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.
Advisors: Professor Lorrie Schmid, Professor Michelle Connolly | JEL Codes: L3, L31, D23
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.
Advisors: Professor Charles Becker, Professor Kent Kimbrough | JEL Codes: R3, D24, R50
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.
Advisors: Professor James Roberts, Professor David Ridley | JEL Codes: L1, D22, L65
The Effect of Competition on Strategic Discharge at Long-Term Acute-Care Hospitals
By Michael Karamardian
Because Medicare’s prospective payment system for long-term acute-care hospitals (LTCHs) makes a large lump-sum form of payment once patients reach a minimum length-ofstay threshold, LTCHs have a unique opportunity to maximize profits by strategically discharging patients as soon as the payment is received. This analysis explores how the level of competition between LTCHs in geographic markets affects the probability of a patient being strategically discharged. The results show that patients at LTCHs in more competitive markets have a lower probability of being strategically discharged than at those in less competitive markets, suggesting increased competition could help save Medicare funding.
Advisors: Kent Kimbrough and James Roberts | JEL Codes: D22, I11, I18
Are Hollywood Stars Worth the Price Tag?
By TJ Cole and Chris Foote
We investigate the effect of a lead actor’s popularity on the profitability of films. Google search data is used as a proxy for actor popularity. We then investigate if lead actor’s popularity has a different effect on movies that are not part of a sequel or franchise, and those that belong to specific genres. The most profitable movies are franchises and sequels. Movies are more
profitable when they are action movies rated G or PG, although in certain circumstances a small number of horror movies and musicals can be hugely profitable. We find that across all groups
of movies our proxy for lead actor popularity has no significant effect on a film’s profitability.
Advisor: Dr. Michelle Connolly | JEL Codes: D2, D22
Regulatory Uncertainty: The Impact of the 2015 Open Internet Order on Broadband Infrastructure Investment
By Dane Bourcy Burkholder and Chin Jie Lim
This paper analyzes the impact of the United States Federal Communication’s (FCC) March 2015 Open Internet Order (OIO) on broadband infrastructure investment outcomes such as changes in speed of services, market entry. We find that higher broadband investment levels deter potential entrants and may weed out competition amongst incumbent ISPs from December 2014 to December 2016. The 2015 OIO appears to have negatively impacted the probability of an ISP entering a census block for the first time by 7.17% during any six-month time periods from June 2015 to December 2016 compared to the time period from June 2010 to December 2014.
Advisor: Dr. Michelle Connolly | JEL Codes: D21, D25, D42, L20, L50, L96
The Market for Apples: A Theory of Identity and Consumption
By Clement Lee
This paper presents an economic model of the effects of identity and social norms on consumption patterns. By incorporating qualitative studies in psychology and sociology, I propose a utility function that features two components – economic (functional) and identity elements. This setup is extended to analyze a market comprising a continuum of consumers, whose identity distribution along a spectrum of binary identities is described by a Beta distribution. I also introduce the notion of salience in the context of identity and consumption decisions. The key result of the model suggests that fundamental economic parameters, such as price elasticity and market demand, can be altered by identity elements. In addition, it predicts that firms in perfectly competitive markets may associate their products with certain types of identities, in order to reduce product substitutability and attain price–setting power.
Advisor: Michelle Connolly, Rachel Kranton | JEL Codes: D11, D21 | Tagged: Consumption, Firm Theory, Heterogeneous Agents, Identity, Social Norm
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
Market Power & Reciprocity Among Vertically Integrated Cable Providers
By Jeffery Shih-kai Shen
This paper seeks to investigate the effects of vertical integration on the cable industry. There are two main goals that the research paper will attempt to address. The first is to build upon existing research on favoritism shown by multichannel video programming distributors (MVPDs) to affiliated video programming networks. Second, the paper will use 2007 and 2010 industry data to investigate the possible existence of “quid pro quo” among vertically integrated MVPD cable providers. After evaluating the data with multivariate OLS Regressions, the evidence suggests that MVPD cable providers do tend to carry their own affiliated programming networks. Furthermore, the evidence supports the hypothesis that reciprocity relationships exist among major vertically integrated cable providers.
JEL Codes: C01, D22, K21 | Tagged: Cable Provider, Empirical Analysis, Programming Distributor, Programming Network, Vertical Integration
