Department of Economics

2021 Honors Students Abstract of Research

Are Diverse Economies Better? Creating and Evaluating an Economic Diversity Measure at the County Level

Research completed by Kiran Ferrini

Abstract of research: Classical economists such as Adam Smith and David Ricardo advocated for specialization and trade to promote economic growth. Conversely, more recent theories of economic complexity may suggest more diverse, less specialized economies are indicative of greater productive capabilities, greater growth, and resilience to external shocks. This paper applies the theories of economic complexity to sub-national, county-level data in California. I created an economic concentration index using employment sectoral data and used fixed-effects panel regression models to test hypotheses regarding economic concentration and per capita income growth and poverty rates. I find that while there is no statistically significant link between employment diversity and income growth and poverty at the county level in California, there seems to be a link between some specific sector shares and per capita income growth rates.

Falling Roads and Rising Times: Commute Time and Mode Analysis Following a Bridge Collapse

Research completed by Eric Tubbs

Abstract of research: Estimates suggest that three quarters of Americans commute to work in their cars every day, representing millions of twice daily trips with an average time of 27 minutes. Commuting costs to the commuter include out-of-pocket automobile and fuel costs as well as opportunity costs in terms of time. This paper asks how sudden changes in road infrastructure affect commute times and how quickly do commuters adapt to such shocks by adapting to a different commute mode. This paper presents an econometric analysis of commute time and mode following the collapse of the I-35W Mississippi River Bridge of Minneapolis, Minnesota. A difference-in-differences model was used to estimate the changes that the bridge collapse caused in the duration of local commutes as well as in the choice of commute mode. Additionally, attention was paid to the different impacts that the bridge collapse had on across gender, racial, and income in the Twin Cities Metropolitan Statistical Area.

A Tale of Loopholes and Greed: The Effect of the Affordable Care Act on Drug Prices

Research completed by Sarah Svendsen

Abstract of research: This study uses panel data from 2006 to 2014 and a fixed effects model to determine if the Patient Protection and Affordable Care Act amplified or slowed price increases in response to an ingress of newly insured patients. The market structure and its interaction with different insurance types are presented along with analysis of those payment types before and after the Affordable Care Act went into effect. Three different drug types are also isolated and examined. Results show that Medicaid disproportionately shoulders the burden of higher costs across all medication types. Additionally, brand name medications are shown to have the largest increase in prices for all payment types. Interestingly, price growth did not change for consumer share of cost (out-of-pocket payments) for most drug and payment types.

Appalachian Poverty: Don’t fall for the Poverty Trap

Research completed by Duncan M. Young

Abstract of research: The United States Appalachian region has faced persistently high poverty rates since the 1950s. Previously proposed theories have suggested the existence of a poverty trap due to human capital deficiencies and resource curse as possible explanations. In this paper, I review past theories for Appalachian poverty and search for evidence of a poverty trap using panel data. I use county level data from 1970 to 2000 with each decade being a period. In a fixed effects panel model, I regressed poverty rate from the previous decade on the current poverty rate, holding constant human capital levels and mining employment. The results provide additional evidence to uphold past theories and show that, holding constant for human capital and mining employment, poverty tended to naturally decrease by 20 percent per decade during this period.