Economics Commons^™

Do New Sports Facilities Attract New Businesses?, Kaitlyn Harger, Brad R. Humphreys, Amanda Ross

Economics Faculty Working Papers Series

We examine the impact of new sports facilities on new businesses, an unexplored topic in the literature. We use data from the Dunn and Bradstreet MarketPlace files to examine how new sports facilities affect nearby business activity in terms of the number of new businesses and workers. We find no evidence of increased new businesses openings after the opening of new sports facilities in 13 US cities in the 2000s; employment at new businesses near new facilities is larger than at new businesses elsewhere in the MSA; this increase cannot be linked to businesses in any specific industry.

Looking Behind The Scenes: An Assessment Of The Interdependence Of Brazilian Cultural Industries, Amir Borges Ferreira Neto, Fernando Perobelli, Alexandre Rabelo

Regional Research Institute Working Papers

How important is Brazil’s cultural industries to its economy? We provide an answer to this question by evaluating the interdependence of the cultural activities in the Brazilian production structure and its evolution over the last few years (2005 – 2009). To accomplish this, we disaggregate 13 cultural economic industries in the Brazilian input-output table and calculate several indexes, such as, the production multiplier, linkage indexes, fields of influence and extraction analysis. Results show that the only cultural sector with high links to other sectors in the production structure is Telecommunication, edition and news agencies and that this sector provides the …

Constitutional Bargaining, Eminent Domain, And The Quality Of Contemporary African Institutions: A Test Of The Incremental Reform Hypothesis, Roger D. Congleton, Dongwoo Yoo

Economics Faculty Working Papers Series

According to the incremental reform hypothesis, constitutions are rarely adopted whole cloth; thus the starting point, scope for bargaining, and number of reforms, jointly determine the trajectory of constitutional history. We test the relevance of this theory for Africa by analyzing the formation and reform of the independence constitutions negotiated and adopted during the 1950s and early 1960s. We find historical evidence that independence occurred incrementally and that the African countries that experienced the fewest constitutional moments and narrowest domain of bargaining after independence have better contemporary institutions than states that began with less restrictive constitutional rules and experienced more …

Small Business Borrowing And Peer-To-Peer Lending: Evidence From Lending Club, Adam Nowak, Amanda Ross, Christopher Yencha

Economics Faculty Working Papers Series

This study is interested in the ability of borrowers and lenders to signal to each other in the peer-to-peer lending market. We focus on small business loans and investigate the relationship between the loan description that a borrower provides and the impact of this description on the potential funding of the loan by investors. We find that the loan descriptions in the data can be used to predict the probability that the entire loan will be funded. In addition, we also find that an index created from a textual analysis of the loan description can be used to forecast the …

Leadership And Motivation For Public Goods Contributions, Bryan C. Mccannon

Economics Faculty Working Papers Series

Results from a leader-follower public goods game are presented. An individual, when randomly-selected to make a contribution knowing that others will observe the selection, gives more than one does in the simultaneous-move public goods game. Followers adopt a quasi-matching strategy where they systematically donate less than the leader, but contribute more when the leader does and contribute less when the leader free rides. The net result is increased provision of a public good when contributions are sequential. The results highlight that psychological preferences, rather than solely social preferences, can explain behavior.

Quasi-Experimental Methods An Annotated Bibliography, Mulugeta Kahsai, Randall Jackson

Regional Research Institute Resource Documents

No abstract provided.

Economic Freedom And Participation In Physical Activity, Joshua C. Hall, Brad R. Humphreys, Jane E. Ruseski

Economics Faculty Working Papers Series

Physical activity is an important part of a healthy lifestyle and influences a variety of health outcomes. A recent paper has found economic freedom to be positively associated with greater participation in physical activity in a sample of 34 European countries. We empirically investigate the relationship between economic freedom and physical activity across U.S. states. Contrary to the cross-country results, we find that states with higher levels of economic freedom have lower rates of participation in physical activity.

Role Of Personality Style On Bargaining Outcomes, Bryan C. Mccannon, John B. Stevens

Economics Faculty Working Papers Series

Purpose: The motivation for the research is to identify whether personality traits can help explain the outcomes that arise in bargaining outcomes.

Design: Experiments with subjects playing the alternating-offers bargaining game are considered. Both full information and asymmetric information treatments are considered. Subjects also complete standardized Myers-Briggs Type Indicator assessments.

Findings: Personality type measurements are shown to help explain the opening offers, rejections, and resulting wealth in the negotiations. It is shown that interactions between the personality dimensions are important and that the interaction between personality and information play a key role in bargaining outcomes.

Research limitations/implications – The research …

The Logic Of Collective Action And Beyond, Roger D. Congleton

Economics Faculty Working Papers Series

This article provides an overview of Mancur Olson’s Logic of Collective Action and its impact on Olson’s subsequent work. It also suggests that the implications of his simple, elegant, theory have not yet been fully worked out. To illustrate this point, the second half of the essay demonstrates that the number of privileged and latent groups and their costs in a given society are not entirely determined by economic factors or group size alone. Politics, technology, and culture also matter.

Professional Sports Facilities, Teams And Property Values: Evidence From Seattle’S Key Arena, Brad R. Humphreys, Adam D. Nowak

Economics Faculty Working Papers Series

Professional sports teams and facilities can generate negative or positive amenities to be capitalized into nearby property prices. We investigate the effect of the departure of a National Basketball Association team, the Seattle SuperSonics, from Key Arena in Seattle in 2008 on nearby residential property values. The arena continued to operate after the team left, so this departure represents a natural experiment to identify the net effects of a sports team from the effect of a facility and other events that take place in the facility. Results from a repeat sale regression model indicate that the departure of the SuperSonics …

Contracts And Trust, Bryan C. Mccannon, Colleen Tokar Assad, Mark Wilson

Economics Faculty Working Papers Series

Social preferences and third-party enforcement of formal contracts are two mechanisms that facilitate performance of an agreement. The standard argument is that formal contracting substitutes when social preferences are lacking. We explore the hypothesis that social preferences and contract enforcement are complements. We measure social preferences from a Trust Game and use it is an explanatory variable in a contract game. We find that both increased contract enforcement and high trusting preferences lead to enhanced rates of contract formation and larger investments. There is an interaction effect where trusting individuals make larger investment agreements, specifically when enforcement is greater. Thus, …

Visigothic Retinues: Roving Bandits That Succeeded Rome, Andrew T. Young

Economics Faculty Working Papers Series

I employ a case study of the Visigoths in the fourth and fifth centuries to analyze the collective action problems faced by roving versus stationary bandits. A roving bandit provides exclusive collective goods to its members. A stationary bandit also provides exclusive goods to its members, but it also provides inclusive collective goods to out-group individuals in its domain. The inclusive goods provided to the out-group are an input to the production of the exclusive goods enjoyed by the in-group members. I describe how the transition from the former to the latter likely involves redefinition of the relevant group, its …

Can State Tax Policies Be Used To Grow Small And Large Businesses?, Erin Borches, John Deskins, Amanda Ross

Economics Faculty Working Papers Series

The existing literature studying the relationship between small business activity and U.S. state tax policy has focused primarily on a few measures of small business. We expand this literature by estimating the effect of state tax policy on small businesses by using a broader measures of small business activity using a longitudinal dataset for the U.S. states. We also estimate the relationship between state tax policy and large business activity. Results provide evidence that state tax policy can influence small business firm, establishment, payroll, and employment growth in important ways but provide limited evidence that such policy significantly influences large …

Bargaining In The Shadow Of Arbitration, Riccardo Marselli, Bryan C. Mccannon, Marco Vannini

Economics Faculty Working Papers Series

Arbitration, as an alternative to litigation for contract disputes, reduces costs and time. While it has frequently been thought of as a substitute to pretrial bargaining and litigation, in fact, parties may be able to reach a settlement privately while engaged in the arbitration process. Consequently, the institutional design may influence the bargaining. We develop a theoretical model of pre-arbitration bargaining that is able to identify the impact of the institutional features on its success. A detailed data set from arbitration proceedings in Italy is analyzed. The exogenous heterogeneity in the composition of the panel of arbitrators allows us to …

Would A Free Banking System Target Ngdp Growth?, Alexander William Salter, Andrew T. Young

Economics Faculty Working Papers Series

Building on Selgin (1994), we develop a simple model of free banking and study the system’s effects on familiar macroeconomic variables. We show a free banking system does in fact stabilize nominal income in response to aggregate demand shocks. However, in the event of an aggregate supply shock, a free banking system instead stabilizes inflation, engaging in mildly procyclical behavior. We conclude by calling for a broader study of nominal income targeting and free banking in the tradition of ‘monetary constitutionalism’ (Yeager 1962; White et al. 2014) to ascertain whether this result, while almost certainly not the best of all …

Corruption And Entrepreneurship: Evidence From A Random Audit Program, Jamie Bologna, Amanda Ross

Economics Faculty Working Papers Series

In this paper, we examine the effect of corruption on business activity in Brazilian municipalities. Previous research that has examined the impact of corruption has relied primarily on survey or conviction data, which may be problematic as these measures likely to be biased. We use a new measure of corruption that draws upon random audit data of municipal governments’ finances in Brazil. We find that higher levels of corruption cause reductions in the number of businesses operating in an area. Furthermore, we find that these effects become larger over time, suggesting that corruption is more detrimental to long-run economic activity. …

A Framework For Measuring County Economic Resilience, Mulugeta Kahsai, Junbo Yu, Mark Middleton, Peter V. Schaeffer, Randall Jackson

Regional Research Institute Working Papers

The study provides a framework to develop economic resilience index for West Virginia counties based on the premise that county economic resilience depends on its physical and human resources, structure and diversity of its economic base (employment and income diversity), entrepreneurial activity and business dynamics and scale and proximity (spatial issues). Using 17 indicators along four of the six proposed dimensions, a preliminary economic resilience index has been created for West Virginia counties for the years 2000 and 2005. Geospatial maps are also developed to explore the evolution of the geographical patterns of economic resilience across time. The effectiveness of …

Cost-Effectiveness As Energy Policy Mechanisms: The Paradox Of Technology-Neutral And Technology-Specific Policies In The Short And Long Term, Paulo Henrique De Mello Sant'ana

Regional Research Institute Working Papers

When choosing policy mechanisms to design and deploy energy policies, policymakers typically seek cost-effective ones, linking cost effectiveness to the lowest cost of support for RES-E generation and/or consumer costs. The objectives of this paper are to analyze the cost-effectiveness of renewable portfolio standards (RPS), feed-in tariffs (FIT) and auctions in the short and long term, considering both technology-neutral and technology-specific approaches. Results show that RPS and auctions are more cost-effective than feed-in tariffs (FIT) in the short term if cost-effectiveness is defined as minimizing consumer costs. Also, if one or more emerging technologies with higher levelized life cycle costs …

On The Political Economy Of Privacy: Information Sharing Between Friends And Foes, Roger D. Congleton

Economics Faculty Working Papers Series

No abstract provided.

Economic Freedom And Public, Non-Market Institutions: Evidence From Criminal Prosecution, Claudio Detotto, Bryan C. Mccannon

Economics Faculty Working Papers Series

Economic freedom, which measures the protection of property and freedom to contract, is generally argued to capture the quality of a state’s institutions regarding market activity. As to be expected, numerous studies have found that economic freedom is associated with good economic outcomes. Additionally, much effort in public economics has worked to identify the features of quality non-market public institutions. No effort has been made to connect institutions that influence market activity and institutions that govern non-market activities. We take a first step. We employ a linear programming method for measuring relative efficiencies known as Data Envelopment Analysis. We apply …

The Quantity And Quality Adjustment Of Births When Having More Is Not Subsidized: The Effect Of The Tanf Family Cap On Fertility And Birth Weight, Ho-Po Crystal Wong

Economics Faculty Working Papers Series

I examine whether the family cap policy that reduces or eliminates incremental welfare benefits for additional births born to mothers already on welfare would affect both the quantity and quality of births in terms of birth weight. I find that the family cap produces very pronounced effect on reducing out of wedlock birth and low birth weight rates among teenagers. The evidence suggests that the family cap policy might not just produce a deterrent effect on nonmarital childbearing but also a quality effect on birth: those births that actually occur are endowed with better health in terms of birth weight.

Water Valuation Research Annotated Bibliography, Christopher Shultz, Randall Jackson

Regional Research Institute Resource Documents

No abstract provided.

Replacement Referees And Nfl Betting Markets, Bryan C. Mccannon

Economics Faculty Working Papers Series

Are betting markets efficient? The 2012 labor dispute between the NFL and the referees is used as a quasi-experiment to assess whether the betting markets are able to achieve accurate “prices” in an uncertain environment. More points were scored and underdogs performed relatively better resulting in upsets and closer-than-expected games. Betting markets, though, were unable to anticipate or adjust to this systematic effect even though irregularities in gambling markets were reported before the beginning of the season. Not only were they inefficient, but profitable betting strategies can be identified.

Are Industry Clusters And Diversity Strange Bedfellows?, Randall Jackson

Faculty & Staff Scholarship

In this address, I review industry clustering and diversification strategies to compare and contrast their underlying foundations. The lack of a consensus choice of one or the other for regional economic development strategies along with the recognition that in the dynamic process of development these two processes are related leads me to conclude that clusters and diversity need not be such strange bedfellows after all, and that a rational approach to economic development can leverage the strengths of each and offset weaknesses. I follow this discussion by introducing a cluster assessment diversification strategy (CADS) apparatus that can be used to …

Hackerspaces: A Case Study In The Creation And Management Of A Common Pool Resource, Michael R. Williams, Joshua C. Hall

Economics Faculty Working Papers Series

Hackerspaces are community-operated physical places where individuals get together to build things. While the organization itself is private, the ‘space’ that is created for individuals to work has elements of a common pool resource (CPR). Previous literature finds technology to be important in effective CPR management. Through an ethnographic study of a hackerspace, we show how technology is crucial for management of the ‘space’. In addition, we highlight how technology is used in hackerspaces to satisfy three of Elinor Ostrom’s design principles for stable CPR management.

Teaching The Economic Way Of Thinking Through Op-Eds, Joshua C. Hall, Marta Podemska-Mikluch

Economics Faculty Working Papers Series

There are many goals an instructor may wish to accomplish in a course on economic principles. For us one goal should be the education of a generation of sensible and active members of civil society. This is an ambitious goal: it requires that students internalize the economic way of thinking and learn to exercise active citizenry. After experimenting with a variety of methods, we have concluded that requiring students to write an op-ed is the most conducive to the development of the economic way of thinking. Here we share what we have learned in the process, hoping that the pedagogical …

Jack Soper: A Pioneer In Economic Education, J.R. Clark, Joshua C. Hall, Ashley Harrison

Economics Faculty Working Papers Series

John “Jack” Soper passed away on August 9, 2013. A prolific researcher who retired as the John J. Kahl Sr. Chair in Entrepreneurship at John Carroll University, Soper was a leading light in the field of economic education. His scholarship in the 1970s and 1980splayed a very important role in establishing the field. In this educational note, we summarize and highlight his contributions to the measurement of economic literacy and the modelling of student learning in the collegiate and precollege classrooms.

Determinants Of Voting Behavior On The Keystone Xl Pipeline, Joshua C. Hall, Chris Shultz

Economics Faculty Working Papers Series

After lengthy debate, the Keystone XL Pipeline bill passed in January 2015. We use this event to better understand the determinants of Senator voting behavior. Specifically, this paper attempts to examine the relative impacts of political and economic influences. This is accomplished through the use of a binary logit regression model with legislator vote as the dependent variable. Results indicate that while legislators do appear to be representing their political constituency, the role of campaign funding plays an important role as well. The economic effect of such funding, controlling for other factors, is quantitatively small.

An Ordinal Ranking Of Economic Institutions, Scott Beaulier, Robert Elder, Cheryl Han, Joshua C. Hall

Economics Faculty Working Papers Series

We provide the first ranking of countries’ economic institutions using an ordinal methodology. Using the five areas of the Fraser Institute’s Economic Freedom of the World (EFW) Index, we find that final rankings of a country’s institutions are sensitive to the importance-ordering of Area 1 (Size of Government). When Areas 2-5 are in the most important position, we find that there is no significant difference between the EFW rankings and our rankings. When Area 1 is placed in the most important position, however, a number of European countries with large welfare states but good governance do poorly.

Explaining The Worldwide Decline In Military Conscription: 1970- 2010, Danko Tarabar, Joshua C. Hall

Economics Faculty Working Papers Series

We empirically investigate the determinants of the decline in compulsory military service (conscription) from 1970 to 2010 using data on military conscription from the Economic Freedom of the World (EFW) index. We find that the probability of a shorter military service time is strongly associated with the percentage of the population over the age of 65 and the size of government, while the presence of political violence works in the opposite direction. Our results are robust to dynamic panel and ordered probit estimations.