Economics Commons^™

High School Dropout Determinants: The Effect Of Socioeconomic Status And Learning Disabilities, Adrienne Ingrum '06

Honors Projects

Considering the growing importance of higher education due to increased global competition, one might wonder why some students still opt to drop out of high school. Previous literature has focused on a number of determinants of high school dropouts, such as socioeconomic status and learning disabilities. However, this literature has not systematically explored the interaction between these two variables. Therefore, my research extends past literature by focusing on this interaction. A logit model is used to predict the dichotomous variable, high school dropouts, and to run simulations with varying values of the independent variables. The results show that low socioeconomic …

The Effect Of Oil Prices On Exchange Rates: A Case Study Of The Dominican Republic, Jennifer C. Dawson '06

Honors Projects

Oil imports represent a significant fraction of the trade balance for energy-dependant economies. In the case of small open economies with floating exchange rates, the variability in oil prices is expected to have a large impact on the relative value of the currency. Since oil contracts are denominated in US dollars, changes in the price of oil have significant implications for the demand and supply of foreign exchange. This relationship between the price of oil and the exchange rate has been established by the literature for oil-producing countries but not for oil-importing countries. This paper uses the case of the …

The Effects Of 9/11 On The Fire Fighter Labor Market, Kathleen E. Frawley '06

Honors Projects

The purpose of this study is to look at this apparent increase in demand for fire protection services in the theoretical framework of derived demand. The theory of derived demand tells us that the demand for labor in a certain field is determined by the demand for the goods or services produced by that labor (Freeman, 1972). More specifically, we should expect to see a shift to the right of the demand curve for fire fighters from the increased demand for fire protection services since September Eleventh. This should lead to greater employment levels and higher wages in the labor …

The Effect Of Financial Ratios And Market Hype On Short Term Stock Prices, Adam F. Turk '06

Honors Projects

This paper considers possible sources of short term changes in stock price. By predicting these changes, analysts can learn about the forces that drive the stock market enabling investors to earn greater returns. Studies conducted throughout the twentieth century have provided a conclusive basis for stock market analysis. The concept behind these studies is the use of intrinsic ratios to determine a change in stock price. Unfortunately, few studies have produced truly relevant results. This failure led to the introduction of a new variable into stock market analysis: hype. Hype consists of non-market factors that can affect the price of …

Social Security Reform: What Are The Options?, Greg Shaw, Susan Swanlund, Tari Renner

Roundtables

Recorded in 2005, this Roundtable set the social security issue in the context of public opinion, strategies of the political parties, and changes in the Medicare program. The goal of the discussion was to help citizens understand the political and economic challenges confronting the efforts to reform social security.

A transcript of this discussion is available at the download link above and to the right of this page.

Tax Reform: What Are The Options?, James Simeone, Ruth Ann Friedberg, Diego Mendez-Carbajo

Roundtables

This roundtable used the claim-objection-rejoinder format to address the strengths and weaknesses of tax policy reforms brought before the public in 2005. Using a liberal arts format, the discussion aimed to help citizens understand the principles, values and tradeoffs at stake in the tax policy debate.

Predicting Olympic Medal Counts: The Effects Of Economic Development On Olympic Performance, Xun Bian '05

Honors Projects

This paper investigates the relationship between a country's Olympic performance and its overall economic condition, including population, economic resources, and political structures. A panel data set comprising the yearly data of 1996, 2000, and 2004 are estimated by using a fixed-effect Tobit regression model. Following previous studies on this topic, population size and economic resources are measured by using population and per capita GDP. One major focus of this research is the influence of political structure on national Olympic performance. Instead of using a socialist and non-socialist dummy variable like most previous studies, I used continuous variables, political freedom (PF) …

The Effect Of Monopsony Power In Major League Baseball On The Salaries Of Players With Less Than Six Years In The Majors, Andrew Tarman '05

Honors Projects

This research attempts to measure the impact of monopsony power on baseball players with less than six years of experience. Past research indicates that players with less than six years of experience have lower salaries than players with the same productivity and more than six years of experience. To try and combat monopsonistic behavior, baseball player's formed the Players' Union and instituted an arbitration process. Through this process, a third party arbitrator listens to cases from both a player and owner and then chooses either the player's or the owner's salary bid. While this process is intended to help players …

Comparative Study: Factors That Affect Foreign Currency Reserves In China And India, Ana Maria Romero '05

Honors Projects

This paper empirically studies the accumulation of foreign exchange reserves by the countries of India and China. Particularly, it focuses on the determinants of this policy and on the role that the choice of exchange rate regime plays in driving it. Annual data points for the years between 1980 and 2003 were collected and their frequency increased to quarterly through a quadratic match process. The accumulation of foreign exchange reserves in India is best explained as a function of exchange rate volatility and the degree of openness of the economy. The impact of one-time shocks, such as currency devaluations, and …

Language Deficiency And The Occupational Attainment Of Mexican Immigrants, Elizabeth Planas '05

Honors Projects

The number of Mexican immigrants that have entered the U.S. has greatly increased over the past decade. The occupational attainment of these immigrants provides insight into how successful they are in the host country and language deficiency has an effect on this occupational attainment. By controlling for language proficiency, human capital characteristics and other variables from the IPUMS database, this project uses probit analysis to predict the probability that an immigrant will be employed in a favorable occupation in the u.s. Results show that language deficiency reduces the probability of attaining a favorable occupation, but having no English language skills …

Perceived Quality Of Asian Brands In The Automobile Industry, Adrien Gatesman '05

Honors Projects

I use a hedonic pricing model to analyze which characteristics consumers are willing to pay more for, and to determine whether consumers are willing to pay more for one specific brand name when all other factors are held constant. Section II of this paper reviews previous research on demand for automobiles. Section III develops the theory, Section IV explains the empirical model, including the data set, Section V discusses the results, and Section VI concludes with suggestions for future research.

Effect Of Foreign Aid On Development: Does More Money Bring More Development?, Satish Lohani '04

Honors Projects

Developing countries face challenges of massive poverty, slow GDP growth, high mortality rates from illnesses, and low levels of education. The governments in these countries do not have sufficient financial resources to fight these challenges effectively. Foreign aid has played an instrumental role in the implementation of development programs to combat poverty. The purpose of this paper is to examine whether foreign aid has a positive impact on development. Development in this paper is measured using the human development index that incorporates a knowledge index, health index, and standard of living index. Social aid is used to capture foreign aid …

Is There Assessor Bias In The Real Estate Market?, Conor Howard '04

Honors Projects

The purpose of this paper is to determine if the valuation of property adheres to the 33 1/3 proportion of market value required by the state of Illinois or if assessors are overvaluing Bloomington real estate disproportionately across high and low income neighborhoods. Assessors have a motivation to over-value high-income properties disproportionately resulting in intentional and systematic bias which alters the property tax system. The results do not support this idea. They show a lower percent variation between assessed and market values in high-income households.

Democracy, Political Stability, And Developing Country Growth: Theory And Evidence, Ranmali Abeyasinghe '04

Honors Projects

This research project examines the hypothesis that democracy and political stability have significant effects on economic growth in developing countries. Previous empirical studies find rather ambiguous results when testing for the relationship between democracy and growth. This paper extends these past studies by focusing on the effects of democracy and political stability in developing countries. It also attempts to differentiate the effects of political stability and democracy on economic growth. The results suggest that democracy has a negative effect on economic growth. However the results also suggest that political stability regardless of the level of democracy has the greatest effect …

Racial Discrimination In Major League Baseball: Can It Exist When Productivity Is Crystal Clear?, Will Irwin '04

Honors Projects

Minority workers in many industries have dealt with wage and hiring discrimination. In Major League Baseball, it is typically assumed that fair hiring practices are used and that fair wages are offered due to the intense negotiation process involved with each player contract. However, past research shows that both wage and hiring discrimination has been present during some recent time periods. With most industries, racial discrimination is difficult to measure due to the implicit bias in the productivity variables. However, in baseball, productivity can be easily measured with offensive and defensive performance statistics, which are determined completely independent of race. …

The Resource Curse Revisited, Alexis Manning '04

Honors Projects

This research project examines the phenomenon of the resource curse-the inverse relationship between natural resource abundance and economic growth seen in developing countries since 1965. A large body of empirical research detects a negative statistical relationship between natural resource abundance and slow economic growth in developing countries during the latter part of the twentieth century. The resource curse argues that natural resources interact with various social, political, and economic factors, and the modification of these factors results in slower economic growth. This paper aims to investigate the validity of the resource curse. In contrast with many previous studies, the results …

The Effect Of Marital Status On The Standard Of Living Of Young Men And Women, Michael Seeborg

Scholarly Publications

The National Longitudinal Survey of Youth data base is used to explore the effects of changes in marital status on the standard of living of a sample of young adults. OLS regression analysis indicates that changes in marital status have very different effects on young women and young men. Women receive large increases in their income-to-needs ratios when they marry, and they incur large declines in their income-to-needs ratios after experiencing a divorce or separation. Men, on the other hand, do not experience significant changes in their income-to-needs ratios when their marital status changes.

Wage Differentials For Immigrant Women In The U.S., Mahi Garg

Honors Projects

The United States is one of only a handful of nations in which immigrant women outnumber immigrant men. These women come from increasingly diverse regions, thereby bringing considerably different skills to the U.S. workforce. However, the question of how gender and ethnicity interact with each other to affect the economic performance of female immigrants remains especially understudied. Thus, this paper aims at providing some insight into this formerly neglected dimension of female immigrant performance. It examines the sources of wage differentials between immigrant females, and other groups in the U.S. labor force, paying particular attention to earnings inequalities created by …

Local Initiatives And Imf Policies In Quito, Ecuador, Dionissi Aliprantis

University Avenue Undergraduate Journal of Economics

If we are to define development as an increase in the freedoms people enjoy, then we may move beyond structural adjustments and foreign investment as means to create wealth in Ecuador and Latin America. Although not conclusively documented one way or the other [13], microlending is a promising path towards development from this perspective. At the very least, microlending offers hope to a segment of the population that would otherwise be disenfranchised. In Quito, Ecuador, microlending programs are creating wealth and expanding freedoms in a manner consistent with capitalism, while a good deal of IMF policies extract wealth from the …

Re-Examining Venture Capitalist Certification And Insider Selling Decisions During The 1990s., Nicholas S. Koshiw

University Avenue Undergraduate Journal of Economics

This paper addresses the validity of certification and insider selling hypotheses within the context of new issues. Comparisons of venture capital backed and non venture-backed issues with similar offering characteristics show that issuers with venture capital affiliation are more underpriced than non venture-backed IPOs and insider selling results in decreased underpricing. These results contradict the findings of previous venture capital certification studies {Barry (1990), Megginson and Weiss (1991), and Lin and Smith (1997)}, but are consistent with recent work that examines grandstanding {Lee and Wahal (2002)} and insider selling decisions during hot market periods {Ljungqvist and Wilhelm (2003)}.

The Effects Of Ceo Compensation Structure On Reported Earnings And Shareholder Wealth, Kory J. Blumer '03

Honors Projects

Corporate executives are paid at extremely high levels compared to lower-level employees, especially in the United States, and their level of compensation usually does not change based on company performance with respect to competitors, but rather with changes in their company's stock price. It is well known that executive compensation among U.S. corporations is comprised mostly of stock options, sometimes up to 90% of overall compensation (Edgar 2002). These stock options allow executives, namely chief executive officers (CEOs), to cash in big bucks during good times and risk zero losses during bad times.

The Truth About Income Inequality, Juliana Giraldo '03

Honors Projects

Until recently, sustaining high economic growth was thought to be the ultimate goal of development. Unfortunately, economic growth does not necessarily imply an improvement in the standards of living of all of the country's citizens, due to the unequal distribution of income. Income inequality is a problem for both developing and developed nations across the globe, but it is most evident in the great metropolises of the developing world. Much research has been done to determine the true relationship between growth and income inequality and recently, emphasis has shifted to ascertaining exactly what social and economic determinants affect the level …

The Effect Of Supply And Demand Factors On The Affordability Of Rental Housing, Jamie L. Davenport '03

Honors Projects

The difficulty of acquiring affordable rental units remains the most significant concern for low-income households. Despite the strong economic growth of the 1990s, one-third of all households spend more than the recommended thirty percent of their incomes on rental costs. These cost-burdened households face diminishing affordable rental units due to gentrification, rental rates increasing faster than real incomes, and the expiration of government subsidized rental units. The rental market is the focus of this paper since low-income households face the greatest barriers to acquiring affordable housing. This paper uses an empirical analysis of the supply and demand factors affecting affordability …

The Labor Market Of Nurses: A Cobweb Model, Nimish J. Adhia '03

Honors Projects

The labor market of nurses has been plagued by reports of persistent shortages, which raise concerns about the quality of health care. The formulation of appropriate policy intervention requires knowledge of the factors shifting the demand and supply of nurses. This paper develops a model of the nursing labor market, in which the demand and supply curves are identified from the observed employment and wages using econometric techniques. It is found that the short term wage elasticity of supply is not significantly different from zero, and hence the employment trends in the nursing labor market follow a cobweb pattern, where …

The Assimilation Of Immigrants Who Arrived In The United States As Children, Michael Seeborg, Jeremy Sandford

Scholarly Publications

Although there has been much research on the effects of national origin, English speaking ability and educational attainment on the assimilation of immigrants, there has been little work on the effect of age of immigration on assimilation. This paper uses 1990 Census (IPUMS) data to assess the effects of age immigration on the relative earnings performance of 30-year-old immigrant men. Earnings regressions are run for three cohorts of immigrants defined by their age of arrival and a decomposition analysis is conducted to explain earnings gaps between each of the three immigrant cohorts and a sample of nonimmigrant men. We find …

The Effects Of Ethnic Capital And Age Of Arrival On The Standard Of Living Of Young Immigrants, Michael Seeborg, Jeremy Sandford

Scholarly Publications

This paper uses a sample of 30 year old male immigrants from the 1990 Census PUMS data to explore the effects that age of arrival and ethnic capital have on the standard of living of immigrants. It finds that both time of arrival and ethnic capital effect immigrants’ standard of living through a set of interaction effects and indirect effects. In particular, immigrants who arrive as children enjoy greater returns to human capital investments than immigrants who arrive as young adults. Moreover, immigrants who arrive as children are affected less than young adult immigrants by the ethnic capital of the …

Assessing Environmental Externalities Of The Us Coal Base Load Electric Utility Industry Using Data Enveloping Analysis, Faisal Z. Ahmed

University Avenue Undergraduate Journal of Economics

This paper attempts to address two issues. First, is how to objectively measure carbon dioxide emissions from the generation of electricity that uses predominantly coal. Second, is how to incorporate these ‘environmental’ variables into an efficiency model. Using a technique called Data Enveloping Analysis (DEA) a non-parametric piecewise surface (or frontier) over the data is constructed, so as to be able to calculate technical efficiencies (which I call environmental efficiency) relative to this surface. These ‘environmental efficiency’ measures are analyzed. The technique utilized in this study may be extended to calculate each agent’s allocative and scale efficiencies in order to …

Customer Racial Discrimination In The Professional Sports Card Market: The Case Of League Majority Versus Minority, Tyler Forrest

University Avenue Undergraduate Journal of Economics

Previous research finds that customer racial discrimination decreases the price of a non-white baseball player’s card but does not decrease the price of a non-white basketball player’s card. This paper seeks to examine if racial minority or league minority affects the value of a trading card. Using disaggregated player performance data from 1977 we explore this question with baseball cards (in which non-white players are the league minority) and basketball cards (in which white non-players are the league majority). Using Tobit regressions, we find that customer discrimination exists against non-white players in both baseball and basketball leagues.

Reconsidering Gender And Investment In The Intrahousehold Decision-Making Process, Lin Johnson Iii

University Avenue Undergraduate Journal of Economics

In the very recent past, the economics of the household and the economics of development appear to be edging toward a new convergence of concern around the nature and use of assets. However, these two literatures of economics continue to exist in separate spheres. I draw from both bodies of literature in order to examine gender differences in asset portfolios. I find systematic differences in the way that certain assets held by husbands versus wives influence household decision outcomes. A clear understanding of the nature and functions of various types of assets in hands of husbands and wives is necessary …

Housing Preferences Of Spanish-Speaking Migrants, Pueo Keffer

University Avenue Undergraduate Journal of Economics

In this research I attempt to model and investigate the housing decisions of Spanish-speaking migrants. I use methods developed by Bajari and Kahn (2002) to obtain willingness to pay measurements for the migrant groups in samples drawn from three major California cities. I then apply these results to several hypotheses that attempt to describe current migration patterns of Hispanics into increasingly segregated communities characterized by high levels of crowding, low educational attainment, and high levels of Spanish speakers. This research finds that spoken language plays a significant role in a migrant’s decision process. Spanish-speaking migrants demonstrate a significant preference for …