In honor of Asian Pacific American Heritage Month, we’re featuring profiles and interviews with members of our Haas community.

Prof. Xiao-Jun Zhang moved to the U.S. for love, and stayed because he built a family and a career here.

Prof. Xiao-Jun Zhang holding a “Berkeley Haas Culture Champion” pin, worn by those to help to advance the school’s culture.

Since he joined the Haas Accounting Group in 1998, Zhang has become a much-loved professor, opening the minds of generations of students to accounting—even those who start out thinking it’s boring. He twice won the Cheit Award for Excellence in Teaching in the Evening & Weekend MBA program, and last year he made Poets & Quants’ list of the favorite professors of executive MBA students.

Zhang shared how his his life has been a “fate-guided series of decisions,” and how his cultural perspective influences the way he runs his classes in a very intentional way.

Where were you born and where did you grow up?

I was born and raised in Beijing, China. I went to primary school, high school, and college all in Beijing.

When did you move to the U.S., and why?

I moved to the U.S. in 1992 and the reason was simple: My wife—who was then my girlfriend—transferred to Mount Holyoke College in Massachusetts, so I decided to follow her to the U.S.

Did you think you’d stay here?

I was young then and didn’t think too much about my long-term plans, including whether to stay in the U.S. or not after graduation. The end result of staying here was more of a fate-guided series of decisions, driven by family more than a deliberate career path.

How did you come to Berkeley?

At the time, I was choosing between several schools—including Berkeley, Chicago, Yale, and Duke. What made Berkeley stand out was my research area of financial statement analysis. My advisor, James Ohlson, had worked here, and my frequent co-author, Steve Penman, was here at that time. From the research collaboration perspective, Berkeley was a natural fit. Also, my wife really wanted to live in the Bay Area.  

Was there anything about Berkeley’s culture that attracted you?

If you look around the country, I would characterize Berkeley as of one of the most open-minded places. There’s a strong emphasis on equality, on judging people based on what he or she can contribute, rather than more superficial aspects. For people of Asian origin, feeling that sense of fairness is important. I would choose to work among colleagues who share that same sense of equality and fairness.

Having grown up in China, do you feel like you have a different perspective—as an academic and a teacher—than your American-born colleagues?

I would say so. The way you grew up shapes you consciously and unconsciously in so many ways. I’ll give you an example. In the classroom, I find it easier to understand certain student behaviors, especially with students from Asian countries. In the classroom in China, all we were supposed to do was take notes and memorize what we were told. You’re not supposed to ask questions. I suppose there’s similar cultures in Japan, Korea, and other Asian countries. When you teach graduate classes at Berkeley, you notice students from those cultures tend to be more reserved. I tend to be understanding, and when I design my class, I try to create a very relaxing environment without a lot of pressure to participate. It’s really rewarding when you see these students gradually warm up, and at the end of the semester they are as active as the others.

So do you put less emphasis on participation in their grades?

I put as much emphasis on participation, but I redefine it. I don’t count the number of questions they ask. To me, whether a student has been following the class is the most important thing. I tell the students that, after so many years of teaching, I know just by looking at your eyes whether you’re following the class. Once you take that pressure off, students start to participate in a natural way, rather than trying to think of a question just to ask a question.

That’s so interesting. There’s a lot of discussion around Haas and at business schools about inclusion. People have noticed that men often dominate classroom conversations and are working on changing that culture. Do you find that women tend to speak up more in your classes because of the atmosphere you create?

I don’t pay attention to whether it’s a man versus a woman, but I do tell students, “You may notice sometimes you raise your hand but you don’t get called on. Don’t take it personally, but I want to give priority to whoever hasn’t spoken so far.” Most of the students have no problem with that. Once you tell them, “Your role is just keep raising your hand,” they are likely to continue doing it but they can relax.

You’re a well-loved teacher—you’ve won the Cheit Award twice, and last year you were on Poets & Quants list of favorite exec MBA students. What do you like about teaching accounting?

I like helping them realize that accounting is not just a bunch of rules. Accounting is a way of thinking, in the sense that it’s looking at a business from the financial perspective. You can have all these fancy business plans, but in the end, you’re going to be measured by how the financial aspect works out. When students realize they need to learn this to operate in real life they get excited. Most rewarding is when you see the light bulb go on, and they see that accounting is not boring and it can actually be exciting. Then you just leave the rest to them. They will learn it all by themselves. At the end of the day, they give you credit for what they’ve learned, and they start liking you.

So from that perspective, you don’t have to teach them much beyond the first week?

In some sense yes. Once you help them realize what accounting really is, they will do all the work and teach themselves.

Can you share an example of your recent research?  

In finance and accounting there is the book-to-market ratio phenomenon. Basically, people find that the book value (or accounting value) divided by the market capitalization somehow correlates with future stock returns. People got very excited about this idea because it seems they could make money off it. From the academic perspective, the question is why? I think part of the reason has to do with accounting, in the sense that the book value tends to reflect a stock’s downside risk due to the conservatism-bias in accounting. As a result, the book-to-market ratio reflects a stock’s upside potential relative to its downside risk. Another ingredient to this phenomenon is investors’ preference for “positive skewness” in stock returns: In other words, when you make an investment and receive huge return from it, you get a disproportionately high degree of satisfaction. Now you can brag about it at dinner parties, for instance. Maybe the other nine of your ten stocks don’t do well, but that doesn’t seem matter as much. Putting these two ingredients together, we start to see why investors like stocks with a low probability of huge upside potential, which leads them to prefer the so-called growth stocks.

That sounds like almost like a behavioral finance perspective. Is it rational to put faith in a low probability of a high return over a more certain, smaller return?

I would say yes, because these investors get significant happiness from this one big return. The same reasoning underlies people’s preference for gambling. Going after things that make you happy is rational. Trying to understand human behavior and what really gives humans happiness—or what they call in economics “utility”—is quite complicated and quite fascinating to dive into.

Do ever think you’d move back to China?

I don’t see any reason why I’d want to go somewhere else. I couldn’t ask for a better academic environment than Berkeley, in terms of freedom of thinking. Also my family loves living here. Your home is where your family is. I go to Beijing from time to time, but the Beijing of today is completely different from the city I grew up in. The hometown I grew up in will just be in my memory forever.

The post Prof. Xiao-Jun Zhang’s intentional teaching appeared first on Haas News | Berkeley Haas.

Berkeley Haas research finds there may be a dark side to the rise of “alternative data” in capital markets

While Assoc. Prof. Panos Patatoukas was discussing Walmart in his Financial Information Analysis course last year, a student brought up the story of how company founder Sam Walton used to count cars in store parking lots to gauge how sales were going.

Patatoukas knew that sophisticated investors had begun doing exactly that on a large-scale basis by analyzing satellite images of retailers’ parking lots, and he began to wonder just how much of an edge it was giving them. So he called up the company that pioneered satellite-image car counting and pitched the CEO on the idea of letting an academic analyze the data. With the help of funding from the Fisher Center for Business Analytics, he landed 4.8 million images of parking lots at 67,000 individual stores across the U.S. owned by 44 major retailers, including Walmart.

Berkeley Haas Assoc. Prof. Panos Patatoukas

The resulting analysis by Patatoukas and Assoc. Prof. Zsolt Katona—the first to quantify in detail the advantages of trading based on satellite imagery of parking lot traffic—found that the strategy can indeed deliver a significant boost for investors savvy enough to exploit it. Traders can accurately anticipate earnings news based on parking lot volume and earn significantly more than a typical benchmark return.

“The informational advantage yields 4% to 5% in the three days around quarterly earnings announcements, which is a significant return over such short window,” Patatoukas says. “If you annualize it, the number is staggering.”

The researchers also found that although this type of satellite data has been commercially available since 2011, the information hasn’t spread beyond a select few large investors, mostly hedge funds. That’s led to a consistently profitable strategy for hedge funds at the expense of individual investors, Patatoukas says: In particular, investors with access to satellite imagery data can get ahead of the rest of the market and target retailers with bad news for the quarter. This investment edge allows them to bet against those retailers by short selling their stock, even as individual investors are still buying.

“What we found is that it’s a gain for large sophisticated investors who can afford the substantial costs of acquiring and processing big alternative data at the expense of Main Street investors,” Patatoukas said. “If it was just a transfer of wealth between hedge funds, that would be a different story, but it’s small individual investors who tend to be on the other side of the trade.”

His working paper—co-authored by Marcus Painter at the University of Kentucky and Berkeley Haas doctoral student Jieyin Zeng—raises questions about individual investor protections in an age of new “alternative data” sources. Even as technology has made trading more accessible to the masses, the rise of big data is creating so-called alternative data that only those with superior resources are tapping into.

The “dark side” of big data

Skilled investors have always competed for an information edge that allows them to outperform the market by even fractions of a percentage point—that’s how Wall Street operates. Until recently, however, those traders had access to the same reports, earnings calls, SEC filings, and other public sources of information as everyone else. Trading on material non-public information, after all, is against the law, and the SEC makes detection and prosecution of insider trading one of its top enforcement priorities.

But technology is increasingly blurring the boundaries between public and private information, creating data opportunities that are legal, but are expensive and often require special expertise to access.

“Technology was supposed to level the playing field, but what I see is the fence separating sophisticated and unsophisticated investors growing higher,” says Patatoukas, who is passionate about teaching his students to analyze public sources of financial information and finds the trend troubling. “That’s the dark side of big data. Our evidence suggests that unequal access to alternative data leaves individual investors outside the information loop.”

How to formulate a trading strategy from outer space

RS Metrics pioneered the analysis of satellite images of parking lots in 2011, with hedge funds as their primary customers. Other companies such as Orbital Insight have followed suit, obtaining images from satellite companies and processing them with both software and human analysts. Not only is the data expensive, but it takes substantial skill to analyze and combine with other information sources to yield results, Patatoukas says. “You have to have the right people, and those people tend to be expensive.”

Patatoukas’ paper lays out exactly how investors can formulate a trading strategy from outer space. Using images from RS metrics from 2011 to 2017 covering 44 major U.S. retailers, including Walmart, Target, Costco, and Whole Foods, the researchers confirmed that year-over-year changes in the number of cars in individual stores’ parking lots is a reliable predictor of quarterly sales—a widely used metric for retailers’ performance. The researchers later added in more images from competing firm Orbital Insight, which covers the same companies, and found that combing the two datasets allowed for even more accurate predictions, and an even more profitable strategy.

In fact, parking lot volume is such a reliable indicator of retail sales that it can be used to identify errors in analysts’ forecasts in the three-week period after stores’ quarterly earnings are in, but before they’re announced to the public. Using data from Markit, a service that tracks daily institutional lending activity, they found a boost in stock lending in the five days before earnings announcements. That’s an indication of “informed short selling activity,” targeting retailers with bad news for the quarter (the strategy works with long and short-sale positions, but the researchers found it is most profitable for short sales).

Meanwhile, drilling into data on trading by individual investors during the same period, they found that individuals are net buyers of the same retailers that the hedge funds are betting against. Main Street investors can’t piggyback on what the hedge funds are doing since the short-selling market is opaque: The general investment community can only see short-interest data twice per month, and only with a significant delay.

In terms of market reaction to earnings announcements, they found no difference between retailers covered by the satellite image companies and those that are not. Clearly, the parking lot intelligence is not increasing price discovery for the market overall, Patatoukas says.

“Over the last seven years it’s been a pretty profitable strategy for hedge funds, and the value of the parking lot signals hasn’t yet been competed away. Part of that has to do with the fact that access to satellite imagery data has been so exclusive,” he says. “Once uncertainty about the signals has been removed and it’s known that there’s value to be extracted, more investors will start using it and the advantage will be competed away.”

In that regard, Patatoukas says, the dissemination of the working paper itself will impact the market for satellite parking lot data in the short term, since it provides the first independent analysis showing whether—and how—trading from outer space works.

Regulatory interest

In the aftermath of the financial crisis, there has been increased regulatory interest in the role of informed trading and disclosure requirements to protect the fairness and integrity of capital markets. With this in mind, Patatoukas hopes that the paper will get the attention of the regulators. “In a market setting where the line separating public from material non-public information is getting blurrier, the question that regulators need to answer is: What is their role in terms of leveling the playing field for individual investors?”

While the value of the parking lot data will dissipate as technology improves and it becomes more accessible, investors will no doubt find new data sources that will yield insights once only available to company insiders. For example, investors may already be harvesting geolocation data from inside consumers’ pockets as they move around stores with their smartphones, Patatoukas says.

“This is just the tip of the iceberg,” Patatoukas says. “While so far the focus has been mostly on the bright side of big and alternative data, there might be a less auspicious side to the rise of such data in capital markets.”

The post How hedge funds use satellite images to beat Wall Street—and Main Street appeared first on Haas News | Berkeley Haas.

Evening & Weekend MBA graduate Sora Elcan holds up her lil’ grad baby, Jackson Lee Elcan.

Berkeley Haas MBA students in the Class of 2019 were urged to be brave and embrace their power to make significant contributions to improve the world at Friday’s commencement.

The commencement was held under sunny skies at the Greek Theatre, where Dean Ann Harrison welcomed parents, friends, and family of evening & weekend MBA and full-time MBA students. “All of you have been transformed in some profound way. That is, after all, why you came here,” she told them.

Watch the video of 2019 MBA commencement.

Commencement speaker Patrick Awuah, MBA 99 and founder of Ashesi University in Ghana, told graduates the story of how he arrived at Berkeley Haas in his early 30s, with a new baby, having quit his job at Microsoft. He had a singular goal to prepare himself to start a successful university, and he built his plan for Ashesi during his entire time at Haas.

“At Ashesi (University) today I see echoes of Berkeley.” – Patrick Awuah, MBA 99 and 2019 MBA commencement speaker. (Photo: Noah Berger)

“Ashesi started here, and I recognize the fact that there are not many places where this could have happened,” said Awuah, whose school has grown from 30 to 1,000 students. “We all had hope that it was going to be a remarkable institution, but it has exceeded even our loftiest dreams…At Ashesi today I see echoes of Berkeley: In our classrooms and the curriculum that we teach and the values we share; in the open embrace of equitable access to the opportunity for learning and development. I see echoes of Berkeley in how our community works and in our corporate culture. I see echoes of Berkeley in Ashesi’s people and leadership.”

Full-time MBA student speaker Bree Jenkins, who is co-founding the Hayward Collegiate Charter School, shared a personal story of feeling powerless as a teen.

FTMBA student speaker Bree Jenkins (Photo: Noah Berger)

“Age 15, days before my birthday, on a bitter December night, my mom leaves for a tour in Iraq. I honestly don’t know if she will ever come back. When this feeling of powerlessness grabs hold of you, it is usually dark. And you’re typically alone. Your whole body clenches. Palms sweaty. There’s a tightening of your stomach as you realize there is nothing you can do.”

Jenkins said the transformation from powerlessness to power has many faces. “As a new graduate of the Haas School of Business, it has your (face),” she said. “And as a black woman who represents just 1% of her class, yet has the privilege of speaking on your behalf, it has mine. Right now, we have power. And with this power, we share an incredible responsibility to this world and to one another.”

EWMBA student speaker Nancy Hoque (Photo: Noah Berger)

Calling out classmates by name, Nancy Hoque, student speaker for the Evening & Weekend MBA Program, addressed why they were brave for different reasons: for risking it all in changing a career, for joining her in protesting the immigration ban at the San Francisco Airport, for traveling across the world to help Syrian refugees, and for organizing female students to wear white on their commencement caps to symbolize the strength and unity of women who completed the program.

“Yes, absolutely they were all brave, because bravery entails taking a chance,” she said. “Grabbing onto that door which is cracked open and, regardless of the obstacles and unknowns, walking through it.”

Evan Krokowski, who graduated from the evening & weekend program, celebrates. Photo: Noah Berger.

Commencement Awards

Full-Time MBA Program

FTMBA student speaker Bree Jenkins (center) surrounded by the Defining Leadership Principles award winners. (Photo: Noah Berger)

Academic Achievement Award: Somiran Gupta

Full-Time MBA Defining Leadership Principle Awards:

Question the Status Quo: Tam Emerson; Confidence without Attitude: Somiran Gupta; Students Always: Mariana Lanzas Goded; Beyond Yourself: Matthew Freeman Hines; The Berkeley Leader Award: Bosun Adebaki

The Earl F. Cheit Award for Excellence in Teaching: Adair Morse

Cheit Award for Graduate Student Instructor: Margaret Fong

Evening & Weekend MBA Program

Evening & Weekend Program Defining Leadership Principles award winners: Tess Peppers, Eppa Rixey, Michael Toomey, and Melanie Akwule.

Academic Achievement Award: Eppa Rixey

Defining Leadership Principles awards:

Question the Status Quo: Tess Peppers; Confidence Without Attitude: Aimee Bailey; Students Always: Eppa Rixey; Beyond Yourself: Michael Toomey; The Berkeley Leader Award: Melanie Akwule

The Earl F. Cheit Awards for Excellence in Teaching: Prof. Ross Levine (for weekend program) and Assoc. Prof. Yaniv Konchitchki (for evening program)

Graduate Student Instructor: Zachary Olson for the Data & Decisions course

The post MBA grads: Be brave, embrace your power to change the world appeared first on Haas News | Berkeley Haas.

In honor of Asian Pacific American Heritage Month, we’re featuring profiles and interviews with members of our Haas community.

Prof. Candi Yano‘s family immigration history is one of twists and tragic turns, from Japan to the U.S., and back and forth again. 

Yano, who is wrapping up her term next month as the first Asian-American woman to serve as Associate Dean for Academic Affairs and chair of the Berkeley Haas faculty, is an international expert on supply chain management. After three years of helping to win faculty retention battles and countless hours serving colleagues needs big and small, she looks forward to returning to her dual academic role as the Gary & Sherron Kalbach Chair in Business Administration at Haas, and as a professor in the Department of Industrial Engineering & Operations Research.

In between writing her last few memos as faculty chair, Yano took the time to share her family’s fascinating—and heart wrenching—immigration story, as well as the circuitous route she took to discovering the focus of her life’s work via a copy machine at Stanford University.

Prof. Candi Yano

Where did you grow up?

I grew up in a city called Gardena, immediately south of Los Angeles. When I was a kid, about half the population there was Japanese American. My high school was more diverse because of busing in the L.A. school district. There were lots of Hispanic students who were mostly local, and African-American students who were bused in from adjacent communities, as well as Asian and Caucasian students. It was interesting to leave home for the first time and realize the whole world wasn’t like that. I ended up at Stanford, and at that point only about 10% of the students were Asian American. It was eye-opening for me.

What was the history of Gardena, and how did it end up half Japanese American?

When my grandparents immigrated from Japan about a hundred years ago, people weren’t coming in big groups, and so they wanted to go to a place where they felt more comfortable. Many of them were young men and some of them were still in their late teens. It’s really amazing to think about them just getting on ships by themselves. That particular area, even though it’s heavily populated now, was mostly fields—lots of strawberries. My paternal grandfather came from a farming background. He came to California because he felt he had good job opportunities along the lines of what his family had done.  My maternal grandfather immigrated a bit later, and I know less about his reasons for coming the the U.S.

When did your grandparents arrive?

It was around the late teens, maybe early 1920’s. Then in 1924, the U.S. government decided to cut off Asian immigration with the Asian Exclusion Act. I believe both of my grandfathers were here in the U.S. and they sent for their wives-to-be from Japan, because they all had arranged marriages back then. They came over and got married and started their families.

Did you know your grandparents growing up?

Yes, except my mother’s father, who was killed by the bomb in Hiroshima during the second World War.

A video on The Chugoku Shimbun newspaper’s Hiroshima Peace Media website tells the story of the paper, which lost 114 employees (one-third of its staff) when the U.S. dropped an atomic bomb on the city on Aug. 6, 1945. Yano’s grandfather was among them.

Wow. How did that happen, if he had immigrated to the U.S. before the war?

After they had been sent to a relocation camp, my grandfather decided he didn’t want his family being locked up. There were two choices: Stay in the camp or go to Japan. So he decided to take them to Japan, which of course my mother probably didn’t like very much because she was born in the U.S. My grandfather had been a newspaper editor in California, and he picked up that line of work there as an editor at the big regional paper in Hiroshima, The Chugoku Shimbun. He was in the wrong place at the wrong time. My mother seems to have survived mostly unscathed because the family was living out in the burbs. Her mother raised the four kids alone after that. They all ended up coming back to the U.S. at different times. My mom came back at the age of 16. She had finished high school there, and then finished out high school again here.

That’s a heartbreaking story.

Yes, it really is. I had a chance to finally go to Hiroshima a couple of years ago. The Chugoku Shimbun newspaper is still in existence. I saw many panoramic pictures showing the buildings as they were after the bomb. It was heart wrenching to see that.

A photo by Satsuo Nakata shows the 7-story Chugoku Shimbun newspaper building gutted by fire after the bombing. The twisted steel framework next to it is the remains of a kimono shop. (Photo: Hiroshima Peace Media)

Did other members of your family who stayed in the U.S. have to go to the relocation camps?

All of them. My dad’s family was sent to a camp in Gila River, Arizona. They stayed there until they were released after the end of the war.

Did you grow up hearing stories about what happened during the war, or did they avoid talking about it?

I think it affected people differently depending on their age. My parents were both school-aged at the time, which meant that their parents were protecting them from the worst of it. It’s interesting that they don’t seem to have very negative feelings about what happened. But if you talk to people who are just 10 years older, who were adults at the time, they feel very differently. I think if my parents had been bitter they would have passed it on to me, but they weren’t. And in a sense, I consider myself lucky. I can be Japanese-American but not live with that sense of bitterness.

Did you learn much about Asian or Asian-American history in school?

Some, of course, but it was not covered very thoroughly. When I was in high school, most of the talk was about Russia and China. I did have a U.S. history class that required a term paper, and I wrote about the connections from Pearl Harbor to the Japanese surrender. I came to understand that one of the reasons why the second bomb was dropped on Nagasaki was because the U.S. didn’t understand that the Japanese were ready to surrender—but they wanted to retain their emperor, even though he was more of a symbol. The U.S. was being too stubborn about the whole emperor issue, because we don’t have emperors, we don’t have kings and queens in the United States. That was a cultural misunderstanding. Not understanding the roles of various people in government really led to some undesirable outcomes.

An especially tragic example of cultural misunderstanding.

Shifting gears, how did you decide on an academic career, and how did you choose operations as your field?

I took a rather circuitous route. I was studying a lot of math in high school but I was becoming disillusioned with it, so I tried psychology. But when I volunteered as a so-called research assistant for a PhD student, my job was babysitting the five-year-old research subjects. I didn’t really like that. I ended up taking courses on the quantitative end of economics, but meanwhile, I had this odd part-time job. The operations research department at Stanford allowed its PhD students to use the photocopy machine, but they charged a per-copy price plus sales tax. My job was to tally up all the copies and calculate the charges including sales tax, and get the bills sent to the PhD students. As a consequence, I got to know the operations research department chair, and he encouraged me to apply to that department. It was entirely random; I could have had a different part-time job. I did get my undergraduate degree in economics but I eventually did a master’s in operations research and then my PhD in industrial engineering.

Yano with her husband and former PhD students at the Epcot Center following an Orlando research conference.

Were you in the minority as a woman in that department at the time?

There were at least 25% women in my class, but I never really felt like a minority. Actually, I never really felt discriminated against as a woman throughout my graduate career. Not within the campus environment. There were fair number of Asian students at the time too.

How did you end up at Berkeley?

My first full-time job was at Bell Labs in New Jersey. I decided to take an industry job because I had no full-time work experience and I thought it would be helpful. But it was the wrong time to be there, because it was during the first break-up of the Bell system, transitioning  from a monopoly to a competitive environment. The antitrust judge kept on changing his mind, so we never got to finish anything. I was there for 17 months and I don’t think I finished a single project. I had been thinking about going into academia anyway and I said, “I think it’s time to go.” I ended up on the faculty at the University of Michigan and I stayed for about 10 years. But my husband grew up in Berkeley and he decided to take a job out here, so I had to figure out whether I wanted a long-distance relationship. I was lucky enough to get National Science Foundation grant for women faculty to spend a year at another university, and I came to Berkeley as a visiting faculty member. Then I was then lucky enough to get a visiting position at Stanford for another year and have the time to think about it.  And then I decided to come back to Berkeley.

Yano enjoys hiking in her spare time.

You’re wrapping up next month after three years as chair of the Berkeley Haas faculty. How has that been?

Well, first let me tell you about the best part of it. The best part is that I’ve really gotten to know the other faculty in a way that would not have happened otherwise. We have over 80 faculty members and I don’t run into everybody on a regular basis, but I’ve had an opportunity to get to know some really interesting people. I’ve tried to do what I could to help with whatever they they needed. The administrative work has been busy but not very intellectually stimulating. 

Do you think this experience will influence your work going forward?

I think there are people I’ve met who I may be interested in collaborating with, but I haven’t had much time to think about it. Right now, I would just like to finish my last 10 memos (this job entails writing a lot of memos) and get back to being a normal person again. I need to do research for my own sanity.

What do you like best about research?

From when I was very young, I got intellectually bored easily, and I need to have something that keeps my mind going. I like finding new things, working on problems that other people have not tried to tackle before. I also like teaching, and I’ve only taught one class in the last four years, so I’m really looking forward to that.

What do you love about teaching?

I really like imparting knowledge and skills to students to allow them to be better professionals when they graduate. I especially like the undergrads. They’re more like sponges. The MBA students are more focused on what it is they want. I have a funny story about an MBA student in my supply chain management class. He took a job at what was SanDisk, now merged into Western Digital. He told me after his interview that virtually every topic I taught in the class helped him to  answer their interview questions. He said it was so easy for him to get the job. That feels good. I get little notes from students saying they were able to get their job at this consulting firm or that company because of something I taught them. 

Do you feel like being Asian American gives you a different perspective in the classroom?

Obviously I bring the heritage with me, but I have also spent a fair amount of time in Asia, so I think I have a better understanding of the culture and values that the Asian students bring with them. It’s not unusual for Asian students, especially those whose parents are immigrants, to be caught between two cultures. A lot of times I can help them work through the challenge of finding their own career trajectory that might not have been what their parents had planned for them. Also, in my classes I try to help the students who are quieter. In some Asian cultures you don’t speak unless you’re spoken to. I try to draw them out. Because I’m Asian, they can look at me and they say, “She does understand.”

Do you wish there was better understanding of Asian culture in the U.S.?

We are in an environment nationally that is not helping people to be more inclusive. It feels like a divisive time in our world. But let me say something positive: I think here on campus it’s better than in most places. We can talk openly, and I think that helps. But in many industry sectors, the percentages of women and of minorities of all types are far lower than they should be.  I really hope that people start to understand each other a little bit better and try to bridge those gaps.

The post Prof. Candi Yano’s family immigration story: tragedy and forgiveness appeared first on Haas News | Berkeley Haas.

The Full-time Berkeley Haas MBA program placed sixth in the world in the MBA Global 2019 Ranking by América Economia, a Latin American business magazine. The annual ranking includes the best Latin American and worldwide business schools for Latin American students.

Among the top 10 in this year’s ranking, four of the MBA programs are American: Haas, Stanford, Harvard, and Yale.

América Economia ranked the MBA programs based on performance in five areas: multicultural and diversity experience (22.5 percent weight); network potential for Latin Americans (12.5 percent weight); selectivity (27.5 percent weight); focus on innovation (10 percent); and international positioning, which refers to how the programs are ranked in The Economist, The Financial Times, and the QS MBA Rankings (27.5 percent).

For more information on the Spanish-language ranking, visit the website.

The post Full-time MBA program ranked #6 globally by América Economia appeared first on Haas News | Berkeley Haas.

A trip to Montgomery and Selma, Alabama, over Memorial Day weekend led Lisa Rawlings, EMBA 19, to redefine courage.

“Putting myself in my grandparents’ shoes, I realized that courage was not always resistance, but sometimes it was simply endurance, which often required unthinkable compromises to their dignity to save their lives and those of their loved ones,” said Rawlings, whose African American grandmother was born in Alabama and left for Memphis as a teenager.

Left to right: Claire Veuthey, EMBA 19; Travis Adkins; Lisa Rawlings, EMBA 19; John Gribowich EMBA 19; Alexei Greig, EMBA 19; Suprita Makh, EMBA 19; Vansh Makh (Suprita’s husband); and Adam Rosenzweig, EMBA 19, gather in front of the City of Saint Jude Parish in Montgomery, the final campground site for the people who marched from Selma to Montgomery for voting rights.

John Gribowich (who is also a Catholic priest) at the Brown Chapel AME Church, which was the staging area for the beginning of the voting rights march from Selma to Montgomery.

The outside of the National Memorial for Peace and Justice, also called the lynching memorial. "Certain places come to encapsulate large, complex issues: the Temple Mount in Jerusalem, the Berlin Wall, Robben Island," said Adam Rosenzweig. "Without visiting the place, you can’t fully understand the issue. The National Memorial for Peace & Justice has become such a place for anyone seeking to better understand the legacy of racial terrorism in America."

More than 4,300 documented lynchings of African Americans took place between 1877 and 1950. "I was taken aback by the horror we are able to inflict on each other," said Suprita Makh. "I knew this on an intellectual level but it was something else to be confronted with in person, to put names and faces behind numbers."

Jars that contain samples of soil from confirmed lynching sites in Alabama. The victims' names are on the jars. "The sadness and pain I felt while reflecting on the sheer number of people tortured, humiliated and murdered during lynchings or protests... I will not become jaded to the utter terror black Americans experienced for centuries here and continue to experience today," said Alexei Greig.

"In my mind lynchings had been horrendous acts carried out by tens or a few hundred white men in response to perceived slights," said Alexei Greig. "Learning that they were a class of lynchings that were public events with crowds of thousands, with audiences of women and children who took joy in the spectacle was beyond sickening."

"I took this trip to honor the legacy and sacrifice of my grandparents...and all of those before them," Lisa Rawlings said. "I think especially of my grandmother who was born in Alabama and left for Memphis as a teenager. She never looked back and never spoke about her life in Alabama."

"I thought we would have to look harder for signs of “the old South," Adam Rosenzweig said. "I expected that time and modernity would have forced the most visible elements of slavery and racism underground or into sanitized museum exhibits. This was not the case."

The group walked across the Edmund Pettus Bridge, which is named after a Grand Wizard of the KKK. "This shocked everyone in our group," said Adam Rosenzweig. "We all knew the name of the bridge, but we didn’t know who it was named for. It’s a powerful and not uncommon symbol of the centrality of white supremacy in Alabama."

"I’d like to think I would have been part of the freedom fighters, willing to risk my life for equal voting rights," said Claire Veuthey, (left). "But I’m not that brave. I’m pushing myself to consider: what’s the analogy today? What’s the injustice we’re too timid to call out, too frightened to push back against?"

"I still will never comprehend the full extent of the injustice and ongoing plight that exists for people of color," said John Gribowich, left. "I can only try my best each day to be a bit more empathetic and challenge how I am selflessly using my white privilege for the betterment of society."

Rawlings was among a group of six students in the MBA for Executives program who traveled to Alabama to connect the history of racial injustice in America to the present day. Rawlings was joined by Adam Rosenzweig, John Gribowich, a priest who made the same trip last year, Alexei Greig, Claire Veuthey, and Suprita Makh, all EMBA 19.

In Montgomery, the group visited the National Memorial for Peace and Justice, also called the lynching memorial, which opened in 2018 and was built by the the non-profit Equal Justice Initiative. They toured the City of Saint Jude Parish and the Dexter Avenue King Memorial Baptist Church, the first church where Martin Luther King Jr. served as pastor. After visiting the Lowndes Interpretive Center (in 1965, 80% of residents in Lowndes were African-American and not a single one was registered to vote), they walked across the Edmund Pettus Bridge in Selma, the scene of the stand-off between the marchers for voting rights and law enforcement on Bloody Sunday in 1965.

(All photos by John Gribowich and Adam Rosenzweig)

The post EMBA students’ Alabama road trip: Reflections on racial injustice appeared first on Haas News | Berkeley Haas.

A scene from the InnovateHousing conference co-hosted by the Terner Center for Housing Innovation and Fannie Mae in San Francisco last November.

With home prices growing faster than inflation, new home construction falling short of need, and more than a quarter of renters spending half their income on rent, the U.S. is facing a looming housing crisis.

Yet those seeking to make housing cheaper through innovation face a slew of challenges: Housing industry entrepreneurs must navigate a thicket of environmental and other governmental regulations, as well as secure financing for projects that may not fit the industry’s mold.

Enter the new Housing Lab, a first-of-its-kind accelerator specifically for startups seeking to reduce the cost of housing. A collaboration between the Haas School of Business and the College of Environmental Design, the accelerator is housed in the Terner Center for Housing Innovation at the Fisher Center for Real Estate & Urban Economics.

Carol Galante

“The need for innovative solutions and outside-the-box thinking has never been more urgent, and we’re encouraged by the growing number of entrepreneurs who are challenging our antiquated housing system and considering new ways for housing to be more equitable and affordable across the board,” said Terner Center Faculty Director Carol Galante, who previously served in the Obama Administration as U.S. Assistant Secretary for Housing.

The Housing Lab, supported in large part by the Chan Zuckerberg Initiative, aims to help entrepreneurs navigate housing laws and regulations, sharpen their business plans, and locate investors—all with an eye toward making housing less expensive. Applications open June 10 for non-profit and for-profit startups to join an inaugural cohort of five companies. The successful candidates will be announced in September.

Fostering housing innovation

Experts say that the housing industry sorely needs innovation. Median home prices are rising faster than inflation, according to the Joint Center for Housing Studies of Harvard University. And homebuilding isn’t keeping up: The shortfall in new housing construction was recently estimated at 7.3 million units by the Up For Growth National Coalition.

Michelle Boyd, MBA 19

“We know the housing crisis is a complex problem that can’t be solved by innovation alone, but we believe entrepreneurs have a key role to play in contributing to the solution,” said Housing Lab Program Director Michelle Boyd, MBA 19, who began working on the accelerator as a student and is staying on post graduation to lead it. “Because the housing industry is extremely regulated compared with other industries, these entrepreneurs need support.”

Entrepreneurs focused on housing face a huge number of hurdles, including national, state, and local regulations on areas ranging from construction standards and environmental sustainability to rent control and home financing. Local zoning and development plans, often highly politicized, can confound even a savvy and experienced entrepreneur.

Adding to those challenges, many housing innovation startups would have trouble getting accepted into a traditional technology-focused accelerator.

“Most accelerators and VC funds direct the majority of their capital to pure technology-focused innovations, and we think there are a lot of other good ideas out there that may not fit the VC model—either because they’re not a pure tech company, or they’re focused on a more regional market,” Boyd said. “These companies are also asset-intensive, meaning they own and operate real assets and buildings, and there’s is less support for  startups like that. We want to elevate these ideas and connect them to the capital they need to scale.”

Seed funding for housing innovators

Startup candidates for the Housing Lab could include, for example, a company that’s developing a construction method using low-cost yet environmentally friendly building materials, or one that’s promoting a new home-financing product aimed at low-income buyers. Or, a candidate might be producing multi-unit “co-living” structures suited to urban centers, or cottages designed to be tucked behind suburban single-family homes.

Applicants need to demonstrate their ideas’ validity through either customer feedback or extensive market research, and also must be working on their venture on a full-time basis. Candidates should also show a recognition of longstanding problems in the housing industry, such as predatory lending and housing discrimination, and how their venture plans to operate responsibly, Boyd said.

Successful candidates will join the six-month program in the fall and receive seed-funding grants of $100,000 to $150,000. Participants will meet both virtually and in-person at the Terner Center for coaching sessions on developing and scaling their business plans and understanding how best to work in the regulatory environment. In addition to learning about funding sources and meeting potential investors, participants will also gain access to faculty and alumni networks as well as to the Housing Lab’s advisory board of successful entrepreneurs,  government leaders, investors, and housing advocates.

The application can be found at: https://www.housinglab.co/apply.

The post First-of-its-kind accelerator will focus on the housing crisis appeared first on Haas News | Berkeley Haas.

Food-focused students in the Food Innovation Studio course with guest speaker Walter Robb, the former co-CEO of Whole Foods, (back row, fifth from left).

After working in the dairy management industry in Illinois for six years, John Monaghan, MBA 20, arrived at Berkeley Haas on a mission to dive deeper into the business of food.

He didn’t waste any time. In his first year, Monaghan became co-president of the student-run Food@Haas, was nominated to the student advisory board for the Berkeley Haas Center for Responsible Business, and snagged a summer internship at Danone in New York, where he’ll be supporting marketing of the Oikos yogurt brand. He even shared lunch with Alice Waters at her restaurant Chez Panisse, after he worked as a graduate student reader during her Edible Education 101 course. “She hosted us as a thank-you for the semester,” he said.

John Monaghan, who worked in the dairy industry before coming to Haas, has a summer internship at Danone.

Like many of the 20 full-time MBA students who have landed coveted internships and jobs this year in the food and beverage industry—at companies ranging from Clif Bar to Kraft— Monaghan is benefiting from the Sustainable Food Initiative at Haas. The umbrella effort, launched in April 2018, combines food-focused courses, cutting-edge research, entrepreneurship training, events with food industry luminaries, and key industry partnerships.

A food-focused tribe

The initiative both reflects and cultivates a growing interest in the food business at Haas and Berkeley. The number of students landing internships and full-time jobs in the food and beverage industry has doubled over the past three years, and the number of food-related startups—from 2019 MBA grad Somiran Gupta’s nearfarms, an online marketplace that connects small, local farmers directly with consumers, to Tannor’s Tea, founded by Samantha Tannor, MBA 20, whose company sells sugar-free matcha concentrate—is increasing every year.

“We’ve attracted a tribe of people who are food-focused,” says Doug Massa, a corporate relationship manager with the Berkeley Haas Career Management Group. “They want to learn about branding and marketing, but they also want to learn about opportunities in the food supply chain, business operations, and the role of venture capital in food.”

Connecting across Berkeley

Will Rosenzweig is spearheading the new Sustainable Food Initiative at Haas.

Will Rosenzweig, faculty co-chair with the Berkeley Haas Center for Responsible Business (CRB) and a pioneer of the sustainable food movement at Berkeley, is leading the Sustainable Food Initiative. The founder of the Republic of Tea, Rosenzweig taught Haas’ first class on social entrepreneurship 20 years ago—and went on to mentor and invest in successful Haas startups including Revolution Foods, co-founded by Kristin Groos Richmond and Kirsten Saenz Tobey, both MBA 06, to make healthier cafeteria food for kids.

Working with CRB’s program director Emily Pellisier, Rosenzweig is now figuring out how Haas expertise in entrepreneurship and business aligns with sustainability efforts across the Berkeley campus. They’re reaching out to innovative programs like the Berkeley Food Institute and the Alternative Meat Lab at the UC Berkeley Sutardja Center and launching new courses, including a class in impact investing in food, this fall.

“With the riches we have at Berkeley, one of my jobs is to is to remove some of the boundaries between the disciplines, and Haas has been really supportive of that,” Rosenzweig said. “We’re getting other really smart people involved in solving these sustainability problems.”

Watch an “Edible Education 101” session with chef and cookbook author Samin Nosrat and community organizer Shakirah Simley, discussing diversity and inclusion in the food industry.

At the initiative’s core is “Edible Education 101,” which Rosenzweig teaches with Waters, who founded the class in 2011. The undergraduate course brings scientists, CEOs, community activists, and chefs to Haas to talk about the future of food, from seeds to soil health to increasing access to quality food for all. Guests have included chef Samin Nosrat (of the popular Netflix docu-series based on her cookbook, Salt, Fat, Acid, Heat), who spoke last semester on diversity and inclusion in the food industry, to Danny Meyer, founder of Shake Shack and CEO of Union Square Hospitality Group, who addressed the future of restaurant careers.

Will Rosenzweig teaching with Chez Panisse’s Alice Waters.

Victoria Williams-Ononye, MBA 19, the graduate student instructor for the “Edible Education” course, said about 20 of her MBA peers attended the classes. “There’s a core group of people who come to Haas knowing they’re passionate about food,” said Williams-Ononye, who has accepted a job working in Breakthrough Innovation at Kraft in Chicago.

Monaghan called the caliber of “Edible Education” guest speakers “a hidden gem of this entire university.”

The sky’s the limit

Meanwhile, the Food Innovation Studio, Rosenzweig’s two-unit course which uses the Lean LaunchPad method to encourage students in food entrepreneurship, dives deeply into topics such as the rise of regenerative agriculture, sustainable alternatives to single-use packaging, the evolution of plant-based proteins, food system sustainability, and disruptive food delivery models.

While the majority of the students enrolled last semester were from the MBA program, the course draws students from across Berkeley, including Aaron Hall, a PhD student in the Materials Science & Engineering Program who is developing a richer-tasting plant-based fat substitute, and Jessica Heiges, a PhD candidate in Environmental Science, Policy, & Management, who co-founded RePeel, a reusable-food-container service for universities.

Beyond classes, the Sustainable Food Initiative serves as an umbrella for new research, including the recent case, “Reversing Climate Change Through Sustainable Food: Patagonia Provisions Attempts to Scale a ‘Big Wall’.” It’s also a home for partnerships with companies like Patagonia Provisions and General Mills’ Natural and Organics Operating Unit, which includes the Annie’s Homegrown, EPIC, Cascadian Farm Organic, and Muir Glen brands. Both companies are now on the CRB advisory board, where they often find time to collaborate with each other, as well as Haas, said Robert Strand, executive director of the Center for Responsible Business.

“The sky’s the limit with this initiative,” Strand said. “We want to be a strong partner in the global conversation on food and bring the world to California and our ideas to the world.”

The post Haas feeds growing appetite for the business of sustainable food appeared first on Haas News | Berkeley Haas.

The post Prof. Catherine Wolfram: A better way to measure economic growth appeared first on Haas News | Berkeley Haas.

The post Prof. Laura Tyson: What automation means for the gender gap appeared first on Haas News | Berkeley Haas.

(right to left): Joe Castiglione and his partner, Seth, with Joe’s parents on vacation in Key West.

In honor of Pride Month, we’re running a series of profiles and Q&As with members of the LGBTQ community at Haas. Follow the series throughout June.

In this interview, Evening & Weekend MBA student Joe Castiglione, a manager of strategic initiatives at healthcare accreditation  organization NCQA, talks about coming out to his devoutly Baptist family at age 22, how he found pride in the close-knit gay community in Washington D.C., and being out openly at Haas.

Where did you grow up? I grew up in a few different places around Texas, all rural and suburban, but we moved around a lot. Lived a bit outside of Houston and I went to high school outside of Fort Worth, in a small town called Burleson. Kelly Clarkson, our hometown hero, went to our high school — the one claim to fame that we have! I went to college at UT in Austin, moving to Washington D.C. about 48 hours after I graduated. I spent six years in D.C. working in health policy before moving to the Bay Area for Haas.

Joe Castiglione, who grew up in the Baptist church in Texas, celebrating a birthday with his dad.

What was your experience growing up?

I come from a devoutly religious family. I went to Baptist church every Sunday, church on Wednesdays, Youth Group on Wednesdays, the whole kit and caboodle. We even went for a brief period to a mega-church in Houston called Lakewood, where Joel Osteen is the pastor. I didn’t really have much of a safe environment where I could explore my queer identity until much later in life.

When did you first think that you might be gay?

I think the first time I knew something was when I was watching “Saved by the Bell” with my older sister, and I was like way more interested in the cute blond guy Zack Morris than in Kelly Kapowski, the cutest brunette of the 90s. I didn’t have any access to LGBTQ people or media in small-town Texas, so it was a while before I recognized what my interest in Zack Morris was all about.

So when did you finally come out?

I came out in 2012. I was 22, and it was shortly after moving to D.C. Despite my fear of coming out, and really every effort that I put forward to fight coming out, being in D.C. just yanked the gay right out of me. There’s such an amazingly vibrant queer community in D.C., and I am forever indebted to the queer community there for helping me discover a sense of self-love and pride in being a part of that community.

Joe Castiglione, MBA 21, (right) with his boyfriend, Seth, who helped Joe’s father open up to their relationship.

How did your family take the news?

When I came out to my mom, she secretly told everyone in my family, really depriving me of what I think is for many queer folks a watershed moment in our lives. The rest of my family did struggle with it a lot at first as well. There was the “gay people go to Hell” thing, and the “gay people can’t have children” thing. The hardest was my dad, who took a couple of years to really come around. He started to open up in 2015 when I began dating my partner who I’m still with today. It was almost immediate as my partner is similar to my dad in some ways and has many of the personal qualities that he values. Fortunately, since 2012, we’ve come a super long way as family and today my mom is my fiercest supporter and a huge ally for the entire LGBTQ community. Today she’s one of the “Free Mom Hugs” women at Dallas Pride!

“Being out at Haas was really my first opportunity to be openly queer in a classroom setting.” – Joe Castiglione, MBA 21.

Did your experience as a Q-identified person change at all when you came to Haas?

Being out at Haas was really my first opportunity to be openly queer in a classroom setting. I’ve discovered a new sense of pride and confidence in my queer identity by bringing that perspective into a classroom on things like management and leadership. It’s been a real pleasure to challenge myself to be more thoughtful and more nuanced in the way that I articulate my experience as a queer person in the workplace.

Do those experiences translate into the workplace?

Management and leadership are the big areas where this comes up at work—when we’re talking about how to interact with people, how to manage people individually, and manage to their expectations and things like that. What was so immediately clear to me is that Haas prides itself on intentionally creating environments that cultivate diversity, particularly in leadership. That’s a philosophy that I’ve really taken on since coming here–this desire to push that mission forward.

What’s a challenge that you’ve lived through that others who aren’t Q-identified might not be aware of?

For a long time, I was closeted and struggled with self-love, but coming out and embracing my queer identity has been the biggest gift I could ever give myself. People who aren’t Q-identified may not see that, although I think it’s something everyone can identify with. It may sound cliché but because of this self-love that I’ve found, I’m on this journey of learning how to treat people as you would treat yourself—considering who they are, and what that means for the way that you interact with them, and the way that they interact with the world.

The post Joe Castiglione, MBA 21, on coming out to his devout family appeared first on Haas News | Berkeley Haas.

The spring issue of California Management Review features two new articles by Berkeley Haas faculty.

Senior Lecturer Holly Schroth was motivated by her recent experiences in the classroom to research and write “Are you ready for Gen Z in the workplace?”. As a long-time lecturer at Berkeley Haas, Schroth admits that she wasn’t connecting quite as much with this generation as she had with previous students. “It made me wonder about this group and what they respond to,” she said.

Members of Generation Z, defined as those born between the years of 1997 and 2013, are just beginning to enter the labor market. Like millennials, they are very tech savvy and have spent most of their childhood surrounded by screens, limiting the time they spend in face-to-face interactions. Gen Z also lacks work experience–only 34% of teens had a job in 2015 compared to 60% in 1979. Employers have already observed that recent hires are having trouble adjusting to the social aspects of work in the corporate world.  “Social interaction in the workplace is a language,” Schroth noted. “Thankfully, it can be taught.”

Ultimately, Schroth advises managers to help Gen Z employees foster a sense of autonomy by providing training and then allowing them to take ownership of projects.

Also included in the issue is “Affirmative Action and its Persistent Effects: A New Perspective,” by Berkeley Haas Asst. Prof. Conrad Miller.

Miller, a labor economist in the Haas Economic Analysis & Policy Group, examines how companies responded to temporary federal affirmative action regulation. While under regulation, affirmative action increased a company’s black share of employees. But Miller discovered that the black share of employees continued to grow at a similar pace even after a firm is deregulated. This signals that companies made fundamental shifts in their hiring practices, driven in part by affirmative action rules that induced them to improve their methods for screening potential hires.

This piece builds upon Miller’s recent paper, “The Persistent Effect of Temporary Affirmative Action,” published in American Economics Journal: Applied Economics. Federal affirmative action policies, though controversial, have been demonstrated to substantially improve diversity and representation in schools and the workplace. This research provides further evidence. “If a firm is doing something without a regulation in place, presumably their behavior is consistent with their goals,” Miller said.

Published quarterly by Berkeley Haas, California Management Review is top-ranked management journal that serves as bridge of communication between those who study management and those who practice it.

Read the spring edition of California Management Review.

The post California Management Review features Berkeley Haas research on Gen Z, affirmative action appeared first on Haas News | Berkeley Haas.

Can’t stop checking your phone, even when you’re not expecting any important messages? Blame your brain.

A new study by researchers at UC Berkeley’s Haas School of Business has found that information acts on the brain’s dopamine-producing reward system in the same way as money or food.

“To the brain, information is its own reward, above and beyond whether it’s useful,” says Assoc. Prof. Ming Hsu, a neuroeconomist whose research employs functional magnetic imaging (fMRI), psychological theory, economic modeling, and machine learning. “And just as our brains like empty calories from junk food, they can overvalue information that makes us feel good but may not be useful—what some may call idle curiosity.”

Assoc. Prof. Ming Hsu of the Haas Marketing Group

The paper, “Common neural code for reward and information value,” was published this month by the Proceedings of the National Academy of Sciences. Authored by Hsu and graduate student Kenji Kobayashi, now a post-doctoral researcher at the University of Pennsylvania, it demonstrates that the brain converts information into the same common scale as it does for money. It also lays the groundwork for unraveling the neuroscience behind how we consume information—and perhaps even digital addiction.

“We were able to demonstrate for the first time the existence of a common neural code for information and money, which opens the door to a number of exciting questions about how people consume, and sometimes over-consume, information,” Hsu says.

Rooted in the study of curiosity

The paper is rooted in the study of curiosity and what it looks like inside the brain. While economists have tended to view curiosity as a means to an end, valuable when it can help us get information to gain an edge in making decisions, psychologists have long seen curiosity as an innate motivation that can spur actions by itself. For example, sports fans might check the odds on a game even if they have no intention of ever betting.

Sometimes, we want to know something, just to know.

“Our study tried to answer two questions. First, can we reconcile the economic and psychological views of curiosity, or why do people seek information? Second, what does curiosity look like inside the brain?” Hsu says.

The neuroscience of curiosity

To understand more about the neuroscience of curiosity, the researchers scanned the brains of people while they played a gambling game. Each participant was presented with a series of lotteries and needed to decide how much they were willing to pay to find out more about the odds of winning. In some lotteries, the information was valuable—for example, when what seemed like a longshot was revealed to be a sure thing. In other cases, the information wasn’t worth much, such as when little was at stake.

For the most part, the study subjects made rational choices based on the economic value of the information (how much money it could help them win). But that didn’t explain all their choices: People tended to over-value information in general, and particularly in higher-valued lotteries. It appeared that the higher stakes increased people’s curiosity in the information, even when the information had no effect on their decisions whether to play.

The researchers determined that this behavior could only be explained by a model that captured both economic and psychological motives for seeking information. People acquired information based not only on its actual benefit, but also on the anticipation of its benefit, whether or not it had use.

Hsu says that’s akin to wanting to know whether we received a great job offer, even if we have no intention of taking it. “Anticipation serves to amplify how good or bad something seems, and the anticipation of a more pleasurable reward makes the information appear even more valuable,” he says.

Common neural code for information and money

How does the brain respond to information? Analyzing the fMRI scans, the researchers found that the information about the games’ odds activated the regions of the brain specifically known to be involved in valuation (the striatum and ventromedial prefrontal cortex or VMPFC), which are the same dopamine-producing reward areas activated by food, money, and many drugs. This was the case whether the information was useful, and changed the person’s original decision, or not.

Next, the researchers were able to determine that the brain uses the same neural code for information about the lottery odds as it does for money by using a machine learning technique (called support vector regression). That allowed them to look at the neural code for how the brain responds to varying amounts of money, and then ask if the same code can be used to predict how much a person will pay for information. It can.

In other words, just as we can convert such disparate things as a painting, a steak dinner, and a vacation into a dollar value, the brain converts curiosity about information into the same common code it uses for concrete rewards like money, Hsu says.

“We can look into the brain and tell how much someone wants a piece of information, and then translate that brain activity into monetary amounts,” he says.

Raising questions about digital addiction

While the research does not directly address overconsumption of digital information, the fact that information engages the brain’s reward system is a necessary condition for the addiction cycle, he says. And it explains why we find those alerts saying we’ve been tagged in a photo so irresistible.

“The way our brains respond to the anticipation of a pleasurable reward is an important reason why people are susceptible to clickbait,” he says. “Just like junk food, this might be a situation where previously adaptive mechanisms get exploited now that we have unprecedented access to novel curiosities.”

The post How information is like snacks, money, and drugs—to your brain appeared first on Haas News | Berkeley Haas.

Four Haas students—with career goals ranging from starting an investment fund to helping to grow immigrant-run businesses—have been awarded scholarships by The Financial Women of San Francisco.

A total of 13 undergraduate and graduate students were honored at a June 7 gathering at the City Club in San Francisco. The 30-year-old scholarship program was created to honor women leaders who are pursuing careers in finance, and the scholarships all include a pairing with a mentor

Jie Wang, MBA 20

Jie Wang, MBA 20, a native of China who received a $15,000 scholarship, holds both an English literature degree from Nanjing Normal University and a master’s in accountancy from the University of Notre Dam. She previously worked as an international tax consultant at Deloitte. At Haas, she is the vice president of communications for the Asia Business Club and teaches federal income tax as a graduate student instructor.

Having lived mostly in the South and Midwest, she said she was drawn to the Bay Area for its job opportunities and the chance to make an impact. “Lots of exciting things are happening here,” said Wang, who is interning as an investment banking associate for Deutsche Bank in San Francisco this summer and is interested in the long-term in working on educational development for underprivileged women.

Three undergraduates, Sally Liang, Deeksha Chaturvedi, and Kyung Hee Egoian, all BS 20, were each awarded $10,000 scholarships.

Sally Liang, BS 20

Liang has worked as a finance coordinator for the UC Berkeley student-run Basic Needs Center. She said she’s dedicated to continuing her work in food security and holistic wellness in a nonprofit field.

“Investing my skillsets in a nonprofit would be a good way to put my business education to use and help the next generation resolve their basic needs insecurities so they can become more well-equipped during and after college,” she said.

Last summer, Liang was a finance operations intern at Tesla. This summer, she’s interning with PriceWaterhouseCoopers in corporate tax and plans to get her CPA license after graduation.

Deeksha Chaturvedi, BS 20

Chaturvedi, president of the Berkeley Women in Business club, will be interning this summer in San Francisco at Goldman Sachs’ investment banking division and aspires to run her own investment fund.

She said she is interested in gender equity and helping domestic violence victims gain financial independence. “I started volunteering with human trafficking victims and this opened my eyes to the injustices many women in our community face,” Chaturvedi said.

Kyung Hee Egoian, BS 20

For Egoian, pursuing higher education has been a life-long dream. Formal education wasn’t an option in the small town in Korea where she grew up, she said.  Studying finance became her passion and focus when she moved to the US.

While raising her two children, Egoian worked for 13 years as a finance and administration manager at Save the Bay, a nonprofit aiming to restore and protect SF Bay for wildlife and people. After graduating from Haas, she plans to continue using her business and finance knowledge to help immigrant-run small businesses grow and succeed.

“I enjoyed my work so much that I never once looked at the clock to see if it was time to go home,” said Egoian. “I loved helping people, my staff, and working for a cause to improve our community.”

The post Four Haas women awarded finance scholarships appeared first on Haas News | Berkeley Haas.

Associate professors Yaniv Konchitchki and Panos Patatoukas have won the 2019 Notable Contributions to Accounting Literature Award from the the American Accounting Association.

The award was granted for two co-written papers: “Accounting Earnings and Gross Domestic Product,” featured in the Journal of Accounting and Economics, and “Taking the Pulse of the Real Economy Using Financial Statement Analysis: Implications for Macro Forecasting and Stock Valuation,” featured in The Accounting Review. Both were published in 2014.

The AAA award is given annually to work published within five years that has been evaluated for its uniqueness and potential magnitude of contribution to accounting education, practice and/or future accounting research; breadth of potential interest; originality and innovation, clarity and organization of exposition; and soundness and appropriateness of methodology.

The award, which is sponsored by the American Institute of Certified Public Accountants (AICPA), will be presented at the AAA Annual Meeting in San Francisco on August 14.

Assoc. Prof. Yaniv Konchitchki

Konchitchki is a tenured associate professor Haas Accounting Group. His expertise is in the interdisciplinary links between financial reporting and analysis, capital markets, and macroeconomics. His work focuses on the modeling and resolution of real-world problems aimed at enhancing decision making, dealing with topics such as inflation, economic fluctuations/growth, monetary policy, real estate, inequality, and national accounting. He is a founder of the new research field of Macro-Accounting. Konchitchki has been recognized for his research and teaching as a Bakar Faculty Fellow, a Hellman Fellow, and a Schwabacher Fellow for distinguished research excellence; two Cheit Awards for Distinguished Teaching Excellence; Poets & Quants’ “World’s Top 40 Under 40”; and the American Accounting Association’s Financial Accounting and Reporting Section Best Paper Award.

Assoc. Prof. Panos Patatoukas

Patatoukas is also a tenured associate professor in the Haas Accounting Group, and the L.H. Penney Chair in Accounting. His work focuses on interdisciplinary capital markets research and informs “micro-to-macro” and “macro-to-micro” questions bridging the gap between academics and practitioners. He was honored with the 2018 Distinguished Teaching Award, which is the highest teaching award bestowed by the University of California, Berkeley; the 2017 AAA/AICPA Notable Contributions to Accounting Literature Award; and the 2011 American Accounting Association Competitive Manuscript Award. He was also selected as a “Top-10 Business School Professor Under 40” by Fortune. He is the founding faculty director of the Berkeley executive education program on Financial Data Analysis.

More information about the AAA award can be found here.

The post Profs. Konchitchki and Patatoukas receive prestigious accounting literature award appeared first on Haas News | Berkeley Haas.

The post Prof. Lucas Davis: Nuclear moral hazard appeared first on Haas News | Berkeley Haas.

The post Prof. Laura Tyson: What automation means for the gender gap appeared first on Haas News | Berkeley Haas.

A trip to Montgomery and Selma, Alabama, over Memorial Day weekend led Lisa Rawlings, EMBA 19, to redefine courage.

“Putting myself in my grandparents’ shoes, I realized that courage was not always resistance, but sometimes it was simply endurance, which often required unthinkable compromises to their dignity to save their lives and those of their loved ones,” said Rawlings, whose African American grandmother was born in Alabama and left for Memphis as a teenager.

Left to right: Claire Veuthey, EMBA 19; Travis Adkins; Lisa Rawlings, EMBA 19; John Gribowich EMBA 19; Alexei Greig, EMBA 19; Suprita Makh, EMBA 19; Vansh Makh (Suprita’s husband); and Adam Rosenzweig, EMBA 19, gather in front of the City of Saint Jude Parish in Montgomery, the final campground site for the people who marched from Selma to Montgomery for voting rights.

John Gribowich (who is also a Catholic priest) at the Brown Chapel AME Church, which was the staging area for the beginning of the voting rights march from Selma to Montgomery.

The outside of the National Memorial for Peace and Justice, also called the lynching memorial. "Certain places come to encapsulate large, complex issues: the Temple Mount in Jerusalem, the Berlin Wall, Robben Island," said Adam Rosenzweig. "Without visiting the place, you can’t fully understand the issue. The National Memorial for Peace & Justice has become such a place for anyone seeking to better understand the legacy of racial terrorism in America."

More than 4,300 documented lynchings of African Americans took place between 1877 and 1950. "I was taken aback by the horror we are able to inflict on each other," said Suprita Makh. "I knew this on an intellectual level but it was something else to be confronted with in person, to put names and faces behind numbers."

Jars that contain samples of soil from confirmed lynching sites in Alabama. The victims' names are on the jars. "The sadness and pain I felt while reflecting on the sheer number of people tortured, humiliated and murdered during lynchings or protests... I will not become jaded to the utter terror black Americans experienced for centuries here and continue to experience today," said Alexei Greig.

"In my mind lynchings had been horrendous acts carried out by tens or a few hundred white men in response to perceived slights," said Alexei Greig. "Learning that they were a class of lynchings that were public events with crowds of thousands, with audiences of women and children who took joy in the spectacle was beyond sickening."

"I took this trip to honor the legacy and sacrifice of my grandparents...and all of those before them," Lisa Rawlings said. "I think especially of my grandmother who was born in Alabama and left for Memphis as a teenager. She never looked back and never spoke about her life in Alabama."

"I thought we would have to look harder for signs of “the old South," Adam Rosenzweig said. "I expected that time and modernity would have forced the most visible elements of slavery and racism underground or into sanitized museum exhibits. This was not the case."

The group walked across the Edmund Pettus Bridge, which is named after a Grand Wizard of the KKK. "This shocked everyone in our group," said Adam Rosenzweig. "We all knew the name of the bridge, but we didn’t know who it was named for. It’s a powerful and not uncommon symbol of the centrality of white supremacy in Alabama."

"I’d like to think I would have been part of the freedom fighters, willing to risk my life for equal voting rights," said Claire Veuthey, (left). "But I’m not that brave. I’m pushing myself to consider: what’s the analogy today? What’s the injustice we’re too timid to call out, too frightened to push back against?"

"I still will never comprehend the full extent of the injustice and ongoing plight that exists for people of color," said John Gribowich, left. "I can only try my best each day to be a bit more empathetic and challenge how I am selflessly using my white privilege for the betterment of society."

Rawlings was among a group of six students in the MBA for Executives program who traveled to Alabama to connect the history of racial injustice in America to the present day. Rawlings was joined by Adam Rosenzweig, John Gribowich, a priest who made the same trip last year, Alexei Greig, Claire Veuthey, and Suprita Makh, all EMBA 19.

In Montgomery, the group visited the National Memorial for Peace and Justice, also called the lynching memorial, which opened in 2018 and was built by the the non-profit Equal Justice Initiative. They toured the City of Saint Jude Parish and the Dexter Avenue King Memorial Baptist Church, the first church where Martin Luther King Jr. served as pastor. After visiting the Lowndes Interpretive Center (in 1965, 80% of residents in Lowndes were African-American and not a single one was registered to vote), they walked across the Edmund Pettus Bridge in Selma, the scene of the stand-off between the marchers for voting rights and law enforcement on Bloody Sunday in 1965.

(All photos by John Gribowich and Adam Rosenzweig)

The post EMBA students’ Alabama road trip: Reflections on racial injustice appeared first on Haas News | Berkeley Haas.

A scene from the InnovateHousing conference co-hosted by the Terner Center for Housing Innovation and Fannie Mae in San Francisco last November.

With home prices growing faster than inflation, new home construction falling short of need, and more than a quarter of renters spending half their income on rent, the U.S. is facing a looming housing crisis.

Yet those seeking to make housing cheaper through innovation face a slew of challenges: Housing industry entrepreneurs must navigate a thicket of environmental and other governmental regulations, as well as secure financing for projects that may not fit the industry’s mold.

Enter the new Housing Lab, a first-of-its-kind accelerator specifically for startups seeking to reduce the cost of housing. A collaboration between the Haas School of Business and the College of Environmental Design, the accelerator is housed in the Terner Center for Housing Innovation at the Fisher Center for Real Estate & Urban Economics.

Carol Galante

“The need for innovative solutions and outside-the-box thinking has never been more urgent, and we’re encouraged by the growing number of entrepreneurs who are challenging our antiquated housing system and considering new ways for housing to be more equitable and affordable across the board,” said Terner Center Faculty Director Carol Galante, who previously served in the Obama Administration as U.S. Assistant Secretary for Housing.

The Housing Lab, supported in large part by the Chan Zuckerberg Initiative, aims to help entrepreneurs navigate housing laws and regulations, sharpen their business plans, and locate investors—all with an eye toward making housing less expensive. Applications open June 10 for non-profit and for-profit startups to join an inaugural cohort of five companies. The successful candidates will be announced in September.

Fostering housing innovation

Experts say that the housing industry sorely needs innovation. Median home prices are rising faster than inflation, according to the Joint Center for Housing Studies of Harvard University. And homebuilding isn’t keeping up: The shortfall in new housing construction was recently estimated at 7.3 million units by the Up For Growth National Coalition.

Michelle Boyd, MBA 19

“We know the housing crisis is a complex problem that can’t be solved by innovation alone, but we believe entrepreneurs have a key role to play in contributing to the solution,” said Housing Lab Program Director Michelle Boyd, MBA 19, who began working on the accelerator as a student and is staying on post graduation to lead it. “Because the housing industry is extremely regulated compared with other industries, these entrepreneurs need support.”

Entrepreneurs focused on housing face a huge number of hurdles, including national, state, and local regulations on areas ranging from construction standards and environmental sustainability to rent control and home financing. Local zoning and development plans, often highly politicized, can confound even a savvy and experienced entrepreneur.

Adding to those challenges, many housing innovation startups would have trouble getting accepted into a traditional technology-focused accelerator.

“Most accelerators and VC funds direct the majority of their capital to pure technology-focused innovations, and we think there are a lot of other good ideas out there that may not fit the VC model—either because they’re not a pure tech company, or they’re focused on a more regional market,” Boyd said. “These companies are also asset-intensive, meaning they own and operate real assets and buildings, and there’s is less support for  startups like that. We want to elevate these ideas and connect them to the capital they need to scale.”

Seed funding for housing innovators

Startup candidates for the Housing Lab could include, for example, a company that’s developing a construction method using low-cost yet environmentally friendly building materials, or one that’s promoting a new home-financing product aimed at low-income buyers. Or, a candidate might be producing multi-unit “co-living” structures suited to urban centers, or cottages designed to be tucked behind suburban single-family homes.

Applicants need to demonstrate their ideas’ validity through either customer feedback or extensive market research, and also must be working on their venture on a full-time basis. Candidates should also show a recognition of longstanding problems in the housing industry, such as predatory lending and housing discrimination, and how their venture plans to operate responsibly, Boyd said.

Successful candidates will join the six-month program in the fall and receive seed-funding grants of $100,000 to $150,000. Participants will meet both virtually and in-person at the Terner Center for coaching sessions on developing and scaling their business plans and understanding how best to work in the regulatory environment. In addition to learning about funding sources and meeting potential investors, participants will also gain access to faculty and alumni networks as well as to the Housing Lab’s advisory board of successful entrepreneurs,  government leaders, investors, and housing advocates.

The application can be found at: https://www.housinglab.co/apply.

The post First-of-its-kind accelerator will focus on the housing crisis appeared first on Haas News | Berkeley Haas.

Associate professors Yaniv Konchitchki and Panos Patatoukas have won the 2019 Notable Contributions to Accounting Literature Award from the the American Accounting Association.

The award was granted for two co-written papers: “Accounting Earnings and Gross Domestic Product,” featured in the Journal of Accounting and Economics, and “Taking the Pulse of the Real Economy Using Financial Statement Analysis: Implications for Macro Forecasting and Stock Valuation,” featured in The Accounting Review. Both were published in 2014.

The AAA award is given annually to work published within five years that has been evaluated for its uniqueness and potential magnitude of contribution to accounting education, practice and/or future accounting research; breadth of potential interest; originality and innovation, clarity and organization of exposition; and soundness and appropriateness of methodology.

The award, which is sponsored by the American Institute of Certified Public Accountants (AICPA), will be presented at the AAA Annual Meeting in San Francisco on August 14.

Assoc. Prof. Yaniv Konchitchki

Konchitchki is a tenured associate professor Haas Accounting Group. His expertise is in the interdisciplinary links between financial reporting and analysis, capital markets, and macroeconomics. His work focuses on the modeling and resolution of real-world problems aimed at enhancing decision making, dealing with topics such as inflation, economic fluctuations/growth, monetary policy, real estate, inequality, and national accounting. He is a founder of the new research field of Macro-Accounting. Konchitchki has been recognized for his research and teaching as a Bakar Faculty Fellow, a Hellman Fellow, and a Schwabacher Fellow for distinguished research excellence; two Cheit Awards for Distinguished Teaching Excellence; Poets & Quants’ “World’s Top 40 Under 40”; and the American Accounting Association’s Financial Accounting and Reporting Section Best Paper Award.

Assoc. Prof. Panos Patatoukas

Patatoukas is also a tenured associate professor in the Haas Accounting Group, and the L.H. Penney Chair in Accounting. His work focuses on interdisciplinary capital markets research and informs “micro-to-macro” and “macro-to-micro” questions bridging the gap between academics and practitioners. He was honored with the 2018 Distinguished Teaching Award, which is the highest teaching award bestowed by the University of California, Berkeley; the 2017 AAA/AICPA Notable Contributions to Accounting Literature Award; and the 2011 American Accounting Association Competitive Manuscript Award. He was also selected as a “Top-10 Business School Professor Under 40” by Fortune. He is the founding faculty director of the Berkeley executive education program on Financial Data Analysis.

More information about the AAA award can be found here.

The post Profs. Konchitchki and Patatoukas receive prestigious accounting literature award appeared first on Haas News | Berkeley Haas.