Economics Commons^™

Explaining The Wage Gap Between Contingent And Noncontingent Workers, Nicole Skalski '01

Honors Projects

An important labor market trend is the rapid increase of the contingent workforce. Contingent workers are members of the workforce who do not perceive themselves as having an explicit or implicit contract for continuing employment. Under this definition, it is estimated that 6 million workers are classified as contingent. Researchers have discovered a pay gap between contingent and noncontingent workers. Hipple, in his 1998 study, argued that median earnings were $266 per week for contingent workers, compared with $444 for the noncontingents. The purpose of this project is to explore what causes this income differential by using the National Longitudinal …

The Great Divide: A Comparison Of Kentucky And Ohio Counties Along The Ohio River (1840-1860), Jennie Berry

University Avenue Undergraduate Journal of Economics

This paper operates under an opposite assumption and, instead, argues that the Kentucky-Ohio border is an ideal test case for the null hypothesis that the institution of slavery per se had no significant economic effects. Kentucky and Ohio counties tracing the Ohio River are composed of the same soil and face similar weather conditions (Blanford, 2001; Barnhisel, 2001; Foster, 2001). Both regions likewise claim the same geographical access to outside markets.

The Economics Of Dowry: Causes And Effects Of An Indian Tradition, Tonushree Jaggi

University Avenue Undergraduate Journal of Economics

I argue that dowries exist because of a combination of two reasons. First, there is an excess supply of women in the Indian marriage market that results in the use of dowry as an equilibrating mechanism. Secondly, a differential in the patterns of human capital accumulation of men and women have led to a larger positive benefit from marriage for women than for men, the net difference of which is theoretically equivalent to the amount of the dowry. Both these explanations for the existence of dowry are fundamentally grounded in the powerful social and cultural ideologies of marriage held by …

Relationships Among Wine Prices, Ratings, Advertising, And Production: Examining A Giffen Good, Carol Miu

University Avenue Undergraduate Journal of Economics

It has become increasingly popular for statistics to be used in the prediction of wine prices. In fact, the prices of mature wines produced in the Bordeaux region of France have been accurately predicted by vintage growing-season characteristics. This paper analyzes the relationships among wine prices, ratings, advertising, and production, using data obtained from a wine ratings magazine, Wine Spectator. It presents a model of wine price based on information about production quantity, vintage, country of origin, and wine type. This paper then examines the scoring method of Wine Spectator by evaluating the effects of wine price on wine rating. …

A Case Of The Philips Curve In The Formation Of A Monetary Union: A Glimpse At High Inflation Countries Of The European Monetary Union, Yuet Wen Wan

University Avenue Undergraduate Journal of Economics

This paper examines how disinflation in high inflation economies affects unemployment levels. According to Keynesian macroeconomic theories, a decrease in inflation will cause an increase in unemployment in the short run. Due to high inflation over the years among countries like Italy and Ireland, their expected inflation rate is significantly high. As a result, when the government starts a process of disinflation though restrictive fiscal and monetary policies, economic activity declines, and significant short run increase in unemployment follows.

The Effects Of Fiscal Decentralization On Health Care In China, Emily Yee

University Avenue Undergraduate Journal of Economics

From my analysis, I conclude that decentralization has not been detrimental to health care when health care performance is measured by the number of doctors per 10,000 people, mortality rates, and local health care expenditure. However, the effects of decentralization on health care are inconclusive when health care performance is measured by the number of hospital beds per 10,000 people.

This paper is divided into five sections. The first section discusses theories of federalism. The second section presents an overview of China’s economic reforms since 1980. The third section discusses the current state of health care in China and its …

Determinants Of Economic Growth In East Asia: A Linear Regression Model, Elizabeth Kowalski '00

Honors Projects

The level of economic growth for a country represents many aspects of life in that country. These aspects range from the strengths or weaknesses of macroeconomic policy to the quality of life for the average citizen. High or stable levels of economic growth are associated with very productive economies, higher GDP per capita and higher standards of living. However, low levels of economic growth are linked to low levels of productivity, poor living conditions and stagnant markets. High levels of economic growth are clearly desirable.

A Test Of The Environmental Kuznets Curve For Local And Global Pollutants, Robin Meers '00

Honors Projects

The early stages of economic development are generally associated with increases in the level of industrialization. Along with this industrialization comes increases in populations of cities and pollution causing transportation. For all these reasons, the development of a country is usually associated with increases in the amount of pollution. However, after a certain threshold level of income, the quality of the environment becomes important and people are willing to pay for a cleaner environment. After this point the level of pollution is likely to decrease. This hypothesized inverted-U relationship between the amount of pollution and the income of a country …

The Integration Of Capital Markets: A Study Of Market Integration Principles And The Effects Of Macroeconomic Shocks On National Stock Market Comovements, Kristopher Kaneta '00

Honors Projects

Traditionally, international investors seek to determine whether international capital markets are integrated or segmented. That is, do similar assets yield similar risk adjusted returns, or significantly different returns given certain informational and capital flow barriers? With this in mind, this research chooses to focus on the rapidly developing financial markets of Southeast Asia and determine the degree to which international stock market movements may be correlated with each other. Through panel data and OLS regression analysis, the research will show an increasing correlation between these capital markets over time, and the significant impact certain macroeconomic variables may have on capital …

Factors Influencing Foreign Direct Investment In Lesser Developed Countries, Jason Lewis '00

Honors Projects

Net private capital flows to developing countries have dramatically increased in the past 15 years with much of the investment coming in the form of long-term, foreign direct investment. Because of the unique characteristics of this type of growth enhancing investment, developing countries desire to attract and retain foreign direct investment (FDI). As a result, the lesser-developed country (LDC) has an incentive to strengthen areas and aspects of the economy or government that are heavily scrutinized by the firm when considering a possible long-term investment. This study intends to measure the magnitude and the direction of suspected determinants that heavily …

The New Rural-Urban Labor Mobility In China: Causes And Implications, Michael Seeborg, Zhenhu Jin, Yiping Zhu

Scholarly Publications

As the Chinese economy reforms, a huge new populationof rural-urban migrants is transforming the urban labor force. This article explores some of the most important reasons for the emergence of the floating population in China. We argue that the neoclassical model alone is not adequate to explain the massive rural-urban internal migration underway in China. Instead, ideas drawn from both sociological theories of segmented markets and institutional economics are used to supplement the standard neoclassical explanation. We found that Chinese policy reforms in both rural and urban areas decreased the balkanization of labor markets and opened up employment opportunities for …

Economic Influences On The Stock Market, Nate Taulbee '00

Honors Projects

The following sections of this paper further examine the issues raised. Section II offers a theoretical analysis of how real GDP, unemployment, and the Fisher Effect should impact the S&P 500. Section III provides information on the expected relationship between the economy and the following major industry categories: growth, cyclical, defensive, and interest-sensitive. Section IV introduces the research design including the generalized least squares model. Section V presents the results and examines the appropriate econometric specification. Section VI concludes the study and reiterates important findings.

Informational Asymmetry And The Demand For Ipos: An Explanation Of Underpricing, Peter Karlis '00

Honors Projects

There exists large informational asymmetries in the stock market, particularly in the primary market where initial public offerings are made. This paper examines the large initial gains observed in a previous study and explains them using game theory. The process of bringing an IPO to the market involves the issuing firm, the investment bank and the investors. This paper will discuss the strategic relationships that exist between these entities and why each either accepts a smaller gain or demands a risk premium based on the level of uncertainty they face. Accompanying the economic theories discussing these relationships is evidence from …

The Role Of Human Capital In Wealth Accumulation, Thomas Scheiding

University Avenue Undergraduate Journal of Economics

After an introduction to the fundamental elements of human capital theory, I will define the characteristics of general and specific human capital, and show who pays for and yields the benefits from investment in each component. I will then proceed to explain why understanding the magnitude of the rate of return in terms of wealth is imperative, both theoretically and practically. After I develop testable hypotheses, I will introduce the data set to be used, and present my model. Finally, I present the regression results, and provide a direction for future research in this area.

United States V General Dynamics: A Reappraisal, Anthony Wylie

University Avenue Undergraduate Journal of Economics

The purpose of this paper is to examine the reasons behind Material Services’ acquisitions, the reasons why the Government contested the mergers, and how the Government erred in analyzing the case. We wish to show that the combination of the three coal firms—Material Services, Freeman Coal, and United Electric—occurred for reasons of economic efficiency and practicality, not based on any atavistic desire to monopolize and damage social welfare.

The Gender Wage Gap In The Economics Profession A Search In The Return To Marriage And Fertility Of Ph.D. Economists, Weiyi Shi

University Avenue Undergraduate Journal of Economics

Previous researchers have found that after controlling for various determinants of economists’ earnings, there still remains an unexplained residual wage gap across genders in the economics profession. This study uses 1990 Census data to examine the return to marriage and fertility of male and female Ph.D. economists in an attempt to explain in part the residual gender wage gap in the profession. Marital status is found to have no impact on male or female economists’ earnings. Fertility does not affect male economists' earnings, but is negatively correlated with female economists' earnings. I conclude that the different returns to fertility across …

The Phillips Curve In The 1990s, Hayden Smith

University Avenue Undergraduate Journal of Economics

This paper will explore whether or not the Phillips curve relationship exists for the 1990s. I will attempt to estimate a Phillips curve for the past decade using data for the United States. In section two, I will explain the theory behind the Phillips curve and how the theory has evolved. In section three, I will present a literature review discussing previous research and results. Section four will present my empirical model and data. In section 5, I will present my results and discuss econometric problems such as serial correlation that may lead to biased estimates. In section six I …

How Do Varying Investments In Human Capital Differentially Effect Men's And Women's Income?, Dieter Haager

University Avenue Undergraduate Journal of Economics

The purpose of my research is to determine if equally qualified college-educated men receive more compensation than college-educated women do after several years of experience in the labor force. The empirical model will include several variables to account for investments in human capital, which will help to establish if the individuals are equally qualified. The variables include controls for education, mobility, migration and area of residence. I am specifically looking to analyze the effects of human capital investment on income. I will also be paying particular attention to the depreciation of human capital, which may occur as a result of …

How Wages Are Set: Uncertain Political Marginal Productivity: Price Theory, Wage Theory, Agency Theory, And The Theory Of The Firm, Thomas C. Lane

University Avenue Undergraduate Journal of Economics

In this paper, I will derive a new model of wage prices by starting with price theory and wage theory and then blending in the cost factors uncovered by agency theory and the theory of the firm, and Alchian's work on economic uncertainty. The final result is still theoretical and cannot be used to predict a specific workers wage, but is nevertheless more complete and realistic in detailing the process of wage determination.

The Interactions Of Eco-Labeling, Environment, And International Trade, Yi Qian

University Avenue Undergraduate Journal of Economics

A simple graphical model has been developed to examine the relationship between eco-labelling, international trade and environment. This paper analyses that labelling can possibly have adverse effect on environment when the supply of environment-friendly good is greater than the demand of the friendly good pre-labelling (fig.2). In a dynamic setting, however, this situation could be reversed by shifts of demand and supply curves of environment-friendly products (fig.3). The theoretical model predicts change of product prices, which in turn can alter international trade. In bilateral trade, the interaction with country 2 will result in an improvement in the environmental situation in …

Developments In The Banking Industry: Implications For The Future Of Bank Lending To Small Businesses, Myra Read

University Avenue Undergraduate Journal of Economics

This paper investigates the recent developments in the banking industry that are impacting small business lending. The first section describes the traditional lending relationship between banks and small businesses. An analysis of the application of credit-scoring to small businesses follows. The next section discusses potential uses of loan securitization. The final section examines the consolidation trend in the banking industry.

Technological Progress And Its Effects On The Interaction Between Money Supply And Demand: A Cointegration Approach, Patrick J. Holly Jr. '99

Honors Projects

The purpose of this paper is to analyze the significance of the effect current payment technologies ha e had on money supply and demand. Specific attention will be giv n to M1 and M2 stocks and velocities, th Fed Funds Rate and National Income, and how their interaction with each other has been affectrd by technology development. Using Electronic Fund Transfer and Automated Teller Machine introduction as a proxy or current technological development in a cointegration test model it is found that current payment technologies have had mixed effects on money supply and demand, and the interaction between their associated …

The Gender Pay Differential: Choice, Tradition, Or Overt Discrimination?, Jaynanne Calaway '99

Honors Projects

No one disputes that a male-female gender wage differential favoring men exists. This study seeks to unearth not only the sources of this differential but also the relative degrees to which the various sources impact the differential. The theories proposed by current literature suggest three principal causes: differences in human capital, crowding discrimination, and other forms of discrimination. This study estimates separate equations for men and women and then uses the regression results to decompose the gender wage differential into the three aforementioned components. We find, after isolating the effects of differences in individual human capital and choice characteristics as …

The Determinants Of Home Ownership: An Application Of Human Capital Investment Theory To The Home Ownership Decision, Jaclyn K. Hood '99

Honors Projects

The decision to purchase a home is one of the most important financial decisions made by young adults today. This decision is influenced by several factors including the individual's demographics and family characteristics. The purpose of this study is to focus on the influence of these factors on the probability of home ownership for young adults.

Does It Pay To Be A Man? A Study Of Pay Differentials Between College Graduates, Jennifer Van Dyke '99

Honors Projects

This paper takes a section by section approach to address the problem of wage differentials between college men and women. Section I serves as an introduction to the topic and Section II introduces the theoretical foundation for this subject. Section III lays out the hypothesis and explains the theoretical model and data. Section IV discusses the results of the model and Section V draws conclusions from the results and makes policy implications.

A Benchmarking Study Of The Lehigh Valley, Jason Faberman, Stephanie Laski

University Avenue Undergraduate Journal of Economics

This study benchmarks the Lehigh Valley to nine other metropolitan areas within the United States. These areas represent a wide array of economic growth levels. Charlotte, Portland, Seattle, and Nashville represented high growth cities. Minneapolis and Lancaster represented moderate growth cities. Hartford, Flint, Rochester and the Lehigh Valley represented low growth cities. Three analyses attempted to identify reasons for economic growth. The study period included the years 1970 through 1995. All three analyses looked at regional growth relative to the nation. A study of each region’s industry mix compared the diversity of this mix to the overall employment growth of …

An Economic Analysis Of Child Care: Bias, Refinement, And Powerful Insight, Ben Fritz

University Avenue Undergraduate Journal of Economics

This paper considers the various ways in which the child care market operates (and fails), both in reality and in terms of economic models. Economic theory shows that child care should have a significant impact on women's’ decision to enter the labor market, and I consider whether this is true in practice, as well as how the child care market operates compared to the demonstrated need. Economic analysis shows that child care has a significant impact on women’s participation in the labor force, both in theory and in practice.

The Effects On Labor Of Post-Industrial Globalization: A Comparison Of Marxist And Non-Marxist Paradigms, Louis Hyman

University Avenue Undergraduate Journal of Economics

In this paper I will be examining the changes in labor conditions that have occurred during the last ten years, how they are intimately linked to new notions of information technology and the rise of a global economic perspective. I will compare the [Marxist and non-Marxist] trains of thought as well, and attempt to provide a notion of where I believe them to be sufficient and lacking. If these new notions of globalized post-industrial labor resolve the antagonism between Labor and Capital, they would signal a critical shift in the socioeconomic dynamics of the world, similar in importance to the …

The Economic Impact Upon Modern U.S. Elections, James Jackson

University Avenue Undergraduate Journal of Economics

Economic voting has been blamed for Bush’s loss in 1992, Carter’s loss in 1980, and attributed to Clinton’s win in 1996. I intend to dispel the myths against economic voting by showing that it does occur, and examining the four different manners in which it occurs: retrospective, prospective, pocketbook and sociotropic voting.

Editor's Note: The bibliography for this article is missing. We apologize for the inconvenience.

Comparative Analysis Of Max-Planck Gesellschaft And Akademie Der Wissenschften In The Years 1945-1989, Victoria Kats

University Avenue Undergraduate Journal of Economics

The Realm of Science claims to be an autonomous entity, governed by its own rules and institutions. In practice it is difficult to test the extent to which different enveloping political systems affect economics of basic research, as too many cultural and historical differences would distort such a comparison. Unique historical circumstances make East and West Germany the best available ground for setting up an experiment with both experimental and control groups within societies and organizations. Testing the influence of socialistic pressure on economic performance of scientific institutions, the analysis of East German Academy of Sciences and West German Max …