Senior Theses 2018

Jack Fetick (Adviser: Prof. Melissa Thomasson)

“Does a Legal ‘High’ Lead to Higher Rents? An Estimation of the Effects of Cultivation Laws on Colorado Industrial Property Values”

            Abstract: This paper analyzes the effect of a change in the legal status of cannabis cultivation on the value of industrial space. An often-cited positive impact of legalization is the increase in tax revenue to the state, yet an increase in demand for warehouse-like spaces may crowd out other industries. I estimate the effect of municipalities exercising a “local option” to ban cannabis on the values of industrial spaces. The natural variation of the local option across the state is used to compare industrial space values across treated areas using a difference-in-differences design. Using data from real estate listing website LoopNet, this paper estimates a slightly higher difference in the value of industrial space in areas with legal cultivation status.


Jameson Foran (Adviser: Prof. John Bowblis)

“Medicaid Expansion Implications on Health Insurance Coverage and Medical Out-of-Pocket Payments”

            Abstract: As part of the Affordable Care Act, states had the ability to expand Medicaid coverage from 100% of the federal poverty line to 138%. I analyze whether this state voluntary Medicaid expansion increased Medicaid coverage without causing private insurance crowd-out. I also examine whether this expansion reduced medical out-of-pocket payments. I use a difference-in-differences estimator to compare states that expanded in early 2014 and states that chose not to expand their Medicaid coverage. I find that states that expanded saw a statistically significant increase of 4.6% points more Medicaid coverage, with no evidence of crowd-out, than non-expansion states. I also find that medical out-of-pocket payments decreased in expansion states.


Samuel Jerow (Adviser: Prof. Jonathan Wolff)

“Uncertainty and Fiscal Policy”

            Abstract: This paper studies the impact of economic uncertainty on the transmission of government spending shocks. Using a measure of uncertainty derived from the survey of professional forecasters, we construct state dependent output multipliers via the local projection method of Jorda (2005). We find that uncertainty amplifies multipliers on impact, but results in large and negative output responses at longer horizons. Data restrictions make point estimates noisy; a new dataset with a longer horizon is currently under construction.


Alex Lust (Adviser: Prof. Bill Even)

“An Analysis of Efficiency in NBA Point Spread Markets”

            Abstract: Over the past forty years, economists have worked to evaluate efficiency in professional and collegiate sports point spread markets. While some find efficiency, others find exploitable outcomes. This study incorporates new information regarding the markup charged by online sportsbooks, and applies a new econometric technique – the median regression – to evaluate NBA point spread markets. Using data from ten online sportsbooks, I evaluate efficiency using both median and ordinary least squares regressions. When inefficiencies are found, simulations are created to assess potential profitable outcomes. I incorporate strong tests for efficiency, and find profitable betting strategies, which are amplified given the presence of lower markups.


Tarah Mason (Adviser: Prof. Chuck Moul)

“Stories Come Alive: The Impact of Movie Success on Theme Park Demand”

            Abstract: While supplyside scope economies have been extensively explored, demand side scope economies have only recently begun to receive attention. To further the study of this subject, I investigate the case of demandside scope economies in movieproducing firms that also run theme parks. I empirically measure the impact of success in the movie market on theme park demand through two reducedform analyses, using attendance and ticket price as the dependent variables. I find statistically significant evidence that a movie studio’s box office performance increases attendance and ticket price at its theme parks, suggesting that firms with both movie studios and movierelated theme parks do enjoy scope economies of demand.


Tyler Schumacher (Adviser: Prof. Jacob Brindley)

“Inequity-Averse Preferences in the Principal-Agent Framework”

            Abstract: We examine a contracting relationship in the principal-agent framework with groupings of one principal and two agents, particularly employing the FehrSchmidt functional form to allow for inequity aversion. When imposing that there is no guilt parameter, we find significant evidence that the envy parameter (α) is statistically different from zero when we allow agents to reference other agents for payoff comparisons, but we find that the envy parameter is not significantly different from zero when allowing for an agent to reference the principal in payoff comparisons. These results are suggestive of a phenomenon wherein those under a contract relationship make “horizontal” payoff comparisons and are motivated to minimize inequity with respect to those in similar roles, but do not show such motivation when comparing “vertically” to those in roles different from them. If our results are indeed robust, this behavioral phenomenon could have implications on the nature of trends in wage dispersion explained at the level of motivation within individual contract negotiations.


Katie Wells (Adviser: Prof. Analisa Packham)

“The Effects of Syringe Exchange Programs on HIV, AIDS, and Opioid Mortality Rates in the United States”

            Abstract: Syringe exchange programs provide sterile syringes in exchange for used syringes to reduce the risk of spreading disease among injection drug users due to syringe sharing. Previous research observing individual clinics has found syringe exchange programs helped prevent the spread of HIV, reduced syringe sharing behavior, and did not lead to an increase in the amount of drugs used by current drug users or an increase in new drug users. This project investigates the effects of recent syringe exchange clinic openings on health outcomes related to injection drug use in the United States in the wake of the opioid epidemic. I estimate the changes in HIV diagnoses rates, AIDs diagnoses rates, and drug overdose mortality rates in counties with clinic openings ranging from 2003 to 2015 using the difference-in-difference method with counties without any program openings as the control group. I find a significant association between program openings and a higher overdose rate in some subsamples and a significant decrease in the rate of new HIV cases in high-poverty rural counties.


Jiayu Wu (Adviser: Prof. Nam Vu)

“Stock Market Dispersion and International Business Cycle Dynamics”

            Abstract: We find evidence that variations in international output growth and unemployment rate can be explained by lags of stock market dispersion across industries. Using a panel of 16 developed economies for over 20 years, our dynamic regression and panel VAR exercises show that lags of stock market dispersions precede increases in unemployment rate and decreases in industrial production growth. Our result provides international evidence for the sectoral shifts hypothesis, pioneered by Lilien (1982) and Davis (1987), that re-allocation of resources across industries can segue into periods of heightened unemployment in the short run.