An Analysis of the Marginal Products of the One- and Two-Semester Introductory Economics Courses

The authors examine whether the administrative location of an economics department in a business versus liberal arts school alters the character of the economics program provided to undergraduate majors. To test this hypothesis, they constructed a curricular character index (CCI) based on a detailed accounting of assorted dimensions of an economics major. The CCI served as the dependent variable in a regression model that controlled for other institutional attributes that could influence curricular character. The sample of 148 primarily undergraduate institutions was selected to impose some semblance of a ceteris paribus environment. Contrary to earlier findings, the empirical results strongly indicate that the administrative location of an economics department in business versus liberal arts schools significantly changes the character of the program offered to majors.     

Assessing the Impact of an Instructional Innovation on Achievement Differentials: The Case of Computer-Assisted Instruction

In this article the authors offer “an alternative to the conventional procedure for assessing the quantitative impact of an instructional innovation on achievement differentials.” Although computer-assisted instruction is the medium discussed here, the authors claim that any innovative technique that affects the student's allocation of time can be analyzed in a similar fashion. Thus, this piece should be of interest not only to those experimenting with computer-assisted instruction but to all who are engaged in experimental economic education research.     

Poverty and probability: aspiration and aversion to compound lotteries in El Salvador and India

Some experimental participants are averse to compound lotteries: they prefer simple lotteries that depend on only one random event, even when the simple lotteries offer lower expected value. This paper proposes that many behavioral “investments” represent more compound risk for poorer people—who often face multiple dimensions of deprivation—than for richer people. As a result, identical aversion to compound lotteries can prevent investment among poorer people, but have no effect on richer people. The paper reports five studies: two initial studies that document that aversion to compound lotteries operates as an economic preference, two “laboratory experiments in the field” in El Salvador, and one Internet survey experiment in India. Poorer Salvadoran women who choose a compound lottery are 27 percentage points more likely to have found formal employment than those who chose a simple lottery, but lottery choice is unrelated to employment for richer women. Poorer students at the national Salvadoran university choose more compound lotteries than richer students, on average, implying that aversion to compound lotteries screened out poorer aspirants but not richer ones. Poorer and lower-caste Indian participants who choose compound lotteries are more likely than those who choose simple lotteries to have a different occupation than their parents, which is not the case for better-off participants. These findings suggest that the consequences of aversion to compound lotteries are different in the context of poverty and disadvantage.     

Reexamining the significance of childhood recreation patterns on adult leisure behavior

This study is the examination of the impact of childhood participation levels in outdoor recreation on the activity level of that individual as an adult. The study is based on a stratified random sample of adult residents in eight northeastern Iowa counties. Forty‐five outdoor recreation activities were used to determine the “carry‐over” of participation from childhood to adulthood. The results indicate a direct effect of the childhood level of participation on adult level of participation. Only eight of forty‐five activities seem to carry over; therefore, prediction of specific activity carryover is very limited. Implications for educating for leisure and aspects of socialization are discussed.     

Fornell,Claes. Consumer Input for Marketing Decisions,a Study of Corporate Departments for Consumer Affairs. New York: Praeger, 1976

This study examined whether children recognized advergames as a type of advertising and the efficacy of an advertising literacy program. Results indicated that without the advertising literacy education, about three-quarters of the children did not recognize advergames as a type of advertising. However, those with advertising literacy education showed a significantly enhanced understanding. Also, a series of mediation tests showed that recognition of advertising was an indirect-only mediator between the advertising literacy and skeptical attitudes toward advertising. Only those who viewed the advergame as a type of advertising demonstrated more skeptical attitudes toward it.     

Delivering ‘effortless experience’ across borders: Managing internal consistency in professional service firms

This article explores how professional service firms (PSFs) manage across borders. When clients require consistent services delivered across multiple locations, especially across borders, then firms need to develop an organization that is sufficiently flexible to be able to support such consistent service delivery. Our discussion is illustrated by the globalization process of law firms. We argue that the globalization of large corporate law firms primarily takes place in terms of investments in the development of protocols, processes and practices that enhance internal consistency such that clients receive an ‘effortless experience’ of the service across multiple locations worldwide. Over the longer term the ability to deliver such effortless experience is dependent upon meaningful integration within and across the firm. Firms that achieve this are building a source of sustainable competitive advantage.     

Finding Missing Markets (and a Disturbing Epilogue): Evidence from an Export Crop Adoption and Marketing Intervention in Kenya

Farmers may grow crops for local consumption despite more profitable export options. DrumNet, a Kenyan NGO that helps small farmers adopt and market export crops, conducted a randomized trial to evaluate its impact. DrumNet services increased production of export crops and lowered marketing costs, leading to a 32% income gain for new adopters. The services collapsed one year later when the exporter stopped buying from DrumNet because farmers could not meet new EU production requirements. Farmers sold to other middlemen and defaulted on their loans from DrumNet. Such experiences may explain why farmers are less likely to adopt export crops.     

The fallacy of “only the strong survive”: The effects of extrinsic motivation on the persistence decisions for under-performing firms

Under-performing firms persist even though existing theoretical perspectives indicate that they should be selected out of the market. Building upon threshold theory [Gimeno, J., Folta, T., Cooper, A., Woo, C., 1997. Survival of the fittest? Entrepreneurial human capital and the persistence of underperforming firms. Administrative Science Quarterly 42, 750–783.] and using Staw's [Staw, B.M., 1981. The escalation of commitment to a course of action. Academy of Management Review 6 (4), 577–587.] theoretical model of commitment to a course of action, we explore and test the factors that lead entrepreneurs to persist with under-performing firms. We found environmental munificence, personal investment, personal options, previous organizational success, and perceived collective efficacy impact the decision to persist with an under-performing firm. In addition, extrinsic motivation moderates those relationships. This research adds to the growing literature on highly persistent, under-performing firms and complements and extends threshold theory.     

The death of an innovative project: How grief recovery enhances learning

Given the increase in corporate innovative activity, entrepreneurial projects that are created to pursue new and unique opportunities often fail—or “die”—due to the uncertain environment within which they develop. Although failure can be an important source of information for learning, this learning is not automatic or instantaneous. The emotions generated by failure (e.g., grief) can interfere with the learning process. This article highlights explanations of the grief process and how it can be managed by individuals and organizations to enhance learning. Specifically, by using a dual process model for recovering from grief, innovators can learn more from their project failures and remain committed to future innovative endeavors.