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In this article, the financial situations of those who cohabit and those who get married are compared. First off, the number of people who cohabit has more than doubled since the mid 1990s. Those without a college education are also much more likely to cohabit than those with college degrees. When the finances of those who cohabit and those who get married are compared, education becomes a major factor. Those with college degrees who cohabit have greater median household incomes than those with college degrees who get married. However, among those without a college education, couples who get married earn a greater median household income than those who cohabit.

Source: Freakonomics Blog

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Match.com is the world’s leading internet dating website. In an article from the Financial Times that appeared in Slate Magazine, a journalist decided to find out more about how the site had now evolved beyond its origins to the point where it can make recommendations for the types of relationships that individuals should pursue. Some of the highlights from the article include:

  • Match’s algorithm takes into account both your preferences and your behaviour. If the types of profiles you check don’t match your stated requirements then the software will take that into account.
  • Software engineers at Match compare the algorithms they use to the same algorithms that Amazon , Pandora and Netflix use to come up with recommendations for their users. They note, however, that unlike other websites, the attraction to the ‘product’ has to be mutual and this makes the process more complicated.
  • Empirical data shows that men care a lot about hair colour when selecting partners.
  • It’s estimated that between 15-20% of relationships and marriages begin online.
  • Diet ads are popular on the site.

Read more about why the site was initially designed with women in mind and how the founder of the site had his girlfriend leave him…for a man she met on Match.com over here.

Source: Slate

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With the recent credit rating downgrade by S&P of the U.S. to AA+ from AAA, is U.S. debt still a safe investment? After the downgrade, the stock market was sent into a tailspin on Monday as investors lost even more confidence in the economic recovery and the future prospects of U.S. and international businesses. It seems that there is no safe place for these investors to go these days considering the troubles the U.S. is facing and the problems affecting the EU. So where did they decide to seek a little security after this latest round of bad news? Well, it appears that they headed straight to U.S. debt – the very thing which the S&P downgraded. Therefore, the credit rating downgrade by S&P of U.S. debt seems to have had the effect of making U.S. debt a safer bet – or at least in the minds of investors.

Source: Freakonomics Blog

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In this article, the average earnings resulting from different levels of education are compared. As you can see, those holding professional degrees have the greatest income while those who did not finish high school have the lowest. The article goes on to point out that the level of education attained isn’t always the best indicator of income, though. Rather, it is what was studied. Therefore, using education levels to compare incomes can only tell you so much – after all, what those degrees are in may end up giving you better information. Nonetheless, general data such as this is telling, and clearly shows that more education tends to lead to higher earnings.

Source: Economix Blog

Who’s Hiring?

Amid the turmoil surrounding congressional negotiations over the debt ceiling, what has received less attention is that the United States created 117,000 jobs between June and July. Which industries were those jobs created in? View Full Article

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Why do gangs have gang colours? Wouldn’t that just make it easier for the police to identify them? Andrew Mell, an Oxford Economist, decided to find out.

Perhaps the most interesting argument in his paper is that prominent gang colours increase the likelihood that other people will want to do business with them because it makes it more difficult for them to operate. A gang’s success despite their handicap is seen by potential business partners as a signal of their reliability and effectiveness. The author further argues that this would mean that increased penalties for gang activities around certain areas such as school zones might be counter-productive as they might encourage gang activity in those areas because the risk of operating is greater.

Source: University of Oxford

Via: The Wall Street Journal, William Dearden

It’s common for small businesses to pass from parent to child. But what effect does this implicit nepotism have on the performance of the company? One Stanford Economist decided to find out. The ultimate outcome of his analysis was that:

  • CEOs that inherit their position generally see a decline in their return on assets, but not their profitability.
  • Merit seems to make the largest difference. As the report notes “Family CEOs who attended less selective colleges…account for the entire decline in performance observed by the group of firms that promote family CEOs”

Read more about the details of the study and find a link to the full paper over here.

Source: Freakonomics

Popular business social networking site LinkedIn saw a 120% rise in revenue in the first report it has released as a publicly traded company. Despite this its shares have fallen in value from $100 a share at launch to about $95 now. Analysts still think that that there is a potential social networking bubble in the stock markets. Read more about why, despite this success, LinkedIn still won’t be making a profit over here.

Source: BBC News

Popular business social networking site LinkedIn saw a 120% rise in revenue in the first report it has released as a publicly traded company. Despite this its shares have fallen in value from $100 a share at launch to about $95 now. Analysts still think that that there is a potential social networking bubble in the stock markets. Read more about why, despite this success, LinkedIn still won’t be making a profit over here.

Source: BBC News

We’ve moved to Centives.net. Please visit us over here. We’ll continue to update this blog until August 31st.

It has become popular since the financial crisis to criticize the big 3 credit rating agencies out there: Standard & Poor’s, Moody’s, and Fitch. Yet, no one seems to be doing anything to change the reliance that investors have on them. If they’re really so bad, why do we even keep them around? In an article on Slate, that very question is asked. These three credit rating agencies have become so important since federal regulations on investments often require funds to only purchase bonds and securities above a certain rating to limit their risk. There is now a movement to get rid of all references to these ratings in the regulations. However, many oppose this by pointing out that while these agencies have made mistakes, they at least provide some measure of a bond’s risk. If the agencies were gone, how would investors know whether a bond was any good or not? Everyone would essentially have to do their own research. This seems to be an issue with little consensus, as there seems to be good reasons for both relying on the agencies and ignoring them. In the end, it appears that investors will continue to rely on them as they seem to be the best option in providing a necessary service.

Source: Slate