Summary: This study looks at
correlations between advertising expenditures, brand awareness and perceived
quality.The authors arrive at some
pretty interesting conclusions.First,
and most importantly, advertising does not appear to have any statistically
significant effect on perceived quality.Brand awareness does show a positive, statistically significant
correlation with advertising expenditures up to $400M, from $400-$800M the
effect of advertising expenditures on brand awareness is not statistically
different from 0 and beyond $800M per year in advertising expenditures the
effect on brand awareness is actually negative.The rate of brand awareness carryover depreciation (the amount of brand
awareness that is lost by not advertising for a year) varies by product but is
in the range of 12% to 25% per year.And
finally, a one-standard-deviation increase in advertising spending increases
brand awareness by between .0340 standard deviations and .0408 standard
deviations.
Take Away:Advertising increases brand awareness but
not perceived quality.Consumers
forget about you when you don’t advertise but only at a rate of about 17% per year.
Summary:This paper talks about the 7 myths of
Affirmative Action: Affirmative action can involve goals and timetables while
avoiding quotas, color-blind policies offer an efficient substitute for
color-sighted affirmative action, affirmative action undercuts investment
incentives, equal opportunity is enough to ensure racial equality, the earlier
in education or career development affirmative action is implemented, the
better, many non-minority citizens are directly affected by affirmative action,
and affirmative action always helps its beneficiaries.
Review: I did not care for this paper very much. The authors did not contribute any new research, they simply aggregated the research done by other economists, to no great effect.
Take Away:Empirical evidence has shown quite
consistently that wealth builds on itself.If you start out well-to-do you have a much greater chance of success
later in life.Likewise, minorities that
have faced poverty and discrimination have to overcome greater hurdles to reach
the same levels of success.Affirmative
action can be an effective tool in tearing down hurdles but it is not perfect
and needs to be tempered with common sense.
Summary:This paper examines the correlation
between innovation (measured as cited-weighted patents) and institutional ownership.The authors also study two possibilities for
lack of innovation within firms: career-concern and managerial laziness.Career concern arises because innovation
requires risk.If a project fails the
manager is held responsible and could potentially lose her job.Innovation also requires motivation.A manager that prefers to “live a quiet life”
will not innovate and succumb to the lazy manager problem.The authors ultimately find that a 10%
increase in institutional ownership leads to a seven percent increase in the
probability of obtaining an additional cite-weighted patent, which does prove
to be statistically significant.The
authors also come to the conclusion that the career-concern model of innovation
is most likely to describe the increase in innovation correlated with an
increase in institutional ownership.
Take Away:Innovation is risky and failures, when
attempting to innovate, should not be punished.Instead owners should encourage their managers to innovate and take an
active role in observing and evaluating their manager’s abilities outside of
success or failure in previous innovation efforts.
