Senior Project Abstracts 2004

Name: Jonathan Albaugh
Date: Spring 2004
Major(s): Economics
Thesis Committee: Asuman Baskan, Earl Adams
Title: Factors Effecting the Annual Salary of Dentists

Abstract: This study analyzes the effects of foreign-born citizens, Medicaid, and fluoridated water on the annual salary of dentists. Data from the US Census Bureau was collected and a multivariate regression was employed. It was found that a percentage increase in foreign-born citizens and individuals covered by Medicaid led to an increase in the annual salary of dentists by $1070 and $1163 on average, respectively. In addition, a percentage increase in individuals with fluoridated drinking water led to a $214 increase, on average. Therefore, using the data from this study, one could forecast the expected mean salary of dentists based on predicted changes in the explanatory variables. Furthermore, the present value of the stream of salaries for each year could be calculated to aid a student in deciding if dentistry is a profitable enough profession for him or her.

Name: Marc Chagnon
Date: Spring 2004
Major(s): Economics
Thesis Committee: Earl Adams, Asuman Baskan
Title: Earmarked Spending in Federal Appropriations Bills: A Study of its Inefficiencies and Political Influences

Abstract: This paper examines the inefficiencies and political influence associated with earmarked spending found in the Federal Appropriations Bills. A theoretical model is developed that describes the relationship between legislators and constituents, in which legislators have the incentive to act opportunistically in order to gain votes. This model is based largely on a theory presented by Oliver Williamson, dealing with the governance of a firm’s contractual relations. The results of the theoretical model prescribe third party intervention in the earmarking process by the states in order to minimize inefficiency and wasteful spending. Empirical evidence is used to show the effects of factors such as holding the Chair position, of either the entire process or the specific bill, and having a seat on an Appropriations Committee in determining federal funding. In several ordinary least squares regressions utilizing U.S. Senate data, holding the Chair position increased federal funding for the chairman’s state by $51.3 million on the average, while being a member of the Appropriations Committee increased funding for those Senators’ states $3.86 million on average when it was a significant factor. This paper finds strong evidence to support a hypothesis that congressional earmarking comes at a large cost of project biases, is influenced by political variables, and fails to maximize federal funding efficiency.

Name: Sean Croner
Date: Spring 2004
Major(s): Economics
Thesis Committee: Stephen Casler, Janine Sickafuse
Title: The Competitive Advantage of Contracted Labor: A Nike Case Study

Abstract: The purpose of this project is to provide information on how companies, specifically Nike, has used contracted labor to gain a competitive advantage over their competitors in the industry. Labor laws in Asia are not up to the standards set in the United States, so companies are able to outsource their labor for a lower price. With such factors as an ever-increasing population, Asia’s working wage is significantly lower than the one in the United States and this is one of the main reasons why factories are able to provide such a low cost of labor to American companies.

The concept of Competitive Advantage can be broken into multiple segments, each contributing to the main idea. Michael Porter explains how each of these segments adds to the greater picture of competitive advantage. Nike used these concepts of competitive advantage to their benefit within its industry to go above and beyond the competition. Nike has been able to develop relationships with manufacturers that would build factories in countries to receive the lowest-cost labor. As a result, Nike has developed into the largest athletic footwear, apparel and sports equipment company in the world.

Name: Valerie DeMatteo
Date: Spring 2004
Major(s): Economics, Communication Arts
Thesis Committee: Earl Adams, Michael Keeley
Title: The Impacts of Deregulation within the Telecommunications Industry

Abstract: The telecommunications industry fosters mass media entertainment and has been and will continue to be a constant source of influence over the American public. The industry has always been regulated because of a need for organization and market control. Early regulations were more influential in creating competition and protecting public interest than current legislation. Deregulation by the FCC began in 1985 and was intensified by the Telecommunications Act of 1996.

The act of 1996 includes regulation that allows stations to own more communication outlets and therefore monopolize a large part of the media market. Deregulation of the industry created a lack of concern for public interest and increased prices and decreased economic value for consumers. By analyzing the history of telecommunications and the regulations set for the industry, it is evident that there has been a regressive change made within the last three decades. Case studies of companies that have recently merged illustrate the economic effects that the bill has had on consumers. In general, the deregulation of the telecommunications industry has negatively affected the economic and social state of American entertainment.

Name: Phillip DiSilvio
Date: Spring 2004
Major(s): Economics
Thesis Committee: Earl Adams, Stephen Casler
Title: The Effects of Welfare Reform and a Strong Economy on Labor Force Participation in the Late 1990s

Abstract: In the late 1990s, the labor force participation rate increased substantially. During the same time period welfare reform was well under way along with a booming economy. Welfare reform and what it was intended to do is looked at along with the economy in the late 1990s. What determines the labor force participation rate will be clarified and the decision of individuals to work will be explored through microeconomic principles. By using a multiple regression model the paper investigates what played a larger role in adding to the labor force participation rate, the effects of welfare reform or the booming economy of the period. The research shows that based on the data used, the strong economy contributed more to the participation rate rise than did the effects of welfare reform. However, an income effect may have been picked up on by the dummy variable in the regression, which could be downplaying the effect of welfare reform. In addition, if data for the labor force participation rate of single mother households were available then a different result may have emerged.

Name: Lauren Donato
Date: Spring 2004
Major(s): Economics
Thesis Committee: Don Goldstein, Janine Sickafuse
Title:Post-Merger Integration’s: A Business Marriage Counseling Guide

Abstract: This paper examines the various factors that can lead to the success or failure of a merger during the integration process. Given the wide range of information on merging and acquisition approaches it is interesting to wonder why so many of these kinds of business transactions fail. Research has found that the success of a merger is largely dependent on the success of the integration phase. Since the integration stage of the merger process is mostly dependent on cooperation from employees this paper focuses on the different kinds of management approaches and techniques. After analyzing the different theories of management and steps taken during integration, this project takes a specific look at one of the largest transatlantic mergers in history, the DaimlerChrysler merger. The DaimlerChrysler merger reinforces the fact that there is no clear cut recipe for merger success; several proactive procedures were taken during the integration phase and the merger is still considered a failure.

Name:William Dungee II
Date: Spring 2004
Major(s): Economics
Thesis Committee: Stephen Casler, Earl Adams
Title: Factors Underlying High Unemployment Amongst African Americans

Abstract: Every year the unemployment rate fluctuates. Some years it may be high, some years average, and then other years low. But one thing has held constant every year, that there is a gap between the unemployment rate of blacks and whites. This gap has been prevalent ever since 1940′s when the unemployment rate was first officially recorded. Since 2001 the beginning of the latest US recession, this gap is not only widening but at an increasing rate. With high labor supply and low labor demand, there is a larger surplus of blacks out of work than whites, but why? This study examines how GDP, average wages and salaries, labor force participation, and outside trends have contributed to this discrepancy.

Through multiple regression analysis I proved that GDP and outside trends were definitely significant in the level of unemployment for blacks and whites. This study shows that blacks are more closely linked to the amount of production in the manufacturing sector, a sector that has the highest rate of entry and exit and a sector that is becoming more and more obsolete every day. With the implementation of government programs for low-income areas, w can start on a local level to prepare African American both children and adults alike, with the education and skills to be successful in the “new economy.” This will in return, help close the level of unemployment differential between whites and blacks.

Name: Adrian Filip
Date: Spring 2004
Major(s): Economics
Thesis Committee: Behrooz Afrasiabi, Stephen Casler
Title: Market Volatility and the New York Stock Exchange: Is Beta Constant?

Abstract: The purpose of this study is to measure the time-varying behavior of three different stock betas in various segments of the New York Stock Exchange using 6 years of monthly data. Although there is considerable evidence on time variation in betas, it is not clear how this variation should be captured. This study addresses the question of whether the variation in the estimated stock betas can be explained. The study uses two methods: a Chow test and a random coefficient model with dynamic parameters to investigate whether the change in beta can be modeled by an autoregressive process. The findings of this study point to considerable instability in the structure of the Capital Asset Pricing Model (CAPM) and suggest that the simple constant-beta assumption is questionable. Since beta is one of the most widely used measures of risk among practitioners and financial economists, these findings have important implications for asset pricing theory, portfolio selection, and event study analysis. The data used in this project consisted of monthly stock returns for the period of January 1, 1998 to December 31, 2003 and was obtained from the CRSP database.

Name: Michael Fischer
Date: Spring 2004
Major(s): Economics
Thesis Committee: Tomas Nonnenmacher, Asuman Baskan
Title: The Slaughterhouse Cases: their Political and Economic Implications

Abstract: The Slaughterhouse Cases deal with a state’s ability to create a monopoly. Two modern schools of economic regulation, the interest model and the market failure model, are applied to the Slaughterhouse Cases. The justices, who affirmed the lower court’s decision, believed that the Louisiana legislature used its police powers to correct a health concern. The majority opinion is based on using regulations as a way to counteract a market failure. The justices who dissented believed that the measure created by the legislature was unjust since it produced a monopoly. Justices Field and Bradley expanded the interpretation of the Fourteenth Amendment to support their positions. The case highlights the debate on when it is appropriate to pass regulations, and when the government intervention goes too far and adversely affects an individual’s economic liberties.

Name: Eric Johnson
Date: Spring 2004
Major: Economics
Thesis Committee: Stephen Casler, Behrooz Afrasiabi
Title: Why in a Recovering Economy is Unemployment Still Rising?

Abstract: In 2001 the economy entered a recession, its first recession since the recession of 1991. The 2001 recession people think was caused by the attacks on America on September 11th 2001 but it really was not. The economy had entered a recession before September 11th but the government did not announce it until after September 11th. Both of these business cycles were called a job-loss recoveries rather than jobless recoveries. Right now employment is declining the most drastically it has since World War II. This big loss in jobs is bad for the economy because people will be worried about not having jobs and will save more and spend less because most layoffs are permanent rather than temporary. Most of the jobs are manufacturing jobs and are being sent overseas or are being replaced with better technology. The business cycles of 1991 and 2001 will be looked at and compared. Also a general history of business cycles will be looked at to explain trends in business cycles.
Several macroeconomic factors will be looked at also; these include labor demand, labor supply, the production function and also the labor market equilibrium. Also looked at will be reasons for unemployment along with examples of shifts in curves and unemployment. The purpose of this study is to determine the factors that are causing this Job-loss recovery and what can be done to create more jobs.
Finally I will run and interpret a regression model using a dummy variable. The variables used will be growth or change in GDP, employment, investment, total compensation, CPI, labor productivity, and unemployment rate. The results will help to explain why the unemployment rate is so much higher than it was before 2001, we will also be able to see what factors are significant and or insignificant to the model. Also discussed is what can be done to help get more jobs back in the United States, which includes more manufacturing jobs staying in the United states.

Name: Patrick Keating
Date: Spring 2004
Major(s): Economics
Thesis Committee: Tomas Nonnenmacher, Janine Sickafuse
Title: The Effects of Insider Trading on Global Markets

Abstract: This paper is aimed at answering a few basic questions such as: is insider trading really detrimental to stock markets? How did markets function prior to insider trading laws? How do other countries handle the insider trading issue? I analyze the pros and cons of insider trading, concluding that markets can and will function with insider trading. I analyze how other countries handle the issue of insider trading. By examining how Australia, Canada, Japan, the United Kingdom and the United States handle and have handled insider trading, I gained an international perspective of insider trading, which helped me determine whether or not insider trading has a negative impact on the market. I then examined the empirical work of two academic papers, which helped me determine the effects of insider trading laws on the market. I found that insider trading laws help deter insiders from trading, but these laws must be enforced to be a real deterrent to insiders. I conclude that the real problem is enforcing insider trading laws and until these laws are enforced, insider trading will affect how people invest money.

Name: David Keck
Date: Spring 2004
Major(s): Economics
Thesis Committee: Don Goldstein, Stephen Onyeiwu
Title: Innovative Strategies in the Skies

Abstract: In my comprehensive thesis project I intend to examine the economic theory of innovation strategies and how they apply to a competitive market. I will first discuss the five innovative strategies and how they are practiced and applied in the business realm. I will then apply these theories to the competitive aircraft manufacturing industry. To fully evaluate the economic theories, I am going to focus on the two major aircraft manufacturers: Boeing and Airbus Corporations. In focusing on these two corporations I hope to discover how innovative strategies affect a competitive market and what affect an innovative strategy has on a company’s market share and sales revenues. In order to achieve my thesis, I am going to analyze both Airbus and Boeing Corporations research and development programs to see what kind of strategy they are implementing. Then I will see how effective their strategy is by looking at their market share along with their sales revenues from recent years. This will hopefully give me enough information to evaluate each company’s status in the market, and decide whether or not their innovative strategy is working, or whether it should be change.

Name: Robert Kusick
Date: Spring 2004
Major(s): Economics
Thesis Committee: Stephen Onyeiwu, Tomas Nonnenmacher
Title: The Economics of Offshore Outsourcing

Abstract: Similar to the NAFTA debates of the 1992 Presidential Election, the outsourcing of jobs has become the trade topic being argued this year. Outsourcing is not a new concept, as firms have been outsourcing within their respective manufacturing models for years. Through an increase in technology, the effects of outsourcing have now shifted and include more of the service sector. Workers now affected include an increasing number of college graduates, mainly in the Information Technology field.

The study first predicts that outsourcing makes economic sense, and is beneficial to the United States economy in the long run. It is shown that economic theories also predict this via an increase in productivity resulting from the ability to outsource. To test this hypothesis, a case study of Dell, Inc. is used to measure its productivity over the last decade. During this time, Dell has been a pioneer in outsourcing some of its factors of production, and we test the effects of those decisions on job loss, wages and productivity. The study concludes that through an increase in productivity, jobs are actually created within the United States that also offer higher wages. The study ends with policy suggestions for those workers negatively affected by free trade and outsourcing.

Name: Michael Mansfield
Date: Spring 2004
Major(s): Economics
Thesis Committee: Don Goldstein, Stephen Onyeiwu
Title: High-performance Work Systems: Do Firms and Employees Really Benefit? A Study of Internal Capabilities, High-performance Work Systems and Case Study

Abstract: Over the years, competition from foreign markets has forces the United States steel industry to redesign manufacturing capabilities. However, the one variable that has remained constant is the focus on internal capabilities, more important, human capital. I will investigate the impact of HPWSs in the United States steel industry by examining a firm in the US Steel industry. Focusing on the competitive dynamics of HPWSs, I will examine the role that plant-level organizational changes and internal capabilities, such as employee involvement, could play in enhancing the competitive advantage in the steel industry. However, do such systems affect the way in which human capital is portrayed in the steel industry? The incorporation of high-performance work systems will increase a firm’s productivity only if the firm and its managers allow empowerment of its employees. During my experiences employed at a steel mill, it seems as if old, vertical management systems are still being used in the mill. Workers are not treated as equals with respect to management. This has created a problem and has hindered the effectiveness of the new, horizontal systems.

Name: Kimberly Meszaros
Date: Spring 2004
Major(s): Economics
Thesis Committee: Stephen Onyeiwu, Don Goldstein
Title: Entrepreneurship and its Role in the Modern Economy: A Case Study on the Beauty Salon Industry

Abstract: Entrepreneurs play important roles in the American economy. However, much confusion still surrounds the theory of entrepreneurship. This study explores theories of entrepreneurship and their relevancy in the explanation of modern entrepreneurs. The hypotheses posed by the classical theorists are tested on the basis of empirical evidence from the beauty salon industry. Issues reviewed in the empirical chapter are geared toward entrepreneurs looking to implement a successful business plan in the modern salon industry. Evidence from the empirical study proves that the two key problems for entrepreneurs entering into the beauty salon industry are lack of financing for initial outlays, and lack of skilled workers in the industry.

Name: Frank Wesley Morgan III
Date: Spring 2004
Major(s): Economics
Thesis Committee: Janine Sickafuse, Don Goldstein
Title: Building MLB Stadiums: Have They Gone From Being A Competitive Advantage To A Competitive Necessity?

Abstract: This project explores whether or not building a Major League Baseball stadium went from being a competitive advantage to a competitive necessity. If a competitive advantage was gained, it also tries to determine what factors contributed to this advantage. Chapter one simply serves an in introduction. It discusses how the views and attitudes have changed over the past decade about single-sport stadiums. Long before the current facility craze, stadiums simply acted as a venue where games were played and often were shared by both a baseball and football team. However, as technology advances, stadiums have become a huge tool in allowing a team to significantly increase their total revenue. Chapter two presents an overview of what a competitive advantage and competitive necessity are. It also introduces factors that allow a team to gain a competitive advantage and whether or not this competitive advantage is sustainable. Being the first to build a new stadium, a team gains an advantage by becoming the first-mover into the market. However, stadiums are not an intangible resource and do not allow a team to maintain a sustainable competitive advantage. Because they are not sustainable, stadiums have become more of a necessity to a team, rather then an advantage. Chapter three is devoted strictly to a case study involving eight teams that have built a new stadium; four from the early 90s and four from the late 90s and early 00s. The empirical evidence being studied for all eight teams is total revenue, total revenue as a percentage of league average, team payroll, and team payroll as a percentage of league average, all in the five years surrounding a new stadium. The empirical tests developed suggest that building a new stadium did go from being a competitive advantage to a competitive necessity in Major League Baseball. Chapter four serves as a concluding chapter, which summarizes and interprets the findings of this project. It also recommends other research and tests that could be used to compile
a more detail analysis.

Name: Lindsay Nagle
Date: Spring 2004
Major(s): Economics
Thesis Committee: Stephen Onyeiwu, Tomas Nonnenmacher
Title: Brand Development in Monopolistically Competitive Markets: A Focus on the Ready-to-Eat Breakfast Cereal Industry”

Abstract: Branding and Brand Development are common catchphrases in today’s business world. This project focuses on how Brand Development, specifically in the Ready-to-Eat breakfast cereal industry, can be directed to create a unique and differentiated product within a monopolistically competitive market. Topics of Data Collection, Innovation, Brand Identity, Brand Personality, and Brand Loyalty serve to detail the Brand Development process and are showcased through successful case studies.

Once the good being produced is differentiated from its other competitors it holds a special place in the market and the producer assumes increased control over price, acting virtually as a monopolist. A regression analysis is included to find the relationship between Advertising Expenditure, R&D Expenditure, Net Sales, and Product Nature on the Price Elasticity of Demand. Conclusions state that R&D Expenditure and Net Sales have no impact on Price Elasticity of Demand, yet alterations and further study could be made in the analysis that would enhance the results.

Name: Dan Niewoehner
Date: Spring 2004
Major(s): Economics
Thesis Committee: Asuman Baskan, Earl Adams
Title: Credit Card Use and Compulsive Spending by College Students

Abstract: Compulsive spending is described as chronic, continuous purchasing that develops into a primary response resulting from negative events or feelings. This type of behavior is on the rise in American college students along with student credit card use. This paper explores the link between compulsive spending and credit card use in college students, and calls for government regulation pertaining to the credit card industry in order to prevent student compulsive spending. This paper first delivers a brief history of the credit card market, providing a synopsis of the industry’s evolution into its current state. Accordingly, the discounting consumer model is then used to provide an economic representation of consumer behavior for the compulsive spender. The empirical analysis in this paper tests the hypothesis that an increase in compulsive spending has occurred in the college community, which can be linked to credit card use. This is explored through a survey administered to a population of Allegheny College students. In this study it is found that an increase in compulsive spending has occurred when compared to a similar study performed in 1998. In addition, results show compulsive students, on average, hold more credit cards and are more likely to pay the minimum on their credit card bills.

Name: N. Stephen Olsavsky
Date: Spring 2004
Major(s): Economics
Thesis Committee: Stephen Casler, Tomas Nonnenmacher
Title: Supply and Demand: How to Win the War on Drugs

Abstract: In 1971 President Nixon declared drug abuse as “public enemy number one in the United States” (“Frontline”). Even though this war has been a top priority, the survey shows that the percent of 12th graders using any illicit substance within 12 months of taking the survey has decline by less then five percentage points from the inception of the Monitoring study. In 2002 alone, 53% of America’s twelfth graders had used some form of an illicit drug within the 12 months preceding a national survey on drug use (Monitoring 445) even though the Federal government spent $18,822,800,000 on drug control (ONDCP 6).

The purpose of this study is to both determine the extent of which the war on drugs has been successful and find variables that are significant in determining cocaine use. This study begins with an analysis of supply and demand theory and then applies that theory to the war on drugs. Markets are examined theoretically in order to build a model for the drug use of America’s 12th graders. A regression using cocaine use in 12th graders from 1975-2002 as the dependent variable is then used to determine what variables are significant determinants of cocaine use. From this regression, the presence of the Clinton Administration and a variable for trend were the only significant variables. DEA spending actually had a positive relationship with cocaine use, adding weight to the argument that enforcement and the supply-side approach to the war on drugs is not the appropriate means to fight the war. From this data, suggestions of how policy should be structured in order to better fight the war on drugs are made.

Name: Christopher Pavlekovsky
Date: Spring 2004
Major(s): Economics
Thesis Committee: Stephen Onyeiwu, Behrooz Afrasabi
Title: AN INVESTIGATION INTO HOW LEADING FIRMS MANAGE INNOVATION

Abstract: This paper is an investigation into how diversified companies manage innovation in the newly globalized economy. Through high absorptive capacity, fast innovation speed, multiple partnerships and globalized R&D, leading firms are able to create a competitive advantage and retain their leadership position. A case study is used to demonstrate how General Electric (GE) manages its innovation activities for its 11 business units

Name: Shawna Pepper
Date: Spring 2004
Major(s): Economics
Thesis Committee: Don Goldstein, Tomas Nonnenmacher
Title: Strategic Planning of Magazine Firms: An Analysis of the Five Forces of Competitive Advantage Applied to a Particular Slice of the Magazine Industry

Abstract: My goal for this thesis is to clarify to myself and to my readers the importance of having a strategy in order to gain competitive advantage in a market, specifically in the magazine industry. The importance of possessing such an asset for firms is because a strategic model holds a firm together and helps managers to begin and continue with the success of a company. However, many concepts go into a strategy, not just the ideas managers may have to contribute to their objectives. The importance of having a well-rounded knowledge of the core competencies of a firm, knowledge of the internal and external forces of a company and a solid organization to implement into a strategy in order to gain competitive advantage in an industry is essential for firms to have before formulating a strategic plan that will help a firm gain recognition and solid placement in an industry. These ideas and concepts are what I will be discussing and applying throughout this thesis to my own unique idea for a magazine firm in hopes of formulating a quality strategic model for a chance at a competitive advantage in the magazine industry.

Name: Aaron Polack
Date: Spring 2004
Major(s): Economics
Thesis Committee: Asuman Baskan, Earl Adams
Title: The Hedge Fund Puzzle: Challenging Traditional Finance Theory

Abstract: In the past decade, hedge funds have exploded onto the investment scene. Estimates suggest that there are presently over 7,000 hedge funds representing more than $600 billion in assets under management. This paper seeks to explain the hedge fund genesis and unravel traditional financial theories; such as the relationship between risk and return, and the Capital Asset Pricing Model. The CAPM theory states that in efficient markets alpha should be zero for all assets. If alphas are significantly positive then the asset or fund has achieved abnormal returns due to some superior skill possessed by the manager. This paper tests for significantly positive alphas in 14 different hedge fund strategies using regression analysis of the CAPM. This study finds all 14 strategies to have significantly positive alphas indicating superior manager skill. Superior skill of hedge fund managers is derived from lack of disclosure requirements and limited regulation. However, with hedge fund catastrophes such as Long Term Capital Management and after hour trading scandals, I question the sustainability of their superior advantages in the futgure. I predict that hedge funds will soon encounter increasing security regulation and disclosure requirements, which will ultimately diminish the abnormal returns they were once generating.

Name: Brian Root
Date: Spring 2004
Major(s): Economics
Thesis Committee: Tomas Nonnenmacher, Behrooz Afrasiabi
Title: The Underlying Hypocrisy of Prohibition: A Socioeconomic Analysis of the Eighteenth Amendment

Abstract: The Eighteenth Amendment was enacted to prohibit alcohol consumption. National Prohibition banned the “sale, manufacture, and transportation” of intoxicating liquors. But did this constitutional amendment actually succeed in eliminating alcohol consumption within the forty-eight states? Most recollections and opinions regarding alcohol consumption vary, and so do the estimates about the amounts of alcohol consumed prior to prohibition. This paper demonstrates the impact Prohibition had on American society through personal accounts and a statistical analysis of a consumption function.

Conflicting accounts regarding the result the temperance movement had upon alcohol consumption will be analyzed along with the impacts of statewide prohibitions. The consequences of statewide prohibition will be used as a catalyst in the analysis of the impact that national Prohibition had on the United States.

Many problems arise when estimating an illegal good. We will discuss the strengths and weaknesses of using proxy variables (cirrhosis and drunken arrests) to estimate alcohol consumption in the early twentieth century. Formulating a utility function will help to explain reasons for continued alcohol consumption during Prohibition.

Finally, using variables that pertain to statewide prohibition will be utilized in an evaluation of the affects of national Prohibition. Total population, Gross National Product, number of dry states, and the percentage of the population living within dry states will combine to form the consumption equation calculating the impact of the Eighteenth Amendment. The combination of the personal accounts with the statistical analysis proves that national Prohibition had no significant impact upon alcohol consumption.

Name: Daniel Selfridge
Date: Spring 2004
Major(s): Economics
Thesis Committee: Stephen Casler, Behrooz Afrasiabi
Title: Examining the Trend of Increasing Investment in Higher Education

Abstract: It is clear that the number of individuals attending higher education has continually increased over the past fifty years. However the reasons people have for attending higher education may not be so simple. This project examines the increasing trend of individuals choosing to invest in higher education as a form of human capital, as well as what specific factors could lead to creating this trend. First, the history of education and function of education will be examined. A brief description of how education works and some historical events that have shaped the way society has come to view education will be presented. An underlying analysis will then be presented by use of the human capital model. The human capital model will be used to show why individuals choose to invest in differing levels of education to satisfy the amount of earnings that they desire in the future. The education investment decision as well as discontinous employment will be examined in depth by the model. Next, a regression analysis will be used in order to determine that the independent variables: Population, Labor Force Participation Rate, Unemployment Rate, Median Family Income and Government Expenditure on Education, will have an effect on the number of individuals enrolling in higher education institutions. Finally, some general conclusions will be made upon the findings of the project and how

Name: Richard Seward
Date: Spring 2004
Major(s): Economics
Thesis Committee: Stephen Onyeiwu, Janine Sickafuse
Title: How Technologically Innovative Companies Deal with Uncertainties Encountered in the Innovation Process

Abstract: The ultimate goal for competitive firms is profit maximization, and in order to achieve this goal, firms must acquire a competitive advantage in the market. To achieve a competitive advantage, firms are forced to innovate, hopefully introducing a new product into the market that rewards the firm monopoly returns. Every firm that innovates is faced with uncertainties that often lead to the failure of an innovation. In response, firms are forced to use management techniques that reduce uncertainty. In this paper, I explore the two different types of uncertainties: technological uncertainties and market uncertainties. The different management techniques that firms employ to reduce uncertainty and the market structure of the cellular telecommunications is also explored. In addition, I analyze two firms in the highly competitive cellular telecommunications industry, Nokia and Motorola. I show how Nokia has become extremely successful and how Motorola has stumbled over the past decade, and attempt to explain why this has happened through the effectiveness or mismanagment of uncertainty.

Name: Anthony Simon
Date: Spring 2004
Major(s): Economics
Thesis Committee: Janine Sickafuse, Stephen Onyeiwu
Title: NASCAR vs. Major League Baseball: An Analysis of Fan Loyalty

Abstract: NASCAR and Major League Baseball are two of the most popular professional sports in America. Recently however, while NASCAR’s fans have become evermore loyal, Major League Baseball’s fans have become increasingly upset (Mizell). Much of the animosity of the fans towards the players is due to the rise of the players’ salaries (Fort Sports Economics 193-194). This begs the question, if NASCAR drivers and Major League Baseball Players both earn their marginal revenue products, why are the fans more upset with Major League Baseball players than NASCAR drivrs.

The marginal revenue and marginal products of both NASCAR drivers and Major League Baseball players are analyzed. The determination of each party’s marginal revenue and product is based on basic MRP theory as well as other logical assumptions. Based on the analysis, there are two main reasons behind the fans’ anger towards Major League Baseball players. They are the publicizing of Major League Baseball players’ contracts and the competitive imbalance associated with Major League Baseball.

Name: Eric Smith
Date: Spring 2004
Major(s): Economics
Thesis Committee: Tomas Nonnenmacher, Behrooz Afrasiabi
Title: Development and Interaction Through Direct Marketing

Abstract: Optimal conditions in the job market and work force are continually changing. There is no set definition for the most favorable career or lifestyle due to everyone’s varying tastes. The direct marketing industry effectively ties in a broad range of people from various social classes in order to generate the largest appeal towards any industry today. The paper begins by examining the history of the direct marketing industry from its origins. The following chapter observes the tendencies of the critics of direct marketing and the reasons for their perspective. Chapter three contests the viewpoint of the critics by presenting the ideology behind the advocates of direct marketing. The paper concludes with a rigorous study on the reaction of different demographics towards direct marketing. Additionally, a regression is run to determine if there is a correlation in desire to learn more about the industry between Meadville, PA and Cranberry Township, PA.

Name: Michael Smith
Date: Spring 2004
Major(s): Economics
Thesis Committee: Janine Sickafuse, Don Goldstein
Title: Economical Advancements in Professional Snowboarding: A Revised Economic Model for The United States Ski and Snowboard Association

Abstract: Snowboarding is a leader in the emerging extreme sports market. With increasing demand for action sports, the time is now to act on the sports sudden popularity. I will be proposing an economic model, which will enhance the current model instituted by the United States Ski and Snowboard Association. The insight of renown sports economists Rodney Fort and James Quirk, theories in professional sports marketing and the importance of media and sponsorships will be the economic evidence needed to prove that a professional snowboarding league could be successful.

Name: Adam Sondej
Date: Spring 2004
Major(s): Economics
Thesis Committee: Janine Sickafuse, Don Goldstein
Title: The Dominant League Theory as it Pertains to the IRL-CART Battles from 1996-2004

Abstract: In 1996, Tony George left Championship Auto Racing Teams (CART) and formed his own open-wheeled racing league, the Indy Racing League (IRL). The two leagues competed against one another for seven seasons until 2004, when CART was forced to file for bankruptcy. RodneyD. Fort, along with help from James Quirk, developed the dominant league theory to explain why rival leagues have failed in the past. According to their theory, rival leagues have failed because their goal is only to become strong enough to entice the dominant league to take them in sot hat they can share the monopolistic profits available when only one league is in place. The goal of this analysis is to show that not all rival leagues are aiming to assimilate with the dominant league and that in the right market, rival leagues can succeed. The IRL did not want to merge with CART; they were already a member of CART and wanted out. The goal of the IRL was to dismantle CART and corner the open-wheeled racing market. Tony George is also the president of the Indianapolis Motor Speedway, the strongest market for open-wheeled racing. By controlling this market, the IRL was able to beat the dominant league theory and become the first rival league to successfully overthrow the dominant league.

Name: Brian Sondej
Date: Spring 2004
Major(s): Economics
Thesis Committee: Stephen Onyeiw, Janine Sickafuse
Title: Defeating the Pressures Associated withGlobal Competition: A Case Studyon Hewlett-Packard and the Invention of Thermal Inkjet Technology

Abstract: Global Competition is a problem that American companies must deal with every day. There are many pressures that global competition puts on the domestic companies of the United States. Some of these include new international technology, international trade barriers, and foreign labor forces. Because of these pressures, some companies in the United States are not able to sustain themselves and therefore collapse. However, there are some cases where American companies have developed new strategies and technology to respond to international competition. One of these companies is Hewlett-Packard. In the early 1980′s the Japanese dominated the dot matrix printing industry. HP had to find a new way to beat their international opponents. With new innovation and technology HP was able to develop thermal inkjet technology, and steal the printing industry from the Japanese. This study explores the concept of global competition, and how it affects the US companies. Furthermore, in order to help illustrate how American companies cope with the constant intentional pressures, a case study how Hewlett Packard was able to defeat the Japanese is reviewed. In this study, a regression analysis and forecast of future net sales for the company will be included, as well as an analysis of the business philosophy of Hewlett-Packard over he years. Finally, some microeconomics principle are used to explain how and why, Hewlett-Packard made some of their strategically based decisions.

Name: Jason Springer
Date: Spring 2004
Major(s): Economics
Thesis Committee: Don Goldstein, Bill Bywater, Steve Onyeiwu
Title: The Decline of Indigenous Cultures and the Rise of Consumerism

Abstract: This project takes a different approach to the relationship between economic progress and social development. Over the years the world has seen many periods of colonization. Recent years are no different. However, instead of being colonized by Western nations, developing countries are being colonized by Western multinational corporations. To show the relationship between corporate expansion and the effect it has on societies, I have chosen Thailand and Malaysia as benchmarks as both have unique cultures and have received massive inflows of FDI. To estimate the effect that FDI has on culture, especially the rise of a homogenized world consumer culture, I have chose to run regressions on several variables including FDI, the number of automobiles registered, and the number of television receivers. Overall, I hope to present a solution that will help to preserve the uniqueness of various cultures around the world, although at this point it seems the only way to achieve cultural protection for a world consumer culture is by the “good faith” of major corporations.

Name: Kristina Stone
Date: Spring 2004
Major(s): Economics
Thesis Committee: Behrooz Afrasiabi, Stephen Onyeiwu
Title: Determinants of Profitability: Diversification, Innovation, and Organization

Abstract: There are several different determinants of profitability. This project explores the impact that Research and Development and corporate strategies, such as diversification and organization of the firm, have on a firm’s profitability. This paper discusses the ideas of diversification, innovation, and organization of the firm; and suggests that these factors will impact the firm’s profits in a positive way. The project reviews some of the current literature that is available concerning this area. Further, the study shows my own investigations in this area with an empirical chapter devoted to a regression of thirty firms; including twelve firms in the computer industry, ten firms in the pharmaceutical industry, and eight business conglomerates for the year 2000. The results show that research and development has a positive but not significant impact on the firm’s profitability; and that corporate strategy is not a significant factor on profitability either. The paper concludes that problems with the data may have been a reason that the results turned out the way they did; and that further investigations into this area should be done for more accurate results.

Name: Jennifer Strittmatter
Date: Spring 2004
Major(s): Economics
Thesis Committee: Behrooz Afrasiabi, Earl Adams
Title: Economic Valuation of Residential Housing

Abstract: Every year, thousands of people either become first-time homeowners or relocate to another home. When a consumer is looking for a home, they focus on the features and amenities inside and outside of the home that is most suitable for themselves and their families. Using a template of professional appraisers’ evaluations of residential properties and the idea behind Hedonics, an equation was formed by choosing some of the most important features of houses that consumers care about such as number of bedrooms, lot size and condition of the home. By inputting the consumer’s preferred features, the equation can compute an estimated price that the buyer should expect in a selected area.

Name: Robert Taylor Jr.
Date: Spring 2004
Major(s): Economics
Thesis Committee: Stephen Onyeiwu, Behrooz Afrasiabi
Title: A Managerial Application of Cost Functions by a Railroad: An Analysis of the Toledo, Ohio Freight Yard, the East Erie Commercial Railroad and the Pittsburgh & Ohio Central Railroad

Abstract: My intended project will focus on the relationship between cost and output, while examining the results to find the relationships’ direct usefulness to industrial managers in the railroad industry. The ability to control performance and costs is a major necessity in almost every sector of industry and trade. Through the applications of costs functions and control charts, I have examined evidence from three regional railroads to determine firm efficiency, cost minimization, and the least cost efficient results in leadership. The three railroads are class 3 railroads and operate mainly as switching and terminal railroads. The results generated from this project present the determinants involved in the process of cost minimization and therefore firm efficiency within the regional railroad industry of Pennsylvania. The results conclude the Pittsburgh & Ohio Central Railroad as the most efficient firm followed by the East Erie Commercial Railroad and lastly the Toledo, Ohio Freight Yard.

Name: Lee Tenace
Date: Spring 2004
Major(s): Economics
Thesis Committee: Janine Sickafuse, Tomas Nonnenmacher
Title: How Do Antitrust Laws Affect Professional Sports? The Case of Maurice Clarett

Abstract: Antitrust Laws can be found dealing with every level of business in the world today. In this comprehensive project, we will look at antitrust laws with a main focus on the professional sports industry. With an exception to baseball, antitrust laws play a big part in the professional sports industry. The antitrust laws are set to promote competition in the playing field. They keep the leagues running smoothly so that there is not one dominant team that can buy every player and create a monopoly that wins every single year. That is not what sports fans pay their money to see. The one sports league where antitrust laws have recently become harmful in the game is the National Football League. The reason for this is because they have a rule that states that a player cannot gain entry into the National Football League unless he is three years removed from his high school graduation. This rule has been set in stone for quite some time now and although many players have felt that they wanted to challenge the rule, none have ever gone through with it. The players claimed that they would not be able to find the lawyers that could match up with the ones that the NFL has. Also, by the time a decision would be made by the court, they would be of age to enter the league at that point anyway. Needless to say, the rule has never been touched or tampered with until just recently.

Maurice Clarett, a star running back from The Ohio State University, has taken this rule to court claiming that the rule is in violation of antitrust laws. He is trying to leave college after his sophomore year at the age of twenty and only two years removed from his high school graduation. Many believe that this is a terrible decision on behalf of Clarett; while others feel that this is something that has been needed to be done for a while now.

Name: Frank van Ameringen III
Date: Spring 2004
Major(s): Economics
Thesis Committee: Tomas Nonnenmacher, Antoni Moskwa
Title: Determining the Relationship Between Economic Globalization and Human Development

Abstract: Quality of life is a concept defined differently across the broad spectrum of cultures throughout the world. Some consider a simplistic and traditional way of living to be the most fulfilling, while others strive for wealth and political involvement. In empirically measuring such an abstract concept, it is necessary to quantify the elements related to personal and cultural fulfillment. Considering specific cultures hold true to modest ideals and strive to maintain tradition, this assertion is certainly controversial.
This paper answers the following question: Does economic globalization have a positive effect on quality of life (as measured by the human development index)? Regression analysis is the primary method by which the question is answered. This model draws at the relationship between the dependent variable (human development index) and the independent variables (international trade, foreign direct investment, and capital market flow). A substantial correlation between the human development index and the independent variables is expected.

Name: Gregory Wisser
Date: Spring 2004
Major(s): Economics
Thesis Committee: Stephen Casler, Behrooz Afrasiabi
Title: The Effects of Athletics on a Student’s Enrollment Choice

Abstract: There comes a time in every student’s life where they must make a decision on which college to attend. This is an important decision and many factors go into it. In this highly competitive day and age, colleges compete with each other in an attempt to make their schools more attractive to the prospective student in hopes that they will eventually enroll there. In this paper, I analyze the effects that those factors have on a student’s decision to attend a particular college or university. In particular, I plan on exploring how intercollegiate athletics influence this decision. A regression analysis provides insight and proof that athletics affects a student’s enrollment decision, but does not significantly affect it.