Top PDF Three essays on economics of rehypothecation

Three essays on economics of rehypothecation

Three essays on economics of rehypothecation

The direction of this conflict between the intermediary’s objective and the socially efficient choice depends on the terms of the contract between the in- termediary and his borrower. If the contract involves over-collateralization, in the sense that the value of collateral to the borrower exceeds the pay- ment for recovering it, there tends to be an excessive use of rehypotheca- tion by a holder of collateral. Intuitively, this is because when the contract involves over-collateralization, there is a negative externality of not return- ing the collateral to the borrower, which is reflected in the spread between the borrower’s private value on his collateralized asset and the payment for recovering it. From the perspective of the borrower, he is supposed to re- purchase the collateral at a price lower than his valuation on it. However, the intermediary does not internalize this private cost to the borrower from failure of returning collateral, and thus he sometimes wants to participate in rehypothecation even when rehypothecation is inefficient – that is, when the social cost (which includes this private cost to the borrower from rehy- pothecation failure) exceeds the benefit. Similarly, if the contract involves under-collateralization, there tends to be an insufficient use of rehypotheca- tion.
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The economics of childbearing: Three essays

The economics of childbearing: Three essays

Expenditure programs, business cycles, and government interventions can affect many decisions surrounding the birth o f a child. For example, public insurance programs such as Medicaid have the potential to increase the utilization of prenatal care. This, in turn, may lead to better infant and maternal health outcomes. Given the high and increasing number o f pregnant women covered by Medicaid, the effectiveness o f the program in promoting prenatal care use and improving health needs to be evaluated. Also, the impacts o f business cycles on childbearing are of interest to policymakers. For example, does unemployment substantially affect the decision to conceive a child or the ability to obtain appropriate medical services? And, if so, are infant and maternal health outcomes compromised during economic downturns? A well-informed government can design policies to help deal with issues such as these. Government interventions, however, can have unintended (and potentially harmful) consequences as well. For example, several recent economics papers have demonstrated that fiscal policies may affect fertility and the timing o f delivery. Understanding the incentives embedded in government programs and assessing the responsiveness of individual behavior to these incentives is therefore key. My dissertation consists o f three essays in which I investigate an important understudied aspect of the Medicaid program, inform policymakers about the impacts of unemployment on prenatal care use, infant and maternal health, and add to
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Three essays in applied economics

Three essays in applied economics

The London School of Economics and Political Science Three Essays in Applied Economics Amar Shanghavi January 2015 A thesis submitted to the Department of Economics of the London School of Economics f[.]

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Three essays on macro labour economics

Three essays on macro labour economics

The London School of Economics and Political Science Three Essays on Macro Labour Economics Jiajia Gu A thesis submitted to the Department of Economics of the London School of Economics for the degree[.]

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Three Essays on the Economics of Precision Agriculture Technologies.

Three Essays on the Economics of Precision Agriculture Technologies.

This study consists of three essays focused on economic issues related to cotton precision farming (PF) technologies in the Southeastern region of the United States. Precision farming technologies are typically delineated as either site specific information gathering (SSIG) technologies or as variable rate technologies (VRT). The first essay investigates the effect of farmers’ perceived spatial yield variability on precision technology adoption. We extend the theoretical model developed by Isik and Khanna (2002) and find empirical evidence that farmers who perceive their yields as variable will more likely adopt at least one of the precision farming components. In addition, farmers who use computer in their farm management, believe that the technology will be profitable and important in the future, acquire precision farming information through university publications, as well as younger ones who plan on being in the industry for more years, will more likely adopt at least one of the technology's components.
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Three essays in experimental and labor economics

Three essays in experimental and labor economics

4.3. INSTITUTIONAL BACKGROUND and Scoppa (2011); Zinovyeva and Bagues (2011); Bagues et al. (2014)). This avoids endogene- ity due to the possible existence of unobservables that may be correlated with commissions’ and candidates’ characteristics. The exogenous variation in the gender composition of the commission enables the estimation of the impact of one more female commissioner on the likelihood of a female candidate to be selected. Although the papers share the same methodology, the evidence is mixed. De Paola and Scoppa (2011) examine 1,000 candidates in Chemistry and Economics for the Italian qualifications to Associate and Full professorship held in 2008 and document same-sex preferences, while Bagues et al. (2014), analyzing 66,000 applications to Associate and Full Professorships in all academic fields in Italy in 2013, report the opposite result: namely, each additional female com- missioner decreases the success rate of female candidates by 2%. A mixed and different result is provided by Zinovyeva and Bagues (2011) on Spanish data from all academic fields: opposite-sex preferences are found in competitions for Associate Professor, whereas female evaluators tend to prefer female candidates in competitions to become Full Professor. The authors explain their results with the internalization of the glass ceiling effect in academia by female evaluators, who may tend to discriminate against potential future female competitors. However, little is known on the gender dynamics operating at the start of a research career.
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Three essays in international financial economics

Three essays in international financial economics

As a final step, I further assess how the relationship between FX correlation and foreign ownership develops over time for a subset of countries. Figure 4.5 illustrates the development of the coefficients calculated over one year periods with monthly fixed e↵ect for the three largest markets: USA, Japan, and China. A dashed line indicates that the coefficient is not significantly di↵erent from zero using a 10% significance level. The same control variables are used as before. As in the regressions above, the coefficients are overall negative. The US coefficient shows some significantly positive observations around the financial crisis. From 2010 onward, it is consistently significantly negative. The positive coefficient during the financial crisis implies that foreign investors had a preference for firms with positive FX correlation such as importers. There is a similar pattern for Japan, with a period of positive coefficients during the financial crisis fol- lowed by negative coefficients between 2011 and 2013, before turning positive in 2014. A possible explanation for this is that exposure to reserve currencies such as US dollar and Japanese yen was seen as more desirable during the financial crisis. Additionally, expo- sure to importing firms implies a stronger exposure to country specific shocks. Hence, foreign investors chose a higher exposure to US and Japan specific shocks after the be- ginning of the financial crisis. In case of China, the coefficient is initially highly negative before reaching a similar negative level as Japan and the US in 2011. The path that the coefficient for China depicts appears to track the establishment of the Chinese yuan as a major currency.
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Three Essays on the Economics of Risk, Insurance, and Production.

Three Essays on the Economics of Risk, Insurance, and Production.

to avoid payoff scale effect, all the menus of choices for the three MPL designs are developed such that the overall expected payoffs from the three payoff-based MPL designs are very close to each other. Needless to say, each price- based MPL design is exactly equivalent to its corresponding payoff-based MPL design in terms of its expected payoffs. Regarding the endowment effect, it should be noted that there is no possibility for the so-called endowment effect, since the subjects are explicitly told several times that they cannot take the endowment with them outside the lab, and that they have to buy the widgets using the endowment. In order to avoid any potential learning effect, subjects are not shown the outcome (payoff) of each task at the end of each task while they are conducting the tasks. In fact, they are shown the outcomes (payoffs) at the end of the experiment when they can observe all the payoffs associated with each task as well as the payoff selected at random for the purpose of payment. In order to avoid any potential order effects (including both ‘fatigue effect’ and ‘practice effect’), each subject sees the six tasks in a random order set by the computer. For example, one subject might be assigned to do Task 6 first, and then Task 4 afterwards, and so on, while another subject might be assigned to do Task 2 first, and then Task 1 afterwards, and so on, which are not necessarily the same as the order listed on the table of content of the instructions. Everybody in the pool of subjects participated in all the six tasks, so there is no selection bias. And finally, we consider fixed effects by making within-subjects comparisons, in which design the same group of subjects serves in all the six treatments. Therefore, there is no concern about subjects not being the same individuals.
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Three essays on econometrics and economics of education

Three essays on econometrics and economics of education

In the ordered response model with many dummy variables, a by-product of our al- gorithm pertains to the hidden collinearity. This happens when the patterns of the RHS dummy variables, and those of the LHS ordinal outcomes, are highly correlated. This is known as the separation problem in the statistics literature. 4 As a consequence of separation, the likelihood function is monotonically increasing, and the conventional max- imum likelihood estimator is unable to reach the maxima. Heinze (2006) and Heinze and Schemper (2002) have attempted to overcome the separation in a binary logit model by adopting the Jeffreys prior, which is originally used to correct the small sample bias of maximum likelihood estimators in generalised linear models (Firth, 1993). However, the attempts made by Gelman et al. (2008) and our paper all reach the same conclusion that the Jeffreys prior cannot work stably when correcting the separation problem. As an alter- native, we adopt an independent Cauchy prior with scale 10 to handle the separation issue in our ordered probit model, inspired by Gelman et al. (2008) who use the Cauchy prior with scale 4 for a binary logit model. We extend their justifications to the ordered probit context. What is important is that in most applied economics studies, the researchers are only interested in the marginal effects in a probit or logit model instead of the parameters of the regression model. Based on such preferences, we are able to justify the choice of our
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Three Essays in Macroeconomics and International Economics.

Three Essays in Macroeconomics and International Economics.

In this two-country model, the creditor and the debtor decide interactively their policy rules. The numerical solution to the model is found over the space of three state variables, b the bilateral bond,w the creditor’s wealth and y the debtor’s income. The solution to the problem is found through a combination of policy function iteration and value function iteration. We first divide all the three state variables into grids and compute the initial value function at each grid based on different default states. Second, we derive interactively the optimal choice of bond holding of both countries and the creditor’s optimal trade cost τ . In this process, we approximate the value function by cubic spline interpolation, which is significantly more efficient and accurate than the discrete state space technique which is commonly used for the com- putation of sovereign default problems, as is pointed out by Hatchondo et al. (2010). After we find optimal policy functions, we solve for the debtor’s default decision and update its value function. We continue the iterating process until the difference be- tween value functions in consecutive iterations is smaller than my precision criterion. The algorithm is described in detail below.
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Three essays in labour economics and the economics of education

Three essays in labour economics and the economics of education

Proponents of school choice argue that the structure of the public educational system – where education is mainly provided by government with substantial monopoly power and largely no competition – leaves educational consumers with limited choice among schools. They further suggest that this may result in a disconnect between school quality and parents’ preferences. There is a growing literature in economics that suggests that expanding school choice could improve educational outcomes by increasing disadvantaged children’s access to high quality schools, and by causing underperforming schools to become more effective or to shrink as families “vote with their feet” (Friedman 1955; Becker 1995; Hoxby 2003; Belfield and Levin 2003). 1 These ideas have gained strong currency in education policy circles, leading to policy innovations such as open enrollment systems, magnet and charter schools, private school vouchers, and expanded public school choice for students in poorly performing schools.
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Three Essays on Labor and Public Economics

Three Essays on Labor and Public Economics

7 Another explanation for why formal employment of workers 28 years old or younger does not increase, is that labor supply for this segment of the labor market is perfectly inelastic. If[r]

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Three Essays on the Economics of Education Expansion

Three Essays on the Economics of Education Expansion

The previous difference-in-differences results show that, on average, there exists a relative increase in prices for houses sold in locations scheduled for redistricting. To gauge the magnitude of this redistricting plan on aggregate house values and tax revenue, I use property assessment data in 2013, one year before the start of redistricting process, to calculate the total gain in property values. I focus on houses that will be redistricted to the new school catchment area and multiply the 2013 value by the corresponding coefficient I find in the bottom line in Table 4.6. The results are listed in Table 4.7. The total increase in the housing stock value in Bryan Station is more than 85 million dollars from around 8,000 houses that will be redistricted into the proposed area. Henry Clay also has substantial increase around 15 million dollars. Though Lafayette has the largest estimate (10.4%) from previous section, but due to lower average house value and fewer houses, the total gain is less than the other two catchment areas. But the aggregate impact of the new school is large. The total value of housing stock in the three catchment areas amounts to more than 2 billion dollars and change of value is around 108 million dollars, an increase, on average, of $9016 per house. If I annualize the benefits over a 15 year period at a discount rate of 3.5%, this is a benefit of $783 per year per household. The estimated construction cost of the new high school was 82 million dollars 11 though this cost does not include any additional costs associated with maintenance of new facilities or any other costs not strictly a function of enrollments. As discussed in Section (4.3), to the extent that adding the new high school (Frederick Douglass) affects educational quality in the other high schools, the change in value is a measure of the relative benefits of the new school, not the absolute benefits.
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Three Essays on the Economics of Health Reform.

Three Essays on the Economics of Health Reform.

Using federal and state variation in health insurance tax deductions for the self-employed between 1999 and 2005, I show that the effect of subsidies depend crucially on state insurance[r]

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Three Essays on Public Economics and Policy

Three Essays on Public Economics and Policy

Based on the legislative history, I restrict the analysis to births occurred in years 1982 to 1986. This reflect a period when the Medicaid expansions focused primarily on the categorical eligibility rules. Specifically, the pre-policy period includes years 1982 to 1984. I use January 1985 as the first month of post-policy period, as this coincide with the state legislature convene timing of calendar year 1985 for most of the states. I end the post-policy period by December 1986 for two reasons. First, starting in April 1987, a subsequent policy change - the Omnibus Budget Reconciliation Act of 1986 (OBRA86) – was effective. The OBRA86 permitted states to increase income threshold for pregnant women to up to 100% of the poverty line. Variation occurred across states in adopting the expansion. On the other hand, the timing and generosity of state level expansions are potentially correlated with other state level unobserved attributes. To avoid state level legislative endogeneity concern, I exclude from the analysis sample births occurred after OBRA86 became effective. Second, I further exclude birth occurred in the first three month of 1987, to ensure that both pre-policy and post-policy sample are evenly distributed over the months of the year. Buckles and Hungerman (2013) documents substantial seasonality pattern of maternal characteristics.
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Three Essays in Agricultural and Natural Resource Economics

Three Essays in Agricultural and Natural Resource Economics

The topography of the area surrounding the fire is also important for how large it will grow. The three topographical characteristics that are most relevant for fire size are aspect, elevation, and slope. Aspect is the direction of the slope and it affects how much solar radiation a site receives. South facing slopes receive much higher solar radiation, so fuels tend to dry out sooner and more thoroughly during the fire season. Elevation affects fire behavior by influencing the amount and timing of precipitation, as well as exposure to prevailing wind. Slope influences the speed of a wildfire’s spread. Specifically, as heat rises in front of the fire, it more effectively preheats and dries upslope fuels, making for more rapid combustion.
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Three essays in International Economics and Industrial Organization.

Three essays in International Economics and Industrial Organization.

Multinationality is defined as the number of overseas countries where a firm has subsidiaries (Lu & Beamish, 2001; Tallman & Li, 1996). Hennart (2011) criticizes this measure because subsidiaries can significantly vary in size and the measure may not reflect the true effect of economies of scale. Sullivan (1994) calls for a multidimensional measure of the variable to account for any potential bias in the measurement. Following Sullivan, in a meta-analysis of the relationship between multinationality and performance, Contractor et al (2003) combine three existing measures to build the degree of internationalization. This three-component index includes: (1) the eigenvector-weighted sum of foreign sales over total sales, (2) the number of foreign employees over number of total employees and (3) the number of foreign offices over number of total offices. He then uses the principal component analysis to test whether one single component is fully representing the three dimensions or the components eigenvectors need to be treated as weights to adjust the index.
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Three Essays on Energy, Environmental, and Resource Economics.

Three Essays on Energy, Environmental, and Resource Economics.

111 interesting fine structures in the data and wants to investigate the details, then a larger set of neurons would be needed for sufficient resolution. For example, the hundred neurons (10 × 10) show that several neurons are allocated to the northeast region in the figure and the distances between neurons in the region are close each other. A further investigation demonstrates that those neurons simply classify the negative price conditions in west Texas into several different localized negative prices, such as negative prices in further west or negative prices in further north in west Texas. Finally, a multinomial logit regression used to investigate the interactive effects of CREZ projects and the wind generation on market conditions requires at least certain number of observations for each class. Even if the covariates used in the multinomial logit regression include diverse variables and time-fixed effects, we cannot technically derive causal inference for a rare market condition with only a few dozens of observations out of total 48,192 observations. In order to remedy the problem, the neurons having a few hundreds of observations should be either dropped out or combined to other neurons with similar characteristics. In this paper, I used a 4 × 4 set of neurons and combined two to three neurons having only a few hundreds of observations to one class.
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Three Essays on Economics and Information Shocks

Three Essays on Economics and Information Shocks

This study experimentally investigates individual choices to monetarily reward or punish non-profit organizations in response to media coverage and how those choices influence the aggreg[r]

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Three essays on financial economics

Three essays on financial economics

This table lists summary statistics of the innovation factor, Fama-French three factors (from Kenneth French’s website), and Carhart momentum factor (constructed according to Carhart (1997). The five factors are denoted by RDCA (innovation factor), M KT (market factor), SM L (size factor), HM L (value factor), and M OM (momentum factor), respectively. In June of each year t, NYSE, Amex, and NASDAQ stocks are divided into three size groups using the breakpoints for the bottom 30%(Low), middle 40%(Medium), and top 30%(High) of the ranked values of market equity (price times shares outstanding from CRSP) in June for NYSE stocks. In each June, I also independently break NYSE, Amex, and NASDAQ stocks into three book-to-market groups based on the breakpoints for the bottom 30%, middle 40%, and top 30% of the ranked values of book-to-market ratio for NYSE stocks. Book-to-market ratio is calculated as the book value of equity in year t − 1 divided by the market value of equity in December of year t − 1. Aslo independently, in each June, I sort NYSE, Amex, and NASDAQ stocks into three innovation groups based on the breakpoints for the bottom 30%, middle 40%, and top 30% of the ranked value of RDCA, which is defined as R&D capital scale by total assets. 27 portfolios are formed from the intersections of the three size groups, three book-to-market groups, and three innovation groups. Monthly value-weighted returns on the 27 portfolios are calculated from July of year t to June of year t + 1, and the portfolios are rebalanced in June of each year. Thus, every month there are nine low R&D portfolios and nine high R&D portfolios. The innovation factor is defined as the difference, each month, between the simple average of the returns on the nine high R&D portfolios and the simple average of the returns on the nine low R&D portfolios. Panel A lists some basic statistics of the five factors. SKEW and KU RT refer to skewness and kurtosis, respectively. Panel B lists the correlation matrix of these factors. Panel C reports the coefficients of the regressions of innovation factor on traditional factors using two different asset pricing models: Fama-French three-factor model, and Carhart (1997) four-factor model. The sample period is from July 1963 to December 2009.
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