Base-rate Respect by Intuition: Approximating Rational Choices in Base-rate Tasks with Multiple Cues

Although intuitive-automatic processes sometimes lead to systematic biases in judgment and choice, in many situations especially this kind of processes enables people to approximate rational choices. In complex base-rate tasks with repeated outcome feedback we observed choices which were in line with the Bayes’ solution in 86% of the cases and which were made within a relatively short time (i.e., 2.2 seconds). The results indicate reliance on extremely well-calibrated intuition. This view is supported by the findings that choice proportions are almost perfectly predicted by posterior probabilities (r = .93), and that error rates, response times and confidence ratings are highly correlated with inconsistency in the provided information. Our results support the hypothesis that parallel constraint satisfaction models may account for the processes underlying intuition and make the application of simple heuristics and deliberate strategies very unlikely. Taking an interdisciplinary perspective, implications for economic and psychological modeling are outlined.Decision Making, Intuition, Base-rate Neglect, Heuristics, Parallel Constraint Satisfaction

SAW RFID-Tags for Mass-Sensitive Detection of Humidity and Vapors

One-port surface acoustic wave (SAW) devices with defined reflector patterns give characteristic signal patterns in the time domain making them identifiable and leading to so-called RFID-Tags. Each sensor responds with a burst of signals, their timed positions giving the identification code, while the amplitudes can be related to the analyte concentration. This paper presents the first combination of such a transducer with chemically sensitive layer materials. These include crosslinked polyvinyl alcohol for determining relative humidity and tert-butylcalix[4]arene for detecting solvent vapors coated on the free space between the reflectors. In going from the time domain to the frequency domain by Fourier transformation, changes in frequency and phase lead to sensor responses. Hence, it is possible to measure the concentration of tetrachloroethene in air down to 50 ppm, as well as 1% changes in relative humidity

EITC, AFDC, and the Female Headship Decision

Concerns about the incentives for female headship for low-income families have focused on Aid to Families with Dependent Children (AFDC); however, the expansion of the Earned Income Tax Credit (EITC) has brought more low-income households into the tax system, subjecting them to additional marriage nonneutralities. Theoretical predictions about the correlations between the EITC and female headship are ambiguous. This paper is the first to provide empirical evidence that the EITC is correlated with female headship decisions. Using data from the Survey of Income and Program Participation, we find no significant correlations between AFDC and female headship. However, the ambiguous effect of the EITC on female headship is evident in our empirical analysis. After controlling for individual effects, we find that higher EITCs are associated with increased female headship for white women, but with decreased female headship for black women. For a sample of white women, we find that a $100 increase in the EITC would increase the probability of female headship by 0.1 percent. For a sample of black women, we find that a$100 increase in the EITC would decrease the probability of female headship by 1.4 percent, although this result is not robust.

Utilization of Income Tax Credits by Low-Income Individuals

The Internal Revenue Service-a sub-agency that exists to collect revenue-has the task of administering and enforcing a wide array of social policy: from subsidies for college and child care expenses, to creating jobs in depressed areas, and assisting welfare recipients with employment. While these new or expanded credits represent a new paradigm in the delivery of social policy, little is known about who uses these programs and, equally important, who does not use these programs. Understanding utilization is a key to understanding how effective this means of transferring income is and whether we are reaching the targeted populations. This paper provides a framework for thinking about utilization of tax credits among low-income individuals, supported by existing research on credit utilization. With the existing data, it appears that utilization is by far the largest for the EITC, possibly because it is the oldest of these programs, the only refundable program, and the best targeted at low-income individuals. Utilization is low among low-income individuals in some tax credits because low-income individuals are not eligible. A redesign, including reducing complexity and administrative burdens or making these programs refundable, would result in the programs reaching those that they are ostensibly targeted towards. Conditional on being eligible, one common factor associated with increasing participation in many of these programs is a high benefit to cost ratio and sophistication with the tax system, whether that be through the use of a paid preparer, higher education levels, or experience with the tax system. Policymakers should think creatively about reducing filing burdens to increase participation, such as through wider use of electronic filing

Taxes and the poor: A microsimulation study of implicit and explicit taxes

The authors measure the cumulative burden on low-income households resulting from explicit taxes (state and federal income, and payroll taxes) and implicit taxes (reductions of program benefits as earnings rise). With monthly data from the 1990 Survey of Income and Program Participation, a simulation model calculates the benefits and taxes households receive and pay in 1990. A household's marginal tax rate is established by simulating the benefits and taxes the household would receive and pay if each member aged 15 or more received additional earnings of $10 per month. The changes in income that would result if all household members age 15 or older took a half-time, minimum-wage job are also calculated. Typical cumulative marginal tax rates on poor households are found to be about 27 percent, but this masks considerable variation across states as a result of differences in program eligibility rules, state income taxes, and state AFDC policies. The tax burdens resulting from taking a half-time minimum-wage job also vary greatly across states, and participants in AFDC and food stamps face median marginal tax rates significantly above the rates for all poor households. A consistent result, however, is that typical tax rates on the poor rarely exceed 60 percent when income changes resulting from incremental changes in monthly earnings are calculated. The authors conclude that for most poor households, tax rates are not so high as to diminish the possible effectiveness of such policies as the Earned Income Tax Credit, which try to make work more attractive than welfare.

The Role of Media Outreach and Program Modernization in the Growth of the SNAP Caseload

This research seeks to understand the role of information, in the form of media campaigns, and changes in transaction costs, in the form of online applications and call centers, in the growth in county-level SNAP caseloads. We find that SNAP radio advertisements are associated with a small increase in the SNAP caseload, though the magnitude of the estimates are sensitive to the econometric specification. The SNAP television ads, which were run only in 2006, are negatively correlated with caseloads. We find evidence of endogeneity in the placement of the advertising campaigns, leading to a positive bias in the estimated effect of the radio ad campaigns and a negative bias in the estimated effect of the TV ad campaigns. We also find the modernization policies are generally negatively correlated with caseloads, suggesting that providing information via the web and call centers did not successfully lower transaction costs in a uniform way that lead to higher SNAP participation.Supplemental Nutrition Assistance Program, SNAP, food stamps, food assistance, outreach, advertising, Consumer/Household Economics, Food Consumption/Nutrition/Food Safety, Food Security and Poverty, H53, I3,

Making Family Leave More Affordable in Massachusetts: The Temporary Disability Insurance Model

The passage of the Family and Medical Leave Act (FMLA) in 1993 was a milestone in the development of America’s basic labor standards. But many realized that the Act—which guaranteed 12 weeks unpaid leave for employees of large businesses—was only a cautious first step. The US continues to lag far behind most other nations in providing paid time off for employees needing to care for family members or their own non-work-related illnesses. States have begun to examine ways to expand both federal and state family and medical leave policies to make them accessible to more workers. State Temporary Disability Insurance (TDI) programs—which currently exist in five US states to provide wage replacement for employees needing to take time off from their jobs due to personal illnesses or disabilities unrelated to their work (medical leave)—have emerged as promising models for providing paid family leave. States like New Jersey and California have begun to consider expanding their TDI programs by enlarging the definition of disability to include “family disability,” thereby enabling workers to take paid leave for FMLA-type reasons: for the birth or adoption of a child, to care for young children, or to care for a sick child, spouse or parent. Massachusetts—which does not have a TDI program—also considered paid family and medical leave legislation modeled on TDI between 1988-1993, but these efforts were halted just after the passage of the FMLA in 1993. However, recent interest in expanding TDI to offer paid family leave in other states has grown in large part from the sense that the FMLA is inadequate in four main ways: 1) FMLA leave is unpaid; 2) many employees—particularly those of low income—are unable to take advantage of the new FMLA leave benefit (mainly because it is unpaid); 3) employees of businesses with fewer than 50 workers—about half of the American workforce—are not covered by the law; and 4) 12 weeks leave is considered too short for many leave needs. TDI programs, by contrast, offer paid leave for longer periods of time (as long as 26 to 52 weeks) and are generally not restricted by employer size, thereby covering more workers

The two faces of ownership: Introduction to the special section on ownership and economic decisions

(no abstract available