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Economics Department Working Papers

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Full-Text Articles in Social and Behavioral Sciences

Can New Orleans Play Its Way Past Katrina? The Role Of Professional Sports In The Redevelopment Of New Orleans, Victor Matheson, Robert Baade Feb 2006

Can New Orleans Play Its Way Past Katrina? The Role Of Professional Sports In The Redevelopment Of New Orleans, Victor Matheson, Robert Baade

Economics Department Working Papers

Hurricane Katrina devastated the city of New Orleans in late August 2005, and debates are now underway across the country concerning strategies for reconstructing the City. A key to redevelopment involves encouraging former citizens and businesses to return. Both of New Orleans’s professional sports teams, the National Football League Saints and the National Basketball Association Hornets, have taken up residence in other cities, and the question of what the city should provide in the way of financial accommodation to encourage them to return should be considered in devising a reconstruction plan. Infrastructure to facilitate professional sports and mega-events constitutes a …

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Environmental Contamination And House Values, Katherine Kiel Jan 2006

Environmental Contamination And House Values, Katherine Kiel

Economics Department Working Papers

A house is a bundle of many goods: The number of bedrooms, bathrooms, the quality of local public services, the tidiness of a neighbor’s yard, and the quality of the local environment. If transactions in the housing market reflect the interaction of informed buyers and sellers, then the price that the house sells for is the sum of the prices the buyer is willing to pay for each individual characteristic of the house. It is this notion that motivates environmental economists to study property values. If individuals consider the local environment as a component of the house they purchase, then …

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Predicting The Path To Recovery From Hurricane Katrina Through The Lens Of Hurricane Andrew And The Rodney King Riots, Robert Baade, Robert Baumann, Victor Matheson Oct 2005

Predicting The Path To Recovery From Hurricane Katrina Through The Lens Of Hurricane Andrew And The Rodney King Riots, Robert Baade, Robert Baumann, Victor Matheson

Economics Department Working Papers

Hurricane Katrina caused the greatest damage of any hurricane in American history. We look at the rebuilding effort in New Orleans through the lens of two other disasters that occurred in 1992: Hurricane Andrew in Miami and the Rodney King riots in Los Angeles. The rebuilding effort in New Orleans shares similarities with both events, combining the impact of a hurricane on infrastructure and private businesses, and the prospect of an uneven recovery biased against racial minorities and the economically disadvantaged. Using the experience of the King riots, our concern is that the rebuilding effort will be modest at best …

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Development And Food Demand Changes: Production And Management Implications, Norman Rask, Kolleen Rask Aug 2005

Development And Food Demand Changes: Production And Management Implications, Norman Rask, Kolleen Rask

Economics Department Working Papers

Per capita food consumption and production changes during economic development are analyzed using a resource-based cereal equivalent measure. Diet up-grades to livestock products during economic development contribute to an increase in per capita food resource use by a factor of five or more. Food consumption changes are generally consistent across countries and are only marginally affected by a country’s food production resource base (land). Food consumption increases tend to exceed food production increases in early stages of development, leading to food import needs. In later stages of development, per capita food consumption stabilizes. Continued increases in production allow the closing …

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Examining The Halo Effect In Lotto Games, Victor Matheson, Kent Grote Aug 2005

Examining The Halo Effect In Lotto Games, Victor Matheson, Kent Grote

Economics Department Working Papers

The "Halo Effect" occurs when lotto ticket sales are unexpectedly high following a large jackpot. An examination of the Powerball lottery finds evidence that the halo effect exists and that it is the result of bettors exchanging prize winnings for new tickets.

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Conflicts In Development: Tourism And The Cattle Industry In Brazil, Nicholas Sanchez, John F. O'Connell Aug 2005

Conflicts In Development: Tourism And The Cattle Industry In Brazil, Nicholas Sanchez, John F. O'Connell

Economics Department Working Papers

This paper challenges the conventional view that where there is a political elite, economic development will proceed along lines that sacrifice future generations for the benefit of the current ruling class. We find that shortfalls in the balance of payments will cause those in authority to promote activities that encourage tourism as a solution to balance of payments deficit. The vehicle for generating tourism is the provision of public goods. More traditional paths toward development particularly cattle ranching are displaced by tourist attractions. While motivated by myopic self-interest, the pursuit of public goods reduces the amount of debt transferred to …

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Have Public Finance Principles Been Shut Out In Financing New Sports Stadiums For The Nfl In The United States?, Victor Matheson, Robert Baade Jul 2005

Have Public Finance Principles Been Shut Out In Financing New Sports Stadiums For The Nfl In The United States?, Victor Matheson, Robert Baade

Economics Department Working Papers

Over the past 15 years, new stadiums in the National Football League have been built at an unprecedented rate, and most new facilities have utilized significant public funds. This paper looks at whether the methods used to finance these new facilities honored public finance principles regarding equity, efficiency, and transparency. An examination of the 20 NFL stadiums constructed or refurbished since 1992 reveals a trend towards more voter referendums and an increase reliance on taxation of visitors through hotel and rental car taxes. Although taxation of persons living outside one’s own metropolitan area is appealing, this paper suggests that the …

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Selling The Big Game: Estimating The Economic Impact Of Mega-Events Through Taxable Sales, Robert Baade, Robert Baumann, Victor Matheson Jul 2005

Selling The Big Game: Estimating The Economic Impact Of Mega-Events Through Taxable Sales, Robert Baade, Robert Baumann, Victor Matheson

Economics Department Working Papers

Professional sports leagues, franchises, and civic boosters, have used the promise of an all star game or league championship as an incentive for host cities to construct new stadiums or arenas at considerable public expense. Past league-sponsored studies have estimated that Super Bowls, All-Star games and other sports mega-events increase economic activity by hundreds of millions of dollars in host cities. Our analysis fails to support these claims. Our detailed regression analysis of taxable sales in Florida over the period 1980 to 2004 reveals that on, average, mega-events ranging from the World Cup to the World Series have been associated …

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Rationality, Tort Reform And Contingent Valuation: A Classroom Experiment In Starting Point Bias, Victor Matheson Jun 2005

Rationality, Tort Reform And Contingent Valuation: A Classroom Experiment In Starting Point Bias, Victor Matheson

Economics Department Working Papers

This simple classroom experiment demonstrates the existence of starting point bias. Asked to place a dollar value on a non-market good such as the loss of a limb or the destruction of a wetland, students place a much smaller value on the loss if a small value is first suggested by the questioner while placing a significantly higher value on the loss when a large value is originally suggested. This experiment can be used in theory classes to demonstrate the limits of individual rationality or in applied classes in law or environmental economics in relation to tort reform or contingent …

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Striking Out? The Economic Impact Of Major League Baseball Work Stoppages On Host, Victor Matheson, Robert Baade Apr 2005

Striking Out? The Economic Impact Of Major League Baseball Work Stoppages On Host, Victor Matheson, Robert Baade

Economics Department Working Papers

Major League Baseball teams have used the lure of economic riches as an incentive for cities to construct new stadiums at considerable public expense. Estimates of the economic impact of a MLB on host communities have typically been in the vicinity of $300 million. Our analysis suggest these numbers are wildly inflated. Using the baseball strikes of 1981, 1994, and 1995 as test cases, we find the net economic impact for a MLB team on a host city of $16.2 million under one model and $132.3 million under a second model.

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An Analysis Of The Impact Of Multiple Environmental Goods On House Prices, Katherine Kiel, Michael Williams Mar 2005

An Analysis Of The Impact Of Multiple Environmental Goods On House Prices, Katherine Kiel, Michael Williams

Economics Department Working Papers

It seems an established empirical fact that Superfund sites lower local property values. Two recent literature reviews (Farber, 1998, Boyle and Kiel, 2001) report that published academic papers on the topic verify that point. The EPA’s approach assumes that all sites negatively impact property values, and that the impact is similar for all sites. This paper examines 74 National Priorities List (NPL) sites in 13 U.S. counties in order to test these two implicit assumptions. Following the hedonic approach of Kiel (1995) and Kiel and McClain (1995), we find that some sites have the expected negative impact, while other sites …

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Research Note: Athletic Graduation Rates And Simpson’S Paradox, Victor Matheson Mar 2005

Research Note: Athletic Graduation Rates And Simpson’S Paradox, Victor Matheson

Economics Department Working Papers

Graduation rates for male athletes overall as well as men’s football and basketball players lag behind those of male non-athletes at Division I colleges and universities. Scholarship athletes, however, are much more likely to be drawn from racial and ethnic groups with lower average graduation rates. After accounting for differences in racial composition, graduation rates for male athletes overall as well football players match or exceed those of their peers, and racial differences account for over one-quarter of the shortfall in men’s basketball graduation rates. This is a classic example of Simpson’s Paradox.

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The Paradox Of Championships: Be Careful What You Wish For, Sports Fans, Victor Matheson, Robert Baade Feb 2005

The Paradox Of Championships: Be Careful What You Wish For, Sports Fans, Victor Matheson, Robert Baade

Economics Department Working Papers

This paper examines issues related to the economic impact of sports championships on the local economy of host cities. While boosters frequently claim a large positive effect of such championships, a closer examination leads to the conclusion that the impact is likely much smaller than touted and may even be negative.

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A Fall Classic? Assessing The Economic Impact Of The World Series, Victor Matheson, Robert Baade Feb 2005

A Fall Classic? Assessing The Economic Impact Of The World Series, Victor Matheson, Robert Baade

Economics Department Working Papers

An empirical analysis of the economic impact of the Major League Baseball’s postseason on host-city economies from 1972-2001 suggests that any economic benefits from the playoff are small or non-existent. An examination of 129 playoff series finds that any increase ineconomic growth as a result of the post-season is not statistically significantly different than zero and that a best guess of the economic impact is $6.8 million per home game. As a general method of economic development, public support of a baseball team’s attempt to reach the World Series should be seen as a gamble at best.

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Consequences Of Announcements To Voluntarily Adopt The Fair Value Method Of Accounting For Stock-Based Compensation, Shilpa Manaktala, John D. Phillips, Karen Teitel Dec 2004

Consequences Of Announcements To Voluntarily Adopt The Fair Value Method Of Accounting For Stock-Based Compensation, Shilpa Manaktala, John D. Phillips, Karen Teitel

Economics Department Working Papers

We identify 133 firms that between July and December 2002, announced plans to voluntarily adopt the fair value method of accounting for stock-based compensation. We investigate whether such announcements increased the quality of these firms’ earnings as perceived by market participants. Answering this research question not only provides evidence relevant to the debate surrounding the expensing of employee stock options, but doing so provides evidence that conservative accounting choices in general lead to higher perceived earnings quality. Using two measures of earnings quality, the price-earnings relation and the earnings response coefficient, we find evidence consistent with an increase in perceived …

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Applying Intermediate Microeconomics To Terrorism, Charles Anderton, John Carter Dec 2004

Applying Intermediate Microeconomics To Terrorism, Charles Anderton, John Carter

Economics Department Working Papers

The authors show how microeconomic concepts and principles are applicable to the study of terrorism. The utility maximization model provides insights into both terrorist resource allocation choices and government counterterrorism efforts, while basic game theory helps characterize the strategic interdependencies among terrorists and governments.

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Do Policy-Makers Earmark To Constrain Their Successors? The Case Of Environmental Earmarking, Neva Novarro Dec 2004

Do Policy-Makers Earmark To Constrain Their Successors? The Case Of Environmental Earmarking, Neva Novarro

Economics Department Working Papers

This paper examines whether legislators earmark funds in order to constrain the spending of future legislators with different preferences. Specifically, panel data is used to estimate the probability a new environmental earmarking law is passed as a function of Democrats holding and subsequently losing majority control of the government. The results of this study do not support this hypothesis. In fact, Democrats with a large majority who subsequently lose this majority power following the next election are found to be less likely to earmark funds for the environment. One possible explanation for this finding may be that competing forces make …

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Currencies, Identities, Free Banking, And Growth In Early Twentieth Century Manchuria, Thomas Gottschang Dec 2004

Currencies, Identities, Free Banking, And Growth In Early Twentieth Century Manchuria, Thomas Gottschang

Economics Department Working Papers

From 1906 until 1931, Manchuria – Northeast China - was a complex patchwork of Chinese, Japanese, and Russian spheres of control. Since political authority was fragmented, none of the governments was capable of establishing a central bank with a monopoly over the money supply. Multiple currencies were in use, ranging from strings – tiao- of traditional Chinese copper cash, to silver dollars (yuan) from Mexico, China, and Japan, to Russian rubles (which crashed in value after the 1917 Bolshevik Revolution), and miscellaneous paper currencies of varying stability. The modern banks established under national and private auspices to serve the commercial …

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Vulnerable Trade: The Dark Side Of An Edgeworth Box, Charles Anderton, John Carter Dec 2004

Vulnerable Trade: The Dark Side Of An Edgeworth Box, Charles Anderton, John Carter

Economics Department Working Papers

We examine incentives to seize and defend goods offered for trade in an Edgeworth box economy. Appropriation possibilities generate an equilibrium of coerced redistribution and voluntary trade in a reduced box. Potential mutual gains remain untaken because the prospect of piracy creates a price wedge, wherein the effective relative price is lowered for the exporter and raised for the importer. As the vulnerability of one or both goods increases, the price wedge widens, causing trade to diminish. If vulnerability becomes sufficiently high, then trade and appropriation are driven to zero, or one or both players are rendered indifferent to trade.

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Dueling Jackpots: Are Competing Lotto Games Complements Or Substitutes?, Victor Matheson, Kent Grote Nov 2004

Dueling Jackpots: Are Competing Lotto Games Complements Or Substitutes?, Victor Matheson, Kent Grote

Economics Department Working Papers

This paper considers the relationship that exists between two lottery products offered simultaneously in the same state, a smaller lottery game run by the individual state and a larger multi-state game run in coordination with other states. The primary issue is whether the two different products should be considered substitutes or complements for one another. The question is considered from two different perspectives that lead to a conclusion that while the two products do tend to be complements to one another, overall the individually run state lottery games experience a reduction in sales from the presence of the multi-state game.

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Is Smaller Better? A Comment On "Comparative Economic Impact Analyses" By Michael Mondello And , Victor Matheson Nov 2004

Is Smaller Better? A Comment On "Comparative Economic Impact Analyses" By Michael Mondello And , Victor Matheson

Economics Department Working Papers

In a recent article in Economic Development Quarterly, "Comparative Economic Impact Analyses: Differences Across Cities, Events, and Demographics" (November 2004), Michael Mondello and Patrick Rishe examined the economic impact of small, amateur sporting events on host economies. This response to their work suggests four reasons why ex ante economic impact estimates for smaller sporting events may come closer to matching ex post reality than those for "mega-events" including less crowding out, lower hosting costs, higher multipliers, and less incentive for boosters to published inflated figures.

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The Effects Of Labor Strikes On Consumer Demand: A Re-Examination Of Major League Baseball, Victor Matheson Oct 2004

The Effects Of Labor Strikes On Consumer Demand: A Re-Examination Of Major League Baseball, Victor Matheson

Economics Department Working Papers

Previous research has concluded that the 1981 and 1994/95 Major League Baseball (MLB) strikes have caused short-term losses in attendance but have not resulted in any long-term effects on attendance. While total attendance at MLB games following the 1994/95 strike has recovered to its pre-strike levels, this has been done only through the construction of new stadiums at an unprecedented pace which cannot continue into the future. After accounting for stadium effects, average MLB baseball attendance has dropped significantly since the 1994/95 strike.

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Mega-Sporting Events In Developing Nations: Playing The Way To Prosperity?, Victor Matheson, Robert Baade Sep 2004

Mega-Sporting Events In Developing Nations: Playing The Way To Prosperity?, Victor Matheson, Robert Baade

Economics Department Working Papers

Supporters of mega-sporting events such as the World Cup and Olympics claim that these events attract hoards of wealthy visitors and lead to lasting economic benefits for the host regions. Developing countries have become increasingly vocal in demanding a share of the economic benefits of these international games. The specialized infrastructure and operating expenses required to host these events, however, can be substantial. Independent researchers have found that boosters’ projections of the economic impact of sporting events exaggerate the true economic impact of these competitions, and these events are an even worse investment for developing countries than for industrialized nations.

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Padding Required: Assessing The Economic Impact Of The Super Bowl, Victor Matheson, Robert Baade Sep 2004

Padding Required: Assessing The Economic Impact Of The Super Bowl, Victor Matheson, Robert Baade

Economics Department Working Papers

Civic boosters generally have estimated the Super Bowl to have an impact of $300 to $400 million on a host city’s economy. The National Football League has used the promise of an economic windfall to convince skeptical cities that investments in new stadiums for their teams in exchange for the right to host the event makes economic sense. Evidence from host cities from 1970-2001 indicates the Super Bowl contributes approximately one-quarter of what the boosters have promised and that the game could not have contributed by any reasonable standard of statistical significance, more than $300 million to host economies.

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Economic Multipliers And Mega-Event Analysis , Victor Matheson Jun 2004

Economic Multipliers And Mega-Event Analysis , Victor Matheson

Economics Department Working Papers

Critics of economic impact studies that purport to show that mega-events such as the Olympics bring large benefits to the communities “lucky” enough to host them frequently cite the use of inappropriate multipliers as a primary reason why these impact studies overstate the true economic gains to the hosts of these events. This brief paper shows in a numerical example how mega-events may lead to inflated multipliers and exaggerated claims of economic benefits.

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In Search Of A Fair Bet In The Lottery, Victor Matheson, Kent Grote Jun 2004

In Search Of A Fair Bet In The Lottery, Victor Matheson, Kent Grote

Economics Department Working Papers

Although state-operated lotto games have the worst average expected payoffs among common games of chance, because the jackpot can accumulate, the maximum expected payoff is potentially unlimited. It is possible, therefore, that lotto can exhibit a positive expected return. This paper examines 18,000 drawings in 34 American lotteries and finds approximately 1% of these drawings provided players with a fair bet. If it were possible for a bettor to purchase every possible combination, however, most lotteries commonly experience circumstances where such a purchase would provide a positive return with 11% of the drawings providing a fair bet to the player.

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