Elder Financial Fraud: The Economic and Ethical Case for Instituting Mandatory Reporting Laws in Financial Institutions
by Lauren Tse
Abstract
This study examines the effectiveness of the 2016 NASAA Model Act, specifically if states that implemented its provisions see greater levels of elder fraud reporting. This legal reform introduces reporting requirements for broker-dealers and investment advisers to report suspected elder fraud to government authorities, granting explicit immunity to those who comply. To analyze both the immediate and longer-term effects of the Model Act’s staggered passage across states, I use a dynamic Difference-in-Difference model to analyze institutionally reported elder fraud cases from the U.S. Department of Treasury’s Financial Crimes Enforcement Network. Regression findings suggest that the Model Act has a positive enabling effect, increasing the number of elder fraud reports filed by financial professionals. Further, I quantify the monetary losses associated with these fraud cases using self-reported data from the Federal Trade Commission’s Consumer Sentinel Network. In line with this ‘placebo’ dataset, I find that the passage of the Model Act — targeted at financial professionals — has inconclusive impacts on the number of self-reported elder fraud and no effect on the financial losses incurred.
Professor Kate Bundorf, Faculty Advisor
Professor Michelle Connolly, Faculty Advisor
JEL Codes: G28; K42; J14
Keywords: Elder Financial Fraud; NASAA Model Act; Mandatory Reporting Requirements
Alcohol Use and Assault: Regression Discontinuity Evidence from the Minimum Legal Drinking Age
by Maggie Hu
Abstract
While it has long been observed that alcohol consumption is a risk factor for violence, the economics literature has up until recently provided minimal persuasive evidence regarding the causal nature of this relationship. In this study, we employ a regression discontinuity (RD) framework to examine how arrest and victimization rates from assault change at age 21, the U.S. minimum legal drinking age (MLDA-21). Utilizing annual FBI arrest data from the past 36 years since 1988, when the last states adopted the MLDA-21, we estimate that for both males and females, reaching the MLDA increases arrest rates for aggravated and other simple assaults by 5 – 8%, with the aggravated assault effect for females restricted to the latter half of the sample period. Analogous effects at slightly older ages are small and insignificant, as well as the effects for demographic and population characteristics expected to trend smoothly across the MLDA-21 threshold. We extend our analysis of assault-related violence by assessing victimization outcomes, particularly the effect of the MLDA-21 nonfatal injury, by leveraging emergency department (ED) data from the CDC’s Web-based Injury Statistics and Query Reporting System (WISQARS) spanning the period 2001–2022. Notably, we observe that ED visits for “struck by or against” assaults rise significantly by 7–10%, indicating increased participation in violent altercations and increased risk of victimization upon obtaining legal access to alcohol. Taken together, these results suggest that alcohol use increases aggression and violent behavior, the consequences of which thereby represent criminal justice and public health costs that would be exacerbated by lowering the MLDA.
Professor Jeffrey DeSimone, Faculty Advisor
JEL Codes: I18, I12, K0, K32
Keywords: Health Economics, Alcohol Policy, Education and Welfare
Action or Distraction? Assessing the Impact of Post-2020 Police Use of Force Reforms in American Cities
by Vineet Chovatia
Abstract
Between 2013 and 2024, police killed 13,468 people in the United States. Low-income communities of color, who are disproportionately targeted, bear the brunt of this violence. This reality reflects a legacy rooted in a deeply racist history that continues to shape American policing today. In the wake of regular, highly-publicized killings of unarmed Black and Brown Americans and large-scale social movements advocating for police reform, police departments in many American cities implemented a range of reforms over the course of the 21st century. We use data on the adoption of seven of these reforms along with police shootings and killings data from 94 of America’s largest cities to construct fixed effects difference in differences models that estimate the effect of these policies individually and in combination on police shootings and killings. Our findings suggest that chokehold bans, de-escalation policies, and comprehensive reporting reforms are associated with reductions in police shootings when implemented together while findings with regards to police killings are more mixed, but indicate that combinations of these policies are associated with reductions in killings as well.
Professor Michelle P. Connolly, Faculty Advisor
JEL Codes: C23, K42, K14
Keywords: Police Use of Force; Fixed Effect Difference in Differences; Post-2020 Police Reforms
Splitting Hairs or Splitting Regions: The Differential Democratic Impacts of Splitting ZIP Codes vs. Counties During Redistricting
by Jacob Hervey
Abstract
In light of the Supreme Court’s holding in Gill v. Whitford, judicially-enforceable gerrymandering metrics must focus on democratic harms to individual citizens, instead of state-wide measures of proportionality. Previous literature has suggested that gerrymandering metrics should focus on the extent to which congressional districts split preexisting geographic boundaries (namely, ZIP codes and counties). This work compares the differential democratic harms caused by ZIP code versus county splitting during redistricting across two domains. First, we exploit the changes during the 2010 redistricting process to construct a difference-in-difference model that captures changes in voters’ political knowledge as a function of their exposure to geographic splitting. Second, we predict district-level electoral outcomes from 2002-2018 based upon the extent of ZIP code and county splitting. Our results indicate that ZIP code and county splitting cause more significant democratic harms for different outcomes of interest. While county splitting has more negative consequences for constituents’ political knowledge,ZIP code splitting is more detrimental with regards to voter turnout.
Professor Patrick Bayer, Faculty Advisor
Professor Michelle Connolly, Faculty Advisor
JEL Codes: D72, K16, H11
Last Second Comebacks: Examining Influencers of Bankruptcy Success
by Eric Junzhe Zhang
Abstract
The American bankruptcy system allows for companies to file for Chapter 11 bankruptcy to protect their assets from creditors and reorganize their business operations to continue operating after going through bankruptcy court. While the process is meant to help improve the financial health and business operations of companies after they exit the bankruptcy process, supposedly remedied firms will often find themselves filing again for bankruptcy despite the drastic changes they underwent to avoid such a fate. As such, it is difficult to determine what exactly makes a bankruptcy successful, as oftentimes a company with one metric that deems the bankruptcy successful may have another conflicting metric that deems it unsuccessful. This thesis seeks to contribute to prior knowledge on bankruptcy analysis by examining what in-court factors and company metrics drive bankruptcy success, with the change in debt-to-asset ratio and refiling likelihood post emergence being used as measures of bankruptcy success. Probit regression is used to analyze the change in the debt-to-asset ratio from bankruptcy filing to emergence while multivariable regression analysis is used to analyze the likelihood of refiling post-bankruptcy emergence. Explanatory variables which will be examined across these two variables will be the time spent in bankruptcy court, whether there was forum shopping to Delaware or New York, size of assets / EBIT of the firm, hedge fund presence, CEO turnover, whether a case was prepackaged, unionization rate, prime rate at filing and emergence, whether there was a 363 asset sale, whether a firm remained public following emergence, and debtor in possession financing. Results suggest that likelihood of refiling is a better measure of bankruptcy success than relative change in debt-to-asset ratio, which faces issues with the significance of its variables and their explanatory power.
Professor Connel Fullenkamp, Faculty Advisor
Professor Michelle Connolly, Faculty Advisor
JEL Codes: G33, K22, G34
The Effect of Gun Prevalence on the Occurrence of School Shootings
by Abigail Ullendorff
Abstract
This paper studies how gun prevalence, represented by federal firearm background checks, affects the occurrence of school shootings. While precedent literature has estimated adverse effects of school shootings on exposed children, including reductions in mental health, academic achievement, and labor market earnings, few studies have attempted to identify factors that influence school shooting frequency in the first place. The analysis sample is an annual state panel of shootings during 2000-2021, constructed from the proprietary K-12 School Shooting Database as well as from data on background checks, demographic characteristics, economic conditions, and measures of violence and mental health status. Estimates from difference-in-differences regressions that include state and year by-census region fixed effects and state-specific linear trends indicate a positive relationship between gun prevalence and school shootings, particularly when the dependent variable is specified as a binary indicator of multiple school shootings having occurred. Results are robust to using the annual shooting count or its quartic root, an indicator that a shooting occurred, Poisson regressions of school shooting count models, and quadratic state trends as additional controls. Several types of shootings, including targeted, elementary school, high school, and deadly shootings, increase in frequency and/or likelihood when gun prevalence rises.
Professor Jeffrey DeSimone, Faculty Advisor
Professor Grace Kim, Faculty Advisor
JEL Codes: I18, I29, K42
A Two-Stage Analysis Considering Gun Theft & Overall Crime: Evidence from Child Access Prevention Laws
by Ronan Brew
Abstract
Child Access Prevention Laws (CAP) came to prominence in the early 1990s in the wake of the highest
recorded rate of overall and adolescent firearm deaths seen in the United States at that time, placing
mandatory firearm storage requirements on adults living in a home with children. While the primary – and
perhaps sole – intention behind these policies are to prevent adolescent gun death, I contend CAP laws have
the added function of reducing the rate of firearms stolen from homes due to the legal incentives against
improper firearm storage. In the first of a two-stage analysis, CAP laws are proven to substantially reduce
the rate of household firearm theft based on the ascending stringency of different CAP law storage
requirements. The scope of the study is then widened in the second stage of analysis, where I demonstrate
the overall impact illicitly-obtained firearms have on predicting increased firearm homicides.
Professor John DeSimone, Faculty Advisor
JEL Codes: C23, K00, K42
Beyond the But-For World: Weak-necessity causal reasoning for model-based counterfactuals in law and economics
by Lilia Qian
Abstract
Under current standards for scientific evidence defined under Daubert, antitrust models are frequently excluded from legal consideration, but not always for reasons that make them genuinely unreliable. This paper clarifies why antitrust models face difficulties when subjected to methodological scrutiny: the employment of model-based counterfactual arguments under an epistemically defective ‘but-for’ structure of causation. Assessing the relevance and reliability of an antitrust model is a matter of assessing the validity and applicability of the causal claim it makes, not the degree to which the modeling methodology is considered scientific. A more flexible causal framework, the weak-necessity structure of causation, is suggested as a means of developing and evaluating model-based counterfactuals. This framework allows for modeling of overdetermined-causation situations, or situations in which the outcome of interest can be attributed to two or more causes. Since antitrust cases typically involve overdetermined causation, the weak-necessity framework allows them to be modeled in a more precise and intuitive way.
Professor Kevin Hoover, Faculty Advisor
JEL Codes: B41, K21, L41, L44
The Case for Clemency: Differential Impacts of Pretrial Detention on Case and Crime Outcomes
by George Rateb
Abstract
About half-million of individuals in US jails are detained pretrial while legally presumed
innocent. Using data on quasi-randomly assigned bail judges in the third-largest court system in
the U.S., we study the impact of pretrial detention on defendants’ court and crime outcomes
between 2008 and 2012. We supplement our primary analysis to document patterns on bail
amounts and how they differentially impact Black defendants relative to their white and Hispanic
counterparts. Instrumental variable estimates suggest that pretrial detention increases the
likelihood of being found guilty, mainly driven by the uptake of guilty pleas, especially for
minorities. By linking court and jail data, we provide mechanistic evidence that jail time is
positively correlated with the uptake of these guilty pleas. To the best of our knowledge, these
findings have not been empirically documented due to a lack of previous data availability.
Professor Bocar Ba, Faculty Advisor
Professor Michelle Connolly, Faculty Advisor
JEL Codes: C26; J15; K14
