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Understanding Social Effects in the In-Flight Marketplace: Characterization and Managerial Implications

November 17, 2014 Comments off

Understanding Social Effects in the In-Flight Marketplace: Characterization and Managerial Implications
Source: Stanford Graduate School of Business

This paper investigates the in-flight marketplace. It uses detailed data of in-flight purchases to characterize the factors underlying purchasing behavior, including pre- and in-flight factors and in particular social effects. We find that the number of passengers and the flight duration increase in-flight sales. Delays also increase in-flight purchases but they suffer cannibalization from compensations offered to passengers. At the individual level we show that the classical social influence theories do not suffice to explain all patterns in the data. Omission neglect, product contagion and goal balancing are proposed as complementary theories. The analysis shows social effects play a significant role: On average a passenger is approximately 30% more likely to buy after being exposed to a lateral purchase. Importantly, we find that willingness to buy is positively correlated with responsiveness to social influence. Because of this homophily and social feedback effects, otherwise nuisance factors, can provide targeting value for the firm: Behavioral-based targeting can up to double the relative social spillovers of marketing actions.

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U.S. Workers’ Diverging Locations: Policy and Inequality Implications

November 7, 2014 Comments off

U.S. Workers’ Diverging Locations: Policy and Inequality Implications (PDF)
Source: Stanford Institute for Economic Policy Research

Over the past three decades, the earnings of workers with a college education have substantially increased relative to those with less education. In 1980, the average college graduate earned 38% more than the average high school graduate. By 2000, the college-high school graduate wage gap increased to 57%, and by 2011 it rose to 73%.1 At the same time, workers have become increasingly spatially segregated by education. Cities that initially had a large share of college graduates in 1980 increasingly attracted larger shares of college educated workers from 1980 to 2000, while cities with relatively less educated populations in 1980 gained few college grads over the following 20 years. The increasingly “highly educated cities” also experienced higher wage growth for both low- and high-skill workers and substantially larger increases in housing costs. The economic trajectories of these increasing high skill cities are diverging from those with fewer college graduates (Moretti, 2013).

Measuring Managerial Skill in the Mutual Fund Industry

October 23, 2014 Comments off

Measuring Managerial Skill in the Mutual Fund Industry
Source: Stanford Graduate School of Business

Using the dollar-value a mutual fund manager adds as the measure of skill, we find that not only does skill exist (the average mutual fund manager adds about $2 million per year), but this skill is persistent, as far out as 10 years. We further document that investors recognize this skill and reward it by investing more capital with skilled managers. Higher skilled managers are paid more and there is a strong positive correlation between current managerial compensation and future performance.

Quantifying the Lasting Harm to the U.S. Economy from the Financial Crisis

October 22, 2014 Comments off

Quantifying the Lasting Harm to the U.S. Economy from the Financial Crisis (PDF)
Source: Stanford University and NBER

The financial crisis and ensuing Great Recession left the U.S. economy in an injured state. In 2013, output was 13 percent below its trend path from 1990 through 2007. Part of this shortfall — 3.0 percentage points of real GDP — was the result of lingering slackness in the labor market in the form of abnormal unemployment and substandard weekly hours of work. The single biggest contributor was a shortfall in business capital, which accounted for 3.9 percentage points. The second largest was a shortfall of 3.5 percentage points in total factor productivity. The fourth was a shortfall of 2.4 percentage points in labor-force participation. I discuss these four sources of the injury in detail, focusing on identifying state variables that may or may not return to earlier growth paths. The conclusion is optimistic about the capital stock and slackness in the labor market and pessimistic about reversing the declines in total factor productivity and the part of the participation shortfall not associated with the weak labor market.

Book: Mining of Massive Datasets

January 13, 2014 Comments off

Mining of Massive Datasets
Source: Stanford University

At the highest level of description, this book is about data mining. However, it focuses on data mining of very large amounts of data, that is, data so large it does not fit in main memory. Because of the emphasis on size, many of our examples are about the Web or data derived from the Web. Further, the book takes an algorithmic point of view: data mining is about applying algorithms to data, rather than using data to “train” a machine-learning engine of some sort. The principal topics covered are:

1. Distributed file systems and map-reduce as a tool for creating parallel algorithms that succeed on very large amounts of data.

2. Similarity search, including the key techniques of minhashing and locality- sensitive hashing.

3. Data-stream processing and specialized algorithms for dealing with data that arrives so fast it must be processed immediately or lost.

4. The technology of search engines, including Google’s PageRank, link-spam detection, and the hubs-and-authorities approach.

5. Frequent-itemset mining, including association rules, market-baskets, the A-Priori Algorithm and its improvements.

6. Algorithms for clustering very large, high-dimensional datasets.

7. Two key problems for Web applications: managing advertising and rec- ommendation systems.

8. Algorithms for analyzing and mining the structure of very large graphs, especially social-network graphs.

Hat tip: Research Buzz

National Charter School Study 2013

June 25, 2013 Comments off

National Charter School Study 2013 (PDF)
Source: CREDO at Stanford University
From press release (PDF):

A new , independent national study finds improvement in the overall performance of charter schools, driven in part by the presence of more high – performing charters and closure of underperforming charter schools.

The National Charter School Study 2013, released today by the Center for Research on Education Outcomes (CREDO) at Stanford University , is an update and expansi on of CREDO’s 2009 landmark 16-state study , Multiple Choice, the first study to take a comprehensive look at the impact of charter schools on student performance. The 2009 study found a wide variance in quality among charter schools, with students in charter schools not faring as well in the aggregate as those attending traditional public schools.

The National Charter School Study 2013 looks at performance of students in charter schools in 26 states and New York City, which is treated separately as the city differs dramatically from the rest of the state. In those states (and New York City), charter school students now have greater learning gains in reading than their peers in traditional public s chools. Traditional public schools and charter schools have equivalent learning gains in mathematics.

In the aggregate, charter school students in the 26 states in the new study gain ed an additional 8 days of learning each year in readi ng beyond their local peers in traditional public schools. The 2009 study found a loss of 7 days each year in reading among the students in the 16 states. In mathematics, charter school students in 2009 posted 22 fewer days of learning than their traditional public school counterparts; today there exists no significant difference in days of learning.

Executive Summary
Tech Appendix
Supplementary Findings

The Infographics
Virtual Control Records
Interactive Map of Charter States
16-State Update School Groups
16-State Reading State Charter Impact Changes
16-State Math State Charter Impact Changes
27-State School Level Reading Quality
27-State School Level Math Quality
27-State Reading State Charter Impacts
27-State Math State Charter Impacts

Expanding College Opportunities for High-Achieving, Low Income Students

April 12, 2013 Comments off

Expanding College Opportunities for High-Achieving, Low Income Students (PDF)

Source: Stanford Institute for Economic Policy Research

Only a minority of high-achieving, low-income students apply to colleges in the same way that other high-achieving students do: applying to several selective colleges whose curriculum is designed for students with a level of achievement like their own. This is despite the fact that selective colleges typically cost them high-achieving, low-income students less while offering them more generous resources than the non-selective postsecondary institutions they mainly attend. In previous work, we demonstrate that the vast majority of high-achieving, low-income students are unlikely to be reached by traditional methods of informing students about their college opportunities since such methods require the students to be concentrated geographically. In this study, we use a randomized controlled trial to evaluate interventions that provide students with semi-customized information on the application process and colleges’ net costs. The interventions also provide students with no-paperwork application fee waivers. The ECO Comprehensive (ECO-C) Intervention costs about $6 per student, and we find that it causes high-achieving, low-income students to apply and be admitted to more colleges, especially those with high graduation rates and generous instructional resources. The students respond to their enlarged opportunity sets by enrolling in colleges that have stronger academic records, higher graduation rates, and more generous resources. Their freshman grades are as good as the control students’, despite the fact that the control students attend less selective colleges and therefore compete with peers whose incoming preparation is substantially inferior. Benefit-to-cost ratios for the ECO-C Intervention are extremely high, even under the most conservative assumptions.

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