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Category Archives: 2016

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

Determining NBA Free Agent Salary from Player Performance

By Joshua Rosen

NBA teams have the opportunity each offseason to sign free agents to alter their rosters. Using only regular season per game statistics, I examine the best method of calculating a player’s appropriate salary value based upon his contribution to a team’s regular season win percentage. I first determine which statistics most accurately predict team regular season win percentage, and then use regression analysis to predict the values of these metrics for individual players. Finally, relying upon predicted statistics, I assign salary values to free agents for their upcoming season on specific teams. My results advise teams to rely heavily on Player Impact Estimate (“PIE”) when predicting their teams’ win percentage, and to seek players whose appropriate salaries would be significantly more than their actual seasonlong salaries if the free agents were to sign.

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Advisor: Kent Kimbrough, Peter Arcidiacon | JEL Codes: C30, Z2, Z22 | Tagged: Free Agents, Salaries, NBA

The Effect of Social, Cultural, and Political Values on Entrepreneurial Perceptions and Venture Creation: A Global Investigation

By Repton Salisbury

The effect of entrepreneurial activity on economic development has been researched thoroughly. New firm creation spurs economic growth by creating employment opportunities, cultivating innovation, and encouraging competition. Globally, there are countless areas that could benefit from a livelier entrepreneurial ecosystem. So how does a government or population first spur entrepreneurial activity? An entrepreneur’s perceptions are among the most powerful factors that impact the life or death of a new venture, but the determinants that influence how these perceptions first form are still largely unknown. Using survey data collected by the Global Entrepreneurship Monitor in 2010 across the United States, Japan, Switzerland, Israel, United Kingdom, Peru, Russia, Iran, and China, I conduct binary logistic regressions of individual level characteristics, social ideals, cultural norms, human development, and other environmental attributes on the most important perceptions of entrepreneurs. These perceptions have been identified by previous research as an entrepreneur’s perception of local opportunities, internal skills, and fear of failure in creating a new venture. I find that several social, cultural, and political values have a significant effect on the psychological behavior of nascent entrepreneurs.

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Advisor: Alison Hagy, Grace Kim | JEL Codes: L2, L26, O17 | Tagged: Culture, Entrepreneurship, Perceptions, Venture Creation

The Pen or the Sword: Determining the Effects of Different Types of Coups D’état on Income Inequality

By Jie Wei Chia

Existing literature on the relationship between income inequality and coup d’états focus on how the former cause the latter. No research has yet been done on how coup d’états affect income inequality after their occurrence. This study uses crosscountry panel data and fixed effects with instrumental variables models to examine the impact of successful armed coups, successful unarmed coups, failed armed coups and failed unarmed coups. I find that, on average, none of these coups have a significant impact on the Gini coefficient and the income share of the poorest quintile of a population relative to the richest quintile, save for successful armed coups when the subsample of data from 19912013 was used.

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Advisor: Duncan Thomas, Timur Kuran | JEL Codes: D7, D74 | Tagged: Coups, Inequality, Political Economy

Questions?

Undergraduate Program Assistant
Jennifer Becker
dus_asst@econ.duke.edu

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