Booth in the News; Spring 2013, Vol. 2
Covering April 2 to April 15, 2013
Here are highlights of the latest Booth news coverage. The summary below represents only a portion of recent coverage. Questions about the summary should be directed to Allan Friedman, executive director of communications, by e-mail or by calling 773.702.9232.
This summary contains three sections.
Section 1: News coverage of Booth.
BLOOMBERG BUSINESSWEEK. Changes to Booth’s Executive MBA Program were detailed in an article headlined “Curriculum Changes for Two Top EMBA Programs,” published April 11. Beginning in June, incoming EMBA students will experience an additional week of global collaboration and learning with their classmates from around the world, bringing the number of global weeks to five, said Patty Keegan associate dean. In addition, all students will take two weeks of electives and will participate in LEAD. Read article »
THE TIMES OF INDIA. Booth, Harvard Business School and London Business School were featured in an article looking at how graduates of the top business schools are ready to do business internationally. “Booth prepares its students to excel in a global setting,” the newspaper said. Booth’s first-ever emerging markets summit in April was mentioned as an example of the many activities available to students. Deputy Dean Kole was quoted in the article, published April 5. Read article»
FORBES. Booth’s student-organized Energy Forward Conference made news April 7. About 20 experts in energy development and finance spoke at the event, with the most buzz focusing on hydraulic fracturing, or fracking, of shale gas, the article said. Read article»
Section 2: News coverage of Booth faculty.
- THE WALL STREET JOURNAL. Professor John Cochrane published an op-ed titled “America Needs an Alternative Maximum Tax,” April 14. “When do federal, state and local taxes indisputably start to harm the economy and produce less revenue?” he asked. “At 50% of income? 60%? 70%? I like half, but the principle matters more than the number.” Read article »
- THE NEW YORK TIMES. Professor Richard Thaler wrote the Economic View column headlined “Shifting Our Retirement Savings Into Automatic,” April 6. His recommendations: “First, make payroll retirement savings plans available to everyone. Then, add empirically proven design features to them, making it easier for workers to make good choices. In other words, improve the plans’ choice architecture.” Read article »
- THE NEW YORK TIMES. Research by Professor Ayelet Fishbach was featured in an article headlined “You’ve Been Doing a Fantastic Job . Just One Thing …” published April 5. Her research paper “Tell Me What I did Wrong: Experts Seek and Respond to Negative Feedback,” says that when people are experts on a subject, or consider themselves experts, they’re more eager to hear negative feedback, while novices are more likely to seek positive responses, the article said. Read article »
- THE NEW YORK TIMES. Research on productivity growth by Professors Chang-Tai Hsieh and Erik Hurst was featured in an article headlined “How Shared Diaper Duty Could Stimulate the Economy,” published April 2. The research estimates that 15 to 20 percent of American productivity growth over the last five decades has come from more efficient allocation of underrepresented groups, like women, into occupations that were largely off-limits, like doctors or lawyers, the article said. Read article »
The Wall Street Journal also cited the work by Professors Hsieh and Hurst. Read article »
- THE ECONOMIST. Research by Associate Professor Eugene Caruso was featured in an article headlined “Yesterday came suddenly: The Psychology of Time,” published April 5. Professor Caruso and his co-authors found that people judge the distance of events differently, depending on whether they are in the past or future. The paper calls this the “Temporal Doppler Effect.” Read article »
- THE NEW YORK TIMES. Professor Pradeep Chintagunta was quoted in an article about retail pricing strategies pitting everyday low prices against sales and coupons. Costco and Walmart almost never run sales, the article said. “Instead of having a lot of variable pricing on individual items, across all items they can guarantee you’ll get the lowest price for your basket,” Professor Chintagunta said in the article published April 13. Read article »
- THE WALL STREET JOURNAL. Professor Steven Kaplan was quoted in an article about the ousted CEO of J.C. Penney Co. headlined “No Parachute for Penney’s Ron Johnson,” published April 9. The firing shows that high-profile CEO jobs are risky, and some CEOs fail, Professor Kaplan said. That is why most CEOs negotiate an exit package when they first arrive, as a form of insurance, he said. Read article ».
- THE ECONOMIST. Assistant Professor Matthew Notowidigdo’s description of “The Barbie Paradox” was cited in an article published April 1. He says price discrimination is probably the reason Barbie doll prices vary by profession and the differences cannot be explained by the accessories that come with the dolls. Associate Professor Emily Oster wrote about the topic in a Slate column last year. Read article »
- THE WALL STREET JOURNAL. Research by Professor Richard Thaler was featured in an article headlined “How to Save More For Retirement Without Really Trying,” published March 29. His research shows the benefits of automatically enrolling employees into a retirement program that commits them to increase their saving rate later, thus putting off the pain of having less cash to spend. The future rises are timed to coincide with salary increases, so take-home pay doesn’t fall even after the extra retirement contributions are taken out. Read article »
- CNN.COM. Professor Pradeep Chintagunta was quoted in an article about a new marketing campaign by YUM Brands, owner of KFC, Taco Bell and Pizza Hut. YUM recently launched a campaign for products they call “crazy,” such as “Crazy Cheesy Crust” Pizza. The term “crazy” works on two kinds of consumers, Professor Chintagunta said in the April 8 article. One is the heavy junk food consumer, generally young and male. The second target group for “crazy” food marketing is consumers who are working hard to eat healthier. “People like to balance virtue and vice,” Professor Chintagunta said. “They’ll say, ‘During the week, I was a good person. I ate my salad. Now it’s the weekend, and I want to cut loose a little bit. If I try something, I want to try something a little bit crazy.’” Read article »
- WTTW TELEVISION (Chicago). Professors Austan Goolsbee and Steven Kaplan discussed the impact of sequester cuts during a joint appearance on “Chicago Tonight,” April 2. “I think the sequester was stupid,” Professor Goolsbee said. “The administration wanted everyone to think it was going to be doomsday,” said Professor Kaplan, who said the impact of the sequestration cuts will be minor. The economy is harmed more from the tax increases at the end of 2012 than these cuts, Professor Kaplan said. Watch video »
- THE BOSTON GLOBE. Research by Professor Marianne Bertrand and Associate Professor Adair Morse was featured in an article headlined “Spend like the ultra-rich!” published April 7. When the income and spending of higher-income households in a state were further above that of the middle-income households, the latter spent more of their income, the research found. This consumption was facilitated by the increasing availability of credit such that “rising income inequality might have been a contributing factor in the recent financial crisis,” Professor Bertrand and Morse found.
- THE WASHINGTON POST. Professor John Cochrane was featured in an article headlined “Why do people hate deficits?” published April 8. One of the common reasons for balancing the budget you hear is that deficits will give us inflation, the article said, adding that under most macroeconomic models, this ought to be true. “Inflation results when the government prints more dollars than the government eventually soaks up in tax payments,” Professor Cochrane said. Read article »
- SLATE. Associate Professor Emily Oster wrote a column titled “Do You Set Money Aside for Rent, Groceries, Gas? That’s a Stupid Idea,” published April 12. The “envelope system” – where you put gas money in one envelope, grocery money in another, etc., and spend only within a category “is clear and elegant, though it is in violation of basic economic principles,” Professor Oster wrote. “The principle in question here is that ‘money is fungible.’ In reality, all dollars are the same. There is no such thing as a gas dollar, a grocery dollar, a ‘fun’ dollar.” Read article »
- CNBC. Professor Austan Goolsbee predicted that the government’s March jobs report would be weak when he appeared on camera a few minutes before the official numbers were released. “I’m getting pessimistic again,” he said. “The debilitating effect of the sequester is starting to kick in.” The interview was broadcast April 5, just before the government announced that employers added only 88,000 jobs last month, compared with 268,000 in February. Watch video »
- FOX NEWS CHANNEL. Professor Austan Goolsbee discussed the Obama Administration’s handling of the U.S. economy during an appearance on “Hannity” April 9. President Obama “turned it around” since taking office and conditions are improving, Professor Goolsbee said. Watch video »
- CNBC. Professor Randall Kroszner commented on the government’s March jobs report during an interview April 5. The weak report shows that talk of tapering the Federal Reserve’s quantitative easing program seems to have been premature, he said. “The Fed is going to wait, to see the recovery really come back,” Professor Kroszner said. Watch video »
- TIME MAGAZINE. Research by Professor Steven Kaplan was cited in an article headlined “Why Pension Funds Are Hooked on Private Equity,” published April 15. More and more, pension funds are allocating their resources toward alternative investments like private equity, the article said. In 2012, Professor Kaplan and his co-authors studied private equity returns “and found – to their surprise – that private equity funds beat the S&P 500 by an average of more than 3% per year,” the article said. Read article »
- THE NEW YORK TIMES. Research by Professor Ronald Burt was cited in an article headlined “Engineering Serendipity,” published April 5. Close-knit teams do well at tackling the challenges in front of them, but lack the connections to spot complementary ideas elsewhere in the company, the article said. Professor Burt studied these “structural holes,” and found that managers who serendipitously bridged such gaps were more likely to generate good ideas (and advance professionally as a result), according to the article. Read article »
- THE WASHINGTON POST. Research by Deputy Dean Steven Davis was featured in an article about the slow pace that U.S. companies are filling job openings, published April 9. Jobs now remain unfilled for an average of 25 days, Professor Davis found. That’s up from about 16 days in mid-2003, when the job market was recovering from the previous recession. Read article »
- THE WALL STREET JOURNAL. Research by Associate Professor Matt Taddy and Assistant Professor Robert Gramacy was featured in a column of recommended reading from around the web, published April 2. Professor Taddy and Gramacy found that some of the highest paid players in the National Hockey League may not be worth their salaries. Read article »
- THE WALL STREET JOURNAL. Associate Professor Emily Oster’s latest “Ask Emily” column was published April 8, titled “What Has More Value, $1,000 a Month or Free Use of a Cabin?” Read article »
- CNBC ASIA. Deputy Dean Steven Davis appeared on Squawk Box Asia while he was in Singapore to speak at Booth’s Economic Outlook conference. The interview was broadcast April 5. Professor Davis was also interviewed by Channel News Asia.
- MARKETPLACE RADIO. Professor Jean-Pierre Dube was featured in a story about J.C. Penney’s unsuccessful switch from using sales and coupons to using everyday low prices. “People are shopping with very little actual information about what the prices are and so they’re going to rely a lot on cues,” said Professor Dube. “The most commonly used kind of cue is a discount,” which is what Penney customers had been trained to do, he said. Listen to broadcast »
- BLOOMBERG TELEVISION. Professor Luigi Zingales discussed the U.S. economy during an interview broadcast April 2. We are better off than Europe, in part, because the U.S. is more competitive, but he said the recent bull market for stocks in the U.S. was driven by low interest rates, not by great expectations for the future. Watch video »
- CRAIN’S CHICAGO BUSINESS. Professor Steven Kaplan was quoted in an article headlined “’Stealth’ IPOs let emerging firms go public – in private,” published April 6. “The advantage of going to the SEC in a preliminary filing and getting vetted before everything is public is a very positive thing for companies that aren’t sure they want to go public or not,” Professor Kaplan said. Read article »
- PULZ BISNESU (Poland). Professor John Cochrane was quoted in an article about the possibility of Poland joining the Eurozone within the next two years. “I think it would be a great idea,” Professor Cochrane said. “The only reservation I’d have if I were Poland is that the euro itself is in a bit of danger due to ECB-financed southern bailouts,” he said in the article published March 29. Read article » in Polish.
- REASON. Research by Associate Professor Amit Seru was featured in an article headlined “Loose Loans,” published in the April issue of this magazine. Professor Seru and his co-authors looked at the impact of the Community Reinvestment Act, a 1977 law that was designed in part to encourage lending to low-income individuals. “We find that adherence to the act led to riskier lending by banks,” they wrote. Read article »
- HOUSINGWIRE. Associate Professor Amit Seru published a commentary about fraud in residential mortgage-backed securities. “The financial crisis has raised concerns about the ability of market rules and regulations to ensure truthful disclosure of asset quality. There is good reason to worry,” he wrote. In a recent paper Professor Seru and his co-author found that “at least 10% of the private-label residential mortgage-backed securities sold before the crisis were misrepresented by the bankers who had packaged and sold them.” The commentary was published April 10. Read article »
- CRAIN’S CHICAGO BUSINESS. Clinical Professor Ellen Rudnick was quoted in an article headlined “How to bring your invention to market without getting zapped,” published April 6. “Getting really good advisers or mentors on your team can help you avoid mistakes,” she said. Read article »
- CRAIN’S CHICAGO BUSINESS. Clinical Professor James Schrager was quoted in an article headlined “For new Accretive boss, it better not be about the money,” published April 9. Stephen Schuckenbrock likely will take a big pay cut to be CEO of Accretive Health Inc. compared with the nearly $13 million he took home from Dell Inc. in 2012, the article said. “It’s a very big deal to be a CEO, and it’s not out of line to take a lower base salary” for the opportunity, said Professor Schrager. “If you’re stuck in your own organization and can’t ever get there, you’ve got to step out.” Read article »
Section 3: Booth students and alumni in the news.
- CHICAGO TRIBUNE. Andrea Sreshta, MBA’13, was featured in an article headlined “Chicago-based LuminAID wins Clean Energy Challenge,” published April 4. She co-founded the company, which received $100,000 in early stage capital as a result of their #1 showing in the competition. LuminAID also won Booth’s Social New Venture Challenge last year. The company manufactures lightweight, inflatable, solar-powered LED lights. Read article »
- BUSINESS STANDARD (India). Nagesh Basavanhalli, MBA’98, was named president and managing director of or Fiat and Chrysler India, according to an article published April 2. Previously he was the head of Fiat and Chrysler’s Asia Pacific Technical Center in Chennai. Read article »
- FORBES INDONESIA. Tandean Rustandy, MBA’07 (AXP-6), was profiled in an article titled “Tile Time,” published in the April issue. He is the founder and chief executive of PT Arwana Citramulia, Indonesia’s second largest manufacturer of ceramic tiles. The company has grown large by serving smaller cities and rural areas, the article said.
- FORBES. Stella Fayman, MBA’14, published an article titled “Should Entrepreneurs Get an MBA? An Inside Perspective From an MBA Entrepreneur,” April 4. As she was considering business school, “I looked around at the majority of successful entrepreneurs and investors that I admired and one thing held equal: Most of them had an MBA,” she wrote. “At Booth, professors and staff from the Polsky Center for Entrepreneurship and Innovation go out of their way to help students by providing programming, access to mentors, and individualized recommendations based on an entrepreneur’s goals.” Read article »