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Burtch Works study: ‘Salaries of Predictive Analytics Professionals’

According to a recently released Burtch Works study on “Salaries of Predictive Analytics Professionals 2017,” senior-level executives saw the largest increase in salaries from 2016 to 2017, and industry diversification of employment has diluted the concentration of such professionals in financial services and marketing/advertising in favor of consulting and technology.

Senior-level predictive analytics professional executives saw increases in salaries from 2016 to 2017. Photo Courtesy of 123rf.com | © Galina Peshkova

Senior-level predictive analytics professional executives saw increases in salaries from 2016 to 2017.
Photo Courtesy of 123rf.com | © Galina Peshkova

The fifth annual report examined the salaries of more than 1,700 professionals across the United States. The data was collected through interviews instead of an online survey, which allowed Burtch Works to specifically focus on analytics and not BI, IT, etc.

The report includes salaries analyzed by industry, region, education, gender and more, as well as demographic data and analysis of hiring market trends.
Notable trends this year include:

  • The largest salary increase from 2016 to 2017 was seen by senior-level executives (their median base salary increased by 8 percent) as the demand for experienced analytics leaders increases.
  • Financial services and marketing/advertising firms have historically employed over 50 percent of predictive analytics pros, but this year their combined share fell to 45 percent as other industries, such as consulting and tech, saw increases. The use cases for analytics are diversifying.

Copies of the report are available for free download at burtchworks.com/study.

Raging bull: link between testosterone levels, stock market instability

New evidence suggests biology strongly influences young, male, stock market traders’ behavior. Photo Courtesy of Thinkstock

New evidence suggests biology strongly influences young, male, stock market traders’ behavior.
Photo Courtesy of Thinkstock

Increasing testosterone levels in men, who make up the majority of professional stock market traders, causes them to bid up prices, which create price bubbles and crashes.

The majority of professional, U.S. stock market traders are young males, and new evidence suggests biology strongly influences their trading behavior. According to a new study in the INFORMS journal Management Science, this could be a significant contributor to fluctuations in the market, as high testosterone levels can cause these traders to overestimate future stock values and change their trading behavior, leading to dangerous prices bubbles and subsequent crashes.

The study, “The Bull of Wall Street: Experimental Analysis of Testosterone and Asset Trading,” was conducted by Amos Nadler of the Ivey Business School at Western University, Peiran Jiao of the University of Oxford, Paul Zak and Veronika Alexander of the Center for Neuroeconomics Studies at Claremont Graduate University and Cameron Johnson at the Behavioral Health Institute at Loma Linda.

The double-blind study involved 140 young males, each of whom received a topical gel containing either testosterone or a placebo, prior to participating in an experimental asset market in which they were able to post bid and ask prices, as well as buy and sell financial assets to earn real money.

The authors found that among groups that received testosterone relative to those who received a placebo, larger price bubbles formed, mis-pricing lasted longer, market dynamics changed to reflect increasing bidding and selling volume, and their perception of a stock’s value changed despite its being displayed throughout the study. While the traders who received the placebo displayed “buy low to sell high” behavior, those who had received testosterone adhered to “buy high to sell higher.”

“This research suggests the need to consider hormonal influences on decision-making in professional settings, because biological factors can exacerbate capital risk,” Nadler says. “Perhaps the simplest recommendation is to implement ‘cool down’ periods to interrupt exceptionally positive feedback cycles and return the focus to assets’ fundamental valuations to reduce the possibility of biased decision-making.

“Based on our findings, professional traders, investment advisories and hedge funds should limit the risk taken by young male traders,” Nadler continues. “This is the first study to have shown that testosterone changes the way the brain calculates value and returns in the stock market, and therefore testosterone’s neurologic influence will cause traders to make suboptimal decisions unless systems prevent them from occurring.”

The full study is available here.

Study: Posting calories of menu items impacts restaurant reviews

In 2008, New York City mandated all chain restaurants to post the calories of items on their menus. The intent was to induce consumers to choose healthier items in the restaurant. A forthcoming study in the INFORMS journal Marketing Science, a leading scholarly marketing publication, investigated whether the calorie posting on menus has broader spillovers by impacting consumer evaluations of the restaurant. The study finds that health mentions about the foods increased significantly in online reviews after the calorie posting regulation. The result suggests that calorie posting can not only shift consumers toward healthier alternatives when inside a restaurant, but can also have spillovers on other customers reading the reviews by potentially redirecting them toward healthier restaurants and food items.

The study, “The Effect of Calorie Posting Regulation on Consumer Opinion: A Flexible Latent Dirichlet Allocation Model with Informative Priors,” is co-authored by Dinesh Puranam of the University of Southern California, Vishal Narayan of the National University of Singapore and Vrinda Kadiyali of Cornell University.

Posting calorie counts in menus boosts discussion of health in restaurant reviews. Photo Courtesy of 123rf.com | © gstockstudio

Posting calorie counts in menus boosts discussion of health in restaurant reviews.
Photo Courtesy of 123rf.com | © gstockstudio

The authors analyzed 761,962 restaurant reviews across 9,805 restaurants on an online restaurant review website in New York City from 2004 to 2012. Using text-mining methods, the authors examined the change in the mentions of health in reviews over time before and after the calorie posting rule went into effect. To rule out the possibility that the health mentions increase was simply due to increased public interest in health issues over time, they compared the change in topics discussed for chain restaurants, relative to non-chain restaurants that were not mandated by the rule to post calorie information. The authors found a significant increase in the proportion of reviews that discussed health for chain restaurants, relative to non-chain restaurants.

The authors also explored in greater detail the source of the increase in health topics. They found that it was largely driven by new reviewers who were previously not active in posting reviews, but began to post more reviews after the mandate. Puranam notes that, “the increase in health discussion in opinions was not confined to restaurants in more affluent localities, commonly associated with more health-conscious consumers. This is an encouraging sign of the success of the rule across the socioeconomic divide – especially given the greater incidence of obesity among lower socioeconomic classes.”

New York City recently expanded the rule beyond chain restaurants to also include fine dining restaurants. Narayan notes, “Our result that calorie posting on menus impact online reviews is significant for this rule expansion since consumers are even more likely to consult reviews for fine dining restaurants than for chain restaurants that they habitually visit. Whether this will have an impact on calorific content of items on fine dining restaurant menus of restaurants of course remains to be seen.”

Kadiyali cautions that more work is needed to study whether the increased discussion of health topics actually do lead to greater choice of healthier restaurants. “It is possible that health conscious consumers may choose healthier restaurants while the less health conscious may avoid them. In this case, health benefits across the population may be ambiguous. Nevertheless, our study suggests that online reviews are a useful place to look for potential changes in consumer behavior due to this rule,” she says.

To read the complete paper, click here.

New study asks, ‘Is your business AI-ready?’

Despite fears that robots will replace human labor, the majority of artificial intelligence (AI) leaders (79 percent) expect their employees will work comfortably with robots by 2020, according to a new Genpact survey of C-Suite and senior executives titled, “Is Your Business AI-Ready?”

Seventy-nine percent of AI leaders expect their employees will work comfortably with robots by 2020. Photo Courtesy of 123rf.com | © gstockstudio

Seventy-nine percent of AI leaders expect their employees will work comfortably with robots by 2020.
Photo Courtesy of 123rf.com | © gstockstudio

Yet, additional findings from the survey show that inherent organizational challenges may impede this expectation:

  • Companies are not providing ample resources for re-skilling and retraining of employees to handle this technology disruption.
  • Senior management is most likely to resist AI – almost one-third of respondents indicate this group resists the most, compared to a mere 5 percent of entry-level workers.

According to Genpact Senior Vice President Gianni Giacomelli, the opportunity lies in creating an organization that encourages collaboration and sets up workers for success with re-skilling and training programs. Without the proper culture, enterprises’ investments and AI will go to waste and be rendered ineffective.

To access the full survey, click here.

The analytics behind finding true love online via dating services

Looking for love online? You are not alone. Nearly 50 percent of the American public knows someone who has used an online dating site and 5 percent of Americans who are married or in committed relationships today met their significant other online. But with so many different online dating platforms, how can users know which one will best meet their needs? According to a new study in the INFORMS journal Management Science, it all depends on if you are comfortable with rejection. If not, be prepared to pay more.

eHarmony users are more likely to successfully and more rapidly identify a match with another user. Photo Courtesy of 123rf.com | © zerbor

eHarmony users are more likely to successfully and more rapidly identify a match with another user.
Photo Courtesy of 123rf.com | © zerbor

The study, “Competing by Restricting Choice: The Case of Search Platforms,” explains that most sites, such as Match.com, compete by building the largest user base possible, and provide users with access to unlimited profiles on the platform. Others, such as eHarmony.com, pursue user growth with the same intensity, but allow users to only view and contact a limited number of others on the platform. However, despite the limited choice, eHarmony’s customers are willing to pay an average of 25 percent more than Match’s customers.

The study authors, Hanna Halaburda of the Bank of Canada and New York University, Mikolaj Piskorksi of IMD Business School and Pinar Yildirim of the University of Pennsylvania, created a stylized model of online, heterosexual dating which found that increasing the number of potential matches has a positive effect due to larger choice, but also a negative effect due to competition between users of the same sex.

Therefore, by offering its members access to a large number of profiles, Match’s users are also more likely to experience rejection, as each of their potential matches will have access to a larger number of options, increasing the competition among members. With access to only a limited number of profiles, eHarmony users are more likely to successfully and more rapidly identify a match with another user, who because of limited choice, is less likely to reject them.

Ultimately, for online dating users who can tolerate rejection and aren’t bothered by a potentially longer timeframe to identify a match, Match.com provides much greater choice of options. However, for users who are looking to more quickly identify a potential mutual match, eHarmony limits competition that may result in rejection.

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