Economics Commons^™

(Wp 2013-10) Neuroeconomics And Identity, John B. Davis

Economics Working Papers

This short paper discusses majority and minority views in economics regarding the value of neuroscience for economics – and thus the value of the neuroeconomics research program. It argues that neuroeconomics’ reception ultimately depends on whether economists adopt a philosophy of science thinking closer to what exists in other sciences. It then argues that an inadvertent product of this debate is whether people can be identified as relatively independent agents. The paper concludes with comments on what this debate implies about the conception of the decision-maker as a relatively independent identity.

(Wp 2013-09) Virtual Currency And The Financial System: The Case Of Bitcoin, Abdur Chowdhury, Barry K. Mendelson

Economics Working Papers

Technological development and the increased use of the internet have led to the proliferation of virtual communities. Some of these communities have created and circulated their own currency for exchanging goods and services. Bitcoin is currently the most popular among these virtual or digital currencies and has been in news recently because of the wild fluctuations in its ‘value’ and also significant venture capital investment in entities associated with it.1 Bitcoin is relevant in several areas of the financial system and is therefore of interest to central banks, consumers and investors. Digital currencies are part of a broader group of …

The Impact Of Interstate Highways On Land Use Conversion, Chris Mothorpe, Andrew Hanson, Kurt Schnier

Economics Faculty Research and Publications

Between 1945 and 2007, the United States lost 19.3 % of its agricultural land. Over the same time period, the construction of the 42,500 mile interstate highway system lowered transportation costs and opened large tracts of land for development. This paper assesses the impact of the interstate highway system on agricultural land loss in Georgia and uses the empirical estimates to simulate agricultural land loss resulting from the construction of additional interstate highways. Using a historical data set of agricultural land and interstate highway mileage, empirical estimates indicate that each additional mile of interstate highway reduces agricultural land by 468 …

Introduction To The Economics Of Social Institutions, John B. Davis, Asimina Christoforou

Economics Faculty Research and Publications

This volume includes thirty-six important contributions to the economics of social institutions by leading figures in the history of the field. Its nine Parts are: Early Contributions, Methodological and Conceptual Issues, Old Institutionalism, New Institutionalism, Social Costs, Growth and Development, Institutions and Change, Institutions and Organizations, and The Third Sphere of the Economy and Institutions. This set of topics provides a comprehensive review of the origins and development of the economics of social institutions. It addresses the main theoretical and policy concerns that have occupied contributors to the approach. The economics of social institutions has a been well-established research program …

Soros’S Reflexivity Concept In A Complex World: Cauchy Distributions, Rational Expectations, And Rational Addiction, John B. Davis

Economics Faculty Research and Publications

George Soros makes an important analytical contribution to understanding the concept of reflexivity in social science by explaining reflexivity in terms of how his cognitive and manipulative causal functions are connected to one another by a pair of feedback loops (Soros, 2013). Fallibility, reflexivity and the human uncertainty principle. Here I put aside the issue of how the natural sciences and social sciences are related, an issue he discusses, and focus on how his thinking applies in economics. I argue that standard economics assumes a ‘classical’ view of the world in which knowledge and action are independent, but that we …

A Note On War And Fiscal Capacity In Developing Countries, Abdur Chowdhury, Syed M. Murshed

Economics Faculty Research and Publications

We examine the effect of war on state fiscal capacity in developing countries, measured by tax revenue to GDP ratios. In divided or factionalised societies, patronage may substitute for common interest public goods, with the possibility of violent contestation over a rent. Our dynamic panel empirical estimates of the determinants of fiscal capacity are applied to 79 developing countries, during 1980–2010. Results indicate that war, especially civil war, retards fiscal capacity, along with poor governance, oil dependence and macroeconomic mismanagement.

(Wp 2013-06) The Impact Of Output And Exchange Rate Volatility On Fixed Private Investment: Evidence From Selected G7 Countries, Abdur Chowdhury, Mark Wheeler

Economics Working Papers

This study examines the impact of shocks to exchange rate and output uncertainty (volatility) on real private fixed investment (FI) in Canada, Germany, the United Kingdom, and the United States. The analysis is conducted using vector autoregressive models that contain the price level, real output, the volatility of real output, the real exchange rate, the volatility of the real exchange rate, an interest rate, and FI. The results yield important public policy implications with regard to the impact of output volatility of FI. Our analysis indicates that volatility shocks, measured as output volatility or exchange rate volatility, do not have …

(Wp 2013-07) Terms Of Trade Shocks And Private Savings In The Developing Countries, Abdur Chowdhury

Economics Working Papers

Economic agents in the developing countries are subject to tight credit constraints, which are more pronounced during bad state of nature. Thus, adverse shocks to commodity prices in the world market can force them to reduce savings by a larger amount than they would otherwise have. Empirical analysis using a dynamic GMM model and data from 45 developing countries confirm that most of the determinants of savings identified in the literature also apply to the developing countries. The transitory component in the terms of trade have a larger positive impact than the permanent component. This reflects the lack of access …

(Wp 2013-08) Economic (In)Security And Gender Differences In Trade Policy Attitudes, Jeffrey Drope, Abdur Chowdhury

Economics Working Papers

Over time and across countries, researchers have noted frequent and mostly unexplained gender differences in the levels of support for policies of free or freer trade: women tend to be less favorable toward policies of liberalizing trade than men. Yet, no well substantiated theoretical or empirical account of the gender component of trade attitudes has emerged. Using an economic security explanation based principally on a mobile factors approach, we find that it is not women generally who are more negative toward trade but particularly economically vulnerable women – i.e. women from the scarce labor factor. We utilize recent survey data …

Learning From Teen Childbearing Experiences Of Close Friends: Evidence Using Miscarriages As A Natural Experiment, Olga Yakusheva, Jason Fletcher

Economics Faculty Research and Publications

We examine peer effects in teen childbearing among close friends, using miscarriages as a natural experiment. We use 775 women from the core sample of Add Health who had a friend with a teen pregnancy. We find a sizable negative treatment effect – a close friend's teen birth is associated with a 6 percentage point reduction in the likelihood of own teen pregnancy and childbearing. There is evidence that this effect operates through a learning mechanism by changing beliefs regarding early childbearing. Effects of teen pregnancy prevention policies may be partially offset by reductions in the opportunities for social learning.

Exchange-Rate Pass Through, Openness, And The Sacrifice Ratio, Joseph P. Daniels, David D. Vanhoose

Economics Faculty Research and Publications

Considerable recent work has reached mixed conclusions about whether and how globalization affects the inflation–output trade-off and suggests that the ultimate effect of openness on the output–inflation relationship is influenced by a variety of factors. In this paper, we consider the impact of exchange-rate pass through and examine how pass through conditions the effect of openness on the sacrifice ratio. We develop a simple theoretical model showing how the extent of both pass through and openness can interact to influence the output–inflation relationship. Next we empirically explore the nature of these two variables and their interaction. Results indicate that greater …

The Political Investment Cycle Within China: The Next Transition And Its Investment Implications, Abdur Chowdhury, Barry K. Mendelson

Economics Faculty Research and Publications

No abstract provided.

Person-Centered Heath Care: Capabilities And Identity, John B. Davis

Economics Faculty Research and Publications

No abstract provided.

Will Dr. Robot Open New Doors For Nurses?, Olga Yakusheva, Richard C. Lindrooth

Economics Faculty Research and Publications

No abstract provided.

(Wp 2013-05) Future Implications Of Debt And Deleveraging In The United States Economy, Abdur Chowdhury, Patrick Brown

Economics Working Papers

This paper will take a broad based approach in analyzing the structure of the U.S. economy with a particular emphasis on the disruptive U.S. recession and financial crisis which began circa 2008. The role of the U.S. government and the implications high levels of fiscal debt have on the projected growth path of the U.S. economy will be the primary focus of the paper. The discussion will show that the U.S. has likely entered a new, much more difficult stage in its history of economic growth. The short to medium term growth potential of the U.S. economy has fallen below …

The Effect Of Foreign Direct Investment On International Migration: Does Education Matter?, Miao Wang, M. C. Sunny Wong, Jim Granato

Economics Faculty Research and Publications

Using migration data in 1990 and 2000, we find that inward foreign direct investment (FDI) in non-OECD countries affects the out-migration of individuals with tertiary and secondary education to OECD countries originating the investments, but has no significant effect on the out-migration of individuals with primary education. Distinguishing between linkage and home effects, our results show a dominant home effect of FDI for individuals with tertiary education, but a stronger linkage effect for those with secondary education. The existing stock of former migrants in foreign countries influences the out-migration of individuals with primary education.

The Geographic Distribution Of The Mortgage Interest Deduction, Andrew Hanson, Ike Brannon, Zackary Hawley

Economics Faculty Research and Publications

The mortgage interest deduction is one of the largest tax expenditures in the U.S. tax code but the rate at which it is claimed and the average amount deducted vary widely across and within states.

With changes to tax expenditures under consideration, data showing the current distribution of the mortgage interest deduction are key to understanding how federal tax decisions would affect the states.

(Wp 2013-03) War And The Fiscal Capacity Of The State, Abdur Chowdhury, Syed M. Murshed

Economics Working Papers

We examine the role of war in retarding state fiscal capacity in developing countries, measured by tax revenue ratios to GDP. This in contrast to the European experience from the Renaissance to the 20th century, where it is believed that war and state-building were inseparable, enhancing the fiscal capacity of the state; in turn enlarging the scope and magnitude of government expenditure. We build a simple theoretical model of a factionalized state, where patronage substitutes for common interest public goods, along with the possibility of violent contestation over a rent or prize, typically in the form of natural resource revenues. …

The Impact Of Early Commitment On Games Played: Evidence From College Football Recruiting, Jesse Brickers, Andrew Hanson

Economics Faculty Research and Publications

We use data on athletic scholarship acceptance decisions to show that high school football players signal their ability level by delaying commitment. Although colleges can obtain information about student athletes, National Collegiate Athletic Association regulations limit information flow, making private information an important component of the scholarship market. Using ordinary least squares, censored regression, and negative binomial estimation, we show that for a given observed ability level, committing to a scholarship offer early is associated with less playing time after acceptance. In one season and at a typical average early signing date, early-committing athletes played in 0.21 fewer games per …

Estimating Discount Factors For Public And Private Goods And Testing Competing Discounting Hypotheses, Andrew G. Meyer

Economics Faculty Research and Publications

The observation of declining discount rates in experimental settings has led many to promote hyperbolic discounting over standard exponential discounting as the preferred descriptive model of intertemporal choice. I develop a new framework, consistent with the random utility model, which directly models the intertemporal utility function and produces explicit maximum likelihood estimates of discounting parameters. I apply this estimation method to a stated-preference survey of river basin cleanup options and revealed-preference lottery payment choices. Formal statistical tests fail to find evidence in support of hyperbolic or quasi-hyperbolic discounting. Annual discount rates range from ten to fourteen percent across the data …

What Can We Learn From The Existing Evidence Of The Business Case For Investments In Nursing Care: Importance Of Content, Context, And Policy Environment, Olga Yakusheva, Douglas Wholey, Kevin D. Frick

Economics Faculty Research and Publications

Decisions of health care institutions to invest in nursing care are often guided by mixed and conflicting evidence of effects of the investments on organizational function and sustainability. This paper uses new evidence generated through Interdisciplinary Nursing Quality Research Initiative (INQRI)-funded research and published in peer-reviewed journals, to illustrate where the business case for nursing investments stands and to discuss factors that may limit the existing evidence and its transferability into clinical practice. We conclude that there are 3 limiting factors: (1) the existing business case for nursing investments is likely understated due to the inability of most studies to …

Existing Evidence Of The Business Case For Investments In Nursing Care, Olga Yakusheva, Douglas Wholey, Kevin D. Frick

Economics Faculty Research and Publications

No abstract provided.

Economists' Odd Stand On The Positive-Normative Distinction: A Behavioral Economics View, John B. Davis

Economics Faculty Research and Publications

This chapter examines economists’ indefensible attachment to the positive-normative distinction, and suggests a behavioral economics explanation of their behavior on the subject. It reviews the origins of the distinction in Hume’s guillotine and logical positivism, and shows how they form the basis for Robbins’ understanding of value neutrality. It connects philosophers’ rejection of logical positivism to their rejection of the positive-normative distinction, explains and modifies Putnam’s view of fact-value entanglement, and identifies four main ethical value judgments that contemporary economists employ. The behavioral explanation of economists’ denial of these value judgments emphasizes loss aversion and economists’ social identity as economists

Economics Imperialism Under The Impact Of Psychology: The Case Of Behavioral Development Economics, John B. Davis

Economics Faculty Research and Publications

Economics imperialism is broadly explained as economics having an impact on other disciplines. But how should economics imperialism be understood when it is in some sense the product of other disciplines having an impact on economics? The paper examines psychology’s impact on economics in connection with the emergence of behavioral development economics, and then discusses the nature of behavioral development economics imperialism associated with development economists’ explanations of non-market dimensions of life in developing economies in behavioral economics terms. The paper argues that this new form of economics imperialism reflects economics’ selective appropriation from psychology of the Kahneman-Tversky heuristics and …

Environmental Performance Of State-Owned And Privatized Eastern European Energy Utilities, Andrew G. Meyer, Grzegorz Pac

Economics Faculty Research and Publications

Privatization in Eastern Europe has helped in the transition of the region's economies from planned to free market. However, the effects of privatization on the environment are relatively unknown and many firms remain under state ownership today. We compare the environmental performance of state-owned and privatized energy utility plants in Eastern Europe utilizing a novel panel data that includes reported sulfur dioxide emissions, energy input, and ownership status. We find that state-owned plants emit more sulfur dioxide than privately owned plants; this is environmentally significant as privatization is associated with a reduction in emissions of about 55%.

(Wp 2013-02) Economists’ Odd Stand On The Positive-Normative Distinction: A Behavioral Economics View, John B. Davis

Economics Working Papers

This chapter examines economists’ indefensible attachment to the positive-normative distinction, and suggests a behavioral economics explanation of their behavior on the subject. It reviews the origins of the distinction in Hume’s guillotine and logical positivism, and shows how they form the basis for Robbins’ understanding of value neutrality. It connects philosophers’ rejection of logical positivism to their rejection of the positive-normative distinction, explains and modifies Putnam’s view of fact-value entanglement, and identifies four main ethical value judgments that contemporary economists employ. The behavioral explanation of economists’ denial of these value judgments emphasizes loss aversion and economists’ social identity as economists.

(Wp 2013-01) Economics Imperialism Under The Impact Of Psychology: The Case Of Behavioral Development Economics, John Davis

Economics Working Papers

Economics imperialism is broadly explained as economics having an impact on other disciplines. But how should economics imperialism be understood when it is in some sense the product of other disciplines having an impact on economics? The paper examines psychology’s impact on economics in connection with the emergence of behavioral development economics, and then discusses the nature of behavioral development economics imperialism associated with development economists’ explanations of non-market dimensions of life in developing economies in behavioral economics terms. The paper argues that this new form of economics imperialism reflects economics’ selective appropriation from psychology of the Kahneman-Tversky heuristics and …

Should We Strive For Zero Risk?, Olga Yakusheva

Economics Faculty Research and Publications

No abstract provided.

Do Spatially Targeted Redevelopment Programs Spillover?, Andrew Hanson, Shawn Rohlin

Economics Faculty Research and Publications

This paper estimates spillover effects from a spatially-targeted redevelopment program, the Federal Empowerment Zone (EZ), on neighboring and economically similar areas. EZs are a set of generous tax incentives and grants aimed at small, economically depressed areas of large U.S. cities. We find areas that border or are economically similar to EZ locations experience a decline in the number of establishments and employment compared to areas that border or are similar to rejected EZ applicants. We also demonstrate that using spillover prone areas to estimate program effects causes upward bias when the spillover is negative. We find that for many …

Til Recession Do Us Part: Booms, Busts, And Divorce In The United States, Abdur Chowdhury

Economics Faculty Research and Publications

A general hypothesis regarding the impact of permanent income levels and business cycle fluctuations on divorce rate at the state level in the United States is analysed in this article. Based on the data for 45 states over the sample period of 1978–2009, it is shown that the higher the level of transitory income, the higher the incidence of divorce. In other words, divorce is pro-cyclical.