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.

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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.

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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.

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