Can pollution affect white collar productivity levels?
In a first-of-its-kind study on the impact of air pollution on white collar productivity levels, Steffen Meyer of the Leibniz University of Hannover and Michaela Pagel of Columbia Business School show that spikes in concentration of particulate matter in the air can bring down the productivity levels of white collar workers. Their findings, reported in a recent National Bureau of Economic Research (NBER) working paper, are based on an analysis of trading activity of more than a hundred thousand private investors in Germany. The authors show that a rise in pollution levels bring down the likelihood of individual investors to sit down, log in, and trade in their brokerage accounts even after controlling for investor-specific, weather, traffic, and market-related factors. A one standard deviation increase in fine particulate matter (PM 10 levels) leads to the same reduction in the probability of logging in and trading as a one standard deviation increase in sunshine, the authors show. Standard deviation is a measure of variation from the mean. The authors argue that pollution’s impact on the modern world may be more detrimental than previously thought. Read more
Beliefs and income levels both influence people’s expectations about future macroeconomic conditions, shows an NBER working paper by Sreyoshi Das of Cornell University and co-authors. The paper, which analyses data from the Michigan Survey of Consumers from 1978-2014 shows that individuals with a higher socioeconomic status (income, education) are relatively more optimistic about macroeconomic developments, business conditions, stock market returns, and unemployment compared to those from less privileged backgrounds. These expectations are often formed by drawing on their own personal experiences about returns to effort. Read more
New research by David H. Howard of the department of health policy and management at Emory University and co-authors shows that whether or not patients are subjected to diagnostic tests in scenarios where doctors have discretion depends crucially on financial incentives that doctors face. Incentives linked to such tests are likely to promote use of such tests even when those tests may be unnecessary. Read more
A recent research paper by Ashwini Deshpande of the University of Delhi and co-authors published in World Development shows that the gender wage-gap among salaried workers in India cannot be explained by job-related attributes such as educational levels, and arises because of discrimination. Using National Sample Survey Office (NSSO) data for wages of regular or salaried workers, the authors show that the gender gap in wages has increased between 1999-2000 and 2009-10. Discrimination in pay is higher at the lower end of the labour market, and relatively less for workers with high salaries. Read more
The economy is seen to be the most influential factor in determining one’s political inclination but only 12% of people in the UK feel the subject is communicated in a way that is easy to understand, according to a recent report by Economy – a non-profit advocacy that emerged from the Rethinking Economics movement led by students in the UK advocating a more plural economics education.
The survey of 5,000 people in the UK shows that a significant share of the population lacks understanding of economics due to presence of jargon, inability to find relevance of economics in daily lives, lack of basic economics as a subject in school, etc. The study shows that greater understanding of economics is associated with a greater tendency to vote. Read more
Economics Digest runs weekly, and features interesting reads from the world of economics
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