Behavioral Economics Commons^™

The Behavioral Impacts Of Property Tax Relief: Salience Or Framing?, Phuong Nguyen-Hoang, John Yinger

Center for Policy Research

New York State’s School Tax Relief Program, STAR, provides state-funded exemptions from school property taxes. From 2006-07 to 2008-09, these exemptions were supplemented with rebates, which arrived as a check in the mail. The purpose of this paper is to determine whether these two algebraically equivalent but administratively distinct policies of tax relief led to different behavioral responses. Drawing on behavioral economics, we explore the impact of STAR on the price elasticity of demand for school quality based on the concepts of salience and framing. Our main results are that the behavioral impact of the STAR provisions are larger (1) …

The Social Relations Of Consumption: Corporate Law And The Meaning Of Consumer Culture, David G. Yosifon

BYU Law Review

A mature assessment of the society we are making for ourselves, and the legacy we are leaving to the future, must come to terms with consumer culture. Theoretical discourse, as well as common experience, betray persistent ambiguity about what consumerism means to and says about us. In this Article, I argue that this ambiguity can in part be explained by examining the social relations of consumption in contemporary society. These involve, crucially, the relationship between producer and consumer that is dictated by corporate governance law, and embodied in the decision-making dynamics of the directors who command corporate operations. The enigmatic …

Behavioral Finance: Its History And Its Future, Robert Christopher Hammond

Selected Honors Theses

The field of behavioral finance has attempted to explain a litany of biases, heuristics, and

inefficiencies present in financial markets since its creation in the 1980’s. This paper is structured as a comprehensive literature review of behavioral finance, and includes both the seminal works as well as more recent papers. The various subtopics of behavioral finance will also be analyzed, which include loss aversion, corporate finance, and momentum/contrarian investing. Finally, this paper will draw unique conclusions across behavioral finance and hypothesize about what topics within behavioral finance are likely to yield the most interesting research in the near future.

Real Estate Investments In Asia: More Than A Place To Call Home, John Lim

Asian Management Insights

Real estate investment in Asia is currently trending. But what does the future hold?

The Effect Of New York City Sports Outcomes On The Stock Market, Nir Levy

Undergraduate Economic Review

This thesis investigates whether sports outcomes for New York City based teams affect the daily returns, volatility or trading volume of major stock indexes in the United States. I research whether events that affect local mood in a major financial center can influence national stock indexes by swaying the sentiment of workers in the financial sector. By performing an event study I found evidence that returns are abnormally high following championships won by New York City professional sports teams. Returns are abnormally low and volume is abnormally high following elimination from a championship round.

Mandatory Process, Matthew J.B. Lawrence

Indiana Law Journal

This Article suggests that people tend to undervalue their procedural rights—their proverbial “day in court”—until they are actually involved in a dispute. The Article argues that the inherent, outcome-independent value of participating in a dispute resolution process comes largely from its power to soothe a person’s grievance— their perception of unfairness and accompanying negative emotional reaction—win or lose. But a tendency to assume unchanging emotional states, known in behavioral economics as projection bias, can prevent people from anticipating that they might become aggrieved and from appreciating the grievance-soothing power of process. When this happens, people will waive their procedural rights …

Essays On International Risk-Return Trade-Off Relations, Liang Meng

Finance Theses & Dissertations

This dissertation consists of two essays on the international risk-return trade-off relations. The first essay is titled “The Role of the US Market on International Risk-Return Trade-Off Relations” and the second essay is titled “The Role of Investor Sentiment on International Risk-Return Trade-Off Relations”.

In our first essay, we study the intertemporal risk-return trade-off relations based on returns from 18 international markets. Our main contribution is that we find the US market plays an important role affecting the international risk-return trade-off. We present striking new empirical evidence that the inclusion of US market variables significantly changes the estimated risk-return trade-off …

Sense And Sensibility Of Ownership: Type Of Ownership Experience And Valuation Of Goods, Xiao-Tian Wang, Lay See Ong, Jolene Tan

Research Collection School of Social Sciences

This study examined how the type of ownership experience affects the valuation of a good. We hypothesized that the sense of ownership is a psychological derivative of resource acquisition and allocation. We predicted a valuation order of stable ownership or no-ownership

Behavioral Public Choice And The Law, Gary M. Lucas Jr., Slaviša Tasić

Faculty Scholarship

Behavioral public choice is the study of irrationality among political actors. In this context, irrationality means systematic bias, a deviation from rational expectations, or other departure from economists’ conception of rationality. Behavioral public choice scholars extend the insights of behavioral economics to the political realm and show that irrational behavior is an important source of government failure. This Article makes an original contribution to the legal literature by systematically reviewing the findings of behavioral public choice and explaining their implications for the law and legal institutions. We discuss the various biases and heuristics that lead political actors to support and …

Impact Of International Remittances On Schooling In The Philippines: Does The Relationship To The Household Head Matter?, Tomoki Fujii

Research Collection School Of Economics

We study the impact of international remittances on schooling in the Philippines, taking into account the school-age individual's relationship to the household head. This consideration is important because employment opportunities abroad may be taken at the expense of the quality of child rearing. Our estimation results indicate that there are, indeed, significant negative guardian effects on school attendance and education expenditures when children with overseas parents are looked after by a relative other than a parent or grandparent. However, these negative effects tend to be outweighed by the positive impact of remittance flows from overseas.

How Does The Stock Market Value The Renewable Energy Sector: A Public Announcement Analysis And Test Of The Efficient Market Hypothesis, Jack Crampton

Journal of Environmental and Resource Economics at Colby

This study analyzes the market reaction to public announcements in the stock market. The efficient market hypothesis is put to test and similar studies are reexamined in the context of the renewable energy sector. Through fixed effects models, we can assess the validity to the efficient market hypothesis and assess how the market values the clean energy sector.

Boom & Bust: The Perils Of Guaranteed Long Term Contracts. Evidence From Ops100 Performance Over The Contract Cycle, Heather M. O'Neill

Business and Economics Faculty Publications

This study focuses on panel data of 256 MLB free agent hitters under the 2006-2011 Collective Bargaining Agreement (CBA) to demonstrate that hitters, on average, increase their offensive production, measured by OPS100, during the last year of their contract and subsequently underperform the first year of the newly signed long term contract. The contract year phenomenon arises from the incentive to land a lucrative guaranteed contract for players not intending to retire. Signing a long term guaranteed contract creates an incentive to shirk (underperform) the first year of the new contract because performance and pay become unlinked and the need …

Three Essays On Dividend Policy, Mehmet Deren Caliskan

Finance Theses & Dissertations

This dissertation considers paying earnings out as dividends a conservative policy as opposed to investing earnings in to value-increasing projects. Based on this view, this dissertation explores the effect of chief executive officers’ (CEO) risk preferences on dividend policy, market’s reaction to dividend policy changes, and the effect of dividend policy on firm financial distress. The first chapter hypothesizes that risk seeking CEOs will be less likely to pay dividends compared to conservative CEOs. The second chapter hypothesizes that when the market sentiment is high (i.e., when investors are willing to take risk) firms that omit dividends should outperform the …

Inference Under Stability Of Risk Preferences, Levon Barseghyan, Francesca Molinari, Joshua C. Teitelbaum

Georgetown Law Faculty Publications and Other Works

We leverage the assumption that preferences are stable across contexts to partially identify and conduct inference on the parameters of a structural model of risky choice. Working with data on households' deductible choices across three lines of insurance coverage and a model that nests expected utility theory plus a range of non-expected utility models, we perform a revealed preference analysis that yields household-specific bounds on the model parameters. We then impose stability and other structural assumptions to tighten the bounds, and we explore what we can learn about households' risk preferences from the intervals defined by the bounds. We further …

Assessing Alabama Consumer Attitudes And Beliefs About Locally Or Regionally Produced Livestock And Products, Nii O. Tackie, Jannette R. Bartlett, Akua Adu-Gyamfi

Professional Agricultural Workers Journal

Abstract

Local and regional food production has gained increased interest of consumers in recent years. The study, therefore, focused on assessing consumer attitudes and beliefs on local or regional livestock products. Data were obtained from a convenience sample of 432 participants from South Central Alabama, and were analyzed using descriptive statistics, including chi-square tests. A majority of respondents thought using chemicals and additives in locally or regionally produced beef or goat meat was a serious hazard. Therefore, many were willing to pay more for meat certified as locally or regionally produced. Also, most agreed or strongly agreed with statements on …

A Close Look At The Relationship Between Poverty And Political Violence In Nepal, Lauren C. Griffin

Global Tides

Today, one quarter of Nepal’s population of 27 million lives on a daily income of less than two dollars (Sharma 8). Villages are deprived of an ample water supply, and some areas still lie in ruins from the aftermath of the Maoist insurgency. This paper will seek to understand the role of poverty in the historically and presently unfolding political environment of Nepal. Several factors show direct correlation between poverty and insurgent activity, such as land ownership, level of education and socio-economic standing. Nepal has had a volatile and bloody past in the midst of medieval dynasties, an authoritative monarchy …

Gender Bias In Microlending: Do Opposites Attract?, Kanyinsola Adepoju

Master's Theses

This study exploits a quasi-random assignment of clients to loan officers using a unique database and survey from a large microfinance bank in Nigeria to show that opposite-sex preferences affect credit demand and supply. We find that clients matched to loan officers of the opposite gender are more likely to receive credit and are more likely to return for an additional loan with the credit lender.

A Test Of The Household Separation Hypothesis In Rwanda, James E. Anderson

Master's Theses

How does a farm household in rural Africa react when the government decides crop selection? In developing countries, agricultural households strive to optimize a risk mitigating utility function rather than a traditional agricultural production function. These households are termed “non-separated” as their farming efforts are directed towards family food security rather than maximizing agricultural profits. The lack of integration with labor and commodity markets makes these non-separated households difficult to influence with policy initiatives. Various tests for household separation have been developed.

We use a unique dataset from Rwanda to evaluate these separation tests. The data include households forced into …

Making Ice Cream In Tehran: A Field Experiment On The Impact Of Attendance Incentives For Street Working Children, Elnaz Safarha

Master's Theses

A substantial body of literature has focused on educational attainment and children’s performance to foster human capital. Despite the common goal, there is a debate on how to best approach it (Duflo et al. 2013). While in some studies incentives are effective in changing people’s behavior, by inducing more effort and higher performance, other works point to crowding out of intrinsic motivations and other externalities. This study reports the results of an experiment conducted with children usually working in the streets of Tehran (Iran) on the effectiveness of non-monetary incentives on school attendance and related behaviors. My within-subject design (dictated …

Does Poverty Really Impede Cognitive Function? Experimental Evidence From Tanzanian Fishers, Virginia Graves

Master's Theses

Does the feeling of scarcity really impede cognitive function? Using experimental evidence from Tanzanian fishers, this study examines the connection between poverty and cognitive function. Fishers in the experiment are tested on how exposure to a ‘scarcity trigger’ impacts cognition and productivity through measuring performance on problem solving tasks. The study also creates an index of distractions to test how existing problems in an individual’s life, which contribute to limited attention, relates to cognitive function and productivity. Experimental results do not find that mental and financial scarcities significantly impact test performance. Although the study finds no significant causal evidence, this …

The Effects Of Quantitative Easing In The United States: Implications For Future Central Bank Policy Makers, Matthew Q. Rubino

Senior Honors Projects, 2010-2019

The purpose of this thesis is to examine the effects of the Federal Reserve’s recent bond buying programs, specifically Quantitative Easing 1, Quantitative Easing 2, Operation Twist (or the Fed’s Maturity Extension Program), and Quantitative Easing 3. In this study, I provide a picture of the economic landscape leading up to the deployment of the programs, an overview of quantitative easing including each program’s respective objectives, and how and why the Fed decided to implement the programs. Using empirical analysis, I measure each program’s effectiveness by applying four models including a yield curve model, an inflation model, a money supply …

Who Pays For Music?, Meg Aman

Honors Projects in Management

The purpose of this capstone project was to determine the attributes of consumers that pay for music, specifically music streaming services. The recent decline in current individual track sales and the increase in the number of streamed songs, highlights the relevance of this topic. The increasing popularity in music streaming has caused much contreversy in the music industry. Many artists are unhappy with the low revenue they receive from songwriting royalties from these streaming services that offer a free platform. Artists are not the only ones who need consumers to pay for music, the music streaming sites that provide free …

An Indentured Generation? The Effect Of Student Debt On Entrepreneurship In The United States, Lidia P. Medina

Renée Crown University Honors Thesis Projects - All

This paper discusses the topical issue of rising student debt and the effect it has on employment decisions, particularly entrepreneurship. This paper aims to analyze this relationship using labor economic theories on investing and saving, labor decisions and risk aversion. Additionally, it discusses the role of entrepreneurship on economic growth and globalization using both historical and present-day data gathered from the National Longitudinal Survey of Youth (1997—2011), The Kauffman Research Center, and the US Department of Education.

Less Is More: Information And Priming In Charitable Donations, Juliann Tucker

Economics Undergraduate Honors Theses

Dictator Game, Religious Identity, Social Distance

An Analysis Of The Effects Of Financial Education On Financial Literacy And Financial Behaviors, Jamie Wagner

College of Business: Dissertations, Theses, and Student Research

This study estimates how financial education affects a person’s financial literacy score, short-term financial behaviors, and long-term financial behaviors using data from the 2012 National Financial Capability Study (NFCS). There are seven categories of financial education—high school, college, employer, high school and college, high school and employer, college and employer, and combinations of all three courses—to estimate the effectiveness of financial education. This course detail has not been studied in previous literature about financial education.

Financial education has a positive relationship with a person’s financial literacy score. Splitting the sample into groups based on education and income results show that …

Expropriation Risk And Competition With The Military, Madhav S. Aney, Giovanni Ko

Research Collection School Of Economics

How can agents in the military, who control the means of coercion, commit not to expropriate from producers? In this paper we propose competition within the military as one of the mechanisms that can deter predation and consequently create commitment. In our model, even if agents within the military could expropriate all output costlessly, it is attractive to protect producers from predating military units. This is because there is a marginal defensive advantage and consequently defense is an effective way to potentially eliminate other military units, reducing competition and leading to higher future payoffs. Our model predicts that greater internal …

An Exploratory Study Of Spending Patterns, Obstacles And Traditions Among Same-Sex Marriage Vs Heterosexual Marriage: Who's The Bigger Spender?, Lydia Perritt

Graduate Theses and Dissertations

This study investigated if there was a significant difference in the amount of money spent on same-sex weddings versus heterosexual weddings. The results of this study would assist both the wedding and hospitality industry by providing much needed financial and planning information.

A descriptive, four-section survey was distributed online via Qualtrics utilizing snowball sampling. A total of 152 respondents participated in the study; 84 heterosexual and 68 LGBTQ. The respondents completed the questionnaire that measured wedding traditions, wedding spending, obstacles and challenges faced during their wedding and wedding planning, and demographic information.

The results of this study indicated that same-sex …

The Effects Of Discrimination In Public Goods Games, Melinda Maroto

Senior Honors Projects

This paper explores the effects of discrimination on people’s willingness to contribution to public goods. The experiment not only attempts to measure the significance of this partiality, but also attempts to shed light on how discrimination affects this willingness to contribute by testing both the feeling of discrimination and the possibility that discrimination leads to lower payouts. Beyond this, the study acts as an opportunity to further connect the thoughts, behaviors, and political tendencies of social groups to their fiscal decisions.

The experiment tests roughly 120 University of Rhode Island students' willingness to contribute to the construction of a public …

Financial Literacy And College Students: An Exploration Of College Students’ Attitudes, Behaviors, Influences And Preparedness For Financial Decisions After Graduation, Kerry Quirk

Honors Projects in Finance

Financial literacy is the level of understanding an individual has for different financial topics, including but not limited to, investment vehicles, retirement accounts, saving, budgeting, credit and taxes, and the use of such knowledge to change one’s financial behavior to create a more positive financial position for the future. Past research has shown that college students consistently have low levels of financial literacy. They also lack knowledgeable influences on their financial education. Because many college students will soon enter the workforce after graduation and will be responsible for managing their own salary, retirement accounts and investment options, they can be …

The Discreet Trader, Seth Wing

Honors Projects in Finance

This paper examines insider trading, specifically trades by corporate insiders around quarterly earnings announcements. Announcements were broken up into three categories: earnings above analyst expectations, earnings below expectations, and earnings in line with expectations. Trade data was collected from the thirty companies of the Dow Jones Industrial Average from 2012-’13. The trades were sorted by purchases and sales by date and analyzed with the earnings report of which the trades were made. Only trades in the interval from twenty days before the announcement date to twenty days after the announcement date were considered. The prediction was that corporate insiders would …