Economics Commons^™

Tax Expenditures: A Review And Analysis, Joshua C. Hall

Economics Faculty Working Papers Series

This paper originally appeared as a policy report for the Joint Economic Committee of the U.S. Congress. While these publications are in the public domain, they often disappear when the chair of the committee changes and this report is no exception. As this publication is no longer available in print or electronic form, I have provided this version for those interested in obtaining a copy of the paper. At the time of publication I was a policy analyst for the Joint Economic Committee working for the Vice Chairman Jim Saxton.

Does The Median Voter Or Special Interests Determine State Highway Expenditures? Recent Evidence, Joshua C. Hall, Shree Baba Pokharel

Economics Faculty Working Papers Series

Using cross-sectional data from fifty states of the United States and the District of Columbia for two different time periods, this paper examines the degree to which special interests or the median voter determines state highway expenditures. In addition to finding that previous estimates of the determinants of state highway expenditures are robust, we find that that special interests that were important in 1984 were no longer significant nearly 20 years later. Like the previous literature, we conclude that the reduced form median voter model performs well in explaining state highway expenditures.

A Lasting Effect Of The Hiv/Aids Pandemic: Orphans And Pro-Social Behavior, Bryan C. Mccannon, Zachary Rodriguez

Economics Faculty Working Papers Series

The HIV/AIDS pandemic has caused numerous deaths. One unfortunate consequence of this is the deterioration in family structure and the prevalence of orphanhood. We investigate whether individuals who were orphaned as a child suffer long-term consequences through a underinvestment in their social capital. We conduct a framed field experiment in rural, southern Uganda where the HIV/AIDS pandemic hit hardest. In the experiment, subjects made decisions to contribute to a public good. Results indicate that adults who were orphaned as a child free ride more contributing less to the public good. We explore the mechanism through which their background operates. We …

Voting Behavior On Carbon Pollution From Power Plants, Joshua C. Hall, Elham Erfanian, Caleb Stair

Economics Faculty Working Papers Series

Environmental regulation is a polarizing issue. In 2014, a bill came to a vote in the U.S. House of Representatives that would limit the powers of the Environmental Protection Agency. This empirical note identifies the characteristics that influenced the voting behavior of House Representatives on this bill. Political party, educational background, the location quotient of the mining industry in the representative’s state, and the amount of emissions in the Representative’s state are considered. A member’s political party is the primary factor influencing voting behavior but the location quotient of the mining industry also plays an important role.

Bringing Active Learning Into High School Economics: Some Examples From The Simpsons, Joshua C. Hall, Alex Peck, Marta Podemska-Mikluch

Economics Faculty Working Papers Series

In this brief educational note, we provide several examples of directed classroom activities for the high school economics classroom using the long-running television show The Simpsons. In doing so, we provide an overview of the scholarly literature on using popular culture to teach economics. Our examples highlight how popular culture can be successfully employed at the secondary level to engage and teach students through active learning. We conclude with some thoughts for secondary social studies teachers looking to enhance economic instruction.

Can Liberalization Of Local Food Marketing Channels Influence Local Economies? A Case Study Of West Virginia’S Craft Beer Distribution Laws, Trey Malone, Joshua C. Hall

Economics Faculty Working Papers Series

Over the past decade, local food systems have been identified as having a significant influence on regional economies. Using a recent change in West Virginia’s craft beer distribution laws as a case study, we show that although employment might not experience a statistically significant change due to additional legalized marketing channels, wages did experience a significant increase. Our findings suggest that state economies might benefit from reducing restrictions on small, local producers.

What Matters More For Economic Development, The Amount Of Funding Or The Number Of Projects Funded? Evidence From The Community Development Financial Investment Fund, Kaitlyn M. Harger, Amanda Ross, Heather M. Stephens

Economics Faculty Working Papers Series

Governments try to attract entrepreneurs to specific areas by providing incentives to new businesses that locate within their jurisdiction. However, there is a debate over how best to allocate these funds. Using establishment-level data from the National Establishment Time Series (NETS) database for California, and data on the location of disbursements from the Community Development Financial Institutions (CDFI) and New Market Tax Credit (NMTC) programs, we consider the effectiveness of these two programs in attracting new businesses to disadvantaged areas. Investors are eligible to receive funding through these programs if the census tract where they are located has a median …

Do Psychological Traits Explain Differences In Free Riding? Experimental Evidence, Gregory Deangelo, Hannes Lang, Bryan C. Mccannon

Economics Faculty Working Papers Series

We explore the relationship between common psychological traits, such as Theory of the Mind, Rational‐Experiential Inventory, and Big Five Personality styles, and willingness to contribute to public goods. Then, motivated by research that has indicated a relationship between past social interactions and cooperativeness, we consider the interaction between past game outcomes and psychological traits on free riding. We show that psychological traits of individuals have both a direct effect on free riding behavior, as well as an indirect effect as it enhances the correlation between past strategic behavior and public goods giving. Thus, the measurement tools of social psychology and …

An Inventory Of Sports Economics Courses In The Us, Joshua C. Hall, Brad R. Humphreys, Hyunwoong Pyun

Economics Faculty Working Papers Series

Sports economics is a young, growing field in the discipline of economics. An examination of course catalogs at 169 national liberal arts colleges and 254 national universities uncovered undergraduate sports economics classes offered at 17% of the liberal arts colleges and 29.5% of the universities. The characteristics of colleges and universities offering sports economics courses are analyzed. The state of the undergraduate curriculum in economics and barriers to the creation of new elective course offerings are also discussed.

The Political Economy Of Soda Taxation, Sriparna Ghosh, Joshua C. Hall

Economics Faculty Working Papers Series

There has been an increase in the prevalence of obesity in the United States over the past several decades. The academic literature has highlighted numerous possible causes, including the consumption of soda and other sugar-sweetened beverages. Soda taxes have been suggested as a way of reducing the consumption of sugar-sweetened beverages and a number of U.S. states "disfavor" sugar-sweetened beverages relative to food in their tax code. In this note we employ a political economy model to explain the adoption of these \soda taxes." We find that more Democratic states and those with a higher rate of adult obesity are …

Monopsony Exploitation In Professional Sport: Evidence From Major League Baseball Position Players, 2000-2011, Brad R. Humphreys, Hyunwoong Pyun

Economics Faculty Working Papers Series

Some professional athletes still face monoposony power in labor markets, underscoring the importance of estimating players' marginal revenue product (MRP) to assess its effects. We introduce two new empirical approaches, spline revenue functions and fixed-effects stochastic production functions, into the standard Scully (1974) approach to MRP estimation, and calculate Monoposony Exploitation Ratios (MERs) for position players in Major League Baseball over the 2001-2011 seasons. Estimates indicate that MERs are about 0.89 for rookie players, 0.75 for arbitration eligible players, and 0.21 for free agents. Recent collective bargaining agreements have reduced MERs for free agents, but had no effect on MERs …

Theory Of Mind Predicts Cooperative Behavior, Gregory Deangelo, Bryan C. Mccannon

Economics Faculty Working Papers Series

Explanations for cooperation in Prisoner’s Dilemma games (PD) have generated significant interest. While institutional explanations, such as the role of repeated interactions and communication, have offered considerable explanatory ability, a psychological measure of Theory of the Mind (ToM) – Reading the Mind in the Eyes – of an individual’s ability to process social and emotional cognition offers new insights. Using this measure, we examine how ToM explains (un)cooperative behavior in a standard PD game. We find that subjects who have higher ToM are less cooperative in PD games and extract higher payoffs.

Lca Methodologies An Annotated Bibliography, Xueting Zhao

Regional Research Institute Resource Documents

No abstract provided.

Higher Education Accreditation: Market Regulation Or Government Regulation Revisited, Joshua C. Hall

Economics Faculty Working Papers Series

Higher education is under are in the United States. Pressure, both financial and political, is being placed on colleges and universities to reform. One barrier to reform that has been put forth is accreditation. While calls for reform have identified what appear to be problems with accreditation, it is important to not engage in the nirvana fallacy and assume that what we can imagine will be better will be better. In that light, I look at the history of the accreditation process with a focus on the role the federal government has played and how that has influenced other players …

Spatial Interaction Of Renewable Portfolio Standards And Their Effect On Renewable Generation Within Nerc Regions, Eric Dowden, Donald J. Lacombe

Economics Faculty Working Papers Series

While several studies have examined the effectiveness of renewable portfolio standard laws on renewable generation in states, previous literature has not assessed the potential for spatial dependence in these policies. Spatial dependence in the electric grid is likely, considering the connectivity of the electric grid across NERC regions. Using recent spatial panel methods, this paper estimates a number of econometric models to examine the impact of RPS policies when spatial autocorrelation is taken into account. Consistent with previous literature, we find that RPS laws do not have a significant impact on renewable generation within a state. However, we find evidence …

Hospitalitas, Andrew T. Young

Economics Faculty Working Papers Series

Good government requires a constitution that demarcates what political agents can and cannot do, and such a constitution must be self-enforcing. The medieval West was characterized by the estates system, where the political power of monarchs was roughly balanced by that of a landed and militarized nobility. This rough balance of power contributed to a Western tradition of limited government and constitutional bargaining. I argue that this balance has important roots in the fifth and sixth century barbarian settlements that occurred within the frontiers of the declining Western Roman Empire. These settlements provided barbarians with allotments consisting of lands or …

The Effect Of Urban Empowerment Zones On Fertility And Health: A Case Study Of Chicago, New York City, And Philadelphia, Daniel Grossman

Economics Faculty Working Papers Series

I estimate the health impacts of the Empowerment Zone (EZ) program a federal program that gave sizeable grants and tax breaks to certain high-poverty census tracts in selected cities. Using difference-in-differences methods, I find that the EZ program decreased fertility rates by 11 percent and improved birth outcomes. This increase in infant health was not driven by changes in the composition of births. Synthetic control methods and estimates using an alternate control group support these findings. Recent research on the later-life impacts of low birth weight suggest that the health impacts of this program may have substantial long-term benefits.

Economic Freedom, Race, And Health Disparities: Evidence From Us States, Joshua C. Hall, Brad R. Humphreys, Jane E. Ruseski

Economics Faculty Working Papers Series

The social determinants of health include the communities in which people reside. As- sociated with geographic areas are public policies that influence a variety of economic and social outcomes. The group of public policies associated with economic freedom have been found to be positively related to a number of economic and social outcomes. In this paper, we investigate the impact of economic freedom on self-reported health and racial health disparities. We use propensity score matching to construct a control group of whites who can be compared to blacks in the 2011 BRFSS. After accounting for confounding variables and possible selection, …

Estimation Of A Partially Linear Regression In Triangular Systems, Xin Geng, Carlos Martins-Filho, Feng Yao

Economics Faculty Working Papers Series

We propose a kernel-based estimator for a partially linear regression in a triangular system where endogenous regressors appear both in the nonparametric and linear components of the regression. Compared with alternative estimators currently available in the literature (Ai and Chen 2003; Otsu 2011), our estimator has an explicit functional form, is easier to implement, and exhibits better experimental finite sample performance. The estimator is inspired by the control function approach of Newey et al. (1999) and was initially proposed by Martins-Filho and Yao (2012). It explores conditional moment restrictions that make it suitable for additive regression estimation as in Kim …

Foundations Of The Wvu Econometric Input-Output Model, Randall Jackson, Juan Tomas Sayago Gomez

Regional Research Institute Resource Documents

No abstract provided.

Institutional Convergence: Exit Or Voice?, Joshua C. Hall

Economics Faculty Working Papers Series

There is a small but growing literature on the determinants of economic freedom. In this paper I contribute to this literature in two ways. First, I empirically show that beta-convergence in economic freedom occurred from 1980 to 2010. Countries with low levels of economic freedom in 1980 "catch up" at a rate of 0.7 percent a year on average, ceteris paribus. Second, I document the structural characteristics that contribute to this institutional convergence. My conditional convergence estimates suggest democratic institutions do not contribute to conditional convergence. Exitability, a variable that captures how easy it is for citizens to \vote …

The Political Economy Of Local Fracking Bans, Joshua C. Hall, Christopher Shultz, E. Frank Stephenson

Economics Faculty Working Papers Series

Concerns about harmful effects arising from the increased use of hydraulic fracturing (fracking) to extract underground fuel resources has led to efforts to ban the practice. Many townships in western New York, which lies above the gas-rich Marcellus shale formation, have enacted bans or moratoria. Using spatial econometric techniques, we examine factors related to townships' choice to adopt fracking bans and document the importance of spatial dependence when analyzing fracking bans. We find education levels, the poverty rate, and veterans groups are associated with an increased probability of a township banning or putting a moratorium on fracking.

Effects Of Acid Rain Regulations On Production Of Eastern Coals Of Varying Sulfur Content, Straford Douglas, Seth Wiggins

Economics Faculty Working Papers Series

We analyze the effects of the EPA’s Acid Rain Program on county-level production of coals of varying sulfur content in the Appalachian and Illinois basins, controlling for Powder River Basin production, proximity of power plants to mines, and scrubber installation. Using a thirty-year panel data set, we find that during the Acid Rain Program coal sulfur content positively affected mine closure and negatively affected production in most coal-producing counties, with the greatest effect from 1995-2000. Estimated effects of power plant flue gas desulfurization equipment installation are substantial, and depend on coal sulfur content, scrubber unit size, and distance from the …

Object-Oriented Interindustry Systems: Proof Of Concept, Péter Járosi, Randall Jackson

Regional Research Institute Technical Documents

This document provides a proof-of-concept demonstration of an object-oriented approach to modeling an inter-industry system. The example framework uses a small CGE model based on a three-sector social accounting matrix (SAM). The economy is shocked by changing total factor of productivity in the production function, the new equilibrium is determined in classical CGE fashion, and the original SAM is updated to conform to the new equilibrium solution. In this way, the efficiency of the Object-oriented modeling (OOM) approach can be emphasized in the context of the computational simulations of interindustry systems by a simplified CGE example written in Python. Since …

Coal Mining And The Resource Curse In The Eastern United States, Stratford Douglas, Anne Walker

Economics Faculty Working Papers Series

We measure the effect of coal resource sector dependence on long run income growth using the natural experiment of coal mining in 409 U.S. counties that are selected for homogeneity. Using a panel data set (1970-2010), we find a one standard deviation increase in resource dependence is associated with an estimated 0.6 percentage point drop in annual growth rates of per capita personal income. We also measure the extent to which the resource curse operates through disincentives to education, and find significant effects, but results indicate that this education channel explains only perhaps 25% of the curse.

Impact Evaluation Of Investments In The Appalachian Region: A Reappraisal, Juan Tomas Sayago Gomez, Gianfranco Piras, Donald J. Lacombe, Randall Jackson

Regional Research Institute Working Papers

We evaluate the impact of the Appalachian Regional Commission’s investments on its members counties over almost fifty years. We apply different propensity score methods to find the most appropriate matching and to identify the effect of policy implementation in the most accurate way possible.

The general evidence is that counties that received ARC funding had higher per-capita income growth compared to the control counties. Per-capita income growth rate in ARC counties grew an average of 5.5 percent over the entire study time period compared to the control counties. Employment grew significantly faster in ARC counties compared to the control counties …

Textual Analysis In Real Estate, Adam D. Nowak, Patrick Smith

Economics Faculty Working Papers Series

This paper incorporates text data from MLS listings from Atlanta, GA into a hedonic pricing model. Text is found to decrease pricing error by more than 25%. Information from text is incorporated into a linear model using a tokenization approach. By doing so, the implicit prices for various words and phrases are estimated. The estimation focuses on simultaneous variable selection and estimation for linear models in the presence of a large number of variables. The LASSO procedure and variants are shown to outperform least-squares in out-of-sample testing.

Physical Activity, Present Bias, And Habit Formation: Theory And Evidence From Longitudinal Data, Brad R. Humphreys, Jane E. Ruseski, Li Zhou

Economics Faculty Working Papers Series

We investigate temporal decisions to participate in exercise in a dynamic model featuring present bias and habit formation. The model highlights naivete about present bias and projection bias about habit formation/decay and implies that promoting participation in physical activity must both encourage the inactive to start and discourage the active from quitting as behavioral biases apply to both. Our empirical analysis using data from the British Household Panel Survey (BHPS) develops evidence consistent with predictions about present bias and habit formation/decay and an interesting asymmetry between starting and quitting that furthers understanding of existing empirical evidence.

Matlab And Python Functions For Weighted Disaggregation, Amir Borges Ferreira Neto, Randall Jackson

Regional Research Institute Technical Documents

This technical document describes a weighted disaggregation problem and provides the code for a function in MATLAB and Python to perform such disaggregation.

Economic Freedom And Economic Growth Across U.S. States: A Spatial Panel Data Analysis, Joshua C. Hall, Donald J. Lacombe, Timothy M. Shaughnessy

Economics Faculty Working Papers Series

There is a substantial literature estimating the effect of economic freedom on economic growth. Most studies examine the relationship between freedom and growth for countries, while a few examine the relationship for U.S. states. Absent in the state{level literature is consideration of the presence of spatial spillovers affecting the freedom{growth relationship. Neglecting to account for spatial autocorrelation can bias estimation results and therefore inferences drawn. We find evidence of a spatial pattern in real per-capita GSP that affects non-spatial estimates of the freedom{growth relationship. Taking into account the direct and indirect effects of economic freedom on GSP, we find a …