Economics Commons^™

The Impact Of Output And Exchange Rate Volatility On Fixed Private Investment: Evidence From Selected G7 Countries, Abdur Chowdhury, Mark Wheeler

Economics Faculty Research and Publications

This study examines the impact of shocks to exchange rate and output uncertainty (volatility) on real private fixed investment (FI) in Canada, Germany, the United Kingdom and the United States. The analysis is conducted using vector autoregressive models that contain the price level, real output, the volatility of real output, the real exchange rate, the volatility of the real exchange rate, an interest rate and FI. The results yield important public policy implications with regard to the impact of output volatility of FI. Our analysis indicates that volatility shocks, measured as output volatility or exchange rate volatility, do not have …

Theorizing The Social Provisioning Process Under Capitalism: Developing A Veblenian Theory Of Care For The Twenty-First Century, Andrew Cumbers, John B. Davis, Robert Mcmaster

Economics Faculty Research and Publications

Thorstein Veblen highlighted a number of human instincts, one of which was the “parental bent.” In contrast to the other “positive” instincts, the parental bent is specifically other-regarding in that Veblen described it in terms of utilizing knowledge for the betterment of society. Veblen’s “parental bent” stresses the social embeddedness of humanity and the human instinct to care. Our ability to care is partially predicated on our social roles and the values embedded within those roles. Critically, this is influenced by the configuration of institutions within a society. Care is grossly under-valued. By drawing upon recent contributions to care in …

Factoring Emerging Markets Into The Relationship Between Global Liquidity And Commodities, Steven Landgraf, Abdur Chowdhury

Economics Faculty Research and Publications

Purpose – What caused the mid-2000s world commodity price “bubble” and the recent commodity price growth? Some have suggested that rapid global industrial growth over the past decade is the key driver of price growth. Others have argued that high commodity prices are a result of excessively loose monetary policy. The purpose of this paper is to extend the current research in this area by incorporating emerging economies, the BRIC (Brazil, Russia, India, and China) nations specifically, into global measures.

Design/methodology/approach – The paper uses a vector error correction (VEC) model and computes variance decomposition and impulse response functions (IRFs). …

The $10.10 Minimum Wage Proposal: An Evaluation Across States, Andrew R. Hanson, Zackary Hawley

Economics Faculty Research and Publications

This paper offers state-level estimates of job loss from increasing the federal minimum wage to $10.10 per hour in 2016. Given the vast differences in nominal wages across geography, a federal increase in minimum wage that is not indexed to local wage levels will have a differential impacts across states. The proposed minimum wage would be binding for between 17 and 18 % of workers nationally. We estimate coverage rates ranging from just 4 % in Washington D.C. to as high as 51 % in Puerto Rico, with 13 states having at least 20 % of the employed population covered …

Raising Wisconsin's Minimum Wage: Who Would Be Helped? Who Would Be Hurt?, Andrew R. Hanson, Ike Brannon

Economics Faculty Research and Publications

No abstract provided.

‘Pluralism’ In Economics? A Symposium, John B. Davis

Economics Faculty Research and Publications

No abstract provided.

The Puzzle Of Heterogeneity In Support For Free Trade, Jeffrey Drope, Abdur Chowdhury

Economics Faculty Research and Publications

Over time and across countries, researchers have noted frequent and mostly unexplained gender differences in the levels of support for policies of free or freer trade: according to aggregate results from many surveys, women tend to be less favorable toward policies of liberalizing trade than men. Positing an economic security explanation based largely on a mobile factors approach, we ask if it is women generally who are more negative toward trade or rather women who are more economically vulnerable – i.e., women from the scarce labor factor. We utilize data from two recent surveys on individuals’ attitudes toward different facets …

Housing Market Distortions And The Mortgage Interest Deduction, Andrew R. Hanson, Hal Martin

Economics Faculty Research and Publications

Housing market distortions from the mortgage interest deduction (MID) typically focus on a single choice measure such as home size or self-reported amount of debt on a new mortgage. We estimate the amount of mortgage interest deducted on federal tax returns to capture the full range of housing market distortions from the MID. Our primary results show that for every one percentage point increase in the tax rate that applies to deductibility, the amount of mortgage interest deducted increases by US$303 to US$590. Empirical estimates imply elasticities of mortgage interest deducted with respect to the after-tax cost of housing between …

Field Experiment Tests For Discrimination Against Hispanics In The U.S. Rental Housing Market, Andrew R. Hanson, Michael Santas

Economics Faculty Research and Publications

This article tests for discrimination against Hispanics in the U.S. rental housing market using e-mail correspondence with landlords advertising units online. We divide Hispanics into two groups: those that appear assimilated into American culture and recent immigrants. We find little difference in the treatment of assimilated Hispanics and whites; however, Hispanics we portray as recent immigrants receive less favorable treatment with margins of net discrimination as large as 6.89% of landlords. We also find discrimination varies significantly at the region level and by the ethnic composition of neighborhoods.

The World In The Model And The Model In The World: Review Of The World In The Model By Mary Morgan, John B. Davis

Economics Faculty Research and Publications

No abstract provided.

(Wp 2014-03) Bounded Rationality And Bounded Individuality, John B. Davis

Economics Working Papers

This paper argues that since the utility function conception of the individual is derived from standard rationality theory, the view that rationality is bounded suggests that individuality should also be seen as bounded. The meaning of this idea is developed in terms of two ways in which individuality can be said to be bounded, with one bound associated with Kahneman and Tversky’s prospect theory and the ‘new’ behavioral economics and a second bound associated with Simon’s evolutionary thinking and the ‘old’ behavioral economics. The paper then shows how different bounded individuality conceptions operate in nudge economics, agent-based modeling, and social …

Patient Perceptions Of Patient-Empowering Nurse Behaviours, Patient Activation And Functional Health Status In Postsurgical Patients With Life-Threatening Long-Term Illnesses, Teresa Jerofke-Owen, Marianne E. Weiss, Olga Yakusheva

College of Nursing Faculty Research and Publications

Aim

To explore the trajectory of associations between the nursing care process of patient empowerment during postsurgical hospitalization and postdischarge patient self-management outcomes, specifically patient activation and functional health status.

Background

Patient-centred care models advocate for patient empowerment in long-term illness care. Postsurgical patients with life-threatening long-term illnesses frequently feel powerless, have unmet needs, decreased functional health status and high readmission rates; however, previous studies of patient empowerment have conceptualized empowerment as an outcome primarily in outpatient settings, with little attention paid to provider processes used to empower patients during hospitalizations.

Design

A non-experimental, prospective, correlational study.

Methods

This sample …

Social Capital And Social Identity: Trust And Conflict, John B. Davis

Economics Faculty Research and Publications

No abstract provided.

Transportation Costs And U.S. Manufacturing Fdi, Joseph P. Daniels, Marc Von Der Ruhr

Economics Faculty Research and Publications

In empirical models of foreign direct investment (FDI), distance is most often used to proxy for transportation costs and other pure-trade costs. Given that distance is time invariant but transportation costs are not, this approach is less than satisfactory when actual transportation costs rise and fall over time. The contribution of this work is to explicitly control for transportation costs and thereby better understand their impact on FDI. We explore the impact of shipping costs on total US FDI stocks abroad, manufacturing stocks and service stocks using measures of sea-shipping and air-shipping costs in a Hausman–Taylor model that controls for …

Negotiated Settlement Under Mlb Final-Offer Salary Arbitration System, J. Richard Hill, Nicholas A. Jolly

Economics Faculty Research and Publications

This paper provides a detailed analysis of negotiated salaries under Major League Baseball's final-offer arbitration process using data from the 2007–2010 seasons. There is a wage premium of 25% for hitters and 14% for pitchers filing for arbitration. Interestingly, there is an additional premium for exchanging offers for hitters but not for pitchers. The additional premium in salary for hitters who exchange offers with their clubs amounts to 7%.

Homesick: How Housing Tax Breaks Benefit The Wealthy And Create Mcmansions, Andrew R. Hanson, Ike Brannon, Zackary Hawley

Economics Faculty Research and Publications

No abstract provided.

Rethinking Tax Benefits For Home Owners, Andrew R. Hanson, Ike Brannon, Zackary Hawley

Economics Faculty Research and Publications

No abstract provided.

(Wp 2014-02) Trade Volatility And The Gatt/Wto: Does Membership Make A Difference?, Abdur Chowdhury, Xuepeng Liu, Miao Wang, M. C. Sunny Wong

Economics Working Papers

Using bilateral trade data for 210 countries over the period 1948-2003, this paper attempts to shed some light on the relationship between WTO and members’ trade volatilities. We show that the trade among WTO members tends to be more stable than the trade outside the WTO, and there is strong evidence of interdependence of trade volatilities. The results show comovement of trade volatilities across all dyads in general, and much stronger comovement among WTO members than between WTO and non-WTO members. Such strong comovement implies that WTO member countries not only share the benefits of having an interdependent and more …

Review Of The Making Of The Economy: A Phenomenology Of Economic Science By Till Duppe, John B. Davis

Economics Faculty Research and Publications

No abstract provided.

Digital Currency And Financial System: The Case Of Bitcoin, Abdur Chowdhury, Barry K. Mendelson

Economics Faculty Research and Publications

No abstract provided.

The Interaction Between Fdi And Infrastructure Capital In The Development Process, Farrokh Nourzad, David N. Greenwold, Rui Yang

Economics Faculty Research and Publications

This paper focuses on the possible interaction between foreign direct investment (FDI) and the host country’s infrastructure base. Its central hypothesis is that the effect of FDI on per capita real income depends, at least in part, on the size of the recipient country’s infrastructure. This hypothesis is tested in a panel of 46 countries and 5-year averages over the 1980–2000 period using the size of three types of infrastructure capital: telecommunication, power generation, and network of roads or highways. The results indicate that the size of the host country’s infrastructure base helps to improve the marginal effect of FDI …

Where Does Racial Discrimination Occur? An Experimental Analysis Across Neighborhood And Housing Unit Characteristics, Andrew R. Hanson, Zackary Hawley

Economics Faculty Research and Publications

This paper examines racial discrimination across several neighborhood and housing unit characteristics including racial composition, rent, and distance from the urban core. We find that African Americans face higher rates of discrimination than whites in a wide range of racially mixed neighborhoods, in higher rent areas, closer to central cities, and in low vacancy areas. These results are robust to various parameterizations of the local smoothing empirical specification and within a multivariate nonlinear parametric estimation technique. The location of discrimination supports the current/future customer prejudice and perceived preference hypotheses as a cause of discrimination in housing markets but not the …

Obesogenic Environmental Influences On Young Adults: Evidence From Randomized Dormitory Assignment, Kandice A. Kapinos, Olga Yakusheva, Daniel Eisenberg

Economics Faculty Research and Publications

This study utilizes a natural experiment—conditionally random dormitory assignments of first-year US college students—to investigate the influence of obesogenic environmental factors in explaining changes in weight and exercise behavior during the 2009–2010 academic year. The design addresses potential selection biases resulting from the likelihood that individuals sort into built environments that match their preferences for exercise and healthy eating. We find some evidence that the food environment, specifically access to campus dining, significantly affected the weight of female students in our study. Females assigned to dormitories where the nearest campus dining hall was closed on the weekends gained about 1 …

Leisure And Happiness: Evidence From International Survey Data, Miao Wang, M. C. Sunny Wong

Economics Faculty Research and Publications

We study the statistical link between leisure and happiness. Using survey data from 33 countries in 2007, we find that (1) certain leisure activities, leisure’s role in self-fulfillment and social interaction, and leisure’s relation to work and other spheres of life are significantly linked to individual happiness; (2) the effect of leisure quantity is not as important as other aspects of leisure; and (3) some leisure activities can be negatively associated with happiness. Consistent with findings in previous studies, family income and individual demographic variables such as age and health condition are significantly associated with happiness. National unemployment and political …

Mark Blaug On The Historiography Of Economics, John B. Davis

Economics Faculty Research and Publications

No abstract provided.

Inflation And Inflation-Uncertainty In India: The Policy Implications Of The Relationship, Abdur Chowdhury

Economics Faculty Research and Publications

Purpose – Inflation and its related uncertainty can impose costs on real economic output in any economy. This paper aims to analyze the relationship between inflation and inflation uncertainty in India.

Design/methodology/approach – The methodology uses a generalized autoregressive conditional heteroscedasticity (GARCH) model and Granger Causality test.

Findings – Initial estimates show the inflation rate to be a stationary process. The maximum likelihood estimates from the GARCH model reveal strong support for the presence of a positive relationship between the level of inflation and its uncertainty. The Granger causality results indicate a feedback between inflation and uncertainty.

Research limitations/implications – …

Limiting The Mortgage Interest Deduction By Size Of Home: Effects On The User Cost And Price Of Housing Across Metropolitan Areas, Andrew R. Hanson

Economics Faculty Research and Publications

In this paper, I examine the user cost and home price implications of limiting the federal mortgage interest deduction (MID) based on the square footage of a home. I extend the standard user cost model to include a square footage-based cap on the tax-favored status of mortgage interest. I compare two policy alternatives: one that limits the marginal deduction based on home size, and another that removes the deduction on the home based on home size. There is substantial variation across metropolitan areas in both the number of homes exposed to each type of cap, the user cost increase, and …

Are Houses Too Big Or In The Wrong Place? Tax Benefits To Housing And Inefficiencies In Location And Consumption, David Albouy, Andrew R. Hanson

Economics Faculty Research and Publications

Tax benefits to owner-occupied housing provide incentives to consume housing, offsetting weaker disincentives of the property tax. These benefits also help counter the penalty federal taxes impose on households who work in productive high-wage areas, but reinforce incentives to consume local amenities. We simulate the effects of these benefits in a parameterized model, and determine the consequences of various tax reforms. Reductions in housing tax benefits generally increase efficiency in consumption, but reduce efficiency in location decisions, unless they are accompanied by tax rate reductions. The most efficient policy would eliminate most tax benefits to housing and index taxes to …

(Wp 2014-01) Is Bitcoin The 'Paris Hilton' Of The Currency World? Or Are The Early Investors Onto Something That Will Make Them Rich? [Updated Version], Abdur Chowdhury

Economics Working Papers

The bitcoin phenomenon, and the technological innovation that made it possible, is interesting - but for investors large and small, the more pertinent question is whether they should buy the digital currency or avoid it. We analyze a bitcoin investment from the standpoint of an investor with a diversified portfolio using both in-sample and out-of-sample settings. Within the in-sample setting, bitcoin does not yield added value to investors with utility function consistent with the mean-variance setting. On the other hand, they do offer diversification benefits to investors with negative exponential and power utility functions. However, these benefits are not preserved …

The Impact Of Interstate Highways On Land Use Conversion, Chris Mothorpe, Andrew R. Hanson, Kurt Schnier

Economics Faculty Research and Publications

Between 1945 and 2007, the United States lost 19.3 % of its agricultural land. Over the same time period, the construction of the 42,500 mile interstate highway system lowered transportation costs and opened large tracts of land for development. This paper assesses the impact of the interstate highway system on agricultural land loss in Georgia and uses the empirical estimates to simulate agricultural land loss resulting from the construction of additional interstate highways. Using a historical data set of agricultural land and interstate highway mileage, empirical estimates indicate that each additional mile of interstate highway reduces agricultural land by 468 …