Behavioral Economics Commons^™

Are Nigerian Banks Vulnerable To Oil Price Shocks? A Stress Test Approach, A. T. Odu, A. R Sanusi

Economic and Financial Review

This study empirically examines the vulnerability of the Nigerian banking industry to extreme, but plausible, adverse oil price shocks. A structural vector autoregressive (SVAR-X) is adopted to achieve this objective. The study period covers 2007Q1 – 2020Q4. The simulations assess the asset quality performance of DMBs, using the NPLs, under three scenarios (baseline, adverse and severely adverse). The findings suggest that the entire banking industry, as well as individual DMBs, are vulnerable to adverse oil price shocks. Accordingly, the study recommends, strict compliance with the single obligor limit, by commercial banks, to mitigate adverse effects of volatilities in crude oil …

Introduction To The Special Issue On Couples, Families, And Finance, Melissa A. Curran, Ashley B. Lebaron, Xiaomin Li, Casey J. Totenhagen

Faculty Publications

For the nine papers that appear in this special issue, we identified three main organizing themes: (1) Understudied aspects of family financial socialization, (2) Individuals or couples in different-sex romantic relationships, and (3) Finances and perceived parent–child relationships. In this introduction, we describe the main points of each of these papers within each theme. We also discuss what we have learned from these papers (e.g., finances assessed using eight different datasets; range of samples including adults repaying loans, newlywed couples, and a nationally representative sample of U.S. college students) as well as what future research questions remain (e.g., financial studies …

The Impact Of Socioeconomic Status On Single Women, Catherine Martens

Marketing Undergraduate Honors Theses

Since its formation in the 1700’s, America has been home to varying degrees of discrepancies between social classes, which include assumptions inherently held within these differences. Considering the fact that America was largely built by the hands of human slaves ruled by those with political influence often landowners, social hierarchy has been intricately woven into the fabric of America’s story from the beginning. Despite the progress that has been made to create and advance equal economic opportunity, there is still a considerable lack of social mobility available for those in lower socioeconomic statuses. More specifically, the impact of poverty is …

Covid-19: A Black Swan?, Ben M. Uehlinger

Senior Honors Projects, 2020-current

A Black Swan, as termed by Nassim Taleb, is an unexpected, high magnitude event that is often rationalized in hindsight. 9/11 and the Financial Crisis of 2008 are two examples of these tail probability events. Though COVID-19 has been regarded as momentous and unexpected, Taleb does not credit it as a true Black Swan. This paper aims to compare COVID-19 to these recent Black Swans in terms of predictability and significance. Cointegration was tested across 11 major sectors. Further economic indicators were explored with the goal of discussing the broader context of each event. It was concluded that COVID-19 was …

National Cultures And Stock Prices: Evidence From The Emerging Markets, Ahmad E. Shahin, Mostafa Saleh

Papers, Posters, and Presentations

This report in the field of behavioral finance explores the effect of national culture factors and firm specific factors on the stock prices of publicly traded firms in the 36 countries in the emerging markets. Using linear regression, we tested 13 variables (three of them were Hofstede’s indices for Individualism, Uncertainty Avoidance, and Long-term Orientation) against the stock prices. We found that in the Africa, America, and Europe regions, the cultural factors had no significant effect on stock prices. On the other hand we found that only individualistic behavior had a significant effect on stock prices in businesses in Arab …

National Cultures And Capital Structure: Evidence From The Emerging Markets, Ahmad E. Shahin, Laila El Adly, Eman Barr, Islam Fathy, Ahmed Taha

Papers, Posters, and Presentations

This paper identifies the combinations between Hofstede’s six cultural aspects and four selected firm-specific factors, which have a significant impact on the choice of capital structure, in 15,821 listed companies from 34 countries in the emerging market, for the period 2012 – 2014. Thirty seven independent variables and one dependent variable have been tested using regression analysis. It has been concluded that the combinations that have a significant impact on the choice of capital structure (leverage) in the emerging markets were [Cultural – Firm-specific]:

1. Power distance – cash flows, cost of debt
2. Individualism – cash flows, cost of debt
3. Masculinity …

The Effect Of Female Managers On Mutual Fund Performance During Down Markets, Madison Gates, Madison I. Gates

Scripps Senior Theses

Women in the finance industry have long been underrepresented. The mutual fund industry is no exception, with female managers in the United States falling stagnant at only 11% from 2000 to 2019. Given this low and stagnant number, this study seeks to understand if female managers impact mutual fund performance, specifically comparing down and up market periods. The data for this research was compiled from individual US mutual fund prospectus and fact sheet information in order to create a unique dataset containing the returns for every year between 2000 and 2019 as well as gender make-up, average experience, and team …

Meta Analysis On Mosque Economics, Aisyah As-Salafiyah, Aam Slamet Rusydiana, Muhammad Isa Mustafa

Library Philosophy and Practice (e-journal)

This study tries to review the research around the Mosques economy on reputable journal. It uses descriptive statistical analysis based on selected 103 article publications or papers related to the Mosques economy, with national and international journal. The entire sample journal publications have published for twelve years from 2009 to 2020. The Results show that mosques economy research study case is still dominated by Indonesia (76 studies), following by Malaysia (14 studies) and Bangladesh (3 studies). In addition, the average time of journal publication, between 9 and 10 years. There are at least 43 journals that published mosques economy articles …

Does Bitcoin Use Affect Crime Rates?, Kevin Keane

The Corinthian

Bitcoin is the most widely used cryptocurrency in the world because of its decentralized network that completes user-to-user transactions, eliminating the need for intermediaries. During 2017, the volume of Bitcoin transactions totaled $94.3 trillion. Bitcoin transactions are recorded in a public database called the blockchain. Although the blockchain can keep track of how many transactions there are, it can’t identify the people involved in transactions. The lack of identity increases the anonymity of Bitcoin transactions, making it less detectable when used for crime. Using the Uniform Crime Reporting’s state-level crime rate data and blockchain’s Bitcoin transaction information, I estimate the …

Does Early Access To Pension Wealth Improve Health?, Seonghoon Kim, Kanghyock Koh

Research Collection School Of Economics

We examine the health impacts of early access to public pension wealth by exploiting a unique policy in Singapore allowing individuals to withdraw a proportion of their pension savings after their 55th birthday. For the identification, we employ a regression discontinuity design by comparing individuals before and after their 55th birthday. To address anticipated and lagged health impacts, we adopt the donut regression discontinuity approach. Using nationally representative monthly panel data, we find that early access to pension wealth improves self‐reported overall health.

Financial Literacy And French Behaviour On The Stock Market, Luc Arrondel

Numeracy

This article looks back over the different dimensions of financial literacy: theoretical, methodological, empirical and political. The theoretical foundations of the notion of financial literacy are presented with reference to recent contributions by psychological or behavioural economics: “household finance” refers to the concept of financial literacy based on the empirical dead-ends of standard saver theory. This raises the fundamental question as to how to measure and evaluate financial literacy. Here, we are especially interested in the empirical robustness of a standard measure of financial literacy based on three straightforward questions (interest calculations, notion of inflation and risk diversification). Is this …

Empirical Asset Pricing Of Saudi Stock Market, Muath Alolayan

LSU New Orleans Theses and Dissertations

This essay tests the differences in equity returns between Islamic and conventional firms using the Capital Asset Pricing Model (CAPM), Fama & French three factors model, and Fama & French four factors model. We us the Fama-Macbeth methodology to test the adequacy and explanatory power of the various model specifications. We find that the CAPM can better predict the factors for Islamic firms but not the conventional firms. There was a failure of Fama and French three factors and four factors model for Islamic, conventional and the total market. The estimated Beta is very close to the market for the …

Cooling Measures And Housing Wealth: Evidence From Singapore, Wolfgang K. Hardle, Rainer Schulz, Taojun Xie

Research Collection Lee Kong Chian School Of Business

Excessive house price growth was at the heart of the financial crisis in 2007/08. Since then, many countries have added cooling measures to their regulatory frameworks. It has been found that these measures can indeed control price growth, but no one has examined whether this has adverse consequences for the housing wealth distribution. We examine this for Singapore, which started in 2009 to target price growth over ten rounds in total. We find that welfare from housing wealth in the last round might not be higher than before 2009. This depends on the deflator used to convert nominal into real …

Objectively-Measured And Subjectively-Perceived Financial Literacy, Wenyi Lu

Dissertations, Theses, and Capstone Projects

This dissertation consists of three chapters on financial literacy. The chapters examine the impact of financial literacy on households’ risk tolerance and financial planning behavior. Financial literacy was assessed in two dimensions: an objectively-measured financial literacy score, and a subjectively-perceived financial literacy level.

The first chapter reviews the literature measuring financial literacy, and raises concerns about the prevalent state of financial-literacy overconfidence, which can lead to underprepared financial planning and irrational financial behavior. This chapter uses the survey data from the Financial Regulatory Authority’s (FINRAs) 2009, 2012 and 2015 National Financial Capability Study (NFCS) to explore how individual and regional …

Socioeconomic Influences On Property Crime Rates: A Study In Virginia's Counties, Mary Passley

Student Scholar Showcase

Most research on factors and causes of crime, whether property or violent crime, focuses on individuals’ behavior or their surrounding environment. In this research, I explore the idea of socioeconomic factors correlated to property crime. I conducted a retrospective design to fully explore United States Census data and crime data gathered by the Bureau of Justice Statistics to discover statistically significant variables connected to property crime. Significant findings were shown by average people per house and retail sales per capita in all counties. Additional significant findings were percent employment change and percent with high school degree or higher in low …

The Name Game: The Importance Of Resourcefulness, Ruses, And Recall In Stock Ticker Symbols, Gary N. Smith, Naomi Baer, Erica Barry

Pomona Economics

Previous research reported that a portfolio of stocks with clever ticker symbols outperformed the overall market by a significant margin during the years 1984 to 2005. This paper reports the performance of those stocks during the subsequent years 2006 to 2018, and also investigates the 2006-2008 performance of a new set of clever-ticker stocks. Both clever-ticker portfolios beat the market by a substantial margin, supporting the resiliency of the clever-ticker phenomenon.

Socialization Agents That Puerto Rican College Students Use To Make Financial Decisions, Enid Alvarez, Steven Tippins

Journal of Sustainable Social Impact

Using consumer socialization theory as theoretical framework, the purpose of this quantitative, nonexperimental, cross-sectional study was to identify the information sources that Puerto Ricans college students use to gather financial knowledge. A sample of 198 Puerto Rican college students answered a portion of the College Student Financial Literacy Survey. The research question addressed the preference of four financial information sources, including parents, peers, media, and school. A combination of descriptive statistics, one-way analysis of variance, repeated-measures analysis of variance, and multiple linear regression confirmed that participants preferred to gather financial knowledge from parents. Researchers, educators, and policymakers may use this …

Circadian Variations And Risky Decision Making, Sana Sra

Scripps Senior Theses

Over the past decades, decision making under risk has garnered a great amount of attention both in the field of economics and psychology. Although state-dependent variabilities of risk taking are well-documented, little is known about the effects of a person’s preferred time of day, or chronotype, in risky decision making. Under circumstances of circadian mismatch (e.g., when an “early bird” makes decisions in the evening), research suggests that decision making may reflect a greater reliance on heuristics, such as using stereotypes in social judgments. However, the effects of circadian mismatch on heuristics in risky decision making are relatively unexplored. This …

What Drives Merger Waves? A Study Of The Seven Historical Merger Waves In The U.S., Katherine Ching

Scripps Senior Theses

Historically, merger and acquisition (or M&A) activity has occurred in cyclical patterns, forming what are known as “merger waves.” To date, there have been a total of seven waves. Though it is widely acknowledged that merger waves exist, there is no consensus on what drives these waves. Through both qualitative and quantitative analysis, this paper aims to determine the causes of merger waves and looks at those causes through two different lenses: the neoclassical view, which states that economic shocks cause merger waves, and the behavioral view, which states that increases in merger activity are due to managerial behavior and …

Actual And Self-Assessed Financial Literacy Among Employees Of A South African University, Gizelle D. Willows

Numeracy

This study examines the level of financial literacy and self-assessed financial literacy amongst members of a South African tertiary institution’s retirement fund. Based on surveys of the fund’s members, I employ descriptive statistics and multivariate regression analyses to examine differences in financial literacy within and across groups. The results show that, despite working for an employer implementing many best practices identified by financial literacy advocates, respondents from all demographic subgroups possess relatively low levels of financial knowledge. Men, White respondents, and those with a higher cost of employment or higher educational attainment were more likely to have a higher level …

Is Public Transit's 'Green' Reputation Deserved?, Justin Beaudoin

PSU Transportation Seminars

While public transit has a reputation as a potential means to ameliorate the adverse environmental effects of automobile travel, there have been very few empirical studies of the marginal effect of transit supply on air quality. We explore whether any of the substantial improvement in air quality observed in the U.S. from 1991 to 2011 can be attributed to increased public transit supply by developing an equilibrium model of transit and automobile travel volumes as a function of the level of transit supplied. We then empirically analyze the effects of the level of transit supply on observed ambient pollution levels …

Examining Moral Hazard In The Healthcare Insurance Market, Samuel Ashby

Honors College Theses

This study aims to examine the effect of insurance coverage on medical expenditure in the United States. The data was gathered from the Household Component Medical Expenditure Panel Survey and is a cross-sectional data set with a sample size of approximately 1500 observations. The study also distinguishes between public and private insurance coverage to compare the potential moral hazard in the two separate markets. The results of this study suggest that insurance status, specifically public, has a strong positive effect on healthcare expenditure. This result, combined with a negative relationship between household income and healthcare expenditure, suggests that the source …

Are Prize-Linked Savings Accounts The Solution To Arkansas' Savings Problem?, Mckenzie Wages

Accounting Undergraduate Honors Theses

This research finds that access to prize-linked savings could improve the financial security of Arkansans. Prize-linked savings (PLS) accounts are nontraditional savings products that offer depositors the chance to win cash prizes instead of a typical interest rate return. Given the low median incomes, high liquid asset poverty rates, and high levels of underbanked and undereducated individuals in Arkansas, there is a need for an innovative savings solution like PLS in the state. PLS accounts capitalize on individuals’ propensity for lottery-like risk-taking to inspire the productive behavior of personal saving. A wide range of individuals, especially those who could stand …

Income And Subjective Well-Being: Evidence From Singapore's First National Non-Contributory Pension, Yanying Chen, Yi Jin Tan

Research Collection School Of Economics

We use a new monthly panel and a difference-in-differences strategy to study the effects of an exogenous permanent income shock on subjective well-being along previously unexplored dimensions. This permanent income shock is the introduction of Singapore’s first national non-contributory pension, the Silver Support Scheme. The pension improved the life satisfaction of recipients, and appeared to be driven by social, household income, and economic satisfaction. Consistent with the predictions of standard consumption-savings models, well-being improved when the shock was unanticipated (at announcement), but did not improve significantly further when the shock was anticipated (at disbursement). In addition, we find evidence that …

Understanding The Racial/Ethnic Gap In Bank Account Ownership Among Older Adults, Luisa Blanco, Marco Angrisani, Emma Aguila, Mei Leng

School of Public Policy Working Papers

The observed racial/ethnic gap in bank account ownership among older adults is substantial. We investigate socio-economic, cognitive and cultural barriers underling it. As additional potential barriers are accounted for, the residual gaps in financial inclusion with respect to Whites is reduced by 19 percent for Blacks and 46 percent for Hispanics. We find that citizenship and “taste for privacy” play a limited role for both minority groups, while real asset ownership, health, cognitive ability and cultural hurdles contribute substantially to the gap. For Hispanics, language barriers explain most of the gap, while neighborhood-level socioeconomic characteristics are more salient for Blacks. …

Inflation Expectations In Singapore: A Behavioural Approach, Alexander Clark, Aurobindo Ghosh, Samuel Hanes

Research Collection Lee Kong Chian School Of Business

The expectations of economic agents have significant impact on their decisions and are key determinants of macroeconomic outcomes such as inflation, economic growth and unemployment. For example, if a worker believes that consumer prices will rise sharply next year, she would demand a wage increase. Similarly, a homeowner with a fixed interest mortgage might make an early repayment if she expects price levels to fall, knowing that the real value of her mortgage debt will increase. In these cases, expectations about inflation could lead to changes in behaviour and in the aggregate, influence prices and become self-fulfilling.

Entrepreneurship Education Empowers Youth To Change Their Lives, Marianna Brashear, Jason Riddle

National Youth Advocacy & Resilience Conference

The Foundation for Economic Education (FEE) aims at equipping Title 1 schools with free, hands-on, engaging materials that any teacher can facilitate either individually or in a classroom setting with no background in entrepreneurship necessary. These versatile lessons, courses, and workshops teach the entrepreneurial mindset optimizing opportunities for grades 8-12 students no matter which life/career path they choose.

Gender And Financial Risk Aversion, Efstathia Korkou

Dissertations, Theses, and Capstone Projects

The primary goal of this dissertation is the study and measurement of the effect of gender in the process of financial decision making and investment decision making in particular, under uncertainty. In terms of investment decisions, researchers have linked investors’ risk aversion to several individual characteristics of theirs, such as their age, their income or their financial knowledge. However, an investor’s characteristic, somehow overlooked or not properly investigated, has been the investor’s gender, and the latter’s bearing on investment decision making. Research from the 1990s suggested that once individuals are called to allocate their wealth and make investment decisions, women …

A Cross-Sectional Exploration Of Household Financial Reactions And Homebuyer Awareness Of Registered Sex Offenders In A Rural, Suburban, And Urban County., John Charles Navarro

Electronic Theses and Dissertations

As stigmatized persons, registered sex offenders betoken instability in communities. Depressed home sale values are associated with the presence of registered sex offenders even though the public is largely unaware of the presence of registered sex offenders. Using a spatial multilevel approach, the current study examines the role registered sex offenders influence sale values of homes sold in 2015 for three U.S. counties (rural, suburban, and urban) located in Illinois and Kentucky within the social disorganization framework. Homebuyers were surveyed to examine whether awareness of local registered sex offenders and the homebuyer’s community type operate as moderators between home selling …

Exploring Investor Attention In Financial Models, Anna Rodier

Honors Projects in Finance

The purpose of this study is to investigate whether stock prices are influenced by investor attention and how this, in turn, can be used to better advise the financial decisions of the everyday investor. Using weekly adjusted close data, weekly traded volumes, and weekly company searches using Google Trends, I tested my hypothesis that including the frequency of company searches, found through consumers using Google, in financial models will help better predict stock returns. Using S&P 500 company data from February 2012 to February 2017, frequency is a better predictor of price in comparison to trading volumes. But, to maximize …