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Culture, Society & Family Learning & Education Researcher news

Mission Foods Texas-Mexico Center awards first research grants to shape economic, migration policies

Research findings will be presented at the second annual Mission Foods Texas-Mexico Center Symposium to be held in Mexico City April 6, 2018.

The Mission Foods Texas-Mexico Center at SMU has awarded grants to four scholars from both sides of the border who aim to support the Center’s goal of providing policy-relevant, action-oriented research on the dynamic relationship between Texas and Mexico.

Findings from each of the four projects, selected by the Texas-Mexico Center’s Faculty Advisory Board, will be shared this spring, says Luisa del Rosal, executive director of the Center.

“This is a tremendous benefit to Dedman College, where so many faculty members research and teach about Texas and Mexico,” says SMU Dedman College of Humanities and Sciences Dean Thomas DiPiero. “This will help strengthen the social, economic and cultural ties between the two regions.”

The four projects are:

  • “Migration, Inequality & Public Policies in Mexico and the United States”
    Lead researcher: Colegio de Mexico President Silvia Giorguli, Mexico City
  • “Are Mexican and U.S. Workers Complements or Substitutes?”
    Lead researcher: Raymond Robertson, Helen and Roy Ryu Chair in Economics
    & Government, Texas A&M Bush School of Government & Public Service, College Station
  • “Institutions, Trade and Economic Prosperity: An Examination of the U.S. and Mexican States”
    Lead researcher: Dean Stansel, associate professor, O’Neil Center for Global Markets and Freedom, SMU Cox School of Business
  • “Slowdown in Mexico-U.S. Migration: Why is Texas Different?”
    Lead researcher: Colegio Tlaxcala President Alfredo Cuecuecha, Tlaxcala, Mexico

Grant recipient Stansel said his team will focus on the potential economic damage from a possible new regime of trade restrictions in the U.S.

“By examining the interconnected relationships between trade policy, trade volume and economic prosperity in the U.S. and Mexico,” he said, “we hope to provide insights into the importance of maintaining a system of relatively free trade.”

Research findings will be presented at the second annual Mission Foods Texas-Mexico Center Symposium to be held in Mexico City April 6, 2018.

Three dozen applicants applied for the grants, which was “more than we expected for the first year,” says Javier Velez, vice-chair of the Texas-Mexico Center Executive Advisory Board and CEO of Mission Foods’ U.S. headquarters in Dallas.

“It was pleasing for us how much interest there is in effectively promoting and facilitating a better understanding of the relation between Texas and Mexico,” Velez said.

The Mission Foods Texas-Mexico Center at SMU is dedicated to improving relations between Texas and Mexico through dialogue and research. It works to encourage greater cross-border integration and cross-sector collaboration in academia, government, non-governmental organizations and business. The Center strives to enhance a political dialogue to reshape the policies that govern the relationship between Texas and Mexico, focusing on five areas: trade and investment, energy, human capital and education, border issues and migration. — Denise Gee, SMU

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Culture, Society & Family Feature Researcher news

Joint Study on Gender Disparity in Art Museum Directorships Shows Gap Persists Despite Gains

While incremental gains were observed, a new study shows that women still hold fewer than 50% of directorships, earn less than male counterparts, and typically lead institutions with smaller budgets

The Association of Art Museum Directors (AAMD) and the National Center for Arts Research (NCAR) at Southern Methodist University in Dallas today released findings from the second iteration of their gender gap study, which was designed to deepen understanding of the gender disparity in art museum directorships to help AAMD member institutions advance towards greater gender equity.

Through a combination of quantitative analysis of 2016 data collected from AAMD member institutions and interviews with female museum directors and executive search consultants who specialize in recruitment for art museums, NCAR and AAMD researchers – led by Zannie Voss, director, NCAR, and Christine Anagnos, executive director, AAMD – examined the ongoing and historical factors of the gender gap in art museum directorships, and compared their findings to those of the previous study, conducted in 2013.

While incremental gains have been observed in the last three years, the study found that the gender gap persists: women still hold fewer than 50% of directorships and, on average, earn less than their male counterparts. The study also found that museum type and budget size were influential factors on representation and salary differentials.

In 2016, AAMD conducted a survey of its members, collecting data from 210 respondents that included each institution’s operating budget, endowment, the salary of the director (or top leader), the director’s gender, and the self-reported museum type (e.g. encyclopedic, contemporary, etc.). Of these 210 museums, 181 also participated in the 2013 survey, allowing for examination of trends. The study sought to answer three main questions: What is the current state of women in art museum directorships? How has the gender gap in art museum directorships shifted in the past three years? What are some factors that may drive the gender gap? The NCAR and AAMD study had several key findings:

  • While men continue to outnumber women in director roles, there has been a 5% increase in female directorships from 2013: women represented 48% of art museum directorships in 2016 (compared to 43% in 2013).
  • There are clear disparities in gender representation depending on operating budget size: the majority of museums with budgets of less than $15 million are run by a female, rather than a male, director. The reverse is true for museums with budgets of over $15 million, where female representation decreases as budget size increases.
  • Women are at a salary disadvantage: on average, female directors earned 73 cents for every dollar that male directors earned.
  • When segmented by operating budget, the gender disparities are more nuanced:

    For museums with a budget of over $15 million—roughly the top quarter of museums—female directors earned 75 cents for every dollar a male earned, an improvement from 2013, when women earned only 70 cents per dollar earned by a man.
    For the other three-quarters of member museums (those with budgets of less than $15 million), female directors on average earned 98 cents to every dollar earned by a man. This represents a reversal from three years ago, when female directors at these same museums earned an average of $1.01 for each dollar earned by their male counterparts.

  • Women hold the majority of directorships in College/University museums (60%) and Culturally Specific museums (57%). Men hold the majority of directorships at Single Artist (67%), Encyclopedic (59%) and Contemporary (54%) museums.
  • Museum types, which are also tied to budget size, also help reveal salary dynamics at play: some museum types with higher average budgets have less of a salary gap as compared to some museums with lower average budget size. The biggest pay disparity is at Encyclopedic museums, where female directors average only 69 cents for every $1 of their male counterparts, while the smallest gap is at Culturally Specific institutions, where women earn 91 cents for every dollar a male director earns.

Drawing from interviews with executive search consultants and female museum directors, the report also includes a qualitative analysis that examines the personal as well as the institutional barriers in achieving gender equality in the field. Overall, interviewees observed that while progress is incremental, the needle is moving, with changes accomplished through cultural shifts within the field and in broader society, and with the emergence of a new generation of leaders.

In addition to Voss and Anagnos, co-authors of the study are Veronica Treviño, SMU MA/MBA Class of 2017, and Alison D. Wade, Chief Administrator, Association of Art Museum Directors. The authors gratefully acknowledge and thank the members of the Association of Art Museum Directors and, specifically, the following art museum directors and executive search consultants for their perspective: Gretchen Dietrich (Utah Museum of Fine Arts), Madeleine Grynsztejn (Museum of Contemporary Art, Chicago), Sarah James (Phillips Oppenheim), Laurie Nash (Russell Reynold Associates), Lisa Phillips (New Museum), Kimerly Rorschach (Seattle Art Museum), Sally M. Sterling (Spencer Stuart), and Belinda Tate (Kalamazoo Institute of Arts).

About AAMD
The Association of Art Museum Directors advances the profession by cultivating leadership capabilities of directors, advocating for the field, and fostering excellence in art museums. An agile, issues-driven organization, AAMD has three desired outcomes: engagement, leadership, and shared learning. Further information about AAMD’s professional practice guidelines and position papers is available at aamd.org.

About NCAR
In 2012, the Meadows School of the Arts and Cox School of Business at SMU launched the National Center for Arts Research (NCAR). The vision of NCAR is to act as a catalyst for the transformation and sustainability of the national arts and cultural community. The goals of the Center are to unlock insights on: 1) arts attendance and patronage; 2) understanding how managerial decisions, arts attendance, and patronage affect one another; and 3) fiscal trends and fiscal stability of the arts in the U.S., and to create an in-depth assessment of the industry that allows arts and cultural leaders to make more informed decisions and improve the health of their organizations. More information about NCAR and its reports, white papers, and tools can be found at smu.edu/artsresearch.

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Culture, Society & Family Learning & Education Researcher news SMU In The News

Science Magazine: Research identifies keys to managing scientists, engineers

Leaders who understand how to manage their employees’ commitment to both their organizations and professions may be the most successful at motivating and retaining innovators

Science Magazine covered the research of SMU Provost and Vice President for Academic Affairs Steven Currall, also professor of management and organization at SMU’s Cox School of Business. Currall is co-author on research about how leaders can manage innovators to motivate and retain them in their organization.

Study co-authors include Sara Perry, assistant professor of management in Baylor University’s Hankamer School of Business, and Emily Hunter, associate professor of management at Hankamer.

Read the full story.

EXCERPT:

Science Magazine
A new study from Baylor University’s Hankamer School of Business helps leaders better understand how to manage innovators, specifically scientists and engineers.

“Our study suggests that leaders who understand how to manage their employees’ commitment to both their organizations and professions may be the most successful at motivating and retaining innovators,” said the study’s lead author, Sara Perry, Ph.D., assistant professor of management in Baylor’s Hankamer School of Business. “Innovators represent a highly valued workforce.”

The study, Managing the Innovators: Organizational and Professional Commitment Among Scientists and Engineers, which is published in the journal Research Policy, identifies highly innovative individuals as “typically higher performers (who) are rated as more creative and proactive by their supervisors than their less-innovatively oriented peers.”

For this project, researchers surveyed 255 academic science and engineering professionals working in 22 National Science Foundation (NSF)-funded Engineering Research Centers. The study centered on “dual allegiance” among these innovators – their loyalties to their professions versus their commitment to their organizations.

A general assumption, Perry said, is that these are always in conflict, but research shows that is not necessarily the case.

Read the full story.

Follow SMU Research on Twitter, @smuresearch.

For more SMU research see 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, 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

Six new cities added to the Top 20 lists of arts-vibrant cities in the U.S. — data-driven assessment ranks cities by arts and cultural assets

SMU’s National Center for Arts Research (NCAR) releases Second Annual Arts Vibrancy Index

Double click to open and explore interactive heat map.
Double click to open and explore interactive heat map.

SMU’s National Center for Arts Research (NCAR) today released its second annual Arts Vibrancy Index, which ranks more than 900 communities across the country, examining the level of supply, demand, and government support for the arts in each city. This year, the report features six new communities, with three states – Hawaii, Oregon and Texas – appearing in the index for the first time. The new cities featured on the lists are Portland, Oregon; Austin, Texas; and Kansas City, Missouri, in the top 20 large cities list; and Maui, Hawaii; St. Cloud, Minnesota; and Medford, Oregon, in the top 20 small and medium cities list. NCAR provides rank scores on all measures for every U.S. county on its interactive heat map.

“Each community in the report has a unique story and cultural landscape – this report is designed to help us understand what makes a city vibrant in the arts and the different elements that come into play to foster that vibrancy,” 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. “The data helps illustrate how vibrancy varies between cities and what arts vibrancy looks like for different communities around the nation.”

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 arts organizations, independent artists, and arts, culture, and entertainment employees. Demand is gauged by the total nonprofit arts dollars in the community, including program revenue, contributed revenue, total expenses, and total compensation. Lastly, the level of government support is based on state arts dollars and grants and federal arts dollars and grants.

Geographically, the rankings utilize Micro- and 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 (OMB). By focusing on MSAs, the index captures the network of suburbs that rise up around a city or town rather than considering each separately. Where the OMB breaks down very large MSAs into Metropolitan Divisions, this report does, too.

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

  • Washington-Arlington-Alexandria, DC-VA-MD-WV
  • Nashville-Davidson-Murfreesboro-Franklin, TN
  • New York-Jersey City-White Plains, NY-NJ
  • San Francisco-Redwood City-South San Francisco, CA
  • Los Angeles-Long Beach-Glendale, CA

Portland, Oregon; Austin, Texas; and Kansas City, Missouri joined the top 20 list this year, ranked 17, 18, and 19, respectively. Compared to 2015, there was little movement between the highest-ranking cities in both the larger and smaller markets, and the top three cities remain the same as last year, with some repositioning between them. In the top five rankings among large cities, the biggest mover was Los Angeles, which moved up to fifth place from its position in ninth place last year; San Francisco moved up to fourth place (from fifth); and Boston dropped down two positions to sixth place.

For medium and small cities, with populations under 1 million, the top five cities are all in the West. Jackson, Wyoming, which ranked third in last year’s index, has moved to the top of the list from its former position in third place, causing Glenwood Springs, Colorado, and Santa Fe, New Mexico, to drop down one position to second and third respectively:

  • Jackson, WY-ID
  • Glenwood Springs, CO
  • Santa Fe, NM
  • Breckenridge, CO
  • Edwards, CO

Three new cities appear in the top 20 medium and small cities list: Maui, Hawaii; St. Cloud, Minnesota; and Medford, Oregon, ranked at 14, 16, and 20, respectively. The full top 20 lists are available on the NCAR website, including scores on each of the three dimensions (supply, demand, and government support).

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

  • Every region of the country is represented on both lists: 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 and Midwestern 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.
  • Vibrancy in very large cities takes two distinct forms: some cities feature a strong concentration of arts vibrancy in the urban core with less happening in the surrounding areas, while others feature an even distribution of vibrancy across their metropolitan areas.
    The majority of arts-vibrant cities have a population either under 300,000 or between 1,000,000 and 3,000,000.

About NCAR
In 2012, the Meadows School of the Arts and Cox School of Business at SMU launched the National Center for Arts Research (NCAR). The Center, the first of its kind in the nation, 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.

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

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

conspicuous conservation, new aristocrats, ryan murphy, smu, Cox

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.

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.

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

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.

girls, virtual reality, say no, sexual violence, assertiveness training, Rowe, Jouriles, McDonald, SMU
SMU, Meltzer, women, body image
supervolcano, fossil, Italy, James Quick, Sesia Valley
Brian Stump, SMU, earthquakes
Meltzer, contraception, couples, happiness
Blue light, Zoltowski, SMU
Morrison Formation, Jurassic, climate, ancient soil, Myers, paleosols

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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Culture, Society & Family

Conventional vs. modern: Repertoire drives opera house identity, market share

Opera houses in a competitive market can distinguish themselves from the competition through the repertoire they feature

The Palais Garnier of the Paris Opera, one of the world's most famous opera houses. (Credit: Peter Rivera, Paris Opera)
The Palais Garnier of the Paris Opera, one of the world’s most famous opera houses. (Credit: Peter Rivera, Paris Opera)

Though opera companies are often monopolies in their respective area, they have the ability to distinguish themselves from other opera companies and competition from other performing arts venues that vie for audiences.

In new research, Strategy Professor Bo Kyung Kim of SMU’s Cox School of Business and co-author Michael Jensen, University of Michigan, Ann Arbor, explore the options opera companies have to address their competitive positioning. Paradoxically, the authors find, to create space for unconventional repertoire choices it may be necessary to make yet more conventional choices.

A firm’s market identity is a categorization of how the outside world views the firm and their product offerings.

“There are different ways opera companies can claim their own market identity, and one way is through different repertoires in opera settings,” said Kim. “Audiences categorize companies based on several cues; repertoire is a significant cue for audiences.”

For example, the authors mention that a microbrewery sets up certain expectations from consumers that differ from, say, the large, conventional Coors Brewery. The same type of categorization affects opera and performing arts venues.

The research published recently in Organization Science, “Great, Madama Butterfly Again! How robust market identity shapes opera repertoires.”

Opera houses develop market identity to compete for audience share
Generally, opera is a conservative art form and the European opera has come to define widely accepted conventions in the Unite States. In contrast, modern operas are regarded as a challenge to traditional opera standards. The choice between offering traditional and modern opera is a way for companies to differentiate themselves and to claim their market identities. An opera company that schedules only traditional or modern operas has a “distinct” market identity; an opera company that allows audiences to categorize it as either a traditional or modern opera company by systematically balancing both types of operas has a “robust” market identity, say the authors.

Tenor Plácido Domingo, when first becoming Los Angeles Opera’s artistic director, stressed the importance of balancing repertoire choices. The authors noted his dedication to new opera but continuing commitment to Verdi and Puccini to allay fears over too much of the avant-garde. Opera companies try to appeal to both the majority audience preferring traditional Italian opera and the important minority audiences seeking more unconventional opera experiences. This challenge is met by simultaneously adding Puccini’s “Madama Butterfly” and Glass’s modern “Einstein on the Beach” to the repertoire. The authors’ findings imply that offering a very conventional opera and a very unconventional opera in the same repertoire is typically a better solution than offering two intermediate operas.

“If you include more modern operas in a repertoire,” says Kim, “then the conventionality of the traditional operas should increase. You need to perform Puccini’s ‘Madame Butterfly’ instead of his less well-known works. This is the balancing of operas in a repertoire.” That is to say, when adding modern operas into the product mix, the conventional choices become more conventional. Opera companies will then want to include even more popular operas or blockbusters — Puccini’s “La Bohème,” Verdi’s “La Traviata,” or Bizet’s “Carmen.”

Robust market identities sometimes less important
Some large metropolitan markets such as New York City and Chicago are home to more than one company. Even if an opera company is a local monopoly, some opera companies are located in closer geographical proximity to other opera companies. As opera companies face more competitive pressures from other opera companies, robust market identities become less important. This translates into these opera companies balancing conventional and unconventional repertoire choices less tightly.

“We map the physical distance between opera companies,” stated Kim. “Attendees will choose to go to other nearby cities if they prefer that opera’s repertoire. If there are more opera companies nearby, then companies need not worry about the repertoire balancing act.”

Kim explains that in some markets, competition can evolve into opera-to-opera rather than opera-to-musical theater.

“With more opera companies in a vicinity as in Chicago, Tulsa, and New York, more competition exists within the category of opera than between-category competition that includes other performing arts,” she said. “In that case, an opera company worries less about simultaneously meeting differing demands — majority or important minority demands — and focus on one of them.”

That’s not the case in markets where opera houses are few and far between.

“In Fargo, North Dakota, in contrast, with few opera competitors nearby, a company has to address all the differing audience demands,” Kim said. “You will need to focus more on a robust market identity in that case, and choose repertoire accordingly.”

The authors’ analyses showed that companies indeed balance conventional and unconventional operas in a way that is consistent with enacting a robust market identity, their hypothesis. And this identity is more important when opera companies have more divergent audiences and is less important when companies experience more within-opera competition, owing to a greater number of opera companies within geographic proximity.

The research sample for the study included all the professional opera companies in the United States, except seven in sub-genres of opera, from 1995 to 2005. This final sample includes 96 professional opera companies, which resulted in 496 observations.

“Earlier work of ours addresses the interesting dilemma about differing demands in opera settings,” noted Kim. “Attendees or season ticket holders want more traditional operas; critics want modern opera. Our earlier research indicated that through changing the order of operas in a repertoire, this traditional-modern opera repertoire dilemma can be resolved.”

Findings can apply to other areas with divergent audiences
This study contributes to research on why performing arts such as theater, classical music and opera tend to favor conventional repertoires. Importantly, conventionality may actually facilitate unconventional repertoire choices, say the authors. Their line of research may also apply in other situations with divergent audiences. For example, they note that universities have to balance teaching and research, while auto manufacturers must balance safety, fuel efficiency and performance.

Interestingly, Kim said, “For most opera companies that add modern opera, their repertoires are not more than 20 percent of the mix. General attendances still want the Italian and Germans operas.” — Jennifer Warren

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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Culture, Society & Family Researcher news SMU In The News

The New York Times: Study Finds a Gender Gap at the Top Museums

At small and midsize museums, with budgets under $15 million, women have essentially achieved parity

Reporter Hilarie M. Sheets with The New York Times has covered the research of Ann Marie Gan, an SMU student in the MA/MBA in Arts Management in the Cox School of Business and Meadows School of the Arts.

The article, Study Finds a Gender Gap at the Top Museums, published March 7.

Gan authored the study with Zannie Giraud Voss, director of the National Center for Arts Research, NCAR, at Southern Methodist University, and Christine Anagnos, executive director of the Association of Art Museum Directors, AAMD.

The research study was 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, the researchers 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.

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.

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EXCERPT:

By Hilarie M. Sheets
The New York Times

Women run just a quarter of the biggest art museums in the United States and Canada, and they earn about a third less than their male counterparts, according to a report released on Friday by the Association of Art Museum Directors, a professional organization.

The group examined salary data on the 217 members it had last year through the prism of gender, for the first time. The report noted strides made by women at small and midsize museums, with budgets under $15 million, often university or contemporary-art institutions. Here, women have basically achieved parity, holding nearly half of the directorships and earning just about the same as men. But the gap is glaring at big institutions, those with budgets over $15 million: Only 24 percent are led by women, and they make 29 percent less than their male peers.

And just five of the 33 most prominent art museums — those with budgets greater than $20 million — have women at the helm.

“There is a difference if a woman is running one of these big museums,” said Elizabeth Easton, director of the Center for Curatorial Leadership, a training program in New York that has helped place nine women in directorships, but none at the country’s most influential museums. “Those directors are the most loud and authoritative voices. It sets the tone.” ….

…. Written in partnership with the National Center for Arts Research, the report, called “The Gender Gap in Museum Directorships,” explores the factors contributing to the gulf at the top and frames the findings within the debate provoked by Sheryl Sandberg’s book “Lean In” and Anne-Marie Slaughter’s 2012 article “Why Women Still Can’t Have It All” in The Atlantic.

Combining large and small institutions, the report found that an average of 42 percent of the association’s museum directors were women. That is certainly a different picture from 25 years ago, when only 14 percent of museums in the association were run by women, and a slight improvement from 38 percent five years ago.

On average, however, women who run art institutions earned 21 percent less than their male counterparts in 2013 — a bigger difference than the 18 percent overall median pay split between the sexes reported by the federal Bureau of Labor Statistics.

The report, which incorporated observations from interviews with six executive search recruiters, considered reasons for the gap, including the ratio of men to women on museum boards, which hire directors. While the recruiters agreed that boards were no longer all-male clubs — women now outnumber men, 59 to 30, on the board of the Museum of Fine Arts, Houston, for instance — gender ratios remain uneven. At the Metropolitan Museum of Art, the male voting members still outnumber female ones, 23 to 10. At the National Gallery, the board has seven men and two women. ….

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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

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

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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Culture, Society & Family Economics & Statistics Researcher news

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.

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.

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

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.

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.

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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Economics & Statistics Researcher news

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

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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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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 Mind & Brain Researcher news

The Undying Radio: Familiarity breeds content when it comes to listeners and music

Study shows that when offered the choice, listeners opt for familiar tunes, despite belief people prefer constant novelty

Are you tired of hearing Taylor Swift’s familiar “You Belong with Me” played over and over again? Or are you part of the cool set of music listeners, identifying the next great hit or indie band on the rise? Many music listeners, especially the younger generations, want to perceive themselves as listening to cool music. But new research says otherwise when it comes to real choices, says SMU’s Morgan Ward, an assistant professor of marketing in the Cox School of Business.

The tension between the novel and the familiar leads to interesting insights for marketers. The research offers lessons about how actual behavior trumps media portrayals of consumers’ perennial desire for the novel.

Many have this intuition that people are driven toward novelty, says Ward, a co-author of the study. “We believe we want to listen to new music, or anything that is novel, but when we observe what people actually choose, they tend to choose what is familiar.” There is a persistent tension in music choice between the opposing forces of the known and familiar versus the novel and new, write the authors. People do exhibit both tendencies in their consumption choices. But there is little research examining which force will dominate.

The research indicates that our behavior trumps what the media portrays.

“In life we have many day-to-day decisions and responsibilities,” Ward says. “We are sorting through so much information; and at the end of the day, we are ‘cognitive misers.’ That is, we do not want to spend so much time on making choices, which is very depleting. Research backs this up. Choosing something familiar is easy to process and comfortable. The desire to not expend so much energy on choices is what I believe drives these findings.”

Ward co-authored “The Same Old Song: The Power of Familiarity in Music Choice” with Joseph Goodman of Washington University, and Julie Irwin of University of Texas, Austin. It appears in Marketing Letters, including online.

Play on
The music industry is over $30 billion dollars strong. Web radio now exceeds 57 million consumers each week. Traditional radio formats continue to endure, despite cries that radio is dead. According to Radio Advertising Bureau, in 2011 radio reached nearly 95 percent of the U.S. population, and U.S. radio advertising netted $17.4 billion in revenues. The authors suggest offering and emphasizing songs consumers want is good marketing strategy, as is choosing to advertise in venues that play preferred music.

“People were under the impression that radio was no longer relevant,” notes Ward. “Radio is very relevant. We now have new forms of music on popular websites like Pandora and Spotify, where these brands are already maximizing insights such as ours. They present the consumer with music they already like but it is presented in new ways that allow for an easy transition. These sites are successful because they are using the idea of familiarity.”

Across four studies, findings indicate that familiarity is a stronger predictor of music choice than other prevalent measures such as liking and satiation. Consumers pick music that they are familiar with even when they believe they would prefer less familiar music. This research is a first to quantify the effect of familiarity versus other forces — including liking — on consumer choice and to determine the power of these variables on actual market behavior. The authors note that an extensive body of psychology literature “does not provide much actionable managerial guidance for marketers as to which stimulus a consumer will actually choose in a particular product category.”

The authors’ second test shows that people are likely to choose music based on familiarity, even when they will have to actually listen to the music versus an intent. In fact, familiarity predicts choice above and beyond liking, and it has a stronger direct effect on choice. “Liking” is a commonly used variable in marketing research. Especially in the music domain, perceived coolness is a factor. Ward mentions, “We measure this by having respondents make choices individually; if they had their peers observing their choices, they might have chosen differently, trying to make cool choices in front of their peers.”

A heavy load?
Also factored into the study is one’s stimulation levels and cognitive load. For example, the authors predict and prove that when a person is engaged in an activity requiring more stimulation, they prefer more familiar music. Imagine someone jogging or driving in rush-hour traffic, two tasks which already consume some of the listener’s bandwidth. The opposite is also true: in a less stimulating environment, the novel can be better handled. Blaring some new tune while outdoors playing Frisbee with your black Lab is perfectly doable. One’s “cognitive load” is particularly relevant to music choice because listening to music often involves other activities such as driving, exercising or working with “audio wallpaper” playing softly in the background.

A general finding is that consumers do not want to be over-stimulated, says Ward. Optimal stimulation has been researched since the 1980s. “People typically operate at a low level of desire for stimulation in their everyday surroundings or they seek it at certain times. There are people who like jumping out of airplanes and scaling cliffs in Nepal, but this is more of a chronic state of being versus a consumption choice.”

Familiarity however is a major driver of actual music choice and market share, according to results. They note that emphasis on novelty in the music domain, by consumers and people protesting the current state of the music business, is misplaced. While consumers indicate that they want more novelty, in fact their choices suggest that they do not.

Impact on the playlist
When testing consumers about a particular music choice or a particular playlist, marketers would do well to bypass consumers’ notions of what they want, and instead ask how familiar consumers are with the music, the research indicates. Familiarity is as powerful, and sometimes more powerful, than any other measure of music preference in the studies. “Satiation measures,” how tired of a song one is, at least for predicting reduced preference for music, is counterproductive.

For music outlets with playlists, findings suggest the best strategy is to concentrate on familiar songs, even if consumers say they want more novelty. When a new song is introduced, the authors suggest it should be played often and be offered to consumers through promotions. For music platforms allowing users to create a playlist, such as iTunes, marketers should heavily promote and make familiar music, easy to find for purchase, and should not emphasize unfamiliar music. The researchers predict the success of Apps such as Spotify and Pandora, which offer newly released music that has many familiar elements, such as familiar artists, styles, and melodies.

The authors believe that this familiarity story would play a powerful role in other artistic categories other than music, such as the entertainment, food and the visual arts. Many popular movies include familiar actors and plots, and same goes for popular restaurants seeming to serve essentially the same food. The researchers point to people not needing stimulation in these types of product categories, as in music.

The Eagles, Rolling Stones, Cold Play and Taylor Swift may yet live on another century. — 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.

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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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.

“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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For more SMU research see 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, 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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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

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.

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

“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.

SMU is a private university in Dallas where nearly 11,000 students benefit from the national opportunities and international reach of SMU’s seven degree-granting schools. For more information see www.smuresearch.com. Follow SMU Research on Twitter, @smuresearch.

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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Post-Gazette: Bearing an eternal summer: Marketers target people’s mind-set, not age

The research of Thomas E. Barry, vice president for executive affairs at SMU and professor of marketing in the Edwin L. Cox School of Business, was featured in the Pittsburgh Post-Gazette. The Oct. 14 feature story “Marketers target people’s mind-set, not age” by journalist Teresa F. Lindeman explores the concept “you’re as old as you feel.”

Barry and a colleague studied college-educated Japanese 55 years old and above and found those who were psychologically younger had more positive attitudes toward life satisfaction and aging than those whose “cognitive ages” were older.

Read the full story.

EXCERPT:

By Teresa F. Lindeman
Pittsburgh Post-Gazette

A hot red Chevy pulls up to a house, and a graying man climbs out. He knocks on the door, only to be greeted by a suspicious younger man. A white-haired woman, the younger guy’s mother, comes out smiling eagerly, and the couple rush to the car. For just a moment there’s a glimpse of them as attractive, young adults. “Just drive,” she urges her date.

The TV commercial illustrates the marketer’s challenge in a country packed with maturing adults. Just because people look one way on the outside — or their driver’s license says they’ve passed the half-century mark — that may not be how they see themselves.

Not to be trite, but “you’re as old as you feel,” according to Thomas E. Barry, vice president for executive affairs and professor of marketing at Southern Methodist University in Dallas.

He’s got the research to back that up.

Mr. Barry and a colleague from Florida Gulf Coast University studied college-educated Japanese 55 years old and above. They found those who were psychologically younger had more positive attitudes toward life satisfaction and aging than those whose “cognitive ages” were older.

Four factors went into determining a person’s cognitive age: health and how people feel; what chronological age they look; how engaged they are socially; and their interests and hobbies.

“Because somebody is 65 doesn’t mean you market to them as if they are,” Mr. Barry said. “They may cognitively be 50 or 55.”

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 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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Salon: What baseball tells us about racism

Best-selling author, syndicated columnist and progressive talk-radio host David Sirota has covered the research of SMU’s Dr. Johan Sulaeman, an expert in labor economics and discrimination. The article published in the Sept. 30 issue of Salon. Other places it published include Truthout, Denver Post, Nation of Change and Tahoe Daily Tribune.

The Sirota article was also picked up and a shortened version published in the Chicago Tribune, “Study: Umpires are definitely not blind.”

An assistant professor of finance in the Cox School of Business, Sulaeman and his co-authors analyzed 3.5 million Major League Baseball pitches and found that racial/ethnic bias by home plate umpires lowers the performance of Major League’s minority pitchers, diminishing their pay compared to white pitchers.

The study found that minority pitchers reacted to umpire bias by playing it safe with the pitches they throw in a way that actually harmed their performance.

Read the full article in Salon.

EXCERPT:

By David Sirota
Salon

Despite recent odes to “post-racial” sensibilities, persistent racial wage and unemployment gaps show that prejudice is alive and well in America. Nonetheless, that truism is often angrily denied or willfully ignored in our society, in part, because prejudice is so much more difficult to recognize on a day-to-day basis. As opposed to the Jim Crow era of white hoods and lynch mobs, 21st century American bigotry is now more often an unseen crime of the subtle and the reflexive — and the crime scene tends to be the shadowy nuances of hiring decisions, performance evaluations and plausible deniability.

Thankfully, though, we now have baseball to help shine a light on the problem so that everyone can see it for what it really is.

Today, Major League Baseball games using QuesTec’s computerized pitch-monitoring system are the most statistically quantifiable workplaces in America. Match up QuesTec’s accumulated data with demographic information about who is pitching and who is calling balls and strikes, and you get the indisputable proof of how ethnicity does indeed play a part in discretionary decisions of those in power positions.

This is exactly what Southern Methodist University’s researchers did when they examined more than 3.5 million pitches from 2004 to 2008. Their findings say as much about the enduring relationship between sports and bigotry as they do about the synaptic nature of racism in all of American society.

First and foremost, SMU found that home-plate umpires call disproportionately more strikes for pitchers in their same ethnic group. Because most home-plate umpires are white, this has been a big form of racial privilege for white pitchers, who researchers show are, on average, getting disproportionately more of the benefit of the doubt on close calls.

Second, SMU researchers found that “minority pitchers reacted to umpire bias by playing it safe with the pitches they threw in a way that actually harmed their performance and statistics.” Basically, these hurlers adjusted to the white umpires’ artificially narrower strike zone by throwing pitches down the heart of the plate, where they were easier for batters to hit.

Finally, and perhaps most importantly, the data suggest that racial bias is probably operating at a subconscious level, where the umpire doesn’t even recognize it.

To document this, SMU compared the percentage of strikes called in QuesTec-equipped ballparks versus non-QuesTec parks. Researchers found that umpires’ racial biases diminished when they knew they were being monitored by the computer.

Read the full article in Salon.

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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In These Times: How Baseball Explains Modern Racism

Best-selling author, syndicated columnist and progressive talk-radio host David Sirota has covered the research of SMU’s Dr. Johan Sulaeman, an expert in labor economics and discrimination. The article published in the Sept. 30 issue of In These Times.

An assistant professor of finance in the Cox School of Business, Sulaeman and his co-authors analyzed 3.5 million Major League Baseball pitches and found that racial/ethnic bias by home plate umpires lowers the performance of Major League’s minority pitchers, diminishing their pay compared to white pitchers.

The study found that minority pitchers reacted to umpire bias by playing it safe with the pitches they throw in a way that actually harmed their performance.

Read the full article at In These Times.

EXCERPT:

By David Sirota
In These Times

Despite recent odes to “post-racial” sensibilities, persistent racial wage and unemployment gaps show that prejudice is alive and well in America. Nonetheless, that truism is often angrily denied or willfully ignored in our society, in part, because prejudice is so much more difficult to recognize on a day-to-day basis. As opposed to the Jim Crow era of white hoods and lynch mobs, 21st century American bigotry is now more often an unseen crime of the subtle and the reflexive???and the crime scene tends to be the shadowy nuances of hiring decisions, performance evaluations and plausible deniability.

Thankfully, though, we now have baseball to help shine a light on the problem so that everyone can see it for what it really is.

Today, Major League Baseball games using QuesTec’s computerized pitch-monitoring system are the most statistically quantifiable workplaces in America. Match up QuesTec’s accumulated data with demographic information about who is pitching and who is calling balls and strikes, and you get the indisputable proof of how ethnicity does indeed play a part in discretionary decisions of those in power positions.

This is exactly what Southern Methodist University’s researchers did when they examined more than 3.5 million pitches from 2004 to 2008. Their findings say as much about the enduring relationship between sports and bigotry as they do about the synaptic nature of racism in all of American society.

First and foremost, SMU found that home-plate umpires call disproportionately more strikes for pitchers in their same ethnic group. Because most home-plate umpires are white, this has been a big form of racial privilege for white pitchers, who researchers show are, on average, getting disproportionately more of the benefit of the doubt on close calls.

Second, SMU researchers found that “minority pitchers reacted to umpire bias by playing it safe with the pitches they threw in a way that actually harmed their performance and statistics.” Basically, these hurlers adjusted to the white umpires’ artificially narrower strike zone by throwing pitches down the heart of the plate, where they were easier for batters to hit.

Finally, and perhaps most importantly, the data suggest that racial bias is probably operating at a subconscious level, where the umpire doesn’t even recognize it.

To document this, SMU compared the percentage of strikes called in QuesTec-equipped ballparks versus non-QuesTec parks. Researchers found that umpires’ racial biases diminished when they knew they were being monitored by the computer.

Read the full article at In These Times.

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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Dallas Morning News: Economic Freedom is Waning in the United States

Dallas Morning News editorial writer Jim Mitchell has written about the research of SMU economist Robert Lawson, co-author on the new report Economic Freedom of the World: 2011 Annual Report.

Lawson is the Jerome M. Fullinwider Chair in Economic Freedom in the O’Neil Center for Global Markets and Freedom at the SMU Cox School of Business.

Lawson has co-authored the widely-cited Economic Freedom of the World annual report for 20 years. The report provides an economic freedom index for over 140 countries. He helped found and still blogs periodically for www.divisionoflabour.com.

He and his co-researchers penned a commentary for The Huffington Post, “Economic Freedom of the World: Lessons for the U.S..”

DMN subscribers can see the editorial.

EXCERPT:

By Jim Mitchell
Dallas Morning News

So what nation has the greatest economic freedom? Surely it must be the United States, the land of capitalism and rugged individualism?

Well it isn’t, according to a study by SMU researcher Robert Lawson and co-authors of Economic Freedom of the World Index. Key measurements of economic freedom include Size of Government: Expenditures, Taxes, and Enterprises; Legal Structure and Security of Property Rights; Access to Sound Money; Freedom to Trade Internationally; and Regulation of Credit, Labor, and Business.

By this framework, Hong Kong tops the list, for the highest rating for economic freedom, followed in order by Singapore; New Zealand; Switzerland; Australia; Canada; Chile; United Kingdom; Mauritius; and the United States. In fact in the last 10 years, the report notes, the world’s largest economy, the United States, has suffered one of the largest declines in economic freedom due mostly to higher government spending and borrowing and lower scores for the legal structure and property rights components.

And why is this important? According to the report:

  • nations in the top quartile of economic freedom had an average per-capita GDP of $31,501 in 2009, compared to $4,545 for those nations in the bottom quartile, in constant 2005 international dollars.
  • nations in the top quartile of economic freedom had an average growth in per-capita GDP between 1990 and 2009 of 3.07%, compared to 1.18% for those nations in the bottom quartile, in constant 2005 international dollars.
  • In the top quartile, the average income of the poorest 10% of the population was $8,735, compared to $1,061 for those in the bottom quartile, and the average income of the poorest 10 percent in the top quartile is almost double the overall income per capita in the bottom quartile ($4,5459) and the poorest people in the most economically free countries are nearly twice as rich as the average people in the least free countries.

DMN subscribers can see the editorial.

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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Report: U.S. Economic Freedom Continues Fall; Global Average Declines

Levels of economic freedom have decreased around the globe, according to a new report released today by the Fraser Institute, Canada’s leading public policy think-tank.

Economic Freedom of the World: 2011 Annual Report shows that the average economic freedom score fell to 6.64 in 2009, the lowest in nearly three decades, from 6.67 in 2008.

The United States in particular dropped from No. 6 to No. 10 in the ranking.

“The big news this year is that economic freedom in the United States continues to fall,” said SMU economist Robert A. Lawson, an author on the research who has helped compile the annual report since 1997. “For the last decade the United States’ rating has been falling. On our 0-to-10 scale, the U.S. rating has fallen by about a point. This is a big change. In fact for the first time ever Canada ranks higher than the United States.”

The global average also is falling, Lawson said. For the past two years it’s fallen after rising for the last 20 to 30 years, he said.

“This is really important because all of the research that we have done and that others have done tells us one thing: Economic freedom really matters,” Lawson said.

To do well on the index, a country’s taxes must be low, regulations moderate, property rights secure and money sound, with free trade domestically and abroad.

“In response to the American and European debt crises, governments around the world are embracing perverse regulations and this has huge, negative implications for economic freedom and financial recovery,” said Fred McMahon, Fraser Institute vice-president of international policy research.

Hong Kong again ranked number one for economic freedom, followed by Singapore and New Zealand, Switzerland, and Australia.

The United States experienced one of the largest drops in economic freedom, falling to 10th place overall from sixth in 2010. Much of this decline is a result of higher spending and borrowing on the part of the U.S. government, and lower scores for legal structure and property rights, the authors said.

Zimbabwe once again received the worst score among the 141 jurisdictions included in the study, followed by Myanmar, Venezuela and Angola.

“The link between economic freedom and prosperity is undeniable: the countries that score highly in terms of economic freedom also offer their people the best quality of life,” McMahon said.

“The political uprisings sweeping across the Arab World are the result of people wanting the outcomes of economic freedom — prosperity, job growth, political freedoms and poverty reduction,” he said.

The annual peer-reviewed Economic Freedom of the World report is produced by the Fraser Institute, Canada’s leading public policy think-tank, in cooperation with independent institutes in 85 nations and territories.

In addition to Lawson, other authors are James Gwartney, Gus A. Stavros Eminent Scholar Chair at Florida State University; and Joshua Hall, Beloit College.

The report uses 42 different measures to create an index ranking of 141 countries around the world based on policies that encourage economic freedom. The cornerstones of economic freedom are personal choice, voluntary exchange, freedom to compete and security of private property. Economic freedom is measured in five different areas: (1) size of government, (2) legal structure and security of property rights, (3) access to sound money, (4) freedom to trade internationally, and (5) regulation of credit, labor and business.

Research shows that individuals living in countries with high levels of economic freedom enjoy higher levels of prosperity, greater individual freedoms and longer life spans.

International Rankings
Hong Kong offers the highest level of economic freedom worldwide, with a score of 9.01 out of 10. The other top scorers are Singapore (8.68), New Zealand (8.20), Switzerland (8.03), Australia (7.98), Canada (7.81), Chile (7.77), the United Kingdom (7.71), Mauritius (7.67) and the United States (7.60).

The rankings and scores of other large economies include: Germany, 21st (7.45); Japan, 22nd (7.44); France, 42nd (7.16); Italy, 70th (6.81); Mexico, 75th (6.74); Russia, 81st (6.55); China, 92nd (6.43); India, 94th (6.40); and Brazil, 102nd (6.19).

Zimbabwe maintains the lowest level of economic freedom among the 141 jurisdictions measured. Myanmar, Venezuela, Angola and Democratic Republic of Congo round out the bottom five nations.

Several countries have substantially increased their economic freedom scores since 1990. Uganda saw the biggest improvement, climbing to 7.10 this year from 3.00 in 1990, followed by Zambia, which rose to 7.35 from 3.52; Nicaragua, which jumped to 6.76 from 2.96; Albania, which climbed to 7.54 from 4.24; and Peru, which increased to 7.29 from 4.13.

Over the same period, economic freedom has steadily regressed in Venezuela, whose score fell to 4.23 from 5.45; Zimbabwe, which dropped to 4.06 from 5.05; the United States, which slipped to 7.58 from 8.43; and Malaysia, which fell to 6.68 from 7.49.
The report notes that among the highest-ranked countries, the average income of the poorest 10 per cent of people was $8,735 (in constant 2005 international dollars), compared to a meagre $1,061 for those living in the least economically free countries.

On average, the poorest 10 per cent of people in the most economically free countries are nearly twice as rich as the average population of the least economically free nations.

About the Economic Freedom Index
Economic Freedom of the World measures the degree to which the policies and institutions of countries are supportive of economic freedom.

This year’s publication ranks 141 nations representing 95 percent of the world’s population for 2009, the most recent year for which data is available. The report also updates data in earlier reports in instances where data have been revised.

For more information on the Economic Freedom Network, data sets, and previous Economic Freedom of the World reports, visit www.freetheworld.com

SMU’s Lawson is in the Cox School of Business as the Jerome M. Fullinwider Chair in Economic Freedom, O’Neil Center for Global Markets and Freedom. — Fraser Institute and Southern Methodist University.

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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David Sirota Talk Radio: MLB white favoritism lowers minority pitching performance

Best-selling author and progressive talk-radio host David Sirota interviewed SMU’s Dr. Johan Sulaeman, an expert in labor economics and discrimination.

An assistant professor of finance in the Cox School of Business, Sulaeman and his co-authors analyzed 3.5 million Major League Baseball pitches and found that racial/ethnic bias by home plate umpires lowers the performance of Major League’s minority pitchers, diminishing their pay compared to white pitchers.

The study found that minority pitchers reacted to umpire bias by playing it safe with the pitches they throw in a way that actually harmed their performance.

Listen to the full interview.

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White favoritism by Major League umps lowers minority pitcher performance, pay

Findings important when measuring the extent of wage discrimination not only in baseball, but also in broader labor market

When it comes to Major League Baseball’s pitchers, the more strikes, the better. But what if white umpires call strikes more often for white pitchers than for minority pitchers?

New research findings provide an answer. Analysis of 3.5 million pitches from 2004 to 2008 found that minority pitchers scale back their performance to overcome racial/ethnic favoritism toward whites by MLB home plate umpires, said Johan Sulaeman, a financial economist at Southern Methodist University in Dallas and a study author.

The study found that minority pitchers reacted to umpire bias by playing it safe with the pitches they throw in a way that actually harmed their performance and statistics, said Sulaeman, a labor and discrimination expert.

Specifically, minority pitchers limited the umpires’ discretion to call their pitch a “ball” by throwing squarely across the plate in the strike zone more often. Unfortunately for the pitcher, such throws are also easier for batters to hit.

The finding builds on an earlier study that discovered Major League Baseball’s home plate umpires called strikes more often for pitchers in their same ethnic group — except when the plate was electronically monitored by cameras, Sulaeman said.

While the earlier finding surprised the researchers, they said, the latest results are even more surprising.

Since most MLB umpires are white, the overall effect is that umpire bias pushes performance measures of minorities downward, said Sulaeman, an expert in labor economics and discrimination.

The findings have important implications for measuring the extent of discrimination not only in baseball, but also in labor markets generally, say the authors.

“In MLB, as in so many other fields of endeavor, power belongs disproportionately to members of the majority — white — group,” the authors write.

Findings draw on analysis of pitching in QuesTec-monitored parks
Sulaeman and his co-authors analyzed 3.5 million pitches by Major League Baseball pitchers from 2004 to 2008. All parks are now monitored, but during those four years about one-third of major league ballparks were monitored with computers and cameras to check the accuracy of the umpires’ ball and strike calls.

Four cameras tracked and recorded the location of each pitch, with umpires and pitchers aware that QuesTec was the primary mechanism for gauging umpire performance. MLB considers an ump’s performance sub-standard if more than 10 percent of his calls differ from QuesTec.

Of the 3.5 million pitches, umpire and pitcher were the same race — usually white — for about two-thirds of the 1.89 million pitches that were called strikes or balls. About 89 percent of umpires and 70 percent of pitchers were white.

The researchers looked not only at the race of umpires, pitchers and batters, but also: effects for each pitcher, umpire and batter; presence or absence of QuesTec; importance of the at-bat; when the pitch would terminate the at-bat; whether the pitch came early or later in the game; importance of the game; racial demographics of the neighborhood around the park; umpire age and experience; pitch characteristics, including horizontal pitch distance and pitch height; and whether the throw was a fastball, curveball, slider or cutter.

The study controlled for inning, pitch count, pitcher score advantage and whether the pitcher was playing at home or visiting.

The study, “Strike Three: Discrimination, Incentives, and Evaluation,” is published in the current issue of the scholarly journal The American Economic Review.

In addition to Sulaeman, co-authors were Christopher A. Parsons, University of North Carolina at Chapel Hill; Michael C. Yates, Auburn University; and Daniel S. Hamermesh, University of Texas at Austin.

Findings: Minimal direct impact, but significant indirect influence
The researchers found:

  • In non-monitored parks, the percentage of called pitches that are strikes is higher when the race of both umpire and pitcher match than when it does not. This is true not only of whites, but also Hispanics and blacks.
  • In QuesTec parks, if the race of the pitcher and umpire match, the likelihood that a called pitch is ruled a strike is reduced by more than one percentage point relative to the same setup in non-QuesTec parks. This implies umpires implicitly allow their apparent favoritism to be expressed when not being monitored, the study authors say.
  • Implicit monitoring — for example, an important pitch viewed by a big crowd — also dramatically alters umpire behavior. On the other hand, white and minority umpires at poorly attended games appear to favor pitchers of the same race by calling more strikes.
  • Umpires favor pitchers of the same race only when the pitch won’t terminate the batter’s plate appearance.
  • Little evidence was found to indicate the umpire is influenced by the race of either the batter or the catcher.
  • A higher strike percentage showed umpires exhibited same-race favoritism in non-QuesTec parks. A lower strike percentage indicated negative bias toward pitchers of different races in QuesTec parks.
  • There is some weak evidence that bias is more likely among younger and less experienced umpires.
  • Favoritism was a significant factor for pitches thrown to the edge of the strike zone — where umpires have the most discretion — but not for pitches inside or outside the strike zone. In QuesTec parks, the umpire and pitcher having the same race has virtually no effect on pitch location. In non-QuesTec parks, pitches to the edges significantly increase when umpire and pitcher share the same race. The finding suggests pitchers gamble on the fact that this region can reasonably be called as either balls or strikes and therefore offers them an advantage.
  • In QuesTec parks, matched race is associated with a slight preference for hard-to-hit and hard-to-call curveball pitches. In non-QuesTec parks, that preference quadruples.

The researchers concluded:

  • The direct effects on pitch outcomes are small. The indirect effect on players’ strategies may have larger impacts on the outcomes of plate appearances and games.
  • From the starting pitcher’s perspective, a racial match with the umpire helped his statistics by yielding fewer earned runs, fewer hits and fewer home runs.
  • Because the majority of umpires are white, teams with minority pitchers have a distinct disadvantage in non-monitored parks.
  • There is no evidence that visiting managers adjusted their pitching lineups to minimize exposure of their minority pitchers to the subjective bias of a white umpire.
  • In parks without QuesTec, pitchers of the same race threw pitches that allowed umpires the most discretion, apparently to maximize their advantage stemming from the umpires’ favoritism.
  • A batter who swings is less likely to get a hit when the umpire and pitcher match.
  • Applying the effects of favoritism, and given that the average salary of starting pitchers in MLB was $4.8 million in 2006, the findings suggest minority pitchers were underpaid relative to white pitchers by between $50,000 and $400,000 a year.

“If a pitcher expects favoritism, he will incorporate this advantage into his strategy, perhaps throwing pitches that allow the umpire more discretion,” the authors write. “If the batter expects such pitches to be called strikes, he is forced to swing at worse pitches, which reduces the likelihood of getting a hit.”

Not just Major League Baseball; a factor in all work environments
How many minority pitchers have had their pitching records diminished by this phenomenon is impossible to say, Sulaeman said, adding that one can only guess at the impact over decades of professional baseball. But discovery of the indirect effect of racial bias in MLB pointedly demonstrates how discrimination alters the behavior of a discriminated group, say the authors.

In any workplace where pay is based on measured productivity, the findings of small direct and larger indirect effects of favoritism and negative bias have important implications for measuring the extent of wage discrimination not only in baseball, but also in labor markets generally, say the authors.

Supervisory racial bias must be accounted for when generating measures of wage discrimination, the authors conclude.

The researchers’ earlier analysis of the data found that ethnic bias is virtually eliminated when an umpire knows his calls are being monitored with video cameras to check for accuracy.

“The good news is that all ballparks are now equipped with this technology, likely eliminating this subconscious bias,” said Sulaeman, assistant professor of finance in SMU’s Cox School.

Monitoring suppresses bias when evaluators are observed for bias
That isn’t the case, however, in other workplaces, where monitoring is not the norm, he said. As a result, supervisors have ample opportunity to subconsciously evaluate those of a different race more negatively, he said. Supervisors may be less prone to this subconscious bias if they know they are being monitored.

“When their decisions matter more, and when evaluators are themselves more likely to be evaluated by others, our results suggest that these preferences no longer manifest themselves,” the authors say. — 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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Culture, Society & Family Learning & Education Mind & Brain Researcher news SMU In The News

US News & World Report: Advertising Can Warp Your Memory

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Science writer Chris Gorski has covered the research of Priyali Rajagopal, an assistant professor of marketing in Cox School of Business.

Priyali and Nicole Montgomery, an assistant professor of marketing at College of William and Mary have reported findings in which people who read vivid print advertisements for fictitious products actually come to believe they’ve tried those products.

Gorski’s coverage appeared in an online report distributed by the Inside Science News Service and published by U.S. News & World Report.

The scientific paper “I Imagine, I Experience, I Like: The False Experience Effect” appears in the October 2011 issue of the Journal of Consumer Research.

In it, Priyali and Montgomery explain how exposing consumers to imagery-evoking advertising increases the likelihood that a consumer mistakenly believes he or she has experienced the advertised product, and subsequently produces attitudes that are as strong as attitudes based on genuine product experience.

Read the U.S. News & World Report article.

EXCERPT:

Chris Gorski
U.S. News & World Report

“Advertising is everywhere people look. It’s along the highway, in storefronts, and online. It can be funny or poignant; it can be annoying. New research shows it can also encourage people to recall things that never happened to them.

Nicole Votolato Montgomery, an assistant professor of marketing at the College of William & Mary in Williamsburg, Va., and Priyali Rajagopal, an assistant professor of marketing at Southern Methodist University, in Dallas, Texas, developed an experiment to test the effects of advertisements on memory. They asked people to read a very descriptive print advertisement detailing the taste of a fictional popcorn product made by a familiar brand name, then asked a portion of the subjects to taste popcorn labeled with the fictional name. A week later, those who merely read the detailed advertisement were just as likely to report eating this popcorn as people who actually ate it.

People who read an advertisement with less vivid imagery were far less likely to report eating the popcorn. “What we found is that if consumers falsely believe they have experienced this advertised brand, their evaluations of that product are similar to evaluations of products that they actually experienced. That is a fairly unique finding,” said Montgomery. “Humans are a lot more inaccurate than we think we are,” said Michael Nash, a professor of psychology at the University of Tennessee-Knoxville. He said that the phenomenon of false memories is well-known in psychology, and that he found it interesting that the research extends the concept to marketing.

Read the U.S. News & World Report article.

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Culture, Society & Family Learning & Education Mind & Brain Researcher news SMU In The News

Scientific American: Ads Convince Consumers of Nonexistent Experiences

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Science writer Christopher Intagliata has covered the research of Priyali Rajagopal, an assistant professor of marketing in Cox School of Business.

Priyali and Nicole Montgomery, an assistant professor of marketing at College of William and Mary have reported findings in which people who read vivid print advertisements for fictitious products actually come to believe they’ve tried those products.

Intagliata’s coverage appeared in an online report May 10 in the Scientific American feature “60-second science.”

The scientific paper “I Imagine, I Experience, I Like: The False Experience Effect” appears in the October 2011 issue of the Journal of Consumer Research.

In it, Priyali and Montgomery explain how exposing consumers to imagery-evoking advertising increases the likelihood that a consumer mistakenly believes he or she has experienced the advertised product, and subsequently produces attitudes that are as strong as attitudes based on genuine product experience.

Read the Scientific American story or listen to the podcast.

EXCERPT:

Christopher Intagliata
Scientific American

One way advertisers convince us to buy something is to remind us that we’ve enjoyed their product before. Unfortunately, we can have fond memories of a product that we’ve never even had. Or that doesn’t even exist.

A hundred volunteers looked at print ads for Orville Redenbacher’s “Gourmet Fresh” popcorn — a variety that researchers made up. Some subjects saw an ad with a vivid description of the brand’s “big white fluffy kernels.” Others saw a less evocative ad.

A week later, subjects who saw the vivid ad were twice as likely to believe they’d tried this fictional product as were subjects who saw the plain ad. In fact, the believers were as confident that they had tried the popcorn as were people who actually ate popcorn after seeing the fake ads. The study is in the Journal of Consumer Research.

[Priyali Rajagopal and Nicole Votolato Montgomery, “Imagine, Experience, Like: The False Experience Effect”]
Read the Scientific American story or listen to the podcast.

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Culture, Society & Family Economics & Statistics Learning & Education Mind & Brain

Faking It: Vivid print ads create false memories of trying nonexistent product

People who read vivid print advertisements for fictitious products actually come to believe they’ve tried those products, according to a new study by SMU’s Priyali Rajagopal in the Journal of Consumer Research.

“Exposing consumers to imagery-evoking advertising increases the likelihood that a consumer mistakenly believes he/she has experienced the advertised product, and subsequently produces attitudes that are as strong as attitudes based on genuine product experience,” write authors Rajagopal, an assistant professor of marketing in Cox School of Business, and Nicole Montgomery, an assistant professor of marketing at College of William and Mary.

They report their findings in the scientific paper “I Imagine, I Experience, I Like: The False Experience Effect” in the October 2011 issue.

In one study, the researchers showed participants different types of ads for a fictitious product: Orville Redenbacher’s Gourmet Fresh microwave popcorn. Other participants ate what they believed to be Orville Redenbacher’s Gourmet Fresh microwave popcorn, even though it was another Redenbacher product. One week after the study, all the participants were asked to report their attitudes toward the product and how confident they were in their attitudes.

“Students who saw the low imagery ad that described the attributes of the popcorn were unlikely to report having tried the popcorn, and they exhibited less favorable and less confident attitudes toward the popcorn than the other students,” the authors write.

People who had seen the high imagery ads were just as likely as participants who actually ate the popcorn to report that they had tried the product. They were also as confident in their memories of trying the product as participants who actually sampled it.

“This suggests that viewing the vivid advertisement created a false memory of eating the popcorn, despite the fact that trying the fictitious product would have been impossible,” the authors write.

The authors found that decreasing brand familiarity and shortening the time between viewing the ad and reporting evaluations reduced the false memories in participants.

For example, when the fictitious brand was Pop Joy’s Gourmet Fresh instead of the more familiar Orville Redenbacher’s, participants were less likely to report false memories of trying it.

“Consumers need to be vigilant while processing high-imagery advertisements because vivid ads can create false memories of product experience,” the authors conclude. — by University of Chicago

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Events Researcher news

SMU rises in Carnegie Foundation research classification to ‘high research activity’

The Carnegie Foundation for the Advancement of Teaching has raised SMU’s classification among institutions of higher education, reflecting dramatic growth in the University’s research activity since it was last measured in 2005.

SMU is now categorized as a research university with “high research activity,” a significant step up from its last assessment in 2005 as a doctoral/research university. The Carnegie Foundation assigns doctorate-granting institutions to categories based on a measure of research activity occurring at a particular period in time, basing these latest classifications on data from 2008-2009.

“SMU’s rise in the Carnegie classification system is further evidence of the growing quality and research productivity of our faculty. We are building a community of scholars asking and answering important research questions and making an impact on societal issues with their findings,” said SMU President R. Gerald Turner. “In addition to our dedication to outstanding teaching, SMU is becoming increasingly recognized as a vital resource for research in a variety of fields.”

Increased research activity in step with other SMU advances
“The designation of SMU as a ‘high research activity’ university by the Carnegie Foundation is an important step in SMU’s evolution as a strong national university,” said Paul Ludden, provost and vice president for academic affairs. “The faculty, staff, and students at SMU can be proud of this, particularly when paired with our rise in national rankings. The Carnegie Classification recognizes the tremendous efforts by the entire faculty at SMU to expand our research portfolio and address the many questions facing North Texas and the world. Recognition should go to Associate Vice President for Research James Quick and his office for their efforts to support the research activities of our faculty and staff.”

The foundation’s assessment of SMU’s increased research activity occurs as the University is making dramatic advances in other measures of academic progress: U.S. News and World Report magazine gave SMU its highest ranking ever for 2011, placing SMU 56th among 260 “best national universities” — up from 68th in 2010.

Additionally, SMU’s Cox School of Business is one of only a few schools in the nation to have all three of its MBA programs ranked among the top 15, according to Bloomberg Businessweek. Applications to SMU continue to rise, as have average SAT scores for admitted students.

Carnegie finds SMU research activity recorded an increase
The Carnegie Foundation analyzed SMU’s research activity in a category of universities that awarded at least 20 research doctorates in 2008-2009, excluding professional degrees such as those leading to the practice of medicine and law. The analysis examined research and development expenditures in science and engineering as well as in non-science and non-engineering fields; science and engineering research staff (postdoctoral appointees and other non-faculty research staff with doctorates); doctoral conferrals in the humanities, in the social sciences, in STEM (science, technology, engineering, and mathematics) fields, and in other areas such as, business, education, public policy and social work.

The Carnegie Foundation classification of U.S. accredited colleges and universities uses nationally available data from the U.S. Office of Postsecondary Education, the National Center for Education Statistics’ Integrated Postsecondary Education Data System (IPEDS), the National Science Foundation, and the College Board.

“SMU’s rise in academic rankings and research productivity is a strong return on the investment of our alumni and other donors who provide support for research, endowed chairs, and graduate programs and fellowships,” said SMU Board of Trustees Chair Caren Prothro. “SMU students at all levels are the beneficiaries of this distinction as their faculty enliven the classroom with their research and engage students in the tradition of academic inquiry.”

About the Carnegie Foundation for the Advancement of Teaching
Founded by industrialist Andrew Carnegie in 1905 and chartered the following year by an Act of Congress, the Carnegie Foundation for the Advancement of Teaching is an independent policy and research center. Its current mission is to support needed transformations in American education. — Kim Cobb

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Mind & Brain

Study: Taboo prejudices can’t hide from psychological testing tool

People don’t like to admit if they are prejudiced, whether it’s against blacks or gays, women or Jews, or the elderly.

But researchers of social psychology have tests that can measure conscious or unconscious bias, and one of them is the “Implicit Association Test.” Developed in 1998, the test asks implicit questions — as opposed to explicit — to expose bias on socially sensitive topics. Worldwide, various IAT versions have been used in more than 1,000 studies over the years. The test’s most controversial finding has been that 70 percent of people tested for their racial attitudes unconsciously preferred white people to black people, but only 20 percent reported such an attitude.

What researchers hadn’t determined up until now is how reliable IATs have been at predicting behavior related to these taboo prejudices. Now they know.

Poehlman%2CAndrew.jpg In the first study of its kind, publishing in the “Journal of Personality and Social Psychology,” an SMU researcher and others validated the IAT’s ability to predict behavior around socially sensitive topics, particularly race. The study aggregated the findings of 184 different IAT research studies, which tested 14,900 subjects, and found the predictive validity of self-report measures was remarkably low, while incremental validity of IAT measures — how much it can predict behavior over-and-above explicit measures — was relatively high.

“Within behavioral research, we humans have attitudes and feelings and beliefs that we’re not willing or able to report on, or understand ourselves,” says T. Andrew Poehlman, one of the study’s four authors and an assistant professor at SMU. “This research shows that when you aggregate across many studies, it seems that non-conscious attitudes influence the way people behave in a systematic and important way. When you have attitude domains in which people are unable to accurately report on how they feel, then using a test like this can get around some of the touchier attitudes some subjects may have.”

Confirming the IAT’s predictive validity has ramifications for emerging interest in administering the IAT for applications in law, policy and business.

For example, one finding from IAT research is that most Americans associate men — more than women — with math. But most people won’t self-report that belief, either because they consider it unacceptable or they’re unaware of their bias. Also, IAT research has shown a majority of people prefer young people to old people, and white people to black people.

IAT presents concepts to subjects via computer and asks them to categorize them. Measuring the speed at which subjects respond, enables researchers to assess attitudes.

“The reality is, we hold a lot of these undesirable attitudes whether we like them or not,” says Poehlman in SMU’s Cox School of Business. “Since it’s impossible for people to empty the contents of their mental container onto the table — because most of what we’ve got in our brain is unconscious — the IAT has proven to be a good measure of attitudes, and we can use it as a predictor of how people will behave.”

Greenwald%2C%20Anthony%2007.JPG Lead author of the study was Anthony Greenwald, psychology professor and adjunct professor of marketing and international business at the University of Washington. Besides Poehlman, other authors are Eric Uhlmann, Northwestern University; and Mahzarin Banaji, Harvard University.

Greenwald created the IAT, then Banaji and Brian Nosek, a University of Virginia associate professor of psychology, developed it further.

More than 10 million versions of the test have been completed via the Internet site https://implicit.harvard.edu, as a self-administer demonstration, according to the University of Washington.

Anthony Greenwald

“In situations where people can easily report on their preferences because they are either willing or able, then explicit measures do a fine job,” Poehlman says. “But when we get to sticky things that people may not know they think, such as emerging preferences, racism, etc., or things that they know they think, but just don’t want to say, such as ‘women are bad at math,’ then the IAT is pretty useful.”

Studies reviewed for the analysis covered: black-white interracial behavior, non-racial intergroup behavior, gender and sexual orientation, consumer preference, political preference, personality differences, alcohol and drug use, close relationships and clinical phenomena.

Findings showed that:

  • Across all nine areas, measures of the test were useful in predicting social behavior.
  • For consumer and political preferences, both measures effectively predicted behavior, but self-reporting had significantly greater predictive value.
  • For samples with criterion measures involving black-white interracial behavior, predictive validity of IAT measures significantly exceeded that of self-report measures.

“The Implicit Association Test is controversial because many people believe that racial bias is largely a thing of the past,” Greenwald says.”The test’s finding of a widespread automatic form of race preference violates people’s image of tolerance and is hard for them to accept. When you are unaware of attitudes or stereotypes, they can unintentionally affect your behavior. Awareness can help to overcome this unwanted influence.” — Margaret Allen (University of Washington contributed to this report)

Related links:
Online: Take the Implicit Association Test
“Journal of Personality” draft in press: Predictive validity of the IAT
UW News: Study supports validity of test that indicates widespread unconscious bias
Sciencewatch.com: Anthony Greenwald talks about the Implicit Association Test
Anthony Greenwald
SMU Cox School of Business

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Mind & Brain

Forget brainstorming, try brainwriting!

Given difficult business issues such as rapidly emerging technologies, shrinking budgets and growing global competition, generating creative solutions is imperative for organizations to survive and prosper.

However, the widely used process of brainstorming may not be nearly as effective as a technique called brainwriting, says Peter Heslin, an assistant professor of Management and Organization in SMU’s Cox School of Business.

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“The most widely adopted process for generating creative ideas within organizations is brainstorming,” said Heslin, who won the 2006 C. Jackson Grayson Endowed Faculty Innovation Award for excellence and creativity in teaching.

“Despite its immense popularity, when groups of people interact for the purpose of brainstorming, they significantly over-estimate their productivity and produce fewer unique ideas than nominal groups of people generating ideas alone.”

“When the stakes are high, group process innovations that enable even modest increases in the quality of ideas available for consideration could be of immense practical value,” Heslin says in an upcoming paper for the “Journal of Occupational and Organizational Psychology.”

Heslin says that a key challenge for managers and scholars is identifying how groups can be more productive in generating ideas.

In contrast to the oral sharing of ideas in groups during brainstorming, brainwriting involves a group of people silently writing and sharing their written ideas. Research has revealed that brainwriting yields superior idea generation than either non-sharing or nominal groups. Groups that contain people with diverse but overlapping knowledge and skills tend to be particularly creative, he says.

Related links:
Peter Heslin faculty page
Peter Heslin home page
Executive Summary: In need of new ideas? Try brainwriting
Cox School of Business

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Economics & Statistics Researcher news

Financial-market research nets Venkataraman cash prize

kvenkataraman.jpgKumar Venkataraman, in SMU’s Cox School of Business, has received an SMU 2008 Ford Research Fellowship.

Venkataraman’s research has influenced important policy debates on the structure of financial markets and has been cited by regulators with the Securities and Exchange Commission in the United States, as well as with the Financial Services Authority in Europe.

He specializes in market microstructure dynamics and applying sophisticated models to large databases of financial variables.

An associate professor in finance, Venkataraman’s work has been featured in industry publications such as “The CFA Digest.” It’s also been published in several books, including “The Handbook of World Stock, Derivatives and Commodities Exchanges.”

Venkataraman has published articles in “The Review of Accounting Studies,” “The Journal of Financial Economics,” and “The Journal of Financial and Quantitative Analysis.” He is an invited member of the National Bureau of Economic Research Working Group on Market Microstructure.

Established in 2002 through a $1 million pledge from Gerald Ford, chair of SMU’s Board of Trustees, the fellowships help the University retain and reward outstanding scholars. Each recipient receives a cash prize for research support during the year. The new Ford Fellows were honored by the SMU Board of Trustees at its May meeting.

Related links:
Kumar Venkataraman
2008 Ford Research Fellows named