Browsing by Author "Walter N. Thurman, Committee Member"

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Alarming Behavior: Crime Displacement and Observable Private Precaution
(2008-07-31) Collett-Schmitt, Kristen Elizabeth; Charles R. Knoeber, Committee Chair; Xiaoyong Zheng, Committee Member; Walter N. Thurman, Committee Member; Stephen E. Margolis, Committee Member
Creating the Hot Hand Effect with a Grand Prize
(2005-06-10) McFall, Todd A.; Charles R. Knoeber, Committee Chair; Lee A. Craig, Committee Member; Tomislav Vukina, Committee Member; Walter N. Thurman, Committee Member
My dissertation is titled 'Creating the Hot Hand Effect with a Grand Prize.' It develops a theory of how the addition of a grand prize for performance in a sequence of tournaments affects agents' effort and participation decisions. The theory's predictions are empirically tested with data from the Professional Golfers' Association (PGA) Tour. The theoretical model examines choices made by two identical players who compete in two different three tournament 'seasons.' The first type of season provides a prize to the winner of each tournament, while the second type provides an additional grand prize to the overall winner. The model yields three testable hypotheses. First, the effort exerted by each player and the likelihood of participating in a tournament are constant across each tournament in the season without a grand prize. Second, effort and the likelihood of participation is larger throughout much of a season with a grand prize relative to a season without a grand prize because both the payoff to winning and the opportunity cost of not participating in a tournament increase with the addition of a grand prize. Finally, the key finding of the model is that the introduction of a grand prize by the principal induces a 'hot hand effect.' Specifically, the incentives that players face diverge in the middle of the season because the player who has early success (was lucky) in the first tournament of the season has a larger payoff to winning the second tournament of the season because only he can win the grand prize early and avoid the late season effort costs that are associated with winning the grand prize. So, the winner of the first tournament is more likely to also win the second tournament even though both players are equally skilled. These theoretical predictions regarding performance and participation are tested with data from the Professional Golfers' Association (PGA) Tour. An invitation to the season-ending Tour Championship event, created in 1987, acts as the PGA Tour's 'grand prize.' Golfer performance and participation is generally consistent with the theoretical predictions in seasons with (after 1987) and without (before 1987) the Tour Championship.
Limited Attention, Asymmetric Information, and the Hedonic Model
(2007-10-12) Pope, Jaren C.; V. Kerry Smith, Committee Chair; Walter N. Thurman, Committee Member; Daniel J. Phaneuf, Committee Member; Raymond B. Palmquist, Committee Member
The broad objective of this research is to gauge the importance of relaxing the full information assumption in revealed preference models when decisions are made in complex, public information environments. This thesis focuses on housing markets. An information acquisition process is outlined that describes why homebuyers are often less informed than sellers for some housing attributes when they face more stringent information search and processing constraints. Adapting the hedonic model for the possibility that sellers are more informed than buyers suggests that estimates of the implicit price for a housing attribute may be attenuated towards zero if there is asymmetric information about the quantity of the attribute. The importance of the asymmetric information argument is gauged by applying the quasi-random experiment methodology to three applications involving exogenous information shocks for different housing attributes. The first of these applications describes the impact of an airport noise disclosure on housing prices. The results indicate that the disclosure reduced housing prices near the airport by 2-3 percent. This suggests that an estimate of the implicit price for airport noise would have been attenuated towards zero by approximately 36 percent prior to the disclosure. The second application described the impact of a flood plain disclosure on housing prices. The results indicate that the disclosure reduced housing prices in designated flood zones by approximately 4 percent. Thus this application reconfirms the results from the airport noise application and the conceptual framework. The third application describes the impact of information shocks related to the locations of registered sex offenders on housing prices. The results indicate that housing prices fall by 2 percent within one tenth of a mile of a registered sex offender when a sex offender moves into a neighborhood. However, this impact was not affected by increased media attention surrounding two child-abductions committed by registered sex offenders near the study area. These results are somewhat less conclusive about the role of asymmetric information on the estimated implicit price for proximity to sex offenders.
Revealed Preference and Time Series Analyses of U.S. Macroeconomic Aggregates
(2004-08-17) Maia Filho, Luiz Flavio; John J. Seater, Committee Chair; John S. Lapp, Committee Member; Douglas K. Pearce, Committee Member; Walter N. Thurman, Committee Member
This research extends the literature on the revealed preference analysis of macroeconomic aggregates in multiple ways. The relevance of recent methodological changes in data construction is our first topic, as Varian's (1982, 1983) nonparametric tests are run on U.S. consumption series built under NIPA's old and new methods. The results indicate that previous conclusions on the overall GARP-consistency of data and on weak separability of particular aggregates are affected by the methodological changes in data. Additionally, test results are observed to be sensitive to the adoption of series at different frequencies. The issue of temporal aggregation is examined in two ways. We initially show that those changes do not seem to have significantly altered the univariate time-series properties of aggregates or previous conclusions about the impacts of temporal aggregation on those properties; therefore, the aggregation of economic flows into annual figures is once more found to involve significant losses of information about the dynamic behavior of higher-frequency data. The power of the GARP test in datasets of different frequencies is then investigated from analytical and empirical standpoints. Time aggregation is found to reduce the power of the GARP test. Finally, we apply Varian's tools to study for the first time a dataset including the value of nonmarket services produced inside the household. The modification involves a more detailed picture of consumers' allocation of time, alternatively a source of utility (leisure) or a resource in household production. We observe that the changing number of hours spent on average in household production — due to the increasing participation of women in the civilian labor force over recent decades — can be characterized as a rational decision made by the representative agent in a standard utility maximization model.
Spatial Econometric Analysis of a Watershed Utilizing Geographic Information Systems: Water Quality Effects of Point and Non-Point Pollution Sources in the Neuse River Basin, NC.
(2005-12-12) Lee, Jong-Hwa; Montserrat Fuentes, Committee Member; Ada A. Wossink, Committee Member; Kelly D. Zering, Committee Chair; Walter N. Thurman, Committee Member
This study utilizes elements of several different fields of study to facilitate more effective and efficient policy development for water pollution control. In order to implement efficient environmental policy, spatial aspects of watersheds should be carefully incorporated into empirical analysis. The geographical attributes of a watershed induce various spatial stochastic processes, causing surface water quality data in streams to have a unique spatial structure. In this study, geographical data of watersheds are collected and manipulated to find a consistent basis for comparing measures of pollution sources with variations in water quality across hydrologic units in the Neuse River basin in North Carolina. This research seeks to calibrate an empirical watershed model using available spatial (statistical) analytical techniques. Methods are demonstrated of utilizing Geographic Information Systems (GIS) to convert data from multiple sources to a common basis for water quality analysis. A spatial autoregressive response model is chosen considering spatial aspects of a regional watershed, and a corresponding structural watershed model is constructed. The empirical watershed model is designed to incorporate spatial effects and to produce accurate estimates. The model specifies that the spatially weighted sum of neighbor water qualities (total nitrogen [TN] concentrations) affects the TN concentration of each downstream monitoring unit, as do the standard covariates of local pollution sources and heterogeneous watershed characteristics. The completed standard econometric analysis includes cross-sectional estimation of several functions predicting TN concentration in streams conditional on watershed characteristics and potential sources of TN in the hydrologic unit. Results show that a clear understanding of regional spatial capacity will help avoid overuse of water resources. Specific knowledge of spatial information and empirical relationships allows improved design of controls on economic activity across regions (e.g., Total Daily Maximum Daily Load [TMDL] and nutrient trading programs) to preserve environmental resources. The study concludes by recognizing that a more robust watershed analysis would require more spatial data refinement and the option of panel data analysis.
Three Essays on Modeling Risk in Fed Cattle Production
(2007-11-13) Belasco, Eric J; Walter N. Thurman, Committee Member; Sujit K Ghosh, Committee Member; Nicholas Piggott, Committee Member; Barry K Goodwin, Committee Chair
This study examines issues that arise when modeling risk associated with fed cattle production. While research concerning crop yield and revenue risks are numerous, studies focusing on production risk in livestock are much less frequent. The first essay evaluates the relationship among four variables associated with the health and performance of feedlot cattle, and the resulting production and profit risk. The four variables of interest include feed conversion rates, average daily gain, veterinary costs, and mortality rates, which are conditional on characteristics that are known when the pen is placed into a commercial feedlot. Conditional variables include gender, average weight, feedlot location, and season of placement. A multivariate Tobit model is used to characterize the relationship among the four dependent variables, where each element in the covariance matrix is conditional on placement characteristics. The second essay focuses on modeling cattle mortality rates, alone and as part of a system. A zero-inflated log-normal distribution is developed and shown to have advantages in model fit and prediction tests with this data set, relative to classical methods. A simulated data set is also utilized to assess the potential bias from assuming a Tobit model when the data are more accurately characterized through a mixture model. The third essay quantifies the amount of risk inherent in cattle feedlot operations through the use of simulation techniques. More specifically, extit[ex-ante] profit risks are evaluated under scenarios that utilize varying levels of price protection through the use of forward contracts and the options market.
Three Essays on the Demand of Imported and Domestic Meat and Livestock in the United States
(2006-11-19) Boonsaeng, Tullaya; Peter Bloomfield, Committee Member; Barry K. Goodwin, Committee Member; Michael Wohlgenant, Committee Chair; Walter N. Thurman, Committee Member
This dissertation studies the demand for imported and domestic demand models for meat and livestock. The first essay focuses on the separability between import and domestic meat demand and the performance of static versus dynamic models of consumer behavior. A new dynamic system of demand functions is developed and used to test the separability restrictions on U.S. meat consumption data. Our results indicate that imported meat consumption is non-separable from the U.S. consumption and a dynamic specification of the AIDS model is superior to the static AIDS model. The second essay analyzes the demand for domestic and imported livestock by the US meat processing industry and explores the existence of long-run relationships in the derived demand models which are required for the specification of dynamic demand models. The results indicate that the static inverse input demand model performed better than the dynamic models for both the beef and pork processing industries. The results of this study indicate that there is not a long run relationship in the variables of the inverse demand models for livestock. The third essay investigates the impact of the discovery BSE in Canadian cattle on the imported and domestic demand for livestock and meat in the United States. The analysis is based on the results of the first and second essays of the dissertation. A multi-market partial equilibrium model is utilized to simulate the effects of policy-induced shifts in quantities of imports supplied from Canada on the meat and livestock industries. Our simulation results predict small effects on cattle and the results are similar to prediction from Armington type models even though separability strongly rejected.
Three Essays on the Production Effects of Decoupled Payments: Do Decoupled Payments Matter for Acres and Yields?
(2009-12-05) Girante, Maria Joana Sacramento; Nick Piggott, Committee Member; Walter N. Thurman, Committee Member; Ivan T. Kandilov, Committee Member; Barry K. Goodwin, Committee Chair
Conventional wisdom suggests that if decoupled payments do not distort market incentives, they should not distort production or trade. But the literature has identified several potential â€œcouplingâ€ mechanisms that suggest theory and practice are not in accord. Using both estimation and simulation methods, we analyze the effect of decoupled payments on farmersâ€™ decisions in the presence of one such mechanism, credit constraints. Intuitively, as payments enhance the liquidity and/or the collateral of credit constrained farmers, additional investment in production is allowed to occur. We estimate the marginal effect of decoupled payments on total, owned, and pasture acres, and on acres of corn, sorghum, soybeans, and wheat and observe whether payments matter more for more leveraged farmers. Our ability to observe farms over time allows us to improve on the existing literature by controlling for farm-specific unobserved effects. In an effort to analyze the income stabilization aspect of these payments we further estimate their effect on farm household consumption expenditures. The significant acreage effects and insignificant marginal propensity to consume suggest payments are being not put to the policy makersâ€™ intended use. We also extend the existing literature by using simulation methods in an expected utility maximization framework to evaluate the effects of doubling the amount of payments received and of recently proposed tighter payment limits on the typical Kansas wheat farmerâ€™s acreage and borrowing decisions. While tighter limits do not appear to matter, the collateral boosting effect of payments allows farmers to put more acres into production. Finally, we estimate the ability of farm characteristics to explain differences in crop yield performance. Our results reveal the potential for decoupled payments to boost relative yields and give an unfair advantage to their recipients. This may become an issue in future WTO discussions over the distortionary effects of decoupled payments.
Understanding Winter Visitation to Yellowstone National Park Using Revealed and Stated Preference Modeling
(2008-04-11) Sung, Joo-Kyung; Walter N. Thurman, Committee Member; Roger H. von Haefen, Committee Member; Daniel J. Phaneuf, Committee Chair; Raymond B. Palmquist , Committee Member