Evidence Soup
How to find, use, and explain evidence.

6 posts categorized "economics"

Tuesday, 05 April 2016

$15 minimum wage, evidence-based HR, and manmade earthquakes.

Fightfor15.org

Photo by Fightfor15.org

1. SPOTLIGHT: Will $15 wages destroy California jobs?
California is moving toward a $15/hour minimum wage (slowly, stepping up through 2023). Will employers be forced to eliminate jobs under the added financial pressure? As with all things economic, it depends who you ask. Lots of numbers have been thrown around during the recent push for higher pay. Fightfor15.org says 6.5 million workers are getting raises in California, and that 2/3 of New Yorkers support a similar increase. But small businesses, restaurants in particular, are concerned they'll have to trim menus and staff - they can charge only so much for a sandwich.

Moody's Analytics economist Adam Ozimek says it's not just about food service or home healthcare. Writing on The Dismal Scientist Blog, "[I]n past work I showed that California has 600,000 manufacturing workers who currently make $15 an hour or less. The massive job losses in manufacturing over the last few decades has shown that it is an intensely globally competitive industry where uncompetitive wages are not sustainable." 

It's not all so grim. Ozimek shows that early reports of steep job losses after Seattle's minimum-wage hike have been revised strongly upward. However, finding "the right comparison group is getting complicated."


Yellow Map Chance of Earthquake

2. Manmade events sharply increase earthquake risk.
Holy smokes. New USGS maps show north-central Oklahoma at high earthquake risk. The United States Geological Survey now includes potential ground-shaking hazards from both 'human-induced' and natural earthquakes, substantially changing their risk assessment for several areas. Oklahoma recorded 907 earthquakes last year at magnitude 3 or higher. Disposal of industrial wastewater has emerged as a substantial factor.

3. Evidence-based HR redefines leadership roles.
Applying evidence-based principles to talent management can boost strategic impact, but requires a different approach to leadership. The book Transformative HR: How Great Companies Use Evidence-Based Change for Sustainable Advantage (Jossey-Bass) describes practical uses of evidence to improve people management. John Boudreau and Ravin Jesuthasan suggest principles for evidence-based change, including logic-driven analytics. For instance, establishing appropriate metrics for each sphere of your business, rather than blanket adoption of measures like employee engagement and turnover.

4. Why we're not better at investing.
Gary Belsky does a great job of explaining why we think we're better investors than we are. By now our decision biases have been well-documented by behavioral economists. Plus we really hate to lose - yet we're overconfident, somehow thinking we can compete with Warren Buffet.

Tuesday, 22 December 2015

Asthma heartbreak, cranky economists, and prediction markets.

This week's 5 links on evidence-based decision making.

1. Childhood stress → Cortisol → Asthma
Heartbreaking stories explain likely connections between difficult childhoods and asthma. Children in Detroit suffer a high incidence of attacks - regardless of allergens, air quality, and other factors. Peer-reviewed research shows excess cortisol may be to blame.

2. Prediction → Research heads up → Better evidence
Promising technique for meta-research. A prediction market was created to quantify the reproducibility of 44 studies published in prominent psychology journals, and estimate likelihood of hypothesis acceptance at different stages. The market outperformed individual forecasts, as described in PNAS (Proceedings of the National Academy of Sciences.)

3. Fuzzy evidence → Wage debate → Policy fail
More fuel for the minimum-wage fire. Depending on who you ask, a high minimum wage either bolsters the security of hourly workers or destroys the jobs they depend on. Recent example: David Neumark's claims about unfavorable evidence.

4. Decision tools → Flexible analysis → Value-based medicine
Drug Abacus is an interactive tool for understanding drug pricing. This very interesting project, led by Peter Bach at Memorial Sloan Kettering, compares the price of a drug (US$) with its "worth", based on outcomes, toxicity, and other factors. Hopefully @drugabacus signals the future for health technology assessment and value-based medicine.

5. Cognitive therapy → Depression relief → Fewer side effects
A BMJ systematic review and meta-analysis show that depression can be treated with cognitive behavior therapy, possibly with outcomes equivalent to antidepressants. Consistent CBT treatment is a challenge, however. AHRQ reports similar findings from comparative effectiveness research; the CER study illustrates how to employ expert panels to transparently select research questions and parameters.

Tuesday, 17 November 2015

ROI from evidence-based government, milking data for cows, and flu shot benefits diminishing.

This week's 5 links on evidence-based decision making.

1. Evidence standards → Knowing what works → Pay for success
Susan Urahn says we've reached a Tipping Point on Evidence-Based Policymaking. She explains in @Governing that 24 US governments have directed $152M to programs with an estimated $521M ROI: "an innovative and rigorous approach to policymaking: Create an inventory of currently funded programs; review which ones work based on research; use a customized benefit-cost model to compare programs based on their return on investment; and use the results to inform budget and policy decisions."

2. Sensors → Analytics → Farming profits
Precision dairy farming uses RFID tags, sensors, and analytics to track the health of cows. Brian T. Horowitz (@bthorowitz) writes on TechCrunch about how farmers are milking big data for insight. Literally. Thanks to @ShellySwanback.

3. Public acceptance → Annual flu shots → Weaker response?
Yikes. Now that flu shot programs are gaining acceptance, there's preliminary evidence suggesting that repeated annual shots can gradually reduce their effectiveness under some circumstances. Scientists at the Marshfield Clinic Research Foundation recently reported that "children who had been vaccinated annually over a number of years were more likely to contract the flu than kids who were only vaccinated in the season in which they were studied." Helen Branswell explains on STAT.

4. PCSK9 → Cholesterol control → Premium increases
Ezekiel J. Emanuel says in a New York Times Op-Ed I Am Paying for Your Expensive Medicine. PCSK9 inihibitors newly approved by US FDA can effectively lower bad cholesterol, though data aren't definitive whether this actually reduces heart attacks, strokes, and deaths from heart disease. This new drug category comes at a high cost. Based on projected usage levels, soem analysts predict insurance premiums could rise >$100 for everyone in that plan.

5. Opportunistic experiments → Efficient evidence → Informed family policy
New guidance details how researchers and program administrators can recognize opportunities for experiments and carry them out. This allows people to discover effects of planned initiatives, as opposed to analyzing interventions being developed specifically for research studies. Advancing Evidence-Based Decision Making: A Toolkit on Recognizing and Conducting Opportunistic Experiments in the Family Self-Sufficiency and Stability Policy Area.

Tuesday, 20 October 2015

Evidence handbook for nonprofits, telling a value story, and Twitter makes you better.

This week's 5 links on evidence-based decision making.

1. Useful evidence → Nonprofit impact → Social good
For their upcoming handbook, the UK's Alliance for Useful Evidence (@A4UEvidence) is seeking "case studies of when, why, and how charities have used research evidence and what the impact was for them." Share your stories here.

2. Data story → Value story → Engaged audience
On Evidence Soup, Tracy Altman explains the importance of telling a value story, not a data story - and shares five steps to communicating a powerful message with data.

3. Sports analytics → Baseball preparedness → #Winning
Excellent performance Thursday night by baseball's big data-pitcher: Zach Greinke. (But there's also this: Cubs vs. Mets!)

4. Diverse network → More exposure → New ideas
"New research suggests that employees with a diverse Twitter network — one that exposes them to people and ideas they don’t already know — tend to generate better ideas." Parise et al. describe their analysis of social networks in the MIT Sloan Management magazine. (Thanks to @mluebbecke, who shared this with a reminder that 'correlation is not causation'. Amen.)

5. War on drugs → Less tax revenue → Cost to society
The Democratic debate was a reminder that the U.S. War on Drugs was a very unfortunate waste - and that many prison sentences for nonviolent drug crimes impose unacceptable costs on the convict and society. Consider this evidence from the Cato Institute (@CatoInstitute).

Tuesday, 13 October 2015

Decision science, NFL prediction, and recycling numbers don't add up.

This week's 5 links on evidence-based decision making.

Hear me talk October 14 on communicating messages clearly with data. Part of the HEOR Writing webinar series: Register here.

1. Data science → Decision science → Institutionalize data-driven decisions
Deepinder Dhingra at @MuSigmaInc explains why data science misses half the equation, and that companies instead need decision science to achieve a balanced creation, translation, and consumption of insights. Requisite decision science skills include "quantitative and intellectual horsepower; the right curiosity quotient; ability to think from first principles; and business synthesis."

2. Statistical model → Machine learning → Good prediction
Microsoft is quite good at predicting American Idol winners - and football scores. Tim Stenovec writes about the Bing Predicts project's impressive record of correctly forecasting World Cup, NFL, reality TV, and election outcomes. The @Bing team begins with a traditional statistical model and supplements it with query data, text analytics, and machine learning.

3. Environmental concern → Good feelings → Bad recycling ROI
From a data-driven perspective, it's difficult to justify the high costs of US recycling programs. John Tierney explains in the New York Times that people's good motives and concerns about environmental damage have driven us to the point of recovering every slip of paper, half-eaten pizza, water bottle, and aluminum can - when the majority of value is derived from those cans and other metals.

4. Prescriptive analytics → Prescribe actions → Grow the business
Business intelligence provides tools for describing and visualizing what's happening in the company right now, but BI's value for identifying opportunities is often questioned. More sophisticated predictive analytics can forecast the future. But Nick Swanson of River Logic says the path forward will be through prescriptive analytics: Using methods such as stochastic optimization, analysts can prescribe specific actions for decision makers.

5. Graph data → Data lineage → Confidence & trust
Understanding the provenance of a data set is essential, but often tricky: Who collected it, and whose hands has it passed through? Jean Villedieu of @Linkurious explains how a graph database - rather than a traditional data store - can facilitate the tracking of data lineage.

Wednesday, 19 August 2015

Science of criminal sentencing, pharma formulary decisions, and real astrology?

This week's 5 links on evidence-based decision making.

1. Criminal patterns → Risk assessment → Science of sentencing The Marshall Project describes the new science of sentencing, where courts use statistically derived risk assessments to inform their decisions about which prisoners should be released on parole, and how bail should be set. (Thanks to Gregory Piatetsky, @kdnuggets.)

2. Clinical & cost effectiveness → Evidence base → Pharma formulary Express Scripts, a large U.S. pharmacy benefits manager, has released its 2016 formulary outlining which drugs will be covered, and which will not. @BioPharmaDive explains the decision process: An independent group of physicians reviews the evidence on clinical and cost effectiveness of each candidate. "Me-too" products aren't making the cut.

3. March birthday → Atrial fibrillation → Real astrology? The Journal of the American Medical Informatics Association has findings from a retrospective population study that systematically explored (with a phenome-wide method) the connection between birth month and disease risk for 1,688 conditions. Authors claim that for 55 diseases, "seasonally dependent early developmental mechanisms may play a role in increasing lifetime risk."

4. Data-driven → Fewer middle managers → Nimble decision processes Data-driven management processes need careful driving, says Ed Burns. Benefits include transparent and objective decisions, and more nimble ones when analytics can eliminate middle managers. However, some efforts have backfired. More in this podcast by @EdBurnsTT, What are your tips for putting in place data-driven management strategies?

5. Aggregated economic data → Positive trends → Data-driven optimism Economist Max Roser is an optimist. Jeff Rothfeder writes in @stratandbiz about Roser's analysis of disparate data covering "everything from African development to violent death rates", and his conclusions that evidence unambiguously shows a world evolving for the better.