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Short and Long-Term Impacts of a Large-Scale Natural Disaster on Individual Labor Outcomes: Evidence from the 2004 Indian Ocean Tsunami
By Tony sun
Abstract
Natural disasters are often highly disruptive to the livelihoods of impacted populations. This paper investigates the effects of the 2004 Indian Ocean tsunami on male wages and labor supply from its immediate aftermath into the long run. Using fixed effects models that account for individual-specific heterogeneity, I find evidence of significant real wage declines for workers from heavily damaged areas that persist beyond the short-term. This long-term wage effect contrasts with previous literature, particularly in the context of relatively less severe disasters. Male workers also increased their hours-of-work following the tsunami, which suggests reliance on labor markets to smooth income losses and shifted their labor towards less disrupted industries. Additionally, I document the heterogeneity of tsunami impact on wages and hours-of-work by birth cohort and education, as well as by industry and sector of employment.
Professor Duncan Thomas, Faculty Advisor
Professor Michelle P. Connolly, Honors Seminar Instructor
JEL classification: J2; J21; J30; O10; 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 Classification: I, I21, I26, H4, J13
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 classification: C26; J15; K14
A perfect storm: The effect of natural disasters on child health
By Cheyenne Danielle Quijano
Abstract
Typhoons and their accompanying flooding have destructive effects, including an
increase in the risk of waterborne disease in children. Using a spatial regression discontinuity
design, I explore the immediate to short-term effects of flooding as a result
of Typhoon Labuyo on the incidence of diarrhea and acute respiratory infection in the
Philippines by comparing children living in a flooded barangay (town) to children living
just outside of the flooded area. I build on the existing literature by accounting for
both incidence and intensity of the typhoon’s flooding in my model. I construct this
new flooding measure using programming techniques and ArcGIS by manipulating data
collected by the University of Maryland’s Global Flood Monitoring System. This data
as well as health data from the 2013 Philippines National Demographic Health Surveys
were collected the day after Typhoon Labuyo left the Philippines, providing a unique
opportunity to explore the immediate impact of the typhoon on child health. Most of
my results are insignificant, but subgroup analyses show that the effect of flooding on
waterborne disease incidence is less impactful in the immediate term following a flood
and more impactful in the medium-term. This is important, because understanding
the detrimental health effects of flooding is of utmost importance, especially because
climate change will only increase the frequency and intensity of natural disasters.
Professor Erica M. Field, Faculty Advisor
Professor Michelle P. Connolly, Faculty Advisor
JEL classification: I150, O120, O130, Q540
Tale of Two Cities An Econometric Analysis of East & West Coast Fine Art Galleries
By Daniella Victoria Paretti
Abstract
In a 2021 report published alongside Art Basel and UBS, renowned cultural economist Dr.
Clare McAndrew posited that the value of art sales in 2020 amounted to an impressive $50 billion
(although this actually marks an over 10-year low). It is no secret that the global art markets are
extremely lucrative, attracting the interest of industry magnates and business tycoons alike.
Though it is important to note that art markets are historically quite distinct from their normal good
counterparts — the sector is laden with issues regarding transparency, high barriers to entry, and
hiding of wealth. Amidst the COVID-19 pandemic, however, the tides began to turn; online
platforms for museums, auction houses, and galleries were employed more than ever before,
effectively modernizing the antiquated industry and expanding its reach to new consumers. How
has this trend of digitalization changed and improved art markets? More specifically, how can data
analytics and other technological resources serve the interests of private galleries? Using sales data
from a parent gallery with multiple locations across the United States (each displaying similar
works/artists), I have conducted a number of qualitative and statistical analyses to identify key
differences between the West and East coast locations. In short, the gallery on the West coast sold
more works and at a lower average cost than its counterpart, providing key insights into this local
market’s consumer base. Beyond this, factors like size, medium, and artist gender were found to
have statistically significant effects on the ultimate sale price and turnover rate of works. My
findings suggest that means of data analytics should be utilized by all actors in the art markets to
optimize their approach to business, as well as understand their consumers better than ever before.
Professor Michelle Connolly, Faculty Advisor
Professor Hans Van Miegroet, Faculty Advisor
JEL classification: Z11, C10, J11, O33
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
Subprime’s Long shadow: Understanding subprime lending’s role in the St. Louis vacancy crisis
By Glen David Morgenstern
Abstract
Using loan-level data, this analysis attempts to connect the events of the subprime home loan boom to the current vacancy crisis in St. Louis, Missouri. Borrowers in Black areas in the north of St. Louis City and St. Louis County received subprime home loans at higher rates during the subprime boom period of 2003-2007 than those in White areas, with differences in balloon loans especially stark. Specifically, borrowers in Black neighborhoods received subprime loans more frequently than those with equal FICO scores in White neighborhoods. As a result of these differential loan terms, North City and inner ring “First Suburb” areas saw more foreclosure and
borrower payment delinquency, which in turn were highly associated with home vacancy, controlling for other risk factors. However, foreclosure was no longer a significant predictor of home vacancy
after controlling for demographic factors and FICO score, indicating that the unequal loan terms may have driven much of the increase in home vacancy in the St. Louis area since the Great Recession.
Professor Charles Becker, Faculty Advisor
JEL classification: R1; R3; R11; R31; J1; J15
The Effect of Sustainability Reporting on ESG Ratings
By Arthur Luetkemeyer
Abstract
Over the past decade the concept of Environmental, Social, and Governance (ESG) investing has
emerged to aid investors to maximize return on investments while simultaneously supporting
environmentally and socially friendly methods of production and operation. In this paper I
investigate the effect of the quality of sustainability reporting on ESG ratings. I utilize a sample
of 100 chemical companies with ESG ratings and sustainability disclosure indexes over a 14-
year time period (2007-2020) to analyze the short- and long run effects of sustainability reporting
on ESG ratings. Using OLS my regression results suggest that better overall ESG disclosure as
well as individual E, S, and G disclosure leads to worse ESG ratings in both the short run and the
long run.
Professor Christopher Timmins, Thesis Advisor
Professor Grace Kim, Faculty Advisor
JEL classification: M14, M40
Economic Effects of the War in Donbas: Nightlights and the Ukrainian fight for freedom
By Riad Kanj
Abstract
The conflict in Eastern Ukraine began in 2014, and it has now turned into a full-scale
invasion. The separatist areas of Donetsk and Luhansk have remained isolated for the last eight
years while fighting between rebels and the Ukrainian government has continued at a low but
regular level since then. Previous studies analyze the impact of the war in Donbas on the
economic situation in the region, such as the industry and GRP growth. However, this research
uses data solely from the initial part of the conflict (2014-2016) and does not take into account the
severity of the fighting. By using both the DMSP-OLS and VIIRS data as an approximation of
economic activity in addition to the Uppsala Conflict Data Program (UCDP) casualty numbers,
the analysis explores the effects of violent conflict on economic activity over a longer period of
the Donbas war.
This paper uses both yearly and monthly satellite data in analyzing the general progression
of the conflict in addition to the monthly progression. Furthermore, nightlight data of Ukrainian
municipalities outside of Donbas are used in computing the Donbas region’s nightlight data across
several years. The UCDP data for civilian and battle-related casualties are used separately to show
the causal effects of the different fighting severities. A Two-Stage Least Squares regression is
used to see the effects of battle severity on economic outcomes.
Professor Charles Becker, Faculty Advisor
Professor Grace Kim, Faculty Advisor
JEL classification: F51; H56; O52; N44
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 Classification: D1 D31 G20 I24 J11
