Economics Commons^™

Suits Or Pajamas: An Economic Analysis Of The Causes And Consequences Of Telecommuting, Jonathan Marlow

Honors Theses

While the concept is not new, the popularity of telecommuting has increased with the expansion in telecommunications and technology througb the last twenty years. Telecommuting, or the ability to work away from one's regular office site, is now easier than ever to do with the advancements in reliable telephone systems, personal computers, and internet access that allow one to go to the office virtually rather than physically. This concept has gained the attention of policymakers and public planners because of its potential to address various issues, possibly leading to a better quality of life, increased productivity, and improved air quality. …

Enron And The Law Of The Market, Fred Foldvary

Faculty Publications

No abstract provided.

Strategic Environmental Policy And International Trade In Asymmetric Oligopoly Markets, Yann Duval, Stephen F. Hamilton

Economics

This paper examines optimal cooperative and non-cooperative environmental taxes for the case in which a polluting input is used to produce an internationally-traded finished product. The model allows for terms-of-trade effects under oligopoly and employs a general specification of the environmental damage function that encompasses special cases of local, global, and transboundary externalities. The model has several implications for public finance. For example, inefficiently high environmental taxes may be optimal for a net exporting country in non-cooperative circumstances, as the motive to shift rent by selecting an inefficiently low tax rate is countervailed by the incentive to shift the burden …

Economic Impact Of Rock Climbing On The Communities Surrounding The Red River Gorge, Kentucky, William Hobbs

Masters Theses & Specialist Projects

The sport of rock climbing has exploded in America over the last decade resulting in millions of climbers flocking to the available areas near and far from their home. Such traffic demands clear and effective policy-making from land managers, public and private, in order to conserve and protect valuable natural resources. The Red River Gorge area hosts thousands of climbers each year and contains over 1,000 climbing routes in ten separate areas with an array of amenities for lodging, food, and other recreation. However, no research has been completed to determine the benefits of these climbing resources for local businesses …

Dynamics Of The Federal Funds Target Rate: A Nonstationary Discrete Choice Approach, Ling Hu, Peter C.B. Phillips

Cowles Foundation Discussion Papers

We apply a discrete choice approach to model the empirical behavior of the Federal Reserve in changing the federal funds target rate, the benchmark of short term market interest rates in the US. Our methods allow the explanatory variables to be nonstationary as well as stationary. This feature is particularly useful in the present application as many economic fundamentals that are monitored by the Fed and are believed to affect decisions to adjust interest rate targets display some nonstationarity over time. The empirical model is determined using the PIC criterion (Phillips and Ploberger, 1996; Phillips, 1996) as a model selection …

The Mildest Recession: Output, Profits, And Stock Prices As The U.S. Emerges From The 2001 Recession, William D. Nordhaus

Cowles Foundation Discussion Papers

This essay examines the state of the United States economy as it emerges from the 2001 recession. A comparison of several central economic variables indicates that the 2001 recession was the mildest recession in the postwar period. In light of highly differentiated characteristics of recessions, the paper suggests that we differentiate among downturns by a five-category “recession severity scale,” analogous to the Saffir-Simpson Hurricane Scale. According to this approach, the 2001 recession fits in the least severe box, a “category I recession,” along with the 1963 and 1967 non-recessions. The paper next examines the behavior of profits in recent years …

Dynamic Panel Estimation And Homogeneity Testing Under Cross Section Dependence, Peter C.B. Phillips, Donggyu Sul

Cowles Foundation Discussion Papers

This paper deals with cross section dependence, homogeneity restrictions and small sample bias issues in dynamic panel regressions. To address the bias problem we develop a panel approach to median unbiased estimation that takes account of cross section dependence. The new estimators given here considerably reduce the effects of bias and gain precision from estimating cross section error correlation. The paper also develops an asymptotic theory for tests of coefficient homogeneity under cross section dependence, and proposes a modified Hausman test to test for the presence of homogeneous unit roots. An orthogonalization procedure is developed to remove cross section dependence …

Efficient Regression In Time Series Partial Linear Models, Peter C.B. Phillips, Binbin Guo, Zhijie Xiao

Cowles Foundation Discussion Papers

This paper studies efficient estimation of partial linear regression in time series models. In particular, it combines two topics that have attracted a good deal of attention in econometrics, viz. spectral regression and partial linear regression, and proposes an efficient frequency domain estimator for partial linear models with serially correlated residuals. A nonparametric treatment of regression errors is permitted so that it is not necessary to be explicit about the dynamic specification of the errors other than to assume stationarity. A new concept of weak dependence is introduced based on regularity conditions on the joint density. Under these and some …

Nonstationary Discrete Choice, Ling Hu, Peter C.B. Phillips

Cowles Foundation Discussion Papers

This paper develops an asymptotic theory for time series discrete choice models with explanatory variables generated as integrated processes and with multiple choices and threshold parameters determining the choices. The theory extends recent work by Park and Phillips (2000) on binary choice models. As in this earlier work, the maximum likelihood (ML) estimator is consistent and has a limit theory with multiple rates of convergence ( n 3/4 and n 1 /4 ) and mixture normal distributions where the mixing variates depend on Brownian local time as well as Brownian motion. An extended arc sine limit law is given for …

Nonlinear Log-Periodogram Regression For Perturbed Fractional Processes, Yixiao Sun, Peter C.B. Phillips

Cowles Foundation Discussion Papers

This paper studies fractional processes that may be perturbed by weakly dependent time series. The model for a perturbed fractional process has a components framework in which there may be components of both long and short memory. All commonly used estimates of the long memory parameter (such as log periodogram (LP) regression) may be used in a components model where the data are affected by weakly dependent perturbations, but these estimates can suffer from serious downward bias. To circumvent this problem, the present paper proposes a new procedure that allows for the possible presence of additive perturbations in the data. …

End-Of-Sample Instability Tests, Donald W.K. Andrews

Cowles Foundation Discussion Papers

This paper considers tests for structural instability of short duration, such as at the end of the sample. The key feature of the testing problem is that the number, m , of observations in the period of potential change is relatively small — possibly as small as one. The well-known F test of Chow (1960) for this problem only applies in a linear regression model with normally distributed iid errors and strictly exogenous regressors, even when the total number of observations, n + m , is large. We generalize the F test to cover regression models with much more general …

The Block-Block Bootstrap: Improved Asymptotic Refinements, Donald W.K. Andrews

Cowles Foundation Discussion Papers

The asymptotic refinements attributable to the block bootstrap for time series are not as large as those of the nonparametric iid bootstrap or the parametric bootstrap. One reason is that the independence between the blocks in the block bootstrap sample does not mimic the dependence structure of the original sample. This is the join-point problem. In this paper, we propose a method of solving this problem. The idea is not to alter the block bootstrap. Instead, we alter the original sample statistics to which the block bootstrap is applied. We introduce block statistics that possess join-point features that are similar …

Unmediated Communication In Games With Complete And Incomplete Information, Dino Gerardi

Cowles Foundation Discussion Papers

In this paper we study the effects of adding unmediated communication to static, finite games of complete and incomplete information. We characterize S U ( G ), the set of outcomes of a game G , that are induced by sequential equilibria of cheap talk extensions. A cheap talk extension of G is an extensive-form game in which players communicate before playing G . A reliable mediator is not available and players exchange private or public messages that do not affect directly their payoffs. We first show that if G is a game of complete information with five or more …

Limit Theorems For Estimating The Parameters Of Differentiated Product Demand Systems, Steven T. Berry, Oliver B. Linton, Ariel Pakes

Cowles Foundation Discussion Papers

We provide an asymptotic distribution theory for a class of Generalized Method of Moments estimators that arise in the study of differentiated product markets when the number of observations is associated with the number of products within a given market. We allow for three sources of error: the sampling error in estimating market shares, the simulation error in approximating the shares predicted by the model, and the underlying model error. The limiting distribution of the parameter estimator is normal provided the size of the consumer sample and the number of simulation draws grow at a large enough rate relative to …

The Kpss Test With Seasonal Dummies, Sainan Jin, Peter C.B. Phillips

Cowles Foundation Discussion Papers

It is shown that the KPSS test for stationarity may be applied without change to regressions with seasonal dummies. In particular, the limit distribution of the KPSS statistic is the same under both the null and alternative hypotheses whether or not seasonal dummies are used.

The Integration Of The Hispanic/Latino Immigrant Workforce State Of Nebraska Mexican American Commission Project Report, Miguel A. Carranza, Lourdes Gouveia

Latino/Latin American Studies Reports

The main purpose of the study was to explore the degree to which Latino newcomers are being effectively and positively integrated into the economic, social, and political lives and institutions of the state and local communities. The project consisted of three phases. The first was based on analysis of Census 2000 figures, government documents, media archives, and published research. The second phase developed a survey questionnaire mailed to a wide array of agencies and organizations directly or indirectly charged with integrating newcomer populations. In the third phase we conducted focus groups with newcomers and key organizations in three Nebraska communities. …

Local Whittle Estimation Of Fractional Integration, Katsumi Shimotsu, Peter C.B. Phillips

Cowles Foundation Discussion Papers

An exact form of the local Whittle likelihood is studied with the intent of developing a general purpose estimation procedure for the memory parameter ( d ) that does not rely on tapering or differencing prefilters. The resulting exact local Whittle estimator is shown to be consistent and to have the same N (0,1/4) limit distribution for all values of d if the optimization covers an interval of width less than 9/2 and the initial value of the process is known.

The Nature And Nurture Of Economic Outcomes, Bruce Sacerdote

Dartmouth Scholarship

The relative importance of biology and envi- ronment is one of the oldest and most prominent areas of scientific inquiry and has been exam- ined by researchers as diverse as David Hume (1748), Charles Darwin (1859), and Sigmund Freud (1930). Social scientists are particularly interested in the degree to which family and neighborhood environmental factors influence a child’s educational attainment and earnings. The stakes in this debate are quite high and far-reaching. As Richard Herrnstein and Charles Murray (1994) point out, the effectiveness of anti- poverty and pro-education policies is largely de- pendent on the degree to which environment matters. …

The Importance Of Bequests And Life-Cycle Saving In Capital Accumulation: A New Answer, Karen E. Dynan, Jonathan Skinner, Stephen P. Zeldes

Dartmouth Scholarship

As the workhorse of consumption and saving research for the past four decades, the life-cycle model has proved flexible and useful for exam- ining a variety of questions. In a classic paper, Albert Ando and Franco Modigliani (1963 p. 56) stated a key assumption of the basic model: “[t]he individual neither expects to receive nor desires to leave any inheritance.” Although the authors contended that the absence of a bequest motive was not critical to the heart of their results, the assumption set off a long-standing battle over the relative importance of different motives for saving. In an influential study, …

Struggling To Provide: A Portrait Of Alameda County Homecare Workers, Candace Howes, Howard Greenwich, Laura Reif, Lea Grundy

Economics Faculty Publications

Alameda County employs nearly 8,000 homecare workers to help disabled and elderly persons live independently. Over one-third of these workers and their families—about 2,800—earn incomes that are below the official Federal poverty threshold. Many more struggle to meet basic daily needs and have to make difficult choices between caring for themselves and caring for others. Struggling to Provide is based on a recent survey of homecare workers in Alameda County that illustrates the insecure conditions in which many homecare workers live.

The Efficient-Market Hypothesis During A Recession, Jill Marie Williams

Undergraduate Honors Capstone Projects

The phrase, "A Random Walk Down Wall Street" may make a portfolio manager shudder. I first learned about this theory while reading a book of the same name by Burton G. Malkiel. I saw the last four years crashing down around me as I read about the competition I would be facing upon graduation–a blindfolded chimpanzee.

The random walk theorizes that the stock market is so efficient that a blindfolded chimpanzee can throw darts at the Wall Street Journal to select a portfolio of stocks that will perform equally as well as those managed by the experts. Unfortunately for the …

Investing In Hedge Funds: Risks, Returns And Pitfalls, Dong Hong, David Kuo Chuen Lee, Kok Fai Phoon

Research Collection Lee Kong Chian School Of Business

Hedge funds are collective investment vehicles fast becoming popular with high net worth individuals as well as institutional investors. These are funds that are often established with a special legal status that allows their investment managers a free hand to use derivatives, short sell, and exploit leverage to raise returns and cushion risk. Given that that they have substantial latitude to invest, it is instructive to examine the performance of hedge funds compared to other forms of managed funds. This paper provides an overview of hedge funds and discusses their empirical risk and return profiles. It also poses some concerns …

Markov Chains In Predictive Models Of Currency Crises - With Applications To Southeast Asia, Roberto S. Mariano, Abdul G. Abiad, Gultekin Bulent, Tayyeb Shabbir, Augustine H. H. Tan

Research Collection School Of Economics

The decade of the 1990s was marked by an unusual number of financial and economic crises such as the attack on the European Monetary System in 1992-93, the Mexican peso crisis in 1994-95, the Asian crisis in 1997, the Russian default in 1998 and its spillover to Latin America. The Turkish currency and banking crisis in 2001 and the recent difficulties in Argentina indicate that financial crises are still part of the current economic events. In the wake of such developments, there has been a resurgence of interest in early warning systems that can anticipate the likely occurrence of such …

Potential For Floating Offshore Wind Energy In Japanese Waters, A. R. Henderson, R. Leutz, Tomoki Fujii

Research Collection School Of Economics

The prospects for large scale commercialisation of sea-bed-mounted offshore windfarms are currently excellent, with the existing small-scale prototype windfarms currently being joined by the first large-scale parks in the shallow seas off the Danish, German, Swedish, Dutch, Belgian, British and Irish coasts. However other countries, including Japan, have much more limited regions of the shallow waters suitable for such developments and hence other concepts will also need to be utilised if offshore wind energy is also to become a major source of energy there.

New Mexico Labor Market Review 04-30-2002, New Mexico Department Of Labor

Historic Publications

The New Mexico Labor Market Review is a monthly publication presenting statistical data and analysis on labor market conditions throughout New Mexico. Issues examine statewide and regional trends in employment, unemployment, labor force estimates, industry activity, wages, occupational demand, and related economic conditions, often accompanied by feature articles on topics affecting the state’s economy. This issue covers March 2002.

Market Concentration: The Effects Of Technology, David Janashvili '02

Honors Projects

Market concentration is often viewed as an important indicator of monopoly power, which makes it a key aspect for analyzing antitrust and other cases. A good understanding of what market concentration is and how it arises is crucial to policy decision making, especially in today's world where large corporations often tend to dominate the business scene. In this paper I investigate how factors accounting for technological change affect market concentration holding constant the effects of other recognized determinants of concentration.

The Effects Of Malpractice On Medical Specialties, Melinda Mannlein '02

Honors Projects

"Tort law refers to the set of legal rules and practices that govern wrongful injuries to persons or property" (Culyer & Newhouse, 2000). In today's world, individuals highly utilize the law as a resource for blame and compensation. One of the best demonstrations of this mentality is the reaction of some Americans to the terrorist attacks of September 11, 2001. For instance, in Florida, two men filed a $1.1 trillion lawsuit against Osama bin Laden, claiming that his terrorist acts threatened them with personal injury and forced them to re-fortify their bomb shelters. Additionally, they accuse bin Laden of causing …

Bubble Mania Or Not?, Justin Leverton '02

Honors Projects

While many economists define a "bubble" as a deviation from stock market fundamentals, Charles Kindleberger defines a bubble as an upward price movement over an extended range that tends to implode (Kindleberger 1996). An extended negative bubble is a crash. The nature of these beasts makes them very important to the investor. Business schools teach students about the efficient market hypothesis and the economically rational individual. Bubbles make investing difficult because prices deviate from their fundamental valuations. If market fundamentals can not predict prices, the investor is forced to learn new ways of investing.

The Demand For Marijuana, Cocaine, And Heroin, Katherine Hampson '02

Honors Projects

In the last fifteen years, the "War on Drugs" has led to a large increase in the incarceration of individuals due to drug use. Drug-related convictions have increased at a faster rate than convictions for violent crimes (Reid, 2000). The severity of the epidemic is obvious in California where 75% of incarcerated individuals are there due to drug-related convictions. As the drug problem worsens, police find themselves shifting their focus away from violent and serious property crimes. In addition, the influx of drug-related convicts has caused the parole rate for other inmates to increase, sending violent criminals away from prison …

Economic Impact Of Pharmacia On Kalamazoo County In 2001, George A. Erickcek, Brad R. Watts

Reports

No abstract provided.