Monday, October 30, 2017

People who experience a potentially hazardous near-miss but escape without apparent damage feel more optimistic & take less protective action

Near-miss events, risk messages, and decision making. Robin L. Dillon, and Catherine H. Tinsley. Environment Systems and Decisions, March 2016, Volume 36, Issue 1, pp 34–44, https://link.springer.com/article/10.1007/s10669-015-9578-x

Abstract: Decades of research have sought to understand how disaster preparedness decisions are made. We believe one understudied factor is the impact of near-miss events. A near-miss occurs when an event (such as a hurricane or terrorist attack) has some non-trivial probability of ending in disaster (loss of life, property damage), but the negative outcome is avoided largely by chance (e.g., at the last minute, the storm dissipates or the bomb fails to detonate). In the first of two experiments, we study reactions to a hurricane threat when participants are told about prior near-miss events. We find that people with information about a prior near-miss event that has no negative consequences are less likely to take protective measures than those with either no information or information about a prior near-miss event that has salient negative information. Similar results have been shown in prior research, but we seek to understand people’s reasoning for the different reactions. We examine the role of an individual’s risk propensity and general level of optimism as possible explanatory variables for the “near-miss” effect. We find risk propensity to be stable across conditions, whereas general optimism is influenced by the type of prior near-miss information, so that optimism mediates how near-miss information impacts protective decisions. People who experience a potentially hazardous near-miss but escape without obvious cues of damage will feel more optimistic and take less protective action. In the second study, we test messages about the hazard’s risk and examine the impact of these messages to offset the influence of near-misses. We end by discussing the implications of near-misses for risk communication.

Losing loss aversion -- Current evidence does not support that losses, on balance, tend to be any more impactful than gains

Gal, David and Rucker, Derek, The Loss of Loss Aversion: Will It Loom Larger Than Its Gain? (September 30, 2017). Journal of Consumer Psychology, Forthcoming. Available at SSRN: https://ssrn.com/abstract=3049660

Abstract: Loss aversion, the principle that losses loom larger than gains, is among the most widely accepted ideas in the social sciences. The first part of this article introduces and discusses the construct of loss aversion. The second part of this article reviews evidence in support of loss aversion. The upshot of this review is that current evidence does not support that losses, on balance, tend to be any more impactful than gains. The third part of this article aims to address the question of why acceptance of loss aversion as a general principle remains pervasive and persistent among social scientists, including consumer psychologists, despite evidence to the contrary. This analysis aims to connect the persistence of a belief in loss aversion to more general ideas about belief acceptance and persistence in science. The final part of the article discusses how a more contextualized perspective of the relative impact of losses versus gains can open new areas of inquiry that are squarely in the domain of consumer psychology.

Keywords: Loss Aversion, Sociology of Science
JEL Classification: A14, M31, D03, D81, D01, G02

Higher support for redistribution by individuals with high income & lower demand for redistribution by those with low income

Sabatini, Fabio and Ventura, Marco and Yamamura, Eiji and Zamparelli, Luca (2017): Fairness and the unselfish demand for redistribution by taxpayers and welfare recipients. Ludwig-Maximilians Universitaet Muenchen, https://mpra.ub.uni-muenchen.de/82081/

Abstract: We illustrate how the desire to live in a fair society that rewards individual effort and hard work triggers an unselfish though rational demand for redistribution. This leads the well off to prefer higher taxes and the poor to reject extreme progressivity. We then provide evidence of these behaviors using a nationally representative survey from Italy. Our empirical analysis confirms that a stronger aversion to unfair distributive outcomes is associated with a higher support for redistribution by individuals with high income and to a lower demand for redistribution by those with low income.

Keywords: fairness, income distribution, inequalities, taxation, Welfare, redistribution, free-riding, civic capital, social capital

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In this paper, we studied the interplay between sensitivity to fairness and the individual demand for redistribution. First, we theoretically illustrated how the desire to live in a fair society where people’s income depends on merit instead of luck can trigger an unselfish support for redistribution. An increase in the aversion to unfairness can lead the affluent to demand more redistribution even if they will bear its cost without sharing its benefits, and the poor to desire less redistribution thereby renouncing to the advantages related to higher social spending.

We then found evidence of this behavior in a representative sample of Italian taxpayers. The empirical analysis confirmed that an increase in the aversion to unfair allocations is associated with opposing attitudes towards redistribution depending on income. The size of the marginal effects is economically relevant and overcomes that of income. Of course we do not intend to establish any normative presumption equating fairness with support for big governments and high welfare spending. Rather, we show that beliefs about fairness can interact with income in determining the individual preferences for redistribution in ways that were not previously theorized and tested in the literature.

Even if we controlled for the bias of the estimates using the procedure proposed by Wooldridge (2002), we lack a clear identification mechanism standing from external information. This suggests caution in the interpretation of the coefficients. Nonetheless, the empirical evidence was shown to be fully compatible with our theoretical reasoning and also revealed interesting insights concerning, for example, the size of the influence exerted by the selfish and unselfish motives for desiring redistribution. These results have relevant policy implications, as the share of people declaring support for redistribution has been found to be a strong predictor of welfare spending and of the size of government (Alesina and Angeletos, 2005; Guiso et al. 2006).

Reminders of death would lead participants to inflate the size of self-representational objects

McCabe, S., Vail, K. E. and Arndt, J. (2017), The impact of death awareness on sizes of self-representational objects. Br. J. Soc. Psychol.. doi:10.1111/bjso.12227

Abstract: People seem to have a tendency to increase the relative size of self-representational objects. Prior research suggests that motivational factors may fuel that tendency, so the present research built from terror management theory to examine whether existential motivations – engendered by concerns about death – may have similar implications for self-relevant size biases. Specifically, across two studies (total N = 288), we hypothesized that reminders of death would lead participants to inflate the size of self-representational objects. Both studies suggested that relative to reminders of pain, mortality salience led participants to construct larger clay sculptures of themselves (vs. others; Study 1) and a larger ostensible video game avatar for the self (vs. others; Study 2).