Behavioral Economics Commons^™

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 …

Sunk Or Dunk?: An Empirical Analysis Of The Effect Of Sunk Cost Fallacy In Professional Basketball, Hailey Dicicco

Business and Economics Presentations

This project is divided into two sections. The first section is a comparison between the NBA and WNBA, using performance metrics from game statistics. I researched the history of women in sports and specifically read about how women first became integrated into the game of soccer. In the regression for section one, we used a few selected performance metrics and minutes in order to observe any relationships between specific skills and minutes. We also focused on the difference between the leagues in terms of what game stats are more or less significant.

In the second section of this paper, we …

Crisis And Catalonia: An Analysis On The Impact Of Crisis On The Public Opinion Of The Secessionist Movement In Catalonia, Rachel Ducker

Honors Theses

Catalonia, the autonomous region of Spain has seen an increase in secessionist sentiments in recent years. While the past inclination toward independence has been centered on economic autonomy and cultural identity, there has been a recent emphasis on political independence, particularly in the times of crisis. In this thesis. I analyze the relationship between the economic changes during the period of a crisis and the public opinion about the potential Catalan secession. Specifically, it investigates the relationships between the economic change and public sentiment during the financial crisis of 2008, the political crisis of 2017, and the pandemic crisis of …

Intentional Group Curation Of Information (Open Pedagogy Example), Dorina Tila

Open Educational Resources

This assignment aims at making instruction student-centered where students would participate in the curation of content. Students are asked to explain the various economic topics using the economic terminology and personal experience. For example, in this assignment, the students are split in groups and asked to discuss and identify what their opportunity cost of getting a college degree is. They will discuss all the items that comprise the opportunity cost and the benefits of going to college and share this in real time with everyone else through a google document.

Assignment Learning Outcomes:

• Define and apply the notion of opportunity …

Automation Anxieties: Perceptions About Technological Automation And The Future Of Pharmacy Work, Cameron W. Piercy, Angela N. Gist-Mackey

Human-Machine Communication

This study uses a sample of pharmacists and pharmacy technicians (N = 240) who differ in skill, education, and income to replicate and extend past findings about socioeconomic disparities in the perceptions of automation. Specifically, this study applies the skills-biased technical change hypothesis, an economic theory that low-skill jobs are the most likely to be affected by increased automation (Acemoglu & Restrepo, 2019), to the mental models of pharmacy workers. We formalize the hypothesis that anxiety about automation leads to perceptions that jobs will change in the future and automation will increase. We also posit anxiety about overpayment related to …

Asset Classes, Nicolas L. Jacquet

Research Collection School Of Economics

This paper proposes a theory of endogenous differences in liquidity of assets based on the interaction between differences in the risk of assets and differences in liquidity needs of investors. An equilibrium of the model, which always exists and is unique, displays a class structure, where investors’ types sort themselves across different types of assets. I also provide a detailed analysis of the possible types of sorting and of the consequences for the cross-sectional properties of asset prices and their velocity. The framework can also be useful to think about what constitute a ""light-to-liquidity" and a "safe asset".

The Evolution Of Income Risk And Consumption Insurance In South Korea Over The Last Two Decades, Taehyun Ahn, Chung Gu Chee, Seonghoon Kim

Research Collection School Of Economics

Using data from the Korea Labor Income Panel Study, we study the evolution of income risk and consumption insurance against transitory and permanent income shocks in South Korea over the last two decades. We find a decreasing trend in both income and consumption risks. Furthermore, we estimate that 47.6% of permanent income shocks and 9.8% of transitory income shocks pass through to consumption. We also provide evidence of substantial improvements in consumption insurance among the less educated and the older cohort nearing retirement. Our results suggest that recent developments of social safety net and welfare system may have played an …

Essays On Empirical Asset Pricing, Zilin Chen

Dissertations and Theses Collection (Open Access)

The dissertation consists of three chapters on empirical asset pricing. The first chapter examines whether the cross-sectional variation in private subsidiaries’ information disclosure predicts the cross-sectional dispersion in future equity returns of public parent firms. Information disclosure on private subsidiaries is not mandatory for public firms in the U.S., and thus these subsidiaries could be a good choice for public firms to hide bad news. We construct a private subsidiaries’ information disclosure (PSID) measure and find that a value-weighted portfolio that longs stocks in the highest PSID quintile and shorts stocks in the lowest PSID quintile yields a Fama and …

Commodity Futures Returns And Policy Uncertainty, Deepa Bannigidadmath, Paresh Kumar Narayan

Research outputs 2014 to 2021

© 2020 Elsevier Inc. This paper investigates whether economic policy uncertainty is predictable using three sets of commodity futures market variables, namely the equal-weighted average of futures excess returns, the excess returns on a portfolio of going long in backwardated commodities, and the excess returns on a portfolio of going short in contango commodities as predictors. We find significant evidence of both in-sample and out-of-sample predictability. Combination forecasts also reveal strong evidence of predictability. Our findings remain unchanged following several robustness tests.

Editorial - Subsistence Marketplaces: Journal, Knowledge-Practice Portal, And Organization, Madhu Viswanathan

Subsistence Marketplaces

Subsistence Marketplaces: Journal, Knowledge-Practice Portal and Organization

Not-So-Full-Ride Scholarship: Analysis Of Merit-Based Aid Gpa Renewal Requirements, Samuel Brown

Honors Program: Senior Projects (Public)

This paper examines the potential consequences of the 3.50 GPA renewal requirement for the Regents Scholar Tuition Commitment (RSTC) at the University of Nebraska-Lincoln (UNL). To examine these potential outcomes, I’ve synthesized several studies of Georgia’s Helping Outstanding Pupils Educationally (HOPE) program. Additionally, I sought to compare the RSTC with other similar programs at UNL’s peer Big Ten institutions. To accomplish this, I compiled and analyzed public information on merit-based programs at the 14 Big Ten schools from their university websites. In doing so, I found that the RSTC is in the lowest quartile in terms of value to the …

Architecture, Social Norms, And Their Economic Consequences In Japan, Koichi Kume

Japanese Society and Culture

Law and market mechanisms presuppose that people are rational. With the diversification of lifestyles and values, however, there is a limit to appealing only to economic rationality to implement social policies. In this study we focus on architecture as a policy instrument that does not presuppose people’s rationality and empirically analyze the effect on economic consequences in Japan. Specifically, we examine the relationship between bank transfers and poverty reduction, and that between statues (Sontoku Ninomiya, Jizo) and labor norms. The results suggest that the use of architecture in policy can improve policy effectiveness regardless of people’s irrationality and heterogeneous preferences.

The Effects Of Income On Health: Evidence From Lottery Wins In Singapore, Seonghoon Kim, Kanghyock Koh

Research Collection School Of Economics

We estimate the causal effects of household income on self-reported health status by exploiting random variations in the amount of lottery prizes won. We find that a S$10,000 (US$7,245) increase in income via lottery wins improves individuals’ health by a standard deviation of 0.18. As possible mechanisms, we find that lottery wins increase household consumption spending and improve overall life satisfaction, but do not change healthcare spending, labor supply, and risky health behavior. Previous studies, which focused on the health effects of lottery prizes in Western European countries with strong social safety nets, do not find positive effects other than …

What Is The Impact Of Economic Stimulus Measures On Covid-19 Mortality Rates?, Stephanie C. Santaguida

University Honors Theses

This inquiry seeks to establish the degree to which economic stimulus measures impact COVID-19 mortality rates. There appears to be an inverse correlation between domestic social spending and COVID-19 deaths. While confirmed infections are the most reliable predictor of mortality rates, trust in government is an important factor to consider when public compliance with health directives determines the degree of epidemiological risk in each country. Although most economists agree that stimulus monies directed to low-income individuals to prevent financial collapse were appropriate, there is some dissention with regard to the type and size of such cash infusions. Nonetheless, behavioral economists …

Hemp Production Network Effects: Are Producers Tipped Toward Suboptimal Varietal Selection By Their Neighbors?, Tanner Mccarty, Jeffrey Young

Journal of Applied Farm Economics

The 2018 farm bill removed industrial hemp from the Schedule 1 Controlled Substance List. In response, states scrambled to enact hemp legislation. Some hemp flower producers report their hemp fields were cross- pollinated by a neighbor growing a different hemp cultivar. For hemp flower crops, cross- pollination reduces cannabinoid concentration levels within the flower; these concentration levels dictate flower price. We show that in a repeated game, once a sufficiently large percentage of growers decide to plant hemp fiber/seed crops, cross-pollination forces flower growers to convert to fiber/seed to avoid the negative network externality. Over time, a stable, suboptimal Nash …

Information Perception And Climate Change Adaptation, Ji Won Sung

Undergraduate Economic Review

Despite 97% of scientists believing that climate change is occurring, a far smaller proportion of ordinary citizens agree with this statement and the proportion of those who do greatly diverge by political affiliation. This paper lays out a dynamic information updating model with adaptation choice as the final outcome, linking information perception, belief perception, and behavioral implementation. Furthermore, this paper examines how various behavioral and environmental factors affect the agent’s adaptation choices by means of such cognitive processes. This research has implications for further research on climate change preference formation and effective communication strategies, such as informative or normative nudges.

Pregnancy Persistently Reduces Alcohol Purchases: Causal Evidence From Scanner Data, Aljoscha Janssen, Elle Parslow

Research Collection School Of Economics

We analyze household-level changes in alcohol consumption in response to pregnancy. Using scanner data, we identify households with a pregnant household member. Within an event study and a dynamic difference-in-differences estimation, we find that during a first pregnancy, households reduce their alcohol purchases by 36%. After pregnancy, purchases of alcohol are 34% lower than before pregnancy. We do not find any effect during the second pregnancy. One possible explanation for our result is that lower consumption during pregnancy changes habits and reduces consumption in the long term. We discuss other explanations and comment on policy implications.

Educational Investments In Low-Income Households: The Role Of Parental Occupational Identity And Substitutability, Aparna Anand

Dissertations, Theses, and Capstone Projects

Poor parents face difficult trade-offs when investing in their children's education. This dissertation studies how low-income urban households in Southern India, where child labor is a concern, make educational investments for their children. First, I build a model that shows how educational investments are shaped by the possibility of children substituting labor for their parents. Second, I collect parent surveys, child surveys, and student-level administrative data from schools and construct a linked dataset. Third, I examine the relationship between educational investments and several pertinent factors, with an emphasis on child labor substitution and the strength of occupational identity. I find …

2021 Arkansas Business Forecast, Catherine Mann, Mark Palim, Mervin Jebaraj

Publications and Presentations

“The annual Business Forecast is a chance for business and community leaders from Northwest Arkansas, the state and the region to get first-hand insight into the direction for the next year from top economists,” said Matt Waller, dean of the Walton College. “The insights provided by these three experts will inform and shape decisions that help to drive the business community in Arkansas in 2021.”

Waller said those valuable insights and networking opportunities are only possible through the continued strong support of event sponsors.

“Each year, the interest and level of participation in the Business Forecast event continues to grow …

Survey Of The Labor Market For New Ph.D. Hires In Economics 2021-2022, Mervin Jebaraj, David Sorto, Raja Kali

Labor Market Survey

This year, the survey questionnaire was sent to 368 organizations. Questionnaires were returned by 144 organizations (39.1 percent). Of this year’s responses, 53 (36.8 percent) were from those who responded to the last survey conducted for the 2020-21 academic year. Among the academic institutions responding, the distribution of highest degrees offered was as follows: Ph.D.—51.4 percent; Master’s—11.8 percent and Bachelor’s—35.4 percent.

The responses are reported for all respondents, and separately for Ph.D. Degree granting institutions and for schools whose highest degree offered is the Bachelor’s or Master’s Degree. Data for the top 30 institutions in the revised National Research Council’s …

Seeking The Wellspring: Exploring Generosity In A Financial Drought, Laurie Ann Johnson

Doctor of Ministry Theses

This action research project utilized transformative qualitative methods to explore the concept of generous giving by examining the attitudes of a small non-random sample of participants within a congregation before and after an intervention consisting of a seven-part sermon series. Theoretical lenses included generosity, adaptive change, and emergence theory. Biblical lenses included Isaiah 43:18-21 and Isaiah 58:6-12 (wellspring in the desert), John 4 (the Samaritan woman at the well), and John 7:37-39 (living water). Theological lenses included missional pneumatology and the missio Dei, the Christian steward, and the holy currencies of the Cycle of Blessings. Findings revealed that presentation of …

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 Exploitation Or Protection Of Communities And Exploited Persons?, Spencer Boldt

Undergraduate Honors Theses

This study was intended to dissect the inner workings of the newly implemented Bill C-36 in Canada, The Protection of Communities and Exploited Peoples Act through a mixed methods approach. This was done through comparing statistical research (demographics, crime data, and overall economic state) within Regina to interviews conducted with those individually involved in prostitution and the community of the city. This study was meant to draw out the differences between what the statistics depict, a growth in the overall safety of Regina, versus the perspectives gained from multiple interviewees. With this mixed method approach I have deduced that Bill …

Three Essays On Tax Compliance In Indonesia, Himawan Saputro

Theses and Dissertations--Public Policy and Administration

This dissertation studies the impacts of major tax reforms designed to improve tax compliance, particularly in the context of developing countries with limited enforcement capacity due to informality and lack of third-party data using the Indonesian tax administrative data as well as relevant empirical research methods. In order to describe this dissertation, I discuss each essay as the following.

The first essay is titled "How Do Small Taxpayers Respond to Tax Simplification? Evidence from the Indonesian Turnover Tax Reform." This essay studies the firms' behavioral responses to tax simplification in Indonesia by exploiting the implementation of turnover tax in 2013 …

Regulating Financial Guarantors, Steven L. Schwarcz

Faculty Scholarship

To improve financial regulation, scholars have engaged in extensive research over the past decade to try to understand why systemically important financial firms engage in excessive risk-taking. None of that research fully explains, however, the unusually excessive risk-taking by financial guarantors such as bond insurers, protection sellers under credit-default-swap (CDS) derivatives, credit enhancers in securitization transactions, and even issuers of standby letters of credit. With tens of trillions of dollars of financial guarantees outstanding, the potential for failure is massive. This Article argues that financial guarantor risk-taking is influenced by a previously unrecognized cognitive bias, which it calls “abstraction bias.” …

U.S. Consumers' Acceptance And Willingness To Pay For Genetically Modified And Genome-Edited Foods, Bindu Paudel

Electronic Theses and Dissertations

Even though genetically modified (GM) crops have a lot of economic potential for producers and consumers, they have not been widely accepted due to increasing concerns related to food safety, human, animal, and environmental health. Unlike GM technology, genome-editing technology does not involve the transfer of genetic materials. It is simpler, cheaper, more precise, and faster relative to GM technology and has immense potential for incorporating producer and consumer traits. Genome-editing technology, as a novel process, not has been explored much from the consumer’s side. This study uses a nationally representative survey of 1,573 U.S. consumers to examine their acceptance …

Caregiver Treatment Consumption In An Experimental Treatment Marketplace, Delaney J. Darragh

Faculty Publications

Behavioral economics is an approach to understanding consumer behavior by integrating behavioral science with economic principles. Behavioral economics incorporates traditional economic principles with operant learning approaches. There is limited research examining how individuals consume psychological and behavioral treatments. This is especially the case for treatments designed for children. The current study used data from a previously collected sample to explore gender differences in an experimental treatment marketplace (ETM). Experimental treatment marketplaces are generally used to evaluate choices between goods and services (e.g., types of behavior interventions). An ETM was developed to evaluate treatment consumption when levels of evidence differed between …

Determinants Of Indonesian Consumer’S Intention To Purchase Halal Food In Overseas: Modified Theory Planned Behavior Model With Religiosity, Aulia R. Destiana, David R. Tairas

Journal of Strategic and Global Studies

This study aimed to find the relationship between the intentions of Indonesian consumers in buying Halal food products abroad as a dependent variable with components in the Theory of Planned Behavior (TPB) namely attitudes, subjective norms, perceived behavioural control modified with religious relations as an independent variable. This research is a combination of research previously conducted by Alam and Sayuti (2011) and Mukhtar and Butt (2012). This study expands the theory by combining the variables used in previous research conducted by Alam and Sayuti (2011), the use of the TPB theory in halal food purchasing in Malaysia and Mukhtar and …

Conscience Leave, Andrew K. Jennings

Faculty Articles

In the federal government, political officials come and go while civil servants remain. In the ordinary course, the political officials make decisions about what policies the government will pursue while civil servants use their labor and expertise to carry those policies out––even when they disagree with them. But what happens when political officials pursue policies that civil servants view as deviating from normal bounds–– policies that are unethical, immoral, or unlawful? This Article examines when and how civil servants might object to such policies, including going so far as to leave government service. It concludes that when faced with such …