Tuesday, August 4, 2020

Persistence of gross domestic product below precrisis trends remains puzzling; transitory events, especially extreme ones, generate persistent changes in beliefs and macro outcomes

The Tail That Wags the Economy: Beliefs and Persistent Stagnation. Julian Kozlowski, Laura Veldkamp, Venky Venkateswaran. Journal of Political Economy, Volume 128, Number 8, August 2020 (June 10, 2020). https://www.journals.uchicago.edu/doi/abs/10.1086/707735

Abstract: The Great Recession was a deep downturn with long-lasting effects on credit, employment, and output. While narratives about its causes abound, the persistence of gross domestic product below precrisis trends remains puzzling. We propose a simple persistence mechanism that can be quantified and combined with existing models. Our key premise is that agents do not know the true distribution of shocks but use data to estimate it nonparametrically. Then, transitory events, especially extreme ones, generate persistent changes in beliefs and macro outcomes. Embedding this mechanism in a neoclassical model, we find that it endogenously generates persistent drops in economic activity after tail events.

5 Conclusion

Economists typically assume that agents in their models know the distribution of shocks. In this paper, we showed that relaxing this assumption introduces persistent economic responses to tail events. The agents in our model behave like classical econometricians, re-estimating distributions as new data arrives. Under these conditions, observing a tail event like the 2008- 09 Great Recession in the US, causes agents to assign larger weights to similar events in the future, depressing investment and output. Crucially, these effects last for a long time, even when the underlying shocks are transitory. The rarer the event that is observed, the larger and more persistent the revision in beliefs. The effects on economic activity are amplified when investments are financed with debt. This is because debt payoffs (and therefore, borrowing costs) are particularly sensitive to the probability of extreme negative outcomes. When this mechanism is quantified using data for the US economy, the predictions of the model resemble observed macro and asset market outcomes in the wake of the Great Recession, suggesting that the persistent nature of the recent stagnation is due, at least partly, to the fact that the events of 2008-09 changed the way market participants think about tail risk.

Younger adults report more distress and less well‐being: A cross‐cultural study of event centrality, depression, post‐traumatic stress disorder and life satisfaction

Younger adults report more distress and less well‐being: A cross‐cultural study of event centrality, depression, post‐traumatic stress disorder and life satisfaction. Alejandra Zaragoza, Sinué Salgado,  Zhifang Shao, Dorthe Berntsen. Applied Cognitive Psychology, June 10 2020. https://doi.org/10.1002/acp.3707

Summary: The extent to which highly emotional autobiographical memories become central to one's identity and life story influences mental health. Young adults report higher distress and lower well‐being, compared with middle‐aged and/or older adults; whether this replicates across cultures is still unclear. First, we provide a review of the literature that examines age‐differences in depression, post‐traumatic stress disorder (PTSD), and life satisfaction in adulthood across cultures. Second, we report findings from a cross‐cultural study that examined event centrality of highly positive and negative autobiographical memories along with symptoms of depression and PTSD, and levels of life satisfaction in approximately 1000 young and middle‐aged adults from Mexico, Greenland, China and Denmark. Both age groups provided higher centrality ratings to the positive life event; however, the relative difference between the ratings for the positive and negative event was smaller in the young adults. Young adults reported significantly more distress and less well‐being across cultures.

In financial cities we observe that on average online porn viewing decreases as financial stress increases; evidence suggests the causing channel to be altered mood

Sex and “the City”: Financial stress and online pornography consumption. Michael Donadelli, Marie Lalanne. Journal of Behavioral and Experimental Finance, August 3 2020, 100379. https://doi.org/10.1016/j.jbef.2020.100379

Abstract: We examine the effects of financial stress on online pornography consumption. We use novel data on daily accesses to one of the most popular porn website (xHamster) for 43 different cities belonging to 10 countries for the year 2016. In financial cities, in which people are more likely to be affected by financial stress, we observe that on average online porn viewing decreases as financial stress increases. We present some evidence suggesting the causing channel to be altered mood.

Keywords: Financial stressUncertaintyOnline pornography

4. Concluding remarks
This paper employs a unique and novel dataset providing accesses to one of the most visited porn website for several cities around the world in order to examine the relationship between financial stress and online pornography consumption. Regression results suggest that during stressing days people are less prone to go for online pornography. The effect seems to be driven by financial cities: financial stress does indeed affect pornography demand as people living in the proximity of financial districts are more likely to be impacted by stock markets fluctuations.
Unfortunately, our data are not granular enough to (strictly) capture the behavior of people working in the financial industry (e.g., financial analysts, traders, market makers, private bankers etc...) or living (strictly) in cities’ financial districts (e.g., Canary Wharf in London or FiDi in New York). Moreover, we rely on accesses to xHamster only. In this respect, future research could make an effort to retrieve richer data in order to get more insights on the relationship between online pornography consumption and financial market dynamics. We believe that examining the effects of rising financial stress on people’s daily standard entertainment activity (including online pornography viewing) represents an interesting avenue of future research.

Does Using Social Media Jeopardize Well-Being? The conclusions about the causal impact of social media on rising mental health problems in the population might be premature

Does Using Social Media Jeopardize Well-Being? The Importance of Separating Within- From Between-Person Effects. Olga Stavrova, Jaap Denissen. Social Psychological and Personality Science, August 3, 2020. https://doi.org/10.1177/1948550620944304

Abstract: Social networking sites (SNS) are frequently criticized as a driving force behind rising depression rates. Yet empirical studies exploring the associations between SNS use and well-being have been predominantly cross-sectional, while the few existing longitudinal studies provided mixed results. We examined prospective associations between SNS use and multiple indicators of well-being in a nationally representative sample of Dutch adults (N ∼ 10,000), comprising six waves of annual measures of SNS use and well-being. We used an analytic method that estimated prospective effects of SNS use and well-being while also estimating time-invariant between-person associations between these variables. Between individuals, SNS use was associated with lower well-being. However, within individuals, year-to-year changes in SNS use were not prospectively associated with changes in well-being (or vice versa). Overall, our analyses suggest that the conclusions about the causal impact of social media on rising mental health problems in the population might be premature.

Keywords: social media, social networking sites, life satisfaction, emotions, loneliness, self-esteem, longitudinal methods, between- and within-person effects

Social media are often criticized as a driving force behind the current depression epidemics (Twenge et al., 2018). Yet the empirical evidence supporting the harmful effect of social media use on individuals has been based on predominantly cross-sectional data, while the few existing longitudinal studies provided mixed results. Herein, we used a large nationally representative panel of Dutch adults who contributed to a maximum of six yearly assessments of both SNS use and various indicators of well-being. Importantly, in contrast to many previous longitudinal studies, we relied on advanced statistical methods that are able to disentangle between- from within-person effects. Given policy makers’ recent interest in interventions aimed at curbing the suspected harmful consequences of social media use (UK Commons Select Committees, 2019), assessing whether SNS use is indeed associated with poorer well-being over time at a within-person level is particularly important.
Our results showed that, on average, more heavy SNS users indeed tended to consistently report slightly lower well-being—even though, consistent with recent large-scale cross-sectional studies (Orben & Przybylski, 2019a2019b), these effects were small. Importantly, despite the presence of between-person associations, within-individual changes in SNS use were not associated with within-individual changes in well-being (and vice versa). Importantly, our sample size would have allowed us to detect even tiny effects at an α level .05 (N = 10,000 gives a 99% power to detect a correlation of .04), suggesting that these null effects are unlikely to be explained by a lack of power.
How can we reconcile the presence of negative associations between SNS use and well-being at the between-person level with the absence of the prospective effects in either direction? One rather mundane explanation is that between-person associations might be driven by confounding with some third variables. For example, emotionally unstable and introverted individuals might be more likely to use social media (Liu & Campbell, 2017) and to report lower well-being (Diener et al., 2003). As a result, interindividual differences in personality traits, such as neuroticism or introversion, might be responsible for both higher SNS use and lower well-being. Relatedly, the negative between-person associations between SNS use and well-being could be (at least partially) driven by common method variance (Orben & Lakens, 2019). Future research should investigate these possibilities.
Alternatively, SNS use and well-being might affect each other, but on a shorter timescale, such as hours, days, or weeks (rather than years). Hence, assessing SNS use and well-being with shorter time intervals, for example, using daily diary or experience sampling methods would shed some light on this question. Nevertheless, it is important to note that even if SNS use affects daily fluctuations in well-being, the fact that these short-term associations do not translate into longer term effects, as indicated by our results, is worth further investigations.
The presence of between-person associations combined with the lack of within-person prospective effects in our findings might have implications that go beyond the field of social media effects. Specifically, it adds to the literature on the importance of separating effects at different levels of analysis more generally (Curran et al., 2014). The associations between the variables at one level of analysis (e.g., individuals) do not necessarily mirror the associations between these variables at another level (e.g., groups), and using the relations at one level to make inferences about the relations at another level represents an error of inference (ecological fallacy; Robinson, 1950). This has been common knowledge in other social science disciplines, such as sociology or education research, for decades (Raudenbush & Willms, 1995Robinson, 1950). As psychologists have recently been showing increasing interest in exploring psychological phenomena across different levels of analysis too (e.g., within-person vs. between-person), using methods that allow for a proper differentiation of between- from within-person effects is essential (Usami et al., 2019).
It is important to note this study’s limitations. While the data set we used allowed us to include a broad range of well-being indicators, it did not offer a differentiated selection of SNS use measures. Specifically, the available variables mainly reflected a quantitative aspect of use, such as frequency and intensity. However, the mere number of hours spent on SNS might matter less that the content one is exposed to and the type of activities one is engaged in. For example, researchers have recently started differentiating between passive (browsing other people’s profiles) and active (posting messages and status updates) SNS use, showing that only the former (but not the latter) was associated with lower well-being (Verduyn et al., 2015). In addition, SNS use might have different consequences depending on what motives individuals pursue, with using social media for making new friends (vs. for social skills compensation) having positive (vs. negative) correlates (Teppers et al., 2014). Ultimately, while this study used self-report measures of SNS use, we hope that future studies will rely on objective measures, such as obtained from smartphone screen time applications (Ellis et al., 2018). In addition, our attempt to include as many diverse measures of well-being as possible resulted in varying time lags between SNS use and different measures of well-being. Although our additional analyses (see Supplementary Materials) showed that the length of time lag had no consistent effect on the associations between SNS use and well-being, we hope that data sets will become available with even more regular and fine-grained assessments than LISS.

Does Disgust Increase Unethical Behavior? A Replication of Winterich, Mittal, and Morales (2014) Fails to Reproduce Results

Does Disgust Increase Unethical Behavior? A Replication of Winterich, Mittal, and Morales (2014). Tamar Kugler, Charles N. Noussair, Denton Hatch. Social Psychological and Personality Science, August 3, 2020. https://doi.org/10.1177/1948550620944083

Abstract: We consider the relationship between disgust and ethical behavior. Winterich, Mittal, and Morales report several experiments finding that disgust increases unethical behavior. We replicated three of their studies, using high-powered designs with a total of 1,239 participants, three different procedures to induce disgust, and three different measures of unethical behavior. We observe no effect of disgust on unethical behavior in any of the studies, supporting the contention that disgust has no effect on ethical decision making.

Keywords: unethical behavior, self-interested behavior, disgust, emotion, replication

Meta-data from 3,143,270 users: Compared to pre- pandemic levels, found increases in the number of meetings per person (+12.9%) and the number of attendees per meeting (+13.5%), but decreases in the average duration (-20.1%)

Collaborating During Coronavirus: The Impact of COVID-19 on the Nature of Work. Evan DeFilippis, Stephen Michael Impink, Madison Singell, Jeffrey T. Polzer, Raffaella Sadun. NBER Working Paper No. 27612, July 2020. https://www.nber.org/papers/w27612

Abstract: We explore the impact of COVID-19 on employee's digital communication patterns through an event study of lockdowns in 16 large metropolitan areas in North America, Europe and the Middle East. Using de- identified, aggregated meeting and email meta-data from 3,143,270 users, we find, compared to pre- pandemic levels, increases in the number of meetings per person (+12.9 percent) and the number of attendees per meeting (+13.5 percent), but decreases in the average length of meetings (-20.1 percent). Collectively, the net effect is that people spent less time in meetings per day (-11.5 percent) in the post- lockdown period. We also find significant and durable increases in length of the average workday (+8.2 percent, or +48.5 minutes), along with short-term increases in email activity. These findings provide insight from a novel dataset into how the nature of work has changed for a large sample of knowledge workers. We discuss these changes in light of the ongoing challenges faced by organizations and workers struggling to adapt and perform in the face of a global pandemic.

Highly feminist women who desire sexist men experienced more cognitive dissonance (operationalized as negative affect) than women lower in feminist attitudes

Feminism and mate preference: A study on relational cognitive dissonance. Aslı Yurtsever, Arın Korkmaz, Zeynep Cemalcilar. Personality and Individual Differences, Volume 168, January 1 2021, 110297. https://doi.org/10.1016/j.paid.2020.110297

Abstract: Evolution proposes differences in mate preferences between the two sexes. Females prefer mates who can invest in them and their offspring. In the contemporary era, gender ideologies are not always in line with these premises, but desires still could be. The conflict between ideology and desire could trigger cognitive dissonance in contemporary feminist women. We recruited 246 women online to investigate the occurrence of dissonance based on feminist attitudes, and whether dissonance reduction strategies (i.e., behavior change, cognition change) differed based on their preference for consistency. Results showed that highly feminist women who desire sexist men experienced more cognitive dissonance (operationalized as negative affect) than women lower in feminist attitudes. Preference for consistency moderated cognitive dissonance's association with behavior, but not cognition change.

Keywords: Cognitive dissonanceMate preferenceFeminismPreference for consistency

4. Discussion

The current study showed that desire toward evolutionarily preferable mate behaviors conflicted with feminist attitudes, creating cognitive dissonance. We predicted that when attraction was held constant, such behaviors would trigger cognitive dissonance in heterosexual feminist women, deeming them sexist. Indeed, our pilot study supported this finding, and its association with high negative affect as indicative of cognitive dissonance. In the experiment, in line with our hypothesis, feminist women attributed to the vignette protagonist similar dissonance regardless of the type of sexist behaviors, be it overt or subtle. We found support for findings on within-sex variation in mate preferences; desiring resource display was challenged by those who had strong endorsement of feminism, and their desire toward any sexist-deemed behavior proved problematic. Hughes and Aung (2017) found several individual differences that moderated women's mate preferences. We expanded their list with feminism; feminist women were put off by resource display, unlike their non-feminist counterparts. Less feminist women did not experience dissonance in the subtle condition because the man's manner of displaying resources was deemed attractive (as evolutionary trends and traditional gender roles suggest) and was not misaligned with any prior attitudes. They still experienced higher NA in the overt condition compared to the control. Although Harmon-Jones (2000) found that NA measures dissonance irrespective of aversive situations, this could still be due to the overall unpleasantness of the interaction, and not a reflection of feminist attitudes.
Our findings showed that once women experienced cognitive dissonance, they employed dissonance reduction strategies to relieve the emerging negative arousal. This supports previous research in the validity of assessing affect as an indicator of cognitive dissonance. Overall, we found that women who felt high negative affect were more likely to use behavior change (i.e., terminate the interaction). Furthermore, individual's preference for consistency moderated this effect. Previous research had examined preference for consistency as an individual difference that predicted cognitive dissonance (Nolan & Nail, 2014). We, in return, investigated the moderating role of preference for consistency on dissonance reduction strategies. We showed, contrary to our hypothesis, that the association of negative affect with behavior change was stronger for women who were low (vs. high) on preference for consistency. This may be because high PFC participants sought consistency with the “going on the date” decision, and not with their feminist attitudes. That is, once people engage in attitude deviating behaviors, seeking consistency is fixed on the deviation and not on the attitudes, demonstrating the foot-in-the-door effect (Guadagno & Cialdini, 2010).
Interestingly, there was no systematic explanation for employing cognition change after experiencing dissonance. All participants employed it for overt and subtle sexist men, independent of their negative affect and level of feminism. However, in the control condition, only women low on feminism used it. We are not surprised, as without attitude violation, there is no need for cognition change. Less feminist women, conversely, may have needed to change cognitions to adapt to the feminism-aligned treatment of the control man. As for the unexpected findings on NA and PFC, Vaidis and Bran (2018) differentiated between “inconsistency resolution” and “arousal reduction” in dissonance reduction processes. Following that, we argue that our model was based on negative arousal; therefore, PFC was not a suitable variable in explaining cognitions that seek to resolve the inconsistency.
In the current study, it is evident that various cognitive dissonance reduction strategies, such as behavior and/or cognition change, can be employed depending on the individual's dispositions and the context. This study allowed participants to choose several strategies, thus enabling us to approach real life and see that strategies are not necessarily concomitant. People may change cognitions while they terminate the relationship to modify their narrative about the date and feel better, or they may use it to keep dating without feeling dissonance. McGrath (2017) argued that which strategy to use depends on its likelihood of success and effortfulness. In a dating context, termination is a conclusive strategy to end dissonance, whereas cognition change requires effortful restructuring and has the potential to recur. Therefore, the data revealed higher use of behavior change overall, even though both strategies were used.

4.1. Limitations and suggestions for further research

We treated behavior change and cognition change as concurrent independent dimensions; further research should explore reduction strategies with forced-choice paradigms. Our vignettes read from the point of view of a fictional protagonist, inducing vicarious dissonance, to avoid the attraction constant being met with resistance, as was found in our pilot study. However, making termination decisions for another person might be more straightforward, and this might be why our model did not explain the process of cognition change. We manipulated various behaviors of male gender roles and found an additive effect; different contexts and behaviors should be examined to parse this effect. Measures other than negative affect could be implemented to assess dissonance. Additionally, having recruited participants online resulting in a self-selected sample might limit the generalizability of our findings. Future research can investigate how cognitive change strategies influence long-term attitudes and behaviors. Finally, our findings should be taken into consideration within the cultural characteristics of the Turkish population. As a collectivist culture enforcing traditional gender roles that reinforce evolutionary mate preferences, the dissonance feminist participants felt might be indicative of tension between their ideologies and cultural values rather than with sexual desire. This finding should be further replicated in cultures with higher gender equality and lower traditional values.

Overall, their results demonstrate that increased contact opportunities with forced migrants contribute to increases in prejudice

The dynamic relationship between contact opportunities, positive and negative intergroup contact, and prejudice: A longitudinal investigation. Patrick Kotzur, Ulrich Wagner. Journal of Personality and Social Psychology, Jul 2020. DOI: 10.1037/pspi0000258

Abstract: We investigated the dynamics of naturally increasing contact opportunities, frequencies of positive and negative intergroup contact experiences, and prejudice toward forced migrants, in 2 three-wave longitudinal studies (Study 1, N = 183, adult community sample; Study 2, N = 758, nation-wide adult probability sample) in Germany using latent growth curve and parallel process analyses. We examined (research question 1) whether prejudice increases or decreases with increased contact opportunities; (research question 2) whether the rate of change in prejudice is related to the rate of change of positive/negative contact; (research question 3) whether the trajectories of change in prejudice shift as a function of the histories of prior positive/negative contact; and (research question 4) whether the rate of change in positive/negative contact frequencies depends on prior prejudice levels. Across both studies, prejudice increased with increased contact opportunities, as did positive and negative contact frequencies (ad research question 1). Whereas changes in negative contact were significantly related to changes in prejudice in both studies, no such relationships emerged as significant for positive contact (ad research question 2). We did not find any supportive evidence for our research questions 3 and 4. Overall, our results demonstrate that increased contact opportunities can contribute to increases in prejudice. Moreover, they indicate that the trajectories of negative contact and prejudice may be more substantially intertwined than the trajectories of positive contact and prejudice.