Interview John Myles White , Machine Learning for Hackers

Here is an interview with one of the younger researchers  and rock stars of the R Project, John Myles White,  co-author of Machine Learning for Hackers.

Ajay- What inspired you guys to write Machine Learning for Hackers. What has been the public response to the book. Are you planning to write a second edition or a next book?

John-We decided to write Machine Learning for Hackers because there were so many people interested in learning more about Machine Learning who found the standard textbooks a little difficult to understand, either because they lacked the mathematical background expected of readers or because it wasn’t clear how to translate the mathematical definitions in those books into usable programs. Most Machine Learning books are written for audiences who will not only be using Machine Learning techniques in their applied work, but also actively inventing new Machine Learning algorithms. The amount of information needed to do both can be daunting, because, as one friend pointed out, it’s similar to insisting that everyone learn how to build a compiler before they can start to program. For most people, it’s better to let them try out programming and get a taste for it before you teach them about the nuts and bolts of compiler design. If they like programming, they can delve into the details later.

We once said that Machine Learning for Hackers  is supposed to be a chemistry set for Machine Learning and I still think that’s the right description: it’s meant to get readers excited about Machine Learning and hopefully expose them to enough ideas and tools that they can start to explore on their own more effectively. It’s like a warmup for standard academic books like Bishop’s.
The public response to the book has been phenomenal. It’s been amazing to see how many people have bought the book and how many people have told us they found it helpful. Even friends with substantial expertise in statistics have said they’ve found a few nuggets of new information in the book, especially regarding text analysis and social network analysis — topics that Drew and I spend a lot of time thinking about, but are not thoroughly covered in standard statistics and Machine Learning  undergraduate curricula.
I hope we write a second edition. It was our first book and we learned a ton about how to write at length from the experience. I’m about to announce later this week that I’m writing a second book, which will be a very short eBook for O’Reilly. Stay tuned for details.

Ajay-  What are the key things that a potential reader can learn from this book?

John- We cover most of the nuts and bolts of introductory statistics in our book: summary statistics, regression and classification using linear and logistic regression, PCA and k-Nearest Neighbors. We also cover topics that are less well known, but are as important: density plots vs. histograms, regularization, cross-validation, MDS, social network analysis and SVM’s. I hope a reader walks away from the book having a feel for what different basic algorithms do and why they work for some problems and not others. I also hope we do just a little to shift a future generation of modeling culture towards regularization and cross-validation.

Ajay- Describe your journey as a science student up till your Phd. What are you current research interests and what initiatives have you done with them?

John-As an undergraduate I studied math and neuroscience. I then took some time off and came back to do a Ph.D. in psychology, focusing on mathematical modeling of both the brain and behavior. There’s a rich tradition of machine learning and statistics in psychology, so I got increasingly interested in ML methods during my years as a grad student. I’m about to finish my Ph.D. this year. My research interests all fall under one heading: decision theory. I want to understand both how people make decisions (which is what psychology teaches us) and how they should make decisions (which is what statistics and ML teach us). My thesis is focused on how people make decisions when there are both short-term and long-term consequences to be considered. For non-psychologists, the classic example is probably the explore-exploit dilemma. I’ve been working to import more of the main ideas from stats and ML into psychology for modeling how real people handle that trade-off. For psychologists, the classic example is the Marshmallow experiment. Most of my research work has focused on the latter: what makes us patient and how can we measure patience?

Ajay- How can academia and private sector solve the shortage of trained data scientists (assuming there is one)?

John- There’s definitely a shortage of trained data scientists: most companies are finding it difficult to hire someone with the real chops needed to do useful work with Big Data. The skill set required to be useful at a company like Facebook or Twitter is much more advanced than many people realize, so I think it will be some time until there are undergraduates coming out with the right stuff. But there’s huge demand, so I’m sure the market will clear sooner or later.

The changes that are required in academia to prepare students for this kind of work are pretty numerous, but the most obvious required change is that quantitative people need to be learning how to program properly, which is rare in academia, even in many CS departments. Writing one-off programs that no one will ever have to reuse and that only work on toy data sets doesn’t prepare you for working with huge amounts of messy data that exhibit shifting patterns. If you need to learn how to program seriously before you can do useful work, you’re not very valuable to companies who need employees that can hit the ground running. The companies that have done best in building up data teams, like LinkedIn, have learned to train people as they come in since the proper training isn’t typically available outside those companies.
Of course, on the flipside, the people who do know how to program well need to start learning more about theory and need to start to have a better grasp of basic mathematical models like linear and logistic regressions. Lots of CS students seem not to enjoy their theory classes, but theory really does prepare you for thinking about what you can learn from data. You may not use automata theory if you work at Foursquare, but you will need to be able to reason carefully and analytically. Doing math is just like lifting weights: if you’re not good at it right now, you just need to dig in and get yourself in shape.
About-
John Myles White is a Phd Student in  Ph.D. student in the Princeton Psychology Department, where he studies human decision-making both theoretically and experimentally. Along with the political scientist Drew Conway, he is  the author of a book published by O’Reilly Media entitled “Machine Learning for Hackers”, which is meant to introduce experienced programmers to the machine learning toolkit. He is also working with Mark Hansenon a book for laypeople about exploratory data analysis.John is the lead maintainer for several R packages, including ProjectTemplate and log4r.

(TIL he has played in several rock bands!)

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You can read more in his own words at his blog at http://www.johnmyleswhite.com/about/
He can be contacted via social media at Google Plus at https://plus.google.com/109658960610931658914 or twitter at twitter.com/johnmyleswhite/

Denial of Service Attacks against Hospitals and Emergency Rooms

One of the most frightening possibilities of cyber warfare is to use remotely deployed , or timed intrusion malware to disturb, distort, deny health care services.

Computer Virus Shuts Down Georgia Hospital

A doctor in an Emergency Room depends on critical information that may save lives if it is electronic and comes on time. However this electronic information can be distorted (which is more severe than deleting it)

The electronic system of a Hospital can also be overwhelmed. If there can be built Stuxnet worms on   nuclear centrifuge systems (like those by Siemens), then the widespread availability of health care systems means these can be reverse engineered for particularly vicious cyber worms.

An example of prime area for targeting is Veterans Administration for veterans of armed forces, but also cyber attacks against electronic health records.

Consider the following data points-

http://threatpost.com/en_us/blogs/dhs-warns-about-threat-mobile-devices-healthcare-051612

May 16, 2012, 9:03AM

DHS’s National Cybersecurity and Communications Integration Center (NCCIC) issued the unclassfied bulletin, “Attack Surface: Healthcare and Public Health Sector” on May 4. In it, DHS warns of a wide range of security risks, including that could expose patient data to malicious attackers, or make hospital networks and first responders subject to disruptive cyber attack

http://publicintelligence.net/nccic-medical-device-cyberattacks/

National Cybersecurity and Communications Integration Center Bulletin

The Healthcare and Public Health (HPH) sector is a multi-trillion dollar industry employing over 13 million personnel, including approximately five million first-responders with at least some emergency medical training, three million registered nurses, and more than 800,000 physicians.

(U) A significant portion of products used in patient care and management including diagnosis and treatment are Medical Devices (MD). These MDs are designed to monitor changes to a patient’s health and may be implanted or external. The Food and Drug Administration (FDA) regulates devices from design to sale and some aspects of the relationship between manufacturers and the MDs after sale. However, the FDA cannot regulate MD use or users, which includes how they are linked to or configured within networks. Typically, modern MDs are not designed to be accessed remotely; instead they are intended to be networked at their point of use. However, the flexibility and scalability of wireless networking makes wireless access a convenient option for organizations deploying MDs within their facilities. This robust sector has led the way with medical based technology options for both patient care and data handling.

(U) The expanded use of wireless technology on the enterprise network of medical facilities and the wireless utilization of MDs opens up both new opportunities and new vulnerabilities to patients and medical facilities. Since wireless MDs are now connected to Medical information technology (IT) networks, IT networks are now remotely accessible through the MD. This may be a desirable development, but the communications security of MDs to protect against theft of medical information and malicious intrusion is now becoming a major concern. In addition, many HPH organizations are leveraging mobile technologies to enhance operations. The storage capacity, fast computing speeds, ease of use, and portability render mobile devices an optimal solution.

(U) This Bulletin highlights how the portability and remote connectivity of MDs introduce additional risk into Medical IT networks and failure to implement a robust security program will impact the organization’s ability to protect patients and their medical information from intentional and unintentional loss or damage.

(U) According to Health and Human Services (HHS), a major concern to the Healthcare and Public Health (HPH) Sector is exploitation of potential vulnerabilities of medical devices on Medical IT networks (public, private and domestic). These vulnerabilities may result in possible risks to patient safety and theft or loss of medical information due to the inadequate incorporation of IT products, patient management products and medical devices onto Medical IT Networks. Misconfigured networks or poor security practices may increase the risk of compromised medical devices. HHS states there are four factors which further complicate security resilience within a medical organization.

1. (U) There are legacy medical devices deployed prior to enactment of the Medical Device Law in 1976, that are still in use today.

2. (U) Many newer devices have undergone rigorous FDA testing procedures and come equipped with design features which facilitate their safe incorporation onto Medical IT networks. However, these secure design features may not be implemented during the deployment phase due to complexity of the technology or the lack of knowledge about the capabilities. Because the technology is so new, there may not be an authoritative understanding of how to properly secure it, leaving open the possibilities for exploitation through zero-day vulnerabilities or insecure deployment configurations. In addition, new or robust features, such as custom applications, may also mean an increased amount of third party code development which may create vulnerabilities, if not evaluated properly. Prior to enactment of the law, the FDA required minimal testing before placing on the market. It is challenging to localize and mitigate threats within this group of legacy equipment.

3. (U) In an era of budgetary restraints, healthcare facilities frequently prioritize more traditional programs and operational considerations over network security.

4. (U) Because these medical devices may contain sensitive or privacy information, system owners may be reluctant to allow manufactures access for upgrades or updates. Failure to install updates lays a foundation for increasingly ineffective threat mitigation as time passes.

(U) Implantable Medical Devices (IMD): Some medical computing devices are designed to be implanted within the body to collect, store, analyze and then act on large amounts of information. These IMDs have incorporated network communications capabilities to increase their usefulness. Legacy implanted medical devices still in use today were manufactured when security was not yet a priority. Some of these devices have older proprietary operating systems that are not vulnerable to common malware and so are not supported by newer antivirus software. However, many are vulnerable to cyber attacks by a malicious actor who can take advantage of routine software update capabilities to gain access and, thereafter, manipulate the implant.

(U) During an August 2011 Black Hat conference, a security researcher demonstrated how an outside actor can shut off or alter the settings of an insulin pump without the user’s knowledge. The demonstration was given to show the audience that the pump’s cyber vulnerabilities could lead to severe consequences. The researcher that provided the demonstration is a diabetic and personally aware of the implications of this activity. The researcher also found that a malicious actor can eavesdrop on a continuous glucose monitor’s (CGM) transmission by using an oscilloscope, but device settings could not be reprogrammed. The researcher acknowledged that he was not able to completely assume remote control or modify the programming of the CGM, but he was able to disrupt and jam the device.

http://www.healthreformwatch.com/category/electronic-medical-records/

February 7, 2012

Since the data breach notification regulations by HHS went into effect in September 2009, 385 incidents affecting 500 or more individuals have been reported to HHS, according to its website.

http://www.darkdaily.com/cyber-attacks-against-internet-enabled-medical-devices-are-new-threat-to-clinical-pathology-laboratories-215#axzz1yPzItOFc

February 16 2011

One high-profile healthcare system that regularly experiences such attacks is the Veterans Administration (VA). For two years, the VA has been fighting a cyber battle against illegal and unwanted intrusions into their medical devices

 

http://www.mobiledia.com/news/120863.html

 DEC 16, 2011
Malware in a Georgia hospital’s computer system forced it to turn away patients, highlighting the problems and vulnerabilities of computerized systems.

The computer infection started to cause problems at the Gwinnett Medical Center last Wednesday and continued to spread, until the hospital was forced to send all non-emergency admissions to other hospitals.

More doctors and nurses than ever are using mobile devices in healthcare, and hospitals are making patient records computerized for easier, convenient access over piles of paperwork.

http://www.doctorsofusc.com/uscdocs/locations/lac-usc-medical-center

As one of the busiest public hospitals in the western United States, LAC+USC Medical Center records nearly 39,000 inpatient discharges, 150,000 emergency department visits, and 1 million ambulatory care visits each year.

http://www.healthreformwatch.com/category/electronic-medical-records/

If one jumbo jet crashed in the US each day for a week, we’d expect the FAA to shut down the industry until the problem was figured out. But in our health care system, roughly 250 people die each day due to preventable error

http://www.pcworld.com/article/142926/are_healthcare_organizations_under_cyberattack.html

Feb 28, 2008

“There is definitely an uptick in attacks,” says Dr. John Halamka, CIO at both Beth Israel Deaconess Medical Center and Harvard Medical School in the Boston area. “Privacy is the foundation of everything we do. We don’t want to be the TJX of healthcare.” TJX is the Framingham, Mass-based retailer which last year disclosed a massive data breach involving customer records.

Dr. Halamka, who this week announced a project in electronic health records as an online service to the 300 doctors in the Beth Israel Deaconess Physicians Organization,

Interview Dan Steinberg Founder Salford Systems

Here is an interview with Dan Steinberg, Founder and President of Salford Systems (http://www.salford-systems.com/ )

Ajay- Describe your journey from academia to technology entrepreneurship. What are the key milestones or turning points that you remember.

 Dan- When I was in graduate school studying econometrics at Harvard,  a number of distinguished professors at Harvard (and MIT) were actively involved in substantial real world activities.  Professors that I interacted with, or studied with, or whose software I used became involved in the creation of such companies as Sun Microsystems, Data Resources, Inc. or were heavily involved in business consulting through their own companies or other influential consultants.  Some not involved in private sector consulting took on substantial roles in government such as membership on the President’s Council of Economic Advisors. The atmosphere was one that encouraged free movement between academia and the private sector so the idea of forming a consulting and software company was quite natural and did not seem in any way inconsistent with being devoted to the advancement of science.

 Ajay- What are the latest products by Salford Systems? Any future product plans or modification to work on Big Data analytics, mobile computing and cloud computing.

 Dan- Our central set of data mining technologies are CART, MARS, TreeNet, RandomForests, and PRIM, and we have always maintained feature rich logistic regression and linear regression modules. In our latest release scheduled for January 2012 we will be including a new data mining approach to linear and logistic regression allowing for the rapid processing of massive numbers of predictors (e.g., one million columns), with powerful predictor selection and coefficient shrinkage. The new methods allow not only classic techniques such as ridge and lasso regression, but also sub-lasso model sizes. Clear tradeoff diagrams between model complexity (number of predictors) and predictive accuracy allow the modeler to select an ideal balance suitable for their requirements.

The new version of our data mining suite, Salford Predictive Modeler (SPM), also includes two important extensions to the boosted tree technology at the heart of TreeNet.  The first, Importance Sampled learning Ensembles (ISLE), is used for the compression of TreeNet tree ensembles. Starting with, say, a 1,000 tree ensemble, the ISLE compression might well reduce this down to 200 reweighted trees. Such compression will be valuable when models need to be executed in real time. The compression rate is always under the modeler’s control, meaning that if a deployed model may only contain, say, 30 trees, then the compression will deliver an optimal 30-tree weighted ensemble. Needless to say, compression of tree ensembles should be expected to be lossy and how much accuracy is lost when extreme compression is desired will vary from case to case. Prior to ISLE, practitioners have simply truncated the ensemble to the maximum allowable size.  The new methodology will substantially outperform truncation.

The second major advance is RULEFIT, a rule extraction engine that starts with a TreeNet model and decomposes it into the most interesting and predictive rules. RULEFIT is also a tree ensemble post-processor and offers the possibility of improving on the original TreeNet predictive performance. One can think of the rule extraction as an alternative way to explain and interpret an otherwise complex multi-tree model. The rules extracted are similar conceptually to the terminal nodes of a CART tree but the various rules will not refer to mutually exclusive regions of the data.

 Ajay- You have led teams that have won multiple data mining competitions. What are some of your favorite techniques or approaches to a data mining problem.

 Dan- We only enter competitions involving problems for which our technology is suitable, generally, classification and regression. In these areas, we are  partial to TreeNet because it is such a capable and robust learning machine. However, we always find great value in analyzing many aspects of a data set with CART, especially when we require a compact and easy to understand story about the data. CART is exceptionally well suited to the discovery of errors in data, often revealing errors created by the competition organizers themselves. More than once, our reports of data problems have been responsible for the competition organizer’s decision to issue a corrected version of the data and we have been the only group to discover the problem.

In general, tackling a data mining competition is no different than tackling any analytical challenge. You must start with a solid conceptual grasp of the problem and the actual objectives, and the nature and limitations of the data. Following that comes feature extraction, the selection of a modeling strategy (or strategies), and then extensive experimentation to learn what works best.

 Ajay- I know you have created your own software. But are there other software that you use or liked to use?

 Dan- For analytics we frequently test open source software to make sure that our tools will in fact deliver the superior performance we advertise. In general, if a problem clearly requires technology other than that offered by Salford, we advise clients to seek other consultants expert in that other technology.

 Ajay- Your software is installed at 3500 sites including 400 universities as per http://www.salford-systems.com/company/aboutus/index.html What is the key to managing and keeping so many customers happy?

 Dan- First, we have taken great pains to make our software reliable and we make every effort  to avoid problems related to bugs.  Our testing procedures are extensive and we have experts dedicated to stress-testing software . Second, our interface is designed to be natural, intuitive, and easy to use, so the challenges to the new user are minimized. Also, clear documentation, help files, and training videos round out how we allow the user to look after themselves. Should a client need to contact us we try to achieve 24-hour turn around on tech support issues and monitor all tech support activity to ensure timeliness, accuracy, and helpfulness of our responses. WebEx/GotoMeeting and other internet based contact permit real time interaction.

 Ajay- What do you do to relax and unwind?

 Dan- I am in the gym almost every day combining weight and cardio training. No matter how tired I am before the workout I always come out energized so locating a good gym during my extensive travels is a must. I am also actively learning Portuguese so I look to watch a Brazilian TV show or Portuguese dubbed movie when I have time; I almost never watch any form of video unless it is available in Portuguese.

 Biography-

http://www.salford-systems.com/blog/dan-steinberg.html

Dan Steinberg, President and Founder of Salford Systems, is a well-respected member of the statistics and econometrics communities. In 1992, he developed the first PC-based implementation of the original CART procedure, working in concert with Leo Breiman, Richard Olshen, Charles Stone and Jerome Friedman. In addition, he has provided consulting services on a number of biomedical and market research projects, which have sparked further innovations in the CART program and methodology.

Dr. Steinberg received his Ph.D. in Economics from Harvard University, and has given full day presentations on data mining for the American Marketing Association, the Direct Marketing Association and the American Statistical Association. After earning a PhD in Econometrics at Harvard Steinberg began his professional career as a Member of the Technical Staff at Bell Labs, Murray Hill, and then as Assistant Professor of Economics at the University of California, San Diego. A book he co-authored on Classification and Regression Trees was awarded the 1999 Nikkei Quality Control Literature Prize in Japan for excellence in statistical literature promoting the improvement of industrial quality control and management.

His consulting experience at Salford Systems has included complex modeling projects for major banks worldwide, including Citibank, Chase, American Express, Credit Suisse, and has included projects in Europe, Australia, New Zealand, Malaysia, Korea, Japan and Brazil. Steinberg led the teams that won first place awards in the KDDCup 2000, and the 2002 Duke/TeraData Churn modeling competition, and the teams that won awards in the PAKDD competitions of 2006 and 2007. He has published papers in economics, econometrics, computer science journals, and contributes actively to the ongoing research and development at Salford.

Analytics 2011 Conference

From http://www.sas.com/events/analytics/us/

The Analytics 2011 Conference Series combines the power of SAS’s M2010 Data Mining Conference and F2010 Business Forecasting Conference into one conference covering the latest trends and techniques in the field of analytics. Analytics 2011 Conference Series brings the brightest minds in the field of analytics together with hundreds of analytics practitioners. Join us as these leading conferences change names and locations. At Analytics 2011, you’ll learn through a series of case studies, technical presentations and hands-on training. If you are in the field of analytics, this is one conference you can’t afford to miss.

Conference Details

October 24-25, 2011
Grande Lakes Resort
Orlando, FL

Analytics 2011 topic areas include:

Indian Business Schools Alumni try to grow more equal

A message from one the IIM (Indian Institute of Management) alumni networks, just an example of how any global organization should make extra efforts to make things more equal- and (thus position their brand for a differentiated place for attracting talent)

http://en.wikipedia.org/wiki/Indian_Institutes_of_Management

The Indian Institutes of Management (IIMs), are graduate business schools in India that also conduct research and provide consultancy services in the field of management to various sectors of the Indian economy. They were created by the Indian Government[1] with the aim of identifying the brightest intellectual talent[1] available in the student community of India and training it in the best management techniques available in the world, to ultimately create a pool of elite managers to manage and lead the various sections of the Indian economy.

The IIMs are considered the top business schools in India.[3] All the IIMs are completely autonomous institutes owned and financed by the Central Government of India. In order of establishment, the IIMs are located at Calcutta (Kolkata), Ahmedabad, Bangalore, Lucknow, Kozhikode (Calicut), Indore, Shillong, Ranchi, Rohtak, Raipur, Trichy, Kashipur and Udaipur. (My alma mater is Lucknow)

 

IIMs being role models have shared knowledge and skills with other institutions to improve their quality and standards in management education


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IIM A Alumni Association has been reaching out to the alumni associations of other IIMs to broad base the brotherhood (no offense to the fairer sex. Couldn’t think of a replacement word).

IM Calcutta Alumni Association has been conducting a lecture series and has invited us for the next edition. The topic is “The Unlimited Person”

India’s ambitions today – particulary reflected in the Corporate Sector – are Unlimited. What mind-set does it take to realise these ambitions ? Minds that live in the past or in the future – as too many Indian minds do – limit themselves, their companies and their country.

This presentation gives several examples of our current average mind-set and talks about ways in which an unlimited mind-set can emerge, creating “The Unlimited Person”

The speaker will be IIM Calcutta alumnus Shashi Maudgal, Chief Marketing Officer of Hindalco Industries of the Aditya Birla Group. The date is Friday June 24th at Gulmohar at the India Habitat Centre . Time 7 pm.

We hope you will come for this lecture and benefit from Shashi’s experience and insights.

Jayaraman -PGP ’70 / Sunil Kala PGP ’73 / Salil Agrawal PGP ’83

T. Venkateswaran PGP ’85 / Rahul Aggarwal PGP ’94

Heritage offers 3 million chump change for Monkeys

My perspective is life is not fair, and if someone offers me 1 mill a year so they make 1 bill a year, I would still take it, especially if it leads to better human beings and better humanity on this planet. Health care isnt toothpaste.

Unless there are even more fine print changes involved- there exist several players in the pharma sector who do build and deploy models internally for denying claims or prospecting medical doctors with freebies, but they might just get caught with the new open data movement

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A note from KDNuggets-

Heritage Health Prizereleased a second set of data on May 4. They also recently modified their ruleswhich now demand complete exclusivity and seem to disallow use of other tools (emphasis mine – Gregory PS)

21. LICENSE
By registering for the Competition, each Entrant (a) grants to Sponsor and its designees a worldwide, exclusive (except with respect to Entrant) , sub-licensable (through multiple tiers), transferable, fully paid-up, royalty-free, perpetual, irrevocable right to use, not use, reproduce, distribute (through multiple tiers), create derivative works of, publicly perform, publicly display, digitally perform, make, have made, sell, offer for sale and import the entry and the algorithm used to produce the entry, as well as any other algorithm, data or other information whatsoever developed or produced at any time using the data provided to Entrant in this Competition (collectively, the “Licensed Materials”), in any media now known or hereafter developed, for any purpose whatsoever, commercial or otherwise, without further approval by or payment to Entrant (the “License”) and
(b) represents that he/she/it has the unrestricted right to grant the License. 
Entrant understands and agrees that the License is exclusive except with respect to Entrant: Entrant may use the Licensed Materials solely for his/her/its own patient management and other internal business purposes but may not grant or otherwise transfer to any third party any rights to or interests in the Licensed Materials whatsoever.

This has lead to a call to boycott the competition by Tristan, who also notes that academics cannot publish their results without prior written approval of the Sponsor.

Anthony Goldbloom, CEO of Kaggle, emailed the HHP participants on May 4

HPN have asked me to pass on the following message: “The Heritage Provider Network is sponsoring the Heritage Health Prize to spur innovation and creative thinking in healthcare. HPN, however, is a medical group and must retain an exclusive license to the algorithms created using its data so as to ensure that the algorithms are used responsibly, and are only used to provide better health care to patients and not for improper purposes.
Put simply, while the competition hopes to spur innovation, this is not a competition regarding movie ratings or chess results. We hope that the clarifications we have made to the Rules and the FAQ adequately address your concerns and look forward to your participation in the competition.”

What do you think? Will the exclusive license prevent you from participating?

Checks in the mail more effective checks to your pay

Paycheck (film)
Image via Wikipedia

NBER (whose excellent monthly newsletter I subscribe to- among others) http://www.nber.org/ in a recent paper claims that cheque in mails (one time) sare better spent than monthly pay increases.

I wonder what this conclusion can be used for in designing annual bonuses versus higher pay in private sector compensation- but people do seem happier receiving a bigger one time boost than 12 small mini boosts.

 

http://papers.nber.org/papers/w16246

Check in the Mail or More in the Paycheck: Does the Effectiveness of Fiscal Stimulus Depend on How It Is Delivered?

use a mirror
Use a mirror
download in pdf format
(176 K)

email paper

Claudia R. Sahm, Matthew D. Shapiro, Joel Slemrod

NBER Working Paper No. 16246
Issued in July 2010
NBER Program(s):   EFG ME PE

An NBER digest for this paper is available.

Recent fiscal policies have aimed to stimulate household spending. In 2008, most households received one-time economic stimulus payments. In 2009, most working households received the Making Work Pay tax credit in the form of reduced withholding; other households, mainly retirees, received one-time payments. This paper quantifies the spending response to these different policies and examines whether the spending response differed according to whether the stimulus was delivered as a one-time payment or as a flow of payments in the form of reduced withholding. Based on responses from a representative sample of households in the Thomson Reuters/University of Michigan Surveys of Consumers, the paper finds that the reduction in withholding led to a substantially lower rate of spending than the one-time payments. Specifically, 25 percent of households reported that the one-time economic stimulus payment in 2008 led them to mostly increase their spending while only 13 percent reported that the extra pay from the lower withholding in 2009 led them to mostly increase their spending. The paper uses several approaches to isolate the effect of the delivery mechanism from the changing aggregate and individual conditions. Responses to a hypothetical stimulus in 2009, examination of “free responses” concerning differing responses to the policies, and regression analysis controlling for individual economic conditions and demographics all support the primary importance of the income delivery mechanism in determining the spending response to the policies.

This paper is available as PDF (176 K) or via email.

Machine-readable bibliographic record – MARC, RIS, BibTeX