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Adam Smith and Sayyid Qutb: A comparison of two different worldviews

By Kehaan Manjee

The West and Militant Islam have been in conflict with each other because of their different worldviews. Adam Smith and Sayyid Qutb have arguably had tremendous influence on these worldviews i.e. capitalism and Islamic state. Both thinkers provided their prescriptions to improve the condition of their societies, and analyzing these prescriptions helps us understand the differences in these worldviews. I have compared and contrasted their socioeconomic theories, using these two thinkers as proxies for the West and Militant Islam. I have specifically analyzed their prescriptions on three issues: economic inequality, taxation and interest.  These key issues provide an insight into the views of the two scholars, and through that, the conflicting worldviews of the West and Militant Islam. On economic inequality, Smith believed that his economic system of natural liberty would lead to universal opulence; in contrast, Qutb argued that only an Islamic system of government could reduce the gap between the rich and the poor. Both thinkers supported taxation: Smith wanted to use it to finance the provision of public goods, security and justice; while Qutb not only wanted to use it to finance government services, but also viewed taxation as a tool for redistribution of wealth in the society. Smith and Qutb disagreed on the issue of interest: Smith supported interestbearing lending, but argued for the imposition of a ceiling on interest rates; on the contrary, Qutb wanted an outright prohibition on all forms of interest on creditThese similarities and differences in their prescriptions on various issues provide insight inttheir vision for society. Since their vision and objectives are differentthey have competing worldviews, which explains the conflict between the West and Militant Islam. 

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Advisor: Neil De Marchi | JEL Codes: B10, B12, B15, B31, N00 | Tagged: Adam Smith, Capitalism, Different Worldviews, Islamic State, Sayyid Qutb

The Effect of Federal Regulations on the Outcomes of Auctions for Oil and Gas Leaseholds

By Artur Shikhaleev

This thesis attempts to analyze the impact of the differences in regulatory frameworks that govern state-owned and federally-owned lands on the outcomes of auctions for oil and natural gas leaseholds in the state of New Mexico. The analysis tries to isolate the effect of ownership by controlling for auction structure, leasehold characteristics, and prices of underlying resources. Given past research, the hypothesis is that stricter regulations carry a heavier cost to buyers, so the expectation is that federally-owned leaseholds, which are more regulated, are traded at a discount to state-owned leaseholds. However, the result of this thesis is contradictory to the hypothesis. The conclusion is that stricter regulations do not lead to a discounted auction price for an oil and gas leasehold.

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Advisor: James Roberts, Kent Kimbrough | JEL Codes: C12, C21, Q35, Q58 | Tagged: Auction, Education, environment, federal, natural gas, Oil, Regulation, State

Gender Equality as a Result of Offering Employee Benefit Policies

By Meghan Mcaneny

In this study, I investigate the relationship between the percentage of women in leadership in a company and its employee benefits. This papeuses data on individual firms’ benefits such as paid parental leave, familial support, and flexibility arrangements. Using OLS, I conclude that benefits that shift familial burdens from women to men, specifically paid paternity leave, result in more women in leadershipThis creates an even playing field for women to be promoted as the company environment does not penalize women for using benefits. I also find a negative relationship between reimbursement for fertility procedures and women in leadership.

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Advisor: Alison Hagy, Marjorie McElroy | JEL Codes: J22, J32, M51, M52 | Tagged: Employee Benefits, Women in Business Leadership, Work-Life Balance

Predicting Transfer Values in the English Premier League

By Dylan Newman

This paper examines factors that affect the transfer value of players transferred into the English Premier League from 20092015. The analysis begins by examining what factors are significant in determining a player’s projected transfer fee based on the website Transfermarkt.com as well as the actual fee that the player was sold for. The paper goes on to find that competition level and a player’s form are not statistically significant in models built to determine a player’s transfer value. Quantile regression is then used to illustrate that there is a superstar effect with a forward’s goal’s scored in the transfer market. 

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Advisor: Kent Kimbrough, Peter Arcidiacon | JEL Codes: L83, Z21 | Tagged: English Premier League, Quantile Regression, Soccer Transfer Fee

Determinants of SAT Scores in North Carolina

By Abby Snyder

This paper examines the effects of different school and district characteristics on SAT scores across North Carolina from 2007 to 2014. Such characteristics include demographics, poverty and wealth indicators, measures of classroom environment, and achievement levels. A pooled time series panel across districts and schools with fixed effects is used to determine the strength of influence these variables have on scores. Ultimately, this paper identifies which characteristics lead to over or underperformance relative to predicted values; further, it considers the implications of the SAT being more of an “achievement” test versus an “aptitude” test.

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Advisor: Charles Becker | JEL Codes: I2, I24 | Tagged: Achievement Gap, Aptitude Test, Education, SAT

BIDDING FOR PARKING: The Impact of University Affiliation on Predicting Bid Values in Dutch Auctions of On-Campus Parking Permits

By Grant Kelly

Parking is often underpriced and expanding its capacity is expensive; universities need a better way of reducing congestion outside of building costly parking garages. Demand based pricing mechanisms, such as auctions, offer a possible solution to the problem by promising to reduce parking at peak times. However, faculty, students, and staff at universities have systematically different parking needs, leading to different parking valuations. In this study, I determine the impact university affiliation has on predicting bid values cast in three Dutch Auctions of on-campus parking permits sold at Chapman University in Fall 2010. Using clustering techniques crosschecked with university demographic information to detect affiliation groups, I ran a log-linear regression, finding that university affiliation had a larger effect on bid amount than on lot location and fraction of auction duration. Generally, faculty were predicted to have higher bids whereas students were predicted to have lower bids.

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Advisor: Alison Hagy, Allan Collard-Wexler, Kent Kimbrough | JEL Codes: C38, C57, D44, R4, R49 | Tagged: Auctions, Parking, University Parking, Bidder Affiliation, Dutch Auction, Clustering

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 patternsBy 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 pricesetting power. 

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Advisor: Michelle Connolly, Rachel Kranton | JEL Codes: D11, D21 | Tagged: Consumption, Firm Theory, Heterogeneous Agents, Identity,  Social Norm

An Economic Approach to Evaluating the Impact of AML/CFT Regulations

By Caitlin Mcgough

This paper addresses the unintended consequences of AML/CFT regulations, seeking to provide an economic analysis of the drivers of derisking and the broader consequences for the goal of financial integrity. Looking at qualitative data, this paper (1) concludes the problem of derisking warrants a reconsideration of the enforcement approach and (2) recommends reorienting the banks’ payoff matrix by reducing the cost of compliance and regulatory risk associated with providing financial services to highrisk, lowprofit customers. This paper culminates with the recommendation to consider tolerating “honest mistakes” on the part of financial institutions in order to achieve the goals of integrity and inclusion in the international financial system.

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Advisor: Connel Fullenkamp | Tagged: De-Risking, Financial Inclusion, Money Laundering, Terrorism Financing

The Effects of Global Oil Price on Government Investment the Nigerian Agricultural Sector

By Chuka Obiofuma

Nigeria’s heavy dependence on oil makes it a prime target for the resource curse. The occurance of this phenomenon in Nigeria could mean that there is capital flight from the agricultural sectors of the economy when the oil sector increases in profitability. This would disproportionately hurt the poor of Nigeria who depend on agriculture for their livelihood. This work investigates whether or not the Nigerian government, the largest investor into the Agricultural sector, tends to increase or decrease its investment in the agricultural sector as global oil prices rise. Using data from the years 1978-2014, the results of this paper show that as oil prices increase so too does the Nigerian government’s investment in its agricultural sector.

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Advisor: Alison Hagy, Gale Boyd | JEL Codes: I28, O13, Q43 | Tagged:  Agriculture, Energy, Government Policy

Where Did The Liquidity Go? The Cost of Financial Regulation to Foreign Exchange Markets

By James Stevenson

In financial markets, the terms “bull” and “bear” markets are used to describe the cyclicality of asset prices. Similar to asset price cycles, there are cycles in regulatory scrutiny. Beginning in the 1980’s, regulatory scrutiny diminished, cumulating in the repeal of the Glass-Steagall Act in 1999, allowing commercial banks and securities firms to be housed under the same roof for the first time since the 1930’s. In the aftermath of the global financial crisis in 2008 and 2009, the tides have reversed on financial regulation. With the Dodd-Frank reforms in the United States, and similar regulation being signed into law around the world, it is unknown how new regulation will affect financial markets. Legislators wrote the new rules in hopes that they would create safer financial institutions, but at what cost?

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Advisor: Connel Fullenkamp | JEL Codes: G1, G12, G18 | Tagged: Dodd-Frank, Financial Regulation, Foreign Exchange, Market Liquidity, Volcker Rule

Questions?

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Jennifer Becker
dus_asst@econ.duke.edu

Director of the Honors Program
Michelle P. Connolly
michelle.connolly@duke.edu