Digital Commons Network^™

Disamenity Or A Signal Of Competence? The Empirical Political Economy Of Local Road Maintenance, Benjamin Blemings, Margaret Bock

Economics Faculty Working Papers Series

Empirical results find different conclusions than theoretical evidence of how electorates perceive road work. This paper uses a geographically smaller unit of analysis than prior work, political alignment, local election cycles, and difference-in-differences. It finds political distortions in invasive road maintenance timing and rules out maintenance seasonality. Spatial discontinuity plots leveraging ward boundary cutoffs confirm the shift. Results identify new public distortions to road maintenance, local election cycles, which are widespread and frequent. The estimates are used to calculate financial costs of local elections on road maintenance. Local elections have cost medium-large U.S. cities over $185.5 million from 1960- 2020.

Total Factor Productivity And Idiosyncratic Volatility Trends, Hussein Abdoh, Yu Liu

School of Economics and Finance Faculty Publications

Firms’ idiosyncratic stock return volatility has become more volatile in the US since the 1960s. This paper investigates why individual stocks became more volatile over the 1964–2013 period using firm-level total factor productivity (TFP). On average, the volatility of idiosyncratic TFP growth rate has increased, being associated with higher idiosyncratic return volatility. The connection between TFP growth and economic profits provides an explanation for the increase in the idiosyncratic volatility of fundamental cash flows. The results are robust when using timeseries and panel regressions and controlling for cash flow and earnings variability, size, book-to-market, leverage, profitability, age, dividend yield, and …

Determinants Of County-Level Poverty Rates In 2017: An Upper-Midwest Comparison, Trey V. Perez

Undergraduate Economic Review

The American upper-Midwest as a region throughout the 2010s has experienced lower-than-average poverty rates. This paper seeks to uncover the determinants that have the greatest impact on the county-level poverty rates for five states (Iowa, Minnesota, Wisconsin, and the Dakotas). Outcomes for this study came from an Ordinary Least Squares (OLS) regression to estimate the impact each independent variable had on the poverty rate. The empirical results showed the unemployment rate, the percentage of households headed solely by females, and percent of the population that was Native American in 2017 had a significant impact on a county’s poverty rate.

Immigrants And Their Voting Power In Nevada, Elia Del Carmen Solano-Patricio, Caitlin J. Saladino, William E. Brown Jr.

Demography

This Fact Sheet presents the number of both documented and undocumented immigrants in Nevada, synthesizing data provided by New American Economy (NAE), a bipartisan research non-profit organization. To estimate the total number of immigrants in the U.S. and across each of the 50 states, researchers reviewed various data sources including the U.S. Census, the American Community Survey, the Center for Migration Studies, and the United States Citizenship and Immigration Services (USCIS).

Hyman Minsky: An Advocate Of Big Government, Juan Ramon Rallo

Journal of New Finance

In The End of Laissez Faire (1926) and in The General Theory of Employment, Interest and Money (1936), Keynes advocated a new model of the State which put an end to the laissez faire and leave to the Government the task of reaching macroeconomic stability through monetary, fiscal and even demographic control of investment. One of the most original and modern thinkers within this Keynesian tradition in defense of “Big Government” was the post-keynesian economist Hyman Minsky. The Great Recession has revived and reinvigorated the minskyian positions up to the point of becoming a “required reading” especially for central bankers …

Buffett’S Derivatives: Disruptive Financing At Low Cost, Florencia Roca, Juan Carlos Sanchez Meyer

Journal of New Finance

The well-established methodology for valuing options, the Black & Scholes formula, has been successfully challenged by Warren Buffet; who not only has been critical of the formula for the case of long-dated options, but has also applied a different approach in multi-billion derivative contracts. We study Berkshire Hathaway’s Equity Put transactions from a value-investing point of view. We show that Buffett is not using them as speculative investments, but as a disruptive -and cheap- financing source. We uncover Buffett’s methodology for valuing long-dated Equity Puts as long-term loans.

Is Modern Finance Geared Up To Support Financial Regulation?, Massimiliano Neri

Journal of New Finance

The chief intellectual assumptions behind financial regulation are that capital markets are efficient and market participants act rationally. These assumptions have always been subject to some challenges and their empirical verification occupies a large portion of modern finance literature. Nevertheless, they represented the leading financial market theory during the decades preceding the 2007-8 crisis. The crisis demonstrated that modern theory does not allow for solid risk assessment and reliable macroeconomic forecasting. Such challenges suggest that modern finance may be facing a paradigm crisis. While a debate must be opened to assess how to move forward from the current mainstream paradigm, …

Sanctuary Cities And Their Respective Effect On Crime Rates, Adam R. Schutt

Undergraduate Economic Review

According to the U.S. Center for Immigration Studies (2017), cities or counties in twenty-four states declare themselves as a place of “sanctuary” for illegal immigrants. This study addresses the following question: Do sanctuary cities experience higher crime rates than those cities that are not? Using publicly available data, this regression analysis investigates the relationship between crime rates in selected cities and independent variables which the research literature or the media has linked to criminal activity. Results of this research reveal that sanctuary cities do not experience higher violent or property crime rates than those cities that are not sanctuary cities.

Effect Of Unemployment Length On Employment Expectations, Kamyar Kamyar

Undergraduate Economic Review

Unemployment often has devastating effects on individuals -- both in financial and psychological terms. Depending on the type and category of unemployment, its length varies; and as its length increases it may implement biased thought in individuals’ predictions regarding future employment. This paper’s primary purpose is to measure and discuss how the time length that one has been unemployed for affects his or her expectations on his or her own short-term possibility of employment. The results suggest a strong opposite link between one’s prediction of future employment and the same person’s prior unemployment period. This paper was originally written in …

Examining The Popularity Concept In The Initial Public Offering (Ipo) Market, Preston Rad

University Honors Theses

Popularity is the act of being liked. In Popularity: A Bridge Between Classical and Behavioral Finance, authors Roger Ibbotson, Thomas Idzorek, Paul Kaplan, and James Xiong (hereafter IIDX) explore the concept of Popularity in capital market theory. IIDX argue that certain companies have Popular characteristics that leads to overpricing caused by a Popularity premium. This paper begins with an overview of the historical methods of asset pricing, starting with the Capital Asset Pricing Model (CAPM). It progresses through the expansion of the model by financial theorists such as Eugene Fama and Kenneth French. Jay Ritter (1991) has documented the …

Rural Transportation Conference Participants’ Opinions And Concerns Pertaining To Transit For Older Adults, James W. Mjelde, Rebekka M. Dudensing, Geoffrey Battista, Jonathan Brooks, Maria Carrillo, Blane Counsil, Anil Giri, Man-Keun Kim, V. Dimitra Pyrialakou

Applied Economics Faculty Publications

Mobility remains a vital part of the well-being of rural-living, older adults and transportation disadvantaged persons. This study seeks to identify research and policy needs related to rural transit for older people and the transportation disadvantaged. To obtain this goal, the multidisciplinary study team conducted two activities as part of a 2016 rural transportation conference: a survey of conference attendees and open discussion to elicit additional information. Results suggest the attendees felt the need for rural transit for older adults would continue to increase with public and private funding being critical issues. Respondents had similar opinions about challenges and opportunities …

Alternatives To High Nebraska Agricultural Land Real Estate Taxes, Part 2 Of 2: Like-Kind Exchange, Austin Duerfeldt

Extension Farm and Ranch Management News

In part one of this series of articles, I touched on the idea that, when holding land as an investment, considering alternatives is important. We discussed the process of selling the ground, paying the capital gains and then investing in alternatives such as stocks. Here in part two, we will continue to consider the question of agricultural land being the correct investment for your portfolio but will take a different alternative approach. Now, we will look at like-kind exchanges.

1031 Like-Kind Exchange

With a 1031 like-kind exchange, we are taking a real property asset and exchanging it for another real …

Regional Household Economic Stress And Retail Sales Fluctuations, Thomas M. Fullerton Jr., Ana P. Gutierrez-Zubiate

Departmental Papers (E & F)

Economic stress indices are used to monitor business cycle conditions in several regions.Although the deployment of these tools is spreading, there have been relatively few efforts to empirically assess the performance of these gauges, especially at the regional level.This study takes advantage of one such index that is published monthly and has more than 15 years of historical data.Results obtained confirm an inverse relationship between household economic duress and retail sales activity, but it is not found to be statistically reliable over the long-run.Deviations from equilibrium are found to last for 142 months.More relevantly, a 1-point increase in the index …

An Analysis Of Emerging Technology's Impact On Accounting: Creating A Brand - Accountable - To Update Professionals In The Field, Patricia Brynn Schmidt

Undergraduate University Honors Capstones

It is an extremely exciting time for the accounting profession in terms of possibility. Many emerging technologies and innovations are set to disrupt our current paradigm. With new technology, our roles and responsibilities will shift. Some speculate certain technologies, such as machine learning and artificial intelligence, will result in the obsolescence of the accounting career. While it is true the field we know today will change, it will not dissolve completely. The dissemination of pertinent information about these changes must be extensive, timely, and accessible so accounting firms and professionals can adapt to the changes to stay relevant. My project …

Shocks To Aggregate Demand And Aggregate Supply In The Midst Of Covid-19, Anna M. Gellerman

Publications and Research

COVID-19 sent shockwaves throughout the economy, changing the amounts of goods and services distributed and altering the demand. This article discusses the negative demand shock and adverse supply shock that the U.S. economy faced in 2020, and the policies that the government implemented to reverse these effects.

Essays On Asset Pricing: A Model Comparison Perspective, Lingxiao Zhao

Arts & Sciences Graduate Student Theses and Dissertations

In my dissertation, I focus on theoretical and empirical asset pricing from a Bayesian model comparison perspective. In the first Chapter, revisiting the framework of Barillas and Shanken (2018), BS henceforth, we show that the Bayesian marginal likelihood-based model comparison method in that paper is unsound: the priors on the nuisance parameters across models must satisfy a change of variable property for densities that is violated by the Jeffreys priors used in the BS method. Extensive simulation exercises confirm that the BS method performs unsatisfactorily. We derive a new class of improper priors on the nuisance parameters, starting from a …

Oil Price Changes And Unemployment Rate In The U.S. And Chile, Agamani Maity

Master's Theses

Abstract

There is a recurring question in theoretical, empirical and policy work is what the effects of higher oil prices are on the country’s macroeconomic aggregates. Empirical evidence in support of the view that fluctuation in the economy due to the interaction of macroeconomic variables is caused by oil price was based on inappropriate econometric models. These studies do not capture the composition of the price of oil that is affected by the exogenous oil shocks and has an indirect or direct impact on the macroeconomic aggregates. In this study, we decompose the change in oil prices into three structural …

Age Appropriate Wisdom? Ethnobiological Knowledge Ontogeny In Pastoralist Mexican Choyeros, Eric Schniter, Shane J. Macfarlan, Juan J. Garcia, Gorgonio Ruiz-Campos, Diego Guevara Beltran, Brenda B. Bowen, Jory C. Lerbak

ESI Working Papers

We investigate whether age profiles of ethnobiological knowledge development are consistent with predictions derived from life history theory about the timing of productivity and reproduction. Life history models predict complementary knowledge profiles developing across the lifespan for women and men as they experience changes in embodied capital and the needs of dependent offspring. We evaluate these predictions using an ethnobiological knowledge assessment tool developed for an off-grid pastoralist population, known as Choyeros, from Baja California Sur, Mexico. Our results indicate that while individuals acquire knowledge of most dangerous items and edible resources by early adulthood, knowledge of plants and animals …

Multiproduct Intermediaries, Andrew Rhodes, Makoto Watanabe, Jidong Zhou

Cowles Foundation Discussion Papers

This paper develops a new framework for studying multiproduct intermediaries when consumers demand multiple products and face search frictions. We show that a multiproduct intermediary is profitable even when it does not improve consumer search efficiency. In its optimal product selection, it stocks high-value products exclusively to attract consumers to visit, then profits by selling non-exclusive products which are relatively cheap to buy from upstream suppliers. However, relative to the social optimum, the intermediary tends to be too big and stock too many products exclusively. As applications we use the framework to study the optimal design of a shopping mall, …

Regional Airlines, Benjamin Jones Jr.

Student Works

The airline industry plays a major role in the United States. Many passengers use air transportation as a major mode of traveling for business and personal. As the demand for traveling increased, pilot shortage has increased as well. A pilot shortage will devastate the economy and have a lasting effect that will be felt worldwide. However, sources predict that the United States will experience a sizable pilot shortage over the next few years. This paper will identify the reasons for the pilot shortage and discuss the devastating effects that the shortage has on the regional airline industry. In addition, this …

Japanese Whaling And The International Whaling Commission, Tea Barndt

Departmental Honors & Graduate Capstone Projects

This project examines the effect the International Whaling Commission has had on the Japanese Whaling Industry. Economic research into this field has been limited, and new analyses are needed considering Japan’s recent departure from the International Whaling Commission and resumption of commercial whaling. In particular, we seek to determine whether the 1986 moratorium banning commercial whaling has had a significant impact on the quantity of whales harvested by Japanese whaling vessels. Although this project did not find that the moratorium significantly impacted whale harvesting, there is a number of limitations to this research that suggest further study is required.

The Effect Of Revenue-Source Mix On Student Performance In Mississippi K-12 Public Schools, Sally Boswell

Honors Theses

Local, state, and federal funding for public schools have different stipulations on how they are used. Local revenue is more flexible, state revenue is controlled by the Mississippi Adequate Education Program (MAEP) guidelines, and federal revenue is targeted to specific areas. MAEP largely impacts all public school funding through not only state revenue stipulations, but also through its funding formula that sets a minimum contribution per district for state funding. This thesis investigates how a district’s revenue mix of these three different types of funding impacts student performance (ACT scores and graduation rates) in K-12 public school districts across Mississippi. …

An Economic Analysis Of The Short-Term Rental Market: Local Regulatory Decisions, Joseph L. Kauffman, Harrison D. Hooper

Senior Honors Projects, 2020-current

In recent years, short-term home rental companies such as Airbnb and Vacation Rentals by Owner (VRBO) have grown in popularity throughout the United States and the world. The lack of regulation of this rapid growth, which stemmed from the legal grey area these rentals fall under, caused some states to adopt specific regulatory policies. These regulatory policies attempt to better monitor this sector, to tax rental earnings, and to reduce perceived negative externalities to this new market. This thesis researches the benefits and costs that short-term rentals (STRs) provide to cities and the regulatory implications on the growing rental market. …

Place-Based Policy: An Essay In Two Parts, Timothy J. Bartik

Upjohn Institute Policy Papers

Place-based policies that increase jobs in local labor markets can have large benefits, but current policies need reforms. Local job growth can have large benefits by increasing local employment-to-population ratios (employment rates). These employment rate benefits are larger if jobs are created in local labor markets that are distressed, or if new jobs are matched to the local nonemployed. Current place-based policies are mostly business tax incentives, provided by state and local governments. These incentives are costly per job actually created by the incentive. More cost-effective job creation are public services to businesses, such as customized job training or business …

Comovement And Instability In Cryptocurrency Markets, Pierangelo De Pace, Jayant Rao

Pomona Economics

We analyze the extent of comovement between daily price returns of nine major cryptocurrencies during the first three main phases of their development, from April 2013 to November 2018. We assess its evolution using bivariate and multivariate modelling approaches, and detect pronounced time variation. Generally, comovement is initially low and positive, but increases between early 2017 and late 2018. We then adopt a right-tail version of the Augmented Dickey-Fuller unit root test to identify periods of mildly explosive behavior (statistical instability) in the Network Value to Transactions (NVT) ratio (a measure of the dollar value of cryptocurrency transaction activity relative …

Racial Justice Is Climate Justice: Racial Capitalism And The Fossil Economy, Julius Mcgee, Patrick Trent Greiner

Urban Studies and Planning Faculty Publications and Presentations

The narrative of oppression moves through dialectical pressures. Capitalism evolved from the feudal order that preceded it, creating new forms of racial oppression that benefited an emerging ruling class [1]. Racial tensions evolve alongside economic oppression that subjugates labor to capital. The preceding racial order molds to emerging mechanisms of expropriation and exploitation by way of force and resistance. Beneath the surface of these tensions lies the interconnected threads of ecological and human expropriation. At the heart of all oppression, lies the manipulation of reproduction. The social processes necessary to reproduce black and brown communities, the ecological processes necessary to …

Reviving The Philippine Economy Under A Responsible New Normal, Edsel L. Beja Jr, Fernando T. Aldaba, Alvin P. Ang, Cristina Bautista, Tristan A. Canare, Jan Frederick Cruz, Jerome Patrick Cruz, Geoffrey Ducanes, Luis F. Dumlao, Noel De Guzman, Cielito Habito, Leonardo A. Lanzona Jr, Rodolfo Ledesma, Joseph Lim, Genesis Kelly Lontoc, Marjorie Muyrong, Gerald Pascua, Ser Percival Pena-Reyes, Marilou Perez, Majah-Leah V. Ravago, Dino Saplala, Joselito Sescon, Patrick Simon-King, Rosalina Palanca-Tan, Philip Arnold Tuaño, Victor S. Venida

Economics Department Faculty Publications

After the reclassification of areas under enhanced community quarantine (ECQ) to general community quarantine (GCQ), the urgent task for the Philippine government is to provide an exit plan to revive the Philippine economy. Given the significant economic damage resulting from the shutdown of roughly 75 percent of the country’s total production in the National Capital Region (NCR) and in the CALABARZON and Central Luzon areas, a gradual reopening of the economy will be necessary to prevent further economic damage that could not only be difficult to repair, but also long to overcome. Indeed, based on recent directives from the government, …

Female Labor Force Participation And Economic Growth: Granger Causality Test, Zulakha Rahman

Theses and Dissertations

Does rising female labor force participation precede economic growth, or does the relationship run in the other direction? This paper addresses this question by performing a Granger causality test to examine the relationship between economic growth and female labor force participation worldwide. The economic growth –is measured in two ways: using Growth Domestic Product, Purchasing Power Parity (constant 2011 international dollar) and Growth Domestic Product using local currency units. The test uses a completely balanced panel dataset spanning over 28 years from 1990 to 2018 and using 151 countries for Purchasing Power Parity dataset and 154 countries in GDP in …

Currency Internationalization: The Case Of The Rmb, Daniel Powell

Business and Economics Honors Papers

Currency internationalization could be considered as one of the primary facets of globalization in the modern world. Today, the US dollar accounts for nearly eighty-five percent of all global transactions, both in trade and finance. However, as China’s power has risen in the past few decades, many have pondered whether the Chinese currency, the RenMinBi (RMB), can internationalize. This study examines the literature on what components create an international currency. Then, we examine the characteristics of China’s financial markets and international relations to become familiar with the scholarly discourse surrounding China’s financial markets, international influence, and monetary stability. We then …

Is Tuition Free College The Golden Ticket? A Time Series Analysis Of Germany’S Higher Education Policy, 1990-2017, Hannah Wolfram

Business and Economics Honors Papers

Countries which have been able to offer free tertiary education are being applauded while the United States tries to find a way to rectify its high tertiary education costs. Germany has accomplished a system of subsidized higher education since the 1950s, making it seem highly successful. In order to investigate the potential benefits of subsidized higher education, this study uses a time series regression analysis to investigate the relationship between tertiary unemployment rate and public spending as a share of the Gross Domestic Product (GDP) in Germany over the period 1990-2017. The regression analysis corrected for multi-collinearity and serial correlation, …