The Hindu Business Line : `Research abstract' may sound like double jeopardy

What is research? It is "the process of going up alleys to see if they are blind," says Marston Bates, a zoologist whose studies on mosquitoes contributed to a better understanding of yellow fever.

Research is "all effort directed toward increased knowledge of natural phenomena and environment and toward the solution of problems in all fields of science," defines Dictionary of Military Terms on www.dtic.mil. "Diligent inquiry or examination in seeking facts or principles; laborious or continued search after truth," says Webster's 1828 Dictionary.

To the common man, however, research stirs notions of abstractness. He may be `lost in a gloom of uninspired research,' as William Wordsworth would pen. Yet, it is advisable for lay people to read up, at least occasionally, what erudite researchers are working on. A good source can be the abstracts of recent papers from the National Bureau of Economic Research (www.nber.org) . To those who think research is itself abstract, the phrase `research abstract' may sound like a double jeopardy. Please note that `abstract' means `a sketchy summary of the main points of an argument or theory,' as www.onelook.com educates.

The latest e-mail alert from NBER, dated July 31, lists a score papers, on topics as varied as computers and investment, migration and outsourcing. The first paper takes us out to the field; for, it uses "a simple model of solar radiation to measure the amount of energy collected by a vineyard, and then to establish the econometric relation between energy and vineyard quality." Vineyard and grape prices increase more than proportionally with greater ripeness, note the authors.

If that's heady, this can be headier. That "factors associated with computer and Internet penetration do not differ substantially between developed and developing countries," as another paper states. No left-handed compliment, that is, to our IT (information technology) efforts. Also, those who are left-handed can cheer. Because, a research finds "a significant wage effect for left-handed men with high levels of education." Sadly, though, "this effect is not found among women." Not right that they are left out!

Of sombre reading is the abstract of a paper on "the influence of ageing and health shocks on a household's ownership of various assets health shocks". The authors find that households decrease their ownership of most asset classes "as they age, with the strongest evidence for principal residences and vehicles, while increasing the share of assets held in bank accounts and certificate of deposits (CDs). "Death of a spouse is a strong predictor of selling the principal residence," says one of the findings. "Widowhood also leads households to sell vehicles, businesses, and real estate and to put money into bank accounts and CDs."

Grim, again, on a macro scale, is that what is good for big business need not generally advance a country's overall economy, as declares one of the research papers. That's more a given than a puzzle for most of us. But what is `one of the most striking portfolio puzzles'? The `disposition effect', states a different paper. It seems individuals have a tendency `to sell stocks in their portfolios that have risen in value since purchase, rather than fallen in value.'

Using `a simple equilibrium argument to show that the wealth allocation at any date T node does not depend on the path by which the stock price arrives at that node,' the paper shows how `a prospect theory investor sometimes wants to take less risk after a loss than after a gain.' So: "In order to clear the market, then, expected stock returns may need to be higher after a loss than after a gain. This is the opposite of momentum... "

Feeling dizzy? You aren't alone. "Most people are staggered by research, but this is, after all, how I make a living," says Leon Uris. And that perhaps applies to researchers too.

SayCheek@TheHindu.co.in

More Stories on : Research & Development | Say Cheek

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page