Undergraduate Economic Review

Inflation Targeting and Growth: The Role of the Tradable Sector

Luis Monroy Gómez Franco — Wed, 08 May 2013 08:41:48 PDT

This paper provides an analytical explanation to the empirical association between monetary policy conducted according to the inflation targeting (IT) framework and the appreciation of the exchange rate, relating it to the literature on the effects of the exchange rate on growth. A two sector small open economy model is developed in which the behavior of the non tradable inflation and the nominal exchange rate are analyzed. The results indicate that the response to inflation variance under the IT regime causes the appreciation trend. Since this trend is not reversed immediately, increasing returns in the tradable sector affect capital accumulation.

An Econometric Analysis of Anti-Bullying Program Factors on Bullying in Public American Middle Schools and High Schools

Austin B. Beck — Wed, 03 Apr 2013 07:28:52 PDT

This paper seeks to answer the question: “Do typical factors of anti-bullying programs reduce the amount of bullying that takes place in American public middle schools and high schools?” An overview of the literature on bullying and anti-bullying programs is provided. Data from the School Survey on Crime and Safety is analyzed using a probit model. The model is tested for accuracy and the results are analyzed. Parental involvement and out-of-school suspension are found to be significant anti-bullying program factors. Other explanatory variables are also discussed and recommendations for further research are provided.

An Empirical Assessment of the Performance and Competitive Effects of Los Angeles County Charter Schools

Sam Trachtman — Wed, 20 Mar 2013 11:21:39 PDT

This paper evaluates the performance of charter elementary schools in Los Angeles County in three ways. First, I compare charter school performance to public school performance, controlling for a number of key characteristics. Second, I study the characteristics that appear to influence charter school success as compared to public school success. Third, I study the “competitive effect” of charter schools, examining how geographical proximity to charter schools affects the performance of traditional public schools. I find evidence that, ceteris paribus, traditional public schools score higher than charter schools, except in majority African American schools. Further, I find that the opening of charter schools affects nearby traditional public schools negatively.

Turning Followers into Dollars: The Impact of Social Media on a Movie’s Financial Performance

Joshua J. Kaplan — Fri, 01 Mar 2013 15:11:24 PST

This paper examines the impact of social media, specifically Twitter, on the domestic gross box office revenue of 207 films released in the United States between 2009 and 2011. We find that under two different specifications the impact of Twitter on gross revenue and gross revenue per theater is statistically significant when accounting for several control variables. The models show statistical significance of runtime, and production budget. We also find that a film’s release period, genre, rating received, and whether or not it is based on previous material proved to be statistically significant factors in determining a film's domestic gross.

Overfishing: Economic Policies in Finite Resource Biological Pools

Abdullah Nasser — Mon, 25 Feb 2013 07:31:40 PST

Common-property fishing is a classic example of the tragedy of the commons. Driven by competition, rational fishermen are forced to overfish to maintain marketplace viability. This shortsighted strategy will lead to the depletion of the common resource pool, and ultimately the destruction of the local fishing industry. In this paper, we present a dynamic differential system of a finite-resource fishing pool to model choices faced by average fishermen. We show that the situation mirrors a Prisonor’s Dilemma on the short- and long-terms, where overfishing is always the dominant Nash equilibrium strategy. Additionally, we use the model to analyze a multitude of policy measures to address the problem, and qualify their impact depending on how governments approach burden distribution.

Civic Engagement in Low Income and Minority Neighborhoods, and the Role of Public Investment

Saheli Nath — Mon, 25 Feb 2013 07:12:03 PST

This study uses principal component analysis to measure civic engagement in the low-income and minority neighborhood of Fair Park in South Dallas, and seeks to identify the implications of the influx of public investment in the Fair Park neighborhood on civic engagement.

The Effect of College Major on Labor Market Outcomes of Chinese Immigrants: An Examination of Undergraduate Major Choices and Their Impact on Employment and Earnings

Guanyi Yang — Wed, 09 Jan 2013 14:36:58 PST

Education is a crucial factor that determines labor market outcomes, especially for immigrants. This paper specifically examines the undergraduate major choice for Chinese immigrants and its relationship to their labor market outcome. Compared to other Asian groups and the mainstream society, Chinese immigrants are uniquely congregated in business and science categories. The level of popularity to a major is positively related to their labor market outcome. This finding reveals the current pre-market educational investment pattern for Chinese immigrants, and adds to the existing literature by focusing on how detail education quality in terms of major relates to labor market performance.

Pricing Lower or Buying Cheaper? How Grocery Consumers Pay Less during Seasonal Demand Peaks

Colin Watson — Wed, 19 Dec 2012 13:41:54 PST

The average price paid for a seasonal grocery category is (surprisingly) lower during the category's seasonal demand peak. For several product categories at one supermarket chain, demand peaks are shown to be associated with 1) consumer substitution to lower-quality products, 2) product price reductions, especially on products that increase their market shares, and as a result 3) a decline in the average price paid for the product category. In one very seasonal category, price reductions are driven by intertemporal substitution associated with large weekly discounts. Findings are consistent with any of several loss leader models.

Systemic Uncertainty: An Examination of Its Causes and Repercussions

W. Soren Kreider IV — Wed, 14 Nov 2012 14:56:24 PST

This paper examines the nature of systemic uncertainty and the character of public policy which causes it by analyzing two time periods as case studies of how systemic uncertainty is generated by public policy choices. I analyze financial data and polling data for evidence of systemic uncertainty to identify the form of public policy and political leadership which results in the occurrence of uncertainty. My findings suggest that systemic uncertainty is generated by a lack of commitment to the protection of private property and/or a willingness to arbitrarily implement changes to the tax and regulatory structure in the future.

The Effect of Women’s Intrahousehold Bargaining Power on Child Health Outcomes in Bangladesh

Eleanor M. Schmidt — Tue, 13 Nov 2012 11:47:00 PST

Trends in developing economies suggest that as relative female intrahousehold bargaining power improves, consumption preferences favor basic needs which promote child welfare. This study seeks to examine whether greater household bargaining power by Bangladeshi women is related to an improvement the health of their children. Results suggest that certain aspects of bargaining power, including female participation in decision-making about child health care, large household purchases and daily needs, are associated with larger child height-for-age z-scores. There exists a positive correlation between children in families where their mothers have decision-making authority and child health outcomes.

Is Tech M&A Value-Additive?

Ani Deshmukh — Mon, 12 Nov 2012 08:41:57 PST

Given rising M&A deal volume across all high-tech subsectors, the ability to measure post-acquisition performance becomes critical. Despite this growth, the relevant academic literature is severely lacking (Kohers and Kohers 2000). Using an event-study approach, I find that acquirers and targets both realize statistically significant day-0 abnormal returns (1.23% [p<0.1] and 8.1% [p<0.01], respectively). As positive stock returns signal positive growth prospects in a semi-strong efficient market, AR regressions found that firms' technological relatedness, deal financing, purchase price premiums, and the relative book to market ratio, explained most variance. Overall, high-tech transactions are value-additive for both targets and acquirers.

Does Player Performance Increase During the Postseason? A Look at Professional Basketball

Jordan Weiss — Tue, 06 Nov 2012 09:36:15 PST

This study examines the game logs of professional basketball players to determine whether they exhibit elevated performance during the postseason. In a survey of 10 players who were awarded the Most Valuable Player Award during the NBA Finals for the seasons 2001-02 thru 2010- 11, performance was found to be stable throughout the entire season. Implications for why player performance remains stable and why it believed that player performance increases during the postseason are discussed.

A Household Model of Careers and Education Investment

Jessica F. Young — Tue, 06 Nov 2012 08:52:46 PST

This paper develops a two-stage non-cooperative household game, in which parents make career decisions and an investment into their child’s human capital. The model is solved for Nash equilibrium outcomes and extended for a cooperative solution. In non-cooperative pure strategies, both parents choosing to work is a Nash equilibrium, though there are alternative outcomes when the conditions underlying the career decision are varied. The investment behaviour of agents is analysed. We find that choices are critically affected by the magnitude of the cost (and reflected quality) of a high education investment relative to a low investment, and the intrinsic value that a parent places on the child’s future success. The cooperative game demonstrates parents maximise their investment in order to provide their child with a high quality education.

Undergraduate Economic Review: Recent Trends Report

Jake Mann — Mon, 10 Sep 2012 13:31:36 PDT

The Undergraduate Economic Review is a peer-reviewed, internationally distributed open-access journal aimed at promoting high quality undergraduate research. It is supported by the Ames Library and the Department of Economics at Illinois Wesleyan University. The journal has been in existence for eight years, and has published many notable articles from a variety of undergraduate institutions. This report provides an overview and preliminary analysis of statistics and data from Berkeley Electronic Press and Google Analytics reports.

The Growing Concern of Poverty in the United States: an exploration of food prices and poverty on obesity rates for low-income citizens

Catherine Gillespie et al. — Fri, 11 May 2012 07:50:34 PDT

Studies demonstrate the link between income and obesity, determining factors to explain the strong correlation between high body mass index and low socioeconomic status. Many focus on uncovering predictors but few use a systems approach: identifying the interaction among predictors and their relative magnitude concerning obesity. This study asks: do poverty or food price indicators have a statistically stronger relationship with obesity?

By collecting data, evaluating trends, and analyzing statistics, this study extends research by revealing a stronger relationship between obesity and food prices as opposed to obesity and poverty.

Immigrants, Medicaid, and the Deficit Reduction Act

Nicholas T. Fritsch — Thu, 10 May 2012 13:44:55 PDT

This study examines the effects of the Deficit Reduction Act (DRA) on immigrant Medicaid participation using data from the 2005 and 2007 March supplements of the Current Population Survey. The DRA made changes to Medicaid coverage laws by requiring proof of citizenship for eligibility rather than a sworn statement, as was the case prior to the DRA, thus reducing the non-citizen/non-legal permanent resident use of Medicaid. A difference-in-difference methodology is used, and the research finds that the laws were effective in decreasing non-citizen use of Medicaid relative to citizens, though there is a possibility of “chilling effects” on eligible non-citizens.

Demand for Money and Exchange Rate: Evidence for Wealth Effect in India

Sahadudheen I — Sat, 17 Mar 2012 23:06:19 PDT

External factors such as variations in exchange rates should, to some extent, affect the composition of optimal money holdings. It was Robert Mundell who proposed the idea that demand for money could depend on the exchange rate in addition to the income and interest rate. Changes in exchange rate may have two effects on the demand for domestic currency, wealth effect and currency substitution effect. The main objective of the paper is to examine the effects of exchange rate on domestic demand for money in India covering the period of 1998Q1 to 2009Q4. The statistical and time series properties of each and every variable are examined using the conventional unit root test and utilizes Johansen-juselius cointegration analysis to test for the existence of a long run relationship between the determinants and the error correction from the long rum money demand is then used. The results shows a little evidence for the basic contention that exchange rates have a significant influence on money demand and increase in exchange rate not results in reduced domestic demand for money in India.

Shanghai as an International Financial Center - Aspiration, Reality and Implication

Raph Luo — Mon, 12 Mar 2012 19:28:44 PDT

China’s rapid economic development, especially in the financial sector, has ignited the discussion of the re-emergence of Shanghai as a leading international financial center (IFC). Much still remains to be done for Shanghai to catch up with established centers such as New York and London, including deepening its capital markets and opening itself up to cross-border capital flows. While Shanghai’s current financial development has been made possible largely by China’s past economic conditions and policies, recent reforms are also likely to guarantee Shanghai the position as a world-class onshore IFC in the near future. The rise of Shanghai will likely benefit China’s economic structure, as well as that of Asia-Pacific region and the whole world.

Returns from Self-Employment: Using Human Capital Theory to Compare U.S. Natives and Immigrants

Nikola Popovic — Tue, 06 Mar 2012 22:18:31 PST

The focus of this paper is to examine the economic returns from self-employment when comparing natives and immigrants. I hypothesize that returns from self-employment will increase with age and education, and that immigrants from China, India, and the Philippines will have higher returns while immigrants from Mexico will have lower returns than natives. I also hypothesize that immigrants with high levels of education will earn more than natives with the same amount of education. The OLS regressions show that human capital variables explain the differences in self-employed income between natives and immigrants, as the literature suggests.

Economic Shocks, Trade and International Relations

Jack Barnes Thompson — Thu, 23 Feb 2012 12:53:10 PST

In an interdependent world, trade has unavoidable game aspects. A model with two agents is used to determine the impact of trade and a military alliance between two major world players, North America and China, and an external non-actor, South Korea. The objective of this study is to investigate the impact of cooperative actions and outcomes by the two agents on a two-track policy for South Korea. We also study a variant to the game by considering a change in international relations. Welfare implications are also observed.