Finance and Financial Management Commons^™

Gambling Away Stability: Sports Betting’S Impact On Vulnerable H, Scott R. Baker, Justin Balthrop, Mark J. Johnson, Jason Kotter, Kevin Pisciotta

Faculty Publications

We estimate the causal effect of online sports betting on households’ investment, spending, and debt management decisions using household transaction data and a staggered difference-in-differences framework. Following legalization, sports betting spreads quickly, with both the number of participants and frequency of bets increasing over time. This increase does not displace other gambling or consumption but significantly reduces savings, as risky bets crowd out positive expected value investments. These effects concentrate among frequent bettors and low-savings households. Our findings highlight the potential adverse effects of online sports betting on vulnerable households.

Linear And Asymmetric Interactions Of Bank And Stock Market Development In The Face Of Global Economic Uncertainty: A Focus On The Nigerian Economy, Augustine C. Arize, Ebere Ume Kalu, John Malindretos, Srinvias Nippani

Faculty Publications

This study explores the functional interaction between bank development and stock market development in the face of uncertainty variables. The geography of the study is one of the largest economies in Africa—Nigeria—regarding the following variables: credit to the private sector (CPS), broad money (M2) stock market capitalization (MCAP), and industrial production (IP), which are all scaled by the gross domestic product (GDP) and used in natural log form. Additionally, we included the natural logarithm of a measure of monetary policy uncertainty, which represents the uncertainty variable. In terms of methodology, the study uses monthly time series data from 1990:M1-2022M4 (384 …

Who Invests In Crypto? Revealed Types And Economic Drivers Of Retail Investment, Darren Aiello, Scott R. Baker, Tetyana Balyuk, Marco Di Maggio, Mark J. Johnson, Jason Kotter

Faculty Publications

Using transaction-level data from millions of U.S. households, we provide the first comprehensive characterization of retail cryptocurrency investment. Crypto investors are distinguished not by demographics but by a latent behavioral type revealed through consumption patterns—one that also predicts higher participation in traditional equity brokerages. The economic forces driving crypto investment, including income shocks, workplace peer effects, and inflation exposure, mirror those driving traditional investment. Crucially, households whose consumption matches the crypto-investor profile are more responsive to all these drivers across both asset classes, suggesting that investor type is a more relevant distinction than asset class.

When Money Moves In: The Consequences Of Housing Wealth, Darren Aiello, Jason Kotter, Gregor Schubert

Faculty Publications

We construct a novel dataset of millions of household moves over 25 years to examine how housing wealth affects purchase decisions. We find that a $1 exogenous increase in housing equity leads movers to pay a $0.06 premium on their next home, controlling for property characteristics and time-varying local prices. This behavior is driven by search frictions— wealthier households pay a premium rather than incur additional search costs. In aggregate, these decisions spill over to the broader housing market and cause upward regional price pressure. A 10% increase in equity gain among incoming movers increases local house price growth by …

When Money Moves In: The Consequences Of Housing Wealth, Darren Aiello, Jason Kotter, Gregor Schubert

Faculty Publications

We construct a novel dataset of millions of household moves over 25 years to examine how housing wealth affects purchase decisions. We find that a $1 exogenous increase in housing equity leads movers to pay a $0.06 premium on their next home, controlling for property characteristics and time-varying local prices. This behavior is driven by search frictions— wealthier households pay a premium rather than incur additional search costs. In aggregate, these decisions spill over to the broader housing market and cause upward regional price pressure. A 10% increase in equity gain among incoming movers increases local house price growth by …

From Disruption To Integration: Cryptocurrency Prices, Financial Fluctuations, And Macroeconomy, Zhengyang Chen

Faculty Publications

This paper examines cryptocurrency shock transmission to financial markets and the macroeconomy using a Bayesian structural VAR with Pandemic Priors from 2015 to 2024. By affecting overall risk appetite, cryptocurrency price shocks generate positive financial market spillovers, accounting for 18% of equity and 27% of commodity price fluctuations. Real economic effects are significant in driving investment but remain limited, contributing only 4% to unemployment and 6% to industrial production variance. However, cryptocurrency shocks explain 18% of price-level forecast error variance at long horizons. Narrative analysis reveals sentiment and technology as primary shock drivers. These findings demonstrate cryptocurrency's deep financial system …

Distribution Comparisons Of Eac Cost Growth For Aircraft Work Breakdown Structure Elements, Kyle P. Marquis, Edward D. White, Brandon M. Lucas, Robert D. Fass, Jonathan D. Ritschel, Shawn M. Valentine

Faculty Publications

This article analyzes and investigates the distribution of cost growth of the Estimate at Completion (EAC) for the Work Breakdown Structure (WBS) elements of approximately 60 historical United States Acquisition Category I Research, Development, Test and Evaluation aircraft programs. Using the method of maximum likelihood in conjunction with the Akaike Information Criterion, the authors suggest that both the lognormal and Weibull distributions provide relatively good fit to EAC cost growth, with the lognormal slightly edging out the Weibull. As a summarized finding, the authors present their empirical results for the mean, coefficient of variation (CV), the 15th and 85th percentiles …

Analyzing Stability Of Estimates At Completion For Long Duration Development Efforts, Bradley Vuu, Jonathan D. Ritschel, Brandon M. Lucas, Edward D. White

Faculty Publications

Defense program managers utilize Earned Value Management (EVM) methodologies to measure, report, and predict the cost and schedule performance of their programs. Previous research conducted by Christensen (1996) and Kim et al. (2019) has shown varied results in the stability of EVM Estimates at Completion (EACs). Stability is defined as a 10% or less deviation from the final EAC at a specified percent completion point of the program. The Christensen (1996) and Kim et al. (2019) studies also noted that program-specific factors, such as phase, can impact the accuracy of EVM metrics. This study builds upon those works by assessing …

The Marginal Value Of Public Pension Wealth: Evidence From Border House Prices, Darren Aiello, Asaf Bernstein, Mahyar Kargar, Ryan Lewis, Michael Schwert

Faculty Publications

We study how state pension windfalls affect property prices near state borders, where theory suggests real estate reflects the value of additional public resources. Windfalls, representing a source of state revenue about half the size of total taxes, provide economically significant and plausibly exogenous variation in fiscal conditions. We find that each dollar of pension asset returns increases border house prices by approximately two dollars, suggesting that governments allocate additional funds towards high-value projects or tax abatement rather than wasting incremental resources. Evidence of larger effects in financially constrained municipalities highlights how fiscal resources amplify welfare effects of economic shocks.

Correlate Of Savings Attitude And Generational Poverty As Mediated By Financial Literacy: Evidence From Ghana, Adu Bismark Owusu-Sekyere, Williams Kwasi Peprah [email protected]

Faculty Publications

This study examines the mediating role of financial literacy between savings attitudes and generational poverty in Ghana. Generational poverty is a significant issue in Ghana, with a multidimensional poverty rate of 45.6% and a consumer expenditure poverty rate of 23.4%. The problem persists due to low financial literacy and poor savings attitudes, which hinder economic growth and development. The research employed a quantitative methodology, utilizing a series of regression analyses to test the mediation effects of financial literacy. A correlational design was adopted to assess the relationships between the variables. The study’s population included 400 individuals from the five regions …

Predictors Of Audit Quality: A Confirmatory Study, Joseph Philip Kambey, Williams Kwasi Peprah [email protected], Lenny Leorina Evinta, Cecilia Lelly Kewo

Faculty Publications

This study investigated the predictors of audit quality according to registered external auditors in Indonesia. Even though there are improvements in audit reports and practices, there is still some fraud and audit risk that affects the credibility of financial reports. This research is based on a random sample technique where 304 registered external auditors in Indonesia answered self-constructed research instruments and their validity was ascertained with exploratory factor analysis, where they resulted as good. The first-party distributed data were analyzed with multiple regression to determine the predictors of audit quality. The study revealed that internal controls, governance, and audit culture …

Production Box Cost Estimating Relationships For Dod Avionics, Carla J. Cisneros, Edward D. White, Brandon M. Lucas, Jonathan D. Ritschel, Robert D. Fass, Shawn M. Valentine

Faculty Publications

The authors use historical information obtained from the Cost Assessment Data Enterprise to estimate recurring production unit cost for DoD avionics via cost estimating relationships (CERs). The specific modeled responses include mean unit cost, median unit cost, and the 100th production unit cost (T100) utilizing learning curve theory. For T100, the authors adopt both a multiplicative and an additive error for CER comparison. Recommended CERs consist of the mean unit cost and the T100 utilizing a multiplicative error. Moreover, results reveal that weight has a significant effect on cost as well as a potential underaccounting of real price change or …

The Mediating Effect Of The Covid-19 Pandemic On Heuristic Techniques And Cognitive Biases On Investment Decision-Making, Williams Kwasi Peprah, Christopher Ampadu Kwakwah-Oppong, Francis Osei-Kuffour, Lenny Leorina Evinita

Faculty Publications

US investors’ behavioral finance and investment decision-making approach became a concern during the COVID-19 pandemic era as the capital market crashed. The study used mediation analysis to explain how or why the COVID-19 pandemic intervened in the causal association of behavioral finance concepts of heuristic techniques and cognitive biases on their investment decision-making. This causal research design study was based on 500 snowball-sampled US investors who answered self-constructed, validated, and reliability-tested Likert-scale quantitative variables measured through a first-party data collection approach. The results showed that the COVID-19 pandemic was a specific moderate to partial significant mediator on the low positive …

Assessing Energy Mutual Funds: Performance, Risks, And Managerial Skills, Srinvias Nippani, Davinder Malhotra

Faculty Publications

This study investigates the risk-adjusted performance of energy equity mutual funds across a 23-year period, employing the Cumulative Wealth Index (CWI) to gauge their long-term performance relative to benchmark indices. Despite inherent volatility due to the energy sector’s cyclical nature, these funds consistently outperformed benchmarks based on monthly returns, showcasing resilience amid market fluctuations. However, challenges emerged during the COVID-19 pandemic, with notable improvements post-vaccination. Utilizing a multi-factor model, the research highlights the interconnectivity of energy equity mutual funds with broader market movements and systemic factors. Despite their primary focus on the energy sector, these funds exhibit sensitivity to larger …

The Impact Of Changing Disclosure Requirements, Competition, And Private Capital On Firm Exit Methods And Premiums, James C. Brau, Ninon K. Sutton, Qiancheng Zheng

Faculty Publications

Changing disclosure requirements and the evolution of US markets in the 21st century have created historic shifts in the exit strategies and payoffs for private firms. The propensity to sell to an acquirer has dominated firm exits in recent decades, especially for smaller private firms in highly concentrated industries. Exceptions to the merger exit preference are venture capital‐backed firms, which exhibit an enduring preference for IPOs, likely due to the reputation effects associated with this strategy. While the premium for IPO exits has exceeded that for M&A exits in the past, we document a reversal in this pricing trend: in …

The Efects Of Cryptocurrency Wealth On Household Consumption And Investment, Darren Aiello, Scott R. Baker, Tetyana Balyuk, Marco Di Maggio, Mark Johnson, Jason Kotter

Faculty Publications

We use bank transaction data from millions of U.S. households to:

1. Characterize retail crypto investing
2. Examine the efect of crypto wealth on consumption and investment behavior
3. Zoom in on the efect of crypto wealth on housing spending
4. Document spillovers of crypto wealth to the local economy

The Mediating Effect Of Financial Literacy On Blockchain Technology Application And Financial Risk: Insight From Ghanaian Professionals Toward Policy Recommendations, Maxwell Okpoti Mensah, Williams Kwasi Peprah [email protected]

Faculty Publications

This study explores the mediating effect of financial literacy on the relationship between blockchain technology application and financial risk among financial institution professionals in Ghana. Utilizing a correlational research design, data were collected from a sample of 336 professionals through a self-constructed Likert-scale questionnaire. The analysis was conducted using path analysis and mediation techniques. The findings reveal that financial literacy had a significant partial mediating effect between blockchain technology application and financial risk, accounting for 26.0% of the total effect. The direct negative effect of blockchain technology applications on financial risk also remained significant, highlighting the independent contribution of blockchain …

Unattended In-Home Delivery Under Varying Scenarios Of Technology-Enabled Anonymity, James C. Brau, Hugo A. Decampos

Faculty Publications

Whereas many companies have explored attended in-home delivery as one solution to challenges associated with last mile delivery, few have explored unattended in-home delivery. This paper examines consumer willingness to allow unattended in-home delivery under various scenarios of anonymity. Specifically, we study how blockchain-enabled anonymity of sellers, delivery companies, and consumers can influence consumer willingness to allow unattended in-home delivery of a nutritional product in this last mile service triad. Hypotheses build on agency theory and the potential for information asymmetry and opportunism. The analyses are based on data from 784 responses to an online survey of end-consumers who were …

Cost Estimation Trends For Major Defense Acquisition Programs, Sammantha Jones, Edward D. White, Jonathan D. Ritschel, Shawn M. Valentine

Faculty Publications

The authors use both descriptive and inferential techniques to investigate average and standard deviation trends in cost estimates for major defense acquisition programs (MDAPs) grouped into decades from the 1970s to 2010s. For total program-cost-growth factors (CGFs), the 2010s exhibited lower CGFs compared to the 1990s. For the program-acquisition-unit cost (PAUC) CGFs, the 2010s appear lower than the 1990s and borderline lower than the 1970s. A statistically significant decreasing trend in the standard deviations of total program CGFs throughout the decades was identified. This lowering variability trend also appeared for PAUC CGFs from the 1980s onward. This finding appears to …

Automatic Enrollment With A 12 Percent Default Contribution Rate, Josh Beshears, Ruofei Guo, David Laibson, Brigitte C. Madrian, James J. Choi

Faculty Publications

We study a retirement savings plan with a default contribution rate of 12 percent of income, which is much higher than previously studied defaults. Twenty-five percent of employees had not opted out of this default 12 months after hire; a literature review finds that the corresponding fraction in plans with lower defaults is approximately one-half. Because only contributions above 12 percent were matched by the employer, 12 percent was likely to be a suboptimal contribution rate for employees. Employees who remained at the 12 percent default contribution rate had average income that was approximately one-third lower than would be predicted …

Initial Public Offerings And The Local Economy: Evidence Of Crowding Out, Jess Cornaggia, Matthew Gustafson, Jason Kotter, Kevin Pisciotta

Faculty Publications

We test the effect of going public on economic growth in the areas surrounding IPO firms. We focus on IPO-filing firms, thus ensuring that both treatment and control firms are at similar life cycle stages, and use post-filing stock market fluctuations as an instrument for IPO completion. We show that IPOs that are large relative to the size of their counties lead to a 1.1 percentage point relative reduction in annual county-level establishment growth, with similar effects for employment and population growth. There are no corresponding effects for relatively small IPOs. These negative effects appear to be driven by a …

The Effects Of Cryptocurrency Wealth On Household Consumption And Investment, Darren Aiello, Scott R. Baker, Tetyana Balyuk, Marco Di. Maggio, Mark Johnson, Jason Kotter, Emily Williams

Faculty Publications

We use bank transaction data from millions of U.S. households to:

1. Characterize retail crypto traders
2. Explore the drivers of crypto adoption
3. Examine the effect of crypto wealth on consumption and investment
4. Document spillovers of crypto wealth to the local economy

Monetary Policy Transmission Channels And The Performance Of The Real Sectors In Selected Sub-Saharan African Countries: A System-Gmm Approach, Ifeoma Florence Onaga, Augustine C. Arize

Faculty Publications

This study investigated the impact of monetary policy channels on the real sector performance in selected subSaharan African countries. This study covers the period 1990 to 2020. The broad objective of the study was to examine the impact of monetary policy transmission channels on the real sectors of selected sub-Saharan African countries within the period, 1990–2020. Using the system generalized method of moments (sys-GMMs) amidst other preestimation and post-estimation tests, it was discovered that credit and exchange rate channels positively drove agricultural productivity, while interest rate channel exerted a negatively significant influence. Conversely, credit and exchange rate channels were found …

Life After Death: A Field Experiment With Small Businesses On Information Frictions, Stigma, And Bankruptcy, Shai Bernstein, Emanuele Colonnelli, Mitchell Hoffman

Faculty Publications

In an RCT with US small businesses, we document that a large share of firms are not well-informed about bankruptcy. Many assume that bankruptcy necessarily entails the death of a business and do not know about Chapter 11, where debts are renegotiated so that the business can continue operating. Firms also exhibit bankruptcy-related stigma, believing that bankruptcy is embarrassing, a sign of failure, and a negative signal to employees and customers. Short educational videos that address information or stigma increase knowledge and decrease stigma, both immediately and durably over 4 months. Videos increase reported interest in using Chapter 11 bankruptcy …

A Randomized Trial Of Behavioral Nudges Delivered Through Text Messages To Increase Influenza Vaccination Among Patients With An Upcoming Primary Care Visit, Mitesh S. Patel, Katherin L. Milkman, Linnea Gandhi, Heather N. Graci, Dena Gromet, Brigitte C. Madrian

Faculty Publications

Purpose: To evaluate if nudges delivered by text message prior to an upcoming primary care visit can increase influenza vaccination rates.

Design: Randomized, controlled trial.

Setting: Two health systems in the Northeastern US between September 2020 and March 2021.

Subjects: 74,811 adults.

Interventions: Patients in the 19 intervention arms received 1-2 text messages in the 3 days preceding their appointment that varied in their format, interactivity, and content.

Measures: Influenza vaccination.

Analysis: Intention-to-treat.

Results: Participants had a mean (SD) age of 50.7 (16.2) years; 55.8% (41,771) were female, 70.6% (52,826) were White, and 19.0% (14,222) were Black. Among the interventions, …

Blockchain In Supply Chain Management: A Feature-Function Framework For Future Research, James C. Brau, John Gardner, Hugo A. Decampos, Krista Gardner

Faculty Publications

Purpose – Blockchain technology offers numerous venues for supply chain applications and research. However, the connections between specific blockchain features and future applications have been unclear to date in its evolution. The purpose of this study is to fill this void.

Design/methodology/approach – The authors advance the understanding of blockchain in supply chain management by providing a new research framework built on unique blockchain features as applied across core supply chain functions.

Findings – This study’s framework is a feature-function matrix that integrates four overarching supply chain functions (i.e. supplier management, logistics, production processes and customer management) with nine blockchain …

The Effects Of Cryptocurrency Wealth On Household Consumption And Investment, Darren Aiello, Scott R. Baker, Tetyana Balyuk, Marco Di Maggio, Mark Johnson, Jason Kotter, Emily Williams

Faculty Publications

Key Results:

• Retail crypto investors hold crypto as one part of a broader portfolio
• Inflation expectations drive crypto investment
• Marginal propensity to consume (MPC) out of crypto wealth is big!
• Households use crypto wealth to purchase housing
• As a result, crypto wealth shocks spill over into local house prices

Land Prices And The Development Process, Henry J. Munneke, C. F. Sirmans, Barrett Slade

Faculty Publications

As lot area increases, it is commonly believed that land prices will increase at a nonconstant rate. In the case where the land price-area curve increases at a decreasing rate with respect to parcel area, it is believed the cost of subdividing land is the driving factor behind the concavity. This paper uses a unique data set to explore how the area elasticity of price changes over the development cycle as land moves from raw land to finished lots. The results show the area elasticity of price increases as parcels of land move through the phases of development. The results …

Explaining Racial Disparities In Personal Bankruptcy Outcomes, Bronson Argyle, Sasha Indarte, Benjamin Iverson

Faculty Publications

We document substantial racial disparities in consumer bankruptcy outcomes and investigate the role of racial bias in contributing to these disparities. Using data on the near universe of US bankruptcy cases and deep-learning imputed measures of race, we show that Black filers are 21 and 3 percentage points (pp) more likely to have their bankruptcy cases dismissed without any debt relief in Chapters 13 and 7, respectively. We uncover strong evidence of racial homophily in Chapter 13: Black filers are 10 pp more likely to be dismissed when randomly assigned to a white bankruptcy trustee. To interpret our findings, we …

Fintech Lending With Lowtech Pricing, Mark J. Johnson, Itzhak Ben-David, Jason Lee, Vincent Yao

Faculty Publications

FinTech lending—known for using big data and advanced technologies—promised to break away from the traditional credit scoring and pricing models. Using a comprehensive dataset of FinTech personal loans, our study shows that loan rates continue to rely heavily on conventional credit scores, including 45% higher rates for nonprime borrowers. Other known default predictors are often neglected. Within each segment (prime/nonprime) loan rates are not very responsive to default risk, resulting in realized loan-level returns decreasing with risk. The pricing distortions result in substantial transfers from nonprime to prime borrowers and from low- to high-risk borrowers within segment.