The Fifth Annual Undergraduate Research Symposium was held on Friday, April 20 and Saturday, April 21, 2007, in the Social Sciences Building on Duke’s campus. This year, 13 papers from five North Carolina colleges and universities were presented. This was the first year that students from Wake Forest, Salem College, and the University of North Carolina at Charlotte presented papers at the Symposium, and we hope that students from these institutions will continue to submit papers in the coming years.

Financial economics was the most popular topic area this year, with five papers. Three of the five papers investigated the behavior of particular financial prices. Michael Stanley focused on a new approach to modeling the moment-to-moment movement of prices of large stocks in “High Frequency Jump Characteristics of Large Capitalization Common Stocks.” In her paper, “The Value of Unsolicited “Buy” Recommendations to Investors,” Angela Aldrich used event-study methodology to analyze the behavior of small stocks that are touted by so-called spam emails. Tyler Patla compared pricing behavior between traditional bookmaking markets and electronic exchanges in his paper, “The Effect of Market Structure on Pricing Efficiency:  An Empirical Study of Sports Betting Markets.” Two other financial economics papers focused on interesting questions in corporate finance. Chris Lin presented his paper “Corporate Swap Use and Its Effect on Swap Spreads,” while Amrith Krishnakumaar presented his paper entitled “Which Method of Pricing and Selling IPOs, Book-building or Auctions Might Be More Effective in Promoting an Issuer’s Aims?” All of these financial economics papers were authored by Duke students.

Several papers used economic analysis of large microeconomic data sets to examine current educational and social policy questions. Eddy Leal of Duke presented “Public Education in Puerto Rico: Does Class Size Matter?” which featured hard-to-obtain data on the performance of individual schools in Puerto Rico. Jessica Sprinkel of Wake Forest, who worked with the huge Census Bureau data sets, presented “Breaking Down Increasing Income Inequality in the U.S. over the Past Decade.” Stephen LaFata of Duke presented “Maternal Labor Decisions and the Effect on Adolescent Behavior,” which used the National Longitudinal Survey of Youth. And Andrew Nowobilski, also of Duke, utilized several microeconomic data sets in order to construct data for his paper, “Running from Money? The Puzzle of Bars and Liquor Stores Locating in Black Neighborhoods.”

Two papers also examined current policy questions, but used non-empirical methods of economic inquiry to produce interesting and distinctive analyses.  David Hansen of UNC-Charlotte used both philosophical arguments as well as theoretical analysis to examine the economics of eminent domain in his paper, “Kelo vs. New London:  Economics and Ethics.”    And Xanthine Basnet, of Salem College, used case study evidence she collected on a study trip to Nepal in her paper entitled “Microcredit Strategies and Their Challenges in Nepal.”

The two remaining papers developed theoretical models. Ryan Wesslen of UNC-Chapel Hill built a macro model that incorporated his idea that social constraints on women’s opportunities were relaxed as countries industrialized, and that this affected economic performance. His paper was entitled “An Endogenous Dynamic General Equilibrium Model of Fertility: England 1881-1931.” Selin Dilmener of Duke, on the other hand, built a microeconomic model to explain why some people refuse to evacuate when a hurricane is forecast to land on their city. Her paper was called “A Theory of Evacuation as a Coordination Problem.”

Congratulations and thanks go out to all the authors, who wrote outstanding papers and gave polished and clear presentations. Special congratulations go to Selin Dilmener, whose excellent paper was perfectly matched by her enthusiastic and well structured presentation.  She won the Best Paper Prize. Andrew Nowobilski earned the runner-up prize for his paper and presentation, both of which compressed a staggering volume of work into an interesting and accessible package.

Connel Fullenkamp
Faculty Sponsor

Articles

The Value of Unsolicited Buy Recommendations to Investors: Can Investors Trade Profitably Based on E-mail Spam? by Angela Nicole Aldrich

Microcredit programs and their challenges in Nepal by Xanthine Basnet

A Theory of Evacuation as a Coordination Problem by R. Selin Dilmener

Kelo v. New London: Economics and Ethics by David Hansen

Breaking Down Increasing Earnings Inequality in the U.S. 1990-2004 by Jessica Sprinkel

Book-building versus Auctions: An investigation into which IPO pricing and selling method more effectively promotes the aims of an IPO issuer by Amrith Krushnakumaar

Maternal Labor Decisions and the Effects on Adolescent Risky Behavior by Stephen M. LaFata

Public Education in Puerto Rico: Does Class Size Matter? by Eddy V. Leal

Corporate Swap Use and Its Effect on Swap Spreads by Christopher Paul Lin

Running from Money? The puzzle of bars and liquor stores locating in black neighborhoods by Andrew J. Nowobilski

The Effect of Market Structure on Pricing Efficiency: An Empirical Study of Sports Betting Markets by Tyler Hofman Patla

High Frequency Jump Characteristics of Financial Asset Prices by Michael Stanley

An Endogenous Dynamic General Equilibrium Model of Fertility for England 1881-1931 by Ryan S. Wesslen

The Duke Journal of Economics is published each year to showcase outstanding research in economics by Duke undergraduates. This volume contains both honors theses and essays. The essays are examples of research written by Duke Undergraduates at various stages of their economics education at Duke. Honors theses which were presented at the 2006 undergraduate research symposium and are to be published in the special edition of the Duke Journal of Economics devoted to that symposium are not included here.

Four undergraduate and masters students wrote book reviews in the spring of 2006, which have been scheduled for publication in scholarly journals. We are delighted that their critical skills are being appreciated by the profession. These are:

• Karl Boulware, The Coming Economic Collapse: How You Can Survive When Oil Costs $200 A Barrel, by Steven Leeb with Glen Strathy, Warner, 2006.Indian Journal of Economics and Business.

• Daniel Hughes, Capital and Collusion: The Political Logic of Global Economic Development, by Hilton Root, Princeton, 2005, Development Policy Review .

• Carly Knight, The Trouble with Africa: Why Foreign Aid Isn’t Working, by Robert Calderisi, Palgrave MacMillan, 2006, Review of Social Economy .

• Phuong H. Nguyen, Globalization for Development, by Ian A. Goldin and Kenneth A. Reinert, Palgrave MacMillan and World Bank, 2006, Journal of International Logistics and Trade .

We congratulate the authors of the research presented in this issue.

For support of the journal we thank the Allen Starling Johnson, Jr. Endowment Fund and donors to the Harvrilesky Fund, as well as Jennifer Socey, who put the journal online.

Charles Becker & Ed Tower, Faculty Advisors to the Journal

Part I

The CNOOC Bid for Unocal and US National Security: Was the Political Outcry in Congress Justified? by Genevieve Ding

A Century of Economic Thought as Examined through American Trade Unionism by Christian Bonilla and Kathryn F. Fortunato

Complementary Currencies: Mutual Credit Currency Systems and the Challenge of Globalization by Clare Lascelles

Infrastructure and Urban Primacy: A Theoretical Model by Jinghui Lim

Separating the Bulls from the Herd: Race Distribution and Median Household Income in Durham County by Ryan Mattison

Continuity and Change in American Economic Thought Regarding Immigration: 1890-1950 and 1985-1995 by Russell Miller and Chinedu Okpukpara

Implications of Transnational Terrorism on International Trade by John McKenna

Part II

Price Discrimination and the Internet: A look at the changing face of the college textbook industry by Jeffrey Alan Ackermann

Did Unilateral Divorce Laws and No-Fault Divorce Laws Raise Divorce Rates? by Michael Joseph Horowitz

Efficiency of IPO Offering Techniques: Semi-theoretical Framework and Empirical Results for US and Chinese Issues by Xinfeng Hu

Public Policies and Private Decisions: An Analysis of the Effects of Abortion Restrictions on Minors’ Contraceptive Behavior by Leland M. McNabb Jr.

Understanding the Role of the Arts and Women in the Economy: The Contributions of Creative Literature by Danielle P. Petrilli

Could the Kaminsky-Reinhart Model Have Predicted the 2002 Uruguayan Currency and Banking Crises? by Steven R. Vickers

The Fourth Annual Undergraduate Research Symposium was held on Friday and Saturday, April 7th – 8th, on the Duke University campus. This year’s Symposium featured twelve papers authored by students from Davidson College, Duke University, and UNC-Chapel Hill, which were presented in three different sessions. As in past years, the papers focused on a wide variety of issues and disciplines in economics, but were uniformly impressive in terms of their creativity and quality. And nearly all of the research papers analyzed important policy issues.

As in past years, international topics remain popular subjects for undergraduate research, with three of the Symposium papers addressing questions in international economics.   Pauline Abetti, for example, used voting models to analyze the motivations behind the Congressional vote on the Central American Free Trade Area, or CAFTA, in a paper entitled “Congressional Voting on DR-CAFTA: A Focus on Environmental Lobbying.” Ethan Fleegler, in “The Twin Deficits Revisited: A Cross-Country, Empirical Approach,” used multicointegration analysis to examine whether the “twin deficits” problem (fiscal deficit and trade deficit) exists in four different countries. And Corinne Low used a microeconomic data set from Senegal to examine the determinants of fertility in a highly religious society, in order to devise an alternative to prevailing contraception-based population policy, in her paper “The Senegalese Experience: Rethinking Fertility Theory for Highly Religious Societies.”

Two papers focused on the effects of excise tax increases. In “The Impact of the North Carolina Cigarette Excise Tax Increase on Cigarette Sales, Cigarette Excise Tax Revenue, and Cigarette Smuggling in North Carolina and Surrounding States,” Robert (Palmer) Steel examined the impacts of the large increase in North Carolina’s cigarette tax, which occurred in late 2005, on cigarette consumption and especially on smugglers’ demand for North Carolina cigarettes. And in “Federal Excise Taxes and the U.S. Beer Industry’s Three-Tier System of Distribution: Do Beer Manufacturers Benefit from Federal Excise Taxes?” Ankur Fadia examined the effects of the 1991 increase in the federal excise tax on beer, using both theoretical and empirical arguments to show how the beer distribution system in the U.S. produced an increase in the retail price of beer that was greater than the increase in the tax.

Two other papers examined negative externalities and devised policies to remedy their effects. Laura Syn estimated the cost to U.S. society of the congestion on its highways, and then calculated an optimal congestion tax that would be used to fund an increase in bus routing in order to mitigate the negative externality, in a paper entitled “Combating Congestion: Congestion Tax and Expansion of Bus Routing and Coverage.” Six students from Davidson College examined the problem of wasted printer resources caused by the College’s current “free” printing for students, and presented two different solutions to this externality, in “Correcting the Externality of Free Printing at Davidson College: Pollution Abatement Taxes versus Marketable Printing Permits.”

The remaining papers examine many different topics, but are all excellent exercises in applied microeconomics, which use interesting microeconomic data sets. In “Describing Interracial Marriages and What They Convey Regarding Race Relations in America,” John Vickery used Census 2000 data to examine the trends in and determinants of interracial marriage, and assessed what the data say about the current state of race relations. Brandon Carroll took data from North Carolina middle schools and showed how crime and violence in these schools affects the math and verbal test scores of middle school students, in “The Effects of School Violence and Crime on Academic Achievement.” Joel Wiles, in a paper titled “Mixed Strategy Equilibrium in Tennis Serves,” collected data from professional tennis matches to test whether the players followed a modified mixed-strategy equilibrium in their choice of serves. Jennifer Kang, in “Defensive Medicine in Cardiology: Does it exist?” used a national sample of cardiac patients to show that defensive medicine appears to be practiced in cardiology. And finally, Susan Fisk collected photos from the Facebook website and then generated her own data from students’ ratings of these photos to test whether male-to-female ratios on college campuses affects how females present themselves on the Facebook site.   Her paper was titled “The Effect of Male-to-Female Ratio on Female Attractiveness.”

Special congratulations go to Corinne Low and Susan Fisk, whose papers were each awarded runner-up prizes, and especially to Joel Wiles, whose paper on tennis serves was selected as the Best Paper in the 2006 Undergraduate Research Symposium.

Thanks go out to many people whose efforts made the Symposium a great success.   Professor Ed Tower gave a wonderful keynote address at the Symposium banquet extolling the life of the economist and urging the assembled presenters to continue their work in economics. The Economics Student Union provided excellent logistical support, and the staff of the EcoTeach Center, especially Jennifer Becker, literally made the event work. And of course, we owe a great debt of thanks to the Allen Starling Johnson Jr. Fund for its financial support of the Symposium, and to the Johnson family for their participation in the sessions.

Connel Fullenkamp, Faculty Sponsor

Articles

Congressional Voting On DR_CAFTA: A Focus on Enviromental Lobbying by Pauline Abetti

Correcting the Externality of Free Printing at Davidson College: Pollution Abatement Taxes versus Marketable Printing Permits by Aaron Baila, Annie Butler, Brandon Carroll, Steven Gentile, Patrick McConville and Jordan Sundheim

The Effects of School Violence and Crime on Academic Achievement by Brandon R. Carroll

Federal Excise Taxes and the U.S. Beer Industry’s Three-Tier System of Distribution: Do beer manufacturers benefit from federal excise taxes? by Ankur Sunildatta Fadia

The Effect of Male-to-Female Ratio on Female Attractiveness by Susan Fisk

The Twin Deficits Revisited: A Cross-Country, Empirical Approach by Ethan Fleegler

Defensive Medicine in Cardiology: Does it exist? by Jennifer Kang

The Senegalese Experience: Rethinking Fertility Theory for Highly Religious Societies by Corinne S. Low

The Impact of the North Carolina Cigarette Excise Tax Increase on Cigarette Sales and Tax Revenue in North and South Carolina by Robert Palmer Steel

Combating Congestion: Expansion of bus routing and the congestion tax by Laura Syn

Describing Interracial Marriages and What They Convey Regarding Race Relations in America by John Michael Vickery

Mixed Strategy Equilibrium in Tennis Serves by Joel Wiles

The Duke Journal of Economics is published each year to showcase outstanding research in economics by Duke undergraduates.

This volume contains three honors theses and four essays written under the guidance of Professor Craufurd Goodwin in his class, “The Uses of Economics.” These essays are preceded by Craufurd’s introduction.

We congratulate the authors of the papers presented in this issue.

Some honors theses lead ultimately to publication. Justin Knowles (Duke BA 1996 & MA 1997) coauthored with Omer Gokcekus and Ed Tower a revised version of his honors thesis, “Sweetening the Pot: How American Sugar Buys Protection,” as chapter 8 of The Political Economy of Trade, Aid and Foreign Investment Policies, edited by Devashish Mitra and Arvind Panagariya, Elsevier, 2004.

For support of the journal we thank the Allen Starling Johnson, Jr. Endowment Fund and donors to the Havrilesky Fund as well as Molly Brown, who put the journal on line, Kevin Campbell, and Jennifer Socey.

Charles Becker & Ed Tower, Faculty Advisors to the Journal

Articles

Time Well Spent? An economic rationale for the negotiation of confidentiality agreements during corporate mergers and acquisitions by Roy Ben-Dor

Another Pricey European Import? An Economic Analysis of the Artist’s Resale Right by Yuanshu Deng

The Demographic Determinants of Savings, Investment, and Foreign Capital Dependence: An Inquiry into Latin America, 1960-2000 by Steve Poliner

Essays

Introduction by Craufurd Goodwin

Is a Full Scholarship Enough? How various segments of American society have debated whether college athletes should be paid by Jeffrey Ackermann

The Economics of Space Tourism: NASA and the Entrepreneur by Christopher Carr

Should Executive Compensation Be Regulated? An investigation of the economics involved in the societal discussion of this topic by Lauren Kellis

How Wealthy is Our Intellectual Estate, and Does It Really Matter? Assessing Economic Knowledge and Its Diffusion in the Immigration Debate by Jeffrey K. Lee

This special issue of the Duke Journal of Economics features papers presented at the Third Annual Undergraduate Research Symposium, held on April 8-9, 2005. The Symposium is an economics research conference open to all undergraduates studying at North Carolina institutions, initiated in 2002 in order to recognize the accomplishments and contributions that undergraduate research represents.

The Symposium is organized much like a competitive professional conference. Paper proposals were due in mid-February, and then reviewed by a committee of Duke undergraduates and faculty. The Selection Committee invited nine authors to present their papers at the Symposium, offering constructive criticism on the proposals in order to help the authors write or revise their papers. In addition to completing their papers, the authors also prepared 20-minute Powerpoint presentations for the Symposium, which were followed by audience discussion.

Over half of the papers this year had an international focus or international aspect, primarily dealing with the economics of developing countries. These papers included studies on the returns to education in South America, the effect of race on wage disparity in Bolivia, a growth model for sub-Saharan Africa, and the relationship between financial liberalization and corporate governance reform. A final internationally focused paper examined economic influences on the voting behavior of the Palestinian minority in Israel.

Two other papers had a local focus, including one paper on “Amenity-Led Development” in the Asheville area, and one on the relationship between socioeconomic status and exposure to fine particulate air pollution in North Carolina. Papers on the motivations for corporate philanthropy and on the history of the concept of “the good life” in economic thought rounded out the Symposium.

We commend all of the authors for the hard work and dedication that they demonstrated in producing such high quality research papers. Special congratulations go to Ailian Gan of Duke University, whose paper “The Impact of Public Scrutiny on Corporate Philanthropy” won the Best Paper Prize. Congratulations also go to Rachel Heath of Duke, whose paper “Explaining Racial Wage Disparity in Bolivia” was the Runner-Up.

Many people contributed to the success of the Symposium and they have our sincere gratitude. We begin with the Paper Selection Committee, particularly Wendy Wang, Aisha Taylor, and Will Hinckley, who served as Session Chairs. The staff of the EcoTeach Center was equally essential to the success of the Symposium. Dorothy Armento, Molly Brown, and Jennifer Socey did a great job of planning the logistics and the leaders of the Economic Student Union, Phil Neuhart, Mac Conforti, and Ravi Patel, executed those plans flawlessly.

Special thanks go to Professor Marek Gora of the Warsaw School of Economics, who traveled to Duke and gave an outstanding keynote address at the Symposium Recognition Banquet. Finally, our thanks go to the Allen Starling Johnson Jr. Fund, the EcoTeach Center, and the Department of Economics for their financial support of the Symposium.

We invite you to enjoy all of the Symposium papers in this issue, and we look forward to next year.

Connel Fullenkamp

Articles

The Influence of Class and Ethno-religious Identity on Voting Strategies: A Case of the Palestinian Minority in Israel by Wifag Adnan

The Good Life in the History of Economic Thought by Antoine P.J. Artiganave

Measuring the Value of Place: A Case Study of Recent College Graduates by Kate Fuller

The Impact of Public Scrutiny on Corporate Philanthropy by Ailian Gan

Explaining Racial Wage Disparity in Bolivia by Rachel Heath

Financial Market Development: Does financial liberalization induce regulatory governance reform? by Shiying Lee

Explaining Rates of Return to Schooling in Three South American Countries by Daniel K. McCready

A Growth Model of Sub-Suharan Africa by Anna Ramsey

Environmental Equity in North Carolina: Economic and Geo-Spatial Analysis of Fine Particulate Matter (PM2.5), Point Sources and Socioeconomic Status in North Carolina by Robert White