Splitting Hairs or Splitting Regions: The Differential Democratic Impacts of Splitting ZIP Codes vs. Counties During Redistricting
by Jacob Hervey
Abstract
In light of the Supreme Court’s holding in Gill v. Whitford, judicially-enforceable gerrymandering
metrics must focus on democratic harms to individual citizens, instead
of state-wide measures of proportionality. Previous literature has suggested that gerrymandering
metrics should focus on the extent to which congressional districts split preexisting
geographic boundaries (namely, ZIP codes and counties). This work compares
the differential democratic harms caused by ZIP code versus county splitting during
redistricting across two domains. First, we exploit the changes during the 2010 redistricting
process to construct a difference-in-difference model that captures changes in
voters’ political knowledge as a function of their exposure to geographic splitting. Second,
we predict district-level electoral outcomes from 2002-2018 based upon the extent
of ZIP code and county splitting. Our results indicate that ZIP code and county splitting
cause more significant democratic harms for different outcomes of interest. While
county splitting has more negative consequences for constituents’ political knowledge,
ZIP code splitting is more detrimental with regards to voter turnout.
Dr. Patrick Bayer, Faculty Advisor
Dr. Michelle Connolly, Faculty Advisor
JEL Codes: D72, K16, H11
Investing in Rural Healthcare: Impact of Private Equity Acquisition on Financial and Utilization Outcomes of Rural Hospitals
by Amanda He
Abstract
Private equity investment in the healthcare sector has risen considerably in recent decades, yet
the impact of private equity ownership in rural hospital markets is largely unknown. Existing research
points to a correlation between private equity acquisition and increased hospital incomes and charges.
Rural hospitals, however, are structurally and operationally different from their urban counterparts, with
lower occupancy rates and higher susceptibility to financial distress. This paper seeks to (1) characterize
the types of rural hospitals acquired by private equity firms and (2) examine the changes in rural hospital
financial, utilization, and survivability outcomes following private equity ownership. Using a 15-year
panel of Medicare data, I estimate the impact of 352 private equity deal-hospitals across nine financial
and utilization outcomes. Additionally, I estimate the impact of private equity on hospital closures. I find
that private equity acquisition improves profitability for both urban and rural hospitals, but the
magnitude is smaller for rural hospitals. My results suggest that private equity-owned hospitals increase
profits by reducing operating expenses. Among rural hospitals, private equity ownership is associated
with fewer discharges and lower occupancy rates, which may be a concern for long-term viability. I find
a statistically significant negative correlation between private equity acquisition of rural hospitals and an
increased likelihood of closure. PE-acquired hospitals have a negative spillover effect on other hospitals
within the same hospital referral region, leading to a higher probability of closing.
Professor Ryan McDevitt, Faculty Advisor
Professor Michelle Connolly, Faculty Advisor
Professor Grace Kim, Faculty Advisor
Honors
JEL classification: G23, G33, G34, I10, I11
Intergenerational Economic Transfers and Wealth Inequality in the United States
by Parinay Gupta
Abstract
Using longitudinal data from Panel Study of Income Dynamics (PSID) from 2007-2021, this
paper investigates the role of economic transfers (inheritances and gifts) in asset
accumulation processes of US households, in both short-term and long-term. Analysis is
done through dimensions of race, wealth quartile, and age. Examining quartiles reveals
significant wealth disparities, mirrored in income and education levels. Racially, White
households consistently hold higher wealth, income, and educational levels compared to
Black households, indicating systematic racial disparities. Multivariate analysis uncovers
relationships between socio-economic factors and wealth. Past wealth positively influences
future accumulation, except for the lowest quartile. Labor income negatively impacts wealth,
particularly in lowest quartile, potentially indicating poverty traps and dissaving, while asset
income positively affects quartiles except the lowest, in both short-term and long-term. Total
expenditure initially reduces wealth but reverses in quartiles except the lowest in both time
frames. Race is significantly associated with wealth, with young Black households
consistently disadvantaged, though this reverses for the wealthiest quartile and in longerterm.
Age correlates positively with wealth. Transfers’ (inheritances and gifts) impact varies
across quartiles, showing diminishing returns and switching signs as wealth quartile
increases, indicating differential returns for upper quartiles. Noteworthy is the positive
association between transfers received 8-10 years ago and current wealth, irrespective of age
and wealth quartile, highlighting their significant long-term role in wealth accumulation.
Prof. William Darity, Faculty Advisor
Prof. Michelle Connolly, Faculty Advisor
JEL Classification Numbers: D14, D31, J15
A Comparison of the HHI and the Procurement-Based Framework in Merger Review
by Kenneth Gong
Abstract
The Herfindahl-Hirschman Index (HHI), a measure of market concentration, plays
a critical role in the U.S. Merger Guidelines. It is used as a threshold metric that marks
certain mergers as potentially harmful to consumers. However, the microfoundations for
the HHI are grounded in the Cournot oligopoly model, which may not be an appropriate
foundation for certain markets, particularly those in which buyers purchase through
competitive procurements. Recent developments in Incomplete Information Industrial
Organization (IIIO) allow merger analysis to be tailored to such procurement-based
markets. While IIIO methods allow one to calculate the probability of an increase in
price (PIP) as a result of a horizontal merger, until now no work has been done to
compare the HHI approach to merger review with the IIIO approach. In this paper,
we find that the IIIO approach is largely consistent with the 2023 Merger Guidelines
in that we agree that both the post-merger HHI and the change in HHI should be used
in merger review, however our results place greater emphasis on the change in HHI in
terms of predictive power of the PIP.
Professor Leslie Marx, Faculty Advisor
Blaze of Distrust: The Impact of Wildfires on Social Capital and Governance in Brazilian Amazonia
by Feishi “Alicia” Gong
Abstract
The 2019 wildfire crisis in Brazilian Amazonia not only captured global headlines
but also deeply influenced public sentiment towards environmental and
political challenges within the country. Trust, a pivotal element of social capital,
plays a vital role in shaping a nation’s progress and the well-being of its
citizens. This study employs detailed satellite data on wildfire occurrences
and survey data reflecting Brazilian public opinion to investigate the nature
of fire activity in Brazilian Amazonia, treating it as indicative of organized
criminal behavior. Further, it delves into the ramifications of wildfires on
the institutional and interpersonal trust of Brazilians. Our findings reveal
that wildfires exert a considerable detrimental impact on the trust that local
residents place in institutions and each other. These insights underscore the
urgency of enhancing environmental protection measures and wildfire management
strategies. By doing so, Brazil can bolster its social capital and
empower local governments to rebuild and maintain public trust effectively.
Professor Michelle Connolly, Faculty Advisor
JEL classification: H70, Q23, Q51
Fact or Fluff: Does Wording Used by Gene Editing Companies Affect Investor Behaviors?
by Thomas Freireich
Abstract
The writing style a startup uses to portray itself has an impact on investors’ perceptions
of them, subsequently affecting their venture capital decisions. This funding is particularly
important given the prominence of venture capital as a primary financial source for growing
early-stage biotechnology companies. Currently, due to recent scientific advances, many of these
startup companies are utilizing novel gene editing based approaches to cure a variety of
previously untreated diseases. For the sake of those affected, it is essential that this sector of the
biotechnology industry is managed properly early on so that developed treatments can eventually
reach FDA approval. This paper is in part inspired by recent happenings revolving around the
fraudulent biotech startup, Theranos. Elizabeth Holmes, Theranos’ founder, was renowned for
making comments lauding the company’s product. It seemed to many that investors were lulled
by the idea of what Holmes made Theranos to be, invested in the company based on false verbal
promises instead of the reality of the scientific product. Occurrences like the demise of Theranos
are detrimental to both investors and competing companies in need of venture funds in order to
develop their treatments. Thus, this paper explores the impact of word-usage and writing style on
venture capital investment in various gene editing based startups, hoping to elucidate whether
investors are being swayed by word choice.
Dr. Michelle Connolly, Faculty Advisor
Free University? An Investigation of Australia’s 1974 Free Higher Education Policy and Its Impact on Enrollment, Degree Completion, Later-Life Occupational Status, and Income
by Annie Cui
Abstract
To what extent has the free higher education policy of 1974 impacted Australian
students’ decisions of university enrollment, degree completion, and later-life human capital
development? In this paper, I analyze the impact of the policy from both national descriptive
statistics and individual-level enrollment and degree completion decisions using the Australian
Household Income and Labour Dynamics Survey. I find that the policy has significantly
increased the likelihood of female enrollment in higher education, low-income students’
likelihood of diploma degree completion, and is positively associated with later-life occupational
status. However, this study does not find a clear relationship between the policy, bachelor’s
degree attainment, and later-life disposable income. Policymakers need to carefully consider the
efficiency and efficacy of broad-based tuition policy instruments when imagining bridges to
achieve universal access to higher education.
Professor Robert Garlick, Faculty Advisor
Professor Peter Arcidiacono, Faculty Advisor
Professor Michelle Connolly, Seminar Advisor
JEL Classification: I22; I23; I26
The Sub-proportionality of Subjective Probability Weighting in Poker
by William Clark
Abstract
This study uses Texas Hold’em poker to investigate decision-making under
uncertainty and the concept of probability weighting, where individuals may
overvalue or undervalue uncertain outcomes. I conduct an experiment to assess
Cumulative Prospect Theory’s relevance to subjective probabilities in poker by
simplifying the game to compare complex and simple gamble evaluations. The
research aims to understand how risk preferences and probability estimation
without complete information are influenced by individuals’ poker experience
and framing effects. We find that deviations from what theory predicts in the
subjective-probability Poker frame can be explained well by the framing effects
made in the decision maker’s editing phase. By examining the difference in the
predictive power of decision making models in explicit vs subjective probability
gambles, the study seeks to improve comprehension of cognitive processes in
navigating uncertainty.
Professor Philipp Sadowski, Faculty Advisor
Professor Grace Kim, Faculty Advisor
JEL Classification: C91, D80, D91
The Press and Peace, Examining Iraq War Coverage in Newspapers using BERT LLMs
by Jakobe Bussey
Abstract
This study utilizes state-of-the-art BERT (Bidirectional Encoder Representations from Transformers) models to perform sentiment analysis on Wall Street Journal and New York Times articles about the Iraq War published between 2002 and 2012 and further categorize them using advanced unsupervised machine learning techniques. By utilizing statistical analysis and quartic regression models, this paper concludes that the two newspapers report on the Iraq War differently, with both exhibiting a predominantly negative-neutral tone overall. Additionally, the analysis reveals significant fluctuations in negativity from both outlets over time as the war progresses. Furthermore, this study examines the objectivity of reporting between editorial and non-editorial articles, finding that non-editorials tend to report more objectively, and the neutrality of editorials remains relatively constant while the objectivity of non-editorials fluctuates in response to war events. Finally, the paper investigates variations in sentiment across different topics, uncovering substantial variations in positive, neutral, and negative sentiments across topics and their evolution over time.
Professor Peter Arcidiacono, Faculty Advisor
JEL Classification Codes: L8, L82, H56
