Honors Projects

Demographic Changes and Economic Growth: Empirical Evidence from Asia

Sijia Song — Tue, 14 May 2013 07:00:27 PDT

Asia has witnessed robust economic growth since the 1960s and the so-called “East Asian economic miracle”. Even till today when the world’s largest economies are suffering from debt and banking crises, emerging markets in Asia have managed to maintain rapid growth. In the meantime, significant demographic changes are taking place in Asian countries. Using an economic growth model, this article further examines the effects of demographic changes on economic growth in thirteen Asian countries during the period from 1965 to 2009. The results indicate negative effects of growth in the total population and the young population on economic growth while showing positive effects of growth in the working-age population and the working-age population ratio. These findings confirm that rapid economic growth in Asia can be attributed to the favorable demographic changes that took place there.

Analysis of the Temporary Immigrant Labor Market on Information Technology Occupations

Katelyn Rowley — Mon, 06 May 2013 13:31:35 PDT

An important recent labor market trend is the rapid increase in the number of immigrants employed in the information technology sector who have temporary worker status. The dual labor market theory suggests that temporary immigrant workers will be affected more adversely than native workers during a recession. This study uses OLS regression models to predict wages and employment levels (through usual hours worked) in information technology (IT) occupations as a function of immigration status, education level, age, gender, the recession and a set of interactive terms. The results from this study unexpectedly show that employment of native workers in IT occupations fell during the recession while the employment of temporary immigrant workers in IT occupations rose. Also surprising is that wages of temporary immigrant workers in IT occupations do not appear to be significantly different from their native counterparts in those occupations even during the recession. This suggests that employers retained temporary immigrants and even added to their employment to maximize productivity and fill a skills gap rather than realize alternative benefits of retaining native workers in long-term positions.

Transmitting Occupational Niches From First to Second-Generation Immigrants: Are There Earnings Consequences From Being the "Copycat" Generation?

Melissa Seeborg — Fri, 26 Apr 2013 13:46:19 PDT

In recent years, the number of second-generation immigrants entering the labor market has been increasing at a rapid pace. Their parents had immigrated in large waves, with many joining niche occupations dominated by their ethnic groups. This study looks to determine the economic impact of first-generation niche occupations, the extent that the second-generation enters the same occupations, and the resulting consequences on the second-generation’s income levels. In particular, the study investigates whether the second-generation will sustain the first-generation earnings advantage (or disadvantage) relative to natives. This research examines immigrants from China, India, the Philippines, Mexico, and Puerto Rico. Data from the Current Population Survey are empirically tested through two separate OLS regressions. Results differ between countries, but imply no exact set of occupations transmitted across generations. There is some evidence of the continuation of intergenerational income advantage (or disadvantage) within immigrant groups.

Economic Assimilation of Chinese Immigrants in the United States: Is There Wage Convergence with Natives?

Yujie Wu — Fri, 20 Apr 2012 13:30:27 PDT

Asian Americans are often referred to as the “model minority” due to perceptions of their high income and educational attainment; yet relatively little is known about their economic assimilation experience. The purpose of this study is to determine economic assimilation of Chinese immigrants over time. This research follows a cohort of Chinese immigrants from 1994 to 2011 and compares their earnings performance with natives that have similar educational attainment. Multiple regression analysis is used to analyze data from the Current Population Survey. Results show that, although the cohort of Chinese immigrants initially has earnings substantially lower than the natives, it is only about 10 years before they reach income parity. By 2011, Chinese immigrants’ earnings exceed natives’ earnings by about 4 percent. The study concludes that despite the language and adjustment challenges, Chinese immigrants do show rapid economic assimilation in the United States.

Meta-Analysis of Environmental Kuznets Curve Studies: Determining the Cause of the Curve’s Presence

Brittany Goldman — Fri, 20 Apr 2012 08:33:28 PDT

This investigation uses meta-analysis to explore the systematic variation across Environmental Kuznets Curve (EKC) studies to better understand the specific factors that affect the relationship between economic growth and environmental quality. Meta-analysis is the statistical synthesis of data from a set of comparable studies yielding a quantitative summary of pooled results. Following the findings of Li et al., (2007) a multinomial logit model is employed to analyze 929 observations from 120 different studies published between 1992 and 2012. Results indicate that seven variables (time, quality, emissions, development, fitness, anthropogenic-related gases, carbon dioxide, and sulfur dioxide) significantly affect the presence of the EKC. There is no statistically significant evidence indicating an increased or decreased probability of finding an EKC from the number of observations, panel data, global aspect, reverse publication date, GDP measures, chemically active gases, biologically related gases, nitrogen oxide, and air pollution.

Economics of Salary Dispersion in the National Basketball Association

Daniel Schouten — Thu, 19 Apr 2012 13:59:53 PDT

The purpose of this study is to discover the optimal amount of salary dispersion for an NBA team and the affect that dispersion has on team wins and revenue. The optimal amount of salary dispersion could be different for teams that want to maximize wins and teams that want to maximize revenue. For the purpose of this study, five different measures of salary dispersion are utilized to most effectively understand the effects. Empirical models are constructed and OLS regressions employed using cross-sectional data from the 2006-07 NBA season through the 2010-11 season to understand the relationship. The empirical evidence supports the idea that the larger the salary dispersion the greater the number of wins achieved. The evidence also implies that the amount of dispersion does not significantly affect the amount of revenue generated by a team. According to this study, a win maximizing team should attempt to hire as many superstars as possible given the NBA’s salary constraints.

Financial and Labor Market Determinants of Mortgage Delinquency Rates: McLean County, IL, 1985-2011

Jake Mann — Thu, 12 Apr 2012 00:46:43 PDT

This study examines the relationship between labor and financial market factors and the mortgage delinquency rate in McLean County, Illinois, between January 1985 and December 2011. The mortgage delinquency rate is defined as the ratio between the number of defaulting mortgages and the number of mortgages issued. The volume of defaulting mortgages is measured through the number of lis pendens notices filed with the Recorder’s Office. A lis pendens notice informs the grantee of a mortgage loan that the grantor's payments are three months overdue. The issuance of this notice starts a foreclosure process. As labor market indicators we consider the number of both employed and unemployed workers, as well as the unemployment rate. As financial market indicators we consider region-specific and national-level interest rates in both fixed (30-year) and variable (1-year adjustable) forms. We employ Ordinary Least Squares regression to model countywide mortgage delinquency activity. Our findings indicate that the delinquency rate is positively related to the volume of unemployed workers in the county and more strongly, to mortgage interest rates.

The Politics of the 1965 Gold Reserve Law

Robert E. Hendrick — Wed, 06 Apr 2011 12:38:18 PDT

The major focus of this study is the 1965 gold reserve law. This
law was both an economic and political solution to a number of problems
which are discussed under the general subject of the United States balance
of payments. I have used the 1965 law to illustrate many processes within
the American political system.

Risk and College Majors

Dan Scholz '96 — Mon, 21 Mar 2011 09:48:34 PDT

When students choose a certain field of study in college, some opportunities are instantly forgone. Since different types of educations have varying degrees of forgone opportunities, risk is associated with educational choices. The extent to which these educational choices impose a risk on the individual is studied here. It is hypothesized that more technically oriented and job-specific type educations will have a higher risk than less restrictive liberal arts type educations. Using a large sample drawn from the National Longitudinal Survey of Labor Market Experience of Youth, this paper examines the presence and nature of risk across the different areas of study. Initial analysis reveals that compared to other areas of study, engineers and scientists have a high average income and a high variance in those incomes. Using standard linear regression analysis to control for background variables, it is found that in general, this variance is significant and positively correlated to the higher paying, more technical fields.

White Flight and Urban Decay in Suburban Chicago

Lindsey Haines — Mon, 26 Apr 2010 20:42:04 PDT

White flight and urban decay are issues typically analyzed in the context of the inner-city. This study builds on previous literature to test whether these phenomena have affected the Chicago suburbs in the same way as other urban areas. In particular, this study focuses on the effects of changes in racial composition, household income, and the age of the housing stock on changes in home values, the vacancy rate, the homeownership rate, unemployment, the single parent household rate, and the college completion rate. Overall the study supports the theories of white flight and filtering in the suburban Chicago context. The study includes data from 175 Chicago suburbs for years 1980, 1990, and 2000. All data comes from the HUD SOCDS and the US Census. Methodologically, the study utilizes least-squares regression techniques.

The Effects of Marital Status & Gender on Health Care Insurance Coverage in the United States

Jessica S. T. Kong — Mon, 26 Apr 2010 20:42:03 PDT

Having health insurance is a crucial factor for many to sustain life in America. This study examines the demographic determinants of health care coverage within the United States with a focus on how gender and marital status influence the likelihood of having health insurance. Using the human capital theory and the theory of statistical discrimination, it is predicted that married females will have a higher probability of being insured than divorced and separated females. Also, divorced males are predicted to have a higher probability of coverage than divorced females. The data for this research is retrieved from the United States Census Bureau Current Population Survey and consists of a large sample of adults aged 30 to 65. An OLS and probit regression are used to conduct this study, as well as descriptive statistics. The principle finding is that married adults have a much higher probability of having insurance than single, divorced, and widowed adults. It is also found that men and women do not differ greatly in their likelihood of having health insurance. One exception is that single, divorced and widowed women are somewhat less likely to have employer provided insurance than their male counterparts.

Examining Success at the Domestic Box-Office in the Motion Picture Industry

Patrick Topf — Mon, 26 Apr 2010 20:42:02 PDT

The movie business is a multi-billion dollar industry involving production crews, marketing crews, actors, directors, distribution companies, movie theaters, and movie rental companies, but while each movie created follows the same routine, why do some perform so much better than others at the box-office? Why did Juno become a smash hit, while Poseidon is regarded as a major box-office bomb? This study investigates the impact of production cost, star power, professional reviews, release date, sequels, genre, age-rating, and distribution company on total domestic box-office revenue of the widely released films from January 2006 to December 2008.

How European is the European Central Bank's Monetary Policy?

Teodora D. Petrova — Mon, 26 Apr 2010 20:42:00 PDT

Ever since its establishment in 1999, the European Central Bank worked on maintaining relative price stability mainly through inflation targeting. The ECB aims at a target inflation rate below but close to 2%. However, the diversity among the member states in the European Union and the Eurozone requires not only collective attention on the EU economy but also on each individual member state. Some Eurozone member states experience generally higher levels of inflation and higher unemployment. On the other side are countries like Germany which are more concerned with maintaining low inflation only. Many economists and politicians criticize the ECB for its monetary decision-making, which affects various member states differently and could drive their economies out of alignment (Salvatore, 2002).

The literature on the topic suggests a theory also known as the German Dominance Hypothesis (GDH), which explains the prevailing role of Germany and German's economic objectives on the ECB decision-making process. The main purpose of this paper is to study the reasoning behind this commonly spread criticism of the European Central bank and test if the ECB's monetary policy is beneficial for the Eurozone members as a whole or only for a select group of countries, which have similar economic profiles. Or in other words, the paper establishes the differential impact of the ECB monetary policies on the Eurozone member states with the expectations that the policy will benefit mostly the German economy and other economies with similar low-inflation targeting needs and will negatively impact others, which face high unemployment rates, in general.

Consumer Perceptions & Video Game Sales: A Meeting of the Minds

John Sacranie — Mon, 26 Apr 2010 20:41:58 PDT

This paper examines the determinants of video game software sales. What literature currently exists points to an array of factors, ranging from which hardware a title is released on to the game’s genre. This paper incorporates several of these variables, but adds in a new one: quality. Literature up to this point has not addressed the effect that a game’s quality has on its eventual sales, yet one would logically expect this to have a strong positive impact. To account for quality, the model incorporates the average review score a game receives from professional critics. The results indicate that indeed, quality does play a major role in consumers’ purchase decisions.

Labor Market Outcomes for Middle Eastern Immigrants in the Aftermath of the September 11th Attacks

Mujtaba A. Isani — Mon, 26 Apr 2010 20:41:56 PDT

Media reports all over the USA reported that a wave of Islamophobia had gripped the USA after the September 11, 2001 attacks. It seemed as though the American population were blaming not the radicals but the Middle Easterners and the Muslims in general for the inhumane act. Some reports even suggested a new sort of McCarthyism in the USA but this time against the Middle Eastern populace. This paper investigates whether such discrimination transformed itself in the US labor market by conducting an econometric analysis, taking Becker’s taste for discrimination theory as its theoretical basis. It first analyzes whether there was a significant change in wage differentials between Middle Eastern population groups compared to native Americans pre and post 2001. Secondly, it accomplishes a regional analysis to see whether the populations from certain Middle Eastern regions were discriminated more than other regions. Lastly, the paper examines other labor market outcomes such as labor force participation rates and unemployment rates, to determine whether discrimination was present in other avenues and to provide an all encompassing picture of Middle Eastern immigrants in the US labor market before and after the attack of September 11th.

Assessing the Productive Efficiency of US Health Care: Comparison of Analytical Methods

Amanda C. Clayton — Mon, 26 Apr 2010 20:41:55 PDT

In 2006, the US spent approximately 15.8% of its GDP on health care, more than any other Organisation for Economic Co-operation and Development (OECD) country and considerably larger than the 9.1% average of the 23 other peer nations included in this study (OECD Health Data, 2009). The US also had the lowest female and male life expectancies at birth compared to the same 23 OECD nations (OECD Health Data, 2009). This raw and partial evidence suggests that the US health care system may be performing inefficiently. The purpose of my research is to assess the efficiency of the US health care system through a comparative analysis of 24 OECD countries, including the US, with similar per capita income levels over the period 1960 to 2008. I utilize a Cobb-Douglas production function regressed using both Ordinary Least Squares and Stochastic Frontier Analysis techniques in order to test the robustness of my results. My findings suggest that some of the apparent inefficiency of the US is actually due to lifestyle choices, though the US may still be performing inefficiently compared to some of its peers.

Intergenerational Transfer of Human Capital among Immigrant Families

Kelsey Hample — Mon, 26 Apr 2010 20:41:53 PDT

While immigrants in the United States tend to earn less than comparable natives, their children close the earnings gap. The purpose of this study is to determine how differences in intergenerational transfer of human capital between immigrant families and native families affect different earning outcomes for respondents of each group. Specifically, this study uses a human capital framework to analyze both the direct effect of parental education on respondent earnings and the indirect effect on earnings by first affecting respondent education, which in turn affects respondent earnings. Data from the 1979 National Longitudinal Survey of Youth allows background variables within a family from 1979 to be related to respondent earnings in 2006. Thus, human capital investments made by parents can be linked to respondent outcomes several years later. The analysis shows that while parental education is a strong predictor of respondent education and earnings in the native population, it is weaker for second generation immigrants. Perhaps second generation immigrants overcome deficiencies in their parents’ human capital through higher levels of motivation.

What Factors Affect Average Fuel Economy of US Passenger Vehicles?

Suman Gautam — Mon, 26 Apr 2010 20:41:51 PDT

The auto industry consumes about 70 percent of total petroleum products used in the United States and is a major source of green house gas emissions. With the limited supply of traditional non-renewable energy and a slow growing renewable energy industry, it is important to increase energy efficiency to meet energy demand. Fuel economy, a measure of energy efficiency in automobiles, plays a vital role in reducing the consumption of limited energy and decreasing greenhouse gases. After reviewing past literatures, I find that factors such as, vehicle type, the price of fuel, CAFE standards, the weight of a vehicle, and engine performance have affected fleet fuel economy of automobiles in United States. In order to find the impacts on average fuel economy of passenger cars and light trucks (SUVs), I devise two empirical models. I find that among various attributes, technological factors such as, the weight of a vehicle and performance of a vehicles engine, affects the fuel economy of passenger vehicles significantly.

Length of Contracts and the Effect on the Performance of MLB Players

Katie Stankiewicz, '09 — Mon, 03 Aug 2009 05:49:40 PDT

The goal of any professional athlete is to receive a multi-year contract that guarantees them a salary for multiple years. However, a concern that fans, coaches and owners all share is that when a player receives a multi-year contract they may have a strong incentive to shirk. Shirking is when a player purposely does not perform to the best of his ability and may occur when a player has a guaranteed salary. The goal of this paper is to determine if a Major League Baseball player with a multi-year contract will show any pattern of shirking throughout the contract. Each of the fifty players has a four year contract and the theories of moral hazard and asymmetric information suggest that a player may shirk during the contract until the last year. Descriptive statistics and OLS regression results provide evidence that Major League Baseball players with four year contracts do not have a pattern of shirking. Job security, above market wages and monitoring may be the important concepts explaining why there is no evidence for shirking.

Adopted Children"s Outcome as Young Adults in Regards to Educational Attainment and Income

Nicole K. Spear, '09 — Fri, 31 Jul 2009 10:44:56 PDT

This study explains the differences between the outcomes for children adopted by the age of two in comparison to biologically raised children using the National Longitudinal Survey of Youth. It analyzes the educational attainment and income earned through a competing effects framework. The Family Background Effect measures the positive effects caused by higher than average socioeconomic status of the average family with adopted children. The Family Background Effect contrasted with the negative Adoption Effect caused by a number of different factors that could work against an adopted child. Using linear regression analysis, the study finds that the Family Background Effect prevails over the Adoption Effect. Then the Oaxaca Decomposition technique breaks down the effects of each family background variable on educational attainment for the adopted young adult. It is determined that the differences in the average level of education of the respondents' mother explains over 50% of the' difference in educational attainment between adopted and biologically raised young adults.