Masters Theses

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Browsing Masters Theses by Department "Economics & Finance"
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    ESSAYS ON HIGHER EDUCATION, PARENTAL ALTRUISM, AND GRANGER CAUSALITY
    (Middle Tennessee State University, 2018) Salimullah, Abul Hasnat Muhammed ; Economics & Finance
    This dissertation consists of three distinct, publishable ‘papers’ included as separate chapters. Although all of the three chapters can be read and understood independently, the first two chapters are on related themes. The essence of the first two chapters are, therefore, to analyze the individuals’ higher education expenditures over their life-cycle. It considers the standard life-cycle human capital accumulation theory as a benchmark model and tests the rationale and validity of it by applying empirical methodologies and calibration. The third topic employs the Granger causality test to find out what causes the stock price volatility to become more sensitive, whether it is for interest rate or exchange rate risk. More specifically, the first chapter uses Consumer Expenditure Survey (CEX) data to estimate the effects of an individual's age on higher education expenditures. Using a synthetic panel created from the CEX data and controlling for fixed effects and different demographic level characteristics, the regression results are then used to construct the life-cycle profile for higher education expenditures based on age. The estimated coefficients of age and its polynomials are found to be statistically significant. Special emphasis is placed on finding the turning points by using the polynomial regression coefficients that indicate a change in the age pattern over the life-cycle. The turning point analysis indicates a “hump” shaped nature for education expenditures, counter to what theory suggests. The second chapter considers the life-cycle higher education expenditures profile for individuals as a baseline model and investigates the possible impact of parental altruism and borrowing constraints on the human capital investment. The analysis is conducted by employing a standard overlapping-generations model in which “parental altruism” is emphasized over borrowing constrains for children. This quantitatively calibrated model predicts that the intertemporal substitution effect dominates the income effect for the individual of middle age groups, causing allocation of their income towards the higher education expenditures of their young-aged child. The latter effect generates the hump shaped human capital expenditures pattern for individual parents who decided to enroll for college education at a later period of their life. The third and final chapter explores the Granger causality test and the bi-variate as well as the multivariate co-integration to determine the interactions between interest rates, exchange rates, and the composite stock volatilities of different traded contracts under the Chicago Board Options and Exchange. Using the daily sector data for all observed variables from the St. Louis Fed over the period of 2007-2017 and introducing the method of simple vector autoregression, this study examines various aspects of the correlation where the current and the previous values of volatility indices, interest rates, and exchange rates have shown significant Granger causality effects to the return behavior of those volatility indices, interest rates, and exchange rates. The estimated result indicates that, under the absence of any long-run relationships, interest rates have more unidirectional and bi-directional causal effects with the stock market volatility indices than in comparison with the exchange rates, although both of them are identified as significant determinants of stock price volatility.
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    ESSAYS ON ONLINE PRESENCE AND BUSINESS PERFORMANCE
    (Middle Tennessee State University, 2019) Sayfuddin, ATM ; Rennhoff, Adam D. ; Gamble, Keith J. ; Roach, Michael ; Economics & Finance
    This dissertation focuses on interdisciplinary topics related to Industrial Organization, Environmental Economics, and Real Estate Economics. The first chapter of my dissertation studies the impact of going green on business performance. For this study, I show that a firm can adopt green practices in order to differentiate itself from its competitors. Competition in a market drives down prices, but a firm can be less affected by the competition when its products are differentiated. Hence, going green can have economic implications for businesses. Employing multiple empirical strategies, I find a hotel’s location plays a determining role in the effect of going green on its performance (i.e., occupancy rate, price, and revenue). My results suggest while green hotels in small towns and resorts enjoy a price and a revenue premium, with no significant effect on their occupancy rates, green hotels near interstates, airports, and in big cities do not get the economic benefits of adopting green practices. Further investigation reveals that the hotels in less popular cities enjoy the most benefit from becoming green. The results of this study thus point out to the need for asking “when” or “where” going green pays off, instead of “whether” going green pays off. The second chapter of my dissertation investigates the economic implications of online reviews. I use review data from a leading travel website, TripAdvisor.com, and revenue data for the hotel industry in Texas to examine the causal impact of online customer reviews on hotel revenue. On TripAdvisor.com, the star-rating displayed for each hotel represents a rounded average rating for all the submitted reviews, which results in a hotel having a 0.5-star increase in its displayed rating when its actual average rating crosses a threshold. This allows me using a quasi-experimental approach, regression discontinuity, to study the impact of a 0.5-star increase on the revenue of hotels. My findings show that a 1-star increase in the star-rating of a hotel on TripAdvisor.com leads to approximately a 2.2 - 3 percent increase in monthly revenue. This is equivalent to a range of additional $4,593 - $6263 monthly revenue or $55,117 - $75,159 yearly revenue for an average hotel. The third chapter investigates the financial implications of brand affiliation for businesses. Using a sample of hotels in the state of Texas that had a change of ownership between 2014 and 2017, I explore how a change in brand-affiliation that coincides with the ownership change is associated with hotel revenue. For the sample of hotels included in this study, we find after an independent hotel obtains brand-affiliation, its monthly revenue per available room (RevPAR) increases by 28.8%, on average; but I do not find any statistically significant improvement of monthly RevPAR for hotels that give up their affiliation status and become independent hotels.
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    ESSAYS ON THE COSTS AND BENEFITS OF COLLEGIATE ATHLETICS
    (Middle Tennessee State University, 2019) Bijelic, Elvedin ; Economics & Finance
    ABSTRACT This dissertation is composed of three separate empirical analyses. Each analysis is a separate article. Collegiate athletics are a significant aspect of many universities in the United States. The costs for running such programs are vast and the total benefits associated with athletic programs are not easily identifiable. In the following analyses, I seek to analyze the costs and benefits associated with collegiate athletics. Chapter I builds on previous work on the effect of athletic success on the university that has found estimates that suggest both basketball and football success can have a positive effect on student quantity. I utilize university data from the Integrated Postsecondary Education Data System as well as athletics data from Equity in Athletics Data Analysis to analyze how athletic success impacts university growth. I utilize a panel fixed effect model to estimate the impact of having a successful basketball or football season on forthcoming applications, undergraduate enrollment, and tuition revenue. I find that while the basketball champion has a significant impact on applications sent to the university, basketball has no significant effect on tuition revenue. However, results suggest that having a top 25 ranked football program increased tuition revenue by approximately 2% for two years following the successful season. The magnitude of this effect is estimated to be around $3 million in the subsequent academic year. The effect is found to be around 8% for the top football program, which would coincide with an increase of over $11 million in tuition revenue for the average university. When using top conference revenue figures, the magnitude rises to over $22 million. Chapter II analyzes how athletic subsidies differ among teams that compete in football at the NCAA Division I level. The primary comparisons are made between the top 5 conferences, also known as the Power 5 conferences, and the remaining Division I conferences. University-level data from 2005 to 2015 on ticket sale revenue, rights and licensing revenue, and university subsidies are obtained from USA Today's public records requests. The key findings indicate that ticket sale revenues increase by around 1.5% for each additional football win for all Division I programs. For rights revenue, conference champions are found to generate the most significant increases in revenue, ranging from 3 to 7%, which would correspond to an increase between $500,000 and two million dollars. Regarding university subsidies, a significant decrease in university subsidies of around 37%, approximately two million dollars, is estimated for top performing teams in the Power 5 conferences. Results also suggest that non-Power 5 conferences increase university subsidies as a method for keeping up with increasing advertising revenues observed at Power 5 conferences. Chapter III builds on findings of prior studies that have analyzed the relationship between recruiting and team performance. Prior findings indicate that high-quality recruits are associated with better on-field performance. In this paper, I determine the key factors associated with successful recruiting. I utilize panel fixed effect and negative binomial models to identify the university and athletic department indicators that bring about successful recruiting. Team performance is found to be significant in the recruiting process. However, I find that universities may signal their athletic department quality by increasing coaching salaries and by replacing underperforming coaches. These quality signals through spending on coaching staff are found to positively impact subsequent recruiting.
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    MACRODYNAMIC EFFECTS OF EFFICIENCY WAGES AND WAGE DISCRIMINATION POLICIES MODELED WITH HABIT FORMATION IN CONSUMPTION
    (Middle Tennessee State University, 2018) Booth, Matthew Lowell ; Economics & Finance
    This dissertation consists of two independent chapters, and an introductory first chapter with background and summary. While they have some theoretical and analytical tools in common, the models are independent of each other and each chapter can be read and understood by itself and makes its own contribution to the subject studied. Chapter one reviews a segment of the literature on real business cycle research, focusing first on the modeling of efficiency wages to create equilibrium unemployment, then on the use habit formation in consumption to capture some dynamic features of macroeconomic variables. My innovation in the chapters that follow is adding habit formation in consumption to a shirking efficiency wage model, and applying DSGE techniques to create a laboratory where questions of the dynamic effects of altering model parameters can be addressed by Impulse response and simulations that include stochastic shocks to the economy. This chapter includes information about the differences between two models that are studied in chapters two and three, which are theoretical differences in how the habit formation is modeled, and applied to different questions. Chapter two constructs an equilibrium model that combines external habit formation in consumption and efficiency wages arising from imperfectly observable effort to evaluate wage, employment, and output dynamics under fiscal and technology shocks. At certain levels of insurance and habit formation employment output correlations and output volatilities match US data better than a model without habit formation. However, increased employment volatility and counter- factual negative wage-employment correlations emerge. I use impulse response functions to explain the mechanisms that give rise to the observed changes in second moments. Chapter three builds on the result by using a similar analytical framework to pose a policy question. Comparing results from two models, one where a wage gap arises from heterogeneous worker history and another where an equal wage is enforced, impulse response experiments compare the respective welfare costs of a negative shock to technology in either case. The welfare cost of a recession caused by a negative technology shock of one standard deviation in this simulation, when wage equality is enforced, as compared to when employers are allowed to negotiate wages with individuals based on past employment status, is about 1.0% per year for 45 years, if expressed as a compensating variation in consumption, due to a deeper and more persistent drop in employment before a return to steady state growth.