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Economics Student Conference

Economics Student Conference 2018

2017

The Economics Student Conference is held annually each spring and gives the Department of Economics a chance to showcase the excellent research students are doing in a variety of fields covered in their coursework. The conference features both undergraduate and graduate student work. Students have an opportunity to present their papers to their peers and professors.

Read student abstracts from the following sessions:

Labor Economics

The Impact of High-Skill Foreign Born Workers on the Earnings of U.S Born College Graduates

By AnaLiz Castillo

Immigration in the United States has been heavily discussed, yet many of the arguments presented have little evidence. To some, foreign workers present a threat to domestic individuals. People often forget to distinguish that there are high and low skilled immigrant workers. This study focuses on high-skilled immigration. It attempts to capture effects of high-skilled foreign workers on the earnings of high-skilled U.S citizens. Data was obtained from the American Community Survey. Using OLS Regression analysis, the study captures negative and positive effects of high skilled foreign workers on the earnings of domestic workers.

The Impact of Minimum Wage Changes on Crime

By AnaLiz Castillo

Earlier research indicates that minimum wage may have an adverse impact on teen employment, and labor force participation. Few studies, however, have centered on the impact it has on crime. This essay aims to capture effects of minimum wage on crime at the county level. Using panel data, overall, minimum wage appears to reduce crime. However, the difference-in-difference estimator suggests that keeping minimum wage at $7.25 has a greater impact on crime than the effect it has for counties that had a higher rate or adopted a local minimum wage in 2013 or 2015.

The Impact of Right to Work Legislation on the Dispersion of Manufacturing Employment in the Midwest

By Joshua Dickey

In this study I estimate the relationship of right to work legislation on manufacturing employment levels in the Midwest. Using panel data from 2010 to 2016 I utilized a variety of difference in difference regression models controlling for fixed effects to estimate the common effect to which Michigan, Wisconsin, and Indiana benefited from enacting RTW policies. I assert that there is a positive causal relationship of statistical significance on manufacturing employment due to the policy.

Exploring CPS Data: Isolating Determinants of Nominal Hourly Wages from CPS Data

By Lin Sabones

What are the determinants of nominal hourly wage? Current Population Survey Data is one of the oldest, largest, and most well recognized surveys in the United States. It is immensely important, providing information on many of the things that define us as individuals and as a society – our work, our education and, what I am measuring, our earnings. CPS Data is an ideal dataset for in depth regression analysis on how nominal hourly wages are influenced by a variety of other well-known factors, like Gender, Race/Ethnicity, City Status, Education Level, Age, and Disability.

Strategy & Antitrust Regulations

Strategic Analysis of Asteroid Mining

By Aaron Pagel, Alex Solomon and Moriam Vaughan

This paper performs a strategic analysis of the asteroid mining industry in 2017. We define the tremendous level of value that could be created through mining non-terrestrial resources and identify the two companies that are engaged in that activity. We then explore competitive advantages that could be leveraged in order to create a sustainable environment while highlighting the massive investments with long time horizon creates a difficult situation. We conclude by applying the P.A.R.T.S. framework to define ways firms can avoid bureaucratic rents associated with high-value industries.

United States, et al. v. Anthem, Inc. and Cigna Corporation

By Dan Calby and Grant Sieversten

We examine the attempted merger by two large medical insurance companies in 2015, specifically Anthem, Inc. and Cigna Corporation. We examine the background of the healthcare industry at the time, and the major legal, antitrust, and economic issues involved with the merger. We consider in detail the plaintiff’s and defendant’s arguments and the results of the verdict.

The Future of Automated Vehicles in America

By Stasis Nelaimischkies and Karl Pershke

Our research paper explores the conditions necessary for the growth and adoption of automated vehicles in the United States from societal and economic perspectives. Using game theory concepts, we apply framework from games such as the stag hunt, competitive advantage, and chicken to explore our arguments.

How Business Strategy explains the economic returns of the National Football League

By Benjamin Pomeroy, Kyle Mohrbach, and Jeremy Kszastowski

We examine the different business strategies the NFL used to grow into a premier sports league and secure economic profits for its owners. We examine: the league structure that enables owners to mute the forces of competition; the game theory aspects of ownership, that keep the league as a mutual value creator for all owners; and the current trends in the league securing competitive advantage (team relocations) or threatening competitive advantage (concussions & player suicides). We selected this topic because it shows how economic thought and principles are present in the least suspected places.

Urban Economics

The Lasting Implications of Redlining in Chicago Neighborhoods

By Elizabeth Grazevich

In the 1930s, the Home Owners’ Loan Corporation labeled neighborhoods on a scale from “Best” to “Hazardous” in a process now referred to as “lining.” In testing whether these classifications have led to lasting consequences, I have analyzed three Chicago neighborhoods to see how they have progressed over time. I found that the previously redlined neighborhoods experienced a drastic increase in segregation well into the 21st century and had less income growth than the previously greenlined neighborhood. My results lend evidence to the theory that redlining has yielded long-term implications concerning segregation and income growth.

Unemployment, Income, and CTA Train Accessibility: A Study of Eleven Chicago Community Areas

By Emma Nippe and Sofea Lee

This paper investigates possible correlations between Chicago Transit Authority (CTA) rail accessibility with socioeconomic indicators in eleven Chicago community areas. Using data from the City of Chicago Data Portal, we find a correlation between increased CTA train access, higher per capita incomes, and lower unemployment rates for areas with CTA train stations within their borders. However, given that our control areas lack access to CTA rail yet maintain an average rate of unemployment and per capita income, we cannot make any conclusions about the relationship between transit accessibility and these indicators when measured with regard to Chicago community areas.

Cost Benefit Analysis of Green Roofs

By Kyle Craven and Paulie Jouras

In 2004, the city of Chicago implemented a Sustainable Development Policy, which required developers receiving financial assistance from the city to include sustainable features in their project designs. This policy resulted in the “great green roof boom” that Chicago has seen in the last 14 years. In fact, there are currently 509 green roofs in the city of Chicago, with a total square footage of 5,564,412 sqft. Because production of green roofs in Chicago has increased at such a high rate, it is important to understand both the benefits and the costs of green roofs. This paper will focus on if Chicago’s green roof initiative has been effective, and what the future will hold for green roof production in Chicago.

Locations of Chicago Public Library Branches and What They Say About Equity Within Chicago

By Brian Maines

Libraries provide residents with a free space to pursue knowledge, culture, and shelter, they are a valuable piece to any community. This is an analysis of Chicago Public Library locations as well as circulation numbers. This research was done to inquire into the equity of the CPL system based on geographical locations. Upon analysis Chicago’s public libraries are only somewhat equally distributed among the city, creating a number of "book deserts."

Media Markets and Localism: Does Presence of Local News in Chinese Boost Chinese-American Voter Turnout?

By Lucas Nathe

I exploit in variation the number of Chinese language local news programs available to communities in three of America’s highest Chinese population cities to examine whether expansion of local Chinese news programming affects local voting behavior. I find the introduction of one additional Chinese language news program will increase Chinese voter turnout by between 0.35 to 7.1 percent. These figures are preliminary in nature due to a lack of specific Chinese voter data. However, I find expansion of local news programming does yield socially beneficial results. These results provide a strong foundation for further research into policies that may promote local political engagement.

Game Theory & Competition

The Stag Hunt and #MeToo Movement

By Pat Cuscaden and Carsten Raaum

This paper studies the #MeToo movement and how it relates to the stag hunt game. Due to the high costs associated with women reporting sexual assaults against powerful people, these crimes often go unreported. It was very difficult for multiple accusers to coordinate with each other in order to hunt the “stag” and take down a powerful person who committed multiple sexual assaults. However, the #MeToo movement on social media changed the payoffs for accusers. It allowed for easier coordination and signaling that allowed victims to come out strong against their accusers. This paper will discuss the various game theory concepts factoring into this movement.

Applications of Game Theory in Democratic Presidential and Gubernatorial Primaries

By Todd Jasienski and Bola Lamina

While any voter of a primary election prefers one candidate, the greater desire is the party’s candidate success in the general election. Voters are motivated to back the candidate, which will ultimately win the primary. Modeling this interaction among the voting population as a coordination game, voters gain the largest payout when all votes and campaign contributions are given to one candidate. Using publicly available FEC data and the contemporary polling data, we demonstrate voters of the 2008 and 2016 Democratic Presidential Primary coordinated their campaign contributions based on the prevailing poll data, which represented the probability of a candidate’s victory in the primary.

The Bidder’s Curse Overbidding in Live and Online Auctions at Christie’s

By Julia Zanussi

I analyze the causes of overbidding, an anomaly of the individual private-value normal form auction, in both online and live auctions with more than 1,700 lots of fine art multiples in 18 separate Christie’s sales that took place between June and November 2017. I conclude with the causes of the spread between online and live overbidding and a discuss the link between average estimate and expected realized price.

United Launch Alliance: The Anticompetitive Harm of National Security

By Aaron Pagel and Rachel Burke

We analyze the potential anticompetitive harm through the formation of United Launch Alliance (ULA); a joint venture between Boeing and Lockheed Martin. We examine the background of the industry pre-2006 to outline the barriers to entry that created market power. Then we outline the FTC antitrust complaint and apply competitive analysis frameworks to understand the factors that would have used as evidence had the complaint gone to trial, as well as criticize the broad relevant vertical market definition. Finally, we examine the market as it exists in 2018 to ultimately determine that ULA likely created more harm than good.

Financial Markets

How Does Algorithmic Trading Affect our Behavioral Biases?

By Nate Balson

This paper connects studies done on the effect of algorithmic trading in financial markets to behavioral biases involved with market changes. I found that algorithmic trading causes an increase in long-term volatility, volatility spill-over, a change in intraday trading volume, and a decoupling of asset prices from their fundamental values. These market changes exacerbate behavioral biases such as herding behavior, anchoring, and loss aversion. Due to the decoupling of fundamental values and prices, non-algorithmic traders trade as contrarian “noise traders” under a more uncertain market. I concluded non-algorithmic traders are at a disadvantage in today’s markets.

Irrational Investor Behavior Contradicts Keynesian ‘Beauty Contest’ Theory

By Montgomery J. Maxwell

This paper evaluates investors’ trading behavior when they receive unexpected news concerning an asset and whether the trading behavior of investors conforms to the Keynesian concept that the stock market operates as a ‘beauty contest’. This paper examines the relationship between the quality of news, differentiated as positive news or negative news, and investors’ trading behavior. This research finds that investors’ trading behavior is irrational when the quality of the news is contrary to the expectations of investors, specifically when investors expect positive news for an asset but the news concerning the asset is negative.

Efficient Markets and The Implications of Behavioral Finance

By Keaton Schneider

Over time, flaws in traditional models of economics have led some to explore alternative explanations for the reasons these anomalies occur. I focus on the inconsistencies of asset pricing within the efficient markets model. I analyze these flaws and their historical contexts, lab based experiments, and examine investor psychology and show that principles of behavioral finance can heavily influence price formation in markets.

Anomalies in NASDAQ Across Time

By Aditya Sharma

I examine the historical daily returns on the Nasdaq between 1990 and 2017 to test whether there are statistically significant effects across days of the week or months of the year which provide an opportunity to achieve risk-free excess returns (as had previously been shown for other major indices such as the DJIA and S&P 500). I find that though the efficient market hypothesis does hold for the most part, the Wednesday effect is statistically different than zero, and thus potentially an actionable effect.

History of Thought

Marx and Hayek on Smith’s Virtue in Commercial Society

By Douglas Palzer

Adam Smith believed commercial society fostered virtue and elaborated on the three “rules” that make a virtuous person within it: prudence, justice, and beneficence. Moreover, Smith believed the exercise of self-command was key for the practice of these virtues. He believed commercial society afforded individuals self-command to practice those virtues where previous societies had not. Marx and Hayek held conflicting views on the prevalence of self command in commercial society and its role in the practice of virtue therein. While never directly citing Smith, both individually provide insight and perspective regarding Smith’s ideas of self-command and virtue in commercial society.

Debating Human Causality: Its Limitations, Yet Great Contemporary Influence

By Lin Sabones

David Hume’s philosophy of causation integrates mind perceptions, impressions, and ideas to employ a way of reasoning the world. This paper aims to unpack Hume’s pivotal theory, relate it to similar approaches by Sir John Hicks and Immanuel Kant, and to modern day prediction-based modeling rooted in causal inferences and principles of association.

Mercantilism: Comparing Past and Present

By Andrew Stembach

I focus on the relationship between modern day (neo)-mercantilism and historical development of mercantilism prior to Adam Smith’s The Wealth of Nations. I make the argument that the main ideas of 18th century mercantilism (balance of trade, protectionism/innovation and competitiveness) are seen in modern times, although grossly enlarged in scope. An increasing rhetoric of globalization forces the reentry of domination and competitiveness rhetoric and policy. Mercantilism was not killed with Adam Smith, global leaders from Trump to Jinping are actually making the ideology larger to fit within the new views of our world economy.

Economics of Education

Econometric Analysis of College Education

By John Black and Nikita Gerg

This paper uses the Current Population Survey in order to examine the changing return of achieving various levels of education. Data from 1990 and 2016 is compared. The hypothesis of this paper was that, because of increasing numbers of graduates, there would be a higher return on investment from having a degree in 1990. However, this paper concluded that having a college degree yielded a higher return than in 1990. In particular, advanced degrees were rewarded significantly more than any other level of education.

The Impact of Crime on Chicago Elementary Schools

By Austin Harell

This paper analyzed crime data from the Chicago Data Portal and compared it to elementary school educational attainment data from the Chicago Public Schools. Twenty community areas were analyzed to determine the relationship between homicides, narcotics offenses, and total crime and the attendance rates and math and reading test scores. Higher crime rates in a community area showed lower educational attainment for that community area. The results show that the strongest indicator of elementary school educational attainment for a community area is the homicide rate per capita. Narcotics offenses were not as strong of an indicator than total crime.

The Federal Education Law (Ley Federal de Educación, LFE) in Argentina and its Effect on Secondary Education Outcomes Within the Indigenous Population

By Allen Doan

The analysis of data from the 2010 census from Argentina’s statistics bureau demonstrates that the LFE, enacted in 1993, did not significantly increase secondary education rates of indigenous peoples at the same rate it raised the rates of the non-indigenous community. However, data from the economic survey shows that a similar distribution exists in the bottom 10 percent of income earners in Argentina. These similarities suggest that factor responsible for the persistently low educational attainment in the indigenous community is income. The data also suggests the opportunity costs of going to school is not unique to the indigenous community.

Health Crises & Decisions

Food Desert Prevalence in Different Community Areas of Chicago

By Hind Abdelaziz

Food deserts have been an area of concern for the United States for over two decades. They tend to be clustered in certain urban and rural areas. I examine what the important geographic or socioeconomic indicators of food deserts are. I discuss the various definitions and measurements of food deserts and analyze other major metropolitan areas besides Chicago for comparison. I use two Chicago neighborhoods: Lakeview and West Englewood. Although both share the same area size, each differentiates on population size, quantity of grocery stores and nearness to public transportation. Lack of demand from the consumer to buy healthier foods in West Englewood creates no incentive for a grocery store to sell those foods. Additionally, an inadequate public transit system inhibits people from going too far to get cheaper, healthier options. Ultimately, healthier options need to cost less and accessibility to public transit needs to increase for food deserts to be eradicated.

Do Social Norms Affect Individuals Health Decisions?

By Aubrey Jackson

This paper examines how social norms such as framing, peer effects, and delay discounting affect individual health decision-making. Additionally, this paper explains how different behavioral theories (i.e. Nudge Theory) and other economic fields (i.e. neuro-economics) can assist researchers and policy-makers in the creation of prevention and intervention strategies. The research in this paper concludes that social norms are a powerful driver for individual health-decision making, due to how social norms are processed in the brain, and why maladaptive health decisions are difficult to break.

Opioid Epidemic: A Game Theory Analysis

By Luis Escobar and Carlos Santos

The opioid epidemic in the US has risen to a level never before seen and has claimed the loss of an estimated 200,000 lives. In order to stop it, it is necessary to understand this complex problem before designing a plan of action. In this study, multiple game theory frameworks were used to understand and represent the interaction between the different players involved in the opioid crisis. By applying game theory, it was found that possible strategic solutions exist which can move the equilibrium of the games to a strategy pair that moves toward solving the issue. The solutions found can be used to design policies to effectively stop this epidemic.


Economics Student Conference 2017 Abstracts