My wife and I just spent a week at Walt Disney World Resort in Florida. No, we didn't take kids or grand kids with us -- we don't have any, and besides in our view they would spoil our fun.
We have visited WDW many times since it was opened in 1971, usually every five years or so. Any more often is an overdose, similar to going to Las Vegas too often. Both places offer escapist fantasy of the highest order, best enjoyed after a break to re-center and re-ground your sensibilities.
It is important to distinguish between Walt Disney World (WDW) in Florida and Disneyland in California. Disneyland was Walt's first theme park, a ground-breaking concept that opened in 1955 and almost immediately outgrew its available space. WDW in contrast consists of a vast tract of 47 square miles in central Florida, with four widely spaced theme parks (Magic Kingdom, Hollywood Studios, EPCOT, and Animal Kingdom), two water parks,
23 on-site themed resort hotels (excluding eight more that are on-site,
but not owned by the Walt Disney Company), a campground, two spas and physical fitness centers, five golf courses, and other recreational and entertainment venues in an area known as Downtown Disney. If you stay on site, as we choose to do, you are immersed in the whole Disney experience 24/7. Mickey and friends are everywhere, including on the soap in your bathroom; everything is neat and tidy; everyone is polite, friendly, and happy. As I said, escapist fantasy of the highest order. Sadly, Walt Disney died at 65 from lung cancer, five years before his dream opened in 1971. His older brother Roy delayed retirement to oversee the initial development of WDW and then died a few months after the opening.
Our visit was at the end of April, a time we thought would be less crowded because it was after most school spring breaks and before summer vacations. We reasoned that most parents are concerned with their children's education and wouldn't take them out of school just to visit a theme park. This is also a time when central Florida weather is still moderate. Our other visits have been in the fall, around Christmas, and during the summer, and so we were looking forward to our first springtime visit.
We were right about the weather -- most days were clear and the temperature was pleasant. And the crowds weren't as bad as they can be in the peak summer months.
But we were dead wrong about the numbers of school-age kids. Besides quite a few families with one or more children there were many, many groups of junior high and high school kids from all parts of the country, apparently on field trips or senior outings. And there were thousands of teenage girls who were participating in the annual World Championship Cheerleading competitions being held at EPCOT. When the cheerleaders weren't competing they were roaming the parks in packs of 10 to 20 giggling and jiggling "nubile nymphettes," as I called them. Needless to say, this altered the "Magical" atmosphere considerably.
The presence of so many kids whose schools were still weeks away from summer break raised questions in our minds about the commitment of the kids as students, the educational priorities of their parents, and the values of the sponsoring organizations (maybe including Disney Corp.). I'm sure there are all kinds of practical justifications for these children to miss school in order to visit WDW; parents cannot always control the timing of their vacations from work; it's easier for organizations to schedule venues at WDW during this time of year; travel arrangements are cheaper and more plentiful now than in the summer. It is also true that not all "education" takes place in a classroom and indeed there are a number educational aspects to be found in WDW.
These justifications seem reasonable but I think they may be problematic in several ways. First, though visiting WDW can be educational in some ways, that is true no matter when it occurs. On the other hand certain important educational experiences are closely tied to a classroom -- for example, I've never seen anything in WDW that would substitute for a skillful explanation of algebraic expansion or the laboratory experience of working through an analytical chemistry problem. Second, the absence of large numbers of students poses significant logistical problems for teachers and schools, both in altering the classroom structure that is supportive of learning and in placing additional demands on teachers to help students make up work they have missed. Third, when parents and organizations endorse school absence they convey to young people that education is less important than entertainment and enjoyment. I'm afraid this is a general trend in our society today, and I don't believe it serves us well in the global community. As my wife and I have traveled around the world we have seen many developing countries investing heavily in education and infrastructure. The support for educational institutions and teachers is striking. Just the opposite seems to be the case in the U.S., as illustrated by recent budget cuts to schools and universities and salary freezes and reductions for teachers.
Maybe I'm making too much of this. Or maybe I just received my very own Disney Education.
_______________________________________________
An additional resource on Disney can be found at http://www.units.muohio.edu/psybersite/disney. This web site was created by a group of my students as a class project some years ago.
Here are a couple of quotes about Disney you may find interesting:
When Dwight D. Eisenhower was President, called Disney a
"genius as a creator of folklore" and said his "sympathetic attitude toward life has helped our
children develop a clean and cheerful view of humanity, with all its frailties and possibilities for
good."
Prof. William Lyon Phelps of Yale said of Mr. Disney: "He has accomplished something that has defied all the efforts and experiments of the laboratories
in zoology and biology. He has given animals souls."
Wednesday, May 16, 2012
Thursday, April 19, 2012
Bankers' Math -- Part Sept
The first blog in my Bankers' Math series was three years ago and dealt with some of the self-serving manipulations my bank went through when my wife and I refinanced our mortgage. Since then I've documented several excesses of the financial industry that I've encountered first-hand, and you can find links to these blogs below if you haven't read them. Caution -- those readers with high blood pressure are advised against exposure to this material.
In this installment of "what-are-the-folks-who brought-us-the-great-recession-up-to-now" we return to mortgage refinancing, an ordeal we have just undergone once more. We chose to endure this again because we could get a new mortgage rate that is more than a percentage point less than our old rate. Most personal finance experts say a drop of this magnitude is worthwhile -- provided the length of time it takes to recoup the umpteen bank fees and charges is reasonable.
In January we contacted our bank (Bank of Hawaii) and started the process. Because of my tendency toward obsessiveness when it comes to keeping financial and personal information, we quickly got all the required records together -- tax returns for the last two years, mutual fund and investment statements for all of 2011, payment statements from our pension funds, birth certificates, life history, retinal scans, DNA samples, diplomas, fingerprints, Kirlian photographs, urine analyses, etc., etc. We completed the application by the end of January. After 2 1/2 months BOH finally deemed us worthy of their blessing and we "closed" -- the bank's term for an hour-long session in which you sign several thousand documents, all designed to give the bank every possible legal advantage over you.
Of the many irksome aspects of this process, one stands out. It occurred when we received the official Loan Approval Notice which said: "We are pleased to inform you that your application for a mortgage loan on the terms set forth is approved, provided the conditions and terms below outlined are satisfied prior to the expiration date of the loan approval and loan closing." (In other words, keep jumping through hoops until we tell you to stop.) Some of the conditions listed were simply not under our control, for example "Lender (my italics) will provide customer with an IRS 4506-T to be signed at closing." Huh???
But one condition was truly rankling: "Borrowers must provide proof of liquid assets required for closing." (The money required for closing had been spelled out in the application and amounted to just a few thousand dollars.) We puzzled over this because it seemed obvious to us that we had already documented all of our assets, including those that were liquid. But bankers apparently see the world differently than the rest of us....
In our view the documents we provided with the initial application established the following facts that would seem to be relevant to whether we would be able to show up at the closing with enough cash:
However, about a week from D-Day we got a message demanding the latest statement of some accounts Karen has with DWS, a mutual fund company. We had furnished a summary with the initial (now accepted) application, but apparently someone decided that wasn't enough and now they wanted a recent detailed, transaction by transaction statement. I quickly complied and just for good measure I also sent the latest monthly Vanguard Statement showing transactions for all the rest of our mutual funds, and I even threw in a copy of our 2011 Federal Tax Return that I had just filed. Again, the bank bean-counters seemed mollified and we continued oozing.
Until four days later. "Please furnish the most recent monthly statement for your......[wait for it]......Vanguard Accounts" (!!!!!!) Yes, the very same information I had given them four days earlier!
I drew their attention to the fact I had just given them this statement (with great restraint, I might add) and we moved forward. I never received an apology, an explanation or even an acknowledgment that they might have made a mistake. But it's clear they weren't really looking at the information we were providing to them.
It's over, and I'm very glad to have it behind us. But I have to think that if this is how we were treated -- someone with excellent credit and a solid financial status -- then people with even slightly less fortunate circumstances must suffer tremendous insults during this process.
____________________________________________
Other Blogs in the Bankers' Math Series:
Bankers' Math -- Part Six
Bankers' Math -- Part Cinq
Bankers' Math -- Part Quatre
Bankers' Math -- Part Trois
Bankers' Math -- Part Deux
Bankers' Math -- 29=31=$
In this installment of "what-are-the-folks-who brought-us-the-great-recession-up-to-now" we return to mortgage refinancing, an ordeal we have just undergone once more. We chose to endure this again because we could get a new mortgage rate that is more than a percentage point less than our old rate. Most personal finance experts say a drop of this magnitude is worthwhile -- provided the length of time it takes to recoup the umpteen bank fees and charges is reasonable.
In January we contacted our bank (Bank of Hawaii) and started the process. Because of my tendency toward obsessiveness when it comes to keeping financial and personal information, we quickly got all the required records together -- tax returns for the last two years, mutual fund and investment statements for all of 2011, payment statements from our pension funds, birth certificates, life history, retinal scans, DNA samples, diplomas, fingerprints, Kirlian photographs, urine analyses, etc., etc. We completed the application by the end of January. After 2 1/2 months BOH finally deemed us worthy of their blessing and we "closed" -- the bank's term for an hour-long session in which you sign several thousand documents, all designed to give the bank every possible legal advantage over you.
Of the many irksome aspects of this process, one stands out. It occurred when we received the official Loan Approval Notice which said: "We are pleased to inform you that your application for a mortgage loan on the terms set forth is approved, provided the conditions and terms below outlined are satisfied prior to the expiration date of the loan approval and loan closing." (In other words, keep jumping through hoops until we tell you to stop.) Some of the conditions listed were simply not under our control, for example "Lender (my italics) will provide customer with an IRS 4506-T to be signed at closing." Huh???
But one condition was truly rankling: "Borrowers must provide proof of liquid assets required for closing." (The money required for closing had been spelled out in the application and amounted to just a few thousand dollars.) We puzzled over this because it seemed obvious to us that we had already documented all of our assets, including those that were liquid. But bankers apparently see the world differently than the rest of us....
In our view the documents we provided with the initial application established the following facts that would seem to be relevant to whether we would be able to show up at the closing with enough cash:
- Our financial records clearly indicated liquid assets five times greater than the value of the loan itself and dozens of times greater than the estimated closing costs.
- We had been through this process twice before with BOH and both times we successfully paid the closing costs.
- For six+ years we'd faithfully made mortgage payments to BOH showing, one would think, that we have enough liquid assets to meet our financial obligations.
- The appraised value of our house is twice the value of the loan we were asking for, clearly indicating we were not in over our heads.
- We have no other debts of any kind -- no other obligations competing for our liquid assets.
- We both have credit scores over 800 -- only obtainable if financial obligations are fully met over a long period of time.
However, about a week from D-Day we got a message demanding the latest statement of some accounts Karen has with DWS, a mutual fund company. We had furnished a summary with the initial (now accepted) application, but apparently someone decided that wasn't enough and now they wanted a recent detailed, transaction by transaction statement. I quickly complied and just for good measure I also sent the latest monthly Vanguard Statement showing transactions for all the rest of our mutual funds, and I even threw in a copy of our 2011 Federal Tax Return that I had just filed. Again, the bank bean-counters seemed mollified and we continued oozing.
Until four days later. "Please furnish the most recent monthly statement for your......[wait for it]......Vanguard Accounts" (!!!!!!) Yes, the very same information I had given them four days earlier!
I drew their attention to the fact I had just given them this statement (with great restraint, I might add) and we moved forward. I never received an apology, an explanation or even an acknowledgment that they might have made a mistake. But it's clear they weren't really looking at the information we were providing to them.
It's over, and I'm very glad to have it behind us. But I have to think that if this is how we were treated -- someone with excellent credit and a solid financial status -- then people with even slightly less fortunate circumstances must suffer tremendous insults during this process.
____________________________________________
Other Blogs in the Bankers' Math Series:
Bankers' Math -- Part Six
Bankers' Math -- Part Cinq
Bankers' Math -- Part Quatre
Bankers' Math -- Part Trois
Bankers' Math -- Part Deux
Bankers' Math -- 29=31=$
Thursday, March 29, 2012
Flying the (Un)Friendly Skies
One of the worst things about traveling is...traveling. Specifically, air travel. This once-glamorous mode of transportation has now become a stressful, hassle-laden, uncomfortable, and often degrading experience. My wife and I visit other other places for fun and enrichment, which usually makes up for some of the negatives of getting to our destination. We have great sympathy for business travelers who endure flying for their jobs and don't have this compensation.
My wife and I fly quite a lot, often to places that are far from home (see my blogs on Bhutan and on the Middle East). We can't afford Business Class or First Class, so these journeys are in "steerage" unless by some increasingly rare miracle we get a free upgrade. It isn't unusual for the total flying time on these trips to be 15-20 hours, usually but not always broken into two or more segments of 5-10 hours each. Once we suffer through the cattle-pen atmosphere of checking in, the indignities of going through security, the elbow-fest of getting our share of overhead bin space, and finally shoe-horning ourselves into our seats, the rest of the trip is primarily a matter trying to cope with excruciating boredom and physical discomfort.
At this point I should acknowledge that we have it incredibly easy compared to the days before air travel, and we forget that commercial aviation is a very recent technological marvel. Someone from the late 1800's would find our complaints trivial in light of the wondrous feat of traveling half-way around the world in a day or two.
But human nature leads us to use a more restrictive basis of comparison, namely how things have changed in the recent past. Geopolitical events, like 9/11, have led to tightening of airport security. Financial pressures on airlines have led to a host of cost-cutting measures, including reducing the number of flights, cramming more seats in each aircraft, charging for luggage, meals, and on some airlines even for the privilege of reserving a specific seat in advance. In short, it seems like the situation is getting worse and worse.
The latest round of decline for us involves the recent merger of United Airlines and Continental Airlines. For years we have been members of United's frequent flyer program primarily because United has offered the best mainland and international connections. Of course, actually cashing in our award miles has always been a little difficult because we live in Hawai'i -- a popular destination for people to use their miles to visit, making competition for available award seats fierce. Still, we've managed to take advantage of the program often enough that it has balanced some of the negatives of air travel.
One of the best features of United's program was that if your paid travel in a year totaled 25,000 miles or more you were rewarded with some extra perks (please note -- these must be miles flown, not earned in other ways, like with a credit card): You could reserve seats in economy with more leg room, check two bags free, and board the plane earlier (thus avoiding some of the slug-fest for overhead storage). On our marathon journeys these things have made a big difference, particularly having more comfortable seats, and have kept us loyal to United's program. And given the amount of money required for us to achieve 25,000 miles in a year, these perks seemed a fitting gesture of appreciation from United for our business.
The merger has changed all that -- for the worse, naturally.
A few weeks ago we received notice from United about the new "wonderful" and "exciting" features of the merger, including the merged frequent flyer programs. Cutting through all the breathless corporate hype revealed new policies that represent a dramatic downgrade of benefits for customers like us at the 25,000 mile level. The most irksome change is that now reserving seats with more leg room requires 50,000 miles in a year -- double the earlier number and certainly out of reach of the ordinary traveler. Even many business travelers might have trouble meeting that requirement. You can, however, pay extra for those seats -- an additional $150-250 per person for trips of the length we usually take. There is one shred of this perk left -- 24 hours before the flight we can vie for the unsold premium seats with all the other 25k-milers. Of course, this means that we may not find seats together, or that the available seats will be in those wonderful "middle of the middle" locations. Spending 15-20 hours in one of those seats is decidedly unappealing, something you might wish only on the CEO who masterminded this new policy.
For us these changes no longer give United an edge compared to other airline frequent flyer programs. The new policies convey that our loyalty and considerable level of spending don't count for as much as they did. So be it, and we wish United a profitable future. Their profit probably won't be coming as much from us, however, because we will be much more likely to consider alternative carriers.
My wife and I fly quite a lot, often to places that are far from home (see my blogs on Bhutan and on the Middle East). We can't afford Business Class or First Class, so these journeys are in "steerage" unless by some increasingly rare miracle we get a free upgrade. It isn't unusual for the total flying time on these trips to be 15-20 hours, usually but not always broken into two or more segments of 5-10 hours each. Once we suffer through the cattle-pen atmosphere of checking in, the indignities of going through security, the elbow-fest of getting our share of overhead bin space, and finally shoe-horning ourselves into our seats, the rest of the trip is primarily a matter trying to cope with excruciating boredom and physical discomfort.
At this point I should acknowledge that we have it incredibly easy compared to the days before air travel, and we forget that commercial aviation is a very recent technological marvel. Someone from the late 1800's would find our complaints trivial in light of the wondrous feat of traveling half-way around the world in a day or two.
But human nature leads us to use a more restrictive basis of comparison, namely how things have changed in the recent past. Geopolitical events, like 9/11, have led to tightening of airport security. Financial pressures on airlines have led to a host of cost-cutting measures, including reducing the number of flights, cramming more seats in each aircraft, charging for luggage, meals, and on some airlines even for the privilege of reserving a specific seat in advance. In short, it seems like the situation is getting worse and worse.
The latest round of decline for us involves the recent merger of United Airlines and Continental Airlines. For years we have been members of United's frequent flyer program primarily because United has offered the best mainland and international connections. Of course, actually cashing in our award miles has always been a little difficult because we live in Hawai'i -- a popular destination for people to use their miles to visit, making competition for available award seats fierce. Still, we've managed to take advantage of the program often enough that it has balanced some of the negatives of air travel.
One of the best features of United's program was that if your paid travel in a year totaled 25,000 miles or more you were rewarded with some extra perks (please note -- these must be miles flown, not earned in other ways, like with a credit card): You could reserve seats in economy with more leg room, check two bags free, and board the plane earlier (thus avoiding some of the slug-fest for overhead storage). On our marathon journeys these things have made a big difference, particularly having more comfortable seats, and have kept us loyal to United's program. And given the amount of money required for us to achieve 25,000 miles in a year, these perks seemed a fitting gesture of appreciation from United for our business.
The merger has changed all that -- for the worse, naturally.
A few weeks ago we received notice from United about the new "wonderful" and "exciting" features of the merger, including the merged frequent flyer programs. Cutting through all the breathless corporate hype revealed new policies that represent a dramatic downgrade of benefits for customers like us at the 25,000 mile level. The most irksome change is that now reserving seats with more leg room requires 50,000 miles in a year -- double the earlier number and certainly out of reach of the ordinary traveler. Even many business travelers might have trouble meeting that requirement. You can, however, pay extra for those seats -- an additional $150-250 per person for trips of the length we usually take. There is one shred of this perk left -- 24 hours before the flight we can vie for the unsold premium seats with all the other 25k-milers. Of course, this means that we may not find seats together, or that the available seats will be in those wonderful "middle of the middle" locations. Spending 15-20 hours in one of those seats is decidedly unappealing, something you might wish only on the CEO who masterminded this new policy.
For us these changes no longer give United an edge compared to other airline frequent flyer programs. The new policies convey that our loyalty and considerable level of spending don't count for as much as they did. So be it, and we wish United a profitable future. Their profit probably won't be coming as much from us, however, because we will be much more likely to consider alternative carriers.
Wednesday, March 7, 2012
Decision Making in Geezerhood
The waitress returned for the third time, order pad in hand. "How we doin' here folks? Are you guys ready to order or would you like another few minutes?" There was a tone of sweet condescension in her voice, likely the result of her reaction to our grey hair. I imagine she was thinking: come on geezers, make up your minds!
One of the stereotypes of older people is that they have difficulty making decisions and the decisions they finally come up with are often flawed. Like most stereotypes, this one has a kernel of truth but also distorts the real picture, and is flat-out wrong in certain cases. For instance, my wife and I have always taken a long time to order in a restaurant because we share each dish and we are both particular -- so it takes some time to select things we both will like. Being geezers is irrelevant.
However, there is ample evidence from research on aging that the average performance of older people on many types of decisions is both slower and less optimal than younger people. This is particularly true when the decision involves remembering, evaluating, and comparing many pieces of information that vary in relevance to making an optimal choice. The cognitive declines in memory, analytic reasoning, and executive functioning that are common in older adults make these kinds of decisions more difficult and results in sub-optimal choices (Henninger, Madden, and Huettel, 2010).
Financial decision-making is one realm in which the consequences of poor choices can be very important. The cognitive deficits associated with aging have been found to be particularly problematic in this context. For example, a Brookings Institute study comparing age groups on a variety of financial products found that older people wind up paying higher fees, penalties, and interest rates across a wide range of credit transactions, including credit cards, mortgages, and car loans (Agarwal et al., 2007). Interestingly, the relationship between decision quality appears to be U-shaped, with the most optimal decisions made by those around 50. One explanation of this curvilinear function is that young people, though they have high cognitive abilities lack experience and background knowledge, whereas older people have a great deal of experience and knowledge but have difficulty applying this because of cognitive deficits. In middle age there is an optimal trade-off of experience and cognitive functioning.
Another important aspect of financial decision-making involves making choices that require an assessment of risk of loss versus probability of reward. For example, maintaining an investment portfolio of 100% bonds entails very little risk but provides limited rewards, whereas a portfolio of 100% equities entails much more risk but also may provide significantly greater returns over time. And of course there is considerable variation in the risk levels of individual stocks and bonds that requires evaluation and comparison of complex information in order to make an optimal choice.
Unfortunately, research evidence concerning the quality of decisions involving risk indicates that geezers tend to make poorer decisions than young people. Henninger et al.(2010) recently summarized the data succinctly:
So far the picture looks pretty bleak, but fortunately I can end on a couple of positive notes. First, recognizing the challenges of geezer decision-making allows the development of ways of presenting information modifying the context of decision making to compensate for declines in cognitive functioning, for example by reducing the memory load in decision tasks and by presenting information in ways that can be more readily related to older adults' greater past experience (Henninger et al., 2010) and that may more clearly balance the positive and negative aspects of risk alternatives (Ross, 2010).
Second, it is clear that there is considerable variability in the quality of decision-making by geezers, to the degree that some older people outperform younger adults. This variability has been shown to be tied to differences among older people in the degree of cognitive decline -- an important fact because it means that it isn't age per se that leads to poorer decisions but rather it is the degree of specific types of neurological deficit. And there is abundant evidence that the rate and amount of cognitive decline can be altered by life style choices, with the most dramatic effects coming from continuing physical exercise throughout middle and old age (see my blog Jogging the Memory of a Geezer for a review of this research).
Yet another reason to lace up those walking shoes -- it might keep you solvent!
_________________________________________
Agarwal, S., Driscoll, J., Gabaix, X., & Laibson, D. (2009). The age of reason: Financial decisions over the life-cycle and implications for regulation. Brookings Papers on Economic Activity, 2, 51-117.
Henninger, D.E., Madden, D., & Huettel, S.A., (2010). Processing Speed and Memory Mediate Age-Related Differences in Decision Making. Psychology and Aging, 25, No. 2, 262–270.
Mather, M. (2006). A review of decision-making processes: Weighing the risks and benefits of aging. In L. L. Carstensen & C. R. Hartel (Eds.), When I’m 64 (pp. 145–173). Washington, DC: National Academies
Press.
One of the stereotypes of older people is that they have difficulty making decisions and the decisions they finally come up with are often flawed. Like most stereotypes, this one has a kernel of truth but also distorts the real picture, and is flat-out wrong in certain cases. For instance, my wife and I have always taken a long time to order in a restaurant because we share each dish and we are both particular -- so it takes some time to select things we both will like. Being geezers is irrelevant.
However, there is ample evidence from research on aging that the average performance of older people on many types of decisions is both slower and less optimal than younger people. This is particularly true when the decision involves remembering, evaluating, and comparing many pieces of information that vary in relevance to making an optimal choice. The cognitive declines in memory, analytic reasoning, and executive functioning that are common in older adults make these kinds of decisions more difficult and results in sub-optimal choices (Henninger, Madden, and Huettel, 2010).
Financial decision-making is one realm in which the consequences of poor choices can be very important. The cognitive deficits associated with aging have been found to be particularly problematic in this context. For example, a Brookings Institute study comparing age groups on a variety of financial products found that older people wind up paying higher fees, penalties, and interest rates across a wide range of credit transactions, including credit cards, mortgages, and car loans (Agarwal et al., 2007). Interestingly, the relationship between decision quality appears to be U-shaped, with the most optimal decisions made by those around 50. One explanation of this curvilinear function is that young people, though they have high cognitive abilities lack experience and background knowledge, whereas older people have a great deal of experience and knowledge but have difficulty applying this because of cognitive deficits. In middle age there is an optimal trade-off of experience and cognitive functioning.
Another important aspect of financial decision-making involves making choices that require an assessment of risk of loss versus probability of reward. For example, maintaining an investment portfolio of 100% bonds entails very little risk but provides limited rewards, whereas a portfolio of 100% equities entails much more risk but also may provide significantly greater returns over time. And of course there is considerable variation in the risk levels of individual stocks and bonds that requires evaluation and comparison of complex information in order to make an optimal choice.
Unfortunately, research evidence concerning the quality of decisions involving risk indicates that geezers tend to make poorer decisions than young people. Henninger et al.(2010) recently summarized the data succinctly:
...older adults’ real-world decisions involving risk are often of objectively worse quality than those of younger adults, both in laboratory and real-world settings, with an abrupt decrease in decision-making skill observed in individuals over 70 years of age (Korniotis & Kumar, in press). As examples, older adults within that age range earn 3%–5% lower risk-adjusted annual returns (Korniotis & Kumar, in press) and obtain systematically worse outcomes on a wide variety of financial instruments (Agarwal, Driscoll, Gabaix, & Laibson, 2007), even when controlling for confounding factors like income, investment horizon, and desired rate of return... In short, substantial evidence demonstrates that older adults are more likely to make poor-quality financial decisions, often leading to significant negative personal consequences.In line with the "conservative geezer" stereotype, one source of these sub-optimal decisions might seem to be a general tendency toward risk aversion even when some degree of risk is adaptive. However, the evidence indicates a more complex picture. Though older people do exhibit detrimental risk aversion in some circumstances (Mather, 2006), they also may show the same or even more risk preference as young people in other situations. For example, if the benefits of an alternative with more risk are emphasized, older adults may weigh them more heavily than young people. This stems from the general tendency of older people to be more optimistic and positive than younger people, a phenomenon I explored in an earlier blog. In the financial arena this tendency may lead to poorer choices and susceptibility to scammers (Ross, 2010).
So far the picture looks pretty bleak, but fortunately I can end on a couple of positive notes. First, recognizing the challenges of geezer decision-making allows the development of ways of presenting information modifying the context of decision making to compensate for declines in cognitive functioning, for example by reducing the memory load in decision tasks and by presenting information in ways that can be more readily related to older adults' greater past experience (Henninger et al., 2010) and that may more clearly balance the positive and negative aspects of risk alternatives (Ross, 2010).
Second, it is clear that there is considerable variability in the quality of decision-making by geezers, to the degree that some older people outperform younger adults. This variability has been shown to be tied to differences among older people in the degree of cognitive decline -- an important fact because it means that it isn't age per se that leads to poorer decisions but rather it is the degree of specific types of neurological deficit. And there is abundant evidence that the rate and amount of cognitive decline can be altered by life style choices, with the most dramatic effects coming from continuing physical exercise throughout middle and old age (see my blog Jogging the Memory of a Geezer for a review of this research).
Yet another reason to lace up those walking shoes -- it might keep you solvent!
_________________________________________
Agarwal, S., Driscoll, J., Gabaix, X., & Laibson, D. (2009). The age of reason: Financial decisions over the life-cycle and implications for regulation. Brookings Papers on Economic Activity, 2, 51-117.
Henninger, D.E., Madden, D., & Huettel, S.A., (2010). Processing Speed and Memory Mediate Age-Related Differences in Decision Making. Psychology and Aging, 25, No. 2, 262–270.
Mather, M. (2006). A review of decision-making processes: Weighing the risks and benefits of aging. In L. L. Carstensen & C. R. Hartel (Eds.), When I’m 64 (pp. 145–173). Washington, DC: National Academies
Press.
Monday, February 13, 2012
Tons of Fun: Humpbacks in Hawai'i
They're back!
Each winter Hawai'i gets thousands of repeat visitors, many of them of the species Humanica Snowbirdae, giving a much appreciated boost to our economy. The visitors I look forward to the most, however, don't spend a dime. They weigh an average of 40 tons and are the size of a bus. I'm referring to Megaptera Novaeangliae, or Humpback whales, who come here for some of the same reasons as Humanica Snowbirdae; the warm clear ocean waters, idyllic weather, romantic mating habitats.
However, the Humpbacks differ in several respects from most Snowbirdae. For one thing Humpbacks give birth here to their 1-ton 12-foot long calves. The actual moment of birth of a Humpback is still something of a mystery -- no one has been able to document the event itself. Nor are scientists certain why the whales don't just stay in their home territory of Alaska to give birth rather than swimming 2,000 miles to Hawai'i. One reason may be that the shallow warm waters around the Hawaiian Islands are a safer nursery for the babies because they can escape predation from Orca whales, who don't often range this far south, but no one knows for sure.
Another difference between Humpbacks and other visitors is that the Humpbacks don't eat during the entire time they are here, whereas Humanica Snowbirdae are noted for their enthusiastic consumptive behavior. The Humpbacks' diet consists mostly of tiny plankton and krill as well as small fish like mackerel which aren't found in enough abundance in Hawaiian waters to sustain them. This 2-3 month starvation diet is particularly hard on new mothers, whose fat reserves have to be enough for both them and for their newborn calves to develop strength and stamina for the arduous trip back to Alaska. Maybe for this reason females are larger than males, one of the few mammals for which this is the case.
Humpbacks seem to have a lot of fun while they are here, like many other visitors do. But Humpback "fun" can be very dramatic, particularly when they breach, launching themselves almost completely out of the water and landing with an impressive splash visible for miles. You can imagine the strength it must take to propel 40 tons of blubber straight up out of the water -- and I've seen individuals do this repeatedly for 20-30 times. They also like to slap their pectoral fins or their tail flukes on the surface making a tremendously loud noise. Scientists think this behavior is associated with courtship and social dominance, but in their home feeding grounds Humpbacks also use these behaviors to cooperatively round up food. Whatever the reason, it sure looks like they're having a great time.
One of the most widely known behaviors of Humpbacks is their singing. But most people aren't aware that (a) only the males sing and (b) nearly all singing takes place just before and during migration and while the whales are here in their breeding grounds. The strange underwater sounds that sailors heard for centuries weren't identified as coming from Humpbacks until the 1960's, when they began to be studied scientifically. Here are a few of the recent findings detailed by the conservation organization Whale Trust:
Hopefully we can continue to co-exist peacefully with these magnificent gentle giants. They are truly extraordinary sentient beings....and tons of fun.
___________________________________
Animal Diversity Web (University of Michigan)
Earth Trust: Humpback Whales
National Geographic: Humpback Whales
Whale Trust: Humpback Songs
Each winter Hawai'i gets thousands of repeat visitors, many of them of the species Humanica Snowbirdae, giving a much appreciated boost to our economy. The visitors I look forward to the most, however, don't spend a dime. They weigh an average of 40 tons and are the size of a bus. I'm referring to Megaptera Novaeangliae, or Humpback whales, who come here for some of the same reasons as Humanica Snowbirdae; the warm clear ocean waters, idyllic weather, romantic mating habitats.However, the Humpbacks differ in several respects from most Snowbirdae. For one thing Humpbacks give birth here to their 1-ton 12-foot long calves. The actual moment of birth of a Humpback is still something of a mystery -- no one has been able to document the event itself. Nor are scientists certain why the whales don't just stay in their home territory of Alaska to give birth rather than swimming 2,000 miles to Hawai'i. One reason may be that the shallow warm waters around the Hawaiian Islands are a safer nursery for the babies because they can escape predation from Orca whales, who don't often range this far south, but no one knows for sure.
Another difference between Humpbacks and other visitors is that the Humpbacks don't eat during the entire time they are here, whereas Humanica Snowbirdae are noted for their enthusiastic consumptive behavior. The Humpbacks' diet consists mostly of tiny plankton and krill as well as small fish like mackerel which aren't found in enough abundance in Hawaiian waters to sustain them. This 2-3 month starvation diet is particularly hard on new mothers, whose fat reserves have to be enough for both them and for their newborn calves to develop strength and stamina for the arduous trip back to Alaska. Maybe for this reason females are larger than males, one of the few mammals for which this is the case.
Humpbacks seem to have a lot of fun while they are here, like many other visitors do. But Humpback "fun" can be very dramatic, particularly when they breach, launching themselves almost completely out of the water and landing with an impressive splash visible for miles. You can imagine the strength it must take to propel 40 tons of blubber straight up out of the water -- and I've seen individuals do this repeatedly for 20-30 times. They also like to slap their pectoral fins or their tail flukes on the surface making a tremendously loud noise. Scientists think this behavior is associated with courtship and social dominance, but in their home feeding grounds Humpbacks also use these behaviors to cooperatively round up food. Whatever the reason, it sure looks like they're having a great time.One of the most widely known behaviors of Humpbacks is their singing. But most people aren't aware that (a) only the males sing and (b) nearly all singing takes place just before and during migration and while the whales are here in their breeding grounds. The strange underwater sounds that sailors heard for centuries weren't identified as coming from Humpbacks until the 1960's, when they began to be studied scientifically. Here are a few of the recent findings detailed by the conservation organization Whale Trust:
A typical song is ... made up of 5-7 themes that are usually repeated in a sequential order. A song typically lasts 8-15 minutes (although it may range from 5-30 minutes), and then is repeated over and over in a song session that may last several hours... A striking feature of the song is that it gradually changes or evolves over time. Each year, different sounds and arrangements of sounds form to create new phrases or themes. These changes are slowly incorporated into the song, while some older patterns are lost completely...The change in the song display seems to occur in a collective or common way throughout the population. Usually after a period of several years, the song is virtually unrecognizable from the original version. In some cases, however, the song has completely changed in just two years! Despite the constantly changing nature of the song, all singers in a population sing essentially the same version at any one time. In fact, all the singers in the North Pacific (that is, whales in Japan, Hawaii, Mexico and the Philippines) separated by thousands of kilometers sing essentially the same version of a song at any one time...The explanation for the collective change of the song, especially over such vast distances, is currently unknown.Humpbacks were nearly driven to extinction by relentless hunting during the 1800's and early 1900's. Hundreds of thousands were slaughtered during this time for their oil, meat, and bones. During the period 1910-1916 more than 60,000 humpbacks were killed just in the southern hemisphere. The North Pacific population was reduced to just 1,000 animals at the lowest point. They have been protected for about the past 50 years and have made a slight comeback, with the current world-wide population about 6-10 thousand, 50% of whom overwinter in Hawai'i.
Hopefully we can continue to co-exist peacefully with these magnificent gentle giants. They are truly extraordinary sentient beings....and tons of fun.
___________________________________
Animal Diversity Web (University of Michigan)
Earth Trust: Humpback Whales
National Geographic: Humpback Whales
Whale Trust: Humpback Songs
Sunday, January 15, 2012
Fingerprints On My Ceiling
My wife and I are the third owners of our house here in Hawai'i, which we love very much.
Like many Hawaiian houses, ours has what is called an open-beam ceiling. When you look at the ceiling you are actually seeing the underside of the roof -- there is no insulation and no attic, not even a layer of dry wall sheeting. The beams are larger than normal roof joists and not only support the roof, they are a distinct visual element of the house, painted white against the natural wood of the tongue-and-groove roof/ceiling planking.
Mainland readers may be having trouble with the concept of a ceiling without insulation, but it is quite common here because the weather doesn't require it. For the same reason many houses in Hawai'i, ours included, have no central air-conditioning and no heating.
When our house was built about twenty years ago one or more of the carpenters wasn't wearing gloves when the roof planks were installed. I know this because if you look closely you can see fingerprints on the ceiling, most likely the result of the oils in the carpenter's skin darkening over the years.
Some might consider this feature a flaw, but I think it is kind of fascinating. For one thing, it is a clear reminder of an individual human contribution to creating my house, and certainly a reminder that is a uniquely personal one. Each time I look at those fingerprints, I visualize somebody up on the roof struggling to fit each plank into position, maybe thinking "just five more and we can quit for the day and go have a beer...." Real people built this house, and they worked long and hard to do it. Twenty years later the signs of that hard work are still evident, and the fingerprints represent an obvious connection between the workers' sweat and our current happiness.
I doubt the carpenter who left his fingerprints ever thought that one day people would be pondering who he was and appreciating his efforts on such a personal level. He knew he was creating something that would last into the future of course, but his impact on people would be through the structure he was building, not through the loops and sworls on his fingertips.
Come to think of it, we all leave traces as we go through our daily lives, though seldom as uniquely identifiable as fingerprints on a ceiling, and like the carpenter we're often unaware of the influence we have on the experiences of other people. Our traces aren't necessarily physical residues. Our interactions with people alter their experience and change the direction of their lives, even if the impact might be small and subtle. A smile, a word of encouragement, a derisive gesture or condescending comment may alter a person's mood and behavior and in turn determine how they interact with others, the effects continuing to ripple outward. It seems likely that when you meet a stranger there is a high probability that they represent some small amount of your own previous traces. This suggests that the quality of your interaction with the stranger is determined in part by your past behavior with other people. Buddhists might regard this as one aspect of Karma, the causal theory that our intentional actions have consequences that may return to us through long and complex causal chains.
The plausibility of this interconnectedness can be illustrated by the work of the famous psychologist Stanley Milgram on what he called the Small World Phenomenon (other have referred to it as the "six degrees of separation principle'). Through a series of clever experiments Milgram demonstrated that any two people can be connected to each other through only 5 or 6 intermediaries. For example, in one study Milgram asked people to move a letter to a random stranger located in a geographical distant location. Since no one knew the stranger, they were to pass on the letter to a friend who might know the other individual, or who would pass it on to another person who might. On average it took just 5-6 moves to reach the target. Friendship in this case is the trace that ripples outward.
It is possible that the carpenter who left his fingerprints on my ceiling is long gone, maybe even dead. Yet the trace he left still exists, and it will continue to have an impact for a long time to come. Assuming of course that someone has read this blog........
Like many Hawaiian houses, ours has what is called an open-beam ceiling. When you look at the ceiling you are actually seeing the underside of the roof -- there is no insulation and no attic, not even a layer of dry wall sheeting. The beams are larger than normal roof joists and not only support the roof, they are a distinct visual element of the house, painted white against the natural wood of the tongue-and-groove roof/ceiling planking.
Mainland readers may be having trouble with the concept of a ceiling without insulation, but it is quite common here because the weather doesn't require it. For the same reason many houses in Hawai'i, ours included, have no central air-conditioning and no heating.
When our house was built about twenty years ago one or more of the carpenters wasn't wearing gloves when the roof planks were installed. I know this because if you look closely you can see fingerprints on the ceiling, most likely the result of the oils in the carpenter's skin darkening over the years.
Some might consider this feature a flaw, but I think it is kind of fascinating. For one thing, it is a clear reminder of an individual human contribution to creating my house, and certainly a reminder that is a uniquely personal one. Each time I look at those fingerprints, I visualize somebody up on the roof struggling to fit each plank into position, maybe thinking "just five more and we can quit for the day and go have a beer...." Real people built this house, and they worked long and hard to do it. Twenty years later the signs of that hard work are still evident, and the fingerprints represent an obvious connection between the workers' sweat and our current happiness.
I doubt the carpenter who left his fingerprints ever thought that one day people would be pondering who he was and appreciating his efforts on such a personal level. He knew he was creating something that would last into the future of course, but his impact on people would be through the structure he was building, not through the loops and sworls on his fingertips.
Come to think of it, we all leave traces as we go through our daily lives, though seldom as uniquely identifiable as fingerprints on a ceiling, and like the carpenter we're often unaware of the influence we have on the experiences of other people. Our traces aren't necessarily physical residues. Our interactions with people alter their experience and change the direction of their lives, even if the impact might be small and subtle. A smile, a word of encouragement, a derisive gesture or condescending comment may alter a person's mood and behavior and in turn determine how they interact with others, the effects continuing to ripple outward. It seems likely that when you meet a stranger there is a high probability that they represent some small amount of your own previous traces. This suggests that the quality of your interaction with the stranger is determined in part by your past behavior with other people. Buddhists might regard this as one aspect of Karma, the causal theory that our intentional actions have consequences that may return to us through long and complex causal chains.
The plausibility of this interconnectedness can be illustrated by the work of the famous psychologist Stanley Milgram on what he called the Small World Phenomenon (other have referred to it as the "six degrees of separation principle'). Through a series of clever experiments Milgram demonstrated that any two people can be connected to each other through only 5 or 6 intermediaries. For example, in one study Milgram asked people to move a letter to a random stranger located in a geographical distant location. Since no one knew the stranger, they were to pass on the letter to a friend who might know the other individual, or who would pass it on to another person who might. On average it took just 5-6 moves to reach the target. Friendship in this case is the trace that ripples outward.
It is possible that the carpenter who left his fingerprints on my ceiling is long gone, maybe even dead. Yet the trace he left still exists, and it will continue to have an impact for a long time to come. Assuming of course that someone has read this blog........
Thursday, December 29, 2011
I'm Speechless....
As 2011 winds down and limps to an end, so has my blogging.
It's not that there aren't plenty of things that have caught my attention and might deserve my cunningly incisive analysis, for example:
Happy New Year!
It's not that there aren't plenty of things that have caught my attention and might deserve my cunningly incisive analysis, for example:
- The bizarre and frightening GOP/TP candidate-of-the-week-club. Surely there are more competent and compassionate possibilities than these.....
- The upside-down logic of the GOP/TP that the solution to our economic woes is to cut taxes on the wealthy and raise them on ordinary workers. I'm referring of course to the recent attempt of the GOP/TP to block an extension of the payroll tax cut while simultaneously fighting to retain cuts for the wealthy. (Actually, I commented on this somewhat prophetically in my blog last September, Punishing the Victims, Part Deux. )
- The puzzling assessment in the media and by Democratic Leaders that a measly 2-month extension of the payroll tax cut finally passed by Congress is somehow a brilliant victory.
- The stunning failure of the so-called Super Committee to produce a workable deficit reduction plan, illustrating yet again the dysfunction of our congressional leaders.
- A recent study by University of Michigan showing that the average net worth of members of congress more than doubled from 1984 to 2009, while the net worth of the average American family declined slightly, and other research that shows the growth of income inequality has tracked very closely with measures of political polarization (see also my earlier blog about our misperceptions concerning wealth inequality in America).
- Peaceful protests in Syria continue to be brutally punished by a ruthless government. A wrenching interview by Barbara Walters with "President" Assad revealed a man that was pathetically and dangerously out of touch with reality.
- The pride and promise we saw in Egypt has evaporated in a new and more violent round of demonstrations by those who seem to want nothing more than to fulfill the democratic promises they thought they had won.
- A laughably strange and crazy yet thoroughly despotic leader in North Korea dies (yeah!) but is replaced by his mini-me son who promises to be just as bad for his people and for the world (sigh).
Happy New Year!
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