By Helena Wu
The video game industry has grown into a mature market in the past decade, surpassing the size of the U.S. film industry in 2009. As a result of the rise in popularity of video gaming amongst many demographic groups of the American population, the underrepresentation of female and ethnic minorities in video games has become an increasingly relevant topic of discussion. This paper empirically examines the effects of including female and ethnic minority lead characters on the equilibrium sales volume of video games. Through the use of a reduced-‐form regression, the equilibrium quantity is regressed on a list of exogenous variables pertinent to the interest of this study. The findings suggest that the inclusion of female and minority lead characters affects sales of different genres of games in distinct manners, suggesting that the video game market has a heterogeneous consumer base with a diverse range of preferences. In addition to empirical work, one of the main contributions of this paper is creating a new and unique dataset (N=712) on game attributes, especially with regard to character gender and ethnicity. This paper’s findings have implications on the game design decisions for video game producers.
Advisor: Kent Kimbrough, Loi Leachman | JEL Codes: D00, L1, L82 | Tagged: Entertainment, Ethnicity, Gender, Sales, Video Game
By Yuci Zhang
In nance, the beta of an investment is a measure of the risk arising from exposure to general market movements as opposed to idiosyncratic factors. Therefore, reliable estimates of stock portfolio betas are essential for many areas in modern nance, including asset pricing, performance evaluation, and risk management. In this paper, we investigate Static and Dynamic Conditional Correlation (DCC) models for estimating betas by testing them in two asset pricing context, the Capital Asset Pricing Model (CAPM) and Fama-French Three Factor Model. Model precision is evaluated by utilizing the betas to predict out-of-sample portfolio returns within the aforementioned asset-pricing framework. Our findings indicate that DCC-GARCH does consistently have an advantage over the Static model, although with a few exceptions in certain scenarios.
Advisor: Andrew Patton, Michelle Connolly | JEL Codes: C32, C51, G1, G12, G17 | Tagged: Beta, Asset Pricing, Dynamic Correlation, Equity, U.S. Markets
By Phillip Hogan
This paper presents a stochastic model of exchange rates, which is used to explain the forward premium anomaly. In the model, agents switch between four trading strategies, and these changes drive the evolution of the exchange rate. This framework is meant to more realistically represent the important market dynamics of exchange rates, as we suspect these to be the cause of the forward premium anomaly. Our simulations of the model indicate two conclusions: (i) many of the statistical regularities observed in currency markets, including the forward premium anomaly, can be thought of as macro-level scaling laws emerging from micro-level interactions of heterogeneous agents, and (ii) the dynamics of estimates of the beta coefficient in tests of UIP are driven by perceived relationships between changes in interest rates and agents’ aggregate views on the value of the exchange rate, which we call the fundamental value. Section I presents an introduction to the topic and section II reviews the relevant literature. Section III provides the theoretical basis of the forward premium anomaly and our model, then the mathematical definition of the model. Section IV presents the results of a typical simulation which section V compares to relevant stylized facts of the currency markets. Sections VI and VII present our results and a conclusion of what we have drawn from the model.
Advisor: Craig Burnside, Michelle Connolly | JEL Codes: G1, G13, G15 | Tagged: Exchange Rates, Forward Premium Anomaly
By Gabrielle Inder
This paper examines how information transfer about contamination levels found at brownfield sites capitalizes into nearby property values. More specifically, a hedonic model is used to test the impact on housing transaction prices when a binary measure (i.e. exceeding a threshold or not) or a continuous measure (i.e. chemical levels) is used. In the analysis, I exploit the variation in the contaminant thresholds, caused by regulatory conditions defined by the state of Massachusetts, holding the contaminant level constant. As thresholds are tied to neighborhood attributes in areas surrounding brownfields, threshold exceedance is potentially correlated to unobserved factors that impact housing values. An instrumental variables approach is used to create variation in threshold
exceedance through the use of an instrument that measures the presence to underground aquifers. After instrumenting for threshold exceedance, my estimates indicate that a 10.8% decrease in housing values occurs when a contaminant threshold is exceeded, while the continuous measures of toxicity indicate a negative but insignificant effect. These findings suggest that policy makers should consider information conveyance when creating policies to inform homeowners of pollution presence, as improved information provision may increase public awareness about local environmental concerns.
Advisor: Christopher Timmins, Michelle Connolly | JEL Codes: C26, Q5, Q53 | Tagged: Brownfields, Hedonic Analysis, Housing Markets, Instrumental Variables, Pollution
Are the Chinese Altruistic? Explaining Motives behind Chinese Intergenerational Transfers using the Strategic Bequest Motive
By Lucy Yin
Two main competing theories regarding intergenerational transfers from adult children to elderly parents exist: the altruism model and the exchange model. The strategic bequest motive supports the exchange model in claiming parents with bequeathable wealth will incentivize children to devote more resources to parents in order to receive a larger bequest. I use data from the Chinese Longitudinal Healthy Longevity Survey to assess whether children increase monetary or time transfers to elderly parents with bequeathable property ownership. My findings suggest an altruistic model at play, which contradicts most findings in East Asian countries but may be a trend found in other developing countries.
Advisor: Frank Sloan, Michelle Connolly | JEL Codes: D14, D64 | Tagged: Bequests, Altruism, Intergenerational Transfers
The Impact of Online Streaming on Primetime Viewership An Econometric Analysis of Technological Change, Network Practices and Audience Behavior
By Yeshwanth Kandimalla
This study considers the impact of online streaming on the viewership of popular primetime programs aired on four major U.S broadcast networks: ABC, CBS, FOX and NBC. The time period considered will begin with the 2004-2005 TV season through the 2011-2012 season. Technological change, primarily with faster Internet speeds, spurred some growth of online video streaming. Furthermore, over this time period, the four major networks all authorized streaming at different levels. This variation in availability provides the heterogeneity needed to compare the effect of making programs available
online. The existing literature has posited two effects of online streaming: substitution away from traditional TV viewing due to lower costs or complementarity by drawing in additional viewers. Using this framework, this study conducts an empirical analysis of TV viewership and online availability with a panel of more than 3,500 episodes across 8 seasons and 42 programs. The results strongly suggest that online streaming options drive statistically significant substitution away from traditional TV viewing, a trend that can have major consequences for the distribution of TV programs and the broadcast TV business as a whole.
Advisor: Michael Munger, Michelle Connolly | JEL Codes: D12, D22, L82 | Tagged: Big Four, Cable Cord-cutting, FOX, Hulu, Network Television, Networks, Online Streaming
By Alexander Bloedel
This paper studies the mechanisms that link sociopolitical conflict and (expectations about) economic prosperity. Motivated by a large body of empirical and historical work on the correlation between economic development and democratization, I develop a game-theoretic model of economic growth with political economy constraints. In an economy where low income agents are credit constrained, rapid and robust economic growth leads to increasing inequality early on, but provides the means to mitigate civil conflict when inequality becomes suciently large. The rate and persistence of growth similarly determines the stability of extant political institutions and the ability to transition from dictatorship to democracy.
Advisor: Curtis Taylor | JEL Codes: D72, D74, O11, O43 | Tagged: Civil Conflict, Economic Growth, Expectations, Political Economy
By Dana Fenster
This paper examines the relationship between teacher tenure and teacher quality in North Carolina, measured via student performance on the state End of Grade (EOG) standardized tests. After presenting a comprehensive synopsis of the current teacher tenure policy, I use data from the North Carolina Education Research Data Center (NCERDC) to compare demonstrated teacher effectiveness across the tenure bubble, defined as one to eight years of teaching experience within the same district. Ultimately, I find that there is significant jump in average teacher quality at the tenure cutoff, suggesting that tenure policy is effective in retaining high quality teachers while removing those who are ineffective.
Advisor: Hugh Macartney | JEL Codes: I21, J24, J41, M5 | Tagged: Economics of Education, Labor Economics, Teacher Tenure
Determining the Effect of Personal and Familial Wealth on Congressional and State Legislative Election Outcomes
By Anisha Khemlani
This paper seeks to further the debate on money and politics. Specifically, it focuses on the effect of wealth on election outcomes. The goal is to determine the relationship between personal wealth and voter margins of congressional elections and the effect of familial wealth on state legislative elections. A regression analysis of the congressional data suggests that personal wealth does not significantly impact the voter margins of successful candidates. However, a probit analysis of state legislative data suggests that familial wealth can increases candidate’s chances of winning, all else equal. This implies that at the state level, wealth could provide a candidate with advantages, suggesting that money and power may go hand in hand.
Advisor: Nicholas Carnes | JEL Codes: D3, D72 | Tagged: Elections, Personal Wealth, Voter Margin
By Hong Zhu
M-PESA, the hugely popular mobile money system in Kenya, has been celebrated for its potential to “bank the unbanked” and increase access to financial services. This paper provides evidence to support this idea and explores mechanisms through which this might be the case. It specifically looks at the savings products held by individuals and how this changes in relation to M-PESA use. It then constructs an index for measuring the extent to which individuals are integrated into the formal financial sector. This paper argues that M-PESA’s effect on financial inclusion is a growing phenomenon, which suggests that keeping pace with the rapid evolutions of this mobile money system should be a high priority for researchers. As this paper elucidates, M-PESA has become notably more integrated with the formal financial sector in 2013 as compared to 2009, which holds implications for user behavior.
Advisor: Michelle Connolly, Xiao Yu Wang | JEL Codes: D14, E42, G21, G23, O1, O17, O16, O33 | Tagged: Financial Inclusion, Mobile Money, Savings,Technology