Our Economics Honors Theses

This past semester we had 3 students taking Econometrics who took their first major step toward a great honors thesis. I'm excited to see what these young ladies conclude. Below are their abstracts. If you encounter these young scholars out in the wild, then be sure to ask them about their research!

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Mary-Kathleen Dowling-Parra
Micro and Small Enterprise Financing in Peru

Microfinancing is often seen as the answer to providing financial security and empowerment to small business owners who often would not have access or be unable to obtain loans or credit otherwise. In this study, I test the impact of financing on micro and small businesses in Peru to evaluate whether it truly helps marginalized business owners and increases their business profits. Using Micro and Small Business Surveys from Peru's National Institute of Statistics and Information, I examine which demographics are most likely to receive financing as well as what type of financing increases a business’s profits the most. I consider the owner’s gender, age, and education as well as the age of the business, its technology, number of employees, and their training. I find that male owners were more likely to receive financing than women - though there is no evidence that this is due to discrimination or different barriers to access. The characteristic that most increases the likelihood of an owner receiving financing is when an owner has received business training. As I further my study, I will explore where there is a gender difference in the type of financing that an owner receives how it affects micro and small businesses. 

Brianna Hougham
The Protection of Women against Domestic Violence Act and Children’s School Outcomes in India

Studies have shown the challenges children face after witnessing or falling victim to domestic abuse. There is high incidence of violence at home in India, with fifty-two percent of women believing it is okay for a man to beat his wife. This violent home environment can have detrimental effects on children and their school outcomes. I examine whether the implementation of the Protection of Women against Domestic Violence Act (2005) had a positive impact on children’s school outcomes. My study uses panel data of school age children from the 2006 and 2012 Indian Human Development Survey. Additionally, I use data from the Fourth Monitoring and Evaluation Report 2010 on the Protection of Women from Domestic Violence Act of 2005, which reports data on the number of protection officers and the state-level estimated budget set aside towards implementation of the act. I study whether increased budgets and a greater numbers of protection officers help in improving school outcomes for children. My preliminary findings show that states with enforcement of Protection Officers increased children’s attendance in school. An increase in the budget, however, led to a decrease in children’s school attendance, suggesting that budgets for education were decreased in order to fund the act. 

Julia Wool

The Effect of Government and Industry Funding on the Antibiotic Discovery Void

Does increased government health funding impact the discovery of new antibiotics? Previous studies state the importance of antibiotic research given the growing concern of antibiotic-resistant infections.  Researchers point to a void in the discovery of new antibiotics that began in 1987 and has continued to the present.  The consensus in the literature is that the lack of government and private funding has been a significant contributor to this void.  To examine this I use health data from the National Science Foundation on research and development expenditures broken down by type of research: basic, applied, and development.  My preliminary descriptive statistics show that since 1953 all three types of funding by the federal government have increased.  For the private industry my findings show that both applied and development research and development have increased while basic research and development has stagnated. The preliminary findings from my Probit model show a negative and statistically significant relationship between government funding and the discovery of new antibiotics.  However, this result is not consistent with the theory. Therefore, in a future extension, I plan to extend my model to control for regulations that could have disincentivize the discovery of new antibiotics by the private sector.

Balser Recording

In case you missed it, below is a link to the audio recording of the Drs. Balser talk in which he discusses maternity leave and maternal health. Unfortunately, we are unable to release his lecture on the promotion gap.

Audio starts at about 8:40:

Hosting Drs. Cary Balser

The Ave Maria Economics department is happy and excited to announce that it will be hosting Drs. Cary Balser of the University of Notre Dame in order to discuss maternity leave, the gender gap, and maternal health. We are very thankful to AEI and the James Madison institute for co-hosting this event. All members of the Ave Maria community are welcome and light refreshments will be served.

Essay Winner: Kealen Vasquez

The Ave Maria University Economics department is proud to publish its first blog post. We could bore readers with archaic nuances concerning economics, or with trivial and in-offensive content about something uninteresting.  Instead, our first post will be from one of our students.

Earlier this semester, the Econ dept hosted an essay writing contest inviting students to explore, advance, apply, or illustrate an idea that they found most appealing, counter-intuitive, or poignant in their economics classes. We had 4 winners in no particular order:

• Kealan Vasquez
• Niklas Jenkins
• Max Bodach
• Mairead Kennon

As winners of the essay contest, the students will attend the Southern Economics Association conference in late November and they'll have their essays published here. So, without further ado:

Mr. Kealen Vasquez: Some Thoughts on Risk and Utility Functions

Utility Functions are crucial to understanding risk-aversion and risk-seeking behaviors. A risk-averse person has a concave utility function, such that losing money decreases utility more than gaining the same amount of money would increase utility. This idea makes intuitive sense: one might expect the average person to balk at the idea of betting $100 at the flip of a fair coin. Losing $100 hurts a risk-averse person more than gaining $100 benefits them.

Often I’ve thought about what my own personal utility function might look like, in order to understand why I feel inclined to make specific decisions. I have found that the state lottery has been a useful avenue with which to experiment with my preferences on risk. In particular, the Pick-4 game provides itself as a good measuring stick. In the game you choose 4 numbers, each between 0 and 9. There is no jackpot for Pick-4; instead they only have set prizes based on which game you decide to play. A “Straight” game, for example, costs 50 cents to play and you only win if you get the 4  numbers right and in the correct order. The prize for winning the “Straight” game is $2500 and the probability of winning 1 in 10,000, meaning the expected value of the ticket is 25 cents, which is less than the cost for the ticket. 

Alternatively, I could play “Box” games, in which one wins by getting the numbers right in any order. Then, for example, all 12 combinations of my numbers 5-0-4-0 can win, but the prize is only $200, about one twelfth the“Straight” prize. Thus the expected value is still about 25 cents, but the prize is distributed in a different way. In fact, Pick-4 sets all of is prize amounts so that every ticket has an expected value of about 25 cents, rounded to make uniform prize amounts. This makes the game an

excellent measurement of risk preferences: because every ticket has the same expected value, they only differ in deviation, a very basic yet intuitive measure of risk. I noticed in my behavior that I first started playing the “Straight” games, but I decided early on that the “Box” games were more worthwhile, at least for me. Using these kinds of decisions as data, I, playing enough lottery, might be able to better estimate my utility function.

The fact that I feel justified in even playing this lottery game means that at low values of money, I am risk-seeking, and my utility function is convex. However, I know that at large values of money, I am risk-averse: for example, I would not place a $100 bet on a fair coin toss. Then my utility function must at one point flip from being convex to concave, forming a kind of “S” shape. I suspect that this point for me is likely less than $1, because I find it difficult, if not impossible, to save pocket change without losing it. On low values of money then I must be placing very low--negligible, even--values of utility. I’ll call those values for which my utility function is convex “petty money”. Millions of people play the lottery each and every day, so it seems fair to assume that it is not abnormal to see people with utility functions that start convex and flip to concave at a certain point. I’d like to speculate that for each person there is a range between $0 and some positive amount that counts as “petty money”, for which values the person is risk-seeking, before their utility function turns concave. 

Traditionally, one might view a risk-seeking person as reckless and impulsive, but it could be the case that a person who is risk-seeking at higher values just has a larger range for “petty money”. Then risk-seeking behavior might be an indicator of security, or even wealth.