Economics Commons^™

Valuation Bias And Profit Opportunities In Financial Markets, Jayendra Gokhale, Elizabeth Schroeder, Victor J. Tremblay

Accounting, Economics, Finance, and Information Sciences - Daytona Beach

Recent work by Gokhale et al. (2013) proposes a method for detecting misvalued stocks. This paper applies the method to look for profitable investment opportunities by identifying undervalued stocks. Using data on companies in the S&P 100 over a period of 22 years, we test several specifications of our investment strategy for robustness. We find that investing in undervalued stocks significantly outperforms benchmark indices over time, and that this strategy can lead to risk-adjusted excess returns that are positive and statistically significant.

A Study Of Regional Economies In The United States, Tanios Bou Onk

Honors Program Theses and Research Projects

Using multiple time series based on data gathered from reliable government agencies I will compare the effects of national inflation, fluctuations in national GDP, and fluctuations in national employment on the personal income of multiple Metropolitan Statistical Areas (MSA), with the effects that local (MSA) inflation, fluctuations in local GDP, and fluctuations in local employment in multiple MSAs have on real national GDP. This analysis will be limited to four metropolitan areas, San Antonio, Texas, Philadelphia, Pennsylvania, San Diego, California, and Cincinnati-Hamilton, Ohio. These metropolitan areas are each in a different region located within the United States. This was done …

State Of The U.S. Ocean And Coastal Economies 2014, Judith T. Kildow, Charles S. Colgan, Jason D. Scorse, Pat Johnston, Matt Nichols

Publications

The nation's coasts and oceans contribute much to the United States economy. For the past 14 years, the National Ocean Economics Program (NOEP), now a program of the Center for the Blue Economy at the Monterey Institute of International Studies, has compiled time-series data that track economic activities, demographics, ports and cargo volume and value, natural resource production and value, non-market values, and federal expenditures in the U.S. coastal zone both on land and in the water. A report on the ocean and coastal economies of the United States was released by NOEP in 2009 covering data through 2005. The …

Coastal And Ocean Economic Summaries Of The Coastal States 2014, Pat Johnston

Publications

The following summaries of the ocean and coastal economies were prepared by the National Ocean Economics Program as a companion the State of the U.S. Ocean and Coastal Economies 2014. The U.S. report, its appendices, and these state summary reports are available on the NOEP website at www.OceanEconomics.org/download.

Putting A Human Face On The Minimum Wage, Christopher R. Fee

English Faculty Publications

What is a “livable wage,” and should we strive to raise wages for American workers?

There are lots of conflicting studies and reports. The Congressional Budget Office projects that an increase in the minimum wage from $7.25 an hour to $10.10 an hour would eliminate 500,000 jobs while raising the incomes of nearly 17 million Americans.

Even prominent economists like David Card and David Neumark diametrically disagree on the likely consequences of raising the minimum wage, and their studies of results in New Jersey have consistently yielded conflicting results for decades. [excerpt]

Generating Matlab Matrices From Implan Cge Files, Mason Pierce

Regional Research Institute Technical Documents

This document describes the process used to create usable tables from the 27 individual GAMS files in .DAT format generated by IMPLAN software. 26 of these are social accounting matrix (SAM) data files and 1 is an employment-by-industry data file. By performing the appropriate command in MATLAB, the user can create the desired table, for example the use or make tables, which can then be used for various purposes. IMPLAN 2 and IMPLAN 3 produce .DAT files of different formats. This document details the process of handling each of these file formats.

Strengthening The Science Of Public Health Delivery: Complexities In Implementation, Inference & Translation, Glen P. Mays

Health Management and Policy Presentations

Delivery systems for public health programs and policies are diffuse and heterogeneous across the U.S., reflecting wide variation in the capacity to implement population-level health improvement strategies. This lecture examines strategies for evaluating the causes and consequences of variation in public health delivery across the U.S., with a focus on identifying pathways for improving the health and economic effects of policy and practice.

Challenges In Higher Ed: Law School And The Liberal Arts College, Michael Hemesath

Administration Publications

No abstract provided.

Bootstrap Blues, Hannah M. Frantz

SURGE

Meet David*. In mid-January, he came to the small town Iowa elementary school where I work. David has attended more schools in the two years since he started school than I have in my lifetime. In fact, the school he just moved from only has four days of attendance listed on his record. David moves so often because he’s homeless. His situation is not what we may stereotypically think of as “homeless”—you wouldn’t see him on the streets or even in soup kitchens. Instead, David stays with his mother, and they couch surf from one home to another from week …

Discrepancies In Labor Market Outcomes From Migration Evidence From Colombia, Liza Beatriz Pena

USF Tampa Graduate Theses and Dissertations

As of 2012, approximately 10% of the population in Colombia has been displaced by violence. The main motivation of this paper is to estimate the effect of interregional migration on employment outcomes in the country between 1993 and 2005. Using violence as an instrument for migration, I analyzed the differential effects of migration on specific employment outcomes across gender and skill levels. I find that a one percentage point increase in net migration only increases the unemployment rates of female migrants by 0.656 percentage point. I also find that net migration rates do not affect the employment conditions of low-skilled …

An Analysis Of Risk-Taking Behavior For Public Defined Benefit Pension Plans, Nancy Mohan, Ting Zhang

Economics and Finance Faculty Publications

This paper presents the first comprehensive study on the determinants of public pension fund investment risk and reports several new important findings. Unlike private pension plans, public funds undertake more risk if they are underfunded and have lower investment returns in the previous years, consistent with the risk transfer hypothesis. Furthermore, pension funds in states facing fiscal constraints allocate more assets to equity and have higher betas. There also appears to be a herding effect in that CalPERS equity allocation or beta is mimicked by other pension funds. Finally, our results suggest that government accounting standards strongly affect pension fund …

Rhode Island Current Conditions Index -- March 2014, Leonard Lardaro

The Rhode Island Current Conditions Index

No abstract provided.

Game Theory And Family Business Succession: An Introduction, Timothy Mathews, Tim Blumentritt, Gaia Marchiso

Faculty Articles

One of the most significant challenges to enduring family businesses is the process of passing the leadership of a firm from one generation to another. This article introduces game theory as a model for examining succession as a set of rational but interdependent choices made by individuals about a firm’s leadership. Its primary contribution is demonstrating the application of game theory to understanding the decisions and outcomes of succession events.

Optimal Capital Taxation And Consumer Uncertainty, Ryan Chahrour, Justin Svec

Economics Department Working Papers

This paper analyzes the impact of consumer uncertainty on optimal fiscal policy in a model with capital. The consumers lack confidence about the probability model that characterizes the stochastic environment and so apply a max-min operator to their optimization problem. An altruistic fiscal authority does not face this Knightian uncertainty. We show analytically that, in responding to consumer uncertainty, the government no longer sets the expected capital tax rate exactly equal to zero, as is the case in the full-confidence benchmark model. Rather, our numerical results indicate that the government chooses to subsidize capital income, albeit at a modest rate. …

Valuation Structure In First-Price And Least-Revenue Auctions: An Experimental Investigation, Diego Aycinena, Rimvydas Baltaduonis, Lucas Rentschler

Economics Faculty Publications

In many auctions the valuation structure involves both private and common value elements. Existing experimental evidence (e.g. Goeree and Offerman in Am. Econ. Rev. 92(3):625–643, 2002) demonstrates that first-price auctions with this valuation structure tend to be inefficient, and inexperienced subjects tend to bid above the break-even bidding threshold. In this paper, we compare first-price auctions with an alternative auction mechanism: the least-revenue auction. This auction mechanism shifts the risk regarding the common value of the good to the auctioneer. Such a shift is desirable when ex post negative payoffs for the winning bidder results in unfulfilled contracts, as is …

Are Online Pharmacy Prices Really Lower In Mexico?, Thomas M. Fullerton Jr., Adam G. Walke

Departmental Papers (E & F)

Empirical research on international pharmaceutical prices has uncovered numerous interesting commonalities and differences across international markets. This study examines price differences for brand name medicines sold over the Internet in the United States and Mexico. Web sites in both countries advertise their services in English and price their products in dollars. Sample data for 50 topselling medicines are from October 2011 for equal dosages on a per unit basis, exclusive of shipping fees, handling charges, and taxes. For a few medicines, the savings available to consumers who purchase them from companies in Mexico are very large. For most medicines in …

Borders, Ethnicity And Trade, J. C. Aker, M. W. Klein, Stephen A. O'Connell, M. Yang

Economics Faculty Works

This paper uses unique high-frequency data on prices of two agricultural goods to examine the additional costs incurred in cross-border trade between Niger and Nigeria, as well as trade between ethnically distinct markets within Niger. We find a sharp and significant conditional price change of about 20 to 25% between markets immediately across the national border. This price change is significantly lower when markets on either side of the border share a common ethnicity. Within Niger, trade between ethnically distinct regions exhibits an ethnic border effect that is comparable, in its magnitude, to the national border effect between Niger and …

A Spatial Analysis Of Incomes And Institutional Quality: Evidence From Us Metropolitan Areas, Jamie Bologna, Donald J. Lacombe, Andrew T. Young

Economics Faculty Working Papers Series

We use the Stansel (2013) metropolitan area economic freedom index and 25 conditioning variables to analyze the spatial relationships between institutional quality and economic outcomes across 381 U.S. metropolitan areas. Specifically, we allow for spatial dependence in both the dependent and independent variables and estimate how economic freedom impacts both per-capita income growth and per-capita income levels. We find that while economic freedom and income levels are directly and positively related, increases in economic freedom in one area result in negative indirect effects on income levels in surrounding areas. In addition, we find that economic freedom has an insignificant relationship …

The Changing Nature Of Manufacturing, Christopher R. Bollinger

Issue Brief on Topics Affecting Kentucky’s Economy

No abstract provided.

Sovereign And Quasi-Sovereign Insolvency: Features And Resolution Options, Phebian N. Bewaji

Bullion

Governments like businesses, are sometimes faced with financial constraints, which impede it to carry out its functions. Thus, states, like households and firms, sometimes need to borrow to finance its activities. Unlike government revenue, expenditures are counter-cyclical and debts incurred have to be repaid at some future date, based on a repayment schedule and pre-determined terms. ln the event of a debt crisis, default or liquidity situation, unlike households and companies, the effects are more pronounced for sovereign states mainly for two reasons. This paper examines the events that trigger sovereign insolvency and likely measures of resolutions. lt acknowledges the …

Specification Tests For Nonlinear Dynamic Models, Igor Kheifets

Cowles Foundation Discussion Papers

We propose a new adequacy test and a graphical evaluation tool for nonlinear dynamic models. The proposed techniques can be applied in any setup where parametric conditional distribution of the data is specified, in particular to models involving conditional volatility, conditional higher moments, conditional quantiles, asymmetry, Value at Risk models, duration models, diffusion models, etc. Compared to other tests, the new test properly controls the nonlinear dynamic behavior in conditional distribution and does not rely on smoothing techniques which require a choice of several tuning parameters. The test is based on a new kind of multivariate empirical process of contemporaneous …

How Might A Central Bank Report Uncertainty?, Ray C. Fair

Cowles Foundation Discussion Papers

An important question for central banks is how they should report the uncertainty of their forecasts. This paper discusses a way in which a central bank could report the uncertainty of its forecasts in a world in which it used a single macroeconometric model to make its forecasts and guide its policies. Suggestions are then made as to what might be feasible for a central bank to report given that it is unlikely to be willing to commit to a single model. A particular model is used as an illustration.

The Financial Crisis And Macroeconomic Activity: 2008-2013, Ray C. Fair

Cowles Foundation Discussion Papers

This paper provides estimates of the effects of the fall in financial and housing wealth in 2008-2009 on overall macroeconomic activity. These effects are large and account for a large fraction of the slowdown in activity. Much of the 2008-2009 recession is estimated to be simply standard wealth effects at work.

Exploiting The Choice-Consumption Mismatch: A New Approach To Disentangle State Dependence And Heterogeneity, K. Sudhir, Nathan Yang

Cowles Foundation Discussion Papers

This paper offers a new identification strategy for disentangling structural state dependence from unobserved heterogeneity in preferences. Our strategy exploits market environments where there is a choice-consumption mismatch. We first demonstrate the effectiveness of our identification strategy in obtaining unbiased state dependence estimates via Monte Carlo analysis and highlight its superiority relative to the extant choice-set variation based approach. In an empirical application that uses data of repeat transactions from the car rental industry, we find evidence of structural state dependence, but show that state dependence effects may be overstated without exploiting the choice-consumption mismatches that materialize through free upgrades.

Price Search Across Stores And Across Time, Navid Mojir, K. Sudhir

Cowles Foundation Discussion Papers

In response to price dispersion across stores and price promotions over time, consumers search across both stores (spatial) and time (temporal), in many retail settings. Yet there is no search model in extant research that jointly endogenizes search in both dimensions. We develop a model of spatiotemporal search that nests a finite horizon model of spatial search across stores within an infinite horizon model of inter-temporal search. The model is estimated using an iterative procedure that formulates it as a mathematical program with equilibrium constraints (MPEC) embedded within an E-M algorithm to allow estimation of latent class heterogeneity. The empirical …

Do Sympathy Biases Induce Charitable Giving? The Effects Of Advertising Content, K. Sudhir, Subroto Roy, Mathew Cherian

Cowles Foundation Discussion Papers

We randomize advertising content motivated by the psychology literature on sympathy generation and framing effects in mailings to about 185,000 prospective new donors in India. We find significant impact on the number of donors and amounts donated consistent with sympathy biases such as the “identifiable victim,” “in-group” and “reference dependence.” A monthly reframing of the ask amount increases donors and amount donated relative to daily reframing. A second field experiment targeted to past donors, finds that the effect of sympathy bias on giving is smaller in percentage terms but statistically and economically highly significant in terms of the magnitude of …

Innovation Rivalry: Theory And Empirics, John T. Scott, Troy J. Scott

Dartmouth Scholarship

This paper develops the theory of a U relation between seller concentration and R&D investment and integrates the new theory with the traditional expectation of an inverted-U relation. The paper illustrates the U relation, and the integrated U and inverted-U relations, for a single type of R&D performed in most industries, exploiting differences in the degree of structural competition across industries while admitting little if any variation in the type of R&D.

Computational Complexity Of The Walrasian Equilibrium Inequalities, Donald J. Brown

Cowles Foundation Discussion Papers

Recently Cherchye et al. (2011) reformulated the Walrasian equilibrium inequalities, introduced by Brown and Matzkin (1996), as an integer programming problem and proved that solving the Walrasian equilibrium inequalities is NP-hard. Following Brown and Shannon (2000), we reformulate the Walrasian equilibrium inequalities as the Hicksian equilibrium inequalities. Brown and Shannon proved that the Walrasian equilibrium inequalities are solvable iff the Hicksian equilibrium inequalities are solvable. We show that solving the Hicksian equilibrium inequalities is equivalent to solving an NP-hard minimization problem. Approximation theorems are polynomial time algorithms for computing approximate solutions of NP-hard minimization problems. The contribution of this paper …

Varying The Money Supply Of Commercial Banks, Martin Shubik, Eric Smith

Cowles Foundation Discussion Papers

We consider the problem of financing two productive sectors in an economy through bank loans, when the sectors may experience independent demands for money but when it is desirable for each to maintain an independently determined sequence of prices. An idealized central bank is compared with a collection of commercial banks that generate profits from interest rate spreads and flow those through to a collection of consumer/owners who are also one group of borrowers and lenders in the private economy. We model the private economy as one in which both production functions and consumption preferences for the two goods are …

Price Search Across Time And Across Stores, Navid Mojir, K. Sudhir

Cowles Foundation Discussion Papers

In response to price dispersion across stores and price promotions over time, consumers search across both stores and time, in many retail settings. Yet there is no search model in extant research that jointly endogenizes search in both dimensions. We develop a model of search across stores and across time that nests a nite horizon model of search across stores within an in nite horizon model of inter-temporal search. The model is estimated using an iterative procedure that formulates it as a mathematical program with equilibrium constraints (MPEC) embedded within an E-M algorithm to allow estimation of latent class heterogeneity. …