Other Economics Commons^™

Equilibrium Wage Rigidity In Directed Search, Gabriele Camera, Jaehong Kim

ESI Working Papers

Matching frictions and downward wage rigidity emerge as equilibrium phenomena in a twosided labor market where firms sustain variable wage adjustment costs. Firms post wages to attract workers and matches are endogenous. Reducing the wage relative to the wage previously posted is costly to the firm, where the cost is proportional to the size of the proposed cut. Shocks to the firm’s profitability may yield an equilibrium wage above what the firm would offer absent proportional adjustment costs. Wage cuts can be partial or full, immediate or delayed, and are non-linear in the shock size. Importantly, wages are sticky even …

Land Assembly With Taxes, Not Takings, Mark Desantis, Matthew W. Mccarter, Abel Winn

ESI Publications

We use a novel tax mechanism – ‘rejected offer reassessment’ (ROR) – in laboratory experiments to discourage seller holdout and facilitate land assembly. Under this mechanism, if a landowner rejects a developer’s offer, his taxable property value is reassessed to be equal to the rejected offer, increasing his taxes. We find that, relative to a control treatment, ROR discourages the magnitude of seller holdout (but not its frequency) and increases the rate of successful land assembly by almost 60%. It also increases the gains from trade by 22.1% relative to the control treatment, but the difference is not statistically significant.

Moderate Growth With A Stronger Industrial Sector, Eric Thompson

Business in Nebraska

Nebraska will record solid economic growth during the forecast period but will lag U.S. growth. While Nebraska’s large farming sector has stabilized, it will not contribute much to economic growth during the forecast period. Job growth also will be sluggish in transportation, retail trade and state and local government. Job growth, however, will be stronger in the services, finance, manufacturing and construction. Projected growth rates for 2018 to 2020 are presented in Table 1.

Employment will grow by 0.8% to 1.0% per year, below the national rate. Non-farm income will grow between 3.6% and 3.8% each year. This growth is …

Romania -- Systematic Country Diagnostic: Background Note-Agriculture (English), Edinaldo Tebaldi, Anatol Gobjila

Economics Faculty Journal Articles

Agriculture plays a significant socio-economic role in Romania and its transformation to a modern, vibrant, and market-oriented sector is central to fighting poverty, promoting social inclusion, and reducing the urban/rural development divide. Most of Romania's poor live in rural areas and earn their living from agriculture or agriculture-related activities. In 2016, eight out of ten people who were at risk of poverty or social exclusion lived either in rural areas or in towns and suburbs that were predominately rural. Using microdata from the 2013 Household Budget Survey (HBS), this report finds that individuals living in rural areas are 16.5 percent …

Buddhist Economics: Problems And Possibilities, James Mark Shields

Faculty Contributions to Books

No abstract provided.

The Impacts Of Natural Disasters On Educational Attainment: Cross-Country Evidence From Macro Data, Lois Onigbinde

Master's Theses

Do natural disasters impact educational attainment? Education as a paramount factor of economic development suffers from the uncontrollable effects of these increasing events from storms to floods, earthquakes to wildfires. Globally, educational resources are destroyed, directly and indirectly, students and teachers are displaced or killed, parents’ income is affected because of natural disasters. Investments in human capital for rich- and low-income countries are exposed to the uneven impact of natural disasters that adjusts household and country-level decisions, leaving them to short and long-run losses. Exploring the influence of natural disasters on secondary school attainment across a sample of 85 countries …

The Impacts Of Natural Disasters On Educational Attainment: Cross-Country Evidence From Macro Data, Lois Onigbinde

Master's Theses

Do natural disasters impact educational attainment? Education as a paramount factor of economic development suffers from the uncontrollable effects of these increasing events from storms to floods, earthquakes to wildfires. Globally, educational resources are destroyed, directly and indirectly, students and teachers are displaced or killed, parents’ income is affected because of natural disasters. Investments in human capital for rich- and low-income countries are exposed to the uneven impact of natural disasters that adjusts household and country-level decisions, leaving them to short and long-run losses. Exploring the influence of natural disasters on secondary school attainment across a sample of 85 countries …

Swimming For More Than Gold: How Swimming Participation And Success In Elite International Swimming Events Can Decrease Drowning Rates Across The World, Joshua R. Cottle

Undergraduate Economic Review

International swimming provides an opportunity for thousands of swimmers to compete at the highest level of the sport. In this paper, I argue that participation and success in these events can influence drowning rates across the world. My analysis suggests that one of the most notable negative influences on drowning rates is swimming participation in countries that have the smallest roster sizes and the lowest average income levels. My analysis shows that swimming success in the Olympics has a significant positive effect on drowning rates in countries in the middle-income brackets.

Transitions From Higher Education To The Labor Market: Merit Aid, Time To Degree Signals, And Major Choice, Christopher P. Erwin

Economics ETDs

Human capital production is central to economic wellbeing from a national perspective: it improves productivity, spurs technological innovation, and promotes sustainable economic growth over time. Equally important, investments in human capital are central to economic wellbeing at the individual level. College graduates tend to earn more money, are more employable, are better able to manage economic downturns, and have even been shown to have better health. Moreover, for many students, the college experience is an important lesson in living independently, developing social and professional networks, and generally taking on more responsibility in one’s life. It has been said that pursuing …

A Portable Method Of Eliciting Respect For Social Norms, Erik O. Kimbrough, Alexander Vostroknutov

Economics Faculty Articles and Research

Recent models of prosociality suggest that cooperation in laboratory games may be better understood as resulting from concern for social norms than from prosocial preferences over outcomes. Underlying this interpretation is the idea that people exhibit heterogeneous respect for shared norms. We introduce a new, abstract task to elicit a proxy for individual norm-following propensity by asking subjects to choose from two actions, where one is costly. We instruct subjects that “the rule is” to take the costly action. Their willingness to incur such a cost reveals respect for norms. We show that choices in this task are similar across …

Karl Marx And Liberation Theology: Dialectical Materialism And Christian Spirituality In, Against, And Beyond Contemporary Capitalism, Peter Mclaren, Petar Jandrić

Education Faculty Articles and Research

This paper explores convergences and discrepancies between liberation theology and the works of Karl Marx through the dialogue between one of the key contemporary proponents of liberation theology, Peter McLaren, and the agnostic scholar in critical pedagogy, Petar Jandrić. The paper briefly outlines liberation theology and its main convergences with the works of Karl Marx. Exposing striking similarities between the two traditions in denouncing the false God of money, it explores differences in their views towards individualism and collectivism. It rejects shallow rhetorical homologies between Marx and the Bible often found in liberation theology, and suggests a change of focus …

Trends And Disparities In Leave Use Under California's Paid Family Leave Program: New Evidence From Administrative Data, Sarah H. Bana, Kelly Bedard, Maya Rossin-Slater

Economics Faculty Articles and Research

We use novel administrative data to study trends and disparities in usage of California's first-in-the-nation paid family leave (PFL) program. We show that take-up for both bonding with a new child and caring for an ill family member increased over 2005–2014. Most women combine PFL with maternity leave from the State Disability Insurance system, resulting in leaves longer than 6 weeks. Most men take less than the full 6 weeks of PFL. Individuals in the lowest earnings quartile and in small firms are the least likely to take leave. There are important differences in take-up across industries, especially for men.

Human Trafficking In The Wake Of Natural Disasters: Is The United States Any Different Than Third World Countries?, Samantha Stout

Accounting Undergraduate Honors Theses

This research compares the impacts of devastating natural disasters on levels of human trafficking in developed countries to the impacts experienced in third world countries. The two disasters selected for this study were Hurricane Isaac in Louisiana and the Indian Ocean earthquake and tsunami in Indonesia. Factors selected to measure the impacts of the natural disaster include income level, homelessness, and unemployment rates.

Human trafficking is a crime that touches nearly every country around the world. It is known that human trafficking levels are impacted by factors including poverty levels of regions, political unrest, and even natural disasters. There is …

Cryptocurrencies As An Alternative To Fiat Monetary Systems, David A. Georgeson

Applied Economics Theses

The recent popularity of cryptocurrencies is largely associated with a particular application referred to as Bitcoin. Cryptocurrency has a mix of properties that make it difficult to examine. These properties consist of being infinitely divisible, durable, transferable, fungible and can be controlled to be artificially scarce. Further, cryptocurrencies can act as a means of payment, a medium of exchange, a store of value, and a unit of account. This thesis will analyze the technical features underlying cryptocurrencies and find out whether or not they can function as an alternative to fiat money. Since Bitcoin is the most commonly understood application …

Race And Gun Violence In The United States: A Case Study Of Policy Reform In Missouri, Morgan C. Williams Jr

Dissertations, Theses, and Capstone Projects

Gun violence remains an important contributor to racial differences in mortality within the United States. Despite the existence of these significant racial disparities in firearm homicide victimization, the relationship between gun control policy and racial disparities in homicide remains largely unexplored within the empirical crime literature. Previous research suggests that access to secondary firearm markets serves as a salient contributor to local gun violence with the regulation of private firearm sales falling exclusively within state-level jurisdiction. The role of state-level background check requirements for private firearm sales in reducing gun violence remains controversial in both the empirical literature and gun …

Impulsive Behavior In Competition: Testing Theories Of Overbidding In Rent-Seeking Contests, Roman M. Sheremeta

ESI Working Papers

Contests are commonly used in the workplace to motivate workers, determine promotion, and assign bonuses. Although contests can be very effective at eliciting high effort, they can also lead to inefficient effort expenditure (overbidding). Researchers have proposed various theories to explain overbidding in contents, including mistakes, systematic biases, the utility of winning, and relative payoff maximization. Using an eight-part experiment, we test and find significant support for the existing theories. Also, we discover some new explanations based on cognitive ability and impulsive behavior. Out of all explanations examined, we find that impulsivity is the most important factor explaining overbidding in …

Cooler Heads Prevail: An Experimental Study On The “Cooling” Effect Of The Strategy Method On Agent Resentment, Jing L. Davis

Economics Faculty Articles and Research

This study investigates whether agents’ resentment of controls in a gift-exchange game can be effectively mitigated using the strategy method where agents’ effort choices are elicited contingent on all possible contract choices by principals. The results suggest that allowing agents to contemplate contract choices prospectively results in less resentment and that agents exert higher effort than without this “cooling” process.

Green Competition, Hybrid Equilibrium, And Establishment Of A Resale Market, Arthur J. Caplan, Reza Oladi

Applied Economics Faculty Publications

This paper investigates competition between firms whose choices of how much "green effort" to devote to building their reputations as socially responsible producers are determined in the contexts of simultaneous-move and hybrid simultaneous/sequential-move Bertrand equilibria. We derive conditions under which (1) the inter-temporal, green-effort reaction function of the firm with the less-aggressive green strategy is non-monotonic, (2) the level of green effort chosen by the firm with the more-aggressive green strategy increases when it views itself as the leader in a hybrid game rather than moving concurrently in a simultaneous-choice game, and (3) the establishment of a resale market by …

Challenges Facing Youth Entering The Labor Market, Martha Ross

Brookings Scholar Lecture Series

As part of the Brookings Scholar Lecture Series, Brookings Mountain West invites you to a lecture titled "Challenges Facing Youth Entering the Labor Market" by Fellow in Metropolitan Policy, Martha Ross. Labor force participation and employment are declining among teens and young adults, suggesting that fewer young people are having the kinds of work experiences that prepare them for the world of full-time employment. Not everyone is equally affected, as there are marked differences by race/ethnicity, income, and education. This lecture will discuss employment trends among young people and the various strategies that cities and specific programs are using to …

The Economic Impact Of The Fort Martin Power Station On Monongalia County And West Virginia, Eric Bowen, Christiadi

Bureau of Business & Economic Research

No abstract provided.

The Economic Impact Of The Harrison Power Station On Harrison County And West Virginia, Eric Bowen, Christiadi

Bureau of Business & Economic Research

No abstract provided.

What Factors Drive Individual Misperceptions Of The Returns To Schooling In Tanzania? Some Lessons For Education Policy, Plamen Nikolov, Nursat Jimi

Economics Faculty Scholarship

Evidence on educational returns and the factors that determine the demand for schooling in developing countries is extremely scarce. Building on previous studies that show individuals underestimating the returns to schooling, we use two surveys from Tanzania to estimate both the actual and perceived schooling returns and subsequently examine what factors drive individual misperceptions regarding actual returns. Using ordinary least squares and instrumental variable methods, we find that each additional year of schooling in Tanzania increases earnings, on average, by 9 to 11 percent. We find that on average individuals underestimate returns to schooling by 74 to 79 percent and …

Income Distribution, Fertility Behavior And Demographic Transition In Egypt, Sarah El-Khishin

Economics

Abstract - Demographic-economic interrelationships have been broadly examined in the literature from a macro perspective using mostly cross-country panel regressions. A limited strand of literature has emphasized the need to examine the demographic-economic dynamics in a reversed way; inspect dual-causality relation between demographic and economic factors. In this paper, I examine the effect of changes in income distribution and fertility behavior on the speed of demographic transition. I moreover examine the reverse relation by testing effect of changed household structure on income distribution and income disparities in Egypt. Empirical results show that wealth redistribution in Egypt and moving up to …

Preference Conformism: An Experiment, Enrique Fatas, Shaun P. Hargreaves Heap, David Rojo Arjona

Economics Faculty Articles and Research

This paper reports on an experiment designed to test whether people’s preferences change to become more alike. Such preference conformism would be worrying for an economics that takes individual preferences as given (‘de gustibus es non disputandum’). So the test is important. But it is also difficult. People can behave alike for many reasons and the key to the design of our test, therefore, is the control of the other possible reasons for observing apparent peer effects. We find evidence of preference conformism in the aggregate and at the individual level (where there is heterogeneity). It appears also to be …

Goal Setting In The Principal-Agent Model: Weak Incentives For Strong Performance, Brice Corgnet, Joaquín Gómez-Miñambres, Roberto Hernán-González

ESI Publications

We study a principal–agent framework in which principals can assign wage-irrelevant goals to agents. We find evidence that, when given the possibility to set wage-irrelevant goals, principals select incentive contracts for which pay is less responsive to agents' performance. Agents' performance is higher in the presence of goal setting despite weaker incentives. We develop a principal–agent model with reference-dependent utility that illustrates how labor contracts combining weak monetary incentives and wage-irrelevant goals can be optimal. The pervasive use of non-monetary incentives in the workplace may help account for previous empirical findings suggesting that firms rely on unexpectedly weak monetary incentives.

Mutual Economic Incentives For Urban Tree Canopy Restoration, Paul E. Thompson Jr.

Undergraduate Economic Review

Potential alignment of economic incentives for tree canopy restoration are modeled using data from a 2015 Louisville Metro Government (KY) Urban Tree Canopy Assessment. The study revealed marked declines in urban canopy coverage from 2004-2012; accelerating losses are forecast through 2050. Tree coverage conveys substantial financial benefit to private property owners, primarily through increased property valuations. Benefits to local government may be derived from the corresponding increase in property tax assessments. A comprehensive cost-benefit analysis demonstrates the economic efficiency of tree purchase vouchers (issued by government to private property owners) as a potential contributing solution to urban canopy loss.

A Theory Of Focal Points In 2x2 Games, Jonathan W. Leland, Mark Schneider

ESI Publications

Since the classic work of Schelling, the notion of a focal point has been widely applied to explain coordinated behavior. However, focal points remain largely outside the formal apparatus of game theory. This paper develops a model of play in 2 × 2 games where payoff differences determine what strategy players will perceive as “salient” and choose to play. The model uniquely predicts which outcome will emerge for virtually the entire class of 2 × 2 normal form games. For the subset of such games involving coordination and asymmetric payoffs, payoff differences identify focal outcomes and strategies in the same …

Clarity Trumps Content: An Experiment On Information Acquisition In Beauty Contests, Sanjay Banerjee, Hong Qu, Ran Zhao

Accounting Faculty Articles and Research

We provide experimental evidence that under strong beauty contest incentives, players ignore signals from an information source with high content if the source has low clarity. Instead, they acquire equally costly signals from a source with higher clarity despite its lower content. Content measures how precisely an information source identifies an economic situation, whereas clarity measures how precisely the source content is commonly interpreted. Low clarity impairs players' ability to coordinate. When signals are provided exogenously, our experimental results are less severe than theoretical predictions, but consistent with level-2 reasoning in a cognitive behavioral model. When players acquire signals endogenously, …

Sex Differences In Political Leadership In An Egalitarian Society, Christopher Von Rueden, Sarah Alami, Hillard Kaplan, Michael Gurven

ESI Publications

We test the contribution of sex differences in physical formidability, education, and cooperation to the acquisition of political leadership in a small-scale society. Among forager-farmers from the Bolivian Amazon, we find that men are more likely to exercise different forms of political leadership, including verbal influence during community meetings, coordination of community projects, and dispute resolution. We show that these differences in leadership are not due to gender per se but are associated with men’s greater number of cooperation partners, greater access to schooling, and greater body size and physical strength. Men’s advantage in cooperation partner number is tied to …

Monetary Policy Implications Of Cash, Other Money Supplies, And Cryptocurrencies In Singapore: A Growing Cashless Society., Sarah Kesler

Undergraduate Theses and Capstone Projects

The country of Singapore has been a growing cashless society for years. Analyzing their money supplies relative to their gross domestic product and their consumer price index can give insight into how the central bank of Singapore are able to maintain control over their monetary policy. Using data from 1974 to the present, I tested the effect of physical cash and other money supplies on the economic and inflationary growth of this country. With this in mind, I expected to see a positive correlation between these money supplies, GDP, and inflation. However, what I found in my regression analysis was …