The Marital Wage Premium in the Twenty-First Century: Do married men earn a higher wage rate, and if so, why?
By Halley Hu
Married men have historically earned higher wages than single men. One of the most prominent explanations for this phenomenon is the theory of intra-household specialization. However, the marriage premium was found to be decreasing up until the early 90’s. In our paper, we have re-examined the wage premium using data from the National Longitudinal Survey of Youth 1979. Our analysis focuses on an early period (1990-1992) and a later period (2002-2006). Our results suggest that the marital wage premium has actually been increasing over time, but that specialization does not do an adequate job of explaining this result.
Advisor: Marjorie McElroy
The Determinants and Social Benefit of Student Summer Activity: An Analysis of the Determinants of Summer Activity Participation by Elementary and Secondary Students, and the Resulting Social Benefit of Summer Activity Participation on Crime
By Elad Gross
Using data from 1996, this study first identifies the socioeconomic determinants of a child’s participation in an organized summer activity. Models are produced for summer activity in general and for different types of summer activities. The results indicate the importance of caregiver supervisory capability in choosing whether to send a child to a summer program. In the second stage of the project, actual state values of summer activity participation are related to state crime statistics, controlling for the state demographic profile. The results indicate that participation in summer activity is related to a reduction in crime rates under certain conditions.
Advisor: Peter Arcidiacon
By Corinne Grzbowski
Female surname choice at marriage depends on a range of historical, cultural, and branding factors. Two of the three datasets are administrative datasets from the Duke University Alumni Association (DAA), which include every female Duke alumnae from 1960-2000. The third dataset comes from a survey administered to Duke alumnae. We find that the fraction of ―keepers,‖ women who retain their surname instead of taking their husband‘s name, has increased since the 1970s, with a statistically significant peak in the undergraduate class of 1990. We also find evidence of branding: women who spend time developing their name through higher education or a more visible career are more likely to keep their surname upon marriage.
Advisor: Marjorie McElroy
By Yang Ding
The goal of this paper is to investigate the forecasting ability of the Dynamic Conditional Correlation Generalized Autoregressive Conditional Heteroskedasticity (DCC-GARCH). We estimate the DCC’s forecasting ability relative to unconditional volatility in three equity-based crashes: the S&L Crisis, the Dot-Com Boom/Crash, and the recent Credit Crisis. The assets we use are the S&P 500 index, 10-Year US Treasury bonds, Moody’s A Industrial bonds, and the Dollar/Yen exchange rate. Our results suggest that the choice of asset pair may be a determining factor in the forecasting ability of the DCC-GARCH model.
Advisor: Aino Levonmaa, Emma Rasiel
Measuring the Likelihood of Small Business Loan Default: Community Development Financial Institutions (CDFIs) and the use of Credit-Scoring to Minimize Default Risk1
By Andrea Coravos
Community development financial institutions (CDFIs) provide financial services to underserved markets and populations. Using small business loan portfolio data from a national CDFI, this paper identifies the specific borrower, lender, and loan characteristics and changes in economic conditions that increase the likelihood of default. These results lay the foundation for an in-house credit-scoring model, which could decrease the CDFI’s underwriting costs while maintaining their social mission. Credit-scoring models help CDFIs quantify their risk, which often allows them to extend more credit in the small business community.*
Advisor: Charles Becker
By Sott Casale
Drawing on data from a 2007 random sample of Duke University seniors (369 males and 381 females), this paper analyzes individual factors that influence whether men and women were more likely to engage in the hook-up culture or an exclusive romantic relationship (ERR) as compared to doing nothing. There is substantial research to support that relationship styles are changing on college campuses as students delay marriage and maintain more liberalized views on sex before marriage. The economic theory of marital-specific capital may provide some insight into why students on college campuses are developing more casual relationships as time becomes an important factor. In this college environment, student characteristics as well as personal beliefs and perceptions about these particular courtship styles may influence whether a college student will be hooking-up or in an exclusive romantic relationship his or her junior and senior year. Results from this study indicate that students on financial aid, a time variable, will be less likely to be in an exclusive romantic relationship or hook-up during their junior or senior year as compared to doing nothing. In addition, although it is difficult to attribute causality for peer effects, Duke students who believe a higher percentage of their friends hook-up will also be more likely to hook-up. Also, Duke students who have their first intercourse at a older age and are more religious are less likely to hook-up. Finally, students are persistent in their relationship behavior, meaning that their behavior junior year is a strong predictor of behavior senior year.
Advisor: Marjorie McElroy
By David Brunnell
One of the major contributing factors to Vietnam’s macroeconomic instability has been the massive growth of credit inflows and its often inefficient allocations. Vietnam is in a state of economic transition from state-planned to open market based. The private sector has grown very rapidly but private firms’ demand for credit is still largely crowded out by the state sector. This paper specifically focuses on the use and impact of political connections by private firms to gain access to bank loans. More generally, this is one issue resulting from, and contributing to, the inequality of credit distribution across the Vietnam’s economy. Using individual company level data from 2007 to 2009 inclusive, this paper finds that exercising political connections increases a private firm’s probability of accessing a loan by 4.7%. In testing the effect of political connections on loan terms, this analysis found that firms with political connections also paid a price in the form of higher interest rates. Indeed private firms trying to access bank credit apparently pay a premium to their Vietnamese bankers in return for their privileged relationship. This suggests that the benefit of political connections translates into an extra financial advantage to both the lender and borrower.
Advisor: Michelle Connolly
By Nikolay Braykov
Microeconomic models often use the Rational Expectation Hypothesis (REH) instead of including expectation data. This paper examines the validity of the REH using subjective probability questions about mortality, fertility and education outcomes from panel data. First, I ask whether expectations are accurate and homogenous at the individual level; I find substantial forecast biases that depend on the nature of the outcome and decrease with ability and elimination of focal responses. I then propose a Bayesian learning framework to explain biases and find evidence of partial learning, suggesting probabilities become more accurate over time. Finally, I find subjective probabilities have predictive power over and above objective estimates, suggesting they contain private information about anticipated events.
Advisor: Frank Sloan
By Andrew Born
Lopomo, Marx & Sun (2009) show that, given a speci fied environment, pro table collusion is not possible for a two-person bidding ring operating at a fi rst-price sealed-bid auction. This research investigates the rigor of their result by expanding the theoretical framework to the case of a three-bidder cartel. The output generated from the linear programming model con firms the authorsearlier result. This is a key finding as it is the first to establish a basis for comparison of equilibrium surplus scenarios among multiple-bidder auction formats. The analytic and numerical results pave the way for future research examining the effect of cartel size on profi tability and have many real-world implications for both private and public policy alike.
Advisor: Leslie Marx
By David Benson
Previous studies assume consumers make medical care choices over large (e.g. yearly) time steps. However, most health expenses occur in the weeks immediately following a shock to health. It is unknown whether demand during an illness episode diers from normal long-run demand. How do consumers make the sequential, dynamic choices to consume medical care during an episode of severe illness? A theory of the consumer’s short-run health investment is oered and tested empirically using the Medical Expenditure Panel Survey. It is found that demand is extremely price inelastic immediately following the shock, but is very responsive to changes in health.
Advisor: Frank Sloan