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Nonprofit Location, Survival, and Success: A Case Study of El Sistema USA

By Andie Carroll  

As nonprofits work to serve their communities, they must choose a place to locate that best suits their needs and the needs of the population they aim to serve. Locational characteristics such as median income and population density have been shown to impact how many nonprofits choose to locate in a given area. However, few studies have examined the impact of locational characteristics on how nonprofits survive and thrive. This study examines the impact of geographic and demographic factors on nonprofit survival and success through a case study of El Sistema USA (ESUSA), a nationwide network of music education programs with the goal of helping underserved youth. The study analyzes panel survey data from 131 El Sistema-inspired programs in the U.S. from 2005 to 2018 along with demographic data from the American Community Survey, charitable giving data from the IRS, and GIS data compiled through a review of ESUSA program websites. By using regression models of ESUSA program survival and success (defined by more students served and higher program budgets), this study found that ESUSA programs in areas of more need are more likely to survive and thrive.

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Advisors: Professor Lorrie Schmid, Professor Michelle Connolly | JEL Codes: L3, L31, D23

Navigating the Maize of Poverty: Intra-Household Allocation and Investment in Children’s Human Capital in Tanzania

By Saheel Chodavadia  

Intra-household resource allocation influences investment in children’s human capital and hence influences long-term poverty levels. I study how climate shocks in Tanzania shift intra-household bargaining power and investment in children’s human capital. Past empirical work finds that bargaining power is associated with income, assets, education, and other often unobservable factors. Anthropological evidence from Tanzania suggests that male decision-makers in poor households control most income and own most assets. Conditioning on changes in total household resources due to climate shocks, I find evidence consistent with climate shocks increasing female bargaining power through a reduction in male decision-maker’s income. Specifically, climate shocks in households with more educated women increase investment in children’s education and improve anthropometric measures of health. Lastly, I comment on the usefulness of relative education as a proxy for bargaining power in contexts of data and cultural limitations on distinct assets and income streams for decision-makers.

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Advisors: Professor Robert Garlick, Professor Michelle Connolly | JEL Codes: D0, D13, I20

The Impact of Agglomeration Externalities on Product Innovation Output in Chinese Industrial Firms

By Cindy Feng  

Agglomeration externalities is defined as the economic benefits from concentrating firms, housing, and output. This study investigates the impact of agglomeration externalities of industrial firms on product innovation output in China. In the research, I specified the impact of agglomeration into three types: Marshallian or localization externalities, defined as the impact of collocating with same-industry firms; Urbanization economies, defined as the impact of collocating with different-industry firms, and Porter externalities, the impact of competing with same-industry firms as a result of localization. My result suggests endogenous spatial selection of firms account for most of the agglomeration impacts we observe. Despite so, urbanization economies is still impactful in boosting a firm’s innovation performance, and should be taken into account as the government implements policies that boost firm performance.

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Advisors: Professor Charles Becker, Professor Kent Kimbrough | JEL Codes: R3, D24, R50

Incentive Programs for Neglected Diseases

By Pranav Ganapathy   

We propose and evaluate an auction mechanism for the priority review voucher program. The 2007 voucher program rewards drug developers for regulatory approval of novel treatments for neglected tropical diseases. Previous papers have proposed auctioning vouchers for the priority review voucher program but have offered neither a mathematical model nor a framework. We present a mechanism design problem with one pharmaceutical company producing one drug for a neglected tropical disease. The mechanism that maximizes the regulator’s expected surplus is a take-it-or-leave-it offer, with three different offers based on low, intermediate, and high neglected disease burdens. We demonstrate how mechanism design can be applied to settings in which the buyer pays for public access to a product with regulatory speed. Finally, this paper may be useful to policymakers seeking to improve access to voucher drugs through modifications of the program.

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Advisors: Professor David Ridley, Professor Giuseppe Lopomo, Professor Michelle Connolly| JEL Codes: I1, D44, D82

Evolution of Wealth and Consumption in the Aftermath of a Major Natural Disaster

By Ralph Lawton   

Natural disasters can have catastrophic personal and economic effects, particularly in low-resource settings. Major natural disasters are becoming more frequent, so rigorous understanding of their effects on long-term economic wellbeing is fundamentally important in order to mitigate their impacts on exposed populations. In this paper, I investigate the effects of the 2004 Indian Ocean tsunami on real consumption and assets at the individual level. I also examine the heterogeneity of those impacts, and the related effects on inequality. Taking individual-specific heterogeneity into account with fixed effects, I find individuals living in heavily damaged areas experience major declines in real consumption and assets, and do not recover in the long term. These results are strikingly different than results that do not consider price effects, as well as previously published macroeconomic results. I also find significant heterogeneity by age, education-level, pre-tsunami socioeconomic status, and whether an individual went into a refugee camp. The tsunami resulted in large, long-term declines in asset inequality, and a temporary increase in consumption inequality that returns to near pre-tsunami levels in the long run.

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Advisors: Professor Duncan Thomas, Professor Michelle Connolly | JEL Codes: D1, D15, H84

Competition and Innovation: Evidence from Third-Party Reprocessing in the Medical Device Industry

By Varun Prasad   

Healthcare is projected to soon become the industry with the largest amount of spending on research and development in the world. While competition has the potential to catalyze the development of new healthcare technologies and drive down costs, increases in competition have also been thought to hinder innovation as a result of thinner profit margins and reduced incentives. I estimate whether and to what extent competition in the medical device industry promotes innovation. Using Food and Drug Administration data on medical device applications from 1976 to 2019, I examine how original equipment manufacturers respond to the entry of third-party reprocessed devices. I find that, when controlling for year and medical specialty, the introduction of a reprocessed device leads to an almost five-fold increase in new device applications by original manufacturers after both one and two years. These results suggest that an increase in competition within the medical device market has spurred innovation and the development of new technologies.

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Advisors: Professor James Roberts, Professor David Ridley | JEL Codes: L1, D22, L65

Pricing and Pack Size Brand, Quantity, and Cost Considerations in Pricing Multipacks of Toothpaste

By Stephanie Wiehe

The US market for toothpaste, like many other goods, is shifting towards selling
in bulk. Multipacks of toothpaste require quantity discounts to incentivize consumers, making buying in bulk a great deal for the savings-minded toothpaste-shopper. It is more difficult to understand, however, producers’ willingness to sell multipacks of toothpaste, when margins are necessarily slimmer than single tubes due to quantity discounts. This paper explores the consumer’s decision in purchasing toothpaste as an interaction between savings on price and inventory considerations, like shopping and carrying costs. My model combines aspects of prior works on second degree price discrimination and quantity discounts with alterations to fit the intricacies of the market for toothpaste. The model’s predictions support the possibility of pack size as a tool for second degree price discrimination as shopping and carrying costs  constitute two markets with different price elasticities of demand for single and multipacks of toothpaste. This work adds to the existing literature on storable goods and non-linear pricing and brings a new economics-based approach to a question faced by toothpaste producers.

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Advisors: Professor Allan Collard-Wexler, | JEL Codes: L11; L42; D4

The Effect of Marriage on the Wages of Americans: Gender and Generational Differences

By William Song and Theresa Tong

A substantial body of literature on the wage effects of marriage finds that married American men earn anywhere from 10% to 40% higher wages than unmarried men on average, while married American women earn up to 7% less than unmarried women, even after controlling for traits such as background, education, and number of children. Because this literature focuses heavily on men born in a single time period, we study both men and women in two different generational cohorts of Americans (Baby Boomers and Millennials) from the National Longitudinal Surveys of Youth to examine how the wage effects of marriage differ between genders and across time. Using a fixed effects approach, we find that Millennial women—but not Baby Boomer women—experience an increase in wages after marriage, and we replicate the finding from the literature that men experience an increase in wages after marriage as well. However, after controlling for wage trajectory-based selection into marriage by using a modified fixed effects approach that allows wage trajectories to vary by individual, we find that the wage effects of marriage are no longer statistically significant for any group in our data, suggesting that the wage differences between married and unmarried individuals found in previous studies are primarily a result of selection.

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Advisors: Professor Marjorie McElroy, Professor Michelle Connolly | JEL Codes: C33; D13; J12; J13; J22; J30

Asylum Determination within the European Union (EU): Whether Capacity and Social Constraints Impact the Likelihood of Refugee Status Determination

By Louden Paul Richason

This paper analyzes whether capacity and social constraints impact acceptance rates for asylum seekers in the European Union from 2000-2016. Theoretically people should receive asylum based on the criteria outlined in international law – a well founded fear of persecution – but the influx and distribution of applicants in the European Union suggests that this may not hold in practice. For a group of pre identified “legitimate” asylum cases, this paper finds that surges in applications in a country (i.e. capacity constraints) have a positive and statistically significant correlation with acceptance rates, while the percentage of migrants in a country (i.e.  social constraints) has a negative and statistically significant correlation with acceptance rates. This suggests that the burden of proof becomes easier during a surge in total applications in a country. However, as the international migrant stock in that country increases, it is more difficult for that same group of applicants to receive asylum.

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Advisors: Professor Suzanne Shanahan, Professor Michelle Connolly | JEL Codes: D73, D78, F22, H12, J11, J15, K37, O52

Is Inclusionary Zoning a Proper Remedy for the Affordable Housing Crisis? —A Case Study of IZ Programs in New Jersey and North Carolina

By Xinchen Li

The recent decade witnessed a worsening of the affordable housing crisis across the
country. Inclusionary zoning (IZ) has been a popular municipal remedy for the crisis.
However, it is unclear whether IZ actually adds to the affordable housing stock, and
whether it achieves its goal at the expense of average homeowners. Through a case
study of New Jersey and North Carolina, this paper aims to address these two questions.The results suggest that there is no statistically significant positive relationship between the presence of IZ and the housing price in the two states, but its beneficiary effects are also debatable.

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Advisors: Professor Christopher Timmins | JEL Codes: D10 ; R2; R21

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