Congratulations Dr Gemma Piercy-Cameron

Yesterday, my wife had her PhD oral examination. She passed with flying colours, giving a very impressive summary of her very in-depth research on baristas' work identity (the title of her thesis is "Baristas: The Artisan Precariat"), as well as a very impressive display of answering the examiners' questions. Her examination was a model of how an excellent student can demonstrate their deep topic knowledge, their understanding of the relevant literature and how it relates to their own work, and the advantage and limitations of their chosen research methods. It was clear throughout the examination that the examiners were very impressed, and I was not surprised to hear that she passed with only minor revisions required to her thesis (and even the minor revisions are very minor, and will take no more than a couple of hours to action.

Gemma has worked incredibly hard to get to this point, not helped by her ongoing chronic health issues. She should be very proud of her achievement, as I am of her.

For the record, here's the abstract from her thesis (noting that it is a thesis in labour studies, not economics):

My research in the work identit(ies) of baristas demonstrates that different workplaces, in conjunction with individual biographies, produce different kinds of work identities. Connected to these differences are the actual and perceived levels of skill and/or social status ascribed to workers within the service work triadic relationship (customers, co-workers/managers and workers). The higher the level of skill or social status, the greater the capacity of workers to experience more autonomy in their work and/or access improved working conditions. These findings are informed by my research approach, which incorporates three key methods: key informant interviews; observation/participant observation; life history interviews; all of which is underpinned by the mystory approach and autoethnography.

My findings from the case study research of the barista work identity are expressed in the following. (1) The different work identities within a specific occupation contribute to the heterogeneity of service workers and service work. This heterogeneity, in turn, obscures the range of skills utilised in the technical and presentational labour mobilised in service work. The skills are obscured by the social and practice-based nature of knowledge transmission in service work like that of baristas, as well as by the dynamic and shifting alliances that may occur in the triadic relationship of customer, workers and employer/manager. (2) Interactive service workers are involved in providing labour or work that is more complex than is socially understood and recognised. This complexity stems from the ways in which presentational labour is commodified, appropriated and mobilised in the workplace within the spaces of the organisational context, internal practices, and the service encounter. (3) I further argue that service workers are also dehumanised as part of the service encounter through the structure of capitalism, specifically the application of commodity fetishism to workers by customers, colleagues, managers, capital and at times themselves. Commodity fetishism dehumanises workers, creating an empathy gap between customers/managers and workers. As such, the commodity fetishisation of service workers also reinforces and promotes compliance with the insecure and precarious employment practices common to occupations in the service sector. (4) As the conditions of precarious work continue to spread, the employment relationship is being altered in relation to consumption practices. Based on this shift in employment relations, I argue that we are moving towards a labour market and society shaped by the practices of the consumer society as well as the traditional production-based economy. However, the increasing influence of consumption practices stems from neoliberal inspired changes in employment relationships rather than the consumer society emphasis on agentic identity projects. As such, the self-determining identity projects highlighted by researchers engaged in aspects of service work and consumption-based research also need to be accompanied by an understanding of the political economy and structural forces which shape the labour process. 

 Congratulations Dr Piercy-Cameron!

Auckland Airport passport control's accidental nudge fail

I just got back from Europe, where I was attending the EduLearn 2018 conference. On arriving back at Auckland Airport, we were confronted as usual with rows of SmartGate (or eGate) machines, which scan your e-passport and take a photo of you, rather than having to have your passport physically checked by an officer. These SmartGates at Auckland Airport are now usable by many different passport holders (which caused me some disquiet when we arrived in London to find that we couldn't use the same facilities there and yet UK citizens can do so in New Zealand - whatever happened to reciprocity?). Anyway, I digress.

Nudge theory was brought to prominence by Richard Thaler and Cass Sunstein's excellent 2008 book Nudge. The idea is that relatively subtle changes to the decision environment can have significant effects on behaviour. If I remember correctly, one of their examples was the difference between opt-in and opt-out retirement savings schemes, where opt-out schemes have much higher enrolment rates compared with otherwise-identical opt-in schemes. One of the most important insights of behavioural economics and nudge theory is the idea that how a decision is framed can make a difference to our decisions. Governments are making increasing use of nudges to modify our behaviour, including the Behavioural Insights Team in the UK, and similar efforts in the U.S. and Australia.

Not all nudges are intentional or helpful though, as we discovered at Auckland Airport passport control. Above the SmartGate machines was a helpful row of the flags representing all the nations whose passport holders could use SmartGate. However, these flags were lined up in groups of three or four (or two, in the case of Australia and New Zealand), with each group of flags located above a corresponding group of SmartGate machines (I'm really sad I can't share a photo, because of laws prohibiting photography in this area, so you'll have to make do with my description). Unsurprisingly, this gave a strong impression to arriving passengers that they should go to the machines corresponding to the flag of their passport. Passport control framed our decision about which machine to choose by making it seem that the flags mattered. In actuality, all SmartGate machines could handle any of the e-passports.

So, when my wife and I arrived at passport control, there was a huge line for the machines with the New Zealand and Australian flags, and virtually no lines at all for the machines with the European flags. We weren't caught out by this unintentional nudge (because we knew that all of the machines worked the same, and we were willing to buck the trend and not line up in the 'New Zealand and Australia' line), and managed to substantially jump the queue.

I wonder how long it will take for Auckland Airport (or Customs or whoever controls that area) to realise their error and correct it? I'm off to Ireland in August for another conference, so I guess I will see then.

This couldn't backfire, could it?... Paying farmers not to grow coca edition

One of my favourite topics in my ECONS102 class is the first topic, in part because we spend a bit of time considering the unintended consequences of (often) otherwise well-meaning policies. And there are so many examples to choose from, I just can't fit them all into that class. Here's a new one from The Economist last week:

The increased cultivation of coca in Colombia defied expectations that the government’s peace deal with the FARC guerrillas, who relied financially on drug trafficking, would curtail the cocaine trade. One explanation is a textbook example of the law of unintended consequences. The peace agreement required the government to make payments to coca farmers who switched to growing other crops. This wound up creating a perverse incentive for people to start planting coca, so they could receive compensation later on for giving it up.

As we discuss in my ECONS102 class, unintended consequences arise because of the incentives that a policy creates. The incentives to change behaviour arise because the benefits and/or costs have changed. In this case, the benefits of planting coca increased, because the farmers could then switch to another crop and claim the payment from the government. If they weren't growing coca, then they couldn't claim the payment, so an incentive was created to plant more coca. So the payments that were supposed to encourage farmers to plant less coca, actually encouraged farmers to plant more coca.

Of course, this has then led to an increase in the supply of coca, and a consequent increase in the supply of cocaine. Which is exactly the opposite of what was intended.

However, the effect here could be limited to the short run, because farmers can only switch away from planting coca once. So, the incentive to plant coca only occurs until the farmers have switched to something else. Supply should eventually fall. Although it wouldn't surprise me to learn that the incentive payment has been structured in such a way that clever farmers can claim it more than once!
As Steven Levitt and Stephen Dubner noted in their book Think Like a Freak (which I reviewed here), no individual or government will ever be as smart as all the people out there scheming to take advantage of an incentive plan.

New results questioning the beauty premium should be treated with caution

The beauty premium - the empirical finding that people who are more attractive earn higher incomes - seems to be a fairly robust result in labour economics. Daniel Hamermesh's book Beauty Pays: Why Attractive People are More Successful (which I reviewed here) does a great job of summarising the literature, much of which Hamermesh himself has extensively contributed to.

However, in a new paper published in the Journal of Business and Psychology (ungated version here), Satoshi Kanazawa (LSE) and Mary Still (University of Massachusetts - Boston) question the existence of the beauty premium. Using data from several waves of the Add Health survey, and based on a sample size of around 15,000, they look at how attractiveness (as rated by interviewers at ages 16, 17, 22, and 29) is associated with earnings at age 29. Attractiveness is rated on a five-point scale (very unattractive, unattractive, average, attractive, or very attractive). Most previous studies have grouped the bottom two groups (very unattractive and unattractive) into a single category for analysis, due to the small number in the very unattractive category. Kanazawa and Still keep these two groups separate, and it is here where their results differ strikingly from the previous literature:

...it is clear that the association between physical attractiveness and earnings was not at all monotonic, as predicted by the discrimination hypothesis. In fact, while there is some evidence of the beauty premium in Table 4, where attractive and very attractive Add Health respondents earn slightly more than the average-looking respondents, there is no clear evidence for the ugliness penalty, as very unattractive respondents at every age earn more than either unattractive or average-looking respondents.

In other words, there is some evidence for a 'very-unattractive premium' in their data. The results are not driven by outliers, because the same pattern holds for median and mean earnings. They explain this apparent very-unattractive premium as being due to very unattractive Add Health respondents at age 16 being significantly more intelligent, and obtaining more education, than unattractive or average-looking respondents. Once they control in their analysis for education, intelligence, and personality traits, the beauty premium (compared with the very unattractive group) becomes statistically insignificant.

However, there is good reason to treat these results with caution. The sample size was around 15,000 in each year, but only around 200 of those respondents were rated as very unattractive. Kanazawa and Still rightly point out that the small numbers will make us fairly uncertain about the average earnings of that group:

Just like earlier surveys of physical attractiveness, very few Add Health respondents were in the very unattractive category (ranging from 0.9% at 17 to 2.7% at 29). As a result, the standard error of earnings among the very unattractive workers tended to be very large, which prompted earlier researchers in this field to collapse very unattractive and unattractive categories into a below average category. However, the very small number of very unattractive respondents and their large standard errors actually strengthened, rather than weakened, our conclusion because standard errors figured into all the significant tests in the pairwise comparisons. Very unattractive workers earned statistically significantly more than unattractive and average-looking workers despite the large standard errors.

That last point is correct, but you can't have it both ways here. Very unattractive workers may earn statistically significantly more on average than unattractive or average-looking workers in spite of the large standard errors, but one of their other key results is the statistical insignificance of the beauty premium (compared with very unattractive workers) once you control for intelligence, education and personality traits. That null result could be driven by the large standard errors on the very unattractive group. In general, null results are much more difficult to justify because, as in this case, they can be driven purely by a lack of statistical power.

One other result from the paper concerned me slightly. Kanazawa and Still test for whether choice of occupation matters for the beauty premium by including occupation in their regression models. That is fine, but all it does is control for differences in mean earnings between different occupations, but assumes that the beauty premium is the same in all occupations. If you actually wanted to test for self-selection into occupations by attractiveness, you would probably expect that attractive people would self-select into occupations where the beauty premium is largest (Hamermesh makes this point in his book). So, to test for self-selection you really need to allow the beauty premium to be different across occupations, which Kanazawa and Still didn't do.

So, the results of the Kanazawa and Still paper are interesting, but I don't think they overturn the many previous papers that find a robust beauty premium.

[HT: Marginal Revolution]

Read more:

• Book Review: Beauty Pays