Category Archives: Business and Economy

Emerging businesses looking for social scientists who can data mine and use statistics

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The Economic Times of India contains an interview with Prabhakar Raghavan, chief scientist for Yahoo! and head of their labs. Raghavan talks about their studies of social networking and social influence. Then Raghavan was asked about the people undertaking these studies:

What is the percentage of social scientists in Yahoo! Labs who anchor such work ?

They constitute around 10% of our people. We are interested in social scientists who can work on data mining. But in most colleges, the sociology department doesn’t teach data mining and the statistics department does not offer sociology. That’s why emerging businesses face a serious dearth of such social scientists.

A reminder that all sorts of businesses are looking for sociology students who are well-versed in statistics (and data mining). Since many students don’t think sociology and statistics naturally go together, it is up to colleges (and sociology statistics instructors) to help them put it together. Sociology may often be billed as a discipline that will help students understand, analyze, and change the world but one often needs to be able to work with and analyze data in these efforts.

This interview is also a reminder that social scientist degree holders are not just relegated to a career in academia.

Ongoing issue of measuring online audiences

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If you were examining Hulu.com’s online audience figures from the last few months, you would find some fluctuation: 43.5 million viewers in May and then 24 million viewers in June. What happened? Did something radically change with the website? Are people abandoning the practice of watching television online?

No, the main change is that ComScore changed its methodology for measuring who used the website. According to the Los Angeles Times:

The three dominant measurement firms — ComScore, Nielsen and Quantcast — have been working since 2007 with an independent media auditing group to make improvements so the Web data they report don’t have a fun-house quality, in which the same site’s traffic can look emaciated or bulging, depending on the viewer’s angle.

These firms have used different measurements over time including panels of users (like Nielsen uses for television and radio) and embedded tags in videos and websites to track viewership. These numbers matter more than ever for advertisers as they will spend around $25 billion in online advertising in the United States in 2010.

As in many cases, knowing the means of measurement matters tremendously for interpreting statistics.

Inequality due to credit card fees

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A study from the Federal Reserve Bank of Boston argues that credit card reward programs contribute to income inequality. According to the Yahoo story:

Merchants usually don’t charge different prices for card users to recover the costs of fees and rewards, but instead, mark up the prices for all consumers.

As a result, people who pay cash — and who are more likely to be lower income — end up subsidizing those who pay by credit card…

After accounting for rewards paid by banks, households who earn more than $150,000 annually receive a subsidy of $756 on average every year, while the households earning $20,000 or less pay $23.

On one hand, this seems fairly obvious: those with more money to spend will use credit cards in order to earn more rewards. On the other hand, the impact on prices of the fees on business owners pay to the credit card companies is generally hidden.

Perhaps more places could offer discounts for people who pay in cash? The only time I have encountered this on a large scale is at gas stations in New Jersey.

The value of kindergarten (and kindergarten teachers)

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Several economists recently presented a paper analyzing the effect of  kindergarten performance on adult outcomes. The New York Times summarizes the findings:

Students who had learned much more in kindergarten were more likely to go to college than students with otherwise similar backgrounds. Students who learned more were also less likely to become single parents. As adults, they were more likely to be saving for retirement. Perhaps most striking, they were earning more.

All else equal, they were making about an extra $100 a year at age 27 for every percentile they had moved up the test-score distribution over the course of kindergarten. A student who went from average to the 60th percentile — a typical jump for a 5-year-old with a good teacher — could expect to make about $1,000 more a year at age 27 than a student who remained at the average. Over time, the effect seems to grow, too.

The study still has to go through the peer-review process and the researchers aren’t sure what the link is between kindergarten performance and the adult outcomes.

Based on these findings, the economists suggest excellent kindergarten teachers are worth $320,000 a year.

This analysis is based on data from a Tennessee study, Project Star, from the 1980s. By randomly assigning kids to kindergarten classes, they set up an experiment where differences between classes could later be examined.

Stress and social hierarchy

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The latest issue of Wired has a fascinating article about stress. In addition to its effect on our physical bodies, the articles examines how stress is produced from being part of a social hierarchy. According to some studies cited in the article, being at the bottom of a social ladder produces harmful stress. This is not just because of the work but because those at the bottom have less control over their work. Those who we might consider to have “high-stress jobs,” such as doctors or lawyers, don’t feel the same negative effects of this stress since they have more control over their daily activities. Those working low-trust jobs, particularly in bureaucratic organizations, have higher death rates than those at the top, even controlling for other factors.

Apparently, the article is not available online but you can read some of the opening here on a Wired blog.

Extra airline fees are here to stay

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All those fees recently enacted by airlines are adding up and they are likely here to stay. The Chicago Tribune reports that ancillary revenues reached $13.5 billion in 2009. United Airlines led the way by collecting $1.9 billion.

On our recent trip to California, we paid $25 a piece for two bags on each leg of our American Airlines flight. The fares were reasonable – but adding on the extra $100 for luggage squelched any joy produced by finding a decent deal.

Facebook: up or down?

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Stories about Facebook have been plentiful in recent weeks as the company apparently prepares to announce that it has 500 million members and the trailer for The Social Network has hit the web.

Wired suggests “Five things that could topple Facebook’s empire.” One interesting tidbit out of this article: the American Customer Satisfaction Index (from the business school at the University of Michigan) found that Facebook has ratings similar to cable companies and airlines. Also, Facebook is similarly rated to MySpace. Overall, “That puts the world’s most visited website in the bottom 5 percent of private sector companies in the survey.”

More contracted municipal work

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The Wall Street Journal reports on more municipalities contracting out city services.

Cities say they have little choice. Municipalities across the U.S. will face a projected shortfall of $56 to $86 billion between 2010 and 2012, according to a report from the National League of Cities.

The primary focus of the story is California communities.

For many of the services mentioned in the article, such as tree-trimming, residents likely won’t notice much difference.

Problems for green technology in America

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Wired explores five reasons why the green tech sector has had a difficult time in the United States.

These five reasons are primarily cultural: green technology faces an image issue. Either dire circumstances or a breakthrough technology might be needed to push forward.

Generation Y not saving for retirement

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Businessweek writes about efforts to get employees of Generation Y to contribute to 401(k) and other retirement programs. Apparently, this is difficult as student loans average around $20,000 and average salaries for this age group have dropped 19 percent over the last three decades after adjusting for inflation.

If you are in Generation Y, be prepared to see more efforts (through social media, for example) to get you to contribute to retirement savings.

h/t Instapundit