The recognition that emotions such as fear can drive investment choices is a relatively new one. Classical economics long viewed people as hyper-rational. But in the 1960s, a new field called behavioural economics emerged to show that’s far from the case, reported Macleans.ca Dec. 1.
Peter Darke, a professor of marketing at York’s Schulich School of Business, has been looking at the effects of fraud on investment behaviour, and he’s found that fraud by one firm induces an irrational suspicion among investors that causes them to lower their investments in other, unrelated firms. In other words, fear spreads fast and can spoil otherwise safe investments in people’s minds. This negative bias even applies to very well-known and otherwise trusted institutions, like Canadian banks. “While rationally you recognize you can trust the Royal Bank, motivationally you’re not willing to take a chance,” he says. “People become irrationally suspicious.”
Financial fears can also affect more than just stock choices. At York University, Esther Greenglass, a psychology professor in the Faculty of Health, has been conducting an international study that looks at the emotional and psychological effects of the economic downturn. So far, she’s found that people’s personalities (their fears and anxieties) impact things like their financial health and even their ability to find a job. “We are finding that debt, employability and financial well-being are all related,” she says. “If a [person] believes they are not going to get a job in the future, their financial well-being is lower.” Feelings of financial doom are also correlated to higher rates of anxiety and depression.
These findings reinforce the view of behavioural economists that “the way people approach the economy is not rational. Emotional factors influence how we react to the economic situation and to our own finances,” Greenglass says.
Will our hooker laws stay or will they go?
A highly anticipated decision about the sex trade in Ontario was to be issued Thursday morning by the Ontario Court of Appeal. It could put Toronto Mayor Rob Ford in charge of the first provincial capital with legalized prostitution, reported The Toronto Sun Dec. 1 and The London Free Press Dec. 2.
Justice Marc Rosenberg is to decide whether Ontario sex workers may ply their trade legally and openly while an appeal of a lower court ruling winds its way to the Supreme Court of Canada – or whether prostitutes will still be treated as criminals in the shadows until the case is heard years from now.
In her landmark 131-page decision, Justice Susan Himel struck down as unconstitutional three provisions of the Criminal Code – communicating for the purposes of prostitution, operating a common bawdy house and living on the avails – because they prevent sex workers from moving indoors and protecting themselves.
If Rosenberg allows her ruling to stand pending appeal, Ontario sex workers will be legally free to work indoors and in groups.
Osgoode Hall law professor Alan Young, who won the case on behalf of dominatrix Terri Jean Bedford and two other women, said he doesn’t envy Rosenberg’s task. "It’s very difficult to issue a stay when effectively the judge below is saying the current law is harming people," he noted. "On the other hand, the standing presumption is that you preserve the status quo while courts are looking at an issue."
Whatever Rosenberg’s ruling, it is hardly the end of the controversial issue and Young wants the appeal expedited as quickly as possible. "I’m ready tomorrow," he said.
Canadian costs hurt airlines competing against US rivals
A study released this fall by the National Airlines Council of Canada suggested the economic output generated by the four airlines that make up the council – WestJet, Air Canada, Jazz Air LP and Air Transat – could increase by up to $3.3 billion if the taxes were eliminated, reported the Calgary Herald Dec. 2.
"The aggregate impact of a host of government policies accounts for 20 per cent to 25 per cent of the total fares, with the relative impact being larger for the lowest fares," it stated.
"Without the continued success and growth of these airlines, no Canadian airport is likely to join the ranks of international gateways or regional hubs, with their significant economic benefits for Canada," author Fred Lazar, a professor at York University’s Schulich School of Business, wrote. "Furthermore, productivity growth in Canada will be negatively impacted, creating a host of other problems for the government and the country."
Aboriginal, indigenous, native? Activist helped reclaim authentic identity
Patricia (Trish) Monture (LLM ’98), who was 52 when she died in Saskatoon on Nov. 17 of breast cancer diagnosed three years ago, was a larger-than-life presence among Canadian Aboriginals, reported The Globe and Mail Dec. 2.
She served on virtually every major inquiry, commission and blue-ribbon panel convened on Aboriginal issues over the past 20 years, including the seminal Royal Commission on Aboriginal Peoples of 1993-1994. She also served on the Task Force on Federally Sentenced Women and the Task Force on Administrative Segregation, which examined and made recommendations on the use of solitary confinement in Canadian prisons that house men serving two years or more.
York Region chief hangs up his badge
Chief Armand La Barge (BA Hons. ’92), 56, wants his 37-year policing career to be remembered for the community partnerships he helped build and for a focus on law enforcement, along with crime prevention, reported YorkRegion.com Dec. 2.
He plans to continue his graduate studies next year. He already has an honours bachelor of arts degree and a multiculturalism studies certificate from York University, and a master’s degree from Trent University in Canadian and native studies.
What small businesses should consider when choosing to outsource
Markus Biehl, management science professor at York’s Schulich School of Business, says small to medium enterprises (SMEs) are often "able to cut costs when they engage in outsourcing," reported InsideToronto.com Dec. 2.
According to Biehl, the most common functions outsourced by SMEs are bookkeeping, accounting, taxation, payroll and information technology.
On air
- Leo Panitch, distinguished research professor of political science in York’s Faculty of Liberal Arts & Professional Studies, discussed the position taken by Ed Clark, chief executive of the Toronto Dominion Bank, that lower-income Canadians will bear the brunt of the slow economic recovery, on “The John Oakley Show” on AM640 Radio in Toronto Dec. 1.
- Jennifer Birch, course director in York’s Department of Anthropology in the Faculty of Liberal Arts & Professional Studies, spoke about a subdivision in Stouffville that was once the location of a Huron village, on Rogers TV Dec. 1.