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Category Archives: 2017

Low-Income Residential Solar: A SASH Evaluation

By Jeff Knaide

In this paper, I examine the impacts of California’s Single-Family Affordable Solar Housing (SASH) subsidy on the rate of adoption of residential solar power. The SASH program looks to provide low-income families with a sizeable subsidy to install residential solar panels. Eligibility for the program depends on income, among a few other factors. This work represents part of a small body of energy justice literature, and the only existing evaluation of SASH. Zip-codes with higher eligibility (based on income levels) showed a significantly higher number of adoptions when controlling for important characteristics, specifically median income. While this policy did generate low-income adoptions, it does not offer a strong carbon abatement strategy – low-income households require greater financial support than might higher-income households.

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Advisor: Chris Timmins | JEL Codes: Q29

Monetary Unions and Long-Run Growth

By Levi Crews

This paper develops two complementary models of monetary unions and long-run growth. The key result is that a reduction in foreign exchange costs via monetary unication provides a positive growth effect for member nations. This growth effect may come through increased knowledge spillovers in the deterministic model or through the migration of funds to higher-yield investments in the stochastic model. Empirical evidence is presented that generally supports both of these channels of growth.

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Advisor: Pietro Peretto | JEL Codes: F43; F45; O42.

The Cost-Effectiveness of Shared Medical Appointments for Type II Diabetes at Duke Family Medicine

By Lauren Nahouraii

With increasing healthcare expenditures above the rate of inflation, new health care delivery models are needed. Since care for chronic health conditions accounts for a majority of spending, more cost-effective ways to manage these conditions are especially necessary and could be the most effective in decreasing health care costs. Shared medical appointments (SMAs) are a promising solution because they increase patient education through group appointments while simultaneously increasing productivity by allowing a provider to see patients in a group but bill for them individually. In this study, 38 patient volunteers participated in an SMA as part of a pilot program at Duke Family Medicine (DFM). As part of this program, patients were randomly assigned to groups that offered varying versions of an SMA curriculum over the course of 3 years. Data collected included HbA1c scores, number and type of medications, type of insurance and payments, number and type of visit (including hospital admissions, emergency room visits, primary care and specialty visits), laboratory tests completed, and home address. Data was collected during, after, and for the six months prior to starting the SMAs. Data points from six months prior to the SMAs serve as a control. HbA1c served as the measure of health outcome while the rest of the data was used in estimating the total healthcare costs of control and treatment periods. Any changes in HbA1c were converted into changes in quality adjusted life years (QALYs) for the cost-effectiveness calculations. The estimated total costs and changes in QALYs were used to calculate the average cost-effectiveness of both the control and treatment periods. Given the small sample size, the SMAs appeared to be more cost-effective for patients that attended a majority of the SMA sessions. The cost-effectiveness comparison for all patients was inconclusive. This study’s calculations should be repeated once more patients complete SMAs in order to increase the power of the tests and provide conclusive results for all patients.

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Advisor: Tracy Falba | JEL Codes: I10, I12, I13, I18

Segregation, Bargaining Power and Environmental Justice

By Kai Yu Lee

Under efficient Coasian bargaining, the recipients of an environmental harm are compensated by the polluter for every unit of the nuisance that they bear. When those doing the negotiation are also those bearing the costs of the environmental harm, this will lead to an efficient outcome in which the benefits and social costs of the polluting activity are equalized on the margin. Transaction costs frequently lead to bargaining being conducted by government representatives on behalf of their constituents; e.g., county officials may bargain with polluting firms over payments in exchange for siting facilities within their borders. When populations are highly segregated, representatives can more easily target the costs of polluting facilities to a politically weak minority while the majority enjoys the Coasian compensation. We test this theory using information on three decades of county-level polluting employment and
a measure of racial/ethnic dissimilarity. Results confirm the hypothesis that segregation facilitates the siting of polluting facilities, suggesting an important source of procedural environmental injustice.

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Advisor: Chris Timmins | JEL codes: Q52, Q53, Q56, R3, R58

Economic Models and Magical Realism: An Interdisciplinary Approach to Development Through a Concurrent Analysis of 1960’s-70’s Latin American Structuralism and One Hundred Years of Solitude

By Ibanca Anand

This paper aims to join this interdisciplinary community by situating the two fields side-by-side within a historical context of political economy. Political economy research considers not just the merit of economic models, but studies their impact within the larger society, and analyzes their transition from the private policy-making body to the public sphere. It is within this sphere that economics and literature come at a particularly interesting crossroads, where the idea of joining hands is not simply intriguing but almost necessary: culture.

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Advisor: Bruce Caldwell

Small Bidder Preferences in FCC Spectrum Auctions

By Alexandra Zrenner and Chidinma Hannah Nnoromele

The Federal Communications Commission faces a congressional mandate to ensure the participation of small business in its spectrum auctions. The FCC addresses this mandate using preferences for small bidders. This paper examines the impact on auction competition and outcomes of two preferences: bid credits and closed licenses. Bid credits are subsidies for small bidders, specifically, percentage discounts for winning bids made by small bidders. Closed licenses are set-asides for small bidders, that is, only small bidders are allowed to bid on a closed license. We analyze the auction results of 7,167 spectrum licenses for personal communication services. We specifically examine the number of bidders competing for a license, and the presence and use of bid credits and closed licenses. Our results demonstrate that the efficiency gains from competition are outweighed by the efficiency losses of small bidder preferences.

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Advisor: Michelle Connolly | JEL Codes: L5, L96, K20

Perceptions vs. Reality: School Climate in Miami-Dade County

By Makda Habtom and Yuliya Kozina

This study looks at a sample of Miami-Dade public middle and high schools. The aim is to see if school incidents and perceived safety can be predicted by school-level diversity and other school characteristics. At first, it is found that higher diversity is associated with higher incidents and lower perceived safety. Then, looking at differences over time, it is found that diversity is no longer statistically significant. Instead, increases in school population and free/reduced price lunch over time is significantly associated with an increase in incidents. However, only an increase in the school population is associated with a decrease in perceived safety scores.

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Advisor: Hugh Macartney | JEL Codes: I2, I20

Vanguard’s Index Funds vs. Vanguard’s Managed Funds: a Nine Style Box and Fama-French Multi-Variable Regression Approach

By Susheel Nalla

Many investors struggle to determine whether they want to invest in managed funds or indexed funds when they build portfolio. Vanguard, founded by John Bogle, a strong advocate for indexed investing has seen his company grow to over $3.9 trillion in funds. In the last three years $1 trillion of new money has come into their passive funds as investors are moving towards saving on cheaper expense ratios. However, many people like Vanguard’s former CIO Gus Sauter believe that managed funds can deliver additional value to their investors by keeping expense ratios low and hiring the world’s best managers. This study looks at Vanguard indexed and managed funds in three different market capitalizations organized nine style boxes to see whether Vanguard’s strategy of low management expense ratios provides additional value to their own benchmarks. This study uses two comparison methods to analyze market returns of these funds from 2006-2016. First, indexed and managed Vanguard funds will be compared using a Morningstar nine-style box to directly see differences in return rates and estimate riskiness of these assets through standard deviations. Second, the Fama-French three-factor model will be used to create a regression explaining where the fund returns may be coming from. This method will determine the SMB and HML of the funds telling us the size of the equities in the fund along with their value premium over book value. Also, a market coefficient will be determined to see how close these funds are relative to a market benchmark. Overall, it is determined that Vanguard indexed funds in small-cap and mid-caps are slightly better investments based on returns and exposure to risk along with their equity composition. Based on the same criteria, large-cap funds perform slightly better than their indexed counterparts.

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Advisor: Edward Tower | JEL Codes: C55, G10, G11, G12

The Link between Gentrification and Displacement and the Effects of Displacement on Residents in Los Angeles County

By Ashley Qiang

Over the past decades, gentrification has accelerated across the country. Along with this phenomenon comes growing concern about displacement, although limited research has been dedicated to examining gentrification’s impact on displacement. This paper studies the link between gentrification and displacement, as well as who is more likely to be displaced and the effects on the displaced. The results show that lower-income renters are significantly more likely to be displaced from gentrifying neighborhoods, and they tend to move to worse neighborhoods with lower education quality and higher crime rates.

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Advisor: Chis Timmins | JEL Codes: R1, R21, R23

What Gets Paid? Analyzing the Major League Baseball Contract Market

By Brian Pollack

This paper aims to assess the efficiency of the Major League Baseball contract market in the past decade, given that teams are employing more analytical approaches to player evaluation. First, analysis of team-level data reveals the most important determinants of run scoring and run prevention, respectively. Models of player contract value, controlling for player-specific variables and environmental factors, then determine what is most significantly rewarded on the free agent market. Overall, teams have identified the individual skills that are most important and compensated them accordingly, and there is evidence to suggest teams are becoming smarter about this in recent years.

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Advisor: James Roberts | JEL Codes: D7, O3, Z2


Undergraduate Program Assistant
Jennifer Becker

Director of the Honors Program
Michelle P. Connolly