Author Archives: Economics Dept

By Lucy Yin

Two main competing theories regarding intergenerational transfers from adult children to elderly parents exist: the altruism model and the exchange model. The strategic bequest motive supports the exchange model in claiming parents with bequeathable wealth will incentivize children to devote more resources to parents in order to receive a larger bequest. I use data from the Chinese Longitudinal Healthy Longevity Survey to assess whether children increase monetary or time transfers to elderly parents with bequeathable property ownership. My findings suggest an altruistic model at play, which contradicts most findings in East Asian countries but may be a trend found in other developing countries.

Advisor: Frank Sloan, Michelle Connolly | JEL Codes: D14, D64 | Tagged: Bequests, Altruism, Intergenerational Transfers

The Impact of Online Streaming on Primetime Viewership An Econometric Analysis of Technological Change, Network Practices and Audience Behavior

By Yeshwanth Kandimalla

This study considers the impact of online streaming on the viewership of popular primetime programs aired on four major U.S broadcast networks: ABC, CBS, FOX and NBC. The time period considered will begin with the 2004-2005 TV season through the 2011-2012 season. Technological change, primarily with faster Internet speeds, spurred some growth of online video streaming. Furthermore, over this time period, the four major networks all authorized streaming at different levels. This variation in availability provides the heterogeneity needed to compare the effect of making programs available
online. The existing literature has posited two effects of online streaming: substitution away from traditional TV viewing due to lower costs or complementarity by drawing in additional viewers. Using this framework, this study conducts an empirical analysis of TV viewership and online availability with a panel of more than 3,500 episodes across 8 seasons and 42 programs. The results strongly suggest that online streaming options drive statistically significant substitution away from traditional TV viewing, a trend that can have major consequences for the distribution of TV programs and the broadcast TV business as a whole.

Advisor: Michael Munger, Michelle Connolly | JEL Codes: D12, D22, L82 | Tagged: Big Four, Cable Cord-cutting, FOX, Hulu, Network Television, Networks, Online Streaming

Faith in the Future and Social Conflict: Economic Growth as a Mechanism for Political Stabilization

By Alexander Bloedel

This paper studies the mechanisms that link sociopolitical conflict and (expectations about) economic prosperity. Motivated by a large body of empirical and historical work on the correlation between economic development and democratization, I develop a game-theoretic model of economic growth with political economy constraints. In an economy where low income agents are credit constrained, rapid and robust economic growth leads to increasing inequality early on, but provides the means to mitigate civil conflict when inequality becomes suciently large. The rate and persistence of growth similarly determines the stability of extant political institutions and the ability to transition from dictatorship to democracy.

Advisor: Curtis Taylor | JEL Codes: D72, D74, O11, O43 | Tagged: Civil Conflict, Economic Growth, Expectations, Political Economy

Implications of Teacher Tenure on Teacher Quality and Student Performance in North Carolina

By Dana Fenster

This paper examines the relationship between teacher tenure and teacher quality in North Carolina, measured via student performance on the state End of Grade (EOG) standardized tests. After presenting a comprehensive synopsis of the current teacher tenure policy, I use data from the North Carolina Education Research Data Center (NCERDC) to compare demonstrated teacher effectiveness across the tenure bubble, defined as one to eight years of teaching experience within the same district. Ultimately, I find that there is significant jump in average teacher quality at the tenure cutoff, suggesting that tenure policy is effective in retaining high quality teachers while removing those who are ineffective.

Advisor: Hugh MaCartney | JEL Codes: I21, J24, J41, M5 | Tagged: Economics of Education, Labor Economics, Teacher Tenure

Determining the Effect of Personal and Familial Wealth on Congressional and State Legislative Election Outcomes

By Anisha Khemlani

This paper seeks to further the debate on money and politics. Specifically, it focuses on the effect of wealth on election outcomes. The goal is to determine the relationship between personal wealth and voter margins of congressional elections and the effect of familial wealth on state legislative elections. A regression analysis of the congressional data suggests that personal wealth does not significantly impact the voter margins of successful candidates. However, a probit analysis of state legislative data suggests that familial wealth can increases candidate’s chances of winning, all else equal. This implies that at the state level, wealth could provide a candidate with advantages, suggesting that money and power may go hand in hand.

Advisor: Nicholas Carnes | JEL Codes: D3, D72 | Tagged: Elections, Personal Wealth, Voter Margin

The Rise of Mobile Money in Kenya: The Changing Landscape of M-PESA’s Impact on Financial Inclusion

By Hong Zhu

M-PESA, the hugely popular mobile money system in Kenya, has been celebrated for its potential to “bank the unbanked” and increase access to financial services. This paper provides evidence to support this idea and explores mechanisms through which this might be the case. It specifically looks at the savings products held by individuals and how this changes in relation to M-PESA use. It then constructs an index for measuring the extent to which individuals are integrated into the formal financial sector. This paper argues that M-PESA’s effect on financial inclusion is a growing phenomenon, which suggests that keeping pace with the rapid evolutions of this mobile money system should be a high priority for researchers. As this paper elucidates, M-PESA has become notably more integrated with the formal financial sector in 2013 as compared to 2009, which holds implications for user behavior.

Advisor: Michelle Connolly, Xiao Yu Wang | JEL Codes: D14, E42, G21, G23, O1, O17, O16, O33 | Tagged: Financial Inclusion, Mobile Money, Savings,Technology

Marijuana Pricing Structure and State-Level Price Determinants

By Rebecca Li

This study uses the PriceofWeed.com data set first examined in Thies (2012) to analyze the price-quantity relationship for marijuana transactions and to determine the effect of various state-level factors on marijuana prices. By applying the cost-based full fixed cost recovery pricing model developed by Britney, Kuzdrall, and Fartuch (1983), this paper finds support for an inverse price-quantity relationship for marijuana rather than a logarithmic or linear relationship. User-rated quality is robust and significant across all models, and price-quantity discount elasticity of -0.220 is observed empirically. An analysis of state-level legal, demand-side, and supply-side determinants of marijuana price demonstrates that medical marijuana has a negative relationship with price, perhaps due to the reduction in risk faced by suppliers when medical marijuana is legalized.

Data Set

Advisor: Michael Munger, Phil Cook | JEL Codes: D04, I18, K42 | Tagged: Marijuana, Price, Quality, Transaction Size

The effect of Mexico’s Conditional Cash Transfer Program on Migration Decisions

By Aki Ishikawa

The Mexican conditional cash transfer program, Oportunidades, is commonly overlooked for long-term evaluations. One understudied effect of this poverty-reduction program is the change in migration behavior caused by the cash transfers. Using data from the Mexican Family Life Survey, this study outlines the effects of the social net program on international migration of low-income households in Mexico. The results suggest that the program causes a positive increase in likelihood for international migration for program participants. Within participating households, individuals who are responsible for grant income tend to migrate less compared to the other members of the households. This research provides valuable insight into existing literature on migration of low-income households in relation to the availability of the conditional cash transfer program.

Advisor: Charles Becker | JEL Codes: R2, R23, R28 | Tagged: Conditional Cash Transfer Program, Developmental Economics, International Migration

The Impact of Greek Affiliation on Grades and Course Selection

By Andrew De Donato

We seek to understand how affiliating with a Greek organization impacts both grades and course selection. This research provides a novel addition to the literature due to a unique situation at the sample university, in that the first opportunity for freshmen to join Greek organizations occurs in the spring semester rather than the fall, as is more common. This situation allows us to control for otherwise unobserved characteristics that may be common to those who affiliate with Greek organizations. For men, joining a Greek organization is associated with a .07 point decrease in the grade received for an average class, while, for women, it is associated with an increase of .02 points in the fall semester and a decrease of .06 points in the spring semester. Joining a Greek organization is also associated with a decrease in the difficulty of selected courses, such that the average course selected provides grades that are .03 points higher than the average course, controlling for enrolled student characteristics.

Advisor: Michelle Connolly, Peter Arcidiacono | JEL Codes: I, I21, I23, I24 | Tagged: Course Selection, Fraternity, GPA, Grades, Greek, Sorority

Corporate Financial Distress and Bankruptcy Prediction in North American Construction Industry

By Gang Li

This paper seeks to explore the application of Altman’s bankruptcy prediction model in the construction industry by measuring its percentage accuracy on a dataset consisting of 108 bankrupt & non-bankrupt firms selected across the timeline of 1985-2013. Another main goal this paper is to explore the predictive power of an expanded variable set tailored to the construction industry and compare the results. Specifically, this measuring process is done using machine learning algorithm based on scikit-learn library that transforms a raw .csv file into clean vectorized dataset. The algorithm provides various classifiers to cross-validate the training set, which produces mixed statistics that favors neither variable set but provides insight into the reliability of the non-linear classifiers.