Wednesday, May 22, 2019

Coverture’s demise in the US: Women’s rights led to shifts in household portfolios; a positive shock to credit supply; & a reallocation of labor towards non-agriculture & capital intensive industries, aiding industrialization

Women’s Liberation as a Financial Innovation. Moshe Hazan and David Weiss. October 23, 2018.

ABSTRACT: In one of the greatest extensions of property rights in human history, common law countries began giving rights to married women in the 1850s. Before this “women’s liberation,” the doctrine of coverture strongly incentivized parents of daughters to hold real estate, rather than financial assets such as money, stocks, or bonds. We exploit the staggered nature of coverture’s demise across US states to show that women’s rights led to shifts in household portfolios; a positive shock to the supply of credit; and a reallocation of labor towards non-agriculture and capital intensive industries. Investor protection deepened financial markets aiding industrialization.

Keywords: Women’s liberation, financial innovation, investor protection, economic growth.

 Property rights are at the heart of capitalism’s ability to efficiently allocate resources. Inone of the greatest extensions of property rights in human history, common law countriesbegan giving rights to married women in the second half of the19th century. Before this“women’s liberation,” married women were subject to the laws of coverture.1Coverturehad detailed regulations as to which spouse had ownership and control over various aspectsof property, both before and after marriage, and strongly incentivized women to hold realestate, rather than financial assets such as money, stocks, orbonds. This paper explores theeconomic ramifications of coverture’s demise, and the resultant expansion of investor pro-tection to women. We exploit the staggered nature of coverture’s demise across the United States to show that these rights had a large impact on household portfolios, credit markets, and labor allocations.

Under coverture, property was divided into two types. Moveable property (also referredto as “personal property”), including money, stocks, bonds, furniture, and livestock, became the husband’s property entirely upon marriage. He could sell or give the property away, oreven bequeath it to others. Real assets, such as land and structures, were placed under the husband’s partial control while remaining in the wife’s name. He could manage the assets as he saw fit, including any income generated by the assets, but he could not sell orbequeath the property without his wife’s consent.2 After analyzing the laws of coverture, Holcombe (1983) concludes that “[w]hatever the reasons forthe distinction between realand personal [moveable] property, the legal rules applyingto these categories of propertywere substantially different. The common law afforded married women considerable protection with respect to real property. It afforded no protection for their personal property.” (Holcombe 1983, p.20).

By differentially allocating property rights, coverture affected portfolio incentives notonly for women, but for parents wishing to bequeath or gift assets to their daughters. Con-sider a father who wants to bequeath his estate to his daughter upon his death. He wouldface an incentive to hold his wealth in real assets. Indeed, parents did bequeath to daughtersin the US as primogeniture was abandoned after the War of Independence. The default became to divide equally inheritances of both types of assets equally among children, including girls (Shammas, Salmon and Dahlin 1987, p.67). Therefore, our first prediction is that undoing coverture should cause portfolios to shift towards moveable assets, such as financial assets, because removing legal constraints allows households to purchase assets withhigher returns or diversify their portfolios.3This shift in portfolios towards moveable assets represents an increase in the supply of financial assets. Accordingly, our second predictionis that after rights are granted, we expect bank deposits–and loans–to increase, along with a reduction in interest rates. An increase in the supply of loanable funds should aid industrialization, as entrepreneurs find capital to be cheaper and thus invest more readily. Greater industrialization yields a sectoral reallocation of workers. Accordingly, our third predictionis that coverture’s demise leads to a shift in the labor forceaway from agriculture. More-over, even within the non-agricultural sector, cheaper capital causes greater investment inindustries that are more capital intensive. Thus, our fourth and final prediction is that rightslead to a relative increase in employment in capital intensive industries.

Those assigned to the perspective taking intervention did not empathize more than subjects assigned to no intervention; instead, subjects assigned to the objective intervention down-regulated their emotions & empathized less

Wondra, Joshua D., and Sylvia Morelli. 2018. “Limitations of the Evidence That Perspective Taking Increases Empathy.” PsyArXiv. October 13. doi:10.31234/

Abstract: Perspective taking is commonly believed to increase empathy. To support this idea, empirical research must show two pieces of evidence. First, perspective taking interventions should make people empathize more than they would by default. Second, the increase in empathy should be due to perspective taking, and not some other feature of the intervention. Much of the evidence that perspective taking increases empathy comes from studies that compare a perspective taking condition to a condition where subjects are asked to “remain objective”. However, if subjects are not objective to begin with, then asking them to “remain objective” might make them empathize less, which makes it unclear if perspective taking also makes them empathize more. In two new experiments and one replication of the well-known “Katie Banks” experiment, subjects were assigned to a perspective taking intervention, an objective intervention, or no intervention. Subjects assigned to the perspective taking intervention did not empathize more than subjects assigned to no intervention; instead, subjects assigned to the objective intervention down-regulated their emotions and empathized less. Further evidence about whether, when, and how perspective taking increases empathy is needed.

Memento mori, melancholy, and the resident ornamental hermit: A person paid to dress like a druid, serve wine and read poetry, living in your estate's grotto

Before the Garden Gnome, the Ornamental Hermit: A Real Person Paid to Dress like a Druid. Allison Meier. Atlas Obscura, March 18, 2014.

While some gardeners might now throw in a gnome statue among their flowers and shrubberies, back in the 18th century wealthy estate owners were hiring real people to dress as druids, grow their hair long, and not wash for years. These hired hermits would lodge in shacks, caves, and other hermitages constructed in a rustic manner in rambling gardens. It was a practice mostly found in England, although it made it up to Scotland and over to Ireland as well.

Gordon Campbell, a Professor of Renaissance Studies at the University of Leicester, recently published The Hermit in the Garden: From Imperial Rome to Ornamental Gnome with Oxford University Press. It’s the first book to delve into the history of the ornamental hermit in Georgian England. As Campbell explains in this video for the book:
“Recruiting a hermit wasn’t always easy. Sometimes they were agricultural workers, and they were dressed in a costume, often in a druid’s costume. There was no agreement on how druids dressed, but in some cases they wore what we would call a dunce’s cap. It’s a most peculiar phenomenon, and understanding it is one of the reasons why I have written this book.”
How the live-in hermit came to be a fashionable touch to a splendid garden goes back to the Roman emperor Hadrian with his villa at Tivoli, which included a small lake with a structure in it built for one person to retreat. When the ruins of this early hermitage were unearthed in the 16th century, it was suggested that Pope Pius IV build one for himself, which he did at the Casina Pio IV. Yet from here it gradually verged away from religious devotees isolating themselves for spiritual reflection to hermitting being an 18th century profession for those willing to put up with the stipulations.

As Campbell cites from an advertisement referenced in Sir William Gell’s A Tour in the Lakes Made in 1797, ”the hermit is never to leave the place, or hold conversation with anyone for seven years during which he is neither to wash himself or cleanse himself in any way whatever, but is to let his hair and nails both on hands and feet, grow as long as nature will permit them.”

Others asked that their hermits not wear shoes or even to entertain party guests with personalized poetry or the serving of wine. It might seem like a whimsical garden feature, but in fact it was all about that most celebrated of Georgian England emotions: melancholy. Introspection and a somberness of spirit were prized among the elite, and the roles they asked their hermits to play embodied this. A 1784 guide to the Hawkstone estate in Shropshire belonging to Sir Richard Hill describes its resident hermit:
“You pull a bell, and gain admittance. The hermit is generally in a sitting posture, with a table before him, on which is a skull, the emblem of mortality, an hour-glass, a book and a pair of spectacles. The venerable bare-footed Father, whose name is Francis (if awake) always rises up at the approach of strangers. He seems about 90 years of age, yet has all his sense to admiration. He is tolerably conversant, and far from being unpolite.”

We care about the minds of others, attempting to understand others' thoughts, attitudes, beliefs, intentions, & emotions; but perspective taking or increasing attention to behavioral cues increase accuracy only in very specific circumstances

Through a looking glass, darkly: Using mechanisms of mind perception to identify accuracy, overconfidence, and underappreciated means for improvement. Nicholas Epley, Tal Eyal. Advances in Experimental Social Psychology, May 22 2019.

Abstract: People care about the minds of others, attempting to understand others' thoughts, attitudes, beliefs, intentions, and emotions using a highly sophisticated process of social cognition. Others' minds are among the most complicated systems that any person will ever think about, meaning that inferences about them are also made imperfectly. Research on the processes that enable mental state inference has largely developed in isolation from research examining the accuracy of these inferences, leaving the former literature somewhat impractical and the latter somewhat atheoretical. We weave these literatures together by describing how basic mechanisms that govern the activation and application of mental state inferences help to explain systematic patterns of accuracy, error, and confidence in mind perception. Altering any of these basic processes, such as through perspective taking or increasing attention to behavioral cues, is likely to increase accuracy only in very specific circumstances. We suggest the most widely effective method for increasing accuracy is to avoid these inference processes altogether by getting another's perspective directly (what we refer to as perspective getting). Those in the midst of understanding the mind of another, however, seem largely unable to detect when they are using an effective versus ineffective strategy while engaging in mind reading, meaning that the most effective approaches for increasing interpersonal understanding are likely to be highly undervalued. Understanding how mind perception is activated and applied can explain accuracy and error, identifying effective strategies that mind readers may nevertheless fail to appreciate in their everyday lives.

Early-life family disruption (death or divorce of a parent) causes fund managers to be more risk averse when they manage their own funds

Betzer, André and Limbach, Peter and Rau, P. Raghavendra and Schürmann, Henrik, Till Death (Or Divorce) Do us Part: Early-Life Family Disruption and Fund Manager Behavior (March 16, 2019). SSRN

Abstract: We show that early-life family disruption (death or divorce of a parent) causes fund managers to be more risk averse when they manage their own funds. Treated managers take lower idiosyncratic, systematic, and downside risk than untreated managers. This effect is most pronounced for managers who experienced family disruption during their formative years and in cases of parental deaths when the bereaved parent either had no new partner or had little social support. Treated managers also invest less in lottery-like stocks, make smaller tracking errors, and bet less on factors during recessions, but do not perform worse than their untreated cohorts. Our evidence indicates that familial background affects economic decisions later in life even for finance professionals.

Keywords: Family Disruption, Formative Experiences, Portfolio Activities, Risk-Taking
JEL Classification: G11, G23, G41

Popular version: Broken Homes Produce More Cautious Fund Managers,

Crews would routinely return with whales that had been left to rot, “which could not be used for food. This was not regarded as a problem by anybody.”

The Most Senseless Environmental Crime of the 20th Century. Charles Homans. Pacific Standard, Jun 14, 2017.

Fifty years ago 180,000 whales disappeared from the oceans without a trace, and researchers are still trying to make sense of why. Inside the most irrational environmental crime of the century.


*  In fact, the country’s fleets had killed nearly 18 times that many, along with thousands of unreported whales of other species. It had been an elaborate and audacious deception: Soviet captains had disguised ships, tampered with scientific data, and misled international authorities for decades. In the estimation of the marine biologists Yulia Ivashchenko, Phillip Clapham, and Robert Brownell, it was “arguably one of the greatest environmental crimes of the 20th century.”

*  Why did a country with so little use for whales kill so many of them?

*  The Japanese, motivated as they were by domestic demand for whale meat, were “at least understandable” in their actions, he wrote. “I should not say that as a scientist, but it is possible to understand the difference between a motivated and unmotivated crime.” Japanese whalers made use of 90 percent of the whales they hauled up the spillway; the Soviets, according to Berzin, used barely 30 percent. Crews would routinely return with whales that had been left to rot, “which could not be used for food. This was not regarded as a problem by anybody.”

*  The scientific report for the Sovetskaya Rossiya fleet’s 1970-71 season noted that the ship captains and harpooners who most frequently violated international whaling regulations also received the most Communist Party honors. “Lies became an inalienable part and perhaps even a foundation of Soviet whaling,” Berzin wrote.

*  Clapham and Ivashchenko now think that Soviet whalers killed at least 180,000 more whales than they reported between 1948 and 1973. It’s a testament to the enormous scale of legal commercial whaling that this figure constitutes only a small percentage—in some oceans, about five percent—of the total killed by whalers in the 20th century. The Soviets, Dmitri Tormosov told me, were well aware of all that had come before them, and were driven by a kind of fatalistic nationalism. “The point,” he says, “was to catch up and get their portion of whale resources before they were all gone. It wasn’t intended to be a long industry.”

Mate Choice in Visually Impaired and Blind People

Are You Seeing Him/Her? Mate Choice in Visually Impaired and Blind People. Or Fekler, Ya’Arit Bokek-Cohen & Yoram Braw. International Journal of Disability, Development and Education, May 15 2019.

ABSTRACT: We examined whether individuals who are VI (visually impaired; people with low vision or totally blind) choose their romantic partners differently than those who are sighted. The theoretical framework that informed our inquiry is Social Exchange Theory. Fifty-five participants who are VI and fifty-one participants who are sighted were administered mate preference and marital satisfaction questionnaires. Participants who are VI also answered open-ended questions regarding difficulties in finding a suitable mate. Participants who are VI did not significantly differ from participants who are sighted in their rated importance of traits of an ideal romantic partner, as well as their relationship satisfaction. No tradeoff of resources among participants who are VI and their partners was found, i.e. they did not “pay” for their disability by coupling with a partner who has a lower socio-economic status than theirs. Participants who were VI told about their main difficulties in finding a mate and offered proposals to mitigate these difficulties. We conclude by proposing ways to help individuals who are VI to establish intimate relationships.

KEYWORDS: Blindness, visual impairment, mate choice, reading aloud questionnaire, romantic relationship, social exchange