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Protecting Long Term Human Capital in a Financial Crisis: Evidence from the Indonesian Family Life Survey

By Sachet Bangia

The East Asian Financial crisis of the late nineties made its way to Indonesia in January 1998. Using longitudinal data from the Indonesian Family Life Survey (1993-2015), this paper studies the impact of the crisis on education attainment. In the midst of economic upheaval, households with liquid assets at hand, particularly gold, were better able to maintain per capita expenditures. Tracing out the impact of gold ownership on completed education, I find that the effect is most apparent on 7 to 12 year olds in Indonesia. Using within-household variation in completed education, I find that a divergence in the use of gold to protect child education: urban households direct it towards older children, while rural households do the opposite. This result is best understood by considering the effect of the crisis on opportunity costs of schooling. In urban areas, wages declined sharply, while in rural areas, the return to food production increased dramatically. Thus older children in rural areas would be more likely to exit schooling during the crisis, and consequently not benefit from gold ownership in the household. The evidence examined indicates that families sought to protect their children’s long-term human capital, but in households with fewer resources, the children suffered permanent consequences.

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Advisor: Duncan Thomas | JEL Codes: D1, I2, O0

Japan’s Furusato Nouzei (Hometown Tax): Which Areas Get How Much, and Is It Really Working?

By Kay Hasegawa

In 2015, 7,260,093 individuals donated a total of ¥165,291,021,000 (approximately 1.5 billion USD total) to 1,741 municipalities in Japan using the furusato nouzei system (Ministry of Internal Affairs and Communications). In this paper, I examine this system in two ways. Firstly, I predict the amount of donations each municipality receives based on a number of explanatory variables. Secondly, I run a 2SLS difference-in-differences regression to see if the tax was successfully redistributing wealth from city centers to rural areas, using an increase in municipal-level expenditure as a proxy.

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Advisor: Charles Becker JEL Codes: H2, H21, H27

The Effects of Religion and Patriarchal Norms on Female Labor Force Participation

By Chidinma Hannah Nnoromele

This paper provides an empirical study of the influence of religion, religiosity, and patriarchal norms on female labor force participation across 40 countries. Using micro-level data from the International Social Survey Programme (ISSP) 2012: “Family and Changing Gender Roles IV and macro-level data from World Bank Group’s Women, Business, and the Law 2012 database, the study examines religious and patriarchal aspects that influence female labor force participation among working women, ages 15 to 64. The analysis supports the hypothesis that more religious and socially conservative women are less likely to have paid work. However, the analysis, which examines ten different religions, finds that the specific religion a woman practices, excluding the cultural religions (Judaism and Hinduism), does not influence female labor force participation when controlling for national and environmental cultural factors. This suggests that a country’s institutions, socio-political context, and geographic cultural heritage matter in the way that religiosity is expressed in women’s economic participation.

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Advisor: Michael Munger, Michelle Connolly | JEL Codes: J1, D19, J21, J22

Team Payroll Versus Performance in Professional Sports: Is Increased Spending Associated with Greater Success?

By Grant Shorin

Professional sports are a billion-dollar industry, with player salaries accounting for the largest expenditure. Comparing results between the four major North American leagues (MLB, NBA, NHL, and NFL) and examining data from 1995 through 2015, this paper seeks to answer the following question: do teams that have higher payrolls achieve greater success, as measured by their regular season, postseason, and financial performance? Multiple data visualizations highlight unique relationships across the three dimensions and between each sport, while subsequent empirical analysis supports these findings. After standardizing payroll values and using a fixed effects model to control for team-specific factors, this paper finds that higher payroll spending is associated with an increase in regular season winning percentage in all sports (but is less meaningful in the NFL), a substantial rise in the likelihood of winning the championship in the NBA and NHL, and a lower operating income in all sports.

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Advisor: Peter Arcidiacono | JEL Codes: Z2, Z20, Z23, J3

A Brief Review and Analysis of Spectrum Auctions in Canada

By Martínez-Cid, Wenfei Jiao, and Zeren Zhang

We begin by explaining the importance of efficient spectrum allocation and reviewing Canada’s recent spectrum allocation history. We then use a dataset covering more than 1,200 licenses auctioned from 2001 to 2015 that seeks to account for each auction’s particular rules. Our results confirm that measures of demand such as population covered, income levels, frequency levels, bandwidth, etc. indeed drive license valuation. We also quantify the negative impact on price of setting aside particular license auctions for new entrants, suggesting that the set-aside provision constitutes an implicit subsidy for those firms.

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Advisor: Michelle Connolly | JEL Codes: D44, D45, D47, L51, O33

Determinants of Franchise Value in the National Basketball Association

By Matthew Van Liedekerke

Franchise values in the National Basketball Association (NBA) have more than tripled over the last five years, with the average franchise worth $1.36 billion. Using panel data on NBA franchises between 2009 and 2016, this paper finds that market, performance, star players, and brand are significant determinants of franchise value at the team level and the NBA’s television contract is the primary driver of league-wide franchise value appreciation. The valuation methodologies used in this paper predict that a franchise in Seattle would be worth $1.4 billion in 2017, which could inform the NBA’s decision on expansion.

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Advisor: Connel Fullenkamp | JEL Codes: Z2, Z23, G32

Macroeconomic and Capital Market Determinants of Venture Capital Investment

By Jeffrey Zeren

This thesis explores the impact of macroeconomic, equity and credit market conditions on venture capital investment. The theoretical methodology outlines the logical foundation that supports the relationships between each explanatory variable and the supply and demand of venture financing. The hypotheses suggested by theory are tested using five multi-vector ordinary least squares regression that analyze the impact of the macroeconomic and capital market variables, after adjustment for multicollinaerity and overspecification bias, on each stage of venture capital investment. The next empirical strategy uses category variables and interaction terms to vastly expand the number of observations in the dataset and provide a more robust analysis of select variables. The results show that macroeconomic conditions associated with increased economic activity and productivity growth cause an increase in venture capital investment at all development stages, though early and late stage investments are the most sensitive to growth and productivity advances. In addition, strong public equity market valuations and initial public offering successes are positively associated with venture capital investments. Finally, optimism in credit markets are found to have an indirect impact on venture capital investment, through confounding factors related to investor and entrepreneurial confidence.

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Advisor: Mary Beth Fisher | JEL Codes: G2, G24, E44

The Neighborhood Effect on Health Outcomes for Women in Urban India

By Priyanka Venkannagari

The paper uses 2011 Indian Human Development Survey data to assess the impact of 5 categories of variables on health outcomes. It uses OLS models, interaction terms, instrumental variable models, fixed effects and random effects to investigate the existence of a neighborhood effect on health outcomes for women in urban India. This paper finds that various aspects of health practices, empowerment, amenities and financial security are relevant when looking at health outcomes. Interventions looking to address health outcomes should consider these variables and the compounding neighborhood effect.

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Advisor: Charles Becker | JEL Codes: C36, I1, I12, O18

The Puzzle of Mobile Money Markets: An Example of Goldilocks Conditions

By Ricardo Martínez-Cid and Gonzalo Pernas

This paper investigates the supply-side and demand-side factors that explain the success of mobile money markets. Namely, we argue that there exists a set of Goldilocks conditions that best supports mobile money services. A population must have exposure to financial services to understand mobile money and have a high enough level of income to have a use for these services. However, the population must also not have access to highly developed banking architecture, such that their banking needs are already satisfied. By comparing El Salvador and Kenya, countries in different stages of development, we find empirical support for our hypothesis. Our evidence suggests that low income regions and households with some exposure to financial services are more likely to use mobile money than fully banked people who enjoy a higher income.

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Advisor: Erica Field | JEL Codes: E40, E42, G21, G23, O12, O16, O17

Low-Income Residential Solar: A SASH Evaluation

By Jeff Knaide

In this paper, I examine the impacts of California’s Single-Family Affordable Solar Housing (SASH) subsidy on the rate of adoption of residential solar power. The SASH program looks to provide low-income families with a sizeable subsidy to install residential solar panels. Eligibility for the program depends on income, among a few other factors. This work represents part of a small body of energy justice literature, and the only existing evaluation of SASH. Zip-codes with higher eligibility (based on income levels) showed a significantly higher number of adoptions when controlling for important characteristics, specifically median income. While this policy did generate low-income adoptions, it does not offer a strong carbon abatement strategy – low-income households require greater financial support than might higher-income households.

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Advisor: Chris Timmins | JEL Codes: Q29

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