Reconstruction following Destruction: Entrepreneurship in the Aftermath of a Natural Disaster
by Richard Lombardo
Abstract
Entrepreneurship is thought to be the engine of growth in many developing countries. There is, however, a paucity of evidence on the role that entrepreneurship plays in rebuilding economic livelihoods both in the short and longer-term in the aftermath of a large-scale shock. This is an important gap in the literature given the increasing frequency and severity of shocks across the globe. This paper contributes to filling that gap by investigating the evolution of entrepreneurial success following the 2004 Indian Ocean tsunami, a large-scale and unexpected shock. Using longitudinal survey data, the Study of the Tsunami Aftermath and Recovery (STAR), I find large declines in business ownership, profits, and capital for those most exposed to the tsunami that persisted through 10 years following the tsunami. These estimates can be given a causal interpretation under the plausible assumption that exposure to the tsunami can be treated as exogenous after taking into account individual-specific unobserved heterogeneity with fixed effects, including pre tsunami geographical features that drove exposure. Individuals living in rural areas and individuals with the least resources pre-tsunami fared the worst in terms of developing new businesses. However, the massive Build Back Better reconstruction program promoted entrepreneurship. Receipt of housing aid as part of that program is linked to an increase in the development of non-agricultural businesses that spurred gains in real profits.
Professor Duncan Thomas, Faculty Advisor
Professor Michelle Connolly, Faculty Advisor
JEL Codes: D1; H84; L26; Q54
Peer Effects & Differential Attrition: Evidence from Tennessee’s Project STAR
by Sanjay Satish
Abstract
This paper explores the effects of attrition on student development in early education. It aims to provide evidence that student departure in elementary schools has educational impacts on the students they leave behind. Utilizing data from Tennessee’s Project STAR experiment, this paper aims to expand upon the literature of peer effects, as well as attrition, in public elementary schools. It departs from previous papers by utilizing survival analysis to determine which characteristics of students prolonged participation in the experiment. Clustering analysis is subsequently employed to group departed students to better understand the various channels of attrition present in STAR. It finds that students who left Project STAR were more likely to be of lower income and lower ability than their peers. This paper then uses these findings to estimate the peer effects of attrition on students who remained in the experiment and undertakes a discussion of potential sources of bias in this estimation and their effects on the explanatory power of peer effects estimates.
Professor Robert Garlick, Faculty Advisor
Professor Michelle Connolly, Faculty Advisor
JEL Codes: I, I21, I26, H4, J13
Revisiting California Proposition 209: Changes in Science Persistence Rates and Overall Graduation Rates
by Anh-Huy Nguyen
Abstract
California Proposition 209 outlawed race-based affirmative action in the University of California (UC) system in 1998. However, the UC system subsequently shifted towards race-blind affirmative action by also reweighing factors other than race in the admissions process. To evaluate the hypothetical changes in the science persistence rate and graduation rate of all applicants if racial preferences had been removed entirely, I estimate baseline and counterfactual admissions models using data from between 1995-1997. Using a general equilibrium framework to fix the total number of admits and enrollees, I find that the removal of racial preferences leads to a cascade of minority enrollees into less selective campuses and a surge of non-minority enrollees into more selective campuses. The improved matching between students and campuses results in higher science persistence rates and graduation rates across the pool of all applicants. In particular, the gains are driven by minority students who were admitted under racial preferences, because the gains from better matching across UC campuses outweigh the losses from potentially being pushed outside the UC system. Non-minority students who are originally rejected under racial preferences also benefit, as some are induced into the system in the counterfactual, where they are more likely to graduate. I also investigate claims that applicants may have strategically gamed during the admissions process by misrepresenting their interest in the sciences in order to maximize their admissions probability. While there exist incentives to apply in different majors across the campuses, I find evidence that applicants often fail to game optimally, suggesting that they may not be fully informed of their relative admissions probabilities in the sciences and non-sciences.
Professor Peter Arcidiacono, Faculty Advisor
JEL Codes: I23, I28, J24, H75
Economic Effects of the War in Donbas: Nightlights and the Ukrainian fight for freedom
Paper available to internal Duke affiliates only upon request.
Professor Charles Becker, Faculty Advisor
Professor Grace Kim, Faculty Advisor
JEL Codes: F51; H56; O52; N44
The Impact of Conflict on Economic Activity: Night Lights and the Bosnian Civil War
by Stephanie Dodd
Abstract
The tendency of violent conflict to suppress economic activity is well documented in the civil war economic literature. However, differential consequences resulting from distinct characteristics of conflicts have not been rigorously studied. Utilizing new conflict data on the 1992-1995 Bosnian civil war from Becker, Devine, Dogo, and Margolin (2018) and DSMP-OLS night light data as a proxy for economic activity, this paper investigates the disparate economic impacts that different types of conflict have on Bosnia’s municipalities.
This investigation first uses data from other Yugoslavian countries to impute pre-war night light values for conflict-affected Bosnian municipalities. Next, a spatial autocorrelation model with fixed effects is used to determine if and how the occurrence of different types of violence vary in their implications for economic activity. This analysis finds that the five types of warfare identified in the context of the Bosnian Civil war have different impacts on night lights and economic activity.
Professor Charles Becker,Faculty Advisor
Professor Grace Kim, Faculty Advisor
JEL Codes: F52, H56, O52
Taxing Marijuana and the Road to Reparations: Comparing the Colorado and Illinois Cannabis Markets
by Tommaso Carlo Filippo Babucci
Abstract
Although still prohibited at the federal level, cannabis can now be found on the shelves of recreational dispensaries across thirty-three U.S states. This thesis examines the development of this legal market from both historical and empirical perspectives. Using a new data set, it estimates the determinants of cannabis sales and tax revenues in the Colorado market and analyzes the incidence of a single tax increase. The results, which suggest that legal cannabis behaves like a luxury good, are used to analyze the potential for cannabis-funded reparations programs in Illinois, which recently approved recreational sales of cannabis.
Advisor: Connel Fullenkamp | JEL Codes: H2, R50, L15
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.
Advisors: Professor Duncan Thomas, Professor Michelle Connolly | JEL Codes: D1, D15, H84
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.
Advisors: Professor Suzanne Shanahan, Professor Michelle Connolly | JEL Codes: D73, D78, F22, H12, J11, J15, K37, O52
Assessing the Impacts of an Aging Population on Rising Healthcare and Pharmaceutical Expenditures within the United States
By Rahul Sharma
This paper studies the impact of aging on rising healthcare and pharmaceutical expenditures in the United States with the goal of contextualizing the future burden of public health insurance on the government. Precedent literature has focused on international panels of multiple countries and hasn’t identified significant correlation between age and healthcare expenditures. This paper presents a novel approach of identifying this correlation by using a US sample population to determine if age impacts an individual’s consumption of healthcare services and goods. Results suggest that age has a significant impact on healthcare and pharmaceutical expenditures across private and public insurance.
Advisors: Gilliam D. Saunders-Schmidler and Grace Kim | JEL Codes: H51, H53, I12, I13, I18, I38
Benefit Spillovers and Higher Education Financing: An Empirical Analysis of Brain Drain and State-Level Investment in Public Universities
By Chinmany G. Pandit
This paper analyzes the impact of out-migration of college graduates on state higher education investment. A three-stage least squares regression model with state and year fixed effects is developed and estimated, addressing the relationship between state legislative appropriations, tuition, and educated out-migration across 49 U.S. states from 2006-2015. The results support the notion that states respond negatively to benefit spillovers in higher education: for every one percent increase in the rate of educated out-migration, state appropriations decrease by 1.92 percent (roughly $140 per student). These findings suggest that an education subsidy
provided to states may be necessary to prevent underinvestment in higher education.
Advisor: Thomas Nechyba and Kent Kimbrough | JEL Codes: H7, H75, I22, I28, R23
