists Tyler W. Moore, in the Lyle School of Engineering, Southern Methodist University, Dallas, and Nicolas Christin, with the Information Networking Institute and Carnegie Mellon CyLab at Carnegie Mellon University.

    SMU Lyle School of Engineering
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    As of April 2013, Bitcoin’s market capitalization had soared to more than $1 billion, making it a frequent target of fraudsters. Bitcoins are encrypted virtual money created by computer programmers and not backed by any country or government.

    A traceable form of cyber money, Bitcoins can be purchased and used much like hard currency to pay for goods and services, mostly over the Internet. Part of Bitcoins’ attraction is its potential to reduce transaction fees for online purchases, as well as its mathematically-enforced protections against inflation.

    Study authors Moore and Christin identified 40 Bitcoin exchanges worldwide that convert the cyber money into 33 hard currencies. Of those 40, 18 have gone out of business. Nine of the 40 experienced security breaches from hackers or other criminal activity, forcing five of them to subsequently close. Another 13 closed without any publicly announced breach, according to Moore and Christin.

    From their study, the researchers found the failure rate of Bitcoin exchanges is 45 percent. The median lifetime of an exchange is just over one year, 381 days.

    Of the 18 Bitcoin exchanges that closed, in 11 of those cases the authors were able to find evidence of whether or not the customers were reimbursed their money. Five exchanges didn’t reimburse their customers. Six claim to have done so.

    “The risk of losing funds stored at exchanges is real but uncertain,” write Moore and Christin in “Beware the Middleman: Empirical Analysis of Bitcoin-Exchange Risk,” which was invited for presentation at the 17th International Financial Cryptography and Data Security Conference held in Okinawa, Japan, April 1-5.

    While various so-called crypto-currencies have been introduced in the past few years, Bitcoin is the first to be so widely adopted. Besides being open source, Bitcoin’s attraction includes real-time peer-to-peer transactions, worldwide acceptance and low or no processing fees.

    Crypto-currencies are intended to eliminate reliance on brick-and-mortar middlemen such as banks, exchanges, credit card conglomerates and other financial intermediaries. Despite that, and as a result of Bitcoin’s booming popularity, a wide variety of middlemen have sprung up around the cyber currency. Those range from currency exchanges and online wallets to mining pools and legitimate or Ponzi scheme investment services, the authors said.

    Moore and Christin focused their study on currency exchanges to examine the risk Bitcoin holders face from exchange failures.

    Middlemen rise up in a system specifically meant to avoid middlemen
    “Bitcoin is expressly designed to be completely decentralized with no single points of control,” Moore said. “Yet currency exchanges have become de facto central authorities, and their success or failure drives Bitcoin’s success or failure.”

    Recent wild fluctuations in the exchange rate of Bitcoins can be traced in part to the role of digital middlemen, he said, including the emergence of the currency exchanges that buy and sell Bitcoins.

    Bitcoin’s trading value at the start of the year was around $10 per Bitcoin. But its price soared as high as $260 earlier in April, then recently took a nosedive and is now hovering around $68, explained Moore.

    “Much of that can be attributed to the Mt. Gox exchange temporarily shutting down because of heavy trading that overwhelmed the exchange,” Moore said. “Studying why these exchanges fail helps us better understand the risks of Bitcoin.”

    Mt. Gox, https://mtgox.com/, based in Tokyo, is the most popular of the exchanges, with average daily transactions totaling more than 50,000 Bitcoins. Other high-volume exchanges include btc-e.com and Intersango.

    Of the 40 exchanges Moore and Christin studied, the median for daily transactions carried out is 290. The mean is 1,716. Some 25 percent of exchanges process under 25 Bitcoins each day on average.

    The findings of the study leave Bitcoin buyers in a dilemma: According to the study’s empirical analysis, “Mt. Gox and Intersango are less likely to close than other exchanges” because of their high volume, the authors write.

    But the study’s logistic regression model yielded the result that the higher the transaction volume, the more likely a security breach by hackers. “More than 43,000 Bitcoins were stolen from the Bitcoinica trading platform in March 2012,” the authors write, and “in September 2012, $250,000 worth of Bitcoins were pilfered from the Bitfloor currency exchange.” Moreover, Mt. Gox has been breached multiple times.

    Holding money at Bitcoin exchanges is risky
    There are two ways to buy Bitcoins. Purchasers go online through an exchange such as Mt. Gox. They pay hard currency such as U.S. dollars at the market exchange rate, typically funded by a credit card. The exchange transfers the purchased Bitcoins to the buyer’s Bitcoin address or the money remains in an online account maintained by the exchange.

    “In the latter case, customers are at risk of losing their Bitcoins if the exchange suddenly closes,” Moore said. “Believe it or not, many people — if not most —choose to leave the Bitcoins in the exchange account, thinking that their Bitcoins are better protected there and with faster access to convert back to hard currencies.”

    Bitcoins also can be purchased from local dealers found on web sites such as https://localbitcoins.com/. Buyers meet up with the dealer online or in person and pay cash for the Bitcoins, which are then transferred to the Bitcoin address provided.

    Data for the study included daily trade volumes, average weighted daily price for conversions to other currencies, the lifetime of each exchange, whether investors were repaid following an exchange’s closure, and whether the country where the exchange is based complies with the World Bank’s regulations for Anti-Money-Laundering and Combating the Financing of Terrorism. — Margaret Allen

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    New Scientist: Bitcoin hits $200 but swapping for real money is risky

    Bitcoin-coin2-thumb-600x460-175642

    Technology reporter Jacob Aron with New Scientist covered the Bitcoin research of SMU cybersecurity expert Tyler W. Moore, an assistant professor of computer science in the Lyle School of Engineering.

    Moore’s research found that online exchanges that trade hard currency for the rapidly emerging cyber money known as Bitcoin have a 45 percent chance of failing — often taking their customers’ money with them.

    The finding is from a new computer science study that applied survival analysis to examine the factors that prompt Bitcoin currency exchanges to close.

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    Moore carried out the research with Nicolas Christin, with the Information Networking Institute and Carnegie Mellon CyLab at Carnegie Mellon University.

    Aron’s coverage, “Bitcoin hits $200 but swapping for real money is risky,” was published online April 9.

    Read the full story.

    EXCERPT:

    Jacob Aron
    New Scientist
    Online currency Bitcoin hit yet another record high today as it smashed through the $200 barrier, but a new analysis of Bitcoin exchanges shows that swapping real-world cash for its virtual equivalent can be a risky business.

    The stratospheric rise of Bitcoin in recent days – it was at $70 just two weeks ago and less than $10 when we first wrote about it – has left many wishing they had got in on the currency when it was much cheaper. But it is easy to forget that Bitcoin exchanges, where many users store their cash, have a history of being hacked or even folding altogether.

    Tracking the fortunes of 40 such exchanges over the past three years, Tyler Moore of Southern Methodist University in Dallas, Texas, and Nicolas Christin of Carnegie Mellon University in Pittsburgh, Pennsylvania, discovered that 18 have closed. Of these, five failed to reimburse their customers, while six claimed they did. The pair were unable to confirm either way for the remaining seven exchanges.

    The pair also used mathematical modelling to predict the general behaviour of Bitcoin exchanges, and found that there is a 30 per cent chance of an exchange folding within one year of opening, increasing to nearly 80 per cent after two years.

    Unsurprisingly, the larger exchanges such as Mt.Gox are much less likely to implode, but the findings suggest these popular money-swappers are also at greater risk of hack attacks. “The continued operation of an exchange depends on running a high transaction volume, which makes the exchange a more valuable target to thieves,” say the pair in a paper presented at the Financial Cryptography conference in Okinawa, Japan, last week.

    So, jump on the Bitcoin bandwagon by all means – but as with all investments, don’t risk anything you aren’t prepared to lose.

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    SMU-North Texas Food Bank study will analyze causes of hunger in Dallas and rural North Texas

    SMU with The Hunger Center of North Texas will look at the impact of social networks and social capital

    Economics researchers at SMU will analyze the roles social networks and isolation play in fighting hunger in North Texas.

    Recent studies have found that household economic resources are not the only factor contributing to food insecurity, according to SMU economist Thomas B. Fomby.

    About 1 in 6 U.S. households are affected by food insecurity, meaning there’s not enough food at all times to sustain active, healthy lives for all family members, according to the U.S. Department of Agriculture.

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    “This study will analyze the role of other factors causing food insecurity, such as urban or rural settings, access to nutrition assistance programs, access to inexpensive groceries, family support and social stigma,” Fomby said.

    Fomby, professor of economics and director of the Richard B. Johnson Center for Economic Studies, and Daniel Millimet, SMU professor of economics, are conducting the study. A $120,000 grant from the North Texas Food Bank is funding the research. The study will be complete in March 2014.

    Household income a powerful predictor, but social networks play role
    Although household income is the single most powerful predictor of food security, poverty and hunger are not synonymous. According to Feeding America, 28 percent of food insecure residents in Dallas County are ineligible for most nutrition assistance programs because they have incomes above 185 percent of the federal poverty level; and the U. S. Department of Agriculture reports that 58.9 percent of U.S. households with incomes below the poverty level are food secure. The reasons for this are not well understood.

    “With this research, we expect to better understand the causes of food insecurity in North Texas and improve the assessment of at-risk households,” Fomby said.

    The SMU study is one of two major research projects launching The Hunger Center of North Texas, a new collaborative research initiative created by the North Texas Food Bank. The University of North Texas is also collaborating on a study.

    The studies will focus on the impact that “social networks” and “social capital” have on household food security. The central questions are:

    • How do social relationships and community conditions make it easier (or harder) for low-income households to keep healthy food on the table?
    • How do these social and community influences differ in the City of Dallas and rural areas of North Texas?

    Groundbreaking research may help leverage social forces to reduce food assistance
    “We believe that this research will be groundbreaking,” said Richard Amory, director of research for the North Texas Food Bank. “Nutrition assistance programs tend to approach individuals and households in isolation. Understanding the role that communities play in food security may help us leverage social forces to develop more effective programs and, ultimately, reduce the need for food assistance.”

    The studies will start to shed some light on issues related to hunger in the community, said Kimberly Aaron, vice president of Policy, Programs and Research for the North Texas Food Bank.

    “In performing our due diligence on existing research, while forming The Hunger Center, it became clear that many factors related to food insecurity are not well understood,” Aaron said.

    SMU and the North Texas Food Bank recently formed a partnership, “Stampede Against Hunger,” to build on SMU’s strong support for NTFB, connecting campus groups already working with the food bank, as well as encouraging new types of participation for the campus and alumni community.

    SMU support for the food bank has ranged from traditional food drives and volunteer work in the NTFB distribution center, to research for the food bank conducted by students in the Cox School of Business and the Bobby B. Lyle School of Engineering. Faculty and students from the Annette Caldwell Simmons School of Education and Human Development volunteer regularly in NTFB nutrition courses and Fondren Library staff organize a “Food for Fines” drive each year, waiving library fines in exchange for donations of non-perishable food items.

    Fomby and Millimet are in the SMU Department of Economics in Dedman College. — Nancy George, and the NTFB

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    CNN: Study links mutual fund decisions with religion

    Predominant religion in a community affects the decision-making process of mutual fund managers in that community

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    CNN’s “Belief” blog covered the research of SMU financial economist Johan Sulaeman. In the Sept. 25 article “Study links mutual fund decisions with religion,” CNN journalist Laura Koran reported on research by Sulaeman and others who found that religion plays a major role in many Americans’ lives, including their investing.

    “Specifically, the study found that mutual funds located in predominantly Catholic areas are associated with increasing fund volatility, a measure of risk taking, by about 6 percent, compared to those in low-Catholic areas. Those in predominately Protestant counties have a 14 percent lower fund volatility compared with those in low-Protestant areas.”

    Sulaemann is an assistant professor of finance in the Cox School of Business.

    Read the full story.

    EXCERPT:

    By Laura Koran
    CNN

    Faith plays a major role in many Americans’ lives, affecting their outlook on morality, politics and even – according to a new study – investing.

    The study, conducted at the University of Georgia and Southern Methodist University, found that the predominant religion in a community affects the decision-making process of mutual fund managers in that community, specifically when it comes to risk.

    Mutual funds in counties with larger Catholic communities tend to embrace risk more than those in majority-Protestant counties, the study found. Earlier studies have found that Catholics are generally more prone to take speculative risks than the average population, while Protestants are more risk-averse than the average population.

    The findings, which will be published next month in the academic journal Management Science, could help provoke a re-evaluation of how investing works, its authors said.

    “One would expect that with very, very severe competition within the mutual fund industry, culture should play no role in mutual fund decisions because fund managers … should adopt value-maximizing strategies,” said Tao Shu, an assistant professor of finance at the University of Georgia and one of the study’s authors.

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    “Surprisingly,” Shu continued, “we found that despite the very intense competition within the mutual fund industry, mutual funds are still impacted by local culture.”

    Specifically, the study found that mutual funds located in predominantly Catholic areas are associated with increasing fund volatility, a measure of risk taking, by about 6%, compared to those in low-Catholic areas. Those in predominately Protestant counties have a 14% lower fund volatility compared with those in low-Protestant areas.

    The study looked at 1,621 growth and aggressive growth mutual funds.

    Shu conducted the study with University of Georgia colleague Eric Yeung and Johan Sulaeman of Southern Methodist University.

    Read the full story.

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    Ancient tree-ring records from southwest U.S. suggest today’s megafires are truly unusual

    Unprecedented study relies on more than 1,500 years of tree-ring data and hundreds of years of fire-scar records gathered from Ponderosa Pine forests

    Today’s mega forest fires of the southwestern U.S. are truly unusual and exceptional in the long-term record, suggests a new study that examined hundreds of years of ancient tree ring and fire data from two distinct climate periods.

    Researchers constructed and analyzed a statistical model that encompassed 1,500 years of climate and fire patterns to test, in part, whether today’s dry, hot climate alone is causing the megafires that routinely destroy millions of acres of forest, according to study co-author and fire anthropologist Christopher I. Roos, Southern Methodist University, Dallas.

    The researchers found that even when ancient climates varied from each other — one hotter and drier and the other cooler and wetter — the frequencies of year-to-year weather patterns that drive fire activity were similar.

    The findings suggest that today’s megafires, at least in the southwestern U.S., are atypical, according to Roos and co-author Thomas W. Swetnam, the University of Arizona. Furthermore, the findings implicate as the cause not only modern climate change, but also human activity over the last century, the researchers said.

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    “The U.S. would not be experiencing massive large-canopy-killing crown fires today if human activities had not begun to suppress the low-severity surface fires that were so common more than a century ago,” said Roos, an assistant professor in the SMU Department of Anthropology.

    Today’s extreme droughts caused by climate change probably would not cause megafires if not for a century of livestock grazing and firefighting, which have combined to create more dense forests with accumulated logs and other fuels that now make them more vulnerable than ever to extreme droughts. One answer to today’s megafires might be changes in fire management.

    “If anything, what climate change reminds us is that it’s pretty urgent that we deal with the structural problems in the forests. The forests may be equipped to handle the climate change, but not in the condition that they’re currently in. They haven’t been in that condition before,” Roos said.

    Roos and Swetnam, director of the University of Arizona Laboratory of Tree-Ring Research, published their findings in the scientific journal The Holocene.

    Study combines fire-scar records and tree-ring data of U.S. southwest
    This new study is based on a first-of-its-kind analysis that combined fire-scar records and tree-ring data for Ponderosa Pine forests in the southwest United States.

    Earlier research by other scientists has looked at forest fire records spanning the years from 1600 to the mid-1800s — a climate period known as the Little Ice Age — to understand current forest fire behavior. Those studies have found that fires during the Little Ice Age occurred frequently in the grasses and downed needles on the surface of the forest floor, but stayed on the floor and didn’t burn into the canopies.

    Critics dispute the relevance of the Little Ice Age, however, saying the climate then was cooler and wetter than the climate now. They say a better comparison is A.D. 800 to 1300, known as the Medieval Warm Period, when the climate was hotter and drier, like today’s.

    Scientists who favor that comparison hypothesize that forest fires during the Medieval Warm Period probably were similar to today’s megafires and probably more destructive than during the Little Ice Age.

    Tree rings and fire scars provide the evidence for moisture, drought and burn activity
    Scientists rely on tree rings not only to calculate a tree’s age, but also to determine wet and dry weather patterns of moisture and drought. Similarly, scientists’ best evidence for fire activity is the scarring on tree rings that dates the occurrence of fires. While tree-ring data for climate are available for long time periods, annual forest fire records don’t yet exist for the Medieval Warm Period.

    In response to the need for data, Roos and Swetnam tested the Medieval Warm Period hypothesis by calibrating a statistical model that combined 200 years of Little Ice Age fire-scar data and nearly 1,500 years of climate data derived from existing tree rings. With that they were able to predict what the annual fire activity would have been almost 1,500 years ago.

    They discovered that the Medieval Warm Period was no different from the Little Ice Age in terms of what drives frequent low-severity surface fires: year-to-year moisture patterns.

    “It’s true that global warming is increasing the magnitude of the droughts we’re facing, but droughts were even more severe during the Medieval Warm Period,” Roos said. “It turns out that what’s driving the frequency of surface fires is having a couple wet years that allow grasses to grow continuously across the forest floor and then a dry year in which they can burn. We found a really strong statistical relationship between two or more wet years followed by a dry year, which produced lots of fires.”

    Modeling of tree-ring and fire-scar data can be applied to any locale
    The research, “A 1416-year reconstruction of annual, multidecadal, and centennial variability in area burned for ponderosa pine forests of the southern Colorado Plateau region, Southwest USA,” was funded by the International Arid Lands Consortium.

    “The best way to look at how fires may have varied — if climate were the only driver — is to do this type of modeling,” Roos said. “Our study is the first in the world to go this far back using this methodology. But this method can be used anyplace for which there is a fire-scar record.”

    The study’s tree-ring-derived climate data are from the southern Colorado Plateau, a region that includes the world’s largest continuous stand of Ponderosa Pine stretching from Flagstaff, Ariz., into New Mexico. Large Ponderosa Pine forests have existed in the area for more than 10,000 years.

    Fire-scar data for the region go back as far as the 1500s, but are most prevalent during the Little Ice Age period. Fire scientists have analyzed fire-scars from hundreds of trees from more than 100 locations across the Southwest. All fire-scar data are publically available through the International Multiproxy Paleofire Database, maintained by the federal National Oceanic and Atmospheric Administration’s paleoclimatology program.

    Ancient fires were frequent, but didn’t burn the forest canopy
    Fire scientists know that in ancient forests, frequent fires swept the forest floor, often sparked by lightning. Many of the fires were small, less than a few dozen acres. Other fires may have been quite large, covering tens of thousands of acres before being extinguished naturally. Fuel for the fires included grass, small trees, brush, bark, pine needles and fallen limbs on the ground.

    “The fires cleaned up the understory, kept it very open, and made it resilient to climate changes because even if there was a really severe drought, there weren’t the big explosive fires that burn through the canopy because there were no fuels to take it up there,” Roos said. “The trees had adapted to frequent surface fires, and adult trees didn’t die from massive fire events because the fires burned on the surface and not in the canopy.”

    Today’s huge canopy fires are the cumulative result of human activity
    The ancient pattern of generally small, frequent fires changed by the late 1800s. The transcontinental railroad had pushed West, bringing farmers, ranchers, cattle and sheep. Those animals grazed the forest floor, consuming the grasses that fueled small fires but leaving small saplings and brush, which then grew up into dense, mature bushes and trees. In addition, the U.S. began to restrict the traditional land use of the region’s Native American communities, including confining them to reservations. This removed another source for frequent surface fires in the forests — burning by Native Americans for horticulture and hunting.

    By the early 20th century, the U.S. Forest Service had been established, and fighting fires was a key part of the agency’s mission. Without continuous fuel, fires on the forest floor ceased.

    “Many of our modern forests in central Arizona and New Mexico haven’t had a fire of any kind on them in 130 or 140 years,” Roos said. “That’s very different from the records of the ancient forests. The longest they would have gone without fires was 40 or 50 years, and even that length of time would have been exceptional.”

    The research reported in The Holocene is the basis for a new four-year, $1.5 million grant from the National Science Foundation in which Roos and Swetnam are co-principal investigators. That project will examine how human activities have changed forests and forest fires over the past 1,000 years of Native American occupation, as well as the influence of droughts during the Medieval Warm Period and Little Ice Age in New Mexico’s Jemez Mountains. — Margaret Allen

    SMU is a nationally ranked private university in Dallas founded 100 years ago. Today, SMU enrolls nearly 11,000 students who benefit from the academic opportunities and international reach of seven degree-granting schools. For more information see www.smuresearch.com.

    SMU has an uplink facility located on campus for live TV, radio, or online interviews. To speak with an SMU expert or book an SMU guest in the studio, call SMU News & Communications at 214-768-7650.

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    SELF: How Exercise Can Make You Happy (in Just 20 Minutes!)

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    SELF writer Ginny Graves has covered the research of SMU psychologist Dr. Jasper Smits. The article in the latest issue of SELF, “How Exercise Can Make You Happy (in Just 20 Minutes!),” quotes Smits, an associate professor of psychology, on his research finding that high levels of physical activity can buffer against stress for those who are at risk.

    Read the full story.

    EXCERPT:

    By Ginny Graves
    SELF
    It turns out that stressing the body by working out de-stresses the mind. We tested the effect on four sedentary women who were feeling frazzled, and the proof is in: mood-boosting, life-changing results.
    By Ginny Graves

    Woman A is having a bad day. First, her boss comes by and barks at her for missing a deadline. Then her mom calls and guilt-trips her for forgetting her aunt’s birthday. Oh, and that new guy she has been texting? He’s MIA.

    Her stress hormones—cortisol and adrenaline—are surging. In her brain, cortisol is binding with receptors in the hippocampus, the seat of memory formation and learning. For now, this will hone her recall. But if she doesn’t get her stress in check, over time, key connections between nerve cells in her brain won’t function as well, impairing her memory and her ability to take in new information, and raising her risk for depression and anxiety.

    All she knows is that she’s overwhelmed. So at lunch, she heads to the gym and hops onto the elliptical. As her heart begins to pound, levels of the feel-good neurochemicals serotonin, dopamine and norepinephrine rise in her body. So does brain-derived neurotrophic factor (BDNF), a substance that may protect her brain from emotional disorders and repair damage that stress and depression cause. At the same time, opiate-like endorphins and endocannabinoids (similar to the other kind of cannabis) flood her system, leading to a sense of well-being. …

    … Unlike those deprived mice, Woman A is feeling so good that she cranks up the elliptical. As she does, her body begins releasing gamma-aminobutyric acid, or GABA, a calming neurotransmitter. Not that she is calm, exactly; she’s subjecting her system to a low-level form of stress. “Exercise raises your heart rate and triggers a surge of hormonal changes. Expose yourself to this ‘stress’ enough and your body builds up immunity to it. Eventually, it will get better at handling the rest of life’s stressors,” says clinical psychologist Jasper Smits, Ph.D., coauthor of Exercise for Mood and Anxiety. But stay sedentary and your body can become more sensitive to stress, so even minor triggers leave you tied up in knots. …

    Read the full story.

    SMU is a nationally ranked private university in Dallas founded 100 years ago. Today, SMU enrolls nearly 11,000 students who benefit from the academic opportunities and international reach of seven degree-granting schools. For more information see www.smu.edu.

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    The London Telegraph: Runner’s world: Usain Bolt and his entourage

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    The London Telegraph has written a comprehensive piece on Usain Bolt, the fastest sprinter on earth, as he is preparing for the London 2012 Olympic Games this summer.

    The April 27 article, “Runner’s world: Usain Bolt and his entourage,” quotes SMU’s Peter Weyand, an expert in human locomotion.

    Weyand is widely quoted in the press for his expertise on human speed. He is an SMU associate professor of applied physiology and biomechanics in the Annette Caldwell Simmons School of Education & Human Development.

    Read the full story.

    EXCERPT:

    By Mark Bailey
    The Telegraph
    The fastest man on earth is lying motionless on the spongy blue running track at the University of the West Indies in Kingston, Jamaica. He appears to be asleep. The elongated limbs of his 6ft 5in body stretch across the track like felled branches. Protruding from beneath his hitched-up T-shirt, a xylophone of abdominal muscles glistens in the midday sun. From a nearby festival the mellow patter of reggae floats along the warm Caribbean breeze. A contented smile melts across Usain Bolt’s face.

    This supine figure is surrounded by people in a hurry. A film crew, sponsors and PRs are scuttling around, planning, chattering. A photographer is preparing for his next shot, and wants Bolt in a horizontal position. Unbeknown to anyone, some teenage boys have clambered over a fence and are hiding behind an advertising banner. At intervals they pick up the banner and stealthily shuffle closer to their idol, like cartoon spies tiptoeing behind a cardboard bush. …

    … Research by Ethan Siegel, an American theoretical astrophysicist, suggests that Bolt represents a physiological leap forward. The men’s 100m world record has dropped by 0.05 seconds every 10 years since 1968 (when Jim Hines became the first man to break 10 seconds). But Bolt has been performing at a level three decades beyond what should be achievable in the present era, according to Siegel’s graphs. And Dr Peter Weyand, a leading physiologist at Southern Methodist University in Dallas and an expert on the science of sprinting, says “Bolt is a freak – he defies the laws of biology.”

    Bolt is blessed with unique physical gifts. “He is such an unusual physical specimen and one need not look beyond that for an explanation of his speed,” Mark Denny, a Stanford University biology professor, tells me. With his long legs, Bolt takes 41 steps to complete the 100m. His rivals take 44. He has a high percentage of fast-twitch muscle fibres, which produce explosive speed, and he can channel more than 1,000lb of force through each stride – double the human norm, according to Dr Weyand. Professor Alan Nevill, a biostatistician at the University of Wolverhampton, suggests his superior height enables him to dissipate heat faster, so his muscles can work harder. …

    Read the full story.

    SMU is a nationally ranked private university in Dallas founded 100 years ago. Today, SMU enrolls nearly 11,000 students who benefit from the academic opportunities and international reach of seven degree-granting schools. For more information see www.smu.edu.

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    Despite belief WIC improves infant health, new study finds no positive or negative impact

    New study is the first to account for two factors: women misreporting their WIC nutritional benefits and participation of the very poor in the program

    Adfertising messages publicizing WIC vary by state.

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    Existing scientific literature suggests the U.S. government nutritional program known as WIC improves birth outcomes of children, but new research is unable to find either a positive or negative impact on infant health.

    WIC, which serves 53 percent of all U.S. infants, is for low-income pregnant women and their young children under five who are at or below 185 percent of the federal poverty level. The program provides grocery store food vouchers or electronic benefit transfer cards for healthy and nutritious food, and free prenatal care and health and nutritional counseling.

    But economist and study author Manan Roy, Southern Methodist University, Dallas, says women severely underreport having received WIC food vouchers, either because they fear the stigma or fail to recall participating; and also the “poorest of the poor” sign up for the programs. Ignoring either of those two factors could skew an analysis of WIC’s impact on infant health. This is the first study to simultaneously account for both.

    Since the poorest of the poor have the most unfavorable attributes to begin with, the “true” effect of the program will be biased downwards. Measurement error in the reports also bias the “true” effect of WIC participation, Roy said.

    “To my knowledge, this is the first study of WIC to account for both factors,” said Roy. “The results are striking and ought to serve as a note of caution and guide to future evaluations of the program. I am unable to conclude there exists a causal effect — positive or negative — of prenatal WIC receipt on birth outcomes, even if as few as 1 percent of eligible women misreport their participation.”

    Based on these findings and the existing literature on program evaluation, Roy said, it would be ideal to have experimental data or at least some form of verification of program participation in nationally representative household surveys to accurately evaluate WIC’s impact. In the absence of such data, researchers should be aware of and accordingly account for both these problems using varied statistical methods. Roy’s study focused on birth outcomes of infants, and didn’t look at WIC’s effect on older eligible children or breastfeeding practices.

    Existing literature notes underreporting without accounting for it, but suggests WIC improves birth outcomes
    The evidence has strong implications, Roy said, since WIC caters to a special sub-population that is in maximum need of nutritious food, regular health check-ups and nutritional counseling.

    Formally known as the Special Supplemental Nutrition Program for Women, Infants and Children, WIC is a $7.1 billion program of the U.S. Department of Agriculture. As of March 2012, WIC provides nearly 9 million women and young children an average of $46 a month each, according to the government. Recipients can buy milk, cheese, cereal, juice, fruits, vegetables, bread, beans and rice.

    Driving research interest in WIC is the growing perception that early life conditions have a long-term impact on adult-life outcomes as well as the evidence that early life interventions yield higher returns than do later life remedial or compensatory interventions.

    Prior studies evaluating the effectiveness of WIC are mostly based on household surveys. Researchers are aware, however, that the poorest of the poor enroll into programs like WIC and that an overwhelming number of women deny receiving the benefits when polled on household surveys. Existing scientific literature has consistently recognized the underreporting problem without accounting for it, but nevertheless suggests WIC improves birth outcomes of children, such as birth weight and gestation age.

    New study accounts for poorest of the poor and underreporting receipt of benefits
    “My contribution is that I account for both these problems simultaneously and conclude that it is difficult to be sure whether there is a positive or a negative effect of the program,” Roy said.

    Roy used data on more than 4,000 9-month-old infants available from the Early Childhood Longitudinal Study-Birth Cohort, released by the National Center for Education Statistics, U.S. Department of Education.

    In that study, women are interviewed when the child is 9 months old. They are asked whether they received WIC benefits while they were pregnant with the child. So, it is difficult to rule out an element of recall error in addition to the social stigma of “being on welfare,” Roy said.

    “In this first step toward quantifying the consequence of misreporting, I find that even 1 percent of misreporting is sufficient to render inconclusive the evidence concerning WIC’s causal effect. Any greater degrees of misreporting will only worsen the situation,” she said.

    Earlier research found low-income infants better off under public insurance
    Roy presented her study, “Identifying the Effect of WIC on Infant Health When Participation is Endogenous and Misreported,” at the Southern Economic Association Annual Meeting, Washington, D.C., and in her dissertation, “Three Essays on the Effect of Public Policies on Infant and Adolescent Health.” The paper is available from IDEAS, a service of the Economic Research Division of the Federal Reserve Bank of St. Louis. Roy is a Ph.D. candidate in SMU’s Department of Economics.

    The study follows earlier infant health research in which Roy analyzed data from the Early Childhood Longitudinal Study-Birth Cohort to compare private vs. public insurance and its impact on infant health. In that study, Roy found that among insured infants, those in low-income families are better off under government-provided Medicaid and CHIP than infants covered by private insurance, because public plans provide cheaper but comprehensive coverage.

    Manan presented that study — “How well does the U.S. government provide health insurance?” — at the 2011 Western Economic Association International Conference, San Diego. — Margaret Allen

    SMU is a nationally ranked private university in Dallas founded 100 years ago. Today, SMU enrolls nearly 11,000 students who benefit from the academic opportunities and international reach of seven degree-granting schools. For more information see www.smu.edu.

    SMU has an uplink facility located on campus for live TV, radio, or online interviews. To speak with an SMU expert or book an SMU guest in the studio, call SMU News & Communications at 214-768-7650.

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    Imposing trade restrictions on parallel imports can motivate a firm to export, study finds

    Game theoretic analysis indicates that strategic policies to allow or ban parallel imports are often based on motivating domestic firms to succeed in competitive foreign markets.

    Imposing trade restrictions on parallel imports has the surprising effect of motivating a firm to export, according to a new study using game theory economic analysis.

    That’s the finding of economists Santanu Roy, Southern Methodist University, Dallas, and Kamal Saggi, Vanderbilt University, Nashville.

    The economists found that diverse parallel importing policies among countries today make it possible to analyze for the first time how competition between firms and allowing or banning parallel imports can influence competition in foreign and domestic markets.

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    “Our research is the first to look at the consequence of strategic policy setting by governments in the context of competition in domestic and foreign markets,” Roy said.

    Most surprising among the findings, he said, is that imposing trade restrictions on parallel imports can actually motivate a firm to export.

    That can be the case when the market to which the firm is exporting is smaller than its own.

    “So even though you are formally prohibiting the import of a product, you are actually promoting trade,” Roy said. “And that’s a new way of looking at this.”

    Click this link to hear Santanu Roy discuss how parallel import policies impact global free trade.

    Parallel importing: When a firm competes with itself
    Parallel importing occurs when a manufacturer exports its trademarked or patented products to a foreign market where demand, policies or price pressures require the goods be sold at a lower price. A third-party buyer purchases the low-priced goods and imports them back to the manufacturer’s home country, undercutting domestic prices.

    The controversial practice has spawned gray market retail, where consumers buy high-value, brand-named goods at cut prices, such as electronics, video games, alcohol, books and pharmaceuticals.

    Parallel importing and gray market retail are growing worldwide
    Some advocates of free trade decry parallel importing, saying it infringes on manufacturers’ intellectual property rights accorded by copyright, patent and trademark laws. That, in turn, can discourage investment in new technology and products.

    As a result, some countries allow parallel importing; others ban it. For example, parallel importing is allowed among the member countries of the European Union. It’s not permitted by the United States, although exceptions exist for many different products. Generally speaking, developed nations restrict parallel importing, while developing nations allow it.

    The study by Roy and Saggi found there is no one-size-fits-all solution — neither a global ban nor a blanket endorsement.

    Only need for intervention could be countries with major asymmetries
    In fact, the study’s authors found that policy diversity is working well because it takes into account important variables such as similarity or dissimilarity of markets, as well as competing products and government regulations.

    “The only area where there may be need for intervention is where there may be major asymmetries between countries — where one country is very large and the other is very small,” Roy said.

    Roy and Saggi found that there’s strategic interdependence in the policymaking across governments, as well as a lot of strategic dependence in the decisions of firms. For that reason, the degree of asymmetry of demand across countries is going to be a very important part of the picture, Roy said.

    Impact of parallel importing varies, depending on the markets
    By modeling the impact of parallel importing under various scenarios, Roy and Saggi discovered that parallel importing typically works in favor of a domestic manufacturer whose export market is similar in size to its domestic market, and where intellectual property rights and parallel trade policies are similar to its own. In that case, a competitor is unlikely to cut prices, and prices remain stable and profitable both at home and abroad.

    However, where markets are dissimilar, they found that parallel importing led to price slashing both at home and abroad, which in turn drove manufacturers to abandon exporting to prevent prices being slashed at home.

    “One of the consequences of parallel import policy is that when it’s allowed, firms will actually take steps to alter their pricing in such a way that parallel imports don’t occur,” Roy said. “So the fact we don’t actually observe parallel imports in data doesn’t mean that parallel import policy does not have a very important impact on the way firms price their goods across the markets.”

    Parallel importing policies should be set on a case-by-case basis
    Because the impact of parallel importing varies on a case-by-case basis, policies governing parallel imports should be determined country by country and product by product. Roy and Saggi warn against uniform global standards to restrict or allow parallel imports, such as could be imposed by the international trade governing body, the World Trade Organization, or through its agreements, such as the TRIPS agreement on trade-related intellectual property rights.

    Roy and Saggi report their findings in two articles: “Equilibrium Parallel Import Policies and International Market Structure,” a scenario in which there are quality differences in the products across countries, forthcoming in the Journal of International Economics; and “Strategic Competition and Optimal Parallel Import Policy,” a scenario in which there’s asymmetrical protection of intellectual property, forthcoming in the Canadian Journal of Economics. Roy and Saggi were members of a development research group at the World Bank that researched parallel importing.

    Roy is professor and director of graduate studies in the SMU Department of Economics. Saggi is professor and director of the graduate program in economic development in the Vanderbilt Department of Economics. — Margaret Allen

    SMU is a nationally ranked private university in Dallas founded 100 years ago. Today, SMU enrolls nearly 11,000 students who benefit from the academic opportunities and international reach of seven degree-granting schools. For more information see www.smu.edu.

    SMU has an uplink facility located on campus for live TV, radio, or online interviews. To speak with an SMU expert or book an SMU guest in the studio, call SMU News & Communications at 214-768-7650.

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    USA Today: Women scientists lose out on research prizes

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    USA Today’s “ScienceFair” blog has covered the research of SMU sociologist Anne Lincoln. In a March 13 entry, journalist Dan Vergano writes about Lincoln’s latest findings surrounding discrimination against women in the STEM fields: science, technology, engineering and math. Dubbed “the Mathilda Effect,” Lincoln has shown that women in the STEM areas do not receive the same recognition for their research and achievements as do men in those fields.

    In earlier research funded by the National Science Foundation and sponsored by the Association for Women in Science, Lincoln found that female scientists do not win awards for their research in proportion to the number of women in the PhD pool for their discipline.

    An assistant professor in the Department of Sociology, Lincoln also has done extensive research on how science careers can be incompatible for both women and men who also want to have a family.

    Read the full ScienceFair article.

    EXCERPT:

    By Dan Vergano
    USA Today
    Male scientists still receive an outsized number of research awards compared to women, a study finds.

    Women are nominated for research prizes just as frequently as men, however unconscious bias and men running prize panels seems to be swaying award outcomes, suggests the study in the current Social Studies of Science journal.

    Varying widely by discipline, women receive about 40% of all doctorates in science (around 70% of psychology degrees but less in other fields) and engineering (about 10%), and have long suffered from lower odds of becoming full professors or attaining other markers of prestige in those fields.

    “A large body of social science research finds that work done by women is perceived as less important or valuable that that done by men,” begins the study led by sociologist Anne Lincoln of Southern Methodist University in Dallas. In their research, the study authors looked at award patterns from 13 scientific and medical societies from 1991 (206 awards) to 2010 (296 awards).

    At first glance, things looked better for women, who won 78% more awards in 2010 compared to two decades earlier. “Closer analysis shows that women continued to win far fewer of the more prestigious scholarly awards than the other types of awards, however – averaging just 10 percent. By comparison, women won 32.2 percent of service awards and 37.1 percent of teaching awards between 2001 and 2010,” says the study.

    How come? The study authors found seven math, science and medical societies willing to open their award process for examination.

    Read the full story.

    SMU is a nationally ranked private university in Dallas founded 100 years ago. Today, SMU enrolls nearly 11,000 students who benefit from the academic opportunities and international reach of seven degree-granting schools. For more information see www.smu.edu.

    SMU has an uplink facility on campus for live TV, radio or online interviews. To speak with an SMU expert or to book them in the SMU studio, call SMU News & Communications at 214-768-7650 or UT Dallas Office of Media Relations at 972-883-4321.