Award Winning Economics Papers

Does Proximity to Wind Farms Affect the Value of Nearby Residential Properties? Evidence from Washington and New York States

Natalie Camplair — Thu, 13 Dec 2012 09:14:47 PST

The rapid growth of wind farms across rural communities in the U.S. has spurred concerns over the effect of wind turbines on residential property values. This paper presents a hedonic regression analysis of property values using a partial panel of properties from two counties in the United States. A total of 24 models are estimated. This paper compares the results of market and county-assessed data, interaction terms, and varying assumptions about the effect of wind turbines. This study finds weak evidence that property values near wind turbines are lower than nearby areas, but given methodological limitations and likely endogeneity bias further research is necessary.

Brains Over Brawn: Are There Lower Levels of Wage Discrimination Between the Sexes in Industries that Require Less Physical Strength and More Cognitive Skill?

Jessica Baier — Thu, 11 Oct 2012 08:55:21 PDT

With the advent of technological innovations, cognitive abilities have become increasingly valued in the workplace, while physical strength, an important requirement for manual labor, has become less important. One might expect, therefore, the gender wage gap to be lower in occupations that require more cognitive skills, as men’s comparative advantage should be lower in those industries. Using 2010 individual data from the PUMS, I test whether the gender wage gap varies by industry or occupation, grouped according to skill level. I decompose the gaps using the Oaxaca decomposition, and find that, while there is not a clear pattern of wage discrimination between the industry or occupation groups that were deemed as high-skill, the largest wage gap, and resultant level of discrimination, exists in the lowest skill group.

Do Commercial Banks’ Foreign Claims Affect Sovereign Bond Yields in the Euro Zone?

William Creedon — Thu, 11 Oct 2012 08:55:20 PDT

Do Bank Mergers Create Shareholder Value? An Event Study Analysis

Varini Sharma — Wed, 10 Nov 2010 06:34:20 PST

This paper investigates the economic role of bank mergers in creating shareholder value based on the idea that shareholder wealth will increase if the consolidation leads to the aforementioned gains. This paper is divided into seven sections. The second section of my paper provides an academic review of the literature, focusing on econometric theory that tests the gains in shareholder value and corporate synergies after a merger. The third section introduces a conceptual model I have designed using econometric tools to test how bank mergers create shareholder value. The fourth section embarks on a discussion about my ideal data followed by the fifth section about my actual data. The sixth section is an analysis of my actual regression results. It was found that the average bank merger has either no effect/ X effect on total firm value. The reasons for these results are also enumerated and critiqued in this section. The study of bank mergers remains an area of interesting econometric research because of the performance implications of such mergers and thus, the concluding seventh section will suggest possible areas for future research.

The Size Effect and the Capital Asset Pricing Model

Nikhil Gupta — Wed, 10 Nov 2010 06:26:39 PST

The Effects of Economic Factors in Determining the Transition Process in Europe and Central Asia

David A. Lopez — Tue, 02 Nov 2010 08:47:56 PDT

This paper examines how economic determinants affect foreign direct investment into a sample of Western European and transition countries from 1990 to 2003. The observed differences in the flow of foreign investment into the transition countries, relative to those in Western Europe, provokes the question of whether this phenomenon was determined by the economic factors present in those countries. Using a conceptual model constructed from economic factors that affect FDI inflows, this study considers the sample set for two sub-periods in the transition process, namely the early period from 1990 to 1998 and the later period from 1998 to 2003. In the first period, economic factors do not account for comparatively higher rates of capital inflows into the Central European and former Soviet economies. This result is reconciled with the obvious difference observed in reality, by suggesting that the higher than expected FDI flows into the transition countries of Central Europe specifically were due to the transition process. In the second period, the rates of capital inflow remain relatively similar between Western and Central European economies, though the former Soviet economies were shown to experience different rates of FDI inflows based on the economic factors specified. The lack of difference between Central European and Western European FDI flows proves that the transition period had come to any end by 2003 for Poland, Hungary and the Czech Republic.

Anonymity and Cooperation: Experimental Evidence from a Public Good Game

Dakota Ryan — Mon, 23 Nov 2009 11:52:18 PST

Does Perceiving a Shorter Life Expectancy Make You More Likely to Commit a Crime?

Jeremy Roth — Mon, 23 Nov 2009 10:49:18 PST

This paper develops an econometric model of crime using cross-sectional data for 2,728 U.S. counties in the year 2000. From the debate over the role of rationality in decisions based on heavy future discounting, I present a theoretical calculation for all costs faced by an individual deciding whether to commit a crime. This definition allows me to suggest a new variable for the economic study of crime, absent from the expansive body of literature available: the number of years an individual is expected to live. I find strong evidence that a higher perceived life expectancy has a negative impact on violent and property crime rates that carries both statistical and economic significance. Facing possible specification and omitted variable biases, I subject my results to robustness checks that provide encouraging results and a foundation for further research into the economic underpinnings of criminal behaviors.

Does Tax Increment Financing (TIF) Favor Properties Adjacent to the Development Site?

Atang Gilika — Mon, 23 Nov 2009 08:47:41 PST

Welfare Caseloads and the 2001 Recession

Andrew Goodman-Bacon — Wed, 29 Mar 2006 14:05:06 PST

This paper investigates the effects of welfare reform policies on the number of families receiving welfare (caseloads) since the 2001 recession. 1996's welfare reform legislation was passed amidst the longest economic expansion in US history, making it hard for researchers to estimate the role of policy. Furthermore, caseload research has not sufficiently explored the effects of specific policy choices within a broader reform package. This paper uses state panel data to examine the effects of specific policies on caseloads since the recession. Results indicate that since the 2001 recession, generous financial incentives to work reduced the number of families on welfare, while time limits and punishments for non-compliance had no impact. Taken as a whole, welfare reform helped move low-income women off of welfare in the 90s boom and subsequent recession.

Stock Option Repricing and Executive Turnover

Jon E. Flatnes — Mon, 20 Mar 2006 13:59:16 PST

With the increasing importance of stock options as a component of executive compensation , it is important to understand their effectiveness in aligning executive interests with those of shareholders and their function as a retention device. With the collapse of the tech stock bubble in the past three years, compensation committees of an increasing number of firms have repriced previously granted stock options downward. While many authors argue that downward repricing is essential to intentivize executives and to retain valuable managers, repricing also creates a potential disincentive to performance by granting the executive a potential windfall while the stock price plummets. Previous studies have been focusing on the underlying factors that determine the repricing decision, and less research has been addressing the consequences from this board action . This paper examines the effect of stock option repricing on executive turnover. Do firms that choose to reprice experience a relatively lower turnover rate among its top executives when compared to firms faced with circumstances in which repricing might be chosen, but chose not to? This paper is divided into six sections. Section 2 discusses the theoretical background and the existing literature on the topic. Section 3 outlines the conceptual model and discusses the ideal data. Section 4 describes the actual data, and develops the actual model. Section 5 shows the regression results and discusses the findings, and section 6 concludes.

Wage and Productivity Differentials across Privatized, State-Owned and De Novo Firms: Matched Employer-Employee Evidence from Slovenia

Matija Vodopivec — Mon, 20 Mar 2006 13:50:34 PST

How has the transition to a market economy affected the relationship between wages and productivity across different types of workers and firms? This paper examines this question using unusually rich matched employer-employee data from Slovenia over the 1992-2001 period. The findings include strong evidence that 1.) state-owned firms overpaid their employees at the onset of transition, a finding consistent with theoretical predictions on self-managed firms, 2.) older workers have become relatively less productive, indicating a difficulty in acquiring the skills demanded in a market economy, 3.) the relative wages of workers across demographic characteristics such as gender, age and education generally reflect their relative marginal productivity differentials.

Political Instability and Economic Performance: A Panel Data Analysis

Hazem M. Zureiqat — Mon, 20 Mar 2006 13:45:02 PST

This paper studies the relationship between political instability, measured by a country's Polity2 decmocratization score, and economic performance, measured by the GDP per capita. We use data from 1985 to 2002 for 25 countries in five different regions: Africa, Central and Eastern Europe, Latin America, the Middle East, and Southeast Asia. The results of the empirical models in this paper show a significant relationship between democracy and economic growth, but no significant sign of endogeneity (joint causality) as suggested by previous research. This paper also finds the 'optimal' Polity2 score that maximizes GDP per capita in each of the five regions.