<b>Have trade deals been a disaster?</b>

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Have trade deals been a disaster?

Donald Trump says that trade deals have been a disaster for this country. While most economists would say that free trade improves overall efficiency — not to mention the diplomatic and strategic rationales for trade deals — many lay people share Trump’s assessment. How misinformed are they? In a recent study, two economists find that tariff reductions on imports from Mexico as a result of the North American Free Trade Agreement ended up “dramatically lowering wage growth for blue-collar workers in the most affected industries and localities (even for service-sector workers in affected localities, whose jobs do not compete with imports).” These findings were not explained by “pre-existing trends, prevailing general globalization, or the coincident rise of imports from China.” So while consumers and exporters can expect some benefit from trade deals, some sectors of the economy do take a major hit.

Hakobyan, S. & McLaren, J., “Looking for Local Labor-Market Effects of NAFTA,” Review of Economics and Statistics (forthcoming).

The right memory for bad things

Different people excel at different things. For conservatives, that includes remembering bad things they’ve seen. Researchers at the University of Nebraska showed students pictures of positive, neutral, and negative scenes and later tested whether the students could recall seeing the pictures. Negative scenes depicted snakes, spiders, animal suffering, and human suffering. Conservatives had a better memory for these negative scenes.

Mills, M. et al., “Political Conservatism Predicts Asymmetries in Emotional Scene Memory,” Behavioural Brain Research (1 June 2016).

Open your arms to me

If you’re looking for a date, strike a pose, there’s something to it. Researchers found that speed-daters of both genders who adopted wide postures garnered more interest, even controlling for smiles, laughs, and head nods. This was also found to be the case in an experiment with a location-based dating app: Researcher-created profiles of individuals — especially of men — were more likely to elicit a response if they displayed wide postures. People considered wide postures to be a signal of an open, inviting type of dominance.

Vacharkulksemsuk, T. et al., “Dominant, Open Nonverbal Displays Are Attractive at Zero-Acquaintance,” Proceedings of the National Academy of Sciences (forthcoming).

Poor choice

As Americans, we don’t like to think of ourselves as divided by class, à la “Downton Abbey.” But new research suggests that class permeates even our mundane choices. In several experiments at the University of Texas at Dallas, researchers asked participants to choose between two aesthetically different versions of the same type of consumer product. After making their choices, participants were told either that a large or small percentage of other participants had made the same choice. Later, participants were asked to choose among the same pairs of products and then recall which were more popular. Working-class participants — whether defined by maternal education, family income, or self-rating — were more likely to switch their choices when told their choices was unpopular. This was not true for middle-class participants, though it was true for international/first-generation Asian students regardless of class. Middle-class Americans were also more likely to misremember an unpopular choice as a popular one. These differences in choice conformity and memory between working-class and middle-class Americans were eliminated if participants were first asked to write about “what makes you similar to your family and friends” (which made all participants more working-class) or “what makes you different from your family and friends” (which made all participants more middle-class).

Na, J. et al., “Social-Class Differences in Consumer Choices: Working-Class Individuals Are More Sensitive to Choices of Others than Middle-Class Individuals,” Personality and Social Psychology Bulletin (April 2016).

Moving on up. . . with each other

One of the rationales for loosening mortgage standards in the previous housing boom was to make it easier for minorities to buy homes and move into better neighborhoods. However, this seemingly straightforward proposition neglected how non-minorities might react to the same loosened mortgage standards. Two economists found that loosened mortgage standards increased racial segregation because whites were able to move out of mixed neighborhoods into overwhelmingly white neighborhoods. This was especially true in metropolitan areas where the supply of new housing was constrained (for example, by strict regulations).

Ouazad, A. & Rancière, R., “Credit Standards and Segregation,” Review of Economics and Statistics (forthcoming).