Tag Archives: operationalization

Defining what makes for a luxury home

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Here is how one data firm defines what it means to be a luxury housing unit:

Although upscale housing is selling better in some cities than in others, a monthly analysis by the Altos Research data firm for the Institute for Luxury Home Marketing says that overall, that segment of the market is gaining momentum and prices are rising…

Q: “Luxury home” is probably one of the most abused phrases in real estate-ese. How do you define it?

A: A price range that’s considered the high end of the market in one place might be something that’s average in another. So, “luxury” is local: Our organization generally defines it as the top 10 percent of an area’s sales in the past 12 months. But for the purposes of the research that we do with Altos for our monthly Luxury Market Report, we’ve taken the ZIP codes within each of 31 markets that have the highest median prices, and for about five years we’ve tracked the sales of homes in those (areas) that are $500,000 and above.

There are two techniques proposed here:

1. The highest 10 percent of a local housing market. Thus, the prices are all relative and the data is based on the highest end in each place. So, there could be some major differences in luxury prices across zip codes or metropolitan regions.

2. Breaking it down first by geography to the wealthiest places (so this is based on geographic clustering) and then setting a clear cut point at $500,000. In these wealthiest zip codes, wouldn’t most of the units be over $500,000? Why the 31 wealthiest markets and not 20 or 40?

Each of these approaches have strengths and weaknesses but I imagine the data here could change quite a bit based on what operationalization is utilized.

Interestingly, the firm found that luxury sales rebounded quicker than the rest of the market:

The interesting thing about this recovery is that the luxury segment, that group of affluent households, was able to recover fairly quickly. They shifted their assets around, and a lot of them were able to see opportunities in the down market. By 2010, there were almost as many high-end households as before the downturn, not just in the United States, but internationally, as well. This group focused on residential real estate as a pretty desirable asset — for them, a second or third home turned out to be a portfolio play.

This shouldn’t be too surprising – when an economic crisis hits, the wealthier members of society have more of a cushion. While the upper end is doing all right, others have argued the bottom end, those looking for starter homes, are having a tougher time.

Nielsen changes the definition of watching TV to include streaming

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When people starting watching TV in new ways, companies have to adjust and collect better data:

The decisions made by the [What Nielsen Measures] committee are not binding but a source at one of the big four networks was ecstatic at the prospect of expanded measurement tools. The networks for years have complained that total viewing of their shows isn’t being captured by traditional ratings measurements. This is a move to correct that.

By September 2013, when the next TV season begins, Nielsen expects to have in place new hardware and software tools in the nearly 23,000 TV homes it samples. Those measurement systems will capture viewership not just from the 75 percent of homes that rely on cable, satellite and over the air broadcasts but also viewing via devices that deliver video from streaming services such as Netflix and Amazon, from so-called over-the-top services and from TV enabled game systems like the X-Box and PlayStation.

While some use of iPads and other tablets that receive broadband in the home will be included in the first phase of measurement improvements, a second phase is envisioned to include such devices in a more comprehensive fashion. The second phase is envisioned to roll out on a slower timetable, according to sources, will the overall goal to attempt to capture video viewing of any kind from any source.

Nielsen is said to have an internal goal of being able to measure video viewing on an iPad by the end of this year, a process in which the company will work closely with its clients.

This is a good example of how operationalization and measurement are not just for scientists. Here, possibly millions of dollars are at stake in advertising. It would be interesting to hear the advertisers’ side of the story; higher numbers could mean they pay more but it would also mean that they can reach bigger audiences.

So can we assume that better measurement means we will find that Americans watch more TV than we currently think?

Bill Gates: we can make progress with goals, data, and a feedback loop

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Bill Gates argues in the Wall Street Journal that significant progress can be made around the world if organizations and residents participate in a particular process:

In the past year, I have been struck by how important measurement is to improving the human condition. You can achieve incredible progress if you set a clear goal and find a measure that will drive progress toward that goal—in a feedback loop similar to the one Mr. Rosen describes.

This may seem basic, but it is amazing how often it is not done and how hard it is to get right. Historically, foreign aid has been measured in terms of the total amount of money invested—and during the Cold War, by whether a country stayed on our side—but not by how well it performed in actually helping people. Closer to home, despite innovation in measuring teacher performance world-wide, more than 90% of educators in the U.S. still get zero feedback on how to improve.

An innovation—whether it’s a new vaccine or an improved seed—can’t have an impact unless it reaches the people who will benefit from it. We need innovations in measurement to find new, effective ways to deliver those tools and services to the clinics, family farms and classrooms that need them.

I’ve found many examples of how measurement is making a difference over the past year—from a school in Colorado to a health post in rural Ethiopia. Our foundation is supporting these efforts. But we and others need to do more. As budgets tighten for governments and foundations world-wide, we all need to take the lesson of the steam engine to heart and adapt it to solving the world’s biggest problems.

Gates doesn’t use this term but this sounds like a practical application of the scientific method. Instead of responding to a social problem by going out and trying to “do something,” the process should be more rigorous, involve setting goals, collecting good data, interpreting the data, and then adjusting the process from the beginning. This is related to other points about this process:

1. It is one thing to be able to collect data (and this is often its own complicated process) but it is another to know what to do with it once you have it. Compared to the past, data is relatively easy to obtain today but using it well is another matter.

2. Another broad issue in this kind of feedback loop is developing the measurements and what counts as “success.” Some of this is fairly easy; when Gates praises the UN Millennium Goals, reducing occurrences of disease or boosting incomes has face validity for getting at what matters. But, measuring teacher’s performances or what makes a quality college are a little trickier to define in the first place. Gates calls this developing goals but this could be a lengthy process in itself.

It is interesting that Gates mentions the need for such loops in colleges so that students “could know where they would get the most for their tuition money.” The Gates Foundation has put money into studying public schools and just a few weeks ago released some of their findings:

After a three-year, $45 million research project, the Bill and Melinda Gates Foundation believes it has some answers.

The most reliable way to evaluate teachers is to use a three-pronged approach built on student test scores, classroom observations by multiple reviewers and teacher evaluations from students themselves, the foundation found…

The findings released Tuesday involved an analysis of about 3,000 teachers and their students in Charlotte; Dallas; Denver; Memphis; New York; Pittsburgh; and Hillsborough County, Fla., which includes Tampa. Researchers were drawn from the Educational Testing Service and several universities, including Harvard, Stanford and the University of Virginia…

Researchers videotaped 3,000 participating teachers and experts analyzed their classroom performance. They also ranked the teachers using a statistical model known as value-added modeling, which calculates how much an educator has helped students learn based on their academic performance over time. And finally, the researchers surveyed the students, who turned out to be reliable judges of their teacher’s abilities, Kane said.

All this takes quite a few resources and time. For those interested in quick action, this is not the process to follow. Hopefully, however, the resources and time pay off with better solutions.

Sorting out the statistics about Christians and divorce

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BeliefNet.com has a useful summary of a recent discussion that includes sociologists: do Christians divorce as frequently as other Americans?

1. Data from The Barna Group suggests that born-again Christians divorce at a similar rate as the general population. This seems to be tied to Barna’s particular definitions:

Barna’s statistics are tied to its highly specific — and controversial — definitions of born-again Christians and evangelicals.

For instance, Barna labels Christians “born-again” if they have made a personal commitment to Jesus and believe they will go to heaven because they have accepted him as their savior.

Evangelicals, on the other hand, are those who fit the born-again definition but also meet seven other conditions, including sharing their beliefs with non-Christians and agreeing that the Bible is completely accurate.

With these stricter definitions, Barna can claim that Christians and other divorce at similar rates.

2. Several sociologists, including Bradley Wright and Brad Wilcox, suggest there is a different story regarding Christians and divorce. Wright, for example, looked at General Social Survey data and found that higher rates of church attendance were related to lower rates of divorce:

Wright combed through the General Social Survey, a vast demographic study conducted by the National Opinion Research Center at the University of Chicago, and found that Christians, like adherents of other religions, have a divorce rate of about 42 percent. The rate among religiously unaffiliated Americans is 50 percent.

When Wright examined the statistics on evangelicals, he found worship attendance has a big influence on the numbers. Six in 10 evangelicals who never attend had been divorced or separated, compared to just 38 percent of weekly attendees.

Wilcox came to some similar conclusions based on another data source:

“You do hear, both in Christian and non-Christian circles, that Christians are no different from anyone else when it comes to divorce and that is not true if you are focusing on Christians who are regular church attendees,” he said.

Wilcox’s analysis of the National Survey of Families and Households has found that Americans who attend religious services several times a month were about 35 percent less likely to divorce than those with no religious affiliation.

Nominal conservative Protestants, on the other hand, were 20 percent more likely to divorce than the religiously unaffiliated.

If Wright and Wilcox are correct, it is less about whether one calls themselves a Christian or meets a theological definition of being a Christian and more about the Christian actions that they undertake. If we take church attendance as some measure of spiritual commitment or beliefs, then it appears that going to church more is tied to getting divorced less.

Another part of this debate seems to be about how to define people as Evangelicals. Barna has a particular method as do others. One standard in the field of sociology of religion is to use RELTRAD, which accounts for both “doctrine and historical changes in religious groups.”

(I explained Wright’s argument in class recently and was asked if we could take Wright’s claims about church attendance as a causal argument: does going to church lead to less divorce? Or is it that people who divorce less feel more comfortable about going to church while those who are already divorced feel less comfortable in church and therefore go less? I’m guessing someone has answered this question.)

How to measure happiness (“prosperity”) across countries

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Here is a topic just perfect for a Research Methods class discussion about conceptualization and operationalization: how to measure happiness across countries. Here is a quick summary of how the Legatum Institute measured this and found that Norway is the happiest country in the world:

With this in mind, five years ago researchers at the Legatum Institute, a London-based nonpartisan think tank, set out to rank the happiest countries in the world. But because “happy” carries too much of a touchy-feely connotation, they call it “prosperity.”

Legatum recently completed its 2010 Prosperity Index, which ranks 110 countries, covering 90% of the world’s population.

To build its index Legatum gathers upward of a dozen international surveys done by the likes of the Gallup polling group, the Heritage Foundation and the World Economic Forum. Each country is ranked on 89 variables sorted into eight subsections: economy, entrepreneurship, governance, education, health, safety, personal freedom and social capital.

The core conceit: Prosperity is complex; achieving it relies on a confluence of factors that build on each other in a virtuous circle.

Ultimately how happy you are depends on how happy you’ve been. If you’re already rich, like Scandinavia, then more freedom, security and health would add the most to happiness. For the likes of China and India (ranked 88th), it’s more a case of “show me the money.” What they want most of all? The opportunity to prove to themselves that money doesn’t buy happiness.

Some quick thoughts on this:

1. This is a lot of dimensions and indicators to consider: 89 measures, 8 subcategories.

2. The change from “happiness” to “prosperity” is an interesting one. Happiness is indeed a fuzzy term. But prosperity often refers to material wealth in terms of income or buying power. This prosperity defined more broadly: material wealth plus freedoms plus level of services plus social interactions. The Legatum Website suggests the Index is “the world’s only global assessment of wealth and well-being.”

3. I would be curious to know how comparable the data is across countries and across the organizations that form and ask these survey questions.

4. In this complexity, it is interesting to note that prosperity means different things to countries in different stages.

5. Even with all of these measures, which measures are used and how this Institute weights these particular factors would matter for the outcome. For example, the story at Forbes suggests that improving a nation’s entrepreneurial culture could make a big difference in these rankings. And the United States is ranked #1 in health care because “$5,500 a year in per-capita health spending has resulted in excellent vaccination rates, water quality and sanitation.” The Legatum Institute itself seems to put a big emphasis on business.

6. How come so many of these lists come from Forbes? Beyond the answer that Yahoo has a deal with Forbes for content, this is an interesting way to drive web traffic: top ten lists that catch people’s attention. How useful these sorts of lists are is debatable but they are often interesting and quickly summarize complex areas of life.

Google measures inflation by looking at web data

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Once again drawing upon its access to  information, Google suggests it developing an alternative measure of inflation:

Google is using its vast database of web shopping data to construct the ‘Google Price Index’ – a daily measure of inflation that could one day provide an alternative to official statistics.

The work by Google’s chief economist, Hal Varian, highlights how economic data can be gathered far more rapidly using online sources. The official Consumer Price Index data are collected by hand from shops, and only published monthly with a time lag of several weeks…

The GPI shows a “pretty good correlation” with the CPI for goods such as cameras and watches that are often sold on the web, but less so for others, such as car parts, that are infrequently traded online.

This bears watching as Google can access data and then analyze/summarize it at a much quicker speed than the government. But it will be interesting to see how Google gets around the issue of what is being sold online – the story also notes that Google’s index downplays the role of housing.

This could play out in a number of ways. Could this online index be improved so that markets were responding to Google’s data rather than the government’s data? Let’s say the government decides it likes Google’s approach. Does it develop the same or a similar algorithm within the government? Does it contract the task to Google?

More on the study of happiness: the role of priorities

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Measuring happiness is a small industry among researchers. A new study suggests another important factor: the priorities that people set for their life affects long-term happiness.

Most of us have thought, ‘If only I could win the lottery, then I’d be happy forever.’ But according to one of the first studies to look at long-term happiness, major life events, like a sudden cash windfall, are not what make us happy, rather, it’s the priorities we set in life.

“The main thing that’s surprising about these results is that it challenges this whole field,” said lead author Melbourne University sociologist Bruce Headey. “This study goes against the prevailing wisdom that happiness is fixed.” The study was published Monday in the Proceedings of the National Academy of Sciences.

Previous studies suggest that happiness is predetermined by genetics and early upbringing, and that we eventually revert back to the same level of happiness regardless of changes in our lives. Looking at data from about 60,000 Germans for up to 25 years, however, Headey found that the more people decided to prioritize goals such as good relationships and good health, the happier they were, regardless of major life events.

While there are some critiques of this study (for example, it measures long-term happiness rather than daily satisfaction), it suggests again that the topic of happiness is a complex one to research with many possible factors influencing outcomes.

So should people set easier-to-reach priorities to be happy? What happens to people who set good priorities but aren’t able to reach them?

This also seems to be an interesting dataset with 60,000 people being tracked over the last two and a half decades.

(I’m also curious about the lead author saying that the study challenges “the prevailing wisdom that happiness is fixed.”)

Searching for good colleges in the suburbs

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Newsweek recently put together a list of desirable colleges. One of the lists is the “25 most desirable suburban schools.” A couple of questions:

1. Are there people who specifically search for a college because it is located in a suburb? I can see the appeal to many of applying to a college in a big city – but I doubt being located in a suburb tops many lists of what people are looking for in a college.

2. I would take issue with whether several of these schools are suburban schools. The University of Notre Dame? It may have its own address and zip code but it is basically surrounded by South Bend. The real suburbs of the area, a place like Granger, are miles away. The University of Virginia is located in Charlottesville, roughly 70 miles from Richmond. For these two cases, this is a very loose definition of a suburb.

A sizable but smaller gap in happiness between blacks and whites

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The Freakonomics blog reports on a new study showing that there is a narrowing gap in happiness between black and whites. The reason for this may be the lessening of “day-to-day racism” – but there needs to be more research so that scholars can figure out “How best to get a handle on the evolution of day-to-day racism.”

Having children = family

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New research from a University of Indiana sociologist suggests that Americans define a collection of people as a family if children are involved:

“Children provide this, quote, ‘guarantee’ that move you to family status,” Powell said. “Having children signals something. It signals that there really is a commitment and a sense of responsibility in a family.”

For instance, 39.6 percent in 2010 said that an unmarried man and woman living together were a family — but give that couple some kids and 83 percent say that’s a family.

Of course, the definition of family has changed over time. The “nuclear family” developed several hundred years ago as people moved away from a broader definition of family that included extended family members or other members of a community.

One can see this recent definition in action in many churches. Having children changes the status of couples from a social grouping not worthy of extra attention to a very important social grouping.