Self-selection Effects Research Articles

Gender robustness of overconfidence and excess entry

Camerer and Lovallo (1999; henceforth CL) present thought-provoking experimental evidence that overconfidence might lead to excess entry into markets. As their findings are based on the majority of sessions exclusively consisting of male participants, we conduct two experiments in an attempt to replicate their study while including both men and women in all of our sessions. Our Experiment 1 closely follows CL’s design whereas Experiment 2 employs a gender-neutral addition task and provides more control in assessing gender differences in overconfidence and excess entry. Using participants of both genders we are unable to replicate CL’s main finding that market entry decisions are driven by overconfidence. Contrary to CL, where self-selection increases the entry rate, in our Experiment 1 self-selection leads to less entry. This result is driven by self-selected females who rationally enter the market less often than self-selected males as their rank-determining performance on a sports and current events trivia quiz is weaker than the performance of self-selected males. In Experiment 2 we find no effect of self-selection on entry and no gender differences in entry rates or performance in the addition task. Our results point out that (i) the finding that overconfidence leads to excess entry is not robust to a population consisting of both genders; and (ii) the self-selection effect is sensitive to both gender and task that is used to determine the rank upon entry.

Context, gender and entrepreneurial intentions

PurposeThis paper aims to explore how gender differences in entrepreneurial intentions (EI) change when entrepreneurship education (EE) is added to the force field of macro-social stimulants and inhibitors of female EI in the particular context of the United Arab Emirates (UAE).Design/methodology/approachThe study is based on a pre-post survey with entrepreneurship students and students with a similar profile enrolled in other courses (N = 246) at three universities. The three main hypotheses are evaluated through independent-samples t-tests and a hierarchical multiple regression analysis.FindingsThe findings indicate a negative effect of gender stereotypes on female students’ EI in the UAE, regardless of the course type. Furthermore, entrepreneurship courses appear to be more successful than other courses in raising the EI of students in general and female students in particular. Finally, adding EE to the equation of macro-social inhibitors and stimulants of female EI in the UAE seems to tip the balance in favor of the influence of economic affluence, rapid modernization and proactive governmental policies to stimulate the entrepreneurial spirit among female residents. That is, at the end of the entrepreneurship courses, there was no significant gender difference in EI anymore and female students are significantly more likely to experience a positive change in EI than male students.Research limitations/implicationsThe literature review identifies the need for future studies to evaluate the impact of variability in sampling and methods among previous studies on gender effects in EE. Building on the findings, future studies could identify which aspects of EE are pivotal for customizing female students’ specific local interests and needs. The study is limited in the sense that the data set did not enable tests of moderators at the course level (which mostly requires more qualitative data) and individual level. In addition, the sample is not representative for all female residents in the UAE at large.Practical implicationsThis study might stimulate (UAE) policymakers to increase the scope and quality of EE. In turn, university administrators are recommended to find ways to compensate the self-selection effect (overcome likely opt-out by female students) when entrepreneurship courses are elective.Originality/valueThis exploration was inspired by the strong emphasis that Julie Weeks put on the gendered impact of macro-level factors in business enabling environments (Weeks, 2011). The empirical analysis builds on a conceptual framework that integrates Krueger’s model of EI, theory on gender stereotypes in entrepreneurship and previous literature on the role of EE (reinforcing or mitigating stereotypes). The study is executed in the relatively unexplored context of the UAE, which offers strong macro-social inhibitors for ánd stimulants of female entrepreneurship.

Export and Productivity- Evidence from Israel

We estimate the relationship between exporting and productivity using data on Israeli manufacturing firms from the years 1996-2003. We find that the total factor productivity of exporting firms in Israel is higher than that of non-exporters. The export premium is higher before firms enter the export market, an indicator of a self-selection effect. We also find an additional premium for firms after they have entered the export market, which is suggestive of a learning by exporting effect. We then use econometric methods to estimate the causal link between export and productivity, and obtain varying results depending on the estimation method. Using a matched differences-in-differences methodology we find a significant positive learning effect. Growth in the productivity of exporting firms is approximately 12 percent 5 years after they enter the export market. When using the system GMM methodology proposed by Blundell and Bond (1998) however, we find a non-significant negative effect of exporting on productivity.

Major factors in the development of political attitudes

When studying the political development of young people, level of education matters. However, instead of concentrating on the amount of education and how it affects one’s political attributes (vertical effects of education), we consider the effects of characteristics of one’s education, specifically one’s college major, among people with similar levels of education (horizontal effects). Our study demonstrates that the discipline in which one majors affects one’s political development, over and above the expected self-selection effects. While our results are modest, they suggest that there is much to be gained from exploring horizontal variations in education and its effects on political attributes.

A late bird or a good bird? The effect of 9 o’clock attendance policy on student’s achievement

Policymakers around the world search for an optimal school schedule to enhance student’s academic achievement. In this paper, I examine the effect of the 9 o’clock attendance policy on student’s academic performance in South Korea. I find little evidence that delaying the school schedule positively affects pupil’s performance when I control for an extensive list of characteristics or an individual fixed effect. My result implies that individual’s omitted heterogeneities might confound results of previous literature which supports positive effects. I show that the effect of delaying the school starting time is likely to come from a good bird (self-selection effect) rather than a late bird (policy treatment effect). Therefore, we need to be cautious when interpreting the effect of postponing the school starting time, and more analysis and discussion are necessary on the education front.

Using propensity score matching technique to address self-selection in transit-oriented development (TOD) areas

Many studies have investigated the effects of transit-oriented development (TOD) on travel behavior, especially on transit ridership. However, most studies do not explicitly and effectively address the issue of residential self-selection in their analyses. The aim of this paper is to use cross-sectional data and propensity score matching (PSM) technique to quantify the contribution of residential self-selection to the analysis of mode choice in TOD areas across the metropolitan areas of Washington, D.C. and Baltimore, MD. The authors use PSM because it does not make substantive assumptions to the structure of the self-selection problem (e.g., explicit modeling of outcome and treatment). The results of PSM indicate that, even though the self-selection effect is considerable in the analysis of mode choice in TOD areas (about 7.65% in Washington, D.C. and 5.05% in Baltimore), living in TOD still has a significant impact on encouraging transit and other active modes of transportation.

Quantifying the relative contribution of factors to household vehicle miles of travel

Household vehicle miles of travel (VMT) has been exhibiting a steady growth in post-recession years in the United States and has reached record levels in 2017. With transportation accounting for 27 percent of greenhouse gas emissions, planning professionals are increasingly seeking ways to curb vehicular travel to advance sustainable, vibrant, and healthy communities. Although there is considerable understanding of the various factors that influence household vehicular travel, there is little knowledge of their relative contribution to explaining variance in household VMT. This paper presents a holistic analysis to identify the relative contribution of socio-economic and demographic characteristics, built environment attributes, residential self-selection effects, and social and spatial dependency effects in explaining household VMT production. The modeling framework employs a simultaneous equations model of residential location (density) choice and household VMT generation. The analysis is performed using household travel survey data from the New York metropolitan region. Model results showed insignificant spatial dependency effects, with socio-demographic variables explaining 33 percent, density (as a key measure of built environment attributes) explaining 12 percent, and self-selection effects explaining 11 percent of the total variance in the logarithm of household VMT. The remaining 44 percent remains unexplained and attributable to omitted variables and unobserved idiosyncratic factors, calling for further research in this domain to better understand the relative contribution of various drivers of household VMT.

The Self-Selection Effects of Retail Financial Products. The Case of Contractual Savings for Housing in Germany

The Self-Selection Effects of Retail Financial Products. The Case of Contractual Savings for Housing in Germany

CARRYOVER EFFECT OF ELITE HIGH SCHOOL TO JOB MARKET FOR UNIVERSITY GRADUATES: EMPIRICAL EVIDENCE FROM A UNIVERSITY ADMINISTRATION DATA

This paper estimates carryover effects of attending elite high schools on job markets after students’ university graduation. Most of the previous literature focused on returns of elite or private school attendance on academic achievements in university education. Instead, this study investigates whether the education effect of elite high school is carried forward to the job market after university studies. Our study utilizes unique university-employment-matched data obtained from one Korean university administration. In addition to students’ academic performance, such as grade point average (GPA), we also include participation in extracurricular activities to better control for the self-selection effect portable from elite high school as well as the quality of university education. The empirical results show that the education at elite high schools does not only positively affect the academic performance at university, but interestingly, it is found to be carried forward to the job market even after university graduation.

The Opportunity Costs of Becoming a Dean: Does Leadership in Academia Crowd Out Research?

Researchers in academia typically perform different tasks: research, teaching and services to the scientific community. We analyze the opportunity costs in terms of a potentially reduced publication productivity associated with becoming a dean in the German institutional setting where deans are non-professional expert-leaders who temporarily take the dean position. Theoretically, we distinguish between two different effects that relate deanship and publication productivity: a resource effect where publication productivity during and—as a result of potentially having developed a taste for service—also post deanship decrease as a result of a reduction of the available time for research and a self-selection effect where pre-deanship publication productivity is lower than that of peers who are not about to become dean. Based on a dataset of 1110 business and economics researchers from German-speaking universities, we find evidence for a resource effect with leadership in academia reducing research productivity during and also post deanship. We find no evidence of a negative self-selection effect in the sense of less successful researchers being more likely to take the position of a dean. Reduced research productivity during and post deanship as compared to those researchers that never became dean is driven by those researchers who become dean in later periods of their career, i. e., presumably by those who deliberately shift their focus away from research and towards a stronger engagement in the scientific community in their late career years. Early career deans, on the contrary, seem to see their deanship more as a transitory role and are able to compensate the reduced resources during deanship, and they also do not suffer from a reduced publication productivity post deanship.

When Context Meets Self-Selection: The Built Environment–Travel Connection Revisited

Existing studies on the built environment (BE)–travel connection tend to underestimate the potential of BE-based mobility strategies due to these studies’ limitations in conceptual and analytical frames. This study conceptualized the combined direct and indirect effects of BE on travel as contextual effects around three features of BE: multiplicity, interaction, and scalability. The conceptual framework was operationalized through multilevel modeling. The empirical analysis from Austin, Texas, verified the multiplicity of BE as it affected VMT, confirmed the complementary effects of BE and residential self-selection on VMT, and demonstrated practical procedures to deal with the analytical challenges of BE scalability.

Gender Robustness of Overconfidence and Excess Entry

Camerer and Lovallo (1999; henceforth CL) present thought-provoking experimental evidence that overconfidence might lead to excess entry into markets. As their findings are based on the majority of sessions exclusively consisting of male participants, we conduct two experiments in an attempt to replicate their study while including both men and women in all of our sessions. Our Experiment 1 closely follows CL’s design whereas Experiment 2 employs a gender-neutral addition task and provides more control in assessing gender differences in overconfidence and excess entry. Using participants of both genders we are unable to replicate CL’s main finding that market entry decisions are driven by overconfidence. Contrary to CL, where self-selection increases the entry rate, in our Experiment 1 self-selection leads to less entry. This result is driven by self-selected females who rationally enter the market less often than self-selected males as their rank-determining performance on a sports and current events trivia quiz is weaker than the performance of self-selected males. In Experiment 2 we find no effect of self-selection on entry and no gender differences in entry rates or performance in the addition task. Our results point out that (i) the finding that overconfidence leads to excess entry is not robust to a population consisting of both genders; and (ii) the self-selection effect is sensitive to both gender and task that is used to determine the rank upon entry.

Analysis of Household Consumption Behavior and Indebted Self-Selection Effects: Case Study of Thailand

Copula is deemed to be a good approach for relaxing bivariate or multivariate distributions in econometric models. This paper combines static and dynamic copula functions with endogenous switching to study self-selection effects and interdependence between error terms. This technique, copula-based models, is applied to analyze household consumption behavior and indebted self-selection effects in Thailand. The independent, Gaussian, Frank, Clayton, Gumbel, and Joe copula functions and the relatively rotated copula functions were employed in the empirical work. The best model was selected by the information criterion, AIC. We separated the households into four groups, indebted households, debt-free households, households with housing/land loans, and households without housing/land loans, which favors the examination of the treatment effects of indebted households or households with housing debts. The main results indicate that dynamic copula-based models offer better performance than others, such as classical endogenous switching models or all static copula-based models. Also, the I–I and the G–G models underestimate the treatment effects relative to the best models. Additionally, importantly, the traditional normal bivariate distribution or the static copula function could characterize the relationship as regards errors between household debt choice and household consumption and can lead to very misleading implications about the treatment effects.

After-School and Informal STEM Projects: the Effect of Participant Self-Selection

This research represents an unforeseen outcome of the authors’ National Science Foundation Innovation Technology Experiences for Students and Teachers (ITEST) program grant in science education. The grant itself focused on the use of serious educational games (SEGs) in the science classroom, both during and after school, to teach science content and affect student perceptions of science and technology. This study consists of a Bayesian artificial neural network analysis, using the preintervention measures of affect, interest, personality, and cognitive ability, in members of both the treatment and comparison groups to generate the probabilities that students would opt into the treatment group or choose not to participate. It appears, from this sample and the sampling methods of other related studies within the field, that despite sometimes profound results from technology interventions in science, interventions are affecting only those who already have a strong interest in STEM due to the manner in which participants are recruited.

Hukou-Restricted Migration and Migrants\u2019 Health: Evidence and Policy Implication

Since the 1980s, rapid economic development in China has continued to attract great numbers of migrants from rural to urban labor markets. As a result, the constraints of the hukou registration system on migration flows have gradually declined. Nevertheless, institutional barriers associated with the hukou remain for migrants in their social integration in destination. And these have led to substantial negative impacts on migrants’ physical, social and psychological wellbeing.Regional institutional variation and recent reforms in the hukou system at the provincial or lower level set up a semi experimental context in which to examine how institutional or structural differences can affect migrants’ wellbeing. This study analyzes the health-related differences between migrants in two major migrant-receiving cities, Beijing and Shenzhen. To eliminate the effect of self-selection in destination choice, we use propensity score matching to remove the observable differences which are relevant in destination choice and to make the respondents in the two cities more comparable. With the matched samples, we examine the net effect of migration destination on health outcomes and health service use. We found that migrants in Shenzhen have relatively poorer physical and psychological health compared with those in Beijing, and that they have more unmet health needs in spite of their higher use of health services. We discuss the structural and institutional factors which may be relevant to the observed net health differences, including the differences in policy implementation and regulations between these two cities.

Offshore-sourcing strategies and the puzzle of productivity: a micro-level analysis

PurposeThe purpose of this paper is to assess whether offshoring strategies are able to substantially enhance firms’ international competitiveness in terms of productivity, innovativeness and skill composition for a panel of Italian manufacturing firms.Design/methodology/approachA set of hypotheses derived from the extant literature is tested on data from balance sheets and qualitative surveys of about 4,000 Italian firms. The methodology used is a propensity score matching estimator and difference in differences method that allowed the authors to detect the causal effect of the offshoring status of the firms on some performance measures.FindingsResults demonstrate that offshoring increases the propensity to innovate and the skill ratio of workers but does not show a significant association with productivity growth. The estimates are robust in all the specifications.Research limitations/implicationsThe results are applicable to Italian firms. The magnitude and timing of the effects may vary across firms and countries.Originality/valueThis paper contributes to the empirical literature on offshoring by exploring its impact on a variety of firms’ performance measures by using matching techniques that allow us to investigate more in depth the causality link of the relationship and to control for the self-selection effect (more productive firms self-select to offshore).

Predicting the Fourth Industrial Revolution and Subsequent Changes in the Urban Environment and Human Behavior : A Review on the Validity of Research about the Built Environment-Travel Behavior Relationship

The Fourth Industrial Revolution is expected to greatly influence green space, leisure, land use, transportation use and service, and related residential choice. In the face of the Fourth Industrial Revolution that calls on the construction of a new environmental policy and management system and the prediction of changes in the urban environment and human behavior, the purpose of this study is to examine how to improve research validity for a better construction/prediction and to provide considerations for an appropriate use of big data. Using the case of Google Flu Trends, this study argues that the first limitation of big data is that they draw only correlation, not causality, which increases the chance of the misestimation. As the second limitation of big data, their lack of scientific sampling is discussed, using the cases of a Twitter survey about Hurricane Sandy and Boston’s StreetBump (pothole response) program. Then, this study examines which conditions are required to improve research validity, through an analysis of previous studies on the built environment-travel behavior relationship. As for studies on the relationship, the hottest topic in the current literature is residential self-selection: Individual features work as a confounder that makes the relationship spurious. The spurious relationship accordingly causes the built environment effect to be misestimated. In this sense, considering the four conditions for constructing internal validity or causality -- causal mechanism, covariation, nonspuriousness, and time precedence -- this study critically evaluates the methods of previous studies, including regression-based approaches such as OLS and 2SLS regression, longitudinal design including panel analysis, quasi-longitudinal analysis and recursive and nonrecursive structural equation modeling, and consonant-dissonant matching. Also investigated are two recent models that actively measure the level of residential self- election, propensity score matching and sample selection model. As a result, previous studies turn out to have delivered mixed results regardless of methodology. Specifically, they are not in agreement regarding the magnitude of the confounding effect of residential self-selection. This study ends by highlighting the fact that as a validity threat, selection bias lowers not only internal validity, but also external validity through its interaction with an explanatory variable, suggesting further research on the generalizability of analytical results.

Opting out of treatment: Self-selection bias in a randomized controlled study of a focused deterrence notification meeting

This study investigated the role of self-selection in an evaluation of the impact of a focused deterrence notification meeting on subsequent arrests. We conducted a randomized controlled study that randomly assigned probationers and parolees to a treatment group asked to attend a focused deterrence notification meeting and a control group that was not asked to attend the meeting. A sizable proportion of the treatment group did not attend the meeting. We estimated intent-to-treat, average treatment, and local average treatment models to evaluate the effect of attending the notification meeting on future arrests and the effect of self-selection on the results. Subjects who attended the notification meeting were less likely than those who did not receive treatment to be arrested over the following 17 months. The results were not significantly affected by selection effects. Future evaluations of focused deterrence and related criminal justice interventions should be based on randomized controlled research designs that address selection effects on the outcome.

Beliefs about Economics and Economic Policies: How Different Are Prospective Economists and Teachers at the Beginning of Their Studies?

Abstract We present results from a survey of 1,399 first-year university students of economics and of courses designed for prospective teachers in Germany. We find strong self-selection effects in terms of students’ interests, their views about economics as a discipline and selected economic policy proposal: Students in political and social science education are systematically more sceptical of free-market policies. Regression analysis further suggests that economics and economics education students consistently place lesser emphasis on fairness in their acceptance judgments about policy proposals. Comparison with previous surveys suggest that indoctrination effects at university level may be stronger for economists than for teachers. JEL Codes: A13, A20, A21, F5, H0

Innovation and willingness to export: is there an effect of conscious self-selection?

Abstract This paper presents an analysis of the crucial relationship between innovation, productivity, and export in Small and Medium Enterprises (SMEs). The primary aims of this study are to evaluate the role of innovation in the premium export and test the hypothesis of firm conscious self-selection on willingness to export. To this end, the authors used their database of SMEs, obtained from the survey conducted in the IDEIS project, which provides highly pertinent information on innovation and export areas. Based on the aforementioned database, the authors evaluate apparent premium of exportation and innovation. In addition, they demonstrate the effectiveness of the export premium for high exportation firms that implement process and organization innovations. Finally, the authors analyse the effect of conscious self-selection from the export process that transforms an intention to export into the capacity to export in short term. The conscious self-selection to export is revealed by simultaneously endogeneizing productivity and innovation output based on recursive non-linear model.