Senior Projects 2018

Birol, Margo

Incentivizing Enrollment: A Study of Employee Enrollment in Health Insurance

Date: Spring 2018

Major(s): Economics

Thesis Committee: Econ faculty

Abstract: The health insurance industry has seen a spike in coverage costs over the last decade. To compensate for increasing expenses, firms have begun to offer additional, more financially sustainable plans. Specifically, firms have started to utilize High Deductible Health Plans to increase risk protection and decrease expenditures. Under the assumption that consumers are rational decision makers, lower price points are associated with an increase in quantity demanded. To incentivize enrollment, firms participate in cost sharing models to reduce employee expenditures. Sorting issues arise due to asymmetrical information and consequently adverse selection and moral hazard occur. Results from this project provide insight into consumer priorities, and in turn offer plans that are more desirable for employees and more cost-effective for employers. Employer cost sharing rates and upfront costs have a significant impact on an employee’s decision to opt into the default Preferred Provider Organization health plan rather than the newly available High Deductible Health Plan.

Bretz, Samantha

Is Minimum Wage an Effective Anti-Poverty Tool?

Date: Spring 2018

Major(s): Economics

Thesis Committee: Econ faculty

Abstract: Minimum wage policy has been a topic of contention in the American political sphere. I specify my population of interest to individuals considered to be part of the Millennial generation. In this study I employ an OLS fixed effects model to test the relationship between minimum wage and poverty as expressed by a dummy variable for probability of falling below the poverty threshold. I find different results across two years of data, concluding that younger individuals of minority groups (women, Hispanic-identifying, and black-identifying) benefit the most from minimum wage increases.

Brooks, Samantha

Impact of Increasing Air Emission Fee on the Number of Deaths from Respiratory Diseases

Date: Spring 2018

Major(s): Economics

Thesis Committee: Econ faculty

Abstract: In 1970, President Richard Nixon passed the Clean Air Act, aiming to improve air quality levels throughout the United States through permits and fees. The State Implementation Plan allows each individual state to control the amount of emissions by executing a dollar per ton fee on all pollutants. Although the act decreased the amount of pollutants being released into the air by 70 percent, concentrations of greenhouse gases were still causing various respiratory diseases throughout the nation. This paper aims to analyze the impact of increasing the air emission fee on the number of respiratory deaths. It is predicted that air quality will improve as the fee increases, decreasing the number of people who suffer from respiratory illnesses. Through multiple regressions, however, estimates were inconclusive due to potential bias from omitted variables. Thus, further research is needed to accurately analyze this research idea.

Caufield, Madison

An Analysis of the Inequitable Distribution of Health-Related Goods and Services Impacting Cervical Cancer Rates: A Case Study of Post-Apartheid South Africa

Date: Spring 2018

Major(s): Economics, Global Health Studies

Thesis Committee: Econ faculty

Abstract: In South Africa, cervical cancer is the second most prevalent cancer among women. Despite screening being available and a national screening program having been launched in 2000, the lack of distribution of health-related resources continues to nullify efforts to prevent this form of melanoma. Furthermore, the prevalence of high cervical cancer incidence and mortality rates among black women in rural South Africa is much higher compared to their white counterparts in the urban areas. This study examines the changes in income and socioeconomic status (SES) inequality due to time, race, and geographic locations. The objective of the study is to show that one’s race is not the only determinant of the inequality they face, but also their location (i.e. if they live in a rural or urban area). For this, I will apply the Gini coefficient and the concentration index to measure the socioeconomic inequalities that plague the community of South Africa and impact cervical cancer rates. The time periods I will use will allow me to compare the changes that have occurred since the end of Apartheid in 1994 to present day South Africa. The data that was used to perform these measures was collected from the 1996, 2001, 2011, and 2016 South African censuses and community surveys. Using the Gini coefficient to measure income inequalities between provinces and races, I was able to find significant quantitative proof of improved income distribution between each of these groupings. There was more change between racial groups recognized than between provinces. To apply the Concentration Curve and Index, I studied cervical cancer cases across racial groups, the number of cancer diagnosing facilities per province, and the number of individuals uneducated in each racial group. In each of the calculations, the variables were concentrated in the lower income groups; in my calculations the Black African population was the lowest income group so these negative variables impacted this group the most. Each of these variables are negative variables, so that shows that there is still a lot of room for improvement. An individual’s income impacts almost every decision they make in life, so South Africa should first focus on ensuring that every individual receives equal opportunities to increase their own personal income-making ability. Once the income distribution is solved, more people will be able to afford an education, greater access to healthcare, and thus will be less likely to develop cervical cancer.

Dashti, Arman

Sources of Sustained Competitive Advantage in the U.S. Banking Industry: A Case Study Analysis of J.P. Morgan Chase & Co.

Date: Spring 2018

Major(s): Economics

Thesis Committee: Econ faculty

Abstract: No abstract is available.

DiBucci, Nicholas

Factors That Affect Franchise Location and Profitability in the NFL

Date: Spring 2018

Major(s): Economics

Thesis Committee: Econ faculty

Abstract: In the United States, sports franchises relocate quite often. This study uses an empirical model to examine what location factors affect NFL teams’ choice of location and profitability. I base my model on Bruggnik and Schiz (2008), who examine 50 metropolitan areas in which a NFL team could locate. My first step is to run a model with updated data that calculates the probability that a NFL team locates in a city. The first model is a logit regression and tests what location variables are significant and what cities have the highest probability of having an NFL team. The updated data show that income per capita, number of other teams in the city, and population growth are statistically significant. The second part is a different model that is an OLS regression with the dependent variable of operating income. In this model, I test whether population, population growth, tax rates, number of firms in the city, other professional sports teams in the city, distance to closest NFL team, and income per capita impact operating income. The results indicate no statistical significance between the independent variables and operating income. I therefore conclude that location factors do not have an impact on operating income in the NFL.

DiMattio, Emma

Human Resource Strategies in Large Firms Versus Small Firms

Date: Spring 2018

Major(s): Economics

Thesis Committee: Econ faculty

Abstract: Most of the research on Human Resource practices has analyzed large firms, and neglected small and medium-sized firms. HR practices help firms run smoothly, and if executed in ways that benefit the firm, can ultimately lead to competitive advantage. It is intuitive to conclude that small firms can also enjoy the benefits of implementing strong HR practices. The question arises whether HR practices are interchangeable between large and small/medium-sized firms, or if certain practices are better suited for a specific sized company over the other. Acutec Precision Aerospace, a small manufacturing firm located in Meadville, PA, was examined to see how practices in a small to medium-sized company differ from those in a large company. Information on Acutec was gathered through a survey conducted in January and February of 2018. Survey questionnaires were placed in areas of the company where many employees would see them, such as in the lunch room. Due to company being a manufacturing firm and much of the work being done physically, employees do not have access to computers and the surveys had to be done on paper. Initially, an incentive was not offered and the response rate was extremely low. Once an incentive was offered, the response rate increased substantially. In analyzing the results of the study, the biggest difference was the scale in which HR practices were implemented. This difference arises from small/medium-sized firms having less resources available to them.

Donohue, Sarah

The Impacts of Immigration of Migration of Natives in the United States

Date: Spring 2018

Major(s): Economics

Thesis Committee: Econ faculty

Abstract: Since the 1970s the United States has seen an increasing influx of immigrants, in which immigrants now make up about 27% of the United States population. This is a significant increase, which contributes to the changing characteristics of the population and the workforce. With this in mind, this study investigates the impacts this increase has on native’s migration patterns, specifically state level out-migration patterns. Past literature looking at this topic has found mixed results, depending on the geographic location chosen. This study will expand upon these various findings in hopes to contribute to this literature as well as look at 2010-2015, which has not yet been examined. The migration patterns have been theoretically explained by shifts in economic structures, and socioeconomic structures when immigrants come into an area. Further, others explanations include the shifts in the labor market when immigrants settle into an area. A logistics regression is used to test the hypothesis that as immigrants come in natives will move out of the state, using state out migration as the dependent variable. What the regression suggests is that alone, that a rise of immigrants in a state is not significant, but is jointly significant when paired with Unemployment, and Crime Rate variables. Further, it is found that one’s income has a significant impact on one’s migration out of the state, but this is a minor impact, this is not large enough to be economically significant.

Falck, Bennett

Proving the Existence of Nash Equilibrium and Examining its Applications in Economic Bargaining

Date: Spring 2018

Major(s): Economics, Mathematics

Thesis Committee: Econ faculty

Abstract: Game theory in economics is an enormous field, and rightfully so. We play economic games every day, in every decision we make. Game theory is the study of these decisions. Within game theory exists the study of bargaining games. We separate bargaining games into cooperative and non-cooperative types. Within non-cooperative games, we have continuous and discrete. Continuous games form the bulk of our exploration. We continue on to prove the existence of Nash equilibrium solutions in non-cooperative games using Brouwer’s Fixed Point Theorem, stating that continuous functions mapping simplexes to themselves have mixed points. To do this, we define barycentric coordinates as a means of describing simplexes. Defining simplexes gives way to subsimplexes, leading us to Sperner’s Lemma, allowing us to prove Brouwer’s Fixed Point Theorem. We then generalize the Theorem to show the existence of mixed points in continuous functions mapping convex, compact sets to themselves. Through the use of simplexes and convex, compact sets, we show that the NFL’s collective bargaining negotiations of 2011 and MLB’s salary arbitration processes have Nash equilibrium solutions.

Gant, Trevor

Disruptive Technologies and the Effects of E-commerce in the Retail Industry

Date: Spring 2018

Major(s): Economics

Thesis Committee: Econ faculty

Abstract: E-Commerce began to emerge in the early 1990’s and has grown ever since. Amazon, the leader of the e-commerce movement has created a disruptive business model that forced many long-standing traditional retailers to reorganize their operations. This paper aims to explore how these pre-established retailers managed to either successfully or unsuccessfully modify their operations. It starts off with an explanation of disruptive technologies and the different types of disruptions that can occur in any industry. It also mentions the history of e-commerce, how e-commerce grew, the change in consumer demand, and the different types of merchants that adapted differently. Walmart and Macy’s are shown as examples of retailers who were successfully able to recognize the disruption and positioned themselves to stay competitive in the industry. Sears Holdings which is a combination of Kmart and Sears will be an example of retailers that recognized the disruption later than their competitors. As a result, they are failing because they failed to invest in their online presence early and adjust themselves for the future.

Garcia, Alfonso

Impact of State Policies on Immigrant College Enrollment, Graduation, and Post-Graduate Income

Date: Spring 2018

Major(s): Economics

Thesis Committee: Econ faculty

Abstract: The objective of this research is to investigate whether in-state tuition rates, state provided financial aid, and institutions that provide generous financial aid packages to immigrants increase the likelihood of foreign-born, non-citizen immigrant ability to enroll and graduate college. Furthermore, this research will investigate the effects of immigrants obtaining a college degree on the wages and salaries they earn. Prior literature in this topic have investigated only in-state tuition rates on immigrants from Latino-descent and test the impact of those effects up to the year 2011. This research expands on prior literature by providing additional sources of aid in the form of state-provided aid and individual institution financial aid packages. Additionally, this research investigates a larger, diverse group of immigrants of different ethnicities from the years 2000 to 2016. Using data provided by the Current Population Survey, three Linear Probability Model regressions were used to test the hypothesis. The results of this investigation suggest that in-state tuition rates, state-provided aid do positively impact immigrants in enrolling and obtaining a college degree and observe significant increases in wages with a college education.

Gaul, Chris

Internet Access and its Effect on Probability of Unemployment For American Millennials

Date: Spring 2018

Major(s): Economics

Thesis Committee: Econ faculty

Abstract: The goal of my research is to investigate the relationship between internet access and unemployment rates for American millennials. The millennial generation will be defined as any person born between the years 1982 and 2000. I expect to see a significant correlation showing that if a millennial has access to the internet they have a higher probability to find employment. The results show a statistically significant correlation between internet access and the probability of employment; however, the coefficient is economically insignificant. The statistical significance of the independent variable of interest and the positive correlation with the dependent variable demonstrates the internet is being used productivity, and policy moving forward should take this relationship into account.

Henderson, Isaiah

Does the lack of a father figure in the household relate to an increase in the recidivism rate within the youth population?

Date: Spring 2018

Major(s): Economics

Thesis Committee: Econ faculty

Abstract: The research I decided to explore is something that is imperative for society to be aware of. In my research I analyzed the impact of the lack of a father figure on a child. In addition, I examined different determinants that causes young adults to recidivate back to prison. Finally, I made an argument to link both of these together. It is my belief that the lack of a father figure leads to lower education which eventually leads to a higher recidivism rate among young adults. With significant awareness and more research presented to the public, people will be aware of how much of an impact a father figure has on a child and their future.

Hurst, Valerie Lynn Zablotny

A Comparison of Worst First Forestry and Diameter Limit Cutting: Long-term Yields and Valuations in Northwestern Pennsylvania Forests

Date: Spring 2018

Major(s): Environmental Studies, Economics

Thesis Committee: Econ faculty

Abstract: Worst first (WF) forestry is a single-tree selection management approach that strategically removes undesirable species and cull trees to allow other desirable crop trees to reach financial maturity. Diameter limit cutting (DLC) is a common practice in northwestern Pennsylvania forests that removes trees above a certain diameter. Using a modeled 16 inch diameter limit cut and input from a local expert forester in worst first forestry, this study modeled cuts to three northwestern Pennsylvania mixed hardwood stands over a 40 year period. SILVAH 7.0 computer growth simulations modeled long term volume and value yields. This study treated diameter limit cutting and worst first forestry as mutually exclusive investments so as to compare revenues from harvests and net present value (NPV). The empirical results reveal that at 2, 4 and 6% discount rates WF generally outperforms DLC for NPV when all study plots are combined, but prior stand characteristics impact individual stand response. Worst first registered greater total harvest revenues in two of the three stands and greater residual stand volume and value.

Iheanacho-Hall, Nathan

Can The Private Prison Industry Be Incentivized To Reduce Recidivism Rates?

Date: Spring 2018

Major(s): Economics

Thesis Committee: Econ faculty

Abstract: This study will look at whether the private prison industry can be incentivized to reduce recidivism rates and follow steps towards prison reform. To find an answer to this question we review relevant literature and theories. We will review the various economics components of the private prison industry and attempt to find where the issues lie in the industry and how they can be improved. I hypothesize that there are numerous loopholes currently exploited by private prison companies to keep their recidivism rates high and profits higher.

Javorsky, Zachary

The Bottom Line and Corporate Social Responsibility: An Analysis of the World’s Most Sustainable Firms

Date: Spring 2018

Major(s): Economics, Environmental Studies

Thesis Committee: Econ faculty

Abstract: The purpose of this paper is to determine if the financial performance of the world’s most sustainable corporations was affected by their practice of Corporate Social Responsibility (CSR). Many firms would agree that CSR is the right thing to do but refuse to enact sustainability programs and incentives because of their perceived negative impact on the bottom line. Firms enacting a green strategy will be crucial to addressing many of the impending environmental disasters and resource shortages. Firms need evidence that CSR can be a financially beneficial decision and this paper’s findings suggest that it will at the very least not hurt a firm’s financial performance. By conducting a regression based empirical analysis using both economic and environmental variables from Mergent Online, Corporate Knights and the World Bank. This paper concludes that practicing CSR, with a year lag will positively impact a firms Net Income in a statistically significant way. Key environmental indicator variables, such as Overall Score were significant and positive a year after employing CSR and doing it well. Furthermore, this study found no evidence that practicing CSR will hurt a firm’s financial performance in a given year. The findings of this paper suggest that firms have a responsibility to both shareholders and stakeholders to practice as much CSR as possible.

Kutz, Timothy

Convergence of East & West Germany: An empirical analysis of industries as indicators of economic growth

Date: Spring 2018

Major(s): Economics, German

Thesis Committee: Econ faculty

Abstract: This research works to analyze the economic development of Germany after the reunification of the Federal Republic of Germany (FRG) and the German Democratic Republic (GDR). Although the two nations reunified in 1990, the economic performance of the two regions remain vastly different today. The paper uses macroeconomic data from the European Union nations identify variables that are significant for economic growth in East and West Germany. Utilizing these variables, as well as including additional variables deemed significant in the literature, this paper develops a concentrated model for economic growth intended to analyze the economic convergence of East and West Germany. The question of German convergence or divergence between the two regions has been a highly controversial topic, which allows this research to provide additional insight in the discussion. The paper also discusses the divergence of the two regions, while providing a commentary on the political and historical factors that influenced the disparity in the economic performance of East and West Germany. Following the conclusion of the paper, a summary will be conducted in the German language. While the summary will be a brief synopsis of the research as a whole, it will contain a concentrated focus on the political and historical development of Die Bundesrepublik Deutschland.

Neamon, Travis

Contracting in the Construction Industry: Risk Management and Allocation

Date: Spring 2018

Major(s): Economics

Thesis Committee: Econ faculty

Abstract: The construction industry is the backbone of the United States, virtually all other businesses rely on the construction industry to provide and maintain their accommodation, plants, and infrastructure, and construction is a determinant of where and how almost everyone lives and works. It is essential for construction companies to understand what risk they are responsible for and how to allocate risks to other firms that have more over outcomes. The way that a company contracts contributes to how well the company completes project and how large their profit margin is, a reason why contracts are so important in the industry.

O’Connell, Kyle

Pharmaceutical Patent Strength and Drug Prices

Date: Spring 2018

Major(s): Economics

Thesis Committee: Econ faculty

Abstract: The United States pharmaceutical market has experienced rapid rates of drug price inflation over the past few decades with some annual rates exceeding 10%. On a global scale, drug price inflation seldom reaches that of the U.S. but still presents an ongoing threat to drug affordability. The purpose of this study is to identify the driving forces behind drug price inflation on a global scale with a particular emphasis on patent protections for pharmaceutical firms. In theory, stronger patent protections allow firms to obtain monopoly power for a specific drug, which allows them to increase price at will. Using pharmaceutical revenues per capita as a proxy for drug price, data from 128 countries is used to identify the contributing factors behind drug price inflation. The study finds a statistically significant positive relationship between the strength of pharmaceutical patent protections offered to firms and pharmaceutical revenues per capita. This suggests that countries that offer stronger patent protections for pharmaceutical firms likely experience higher price drugs as a result.

Pentland, Shane

An Economic and Sociocultural Analysis of the Cross-Border Impact of Temporary Migrant Agricultural Worker Visa Programs

Date: Spring 2018

Major(s): Economics, Spanish

Thesis Committee: Econ faculty

Abstract: The h3-A visa program allows American farmers to hire foreign workers temporarily in order to fill the need for labor. Over the last decade, the agricultural industry has been experiencing a labor shortage. A seemingly logical solution to this problem would be to expand the h3-A visa program. There is a lack of direct research on the economic impacts of low-skilled visas, specifically the h3-A program. Through understanding previous literature on other worker visas, establishing a theoretical framework, and running an economic regression, this study aims to provide statistical evidence of a relationship between these visas and the prices of three agricultural commodities: wheat, corn, and soybeans. Additionally, through a sociocultural analysis of several primary sources, a second analysis will be conducted in order to understand the significance of these visas for the Mexican citizens who often receive them, as they consistently make up 90% or more of these visas each year. The proposed hypothesis argues that an increase in h3-A visas is related to a decrease in the prices of these agricultural goods. The results of the regression are significant, yet mixed, as corn and soybeans both provide evidence to support the hypothesis. Additionally, the sociocultural analysis provides a deeper understanding of the necessity of these visas and of work opportunities in America for many poor Mexican citizens. Finally, as a result of these analyses, a policy recommendation is put forward, arguing that an expansion of the h3-A visa program would likely be beneficial to both the United States and Mexico.

Ramsey, Rachel

Are Investors Attracted to Positive Environmental Announcements? Evidence from the Automotive Manufacturing Industry.

Date: Spring 2018

Major(s): Environmental Studies, Economics

Thesis Committee: Econ faculty

Abstract: Climate change is becoming a relevant aspect in today’s changing world and the transportation sector, more specifically automotive industry, is one of the main culprits of constant greenhouse gas emissions at 27% of the 2015 yearly greenhouse gas emissions (EPA, 2017). Vehicle emissions, resource extraction, and daily business function have created an industry far from being sustainable. To decrease an automotive firm’s impact on the environment and mitigate some of the effects their products have on the environment, they can implement corporate social responsibility programs focusing on different sustainable initiatives. My objective is to assess the impact an environmental-related announcement, such as emission-reducing innovations or environmental recognition, has on financial performance for the top five auto-manufacturing firms from 2012 to 2016. For the data, I use the firms opening stock price, the firm’s environmental announcements, the firm’s characteristic variables, as well as other industry and market indexes, to measure the impact and significance of each variable on the daily return of a firm. Shareholder theory, corporate social responsibility, and theory of organizational image management are used to hypothesize that the presence of an environmental announcement will positively increase a firms’ financial performance. An Ordinary Least Squares (OLS) regression found that financial performance is not affected by the presence of environmental announcements within a six-day window and the type of announcement does not consistently affect an individual firm’s financial performance. However, adjusting the window to cover one, three, and six months following an announcement, leads to a significant decrease in stock price. It suggests that the investors are not overnight reactors and are risk-averse. It is important to observe other factors that could be affecting the stock price changes, such as investor demographics, prior regulations on a firm depending on location, and the individual firm’s sustainability choices, such as the profits, costs and lengths of environmentally friendly projects. Overall, sustainability could be a concern for the majority of investors and consumers, but there may be another way to observe this importance.

Sisley, Perry

Determinants of Success and Failure in Game Console Innovation

Date: Spring 2018

Major(s): Economics

Thesis Committee: Econ faculty

Abstract: This case study will attempt to recognize the importance of both innovation and marketing strategies within the console development industry, and their dependency on each other to allow for a successful hardware generation. When looking at Nintendo, three radical examples of this dependency are shown in both successes and failures. When compared to rivals such as Sony and Microsoft, the risk-taking behavior far outweighs the competition, proving to be useful in tackling these concepts. After analyzing these moments in Nintendo’s history, they will be applied to the current generation while using the concepts of innovation and the facilitation of innovation to deliver products to the customer base of a firm and to test the dependency of innovation and strategies in the modern market environment. In order to do this, Nintendo’s audience will be discussed and how they cater to their audience based on the innovations presented by the firm. In combining marketing and innovation strategies, innovation facilitation allows for a successful console generation.

Smith, Carter

Impact of Transportation Infrastructure on China’s Economic Growth

Date: Spring 2018

Major(s): Economics

Thesis Committee: Econ faculty

Abstract: China’s central government influences the GDP growth of their economy with investment. The bulk of this investment is on transportation infrastructure, which continues to grow, expected to total $724 billion from 2017-2019. This paper uses regression analysis to quantify the impact transportation indicators have on GDP and GDP growth rate in China. From 1990 to 2015 transportation infrastructure is statistically significant and positively correlated to China’s GDP. However, it is also less statistically significant and negatively correlated with China’s GDP growth rate. The technology was the explanatory variable that yielded the most consistent, positive and statistically significant, results in both regressions. This suggests that an alternative investment strategy for the Chinese government, focused on technology-intensive investments, as opposed to infrastructure and labor-intensive investments, could result in better long-run economic growth.

Temeng, Brent

Does the Impact of The HITECH Policy Cause Office Physicians to Seek Employment in Hospitals?

Date: Spring 2018

Major(s): Economics

Thesis Committee: Econ faculty

Abstract: The aim of this study is to determine if the Health Information Technology for Economic and Clinical Health policy causes office-based physicians to seek employment in hospitals. To find an answer to this question we review relevant literature and theories. This is further reinforced by an economic model consisting of graphs to support developed economic theories and empirical analysis which consists of regressions and F- tests that analyses whether specific hypothesized variables are significant factors contributing to the shift of employment of physicians from offices to hospitals. I hypothesize that the payments associated with this policy is causing an employment shift from physician offices to hospitals.

Thomas, Travis

Is Twitter Traffic a Strong Indicator of Company Performance?

Date: Spring 2018

Major(s): Economics, Computer Science

Thesis Committee: Econ faculty

Abstract: Twitter provides a perfect environment for companies to communicate to their consumers and advertise their products. A company posts content to their page and they immediately begin receiving feedback in the form of retweets, likes, and replies. In the study, retweets, likes, and replies are classified as Twitter traffic and it is with this traffic data I test the relationship between Twitter traffic and stock price. Is Twitter traffic capable of explaining changes in a company’s stock price? The data for the study is gathered using two tools, Twitterscraper and an original program I have written, SpreadTweets. This program takes Twitter data returned by Twitterscraper and turns it into a STATA-ready Excel sheet. The rejection of the Hausman and F-test confirm that the fixed effects model is best suited for the data set. After running the fixed effects model, I concluded that retweets, likes, and replies are each statistically insignificant. Therefore, they do not explain changes in stock prices of companies. Still, the data set alone supports managerial implications. This project provides a solid first step in future research in the field.

Turiano, Celena

Does the Affordable Care Act impact adults aged, 55-64, and their probability to purchase private health insurance?

Date: Spring 2018

Major(s): Economics

Thesis Committee: Econ faculty

Abstract: The externalities of the Affordable Care Act provide a framework for this study. The study examines how the early effects of the ACA, impacts those aged, 55-64, and their probability to purchase private health insurance. The paper expands upon existing literature by concentrating on the population aged, 55-64, and using Medicaid income eligibility as a predictor of an individual’s probability to purchase private health insurance, as they are previously not eligible for Medicaid. The theories of adverse selection and the consumer choice theory establish the hypothesis that increasing the income eligibility for Medicaid is associated with a lower probability of adults aged, 55-64, purchasing private health insurance. The data set which is based on several sources across the years 2013-2015 and 50 states, including the District of Columbia is used to run an OLS regression. The results of the empirical analysis do not support my hypothesis. The key variable of interest, Medicaid income eligibility, was found not to be statistically significant. This suggests that increasing the Medicaid income eligibility translates to having no correlation with an individual’s probability to purchase private health insurance.

Vergara Larran, Juan de Dios

Adoption of Disruptive Innovation: The Case of Volvo

Date: Spring 2018

Major(s): Economics

Thesis Committee: Econ faculty

Abstract: The present case study uses theory to explain the reasoning behind Volvo’s risky strategy to sell electric vehicles exclusively, beginning 2019. For now, this would make Volvo the first major auto manufacturer to abandon the conventional gas-powered vehicle. The present study concluded that time-cost trade-off of innovation theory and parallel development efforts theory help to explain the rationale behind Volvo’s strategy. Parallel development efforts theory can explain why Volvo abandoned conventional gas-powered vehicle technology, while time-cost trade-off of innovation theory can explain the timing of its complete transition towards electric vehicle technology. With these two theories at the center of the analysis of the present case study, it appears that Volvo’s electric vehicle strategy may be motivated by the reduction of the risk associated with incurring high development costs and by maximizing gross profit (gross of development costs).

Wesolowski, Joseph

Strategy and Competition in the Cell Phone Carrier Market: A Comprehensive Analysis on the Role Innovation and Market Share have on Performance

Date: Spring 2018

Major(s): Economics

Thesis Committee: Econ faculty

Abstract: This research paper analyzes the role of innovation, one of the key determinants of success, in one of the world’s fastest growing service industries, the cell phone carrier industry. Through both an empirical and case analysis, this paper will investigate whether innovation is the key driver of success in the industry, compared to a more traditional financial indicator like market share/power. Through the analysis of this oligopolistic market’s firms and their financial data over a five-year period, the paper explores whether cell phone carriers dominate because of their innovative processes. Through four-panel regressions both on the industry and the industry leader, Verizon Wireless, the results showed that innovation, although valuable, was not the key driver of success compared to other major financial indicators. Innovation will remain a key driver for firms, but the results of this study suggests that it was not the main force behind firm’s success in earnings per share and market presence.

Wojnar, Nicholas

The Effect of Price Anchoring on Different Product Types in the Retail Market

Date: Spring 2018

Major(s): Economics

Thesis Committee: Econ faculty

Abstract: A commercial business pricing strategy used to falsely give the impression that a product is on sale is commonly known as price anchoring. There have been many accounts of big-name retailers being sued in court for implementing this practice. The purpose of this senior project is to explain how and why price anchoring works. The study uses a regression that tests the effects of goods that are easy to value on the percent of discount. The data are the prices and other characteristics of products from Amazon’s website split into two categories“ which are defined as being either easy or hard to value. TV’s and tabletop items are the easy to value goods, and furniture and sports nutrition products are hard to value goods. Ten items from each product type were randomly selected, and the results conclude that hard to value items have a larger discount percentage. This was consistent with both hypotheses, that price gaps are a result of price anchoring, and price anchoring is more susceptible for items that are harder to value.

Zhou, Xuan

Determinants of housing prices in Pennsylvania from 1990-2016

Date: Spring 2018

Major(s): Economics

Thesis Committee: Econ faculty

Abstract: How do macroeconomic variables affect housing prices? In this paper, I use both linear and non-linear modeling approaches to investigate the determinants of housing prices in Pennsylvania over the period 1990-2016. Estimation results suggest that housing prices are affected significantly by real gross domestic product (GDP), interest rates, and average house prices in the U.S. For instance, a 1% increase in interest rate is expected to increase housing price index by 7.690335 unit, holding all other factors constant; as the real GDP increases by one unit, the housing price index is expected to increase by 0.0027386 unit, holding all other factors constant. Meanwhile, real economic variables such as income and new home construction are not significant determinants of housing prices in Pennsylvania.