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Category Archives: C2

Hedonic Pricing in the Sneaker Resale Market

By Kevin Ma and Matthew Treiber

This paper explores the secondary resale market for high-end and limited-edition sneakers, specifically analyzing the determinants that affect what value sneakers trade for in the secondary market. While it is common knowledge that the sneaker resale market is a thriving and active secondary market, there is little to no empirical research about what exactly causes such sneakers to sell for exorbitant prices in the resale market. The study utilizes a hedonic pricing approach to investigate the determinants of sneaker resale price. We use a dataset of sneaker resale transactions from the online marketplace StockX between the years of 2016 and 2020 as the basis for our research. After analyzing the results, we have determined that the amount of “hype” that surrounds a sneaker as well as supply scarcity are statistically significant factors when determining the resale price premium a particular sneaker commands in the secondary market. This work adds to the sparse literature on the sneaker resale industry and brings an econometrics-approach to determining the price a given pair of sneakers commands in the resale market.

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Advisors: Professor Kyle Jurado, Professor Michelle Connolly, Professor Grace Kim| JEL Codes: C2, C20, J19

“Behind the Scenes:” An Empirical Investigation of Broadway Show Success Factors

By Alexander Sanfilippo   

This paper analyzes the impact of financial and objective factors on Broadway show success. The analysis differs from previous literature through its exclusive focus on Broadway productions that open between June and February, so defined as the “Pre-Season,” as well as its attempts to establish causality through an instrumental variable regression. Two other methods of analysis are also used in accordance with past research: an ordinary least squares regression and relative risks hazard model. The results demonstrate the significant impact of first week attendance on long-term show success and reiterate the essential function of the Tony Awards in Broadway survival. This paper also introduces the positive impact of ticket pricing on show survival. Discussion on the implications surrounding the difficulty of obtaining show-specific budget data concludes the paper, arguing that this should be an area of future focus and collaboration between researchers and Broadway producers.

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Advisors: Professor James Roberts, Professor Brad Rogers, Professor Kent Kimbrough| JEL Codes: C4, C41, C26

The Impact of Violence in Mexico on Education and Labor Outcomes: Do Conditional Cash Transfers Have a Mitigating Effect?

By Hayley Jordan Barton

This research explores the potential mitigating effect of Mexico’s conditional cash transfer program, Oportunidades, on the education and labor impacts of increased homicide rates. Panel data models are combined with a difference-in-differences approach to compare children and young adults who receive cash transfers with those who do not. Results are very sensitive to specification, but Oportunidades participation is shown to be positively associated with educational attainment regardless of homicide increases. Homicides are associated with decreases in likelihood of school enrollment and compulsory education completion; however, they also correspond with increases in educational attainment, with a larger effect for Oportunidades non-recipients.

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Advisors: Dr. Charles Becker, and Dr. Michelle Connolly | JEL Codes: C23; D15; I20; I38; J24

The Effect of Federal Regulations on the Outcomes of Auctions for Oil and Gas Leaseholds

By Artur Shikhaleev

This thesis attempts to analyze the impact of the differences in regulatory frameworks that govern state-owned and federally-owned lands on the outcomes of auctions for oil and natural gas leaseholds in the state of New Mexico. The analysis tries to isolate the effect of ownership by controlling for auction structure, leasehold characteristics, and prices of underlying resources. Given past research, the hypothesis is that stricter regulations carry a heavier cost to buyers, so the expectation is that federally-owned leaseholds, which are more regulated, are traded at a discount to state-owned leaseholds. However, the result of this thesis is contradictory to the hypothesis. The conclusion is that stricter regulations do not lead to a discounted auction price for an oil and gas leasehold.

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Advisor: James Roberts, Kent Kimbrough | JEL Codes: C12, C21, Q35, Q58 | Tagged: Auction, Education, environment, federal, natural gas, Oil, Regulation, State

Exceeding the Threshold: Analysis of Public Information Transfer using Instrumental Variables

By Gabrielle Inder

This paper examines how information transfer about contamination levels found at brownfield sites capitalizes into nearby property values. More specifically, a hedonic model is used to test the impact on housing transaction prices when a binary measure (i.e. exceeding a threshold or not) or a continuous measure (i.e. chemical levels) is used. In the analysis, I exploit the variation in the contaminant thresholds, caused by regulatory conditions defined by the state of Massachusetts, holding the contaminant level constant. As thresholds are tied to neighborhood attributes in areas surrounding brownfields, threshold exceedance is potentially correlated to unobserved factors that impact housing values. An instrumental variables approach is used to create variation in threshold
exceedance through the use of an instrument that measures the presence to underground aquifers. After instrumenting for threshold exceedance, my estimates indicate that a 10.8% decrease in housing values occurs when a contaminant threshold is exceeded, while the continuous measures of toxicity indicate a negative but insignificant effect. These findings suggest that policy makers should consider information conveyance when creating policies to inform homeowners of pollution presence, as improved information provision may increase public awareness about local environmental concerns.

Honors Thesis

Data Set

Advisor: Christopher Timmins, Michelle Connolly | JEL Codes: C26, Q5, Q53 | Tagged: Brownfields, Hedonic Analysis, Housing Markets, Instrumental Variables, Pollution

Possibility of Cost Offset in Expanding Health Insurance Coverage: Using Medical Expenditure Panel Survey 2008

By Catherine Moon

The Patient Protection and Affordable Care Act aims to substantially reduce the number of the
uninsured over time and asserts that the financial burden of extending insurance coverage to the
previously uninsured will be offset by the benefit of the attendant improvement in their health.
Motivated by this policy, I explore whether health-insurance status and type affect one’s likelihood of
improving or maintaining health using the Medical Expenditure Panel Survey data. I build a set of
ordered regression models for health-status transitions under the first-order Markov assumption and
estimate it using maximum likelihood estimation. I perform a series of likelihood ratio tests for pooling to determine whether the latent propensity index is the same between adjacent initial health-status groups. Empirical results imply that expanding health care to the unwillingly uninsured due to severe
economic constraints and extending the scope of public insurance to that of private insurance will lead to improvement or maintenance of health for the relatively healthy population, implying the possibility of cost off-set in the expansion of coverage and the extension of scope.

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Advisor: Frank Sloan, Michelle Connolly | JEL Codes: C12, C25, I12, I13, I18 | Tagged: Health Insurance, Health Transition, Ordered Regression Model, Patient Protection and Affordable Care Act (PPACA), Self-Assessed Health Status, Test for Pooling Adjacent Ordinal Categories

Neighborhood Effects and School Performance: The Impact of Public Housing Demolitions on Children in North Carolina

By Rebecca Aqostino

This study explores how the demolitions of particularly distressed public housing units, through the Home Ownership for People Everywhere (HOPE VI) grants program, have affected academic outcomes for children in adjacent neighborhoods in Durham and Wilmington, North Carolina. I measure neighborhood-level changes and individual effects through regression analysis. All students in demolition communities are compared to those in control communities: census blocks in the same cities with public housing units that were not demolished. Those in the Durham experiment community experienced statistically significant gains when compared to those in the control communities; the effect is insignificant in Wilmington.

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Advisor: Charles Becker | JEL Codes: C23, H41, H52, H75, I24, I25 | Tagged: Achievement, Demolitions, Distressed Housing, HOPE VI, Neighborhood Effects, Public Housing, School Performance

Time-Varying Beta: The Heterogeneous Autoregressive Beta Model

By Kunal Jain

Conventional models of volatility estimation do not capture the persistence in high-frequency market data and are not able to limit the impact of market micro-structure noise present at very finely sampled intervals. In an attempt to incorporate these two elements, we use the beta-metric as a proxy for equity-specific volatility and use finely sampled time-varying conditional forecasts estimated using the Heterogeneous Auto-regressive framework to form a predictive beta model. The findings suggest that this predictive beta is better able to capture persistence in financial data and limit the effect of micro-structure noise in high frequency data when compared to the existing benchmarks.

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Advisor: George Tauchen | JEL Codes: C01, C13, C22, C29, C58 | Tagged: Beta, Financial Markets, Heterogeneous Autoregressive, Persistence

Questions?

Undergraduate Program Assistant
Jennifer Becker
dus_asst@econ.duke.edu

Director of the Honors Program
Michelle P. Connolly
michelle.connolly@duke.edu