The Cost of Annuities: Implications for Saving Behavior and Bequests

The fact that most eldealy individuals in the United States choose to maintain a flat age-wealth profile, rather than buy individual life annuities, stands in contrast to central implications of the standard life-cycle model of consumption-saving behavior. The analysis in this paper lends support to an explanation for this phenomenon based either on the cost of annuities, importantly including the element of that cost due to adverse selection, or on the interaction of that cost and an intentional bequest motive. Expected yields offered on individual life annuities in the United States are lower by some 4-6%, or 2 1/2-4 1/2% after allowing for adverse selection, than yields on alternative long-term fixed-income investments. Simulations of an extended model of life-cycle saving and portfolio behavior, allowing explicitly for uncertain lifetimes and Social Security, show that yield differentials in this range can account for the observed behavior, even in the absence of a bequest motive, during the early years of retirement. By contrast, at older ages the combination of yield differentials in this range and a positive bequest motive is necessary to do so.

Annuity Prices and Saving Behavior in the United States

The observed reluctance of most individuals in the United States to buy individual life annuities, and the concomitant approximately flat average age-wealth profile, stand in sharp contradiction to the standard life cycle model of consumption-saving behavior. The analysis in this paper lends support to an explanation for this phenomenon based on the interaction of an intentional bequest motive and annuity prices that are not actuarially fair. Premiums charged for individual life annuities in the United States include a load factor of 32-48c per dollar,or18-33c per dollar after allowing for adverse selection, in comparison to actuarially fair annuity values. Load factors of this size are not out of line with those on other familiar (and almost universally purchased) insurance products. Simulations of an extended model of life cycle saving and portfolio behavior, allowing explicitly for uncertain lifetimes and Social Security, show that the load factor charged would have to be far larger than this to account for the observed behavior in the absence of a bequest motive. By contrast, the combination of a load factor in this range and a positive bequest motive can do so for some plausible values of the assumed underlying parameters. Moreover,if this combination of factors is leading elderly individuals to avoid purchasing life annuities, it implies a typical bequest that is fairly large in comparison to their consumption.

Bridging the gap between social tagging and semantic annotation: E.D. the Entity Describer

Semantic annotation enables the development of efficient computational methods for analyzing and interacting with information, thus maximizing its value. With the already substantial and constantly expanding data generation capacity of the life sciences as well as the concomitant increase in the knowledge distributed in scientific articles, new ways to produce semantic annotations of this information are crucial. While automated techniques certainly facilitate the process, manual annotation remains the gold standard in most domains. In this manuscript, we describe a prototype mass-collaborative semantic annotation system that, by distributing the annotation workload across the broad community of biomedical researchers, may help to produce the volume of meaningful annotations needed by modern biomedical science. We present E.D., the Entity Describer, a mashup of the Connotea social tagging system, an index of semantic web-accessible controlled vocabularies, and a new public RDF database for storing social semantic annotations

Bromostibine complexes of iron(II): hypervalency and reactivity

The halostibine complexes [CpFe(CO)2(SbMe2Br)][CF3SO3] and [CpFe(CO)2(SbMe2Br)][BF4] both contain significant interactions between the anion and the formally neutral Sb(III) ligand, which simultaneously displays Lewis acidic and Lewis basic properties. The unexpected secondary product [CpFe(CO)(Me2BrSb-?-Br-SbBrMe2)] is formed in the presence of excess ligand, the strongly associated Br– anion bridging the two Sb donors to form a four-membered FeSb2Br ring.<br/

A multi-species functional embedding integrating sequence and network structure

A key challenge to transferring knowledge between species is that different species have fundamentally different genetic architectures. Initial computational approaches to transfer knowledge across species have relied on measures of heredity such as genetic homology, but these approaches suffer from limitations. First, only a small subset of genes have homologs, limiting the amount of knowledge that can be transferred, and second, genes change or repurpose functions, complicating the transfer of knowledge. Many approaches address this problem by expanding the notion of homology by leveraging high-throughput genomic and proteomic measurements, such as through network alignment. In this work, we take a new approach to transferring knowledge across species by expanding the notion of homology through explicit measures of functional similarity between proteins in different species. Specifically, our kernel-based method, HANDL (Homology Assessment across Networks using Diffusion and Landmarks), integrates sequence and network structure to create a functional embedding in which proteins from different species are embedded in the same vector space. We show that inner products in this space and the vectors themselves capture functional similarity across species, and are useful for a variety of functional tasks. We perform the first whole-genome method for predicting phenologs, generating many that were previously identified, but also predicting new phenologs supported from the biological literature. We also demonstrate the HANDL embedding captures pairwise gene function, in that gene pairs with synthetic lethal interactions are significantly separated in HANDL space, and the direction of separation is conserved across species. Software for the HANDL algorithm is available at http://bit.ly/lrgr-handl.Published versio

From a different angle: A novel approach to health valuation

The value of a health state is typically described relative to the value of an optimal state, specifically as a ratio ranging from unity (equal to optimal health) to negative infinity. Incorporating potentially infinite values is a challenging issue in the econometrics of health valuation. In this paper, we apply a directional statistics approach based on the assumption of wavering preference. Unlike ratio statistics, directional statistics are based on polar coordinates (angle, radius). The range of angles is bounded between 45 degrees (unity) and negative 90 degrees (i.e., negative infinity); therefore, mean angles are well behaved and negate the impetus behind arbitrary data manipulations. Using time trade-off (TTO) responses from the seminal Measurement and Valuation of Health study, we estimate 243 EQ-5D health state values by minimizing circular variance with and without radial weights. For states with published values greater than zero (i.e., better-than-death), the radially weighted estimates are nearly identical to the published values (Mean Absolute Difference 0.07; Lin’s rho 0.94). For worse-than-death states, the estimates are substantially lower than the published values (Mean Absolute Difference 0.186; Lin’s rho 0.576). For the worst EQ-5D state (33333), the published value is -0.59 and the directional estimate is -1.11. By taking a directional statistics approach, we circumvent problems inherent to ratio statistics and the systematic bias introduced by arbitrary data manipulations. The predictions suggest that published estimates overvalue severe states. This paper examines TTO responses; however, it may be extended to all forms of health valuation

From Governance to the Classroom: Rethinking Large-Scale School Reform to Improve Educational Opportunity and Equity

For decades, governmental institutions have focused on improving and equalizing the educational opportunities for students. Courts, legislatures, and chief executive officers at federal and state levels have spearheaded a range of large-scale educational reform efforts, including desegregation, school finance reform, educational improvement for students with disabilities, charter schools, and standards-based accountability systems. However, many assessments of these efforts reflect limited or mixed success. This Article takes a bird’s-eye view examination of not simply why a single type of educational reform has failed to reach its goals in a particular area, but instead at why such efforts have failed to reach their goals more generally. Drawing insights from both the history of these reform efforts and educational research, this Article analyzes cross-cutting challenges from a perspective that highlights the horizontal and vertical governance structures underlying these reforms. Based on the analysis of these reforms, this Article presents principles for rethinking educational governance in a way that has a greater potential for equalizing and improving students’ learning opportunities and performance