Economics Student Scholarship Copyright (c) 2013 Occidental College All rights reserved. http://scholar.oxy.edu/econ_student Recent documents in Economics Student Scholarship en-us Mon, 28 Jan 2013 15:59:00 PST 3600 The Role of Chieftaincy in Financial Inclusion: A Case Study of Eight Rural Communities in the Northern Region of Ghana http://scholar.oxy.edu/econ_student/7 http://scholar.oxy.edu/econ_student/7 Wed, 03 Oct 2012 11:17:43 PDT Misunderstood customary political and social institutions can jeopardize attempts at introducing microfinance into rural villages. This paper examines how microfinance institutions approach the chieftaincy system in Ghana. Using insights from over 200 interviews across 8 communities and 10 microfinance institutions in the Northern Region, observations are made regarding the equity and efficiency of the private and public sector processes aimed to increase financial inclusion. The investigation’s findings suggest a number of recommendations for all key actors regarding the effective delivery of microfinance services. First, microfinance institutions must make a better effort of engaging the District Assembly to give credit to the local government structure and take advantage of its valuable platform, more clearly communicate their community selection criteria to prospective clients, and be wary of the cultural consequences of singling out women. In turn, traditional chiefs and elected Assemblymen, the official linkage between chieftaincy and the central government, need to practice due diligence with outside visitors, encourage internally led development projects to enhance community capacity and mobilize local residents and resources to demonstrate a self-help mentality. Finally, community members must also take responsibility as clients and the ultimate beneficiaries of microfinance delivery to keep their local leaders honest and proactive as well as being willing to contribute to community projects.

]]> Chris Suzdak Impact of Academic Experience in Economics on Risk Preferences and Rationality: An Empirical Investigation http://scholar.oxy.edu/econ_student/6 http://scholar.oxy.edu/econ_student/6 Tue, 27 Apr 2010 16:23:40 PDT When we model human choices under risk, the standard is to apply a rational choice model such as Expected Utility Theory (EUT). However, humans are not always rational, and Kahneman and Tversky developed Prospect Theory (PT) to account for people’s cognitive limitations in decision-making. However, both EUT and PT do not differentiate among individuals, nor discuss factors that lead to different risk preferences and rationality for different individuals. This study examines whether academic experience in economics reduces risk aversion and irrationality. A survey was administered to economics and non-economics majors in Occidental College. The survey was design as pairs of gambling choices to detect subjects’ risk preferences and responses when induced to display certainty, framing, reflection and lottery effect as defined in PT. It was found that economics majors had lower risk aversion, and generally behaved differently from non-economics majors in rationality tests, although their behaviors were not always more consistent with EUT than those of non-economics majors. Academic experience in economics, in most cases, significantly reduced risk aversion and irrationality among non-economics students, but this learning effect was not observed among economics majors. A further test of self-selection among economics and non-economics major with little economics training showed that economics majors were born rather than made. It is further shown that the monetary incentives used in this study reduced risk aversion, but did not have much impact on rationality. It is also found that risk aversion and irrationality were positively correlated, and math/science majors were more rational than humanities majors.

]]> Zhengyi Zhou Are Ethanol Policies Affecting Crop Prices? An Empirical Analysis of US Ethanol Policies http://scholar.oxy.edu/econ_student/5 http://scholar.oxy.edu/econ_student/5 Fri, 23 Apr 2010 17:00:37 PDT Ethanol has been characterized as the alternate energy solution to the United States gasoline gluttony. There are many benefits that come with the consumption of ethanol, but there are costs that are often overlooked. Specifically, crop prices are increasing as a result of ethanol production due to corn being the main input for US ethanol. This paper investigates how much influence ethanol legislation has on crop prices over the past decade. Using a hedonic price model, various federal and state policies are tested to see if there is a statistically significant impact on corn, wheat, and soybean prices.

]]> Nicholas Summers Improving Health Insurance in America: A Comparative Analysis of Swiss and U.S. Insurance Markets http://scholar.oxy.edu/econ_student/4 http://scholar.oxy.edu/econ_student/4 Thu, 22 Apr 2010 11:47:51 PDT Comparisons of health systems worldwide have commonly been used to evaluate the strengths and weaknesses of certain health systems. The consumer-driven model of Switzerland’s health insurance market, however, has not been extensively compared with U.S. health insurance. While previous literature by Herzlinger & Parsa-Parsi (2004) and Tanner (2008) has broadly compared the two systems, a more detailed analysis has not been completed. An economic approach which controls for external factors that affect the productivity and effectiveness of health care and health insurance can help determine the relative strengths and weaknesses of each system. This paper attempts to control for these factors to analyze the characteristics of each health insurance market and their implications for health care reform in the United States.

]]> Tyler P. Woods Fostering Credit: Financial Innovation and the Development of the Raiffeisen Credit Cooperatives http://scholar.oxy.edu/econ_student/3 http://scholar.oxy.edu/econ_student/3 Thu, 22 Apr 2010 10:43:53 PDT Over the last two decades, the rise of microcredit has cast new light on the age-old question of how to provide credit to the poor. The attention paid to microcredit organizations however, tends to ignore the deeper historical legacy of microfinance, a legacy with important implications for designing successful future lending institutions. German credit cooperatives, which became popular in nineteenth-century Germany despite an already highly developed banking system, are one such example.

This paper examines the social and political context which inspired the development of credit cooperatives before turning to arguments about why cooperatives were able to provide small long-term loans to borrowers without collateral. These arguments center on efficiency advantages cooperatives’ possessed over traditional institutions because of: (1) an ability to capitalize on superior information, and (2) an ability to effectively impose low-cost sanctions on members who have defaulted. Testing these hypotheses against the data yielded by the business records of the first rural credit cooperative founded in Germany, the Heddesdorf cooperative, this research provides qualified support for both efficiency arguments and reveals important considerations for current microfinance efforts.

]]> Victor Sowers Unwrapping the Hot-Toy Problem: An Analysis of Peak Demand and Price Dispersion in the Holiday Market for Zhu Zhu Pets http://scholar.oxy.edu/econ_student/2 http://scholar.oxy.edu/econ_student/2 Wed, 21 Apr 2010 16:09:55 PDT The sold out toy is a recurring theme during the holiday season, so why don’t manufacturers and retailers increase the price of these holiday season sellout products? This work considers whether a larger shortage implies a more elastic demand curve and a smaller opportunity cost to the manufacturer and retailers of maintaining the shortage than might be expected. It does so by using the dispersion of final bid prices on eBay of the Zhu Zhu Pet Hamster Pipsqueak as a measurement of consumer price sensitivity. It also considers whether weekends represent min-demand peaks.

]]> John D. Clair En Garde! Tournament Asymmetry and Disincentive Effects in International Fencing Competitions http://scholar.oxy.edu/econ_student/1 http://scholar.oxy.edu/econ_student/1 Wed, 21 Apr 2010 16:09:54 PDT In this paper I test the predictions of tournament theory using panel data from international fencing competitions. The theory predicts that for a given level of prize spread, agents’ effort incentives are reduced due to the asymmetry. Using two measures of prize spread, I estimate the impact of these measures on performance for five separate skill-sorted cohorts using OLS and the Heckman selection model. I find evidence of ordinal disincentive effects for fencers of a lower skill level, which is consistent with the predictions of the theory.

]]> Alexander W. Salter