Economics Commons^™

The Effects Of The 1933 Bank Holiday And The Emergency Banking Act Of 1933 On The Systematic Risks Of Various Industries, James E. Ingram

CMC Senior Theses

Utilizing the industry portfolio classifications that Fama and French provide in their data library, I analyze the specific effects that the 1933 Bank Holiday has on various industries. My empirical results go beyond what Silber (2009) determines to be significantly positive abnormal market returns on March 15, 1933, which is the day after the Bank Holiday and the largest ever one-day increase in the stock market. I use the CAPM and the Fama-French 3-factor Model to find significant systematic risk decreases after the Bank Holiday in the Coal and Transportation industries, as well as systematic risk increases in Consumer Goods …

Paying For Performance At The Plate: An Investigation Of Variable Pay Systems In Major League Baseball, Mitchell S. Bremermann

CMC Senior Theses

Previous empirical research on variable pay systems have suggested that possible gains can come from paying for performance, but highlight the difficulty firms face in measuring performance. Using contracts signed in Major League Baseball’s free agent market, I find that over the 2010-2014 period, teams utilized variable pay schemes with players that were more productive or signaled greater risk, either in their contract terms or via overspecialization. However, not all forms of risk signaling were correlated with greater use of performance incentives, including age and proxies for injury history. These findings have significant implications for labor practices more broadly, as …

Bitcoin: Implications For The Developing World, Makari Krause

CMC Senior Theses

Bitcoin has become notorious as the first cryptocurrency to gain widespread media attention, however, despite its many benefits over the existing financial system it remains a volatile fringe currency. This thesis examines the validity of bitcoin as a currency and whether it can play a role in circumventing extractive economic and political institutions in developing countries. The analysis compares bitcoin usage to the level of financial openness, the inflation rate, and the percentage of the population with a bank account in 21 different countries. The correlation is found to be both statistically and economically significant for all of these variables, …

The Economics Of Hosting The Olympic Games: The Miscalculation Of Cost-Benefit Analyses And Why Cities Continue To Bid, Zachary E. Mobilian

CMC Senior Theses

The Olympic Games have become one of the world’s largest and most popular sporting events. With its massive scale, the costs that come with hosting the Games are elevating to unprecedented levels, leaving host cities with massive financial debt. So why do cities continue to bid for the rights to host the Games? In this paper I will attempt to answer this question by providing an overview of the bidding process and the economic impact of the Games and I will argue that the costs of hosting the Olympics are often underestimated while the benefits are greatly overestimated. I will …

Who Will Be The First To Buy Autonomous Vehicles? An Application Of Everett Rogers’ Diffusion Of Innovations Theory, Reilly Jackson Umberger

CMC Senior Theses

Autonomous, otherwise known as self-driving, vehicles represent the future of transportation. Vehicles that drive themselves offer far reaching benefits from increased leisure and productivity for individuals to significant improvements in congestion and infrastructure for governments. The autonomous car will radically change the way we look at transportation, and they are right around the corner. However, the question remains: are we ready? Are we, as a society, ready to hand over the steering the wheel and trust autonomous vehicles with our safety? This paper predicts how the autonomous car will spread through society by analyzing and applying the product qualities and …

Craft Beer Expansion In The United States, Alex J. Herrera

CMC Senior Theses

For centuries the world’s biggest breweries, including Anheuser-Busch InBev and MillerCoors, have been producing America’s favorite beers like Budweiser and Coors Light. However, more recently smaller, craft breweries have seen significant expansion as a growing number of Americans are drinking craft beers. How has this recent trend affected the beer market in the United States? More specifically, how has the recent success of craft breweries affected Anheuser-Busch InBev and MillerCoors? I examine the economic factors that have led to craft beer’s success in a highly competitive market, and further, how this success has impacted Anheuser-Busch InBev and MillerCoors. My study …

"And The Winner Is..." Predicting Presidential Elections, Amanda Lin

CMC Senior Theses

This paper establishes a model to forecast the Presidential election outcomes, particularly the 2016 United States Presidential Election by analyzing two distinctive approaches: predicting election wins through voting function, and using approval ratings as proxy for votes. I examine and replicate previous models for vote share of the Democratic Party and of the government for elections from 1948 to 2012. Then, I construct a model for approval ratings based on economic and non-economic variables. My findings have direct implications for forecasting elections and the political business cycle.

"I Voted": Examining The Impact Of Compulsory Voting On Voter Turnout, Nina A. Kamath

CMC Senior Theses

Over the past few decades, falling voter turnout rates have induced governments to adopt compulsory voting laws, in order to mitigate issues such as the socioeconomic voter gap and to bring a broader spectrum of voters into the fold. This paper presents evidence that the introduction of mandatory voting laws increases voter turnout rates by 13 points within a particular country through an entity- and time-fixed effect panel model. Moreover, it includes a discussion of the implications of adopting mandatory voting policies within the United States, finding that compelling citizens to vote would have increased participation rates to over 90 …

A Critical Examination Of Oil Wealth Management Strategies And Their Effects On Economic Growth In The Gulf Cooperation Council Countries, Caroline J. Belmont

CMC Senior Theses

Despite their natural resources, the countries of the Gulf Cooperation Council (Kuwait, the United Arab Emirates, Saudi Arabia, Bahrain, Qatar, and Oman) have failed to live up to their economic potential, primarily due to their dependence on a revenue source with volatile prices and political significance in an unstable region. This thesis argues that the best way to convert oil wealth into consistent long term growth is through diversification, both by investing in foreign assets and by growing domestic sectors that are independent from oil and gas prices. The research further investigates the primary tool these countries have used to …

Relationships Within The Family Tree: Roots Of Recidivism, Madison Gebhard

CMC Senior Theses

This paper seeks to examine the correlation between family relations and habitual criminal activity. Building on previous research analyzing the power and influence of positive family environments on criminal behavior, I studied the effect of parent-child relationships as determinants of adult recidivism. My results corresponded with previous studies and implied a direct correlation between positive relationships and recidivism reduction. Furthermore, my findings support the research illustrating the effect of a person's family criminal history, level of education, and socioeconomic status on criminal behavior, which may ultimately have an effect on these influential ties between parents and children.

Player Compensation And Team Performance: Salary Cap Allocation Strategies Across The Nfl, Max Winsberg

CMC Senior Theses

The National Football League’s salary cap constrains the available resources each franchise is allotted to spend on player personnel. I examine the effects of executive management’s compensation allocation strategies on team performance from 2006 to 2013. The findings suggest that spending more than the league-average on offensive lineman hurts overall team performance. Spending above the league average on both the offensive line and quarterback positions negatively affects offensive performance as well. This supports previous research stating that taking a superstar-approach to cap distribution negatively affects team performance. Furthermore, I find evidence of increased compensation inequality among players under the Collective …

Reverse Line Movements In Nfl Gambling: Parallels To Financial Market Biases And The Imitation Of Informed Bettor Strategies, Philip S. Crawford

CMC Senior Theses

Participants in the NFL gambling market can largely be divided into two distinct groups: informed bettors (“Sharps”) and uninformed bettors (“Squares”). Empirical and anecdotal evidence suggest that the dynamic between Sharp and Square bettors is very similar to that between institutional and retail investors. Professionals tend to be far better informed and utilize rational betting/investing strategies while individuals exhibit biases which perpetuate irrational strategies and therefore pricing inefficiencies. This study finds that uninformed participants in financial markets and the NFL betting market do share similar biases, and that these biases can be exploited by informed participants to generate positive excess …

Corporate Inversions: Realigning Tax Incentives To Keep Corporations In The United States, Michael A. Gose

CMC Senior Theses

ABSTRACT

This thesis analyzes the corporate income tax, more specifically related to foreign sourced income, and proposes a solution to reduce the desirability of tax inversions and restore the competitiveness of United States’ corporations. The paper introduces the topic and discusses why corporate taxation has returned to the forefront of political discussion. It then addresses early 2000s regulation passed in response to increased inversion activity of the late ‘90s and how that regulation failed to achieve its intended purpose. Then, the current laws will be introduced with a focus on corporate actions to circumvent these laws in order to reduce …

Friends In High Places: Measuring The Effects Of Compensation Committee Characteristics On Ceo Pay Packages In 2013, Danielle M. Knott

CMC Senior Theses

In the past decade, public scrutiny surrounding rising levels of executive compensation has led to more stringent independence requirements for compensation committees. However, there is little research studying the effects of compensation committees on executive pay from the time these new requirements were implemented. My paper studies the effects of compensation committee chair personal ties to the CEO, economic interests, and group committee characteristics on both the level and structure of CEO compensation. My findings suggest that certain committee chair personal ties to the CEO are associated with both a higher level of CEO compensation and a higher percentage of …

An Exposition And Calibration Of The Ho-Lee Model Of Interest Rates, Benjamin I. Lawson

CMC Senior Theses

The purpose of this paper is to create an easily understandable version of the Ho-Lee interest rate model. The first part analyzes the model in detail, and the second part calibrates it to demonstrate how it can be applied to real market data.

Deconstructing The Third Rail: An Analysis Of The Issue Of Poverty In The United States Through The Lens Of Social Security, Nikita Mehandru

CMC Senior Theses

The ongoing debate over welfare in the United States is rooted in the long-standing tension between the nation’s commitment to providing for its most vulnerable and a deep-seated belief that such support can corrupt its recipients. Social Security has struck this balance and appeals to the masses with its pay-as-you-go system and universally distributed benefits. Yet, the solvency of Social Security is threatening the program that has attempted to guard against old age and disability for the last eighty years. This paper examines how the perception of poverty in the United States is a hindrance when tackling social welfare policies. …

The Changing Relationship Between Fertility And Female Emplyment, Viraj Shastri

CMC Senior Theses

Recent literature finds that in OECD countries the cross- country correlation between the total fertility rate and the female labor force participation rate has changed from negative till the mid-1980s to positive afterwards. In sharp contrast, other studies show that this negative relationship continues to exist, however the magnitude of the effect is lower. In this paper I look at a panel of 23 OECD aggregate fertility and labor market data from 1965 – 2013 and account for country as well as year fixed effects. My findings document that there exists a negative relationship between fertility and female employment for …

Examining The Relationship Between Received Remittances And Education In Malawi, Kasvi Malik

CMC Senior Theses

This thesis examines the relationship between received remittances and education using random samples from panel survey data from households in rural Malawi collected between 2008 and 2010. Past research as well as that conducted in this paper point to the fact that remittances and education share an important correlation. The results of this study indicate that on a microeconomic level, remittances have a highly significant and positive impact on household education. Other remittance-related factors such as the distance from agent, the remittance amount, and the type of account held by an individual also have a significant impact on the highest …

The Resource Curse And Economic Freedom: A Bayesian Perspective, Danielle M. Roberts

CMC Senior Theses

The literature addressing the resource curse has been extensive. Many studies have put forth theories to explain the curse, but these theories are often refuted by new studies. Recently, there has been a theory that natural resource abundance leads to decreased economic freedom, which causes slower economic growth. Many of these studies have using frequentist testing to arrive at their conclusions. Although frequentist testing is widely used, there are several drawbacks. In particular, there is no way of addressing model uncertainty. Unless a study is able to incorporate every significant explanatory variable, the results will suffer from omitted variable bias. …

Applications Of Monte Carlo Methods In Statistical Inference Using Regression Analysis, Ji Young Huh

CMC Senior Theses

This paper studies the use of Monte Carlo simulation techniques in the field of econometrics, specifically statistical inference. First, I examine several estimators by deriving properties explicitly and generate their distributions through simulations. Here, simulations are used to illustrate and support the analytical results. Then, I look at test statistics where derivations are costly because of the sensitivity of their critical values to the data generating processes. Simulations here establish significance and necessity for drawing statistical inference. Overall, the paper examines when and how simulations are needed in studying econometric theories.

County Level Economic Voting In U.S. Presidential Elections, Martin R. Sartorius

CMC Senior Theses

This thesis seeks to understand the relationship between county level economic voting and county level economic voting by demographic group on county level vote shares for U.S. presidential elections. Using an entity and time fixed effects regression model, I study the effects that county level growth in real per capita personal income and unemployment rate change have on county level two-party vote share for the Democratic Party. Additionally, I observe the responsiveness of a county’s voting behavior due to the demographic makeup of that specific county. I then compare my initial results to those of Eisenberg and Ketcham (2004) for …

The Evolution Of Black-White Wage Inequality Across Occupational Sectors In The Us Since The 1990s, Tianxiao Ye

CMC Senior Theses

This paper updates the current knowledge about Black-White wage inequality in the US male labor market by using the NLSY97 sample. Compared with the results obtained from the NLSY79 cohort, I find that the unconditional racial wage inequality is smaller today, but after controlling for premarket academic skills, the conditional racial wage gap remains roughly the same as it was twenty years ago. After dividing the labor market by occupational categories, I find that in the white collar sector, the racial wage gap has largely disappeared even without controlling for academic skills. In the blue collar sector, academic skills can …

The Political Economy Of Environmental Justice: A Comparative Study Of New Delhi And Los Angeles, Ratik Asokan

CMC Senior Theses

Though mainstream environmentalism, both in the U.S. and India, was initially rooted in social justice, it has, over time, moved away from this focus. The Environmental Justice Movement consequently arose to reunite social and environmental activism. In this thesis, I trace the historical relationship between the mainstream environmentalism, the Environmental Justice Movement, and marginalized communities. After providing this general overview, I examine two case studies – in Los Angeles and New Delhi respectively – where marginalized communities have been involved in Environmental Justice activities. My analysis reveals that marginalized communities often act in an ‘environmentalist’ or ‘environmentally friendly’ manner, without …

Against The Grain: The Imf, Bread Riots, And Altered State Development In The Hashemite Kingdom Of Jordan, David M. Leathers

CMC Senior Theses

Since the end of World War II, and especially over the past three decades, there has been a dramatic increase of interactions between international financial institutions (IFIs) and states. This paper will explore these interactions by examining the Hashemite Kingdom of Jordan and the International Monetary Fund (IMF). This paper rests on the assumption that the complex implications of these interactions are not yet comprehensively understood and will move towards that goal by setting forth a collection of new approaches to further understand IFI-state interaction. It will discuss Jordan’s economic and political history, structural adjustment policies implemented by the IMF, …

Examining Tanzania's Development Landscape, Jenna Hussein

CMC Senior Theses

This thesis will examine Tanzania’s development landscape through Amartya Sen’s perspective, as per his conception of development that is put forth in Development as Freedom. Applying Sen’s conception of development to the case of Tanzania reinforces his view that development is an intricate process that is dependent on the expansion of various freedoms. It also yields unique insights about the most pressing issues that are currently impeding progress in the country. I will first clarify Sen’s framework and provide an explanation of development that corresponds with his ideals. Next, I will assess Tanzania’s state of affairs in terms of …

Promoting Bold Investment In Renewable Energy Research And Development, Melanie C. Paty

CMC Senior Theses

This thesis discusses the potential for private investment to fund ambitious renewable energy research and development to help mitigate climate change. I begin by discussing the threat of global warming and a brief history of renewable energy development in the United States. Next, I discuss existing avenues for private investment in renewable energy, potential methods of increasing corporate participation, and the belief that businesses must maximize only financial profits. Then I perform an in-depth case study of pension funds that have incorporated a social or environmental mission, existing environmentally focused mutual funds, and liquidated clean energy mutual funds. Finally, I …

Feasibility Analysis And Strategic Measures For Promoting Viable New Urban Development, Elizabeth J. Farr

CMC Senior Theses

This thesis demonstrates that New Urbanism is both an advisable and feasible method for reducing carbon emissions to mitigate global climate change. New Urban areas commonly generate lower carbon emissions compared to conventional suburban development due to lower car use and higher levels of walking and use of other forms of transportation. Economic and political feasibility of New Urban development is determined by analyzing case studies, housing price premia, financing, and fiscal impact. The many contexts and perspectives involved in the planning process are analyzed to determine if New Urbanism is advisable in the larger setting in which developers, advocates, …

A Study On The Effect Of Marijuana Laws On Recidivism, Joseph L. Romano

CMC Senior Theses

This study examines the effects of more lenient marijuana policy on recidivism rates. Using data of prisoners by state it examined the effect that more lenient drug laws by state on that state's recidivism rates.

Trade Liberalization In Mexico: An Analysis Of The Anti-Export Bias, Daniel J. Serra

CMC Senior Theses

Modern trade theory suggests that protectionist policies hinder exports by altering domestic prices and production incentives. This paper examines the effect of import tariffs on Mexican non-oil exports through a comprehensive analysis of the Mexican trade sector, including a breakdown of the most important free trade agreements for the Mexican economy, information on Mexican resource mobility and factor endowment, and analysis on Mexico’s tariff structure. The paper finds that import tariffs on both intermediate and final goods have a direct and significant effect on exports, alluding to the existence of an anti-export bias, and argues that free trade is the …

Africa Rising: Corruption & Foreign Direct Investment Inflows, Kunaal A. Chande

CMC Senior Theses

Using a panel data set spanning from 2005 to 2012 and drawn from 35 Sub-Saharan

African countries, this paper examines the relative impact of corruption on the

inflow of foreign direct investment. This study is motivated by the recent influx of

political and media attention on the African continent that is poised to receive

billions of dollars in investment over the coming years. It is argued in this paper that

there is no significant link between the two variables. There did appear to be a

negative skew meaning higher levels of perceived corruption resulted in less FDI

inflows, while few …