Brookings: Centers - Center on Social Dynamics and Policy

A Model of Food Reward Learning with Dynamic Reward Exposure

Thu, 11 Oct 2012 00:00:00 -0400

The process of conditioning via reward learning is highly relevant to the study of food choice and obesity. Learning is itself shaped by environmental exposure, with the potential for such exposures to vary substantially across individuals and across place and time. In this paper, we use computational techniques to extend a well-validated standard model of reward learning, introducing both substantial heterogeneity and dynamic reward exposures. We then apply the extended model to a food choice context.

The model produces a variety of individual behaviors and population-level patterns which are not evident from the traditional formulation, but which offer potential insights for understanding food reward learning and obesity. These include a “lock-in”effect, through which early exposure can strongly shape later reward valuation. We discuss potential implications of our results for the study and prevention of obesity, for the reward learning field, and for future experimental and computational work.

INTRODUCTION

Obesity has a complex etiology, with multiple known pathways. Considerable evidence suggests the food environment can be an important driver of obesity, and that individuals may differ in their propensity to over-consume in response to food cues in the environment. Some researchers refer to “hedonic hunger”—hunger driven by food cues and the anticipation of food pleasure rather than purely homeostatic caloric needs—underlining the importance of brain reward systems in guiding eating decisions.

We focus on the proposition that preference for high calorie foods, and the inability to resist the appeal of food cues, develops in part through a form of conditioning. Conditioning refers to the attribution of incentive properties to previously neutral cues paired with primary rewards, such as food, via learning. Individuals with an enhanced ability to learn from rewards would be more prone to this form of conditioning, and also to the related phenomenon of sensitization, which refers to a progressive increase in the neural and behavioral response to repeated rewards. Animal research strongly suggests that inherent differences in the dopamine system promote differential learning about reward-predicting cues, which in turn promotes greater motivation to consume and seek the associated reward in the presence of such cues.

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A Model of Food Reward Learning with Dynamic Reward Exposure

Authors

Ross A. Hammond
Joseph T. Ornstein
Lesley K. Fellows
Laurette Dubé
Robert Levitan
Alain Dagher

Publication: Frontiers in Computational Neuroscience

A Systems Science Perspective and Transdisciplinary Models for Food and Nutrition Security

Ross A. Hammond and Laurette Dubé — Tue, 24 Jul 2012 12:53:00 -0400

Obesity has been a major focus in the United States due to its impact on both individual health and healthcare costs. Globally, simultaneous epidemics of both obesity and malnutrition are manifestations of widespread food and nutrition insecurity, posing a pressing challenge for policymakers.

In a new paper published in the Proceedings of the National Academy of Sciences, Brookings Senior Fellow Ross Hammond and Laurette Dubé of McGill University argue that the systems that underlie food and nutrition security – including agriculture, health, and the environment – are connected to one another in ways that are often poorly understood by scientists and policymakers. The paper, “A Systems Science Perspective and Trans-disciplinary Models for Food and Nutrition Security,” proposes a “systems approach” to address the problem, leveraging new computational tools like system dynamics and agent-based modeling.

Global food security driven by multiple systems requires integrated solution. A coordinated, interdisciplinary approach is the best way to approach the problem.

Hammond and Dubé argue that these new tools, used in conjunction with the present battery of epidemiological, environmental, and macroeconomic models, will allow researchers and policymakers to better understand key dynamic and adaptive processes driving both malnutrition and obesity worldwide. “Solving food and nutrition insecurity is likely to require the interdisciplinary collaboration of many actors across society, including health professionals, agriculturalists, food industrials, policy-makers, and scientists, and the use of unconventional approaches and tools,” they write.

The authors note that interdisciplinary research is highly challenging, facing obstacles at every step in the research pipeline from education and training through the organization of research and career advancement in universities, to the process of peer review, funding, and publication. However, they conclude that policymakers can help shape the research environment to facilitate the success of such efforts, and they identify existing building blocks in the fields of agri-food, health, and environment that would allow a strategy of incremental progress from existing work toward a more comprehensive approach.

Download the paper at pnas.org »

Authors

Ross A. Hammond
Laurette Dubé

Publication: Proceedings of the National Academy of Sciences

Image Source: John Sommers II / Reuters

Next Steps in Obesity Prevention: Altering Early Life Systems To Support Healthy Parents, Infants, and Toddlers

Fri, 01 Jun 2012 00:00:00 -0400

Summary

The widespread and increasing prevalence of childhood obesity in America presents a critical public health challenge, prompting the Institute of Medicine to call for new “systems approaches” to obesity treatment and prevention. This paper, published in the focal journal Childhood Obesity, describes the role that “obesogenic systems” play in early life and proposes specific strategies for combating their effects to prevent obesity. The authors support an approach that (a) targets the earliest stages of development and (b) takes a systems perspective, simultaneously implementing changes in multiple sectors and at multiple societal levels.

To read the article, visit the publisher's website »

Authors

Philip R. Nader
Terry T.-K. Huang
Sheila Gahagan
Shiriki Kumanyika
Ross A. Hammond
Katherine Kaufer Christoffel

Publication: Childhood Obesity

Image Source: Rick Wilking / Reuters

Getting Obesity Under Control: The Importance of a Systems Approach

Ross A. Hammond — Tue, 08 May 2012 00:00:00 -0400

New research focuses on the cause and spread of the obesity epidemic and just how difficult it will be to coordinate efforts to get it under control. The epidemic not only causes serious health problems but is also driving up medical costs dramatically—by some estimates, 100 percent higher. Senior Fellow Ross Hammond examines the issues around obesity, arguing that the best way to coordinate effective prevention policies is to use a systems approach to model and coordinate the policy side, the scientific side and different methodologies. Hammond’s recent work features extensively in a major new National Academy of Sciences/Institute of Medicine (IOM) report on obesity, as well as a collaboration between the Centers for Disease Control and HBO for the event, “The Weight of the Nation.”

“The obesity epidemic has really become a very pressing problem in the United States and, actually, worldwide. Here in the U.S. two in three adults are now overweight, and one in three are obese; and among children and adolescents one in three are overweight. So these are very large numbers and there are some serious public health consequences of this. Being overweight and obese puts you at much higher risk for things like several cancers, diabetes, cardiovascular disease, and also things like asthma and arthritis.

So in addition to these public health consequences there are some real economic costs associated with [being] overweight and obese. In particular, medical spending is much higher among the overweight and obese. Some estimates say as much as one hundred percent higher. So that adds up to quite a bit in medical spending, and (again) by most estimates at least twenty-one percent of U.S. medical spending is driven by obesity already. That number could easily go up, so that is some of the economic side of it.”

Preventing obesity is the best way to stop the epidemic (1:11)

“The main thing to think about it how important prevention is with obesity, in particular, because once obesity exists there are some very powerful physiological processes and behavior patterns that are very entrenched, and it is quite difficult to reverse. This is the reason why the majority of overweight and obese children go on to be overweight and obese adults. Prevention, particularly early prevention, is really important. I think that is the fundamental focus.

Unfortunately, prevention is also hard. Obesity is a very complex syndrome that is driven by many, many different factors. In one sense it is extremely simple because it is about energy balance – energy in and energy out. If you take more energy in than you have energy out you will gain weight. It is as simple as that. On the other hand it is quite complex because the drivers of what you eat, how much physical activity you get, and what your resting metabolic rate are quite complicated and involve biology, physiology, and genetics; but [it also involves] advertising, marketing, and social norms, our agricultural system of production and distribution, the physical environment around us where we live, and how our world is structured. All of those things work together to produce different outcomes. That linkage between these different factors is less well-understood and is actually very important for trying to do policy in this space.”

A systems approach to obesity needed (2:42)

“I think there is a growing consensus that what we need to do in order to do a better job of preventing obesity is to coordinate activity across different sectors and different levels of scale, or to take what is called a “systems approach.” A systems approach means that you try to coordinate what is going on in education in schools, what is going on in transportation in urban planning, and what is going on in agriculture because all of these things are linked together, and they all drive health outcomes (for obesity in particular). They tend to be addressed from a policy perspective and from a science perspective separately. Really connecting what we are doing in a coordinated and cohesive way is extremely important for making progress on this issue.

Some of the modeling work that we do at the Center on Social Dynamics and Policy here at Brookings is helping to explore these complex linkages, both across sectors (so what is happening in the private and public sectors) but also what is happening at the different levels at the federal, state and household levels. Finally, these connections between the biology, physiology (what is happening inside of people and in their brains as they eat food and observe advertising), and what is happening around them in their physical and social environment – all of these are connected. Models can help us to understand how they work together, and how to design policies that work together to address it more holistically.”

There are three systemic barriers to preventing obesity (4:11)

“There are definitely barriers in the way; there are at least three sets. One set of barriers is institutional. On the policy side we have different departments of government for public health and for the things that actually drive public health, as well, such as education, transportation and agriculture. They are not necessarily used to working together, but they really need to to address this problem. The second set of hurdles in on the scientific side. We have different fields of science – genetics, nutrition, business – and they do not usually talk to each other or work together, either. They also need to to help us understand this problem. The third set of challenges is really methodological. We do not have tools that are good at this amount of complexity, and at helping us to manage it and design effective policies. These new tools that have arisen to address this challenge is what we really specialize in here at the [Center on Social Dynamics and Policy]. We are helping the federal government and the scientific community to apply [expertise] to the obesity epidemic.”

Two out of three overweight people live in the developing world (5:17)

“In the international context the picture looks (in some ways) very different from the United States context. In fact, a lot of obesity is occurring in the developing world. Two in three overweight people in the world are in developing countries, not in the developed world. This is a surprising statistic. In the developing world everything is changing very rapidly. Their systems of growing, producing and distributing food are changing very rapidly as they develop. Their social norms and tastes are developing very rapidly.

What you find in many developing countries is, at the same time, there is a lingering epidemic of widespread malnutrition and a new obesity epidemic which is getting quite bad. They coexist, sometimes even in the same village, or even in the same household. That is a bit of a puzzle, but I think it is because both things are driven by the same fundamental underlying systems that effect nutrition. Malnutrition and over-nutrition (which is what leads to obesity) are really part of the same problem. One of the challenges for developing countries will be to solve their malnutrition crisis without creating an obesity epidemic. That is very challenging to do and it involves coordination between the agriculture sector, and our understandings of environment and health, are how the three are all working together to produce one or the other obese effects, or sometimes both at the same time.

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Getting Obesity Under Control

Image Source: © Rick Wilking / Reuters

Obesity, Prevention, and Health Care Costs

Ross A. Hammond — Fri, 04 May 2012 00:00:00 -0400

Follow @BICampaign2012
Editor's Note: For Campaign 2012, Alice Rivlin wrote a policy brief proposing ideas for the next president on America’s health care system. The following paper is a response to Rivlin’s piece from Ross Hammond. Tom Mann also prepared a response arguing that Americans must accept the reality of today’s political polarization and challenge Washington to offer tangible solutions to the nation’s most urgent problems.

Alice Rivlin highlights the twin health care challenges facing America and the next president: covering the uninsured while curbing unsustainable increases in health care costs and their impact on the debt. She provides a compelling argument for how to address these challenges through health care legislation. I would like to focus here on the role that investment in public health and prevention can play as a complementary strategy for controlling health care spending.

Perhaps the most pressing public health challenge for the United States today is the epidemic of overweight and obesity, which is linked to an array of costly and debilitating health consequences. According to data from the National Center for Health Statistics, two in three American adults are now overweight, including one in three who are obese. A recent study also found that almost one-third of children and adolescents are overweight or obese. These rates are even higher among ethnic minorities, rural populations, and those with low income or education. The health risks associated with obesity reported by the Institute of Medicine include a much higher incidence of cardiovascular disease, diabetes, several cancers, hypertension, high cholesterol, asthma, osteoarthritis, and liver disease.

Not surprisingly, then, the obesity epidemic is a major driver of health care costs in the United States, and the costs may continue to increase significantly in the future if it is not controlled. The increased health risks for major disease that come with obesity carry not only a high social price tag but also a high economic one—relative medical costs for the obese are estimated to be 36 to 100 percent higher than for Americans of healthy weight. A 2009 study found that childhood obesity alone is responsible for $14.1 billion in direct medical costs annually. By some estimates, nearly 21 percent of all current medical spending in the United States is now obesity related. A significant proportion of these medical costs is paid by Medicaid and Medicare, and one recent analysis concluded that total Medicaid spending would be almost 12 percent lower in the absence of obesity. Beyond direct medical spending, additional costs from obesity are driven by increased rates of disability and by reduced productivity.

The impact of obesity on health care spending is likely to increase in the coming years unless further preventative steps are taken. Although recent data suggest that obesity rates may now be leveling off after a period of very rapid growth, the epidemic in children is especially worrisome because most obese children become obese adults. Childhood obesity means more chronic disease will begin earlier in life for more people—driving up lifetime costs considerably. For example, type 2 diabetes (for which obesity is a particularly strong risk factor) occurred primarily in adults until recently, but the Centers for Disease Control report that it is now beginning in childhood for more Americans. A recent report in the Journal of the American Medical Association estimates that one-third of all children born in the United States today (and one-half of all Latino and African American children) will develop type 2 diabetes in their lifetime. Even if the epidemic does not worsen, these costs are likely to prove an unsustainable burden on the health system given the long-term growth of the federal debt.

Keeping the costs of obesity from overwhelming the health care system will require a renewed focus by the next president on obesity prevention. This has the potential to contain costs much more effectively than the mere treatment of obesity-related chronic health conditions. Early childhood can be an especially important period—once obesity develops, a powerful set of physiological processes and behavior patterns make it challenging to reverse. From the perspective of health care costs, early prevention can produce substantial savings. According to an analysis in the American Journal of Public Health, as little as a 5 percent reduction in the prevalence of diabetes and hypertension would save almost $25 billion annually in medium-term health care costs.

Prevention is important, but designing effective prevention efforts remains challenging. The drivers of the obesity epidemic are complex and multifaceted, so there is likely no single solution. Continued investment in research on effective prevention strategies is needed, especially in support of what the Institute of Medicine and National Institutes of Health refer to as new “systems” approaches. Indeed, it may be critical to coordinate policy across many domains and levels of scale in order to see a rapid change in the obesity epidemic. To be most effective, prevention efforts must focus not just on educating individuals or on changing environments, but on doing both together.

The next president should take several steps to address the major public health challenge of obesity and help avoid the unsustainable health care costs it will generate:

Renew the emphasis on prevention efforts. Prevention is especially important, given the role of childhood influences in the development of overweight and the challenge of reversing obesity once entrenched.
Increase investment in public health research to develop an evidence base that supports the design and testing of powerful new prevention strategies for the future. As the scientific community emphasizes, innovative approaches are greatly needed to continue to improve how policy addresses the complex drivers of obesity.
Coordinate public policy across domains and agencies. Many policy areas “outside” of health—including education, housing, transportation, agriculture, and tax policy—have strong effects on public health and obesity. A more systemic approach that takes into account connections across these areas should be a central element in an effective obesity prevention strategy.

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Ross A. Hammond

Image Source: © Lucas Jackson / Reuters

Campaign 2012: The Future of Health Care

Fri, 04 May 2012 13:00:00 -0400

Event Information

May 4, 2012
1:00 PM - 2:30 PM EDT

Falk Auditorium
The Brookings Institution
1775 Massachusetts Ave., NW
Washington, DC

As America confronts the realities of an aging population and a federal budget deficit, methods for containing health care costs while improving the quality and access of care are critically important. With the Supreme Court now considering its constitutionality, the fate of the Affordable Care Act is in doubt, and Medicare costs are projected to rise rapidly. As the presidential candidates look toward the next four years, which reforms are most urgent, and is there sufficient political will to implement them? Can investments in information technology and public health make health care better and more cost-effective?

On May 4, the Campaign 2012 project at Brookings held a discussion on health care reform, the fifth in a series of forums to identify and address the 12 most critical issues facing the next president. David Nather of POLITICO Pro moderated a panel discussion with Brookings experts Alice Rivlin, Ross Hammond, Thomas Mann and Mark McClellan.

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Campaign 2012: The Future of Health Care

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Panelists

Moderator: David Nather

Health Care Editor
POLITICO Pro

A Systems-Based Typological Framework for Understanding the Sustainability, Scalability, and Reach of Childhood Obesity Interventions

Brandon Grimm, Ross A. Hammond and Terry T.-K. Huang — Tue, 23 Aug 2011 00:00:00 -0400

Abstract

This article proposes a systems-based framework to examine three structural dimensions of childhood obesity interventions that can impact intervention sustainability, scalability, and reach. These three dimensions are the locus of intervention drivers (top-down vs. bottom-up), the locus of change effected (policy vs. individual behavior), and the public versus private sector. Interventions focused on individual behavior change often rely on bottom-up approaches and have generally been less sustainable than policy interventions. However, top-down (government or industry) support can lead to better funding and shifts in social norms. In the public sector, top-down efforts targeting individual behavior are generally also more scalable and have wider reach to diverse communities. In the private sector, behavior-change interventions tend to have greater resources and are sustained over longer periods, even when efficacy is in question; they may also be quite scalable. In a systems approach, a combination of approaches that encompass the structural dimensions in systems space will likely be needed to significantly impact childhood obesity. Next-generation childhood obesity interventions should be able to demonstrate sustainability, scalability, and reach as benchmarks of plausible success and criteria for investment.

To read the article, visit the publisher's website »

Authors

Brandon Grimm
Ross A. Hammond
Terry T.-K. Huang

Publication: Children's Health Care Special Issue: The Treatment of Pediatric Obesity: Bringing Contexts and Systems into Focus

Social Influence and Obesity

Ross A. Hammond — Thu, 18 Nov 2010 16:38:00 -0500

ABSTRACT

Purpose of review: To review a selection of research published in the last 12 months on the role of social influence in the obesity epidemic.

Recent findings: Recent papers add evidence to previous work linking social network structures and obesity. Social norms, both eating norms and body image norms, are identified as one major source of social influence through networks. Social capital and social stress are additional types of social influence.

Summary: There is increasing evidence that social influence and social network structures are significant factors in obesity. Deeper understanding of the mechanisms of action and dynamics of social influence, and its link with other factors involved in the obesity epidemic, is an important goal for further research.

To learn more, download the full paper at Current Opinion in Endocrinology, Diabetes & Obesity »

Authors

Ross A. Hammond

Publication: Current Opinion in Endocrinology, Diabetes and Obesity

Image Source: © Rick Wilking / Reuters

Gaming Performance Fees By Portfolio Managers

Dean P. Foster and H. Peyton. Young — Mon, 01 Nov 2010 00:00:00 -0400

Editor's Note: A PDF of the full paper can be downloaded at The Quarterly Journal of Economics website.

ABSTRACT

We show that it is very difficult to devise performance-based compensation contracts that reward portfolio managers who generate excess returns while screening out managers who cannot generate such returns. Theoretical bounds are derived on the amount of fee manipulation that is possible under various performance contracts.We show that recent proposals to reform compensation practices, such as postponing bonuses and instituting clawback provisions, will not eliminate opportunities to game the system unless accompanied by transparency in managers' positions and strategies. Indeed, there exists no compensation mechanism that separates skilled from unskilled managers solely on the basis of their returns histories.

Authors

Dean P. Foster
H. Peyton Young

Publication: The Quarterly Journal of Economics: Volume 125, Issue 4

The Economic Impact of Obesity in the United States

Ross A. Hammond and Ruth Levine — Tue, 14 Sep 2010 00:00:00 -0400

Abstract: Over the past several decades, obesity has grown into a major global epidemic. In the United States, more than two-thirds of adults are now overweight and one-third is obese. In this article, we provide an overview of the state of research on the likely economic impact of the US obesity epidemic at the national level. Research to date has identified at least four major categories of economic impact linked with the obesity epidemic: direct medical costs, productivity costs, transportation costs, and human capital costs. We review current evidence on each set of costs in turn, and identify important gaps for future research and potential trends in future economic impacts of obesity. Although more comprehensive analysis of costs is needed, substantial economic impacts of obesity are identified in all four categories by existing research. The magnitude of potential economic impact underscores the importance of the obesity epidemic as a focus for policy and a topic for future research.

Introduction
Over the past several decades, obesity has grown into a major global epidemic. By 2002, nearly 500 million people were overweight worldwide. In the United States (US), rates of obesity have doubled since 1970 to over 30%, with more than two-thirds of Americans now overweight. The determinants of this epidemic are likely complex, with substantial heterogeneity at the individual level in both causes and consequences that is beyond the scope of the current review.

In this article, we provide an overview of the state of research on the likely economic impact of the US obesity epidemic at the aggregate level. We conducted a broad search of the literature that addresses potential economic costs of obesity. The most recent studies that sample US populations have identified at least four major categories of economic impact linked with the obesity epidemic: direct medical costs, productivity costs, transportation costs, and human capital costs. We systematically review current evidence on each set of costs in turn, and discuss important gaps for future research along with potential trends in future economic impacts of obesity. This review adds to the current research on the economic impact of obesity by providing a more comprehensive overview of the range of effects, as well as a summary of the most up-to-date estimates.

Publication: Diabetes, Metabolic Syndrome and Obesity: Targets and Therapy

Image Source: © Lucas Jackson / Reuters

The Economic Costs of Obesity

Ross A. Hammond — Tue, 14 Sep 2010 09:44:00 -0400

The total costs of obesity in the U.S. alone may exceed $215 billion annually, according to a new comprehensive study co-authored by Ross Hammond, senior fellow and director of the Center on Social Dynamics and Policy, and Ruth Levine. With more than two-thirds of American adults now considered overweight, and one-third obese, Hammond gives an overview of economic and policy impacts of the epidemic at the national level.

Obesity As a Public Policy Challenge
"Our study looked at the economic cost associated with the obesity epidemic which, as you know, is primarily thought of as a public health challenge here in the United States. It is associated with much higher risk of a lot of serious health conditions, including diabetes, hypertension, stroke, and so on. It also turns out that there are some economic costs associated with it. In our study, we review the evidence of what those might be. There are really several major categories. The first category is direct medical spending, and this is the category that comes about because of the higher incidence of disease associated with obesity, which means that higher health care costs are incurred by people that are obese – as much as 100% higher, in fact. Those costs add up. They might total, in the U.S., between about $86 and $147 billion a year, which is quite a bit and is very important as we think about health care cost savings and the current concern over the explosion of health care costs. Those costs have roughly doubled (perhaps) over the last decade and may continue to go up at a substantial rate until we succeed in reducing the growth in obesity rates in this country."

Health Cost Containment Threat
"We were surprised by just how large these costs really are on an annual basis here in the U.S., particularly in light of the conversation that has been going on recently about exploding health care costs and containing those health care costs. Unfortunately, obesity is something that has increased rapidly. Obesity in children is continuing to increase rapidly, and this may mean that these already substantial costs will just grow more over the next several decades and really jeopardize the health care cost containment that is being discussed now."

Obesity's Complex Causes
"Some of the things we know are drivers of obesity or associated with obesity include: certain polymorphisms of genes that are heritable; certain kinds of neuro-psychological variables that are associated with a greater risk of being obese; we know that social norms and social networks play an important role, and our media and the way people are portrayed in the media, all play a role in obesity; we know that the way our cities are built, the walkability of our cities, [and] the way our transportation infrastructure is set up plays a role in obesity; and we know that food prices and food production and the agribusiness industry play a role in the obesity epidemic. But sorting out just how much of a role each plays and how they are connected is a very complex challenge."

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Ross Hammond to Lead Center on Social Dynamics and Policy

Wed, 25 Aug 2010 13:00:00 -0400

Ross Hammond will be the new director of the Center on Social Dynamics and Policy at Brookings, Strobe Talbott announced today. Hammond is currently a senior fellow in the Economic Studies program at Brookings.

The focus of the center, formerly the Center on Social and Economic Dynamics, will continue to be on understanding the social dynamics that drive economic, political, and public health systems, but with a stronger emphasis on examining policy implications for issues such as obesity and public health preparedness.

The center’s research includes computational modeling to shed greater light on the complex determinants of chronic public health challenges, improve the planning and response to threats such as infectious disease outbreaks, and explore new policy options for combating corruption and distrust in government.

“I’m confident that with Ross’s significant experience and expertise the Center on Social Dynamics and Policy will continue to produce pioneering work at the intersection of simulation, modeling and public policy,” said Talbott. “The center’s new mission will make it even more of a resource for policymakers interested in how good data can drive good policy.”

Hammond has been at Brookings since 2006. His research focuses on modeling complex dynamics of social, economic, political, and public health systems using mathematical and agent-based computational methods. His work includes research with both the National Collaborative on Childhood Obesity Research (NCCOR) and Models of Infectious Disease Agent Study (MIDAS) networks, which have been cited by the Department of Health and Human Services for their innovation and contributions to the nation’s health.

He is also an expert member of the Network on Inequality, Complexity and Health (NICH), a new network created to apply systems science approaches to the study of health disparities. Prior to joining Brookings he was a National Science Foundation IGERT fellow at the University of Michigan’s Center for the Study of Complex Systems. He received his bachelor’s degree from Williams College and his Ph.D from the University of Michigan.

Hammond succeeds Josh Epstein, who served as director of the Center on Social and Economic Dynamics since 2007.

Adaptation amidst Prosperity and Adversity: Insights from Happiness Studies from Around the World

Carol Graham — Tue, 13 Jul 2010 11:23:00 -0400

Abstract: Some individuals who are destitute report to be happy, while others who are very wealthy report to be miserable. There are many possible explanations for this paradox; Carol Graham focuses on the role of adaptation. Adaptation is the subject of much work in economics, but its definition is a psychological one. Adaptations are defense mechanisms; there are bad ones like paranoia, and healthy ones like humor, anticipation, and sublimation. Set point theory—which is the subject of much debate in psychology—posits that people can adapt to anything, such as bad health, divorce, and extreme poverty, and return to a natural level of cheerfulness. Graham's research from around the world suggests that people are remarkably adaptable. Respondents in Afghanistan are as happy as Latin Americans and 20 percent more likely to smile in a day than Cubans. The findings suggest that while this may be a good thing from an individual psychological perspective, it may also shed insights into different development outcomes, including collective tolerance for bad equilibrium. The author provides examples from the economics, democracy, crime, corruption, and health arenas.

INTRODUCTION:

When I sell liquor, it's called bootlegging; when my patrons serve it on Lake Shore Drive, it's called hospitality. (Al Capone)

In the past few years there has been a burgeoning literature on the economics of happiness. While the understanding and pursuit of happiness has been a topic for philosophers—and psychologists—for decades, it is a novel one for economists. Early economists and philosophers, ranging from Aristotle to Bentham, Mill, and Smith, incorporated the pursuit of happiness in their work. Yet as economics grew more rigorous and quantitative, more parsimonious definitions of welfare took hold. Utility was taken to depend only on income as mediated by individual choices or preferences within a rational individual's monetary budget constraint (revealed preferences). Most economists shied away from survey data (expressed preferences), under the assumption that there is no consequence to what people say, as opposed to the concrete trade-offs that are posed by consumption choices. This focus on revealed preferences has been a powerful tool for answering many economics questions. Yet it does not do a good job of explaining a number of questions. These include the welfare effects of institutional arrangements that individuals are powerless to change; choices that are made according to perceptions of fairness or other principles; situations where individuals are constrained in their capacity to make choices; and seemingly non-rational behaviors that are explained by norms, addiction, and self-control. Happiness surveys provide us with a novel metric. Traditional approaches also do not do a good job of explaining why some individuals with very little capacity to consume are very happy, while others with a very great capacity are miserable.

In this paper I focus on the latter question and build on research that I have done on happiness across the world, in very poor and in very rich countries (Graham 2009). It departs from my earlier research (Graham 2005) on how the usage of novel metrics to assess the well-being of individuals can (or cannot) contribute to our understanding of development questions; and in this is distinct in its focus on the role of adaptation. Adaptation may shed insights on particular development outcomes, such as societies stuck in bad equilibrium, with high levels of poverty, corruption, and other negative phenomena, with most citizens reporting relatively high levels of happiness. I provide examples from countries and regions around the world—a much broader developing country representation than the previous research—and from a number of domains, including macroeconomic growth, democracy, crime, corruption, and health.

While adaptation is a topic of many economic studies, its roots are in a psychological definition. Adaptations as defined by Anna Freud are unconscious thoughts and behaviors that either shape or distort a person's reality. A simpler definition is that they are defense mechanisms. There are unhealthy ones like paranoia and megalomania, which make reality tolerable for the people enjoying them, and there are neurotic defenses employed by "normal" people, such as dissociation and memory lapse. "Healthy" or mature adaptations include altruism, humor, anticipation, and sublimation (Wolf Shenk 2009).

People can adapt to almost anything: bad health, divorce, poverty, unemployment, and high levels of crime and corruption. Indeed, some psychologists believe that individuals can adapt back from almost any negative event to their natural set point of cheerfulness. Adaptation is seemingly a very good thing—a human defense mechanism.

My studies of happiness around the world suggest that the human race is tremendously adaptable. People in Afghanistan, for example, are as happy as Latin Americans and are 20 percent more likely to smile in a day than are Cubans. The poor in Africa are more hopeful than the rich, and the poor in poor countries in Latin America assess their health better than the poor in rich countries in Latin America. Kenyans are more satisfied with their health systems than are Americans, and victims of crime in crime-ridden cities across the world are less happy about being crime victims than are crime victims in much safer places. What can we make of this?

In this paper, I argue that the ability to adapt is indeed a good thing from an individual happiness and psychological perspective. But this same human defense mechanism may shed insights on how some societies stay stuck in bad equilibrium—such as high levels of corruption, bad governance, or bad health—for prolonged periods of time, while much more prosperous ones continue to go from good to better equilibrium.

Read the full paper at oxfordjournals.org »

Authors

Carol Graham

Publication: The World Bank Research Observer

The Costs of Containing H1N1

Joshua M. Epstein — Mon, 05 Oct 2009 12:53:00 -0400

The Center on Social and Economic Dynamics at Brookings has released a comprehensive report on the economic impact of closing schools and day care centers to help mitigate the infection rate of the H1N1 virus. Center director Joshua Epstein highlights some of the study’s findings and notes that the cost for such closures could be substantial.

TRANSCRIPT

Policymakers always have to compare benefits with costs. The benefits of school closures included reduced mixing, reduced transmission, reduced pressure on the health system, reduced number of cases and so forth. I think the benefits are reasonably clear. What was not clear before this study was the cost side. People had simply not done a calculation of the GDP impact of school closures of various durations and on various scales. The role of the study is to fill that gap and permit policymakers to arrive at a disciplined, informed decision about whether benefits, in fact, outweigh costs. ...

At the moment we are trying to calibrate these models to existing data on prior pandemics, and using the best available estimates of what this disease would look like. That is, to say, in consultation with the Center for Disease Controls, and the National Institute of Health and other agencies. Of course it is not clear how quickly flu could mutate into a really serious disease so we expect something like a thirty percent attack rate (which is a high level of disease). We are talking about tens of millions of cases worldwide. Again, the issue is whether it will mutate into a form more severe than we have seen and whether we can develop a well-matched vaccine to that disease, whether people will adhere to distancing measures to stay home from school, to stay home from work, and so forth. That number (a thirty percent attack rate) assumes business as usual, no interventions, no social distancing, no travel restrictions – none of the things that we would impose. So we hope to do way better than that, but it needs to be understood that if we do not do those things it could be very severe. ...

Classical epidemic model uses differential equations and assumes very well-mixed populations with no particular diversity in the susceptible or infected or recovered groups. Our version of modeling is called agent-based computational modeling, and we basically build artificial societies of software individuals who have different levels of susceptibility, can go through different stages in the disease, can adapt their behavior can exist in social networks that we try to capture. Much more of the social richness and behavioral realism is captured in our form of modeling than in classical epidemiology (although classical epidemiology has given us wonderful and deep insights about disease progression, about the non-linear tipping behavior of epidemics, and has also given wonderful insight into what vaccination strategies should be focused on achieving). ...

You would never base policy on a particular run of the model or a particular evolution. You run these things many, many times and build up a robust statistical portrait of how the disease might progress and address your policy to that. But we know a lot about how people move around, better in the United States than in less-developed countries. In the U.S. we have good data on movement from zip code to zip code, the distribution of trips by distance, we know a lot about international air travel. We have that completely programmed into our models so we have a good idea how people would move around in a day-to-day, business-as-usual scenario. What is a lot less clear is how people will adapt their behavior under the stress and fear of a large scale epidemic. We are seeing (in India for example), at the moment, rapid spread of fear itself. And we have seen this before. There is a famous incident in 1994 in Surat, India where 300,000 people evacuated Surat, a city in India, out of fear of pneumonic plague. In the end not a single case was confirmed by the World Health Organization. So this is also an issue.

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H1N1 Containment: Economic Cost and Workforce Effects of School Closures

Joshua M. Epstein, Ross A. Hammond and Howard Lempel — Wed, 30 Sep 2009 00:00:00 -0400

ABSTRACT

School closure is an important component of U.S. pandemic flu mitigation strategy. The benefit is a reduction in epidemic severity through reduction in school-age contacts. However, school closure involves two types of cost. First is the direct economic impact of the worker absenteeism generated by school closures. Second, many of the relevant absentees will be health care workers themselves, which will adversely affect the delivery of vaccine and other emergency services. Neither of these costs has been estimated in detail for the United States. We offer detailed estimates, and improve on the methodologies thus far employed in the non-U.S. literature. We give estimates of both the direct economic and health care impacts for school closure durations of 2, 4, 8, and 12 weeks under a range of assumptions. We find that closing all schools in the U.S. for four weeks could cost between $10 and $47 billion dollars (0.1-0.3% of GDP) and lead to a reduction of 6% to 19% in key health care personnel. These should be considered conservative (i.e., low) economic estimates in that earnings rather than total compensation are used to calculate costs. We also provide per student costs, so regionally heterogeneous policies can be evaluated. These estimates permit the epidemiological benefits of school closure to be compared to the costs at multiple scales and over many durations.

Introduction

School closures are an important and controversial part of the U.S. federal government’s Community Strategy for Pandemic Influenza Mitigation in the United States. Closing schools would reduce social contacts and suppress transmission. A recent literature review concludes that the direct epidemiological benefits of such a strategy are uncertain and depend on the specifics of implementation, but could include a modest (~15%) reduction in total cases and a large (~40%) reduction in peak attack rates. Controlling the peak attack rate will be crucial to prevent the U.S. healthcare system’s surge capacity from being overwhelmed. In its model scenario, the President’s Council of Advisors on Science and Technology (PCAST) finds that flu cases may demand 50 to 100 percent of the total intensive care unit (ICU) capacity in the United States. This is a major threat to a system that operates at 80 percent of capacity during normal times.

Closing schools is controversial because the epidemiological benefits come with associated costs. With their children out of school, many parents will stay home from work. This absenteeism will lead to significant economic costs. Compounding the problem, some absentees will be health care workers. The most pronounced benefit of school closure is to alleviate pressure on the health care system. But if health care absenteeism is high, the system’s capacity could be reduced when the virus is most prevalent and the demand for health care services is highest.

PCAST emphasizes the lack of research on the magnitude of these formidable costs: “Although evidence-based estimates of such costs are difficult to make and inherently imprecise, they can help to advance the rationality of the debates...” To that Center on Social and Economic Dynamics Working Paper No.55 end, this paper includes the first detailed estimate of two of these costs in the United States. We estimate the economic cost of school closure and its impact on the health care system. In addition to providing the first detailed estimate using U.S. data, we enrich the existing international literature in three ways. First, we use a more comprehensive method to identify adults who stay home to provide care. Second, when calculating the value of work missed by caretakers, our data allows us to use the caretakers’ actual wages for all caretakers who are not self-employed. Third, recent survey data enable a precise estimate of the proportion of the workforce that is able to work from home and the makeup of this segment of the workforce. We find that closing all schools in the U.S. for four weeks could cost between $10 and $47 billion dollars (0.1-0.3% of GDP) and lead to a reduction of 6% to 19% in key health care personnel.

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Modelling the Global Financial Crisis

Warwick J. McKibbin and Andrew Stoeckel — Mon, 28 Sep 2009 16:14:58 -0400

Introduction

The global financial crisis has seen the largest and sharpest drop in global economic activity of the modern era. In 2009, most major developed economies find themselves in a deep recession. The fallout for global trade, both for volumes and the pattern of trade has been dramatic. The OECD predicts world trade volumes could shrink by 13 percent in 2009 from 2008 levels.

In his review of the global banking crisis, Lord Turner said, "what is unique about this crisis is that severe financial problems have emerged simultaneously in many different countries, and that its economic impact is being felt throughout the world as a result of increased interconnectedness of the global economy". To understand the quantitative effects of the global financial crisis, a model that incorporates the interconnectedness within and between economies and the linkages between real and financial effects needs to be specified. To do this, a dynamic, intertemporal general equilibrium model that fully integrates the financial and real sectors of the economy is used in this paper to unravel and understand the mechanisms at work. The model incorporates wealth effects, expectations and financial markets for bonds, equities and foreign exchange as well as trade and financial flows. It is a suitable tool to analyse the impact of the crisis and policy responses on global trade and financial flows.

Modelling the global financial crisis has several elements to it. One is the bursting of the housing bubble, particularly in the United States and the primary source of problems at Lehman Brothers which collapsed in September 2008. This was accompanied by changing perceptions of risk by households and by business. Then, monetary and fiscal policies were deployed to offset the decline in activity and keep the financial sector afloat. The downturn in activity is also causing unemployment to rise sharply and, with it, a political response to protect domestic industries through various combinations of domestic subsidies and border protection, although, so far, the effect in aggregate has been small.

One of the main shocks to represent the crisis is the changed perceptions of risk. The collapse of Lehman Brothers sent a wave of fear around world financial markets. Banks virtually stopped lending to each other. The risk premium on interbank borrowing rose sharply to 5 per cent, whereas typically it was close to zero. Although authorities scrambled to inject liquidity into financial markets, the damage was done. The risk premium on corporate bonds shot up even more to over 6 per cent. Large CAPEX projects were shelved, the corporate sector virtually stopped borrowing, trade credit was hard to get and, with falling demand, particularly for investment goods and manufacturing durables like cars, trade volumes collapsed. Since then, risk premia have returned to more normal levels, although remain elevated.

In a previous paper the differences between a sharp rise in global risk that was permanent versus one that is expected to be temporary was explored. The difference was seen to depend on the role of expectations in a dynamic model. Once "time" is formally included in a dynamic economy-wide model, expectations have to be incorporated. Agents are forward looking and that affects behaviour. How expectations are incorporated in the model is spelt out later, but the problem with a temporary shock to risk premia is that businesses know that risk premia are going to come down and behave accordingly. But, as seen in McKibbin and Stoeckel, a temporary shock to risk premia, as seems to have happened in hindsight, does not generate the large observed real effects. The question is then, what would happen if business and households initially assumed the worst, that is a long lasting permanent rise in risk premia, but unexpectedly revised their views on risk to that of a temporary scenario one year later whereby things are expected to return to "normal"?

The objective of this paper is to examine the above question. That is, what are the economic effects of a global financial crisis where businesses and households unexpectedly switch between a pessimistic view on risk and then to a more moderate temporary scenario. The paper is organized as follows. In the next section, the main features of the G-Cubed model that is used in this analysis are described briefly as the model is documented in full elsewhere.

In section 3, the simulations to represent the financial crisis are described and the justification for the size of the shocks chosen. It turns out five shocks are needed: three for the crisis itself and two for the subsequent policy responses which covers monetary and fiscal stimulus.

In section 4, the impact of the crisis, as if it happened in the United States alone in modeled to unpick the mechanisms at work and demonstrate the importance of Lord Turner’s remarks on the interconnectedness of economies.

To do this we explore the impact of whether the shock to risk premia is a permanent one, a temporary one or one that is assumed to be permanent but after one year switches back unexpectedly to a temporary scenario. Changing expectations after one year of adjustment leads to different results than the case in which the temporary scenario was always believed to be the most likely outcome because investment decisions are already locked in to the permanent scenario in the first year of the shock.

In section 5 we explore the enormity of the policy response, particularly the extra fiscal response which is in addition to the endogenous response already in the model. It matters a great deal for the subsequent adjustment in the global economy whether the fiscal response is combined with the permanent scenario or the temporary scenario.

Finally, in section 6, some of the main insights are highlighted and discussed.

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Authors

Warwick J. McKibbin
Andrew Stoeckel

How Computer Modeling Can Stem the Spread of Influenza

Joshua M. Epstein — Tue, 18 Aug 2009 15:50:36 -0400

Experts are bracing for an extremely high H1N1 flu infection rate this fall and winter. Joshua Epstein, director of the Center on Social and Economic Dynamics, says computer modeling can help the medical community and policy-makers predict which populations are most susceptible to infection, how great the infection rate will be and how to stem the spread of the virus.

TRANSCRIPT

"At the moment we are trying to calibrate these models to existing data on prior pandemics and using the best available estimates of what this disease would look like – that is to say in consultation with the Centers for Disease Control, the National Institutes for Health and other agencies. Of course it is not clear how quickly flu could mutate into a very serious disease so we expect something like a 30% attack rate which is a high level of disease. We are talking about tens of millions of cases worldwide. But, again, the main issue is whether it will mutate into a form more severe than we’ve seen and whether we can develop a well-matched vaccine to that disease, whether people will adhere to distancing measures – to stay home from school, stay home from work and so forth. So that number (the 30% attack rate) assumes business as usual, no interventions, no social distancing, no travel restrictions, none of the things that we would impose so we hope to do way better than that but its needs to understand that if we don’t do those things it could be very severe."

"...Classical epidemic modeling uses differential equations and assumes very well-mixed populations with no particular diversity in the susceptible, or the infected, or recovered groups. Our version of modeling is called agent-based computational modeling and we, basically, build artificial societies of individuals who have different levels of susceptibility, can go through different stages of the disease, can adapt their behavior, can exist in social networks that we try to capture, so much more of the social richness and behavioral realism is captured in our form of modeling than in classical epidemiology. Although classical epidemiology has given us wonderful and deep insights about disease progression, about the non-linear tipping behavior of epidemics and has also given tremendous insight into what vaccination strategies should be focused on achieving."

"...You would never base policy on a particular run of the model or a particular evolution. You run these things many, many times and build up a robust statistical portrait of how the disease might progress and address your policy to that. But we know a lot about how people move around – better in the United States than in less-developed countries – but in the U.S. we have good data on movement from zip code to zip code, the distribution of trips by distance, we know a lot about international air travel – we have that completely programmed into our models. So we have good idea how people would move around in a day-to-day, business-as-usual scenario. What is a lot less clear is how people will adapt their behavior under the stress and fear of a large-scale epidemic. And we are seeing, in India for example at the moment, rapid spread of fear itself. And we’ve seen this before. There is a famous incident in 1994 in Surat, India where 300,000 people evacuated Surat, a city in India, out of fear of pneumonic plague and in the end not a single case was confirmed by the World Health Organization. This is also an issue."

Video

Modelling to Contain Pandemics

Joshua M. Epstein — Thu, 06 Aug 2009 12:00:00 -0400

As the world braces for an autumn wave of swine flu (H1N1), the relatively new technique of agent-based computational modelling is playing a central part in mapping the disease's possible spread, and designing policies for its mitigation.

Classical epidemic modelling, which began in the 1920s, was built on differential equations. These models assume that the population is perfectly mixed, with people moving from the susceptible pool, to the infected one, to the recovered (or dead) one. Within these pools, everyone is identical, and no one adapts their behaviour. A triumph of parsimony, this approach revealed the threshold nature of epidemics and explained 'herd immunity', where the immunity of a subpopulation can stifle outbreaks, protecting the entire herd.

But such models are ill-suited to capturing complex social networks and the direct contacts between individuals, who adapt their behaviours — perhaps irrationally — based on disease prevalence.

Agent-based models (ABMs) embrace this complexity. ABMs are artificial societies: every single person (or 'agent') is represented as a distinct software individual. The computer model tracks each agent, 'her' contacts and her health status as she moves about virtual space — travelling to and from work, for instance. The models can be run thousands of times to build a robust statistical portrait comparable to epidemic data. ABMs can record exact chains of transmission from one individual to another. Perhaps most importantly, agents can be made to behave something like real people: prone to error, bias, fear and other foibles.

Read the full article at Nature.com»

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Authors

Joshua M. Epstein

Publication: Nature

Complex Systems Modeling for Obesity Research

Ross A. Hammond — Mon, 15 Jun 2009 16:41:46 -0400

ABSTRACT

The obesity epidemic has grown rapidly into a major public health challenge, in the United States and worldwide. The scope and scale of the obesity epidemic motivate an urgent need for well-crafted policy interventions to prevent further spread and (potentially) to reverse the epidemic. Yet several attributes of the epidemic make it an especially challenging problem both to study and to combat. This article shows that these attributes — the great breadth in levels of scale involved, the substantial diversity of relevant actors, and the multiplicity of mechanisms implicated — are characteristic of a complex adaptive system. It argues that the obesity epidemic is driven by such a system and that lessons and techniques from the field of complexity science can help inform both scientific study of obesity and effective policies to combat obesity. The article gives an overview of modeling techniques especially well suited to study the rich and complex dynamics of obesity and to inform policy design.

Read the full paper at CDC.gov »
View U.S. Obesity Trends 1985–2007 »

Authors

Ross A. Hammond

Publication: Preventing Chronic Disease

Containing the Spread of Swine Flu and Other Diseases through Dynamic Modeling

Tue, 28 Apr 2009 12:00:00 -0400

When cases of swine flu rose in the United States and around the world in 2009, health officials took action to contain the spread and severity of the disease. Ross Hammond discussed the artificial society models he helped develop that can aid professionals in better understanding how to prepare for and react to epidemics.

Transcript

"This has the potential to be scary. It’s a frightening downside if this gets more serious. At the moment, the indications are that it’s fairly limited to the United States. I think I would encourage everyone to pay close attention, to keep abreast of the latest news, and to follow any instructions they may receive from the public health authorities who really are on top of this. A lot of our research shows that even the best public policies that we have available can be undermined if people are unaware of what they are supposed to be doing or don’t follow the directions they are given. So, I think that’s quite important, but at the moment no one is being asked to do anything in most of the United States except to be vigilant, and I think that makes sense."

"...This particular epidemic caught everyone in the public health community by surprise, a little bit, because we were prepared for an avian flu – a so called H5M1 flu – and this is actually a fairly different virus, and we are still learning more about it and how it behaves and we have to retool our models for that. But, at CSED what we do is we build artificial society models where we are able to, on computers, reconstruct some of the dynamics of an epidemic and understand a little bit better what kinds of interventions might be effective and how people should best respond."

"...There have been some careful estimates done for an avian pandemic flu of what the macroeconomic costs could be. If it were a really severe flu, like the one we had in 1918, the Congressional Budget Office estimates that it could affect GDP by as much as four percent. At the moment that doesn’t seem usually likely because as I say it’s been fairly limited in the U.S., but if it were take a turn for the worst that’s certainly a possibility. Those economic costs come partly in the form of decreased demand as everyone stays home, doesn’t go shopping, doesn’t go out to eat, and also partly in the form of productivity losses — people who call in sick or need to stay home to care for a loved one. So that’s a real possibility, but we hope it doesn’t come to that."

"...A lot has changed since 1918, for better and for worse actually. We certainly have a lot more information at our fingertips, we have done a lot more study and preparation. It’s also the case that the transportation networks are very — it’s a much more connected world than it was in 1918, and that’s actually a disadvantage because it means that something like a flu can spread very rapidly around the world, so we have to be vigilant to prevent against that occurring. I would say that what we have learned from studying 1918 is that timing is really important in all sorts of public health interventions – both when you put something like a quarantine or travel restrictions or school closings in place and when you lift it. And there is some evidence in 1918 that they didn’t apply these measures fast enough or they lifted them too early and this can lead to multiple waves of infection, so we would like to avoid that. I think there is very close attention being paid to deploy these interventions the moment they become necessary."