Withdrawal: The Difficulty of Transitioning to a Cashless Economy
by Praneeth Kandula
Abstract
In 2021, modern payment methods such as mobile pay have increased nearly fivefold since their introduction in 2015. This shift to an increasingly cashless, digital economy has been marked by inequitable financial and technological divides. Historically, Black and Latino adults have had less access to financial systems and are less likely to own traditional computers and home broadband. Without rectifying these issues, a cashless, digital economy only serves to widen divides. Using data from the Diary of Consumer Payment, this study descriptively examines the use of cash and alternative payment methods by different racial and ethnic groups from 2015 through 2020. I also extend this effort to address the effects of COVID-19. I find that racial differences not only exist but also the gap between Black and Latino adults and White adults grows between 2015 and 2019. Still, this paper finds that in 2020 the likelihood to employ cash for a transaction falls for Black adults but not for Latino adults. COVID-19 has been a critical driver of change, forcing both consumers and corporations to shift to a more digital-centric economy. While there have been positive shifts for Black adults, policy ensuring that all racial groups have access to the necessary financial and digital networks will be critical in establishing an equitable economy moving forward.
Professor Lisa A. Gennetian, Faculty Advisor
Professor Michelle P. Connolly, Faculty Advisor
JEL Codes: D1 D31 G20 I24 J11
Financial Inclusion and Women’s Economic Empowerment in India
by Nehal Jain
Abstract
On August 14th, 2014 India’s Prime Minister Narendra Modi implemented the largest ever financial inclusion scheme to date known as Pradhan Mantri Jan Dhan Yojana (PMJDY). The program aimed to bank all of India’s unbanked population. Prior to the program, India had one of the highest rates of unbanked citizens. The program also included measures that prioritized women’s access to these financial institutions given the gender gap in financial inclusivity. This paper aims both to understand the effectiveness of PMJDY on granting women equal access as men to financial institutions and whether financial inclusion results in increased economic empowerment, I find that PMJDY was successful in increasing access to bank accounts and separately, that access to bank accounts economically empowers women.
Professor Pengpeng Xiao, Faculty Advisor
Professor Michelle Connolly, Faculty Advisor
JEL Codes: J1; G28; I31
Long-term Benefits of Breastfeeding: Impact on Education in Indonesia
by Natalie Gulrajani
Abstract
Healthy breastfeeding behaviors have been shown to produce many long-term health benefits including improved cognition. This study uses data from the Indonesian Family Life Survey (IFLS) to assess the longitudinal impact of exclusive breastfeeding duration and early life breastfeeding practices on education. Though a positive correlation was found between breastfeeding duration and years of schooling in naïve regressions, the significance and magnitude of this effect decreased when household fixed effects were added. A stronger correlation was found between early life breastfeeding and schooling, with income-stratified results demonstrating that poorer households are potentially subject to greater benefits.
Professor Erica Field, Faculty Advisor
JEL Codes: I0; I12; I21
Generic Entry and The Effect on Prices in the Prescription Drug Market
by Sahana Giridharan
Abstract
Drug firms have utilized a variety of strategies that contribute to rising drug prices in the U.S. for the last few years. Strategic entry timing and number of indications a drug is approved might be two factors that contribute to this rise in prices. While there have been some studies uncovering a positive relationship between generic entry and branded prices, there has been little research done on the effects of generic entry on generic prices thus far. This work can impact policy aimed at decreasing generic drug prices and increasing competition in the generic drug market. Oncology and inflammatory bowel disease (IBD) are two disease areas that have a high price burden to patients in the U.S. today, hence using Medicare Part B Average Sales Price (ASP) data, I analyze the effect of entry timing on the price of 24 drugs in these two indication areas. Using the Drugs@FDA Database, I collect data on the FDA approval date of a drug, and on the indications a drug is approved for. Utilizing OLS, my results suggest that later entry times lead to lower drug prices, with a 1 year increase in entry time resulting in a 6.99% increase in prices. Results also suggest that an increase of 1 in the number of indications a drug is approved for leads to a 49.79% decrease in drug price. This could suggest that having existing generic competitors in the pharmaceutical market decreases generic prices, and that number of indications is a strong indicator of drug price. If the current work is confirmed by future studies similar to this studying entry time and price in the generic pharmaceutical market, it is possible that future drug policy should focus on promoting competition within the pharmaceutical market to lower generic prices.
Professor Frank Sloan, Faculty Advisor
Professor Grace Kim, Faculty Advisor
Professor Kent Kimbrough, Faculty Advisor
JEL Codes: L11; I11; C3
Is Affordable Housing Moving Mobile? Analyzing the Impact of COVID-19 on Demand for Manufactured Housing
by Jair Coleridge Soman Alleyne
Abstract
As demand for affordable housing continues to increase in America, manufactured homes provide a private solution to this problem. Research has shown that manufactured home prices are largely dependent on the price of local housing substitutes as well as other geographic hedonic factors. This paper looks at the impact of Covid-19 on the manufactured housing market to determine the effects that economic shocks have on the demand for manufactured housing. Conditional on wanting to buy a house, we use a logistic model to examine the probability that an individual purchases a manufactured home and whether this probability increases at times of high unemployment and economic uncertainty. Due to the nature of our data, although the impact of Covid as a disease is difficult to measure, we do find decreased income and increased unemployment to be a factor increasing the likelihood of purchasing a manufactured home. We also find that in 2020, demand for manufactured housing increased significantly compared to the years prior.
Professor Charles Becker, Faculty Advisor
Professor Michelle Connolly, Faculty Advisor
JEL Codes: R2, R21, I32
The Effects of Pharmaceutical Price Regulation on Probability of Patenting in OECD Countries
by Rachel Korn
Abstract
The introduction of parallel trade mechanisms allowing for the free trade of pharmaceutical goods in the European Economic Area represents a significant departure from the standard monopolistic competition pricing structure in the pharmaceutical market, in which firms have a great deal of control over pricing. Another mechanism, external reference pricing, also contributes to undermining traditional price structures by imposing a price ceiling on drugs. As these methods of regulating pricing in the healthcare market are receiving growing interest in countries such as the United States, it is prudent to consider their effects. It is apparent that parallel trade and external reference pricing decrease average drug costs, but little has been said about their effects on drug availability. Using global patent data from the European Patent Office PATSTAT database as a proxy for drug availability, I investigate how parallel trade and external reference pricing affect the decision of firms to file a pharmaceutical patent in a given country. I accomplish this through a logistic regression model with a difference-in-differences approach to estimate the probability of patenting a pharmaceutical in an OECD country, given that a patent has previously been approved in the United States. I find that the presence of parallel trade in a country significantly decreases the probability of patenting and increases patent lag time while external reference pricing unexpectedly increases the probability of patenting and decreases patent lag time. These findings demonstrate the complexity in attempting to create policy to regulate rising pharmaceutical prices, as doing so may increase affordability of existing drugs in a country while decreasing availability of new ones.
Professor Michelle Connolly, Faculty Advisor
JEL Codes: I1, I11, I19
Analysis of Brain Diagnoses and the Incidence of Chronic Traumatic Encephalopathy (CTE)
by Arjun Lakhanpal
Abstract
Chronic traumatic encephalopathy (CTE) has become a significant area of scientific inquiry in relation to various sports with contact exposure, specifically boxing and professional football, resulting from many individuals who participated in these sports being diagnosed with CTE neuropathology after death. This paper contributes to the CTE literature by analyzing the various predictors of the progression of neurodegenerative disorders, including CTE, that are associated with a history of head impact exposure. In addition, it analyzes how manner of death shifts depending on an individual’s clinical brain diagnosis, which is a decision based upon the clinical record and case review of a patient.
Through data from the NIH NeuroBioBank, the VA-BU-CLF Brain Bank, and data self-collected from living individuals with symptoms associated with CTE, this paper explores an analysis of various brain diagnoses through a large control population and small subset of athletes and veterans. Logistic regression models are established to analyze explanatory variables of clinical brain diagnosis, manner of death, and CTE presence and severity.
These logistic regression models confirm previous research surrounding the potential racial influence present in Black populations with schizophrenia related diagnoses and illustrate the degree to which neurodegenerative disorders, specifically Parkinson’s Disease, are influenced by increased age. Specific to CTE, the analysis conducted through the sample population illustrates the influence of an extra year of football played at the professional level, while counteracting existing literature regarding the association between position and CTE.
Professor Jason Luck,Faculty Advisor
Professor Michelle Connolly, Faculty Advisor
JEL Codes: I10, Z20, J15
Myocardial Infarction, Health Behavior, and the Grossman Model
by Emma Mehlhop
Abstract
This paper contributes an empirical test of Michael Grossman’s model of the demand for health and a novel application of the model to myocardial infarction (MI) incidence. Using data from the University of Michigan’s Health and Retirement Study (HRS), I test Grossman’s assumptions regarding the effects of hourly wage, sex, educational attainment, and age on health demand along with the effects of new variables describing health behaviors, whether or not a respondent is insured, and whether or not they are allowed sufficient paid sick leave. I use logistic regression to estimate health demand schedules using five different health demand indicators: exercise, doctor visits, drinking, smoking, and high BMI. I apply the Cox Proportional Hazard model to examine two equations for the marginal product of health investment both in terms of propensity to prevent death and to prevent MI, one of the leading causes of mortality in the United States. This study considers the effects of the aforementioned health demand indicators, among other factors, on the marginal product of health investment for the prevention of death compared to the prevention of MI. Additionally, there is significant evidence of a negative effect of health insurance on likelihood of exercising regularly, implying some effect of moral hazard on the health demand schedule.
Professor Charles Becker,Faculty Advisor
Professor M. Kate Bundorf, Faculty Advisor
Professor Grace Kim, Faculty Advisor
Professor Frank Sloan, Faculty Advisor
JEL Codes: I1, I10, I12
The Effects of Leveraged Buyouts on Health Outcomes
by Robert Williams
Abstract
Private equity firms first began acquiring hospitals in the United States during the early 1990s, yet the effects of private equity ownership on patient outcomes and treatment costs are still not clear. Some argue that although private equity firms are adept at improving operating efficiencies and introducing managerial expertise, these cost-cutting measures may come at the expense of patient outcomes.
Because acute myocardial infarctions (AMIs) serve as proxies for patient outcomes and treatment costs, I collect information on 30-day mortality rates and Medicare reimbursements for treatments of AMIs at US Medicare-certified short-term acute care general hospitals from 2014 to 2019. This paper uses fixed effects models to analyze the impact of leveraged buyouts, relative to strategic acquisitions, on patient outcomes. After integrating both hospital and time fixed effects, I find that private equity ownership does not lead to significant changes in Medicare reimbursements or mortality rates for AMI treatments.
Professor Ryan McDevitt, Faculty Advisor
Professor Grace Kim, Faculty Advisor
Professor Michelle Connolly, Faculty Advisor
JEL Codes: I0, I110, G340
Predictors of Student Loan Repayments: A Comparison Between Public, Private For-Profit and Private Nonprofit Schools
by Mannat Bakshi and Arjun Ahluwalia
Abstract
Using a sample of over 3,500 colleges from the College Scorecard Dataset , we investigate the association of average federal student loan repayment rates with institutional, regional, and student demographic characteristics of colleges. We consider educational cohorts from 2010 to 2016 at public, private for-profit, and private non-profit institutions. Our data do not allow us to see individual student characteristics, hence we control for traits of the average student in each college and focus on institutional traits that impact repayment rates. Our controls for demographics are consistent with prior research on student loan repayment rates (Lochner and Monge-Naranjo, 2014; Kelchen and Li, 2017).
We ran a Random Effects panel regression to determine how institutional, regional, and student demographic characteristics impact repayment rates. We see an important influence of the institution attended. Institution selectivity (lower admission and withdrawal rates) is associated with higher average repayment. Furthermore, the highest degree awarded is a more significant variable when it comes to describing the variation in repayment rates for public schools; private for-profit schools exhibit lower repayment rates and private nonprofit schools exhibit higher repayment rates regardless of the highest degree awarded. This could be due to a combination of signaling and screening effects. Local income and unemployment impact repayment for the average student in public and for-profit schools, but not in private non-profit schools.
A noticeable institutional finding is that, even after controlling for average school demographics, for-profit schools exhibit lower repayment rates across all types of degree-granting programs. Attending a for-profit school may be a negative signal of ability or value to potential employers. Median family income positively affects repayment twice as much for for-profit schools compared to other school types. These finding on for-profit institutions help explain Obama’s “crack down on for-profit career training colleges” (Simon & Emma, 2014).
Advisors: Michelle Connolly, Kent Kimbrough, Genna Miller | JEL Codes: I2, I22, I26
