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Economics Senior Project Abstracts
2002


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Name:Jonathan Bazylak
Date: Spring, 2002
Major:Economics
Thesis Committee: Donald Goldstein, Behrooz Afrasiabi

Title: Estimating the Cost Effects of Implementing ISO 14001 for Small Businesses

The thesis of this paper is to investigate the cost effects of implementing ISO 14001 on a small business. This is done through an investigation of ISO 14001, contemporary microeconomic cost theories, and environmental-management advocates' philosophies. After gaining significant knowledge of the aforementioned areas, a case study of DIC Tool/Hytron is used to estimate the costs of implementing ISO 14001. The focus of the cost research is based on the opportunity cost of human resources, the sum of explicit and implicit costs. After the total cost of ISO 14001 implementation for DIC Tool/Hytron is estimated, generalizations are made to allow the information yielded from the empirical research to be applied to small businesses. Finally, the benefits of ISO 14001 certification are discussed to shwo the balance between the costs and benefits of ISO 14001.


Name: Michael D. Belt
Date: Spring, 2002
Major(s): Economics
Thesis Committee: Janine Sickafuse, Donald Goldstein

Title: Impacts of Misleading Income Management Strategies on the Economy

2001 was a year full of controversy surrounding the accounting industry. As misleading income management strategies achieved through the manipulation of accounting methodology were discovered, investors, creditors, and other external users began to lose confidence in the accuracy of financial statements. Initially, the economy will experience the negative impacts of these misleading income management strategies. However, in the long run, the accounting industry will make the appropriate adjustments to accounting methodology, increasing the overall efficiency of the economy and allowing the economy to recover from the initial negative impacts.

I chose to analyze the implementation of FASB Statement Numbers 141 and 142, which changed the methods of accounting for business combinations, and the controversy surrounding Enron Corporation's bankruptcy. In order to gather information regarding the two controversies, I subscribed to economic periodicals, such as the Wall Street Journal and Business Week. Information regarding the implementation of rules was found in the above periodicals as well as in official releases by the regulating agencies. Through significant research using the above sources, I was able to find ample information to support my thesis.

Short term impacts resulting from the misleading income management strategies analyzed in this paper include, significant corporate write-offs, lack of investor confidence, depressed stock prices and the potential bankruptcy of Arthur Andersen. However, the long term impacts will prove to be beneficial to the economy. The revising of accounting methodology will increase the accuracy of financial statements. Therefore, businesses and investors will make more educated investment decisions, resulting in a more efficient allocation of capital. The economy will adjust and eventually benefit as the accounting industry responds to the misleading income management strategies exemplified in this paper.


Name: Kimberly Burke
Date: Spring, 2002
Major(s): Economics
Thesis Committee: Behrooz Afrasiabi, Stephen Casler

Title: Investigating the Relationship between the Stock Market and Business Cycles

There were two major stock market crashes in the history of the United States' economy in 1929 and 1987. These crashes had very different effects on real activity of the economy. The crash of 1929 caused a recession that lasted ten years, referred to as the Great Depression; however, the crash of 1987 did not have as great effects on business cycles, and the economy was able to quickly recover after this crash. Also, the media tends to exaggerate the effect of the stock market on the economy by only reporting stock market information when reporting business news. Because of the weak impact of the second crash on the economy and the media's intensification of the effect of the stock market, I would like to further investigate the relationship that exists between the stock market and business cycles. In order to accomplish this task, I first research the history of the two stock market crashes and their effects on the macroeconomy. Next, I theoretically establish the process through which the stock market affects business cycles and vice-versa. I then develop a vector autoregression model and use Granger-Causality tests to examine whether a causal relationship exists between stock prices and GDP. The results from these tests confirm that a causal relationship between the stock market and business cycles that is jointly determined does exist in the economy today.


Name: Matthew Carman
Date: Spring, 2002
Major(s): Economics
Thesis Committee: Earl Adams, Janine Sickafuse

Title: The Development of Independence for the Federal Reserve System

This article explores the development of the Federal Reserve System, since its founding in 1913. It breaks down the Federal Reserve's existence into four main time periods: 1913-1929, 1930-1949, 1950-1979, and 1980-1987. The main objective of policy as well as the different tools of monetary policy are thoroughly explained in each segment. The important events of each time period are summarized and related to the actions of the Federal Reserve in order to understand the thought behind each of its decisions. The relationship between the Treasury and the Federal Reserve is analyzed, providing both the negative and the positive aspects of a close relation between them. The main focus is on the Federal Reserve's obtaining independence from the Federal government, explaining in full the events leading up to the "accord." The conclusion will offer the author's opinion of the significance of the Federal Reserve's independence and whether it is necessary that such an important branch of the Federal government have as much leniency in its decisions as the Federal Reserve does.


Name: Ed Casciato
Date: Spring, 2002
Major(s): Economics
Thesis Committee: Antoni Moskwa, Steve Casler

Title: The Automobile Shock

This project is composed of a detailed explanation of what happened during the automobile shock in the 1970's. This was the period when the United States economy slipped into a recession and the Japanese automobile industry began to take over. The automobile shock was a result of many economic factors that occurred. In my project I explore each of these economic factors and describe the adverse effect it had on the auto industry. One of the main economic factors that I described in detail was the oil crisis. This crisis set the stage for the automobile shock, in which gasoline prices rose and the U.S. gas guzzlers could not compete with the more efficient Japanese vehicles. The final part of this study is the most interesting and focuses on how the U.S. auto industry regained its stature. This portion of the project focuses on CEO's such as Lee Iacocca and Roger Smith, and shows how they have had both positive and negative effects on the industry. Overall, this study is both historical and analytical; historical inthe way it describes the events in detail and analytical by showing why the events occurred.


Name: Elizabeth Cipolla
Date: Spring, 2002
Major(s): Economics
Thesis Committee: Tomas Nonnenmacher, Stephen Casler

Title: The Agricultural Adjustment Administration during the Great Depression: The way in which it intervened in the agricultural sector of the American economy

This paper focuses on a significant time in American economic history, the Great Depression. It is an analysis of the Agricultural Adjustment Administration (AAA), and the way in which it intervened in the agricultural market economy to increase the price of farm commodities. The interesting question at hand is was this intervention a necessary and wise decision?

Farmers encountered financial distress beginning in the early 1920's which worsened after the depression had set in. The AAA was given the power to intervene in a variety of ways in the agricultural market. The goal of these efforts was to control the overproduction problem in a way that would lead to higher prices and incomes for farmers. The various methods such as production quotas, acreage restrictions, taxation and price support programs are evaluated in the context of the supply and demand model. The immediate and long-term effects of the AAA are evaluated and discussed, and the conclusion is reached that yes, government intervention was a necessary and wise decision.


Name: Mike Colbert
Date: Spring, 2002
Major: Economics
Thesis Committee: Janine Sickafuse, Don Goldstein

Title: An investigation of Division I college athletes: Do they deserve to be paid to play?

The National Collegiate Athletic Association, or NCAA, is an organization that is in complete control of college athletics. They face many difficult decisions when it comes to the student-athletes involved in the association. One major problem that seems to become more and more popular is whether or not the NCAA should pay these players for their service. This senior comprehensive project explores the NCAA from the standpoint of how it works, who makes major decisions within the organization, and how these decisions are enforced. The NCAA faces many underlying problems that may make the decisions on pay to play easier to make. Another topic discussed in this paper is the concept of these athletes being considered amateurs. The NCAA argues that under amateur status, a cash payment is not allowed. In the end, it will be concluded that the NCAA should pay these athletes. A proposal for payment is given that is fair to the athletes, as well as the NCAA. In any job, the people at the workplace deserve to be treated fairly. Why should anyone have the right to take advantage of another person? In the NCAA's case, they are taking advantage of college kids and not rewarding them like they deserve. If the NCAA pays the athletes, they will not only make the athletes happy, they will see that their organization will avoid a lot of the problems they face today.


Name: Jarrod Essey
Date: Spring, 2002
Major(s): Economics
Thesis Committee: Earl Adams, Janine Sickafuse

Title: The Economic Effects of Losing the World Trade Center

This composition contains three chapters: one on the history of the World Trade Center, one on the outlook of the global economy and one of the outlook of New York City's economy. The chapter dealing with the World Trade Center gives a history of the Trade Center, as well as statistics such as office space and costs that are associated with building the Trade Center. The chapter dealing with the global outlook examines the effects that losing the Trade Center have had on other areas of the world. This includes an examination of areas that are dependent upon travel or exporting goods to make a profit, as well as other ways that the rest o the world has been affected by the loss of the Trade Center. The chapter dealing with the outlook of New York City's economy contains information on the amount of money that was lost due to the loss of the Trade Centers. It also examines other costs, such as cleanup, loss of human capital and many other costs. The conclusion summarizes all of the chapters, and it also contains personal input as to what the future holds for the Trade Center and the global economy, as well as New York City's economy.

Name: Jill J. Fuduric
Date: Fall, 2001
Major(s): Economics
Thesis Committee: Donald Goldstein, Janine Sickafuse

Title: Why did the ABL fail and why is theWNBA still in existence?

This study is going to be an economic analysis of the Women's National Basketball Association in comparison with the once existing American Basketball League. It will try to answer why the ABL failed and the WNBA seems to be doing quite well. It will also try to find if the difference in each league's ownership has forced the ABL to fail and the WNBA to succeed. The NBA owns the WNBA and the NBA has much monetary support behind the WNBA, while the ABL was owned privately and operated as a more traditional league. This argument will be contrasted with the idea of Quirk and Fort that professional sports leagues operate as monopolies naturally. This study is also going to explore Quirk and Fort's argument as to when and where rival leagues may or may not succeed.


Name: Metasabia Hailemichael
Date: Spring, 2002
Major(s): Economics
Thesis Committee: Behrooz Afrasiabi, Antoni Moskwa

Title: Oil Price Shocks and the Stock Market

Oil price shocks have an impact on a firm's productivity. Since changes in the stock market are due to changes in corporate profitability, oil proce shocks can affect the stock market causing firms' stocks to adjust according to the shocks. This paper attempts to determine the link between stock prices and fluctuation in oil prices as a whole. These implications of oil prices are tested via Granger's causality. The Granger's causality test provides evidence for a symmetrical link between the oil price shocks and the stock market for the period of 1950-2001. Overall, the evidence suggests that the oil price shocks do cause the stock market to adjust with the shock.


Name: Clifford Hein
Date: Spring, 2002
Major(s): Economics
Thesis Committee: Earl Adams, Behrooz Afrasiabi

Title: As a result of September 11 it has been more risky to invest in the airline market, in fact a lot riskier than before the happenings of September 11

On September 11, 2001 a great tragedy struck the United States of America. Two airplanes went crashing into the World Trade Center Towers, costing thousands of people their lives. Because of this event the airline industry has suffered an enormous downturn. My thesis is that because of September 11 it has become more risky to invest in the airline market, in fact a lot riskier than before the happenings of September 11. There have been many new rules and regulations that have altered the industry. The economy and government are pressing for better airline security. In spite of the lack of consumer confidence and the rules and regulations that are being instilled across the nation, the airline market has not beomcing any riskier to invest in today. The industry has been working feverishly to try and remedy the September 11 losses.


Name: Robert Jacobs
Date: Spring, 2002
Major(s): Economics
Thesis Committee: Earl Adams, Antoni Moskwa

Title: Economic Crime Units of the FBI

This paper allows you as a reader to get more of an understanding of how the Federal Bureau of Investigation and its Economic Crimes Unit operates. After reading this paper you will understand not only how the Federal Bureau of Investigation is organized, but also what types of crimes the FBI's Economic Crimes Unit investigates and even some inside tips from the perpetrator's perspective in regards to how the crime can be accomplished successfully. You will also be made aware of prior investigations and the outcomes of those investigations. This is a very informative and interesting paper and will only allow you to gain a better understanding of the bureau that continues their everyday by maintaining a safe atmosphere for you to conduct business.


Name: Chad Kaldor
Date: Spring, 2002
Major(s): Political Science and Economics
Thesis Committee: Robert Seddig, Dan Shea, Tomas Nonnenmacher, Behrooz Afrasiabi

Title: The Original Intent of the Sherman Act: Populists, Chicagoans, and the Microsoft Case


Name: Joshua Konesni
Date: Spring, 2002
Major(s): Economics
Thesis Committee: Don Goldstein, Steve Casler

Title: The Capital Asset Pricing Model: how accurate is it in ranking portfolios by risk and return?


Name: John Paul Marcantonio
Date: Fall 2001
Major(s): Economics
Thesis Committee: Stephen Casler, Tomas Nonnenmacher

Title: The Effect of Increased Social Security Benefits on the Saving Rate: A study of the Life Cycle Hypothesis


Name: James Marks
Date: Spring, 2002
Major(s): Economics
Thesis Committee: Tomas Nonnenmacher, Asuman Baskan

Title: Agency Relationship: The Contractual Benefits of being a Network Marketing Representative

In any firm there is an employment relationship between the employer and the employees because of employee contracts. The contracts offered in the network marketing industry create a unique agency relationship. These contracts define the rights and responsibilities of the representatives. The paper begins with an historical account of the network marketing industry since the 1920s. The next chapter examines agency theory and applies it to the network marketing industry. Finally, a case study of Ideal Health International, a network marketing company that currently markets customized nutritional products, sent a survey to representatives and a regression is run testing hypotheses generated in the theory chapters.


Name: Jeff Miller
Date: Spring, 2002
Major(s): Economics
Thesis Committee: Tomas Nonnenmacher, Asuman Baskan

Title: The Erie Canal: Its Economic Impact in the Creation of a Socially Aware Middle Class

This Senior Project examines the creation of the middle class in New York in the early 1800s. This was a period of revivalism and social action at an intensity previously unseen in the United States. Prior to the nineteenth century, American society in a two-class system. The project follows the economic development of the United States as it pertains to a new class, the middle class, in New York and attributes the formation of the middle class and the social movements that followed to the construction of the Erie Canal. Because the Erie Canal was the first true transportation link to the West, the Project can analyze its impact on middle class formation of upstate New York in the absence of many factors, allowing for a more accurate representation of how this component led to the creation of a middle class. Data was collected from historical reports, books, and essays to detail the beginnings of a social revolution as the end effect of an economic revolution. The Senior Project concludes that the Erie Canal was the most influential factor in the formation of a middle class society in upstate New York.


Name: Mark J. Minadeo
Date: Spring, 2002
Major(s): Economics
Thesis Committee: Janine Sickafuse, Behrooz Afrasiabi

Title: Are Financial Ratios a Reliable Source of Information when Forecasting Stock Prices?

Financial statements are the means in which analysts use when evaluating a company and determining the recommendations of a stock whether it be buy, hold, or sell. With advancements in technology, individuals can now retrieve the same informations as the analysts. This gives the individual investor the capability of breaking down the financial statements and evaluating companies themselves. This newly acquired knowledge can safeguard the individual from making irrational decisions when investing and relying on untrustworthy institutions to invest their money for them. He can do this by dissecting the financial statements and placing the numbers in a simple ratio analysis format. This allows the investor to be able to look for company trends and gives him the option of comparing a company's ratios to those of industry leaders. However, in the current business atmosphere, much pressure has been placed to show corporate earnings, and many companies have achieved these results unethically. Ironically, in today's setting the individual is more informed, but is continually at a disadvantage due to the widespread corporate ability to mislead investors with falsified financial statements.


Name: Jeremy Noonan
Date: Spring, 2002
Major(s): Economics
Thesis Committee: Don Goldstein, Janine Sickafuse

Title: Should Full Scholarship Division I Athletes Deserve a Monetary Stipend?

This comprehensive project investigates the National Collegiate Athletic Association (NCAA) and the student athletes that participate in the NCAA in order to determine if full scholarship Division I athletes deserve a monetary stipend based upon the NCAA acting as a monopsony. It was determined that the NCAA has a monopsony over collegiate athletics as a whole, but it can be seen that the monopsony is actually over college athletic programs. The NCAA invests in collegiate athletics by giving each member's athletic program money. The return on these investments are the revenues produced by the production of athletic competitions. In return for these investments the institutions agree to follow the rules and regulations set forth by the NCAA. Therefore, the NCAA controls its constituents, but through them controls the athletes. In response to this, it was concluded that based upon the substantial revenues generated by the NCAA it is necessary to allow full scholarship Division I athletes to receivea monetary stipend based upon the NCAA acting as a monopsony.


Name: Pieter J. Ockers
Date: Spring, 2002
Major(s): Economics
Thesis Committee: Stephen Casler, Tomas Nonnemacher

Title: The Economics of Immigration: Wage Impacts of Immigrants

Immigrants are used as complementary or substitutable labor inputs in the production process. In "The Economics of Immigration: Wage Impact of Immigration," immigrants are assumed to be used as substitutes and as such an influx of immigrants serves to increase the overall labor supply driving wages down. The discussion opens witha brief historical overview of the various waves of immigrants who have claimed the US as their permanent residence. An introduction of the current issues of debate relative to immigration follows. The derivation of a model, by which to predict the wage impact of immigrants, is then introduced relying heavily on the theoretical dynamics of labor supply and demand. The predictions made with the use of this model are subsequently tested by empirical analysis. Wages are regressed on labor supply and demand shift factors in order to estimate the impact on wage of an increased proportion of immigrants in the US population. We estimate that a one percent increase in the proportion of immigrants implies a decline in the average weekly age rate by $19.20 (holding all other variables constant).


Name: Nicholas Paolini
Date: Spring 2002
Major(s): Economics
Thesis Committee: Donald Goldstein, Stephen Onyeiwu

Title: The Increased Demand of R&D in U.S. Industries: Evidence of 5 U.S. Companies


Name: Brian Peterson
Date: Spring, 2002
Major(s): Economics
Thesis Committee: Tomas Nonnenmacher, Behrooz Afrasiabi

Title: Theories on the Relative Efficiency of Slave Labor

Slavery was used to supply a majority of the work force for the agricultural sector of the antebellum south. The debate over whether or not this form of labor operated efficiently and was productive has been under consideration since slavery existed. In the 1970's hypotheses were proposed indicating that slavery held a considerable advantage in efficiency over northern free labor and small famrs in the South using slave labor. These claims were heavily disputed and under question until more recent work using advanced production functions were employed to obtain better empirical evidence in support of the theory that large slave farms possessed an efficiency over small slave farms based on the technological advantage of the gang system.


Name: Alex Primis
Date: Spring, 2002
Major(s): Economics
Thesis Committee: Behrooz Afrasiabi, Steve Casler

Title: Random Walks or Trends: Which Path do Stock Prices Follow?

Many people have struck it rich by investing in the market and many have lost all of their assets. So the questions that I sought to answer had abviously been asked by many people before me. In act, there are innumerable versions of market theories that have all been tested and retested over and over again. And why shouldn't they be? If one of these analysts found a market theory that was proven and maintained, then their sucess in the market would be endless and a fortune could be made. Hence, althought stock price determination and market trend theories have been analyzed to death, economists still embark on analysis of stock price determination theory. I chose two market theories to analyze that had opposing views of the issue of market trend existence. I chose to analyze and test the Random Walk hypothesis and the Firm Foundation Theory.


Name: Jaimie Sakmar
Date: Spring, 2002
Major(s): Economics
Thesis Committee: Janine Sickafuse, Donald Goldstein

Title: A Cost-Benefit Analysis of the Construction of PNC Park and Heinz Field: Are new stadiums economically beneficial?

Although PNC Park and Heinz Field have already been built, they still evoke controversy over how they were funded and whether or not the benefits are sufficient to cover the costs. Pittsburgh was unable to resist the stadium promise of prestige and money. This fact, coupled with the fear of losing its baseball team, caused city officials to lobby a proposal for the construction of the two facilities for over five years. From the very beginning, officials were promising economic justification for the construction of a new ballpark and football stadium. They repeatedly emphasized the direct and indirect economic efforts that would result from the presence of these facilities and the events held there. These officials relied heavily on economic rationales in their efforts to gain support.

Through an extensive cost-benefit analysis, this research paper examines whether the costs outweigh the benefits or vice versa. A cost-benefit analysis offers a method of evaluating policy measures by taking into account both qualitative and quantitative costs and benefits.

In the particular case of the two facilities built in Pittsburgh, one has the advantage of looking in retrospect. The decisions have already been made. This composition examines these decisions and, again, attempts to determine if the benefits are indeed greater than the costs, which would ultimately make the stadiums wise investments. This research paper is based on extensive research on PNC Park, Heinz Field, and the Pittsburgh economy, as well as on general examinations of similar situations in other cities.

Sports have become more than the revreational activity they once were. They have become an issue in many of the larger cities throughout the country. As long as public subsidization exists as a funding source for stadiums, it will always be a controversial issue that cities must face. When public funding is at stake, wise investment decisions must be made. It is in policy-makers' best interest to us a cost-benefit analysis in these situations, and this composition does just that.

Advocates of these projects are consistently rallying around the idea that these facilities are catalysts of local and regional economic development, as well as anchors for downtown revitalization projects. They argue that the host city's image will be improved, spending will increase, new spending will have a multiplier effect, and tax revenues will increase so much so that they exceed the subsidies used for the construction. However, the information introduced in this composition indicates that the impact of stadiums tends to be modest, at best, in most cities, and Pittsburgh is no exception. There is no evidence that enough revenues are generated to even come close to covering the subsidies required. Although there seems to be plenty of Steelers' and Pirates fans both in and out of Pittsburgh, sports seem to represent a suprisingly small part of Pittsburgh's economy.

To reiterate, though a cost-benefit analysis and many economic theories, this composition examines the impact of PNC Park and Heinz Field on Pittsburgh's economy. The goal of this paper is to weigh the costs and benefits against one another, and ultimately make a compelling case against the construction of PNC Park and Heinz Field based on the data gathered and analyzed throughout this paper.


Name: Geoffrey L. Schultz
Date: Fall 2001
Major(s): Economics
Thesis Committee: Tomas Nonnenmacher, Earl Adams

Title: Modeling the Economics of Profit Maximization in Monopolistic Competitive Firms: An Analysis of the Pharmaceutical Industry's Direct-to-Consumer Advertising Strategy

Successful advertising and marketing are very difficult and complex tasks within the pharmaceutical industry. In recent history, most pharmaceutical manufacturers have begun to advertise their products directly to consumers in an attempt to increase sales and, consequently, profits. This direct-to-consumer form of advertising accounts for only a portion of all spending on advertising by drug companies; however, it is possibly the most influential form, as well as the most worthy of investigation. This paper examines the way in which pharmaceutical firms allocate funds in their marketing budgets towards consumer ads. The paper also tries to evaluate the effectiveness of market segmentation


Name: Janie Senchak
Date: Spring, 2002
Major(s): Economics
Thesis Committee: Steven Casler, Janine Sickafuse

Title: Occupational Segregation

This project explores the trends of occupational segregation within various industries. It also tries to determine which factors have been able to reduce occupational segregation within management positions. Chapter One simply serves as an introduction. it discusses how the views and attitudes concerning women in the United States have changed drastically over the years. The introduction also raises several pertinent questions that will be answered in later chapters. Chapter Two presents an overview of women in the labor force within the United States. It introduces factors such as educational attainment, divorce rates, fertility rates, wage gaps, which influence women's overall participation in the labor market. These factors are significant because they have an effect on the occupations that women choose to enter as well. This chapter also lays the foundation for understanding the degree of occupational segregation in certain occupations. Chapter Three is devoted to the human capital model, which was originally developed by Gary S. Becker. Ths human capital model serves as a supply-side explanation as to why occupational segregation exists between males and females in various occupations. Chapter Four uses Becker's human capital model and applies it to the variables discussed in Chapter Two in order to explain the decrease in occupational segregation in management positions. It utilizes a multiple regression model in order to show that a relationship exists between certain economic trends and the percentage of females in management positions. According to the regression model, if marriage rates continue to fall, and the educational attainment and wages of women continue to rise, occupational segregation in management should continue to decrease. Chapter Five serves as a concluding chapter, which summarizes and interprets the findings of this project.


Name: Charles Sernik
Date: Spring, 2002
Major(s): Economics
Thesis Committee: Tomas Nonnenmacher, Earl Adams


Title: Productivity Paradox: A Review of Theory, History, and Relevant Research Surrounding the Computer and the "Productivity Paradox"

The underlying concept of the modern "productivity paradox" is the rapid investment in computing technology that is not appearing in productivity statistics. The research surrounding the productivity paradox is extensive and varied. For every author who manages to identify measured productivity growth from computers there exists a separate author who does not. The question remains: where and when does the computer tie in to productivity statistics? This senior project explores the relationship between innovation theory, historical development and comparison, and quantitative data to gain a better understanding of the productivity paradox. The goal is to provide a summary of the theoretical foundations concerning the development of innovations, a historical background of the computer and dynamo, and a comparison of the two technologies. Quantitative data is then represented at the end that identifies the computer's contribution to productivity in a firm level study. However, at the end of the senior project the only thing that is clearly agreed on is that measurement difficulties still exist and may understate the impact of the computer in productivity statistics.


Name: Barrett Sigmund
Date: Spring, 2002
Major(s): Economics
Thesis Committee: Earl Adams, Steven Casler

Title: Evaluating Risk Aversion (a theoretical and experimental assessment)

This study challenges the generally accepted theory of risk aversion as it is commonly understood and taught in the economic world. It is argued that the theory of diminishing marginal utility is not necessarily a correct justification for why risk aversion is the predominant attitude in people. The argument is made that demographics are a better indicator of risk aversion. This theory is then tested in an experimental setting using undergraduate students. The study's findings reveal that there is some correlation between various demographics and the subjects' attitudes towards risk. In particular, it is found that level of education is a definite indicator of risk, as the study reveals that higher levels of education result in less risk aversion, ceteris paribus.


Name: Michael Suffoletto
Date: Spring, 2002
Major(s): Economics
Thesis Committee: Don Goldstein, Earl Adams

Title: Online Trading is Causing Retail Brokerages to Adopt New Business Models Causing Service Convergence: Who Will Survive?

The securities industry has gone through three major transformations, which have developed full-service, discount, and electronic brokerages. These transformations moved the securities industry from an oligopolistic form to monopolistic competition. The development of the Internet and its increase in popularity has allowed electronic brokerages to form and enter the market by reducing the barriers to entry. Electronic brokerages can offer trades at cheaper commission costs by eliminating the services of an individual broker. Many independent investors have chosen to use electronic brokerages due to their cheap costs. This has caused full-service brokerages to restructure their business models to remain competitive. Although full-service brokerages offered a wide range of services to aid the investor, they were forced to unbundle, go online, and offer cheaper commissions. Within monopolistic competition brokerages had to differentiate themselves to appeal to investors. As the full service firms changed, offering online trading, electronic brokerages were forced to change their structure as well by offering more services. This has caused the full-service and discount brokerages to converge their services. As of now full-service brokerages have the advantage, if they remain flexible, due to their established roots and large net worth.


Name: Craig Summers
Date: Spring, 2002
Major(s): Economics
Thesis Committee: Earl Adams, Behrooz Afrasiabi

Title: The Impact of the 1988 Basle Accord on Bank Profitability

On July 11, 1998, G-10 countries adopted the Basle Accord after many years if debate. The purpose of this paper is to provide information about why the Basle Accord was written, the specifics of the Basle Accord, and the importance of cappital in the banking industry due to the contents of the Basle Accord. An event study is used to measure the impact three announcements had on the profitability of bank share prices. The dates of the three announcements are December 10, 1987, June 24, 1988, and July 11, 1988, all important dates dealing with the creation and release to the public the outline of the Basle Accord. After selecting these three announcements, the normal and abnormal returns were calculated for the five banks selected for this study: Amsouth Bancorporation, Banc One Corporation, Bank of America Corporation, J.P. Morgan & Co., and Mellon Bank Corporation. This study found that these announcements had no significant impact on the profitability of bank share prices.


Name: Catherine Trostle
Date: Spring, 2002
Major(s): Economics
Thesis Committee: Steven Casler, Behrooz Afrasiabi

Title: Wage Disparities Among the Sexes: Do they begin with choice of college major?

This senior comprehensive project examines the wage gap among men and women to determine what variables, specifically choice of college major, play a key role in these pay disparities. First, a broad history of women's traditional roles in society is provided and the factors leading to their increased participation in the labor force over the year are discussed. Also presented in the introduction is women's history of educational attainment and their choice of college major compared to men's. A comparison of median weekly earnings is also looked upon.

Underlying the analysis presented here is the human capital model and the assumptions behind it. This model is used to show how differences in women's tastes and preferences from men's lead to investments in human capital. Next, use of regression analysis statistically shows the degree to which specific variables explain wage disparities. These variables are consistent with the human capital model and include: earned master's degrees by women, the birth rate, the divorce rate, women's labor force participation rate, and the marriage rate. I found that most of my variables were significant, of most importance was the percentage of women with master's degrees. This confirms that educational attainment does play an important role in explaining why men's earnings are higher than women's earnings, on average. Finally, I form the weighted average salary for both men and women, who have graduated from Allegheny College in 2001. This study shows the total weighted average salary for men is significantly higher than that of women. This study also finds that the college major has a significant impact on the differences in salaries that men and women experience.


Name: Nathan Visser
Date: Spring, 2002
Major(s): Economics
Thesis Committee: Asuman Baskan, Stephen Onyeiwu

Title: The Effects of Multinational Corporations upon Host Country Development: A Case Study of Intel in Costa Rica

The role MNC's play in international economic restructuring, whether postive or negative, in recent years has become an increasingly heated topic with the global arena. Scholars have sought to determine whether they have a positive or negative impact upon host countries through empirical and theoretical techniques thus creating a plethora of literature and postions on the matter. Any generalizations derived from case studies are not relevant to all instances due to the unique qualities inherent to each individual circumstance. Likewise, theoretical techniques are too general and too broad to provide an accurate interpretation that is applicable in all circumstances. The following paper examines the advent of the Intel Corporation into Costa Rica in order to determine whether or not its overall impacts upon the Costa Rican economy were beneficial or detrimental.


Name: David Whitaker
Date: Spring, 2002
Major(s): Economics
Thesis Committee: Tomas Nonnenmacher, Antoni Moskwa

Title: The Influences of Institutional Structure on Economic Growth: An Analysis of Bankruptcy Law

What creates economics growth? This fundamental question leads to an endless array of answers and theories. While not attempting to answer this question, this paper shows that institutional structure influences the economic prosperity of a country. The argument is not that institutions are the sole purpose of economic growth, but rather that, institutions are an integral part of encouraging growth in an economy. The difficulty in proving the effectof institutions on an economy lies in the challenge of discovering comparable governmental structures. Defining the foundation of efficient institutions, using the theories of Ronald Coase and Thomas Hobbes, a structure is built that institutions must follow to maximize their positive influence on the economy. With an in-depth look into bankruptcy laws of the United States and Germany, this paper will prove that with the right institutional structure economic growth is encouraged.


Name: Tina Wyland
Date: Spring, 2002
Major(s): Economics
Thesis Committee: Earl Adams, Tomas Nonnenmacher

Title: Assessing the Effects of Work Incentives from the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 on Single Mothers with Children

This senior comprehensive project assesses the effects of work incentives placed on single mothers with children following the implementation of the Personal Responsibility and Work Opportunity Act of 1996. Welfare reform has been a hot topic since the early 80's, and the new act was designed to "end welfare as we know it." With strict work requirements and regulations, individuals are cut from the welfare rolls after five years of receiving benefits. Single mothers are especially at risk because this new act affects them the most. What does this act signify to single mothers? It means the opportunity cost of leisure has increased due to strict work requirements and time limits.

This paper begins with an examination of the history of welfare from the Great Depression until just before the Personal Responsibility and Work Opportunity Act of 1996. It examines the evolution of the system that led to recent programs. It also compares the change in consumption of welfare recipients when cash payments are made instead of in-kind benefits. The third chapter introduces the new act and work requirements that are expected to be met by individuals. Finally, the fourth chapter illustrates how some lives have been affected. Two case studies are discussed to update the progress of former recipients and how they feel about the quality of their situations.


 


 

 
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