Heinz Research

Adjusting GPA to Reflect Course Difficulty

Jonathan Caulkins et al. — Tue, 15 Feb 2011 11:14:20 PST

The computation of Graduate Point Average (GPA) incorrectly assumes that grades are comparable across courses and instructors. GPA overstates the performance of students who elect an "easier" course of study relative to those who choose a more "difficult" course of study. This paper proposes a method of adjusting GPA and applies it to data from one cohort of undergraduates at Carnegie Mellon University. Adjusted GPAs are more highly correlated with students’ high school Grade Point Average and with SAT scores than are the raw GPAs or GPAs adjusted using a prominent alternative method, Item Response Theory. A survey of students finds that the new methods’ estimates of relative course difficulty are consistent with students’ perceptions of relative course difficulty.

Insurance, Vertical Restraints and Competition

Martin Gaynor et al. — Tue, 15 Feb 2011 11:14:18 PST

Physician Contracting with Health Plans, A Survey of the Literature

Martin Gaynor et al. — Tue, 15 Feb 2011 11:14:16 PST

Returns to Specialization, Transaction Costs, and the Dynamics of Industry Evolution

Ashish Arora et al. — Tue, 15 Feb 2011 11:14:14 PST

We develop a model of industry evolution to study the process of vertical integration and disintegration (specialization). Absent industry level increasing returns, an industry will be vertically integrated in the long run if and only if transaction costs are greater than the costs of coordinating within a firm. However, convergence to the efficient industry structure may take very long and may not be monotonic: For long periods of time, the industry structure may diverge from its long run equilibrium of vertical integration. When transaction costs depend on the extent of specialization, there can be path dependence and inefficiency even in the very long run. Even when specialization is efficient, the industry may become vertically integrated.

A Structural Perspective on Organizational Cognitions: Attributions of Power, Performance, and Attitudes

Kathleen M. Carley et al. — Tue, 15 Feb 2011 11:14:12 PST

We develop a model of individual’s organizational cognitions (mental models for attitudes and evaluations of self and others in the workplace) that combines structural and cognitive influences. In this model cognition mediates the influence of structure on individual outcomes (attitudes and evaluations). We examine this model using data from a small engineering firm (including social network, attitude, and evaluation information). The results support the model and are consistent with the argument that individuals' structural position and roles constrain their organizational cognitions and so affect their evaluations of themselves and others. Accordingly, supervisors and subordinates both utilize the same information in different ways and utilize different information. Consequently, the organizational cognitions of individuals who occupy different structural positions differ systematically from each other. In particular, supervisors are more likely than subordinates to use external, organizationally validated information in evaluating subordinates; whereas, subordinates’ cognitions are more informed by patterns of friendship.

Estimating Elasticities of Demand for Cocaine and Heroin with Data from the Drug Use Forecasting System

Jonathan Caulkins — Tue, 15 Feb 2011 11:14:08 PST

Elasticities of demand for cocaine and heroin are estimated as the product of the elasticity of demand with respect to an intermediate variable and the elasticity of the intermediate variable with respect to price. The intermediate variable used here is the percent of arrestees testing positive for the drug. The demand for cocaine, at least, appears to be substantially more responsive to price changes that had previously been supposed.

Quantifying Passive Use Values From "Faint" Behavioral Trails: Television News Viewing and the Exxon Valdez

Scott Farrow et al. — Tue, 15 Feb 2011 11:14:07 PST

Observable actions in response to decreases in environmental quality are identified for passive users, those who will never use a damaged resource directly. The welfare implication of changes in the probability and value of time devoted to viewing news of the Valdez oil spill is estimated using a household production approach and assuming weak substitutability between news consumption and environmental protection. The implied change in welfare from viewing the news, expected to be a large component of passive use value, ranges from $12 to 17 million 1989 dollars. The approach also provides a basis for a conditioning element in the study of other observable behavior and for more general application to the observable costs of major news events.

Benchmarking Economic Development: Regional Strategy in Silicon Valley, Austin, Seattle, Oregon and Cleveland

Richard Florida et al. — Tue, 15 Feb 2011 11:14:03 PST

This paper explores "best-practice" regional economic development strategies in cities and regions throughout the United States. Benchmarking case studies were performed on Silicon Valley, Austin, Seattle, Oregon, and Cleveland consisting of field research, site visits and extensive personal interviews. While some of these regional efforts are quite new, and have not advanced beyond the formative stage, together they provide a good example of the cutting-edge approaches to regional economic development.

Capital and Creative Destruction: Venture Capital, Technological Change, and Economic Development

Richard Florida et al. — Tue, 15 Feb 2011 11:14:01 PST

Choosing Among Fuels and Technologies for Cleaning Up the Air

Robert W. Hahn — Tue, 15 Feb 2011 11:13:58 PST

Comparative Study of Cross Sectional Methods for Time Series with Structural Changes

George Duncan et al. — Tue, 15 Feb 2011 11:13:55 PST

Do Stock Prices Follow Random Walks: An Analysis of the Tokyo Stock Exchange

Karen A. Shastri et al. — Tue, 15 Feb 2011 11:13:54 PST

The purpose of this study is to evaluate the random walk hypothesis in the context of stocks traded on the Tokyo Stock Exchange (TSE). Using a volatility based specification test developed by Lo and McKinlay (1988), we conclude that the stock prices for small firms do not follow a random walk. To determine if this deviation from random walks is associated with long-range dependence, we estimate and analyze the modified "range over standard deviation" statistic constructed by Lo (1991). The results of this analysis suggest that short-term memory is most likely the reason for the observed structure of returns.

Dyadic and Demographic Strategies in Cross-Cultural Management: A Test of the Effect of Complementary Practices in MNC Performance

Stephen J. Appold et al. — Tue, 15 Feb 2011 11:13:52 PST

Employee Stock Ownership Plans and Financial Performance in American Firms

Gary W. Florkowski et al. — Tue, 15 Feb 2011 11:13:50 PST

Endogenous Preferences: A Structural Approach

David Krackhardt — Tue, 15 Feb 2011 11:13:48 PST

Incompletely Specified Probabilistic Networks

Stephen Roehrig — Tue, 15 Feb 2011 11:13:46 PST

Intuitive Time-Series Extrapolation of Sales

James M. Peters et al. — Tue, 15 Feb 2011 11:13:43 PST

ONDCP's First Four Years as a Policy Agency

Peter Reuter et al. — Tue, 15 Feb 2011 11:13:40 PST

Optimum Population -- A New Look: A Hamiltonian Approach Towards a Dynamic Analysis

Farasat Bokhari et al. — Tue, 15 Feb 2011 11:13:37 PST

The Effect of Culture and Staffing Patterns on Firm Performance: An Investigation of MNEs in Thailand

Stephen J. Appold et al. — Tue, 15 Feb 2011 11:13:34 PST