November 2008

Which Crash Was Most Like This?

Which past market environment was most like today's? This post shows that in terms of correlation to returns, the closest of all major markets to the S&P 500 in the last year was the Nikkei in 1991.

The S&P 500 peaked in mid-October of 2007, and has been down, down, down since then. Common comparisons include the Nikkei in 1990, the Dow Jones in 1929, and the NASDAQ crash of 2000.

Estimation of the Stereotyped Ordered Regression Model

While reading Xiaogang Wu and Donald Treiman's paper entitled "Inequality and Equality under Chinese Socialism: The Hukou System and Intergenerational Occupational Mobility" in American Journal of Sociology (2007, 113: 415-445) , I was directed to a technical paper written by John Hendrickx (2000), describing how to use "mclgen" and "mclest" in Stata to estimate the Stereotyped Ordered Regression Model (SOR) in social mobility studies.

NYT article on measuring racial bias

In today's paper, the NYT reports on an interesting debate between two groups of researchers regarding studies on unconscious racial bias (``In Bias Test, Shades of Gray''). The discussion centers around the usefulness of an online test, the Implicit Association Test, which measures how quickly respondents associate ``good'' or ``bad'' words with blacks or whites. How useful are such tests?

Conditions under Which Observational Studies Produce Comparable Causal Estimates

In the latest issue of Journal of Policy Analysis and Management, Thomas Cook, William Shadish and Vivian Wong wrote a paper proposing three conditions under which experiments and observational estimates are comparable based on their review of 12 recent within-study comparison studies. It is a little bit confusing, at least to me at first glance, to use "conditions" rather than "designs" here, as what the authors are really arguing is under three different types of research designs estimates from observational studies are comparable to causal estimates.

Would banning candy cigarettes reduce smoking prevalence? And would such a ban ever get past the courts?

It seems that people who have a ``lifetime history of candy cigarette use'' may be more likely to have ever smoked (Klein et al). Some countries like Canada, the UK, Ireland, Norway, Finland and Australia apparently believe that there is a causal link and already ban this type of candy. I think there are good reasons to believe candy cigarettes may have an influence on children and there are qualitative studies that suggest mechanisms like attitudes towards smoking.