2022 Honors Students Abstract of Research

Food Insecurity, Income Volatility and Liquidity Constraints

Research completed by Faith Fatchen

Abstract: Food insecurity is a pertinent problem in the United States. In this paper, the relationship between food insecurity and liquidity constraints is investigated. Previous literature has explored this relationship. However, this paper seeks to contribute to the literature by employing a proxy for liquidity constraints that may capture more attributes of liquidity constrained households than previously used. The proxy was estimated in a two stage process, using two data sets. First, using the Survey of Consumer Finances (SCF), the probability that a household is denied credit is estimated using explanatory variables common to both SCF and the Survey of Income and Program Participation (SIPP). This estimation was then use to created fitted values in the SIPP data set, which were then used as the proxy for liquidity constraints. In a logistic regression model, it was found that liquidity constraints increase the probability of being food insecure only in the presence of a negative income shock. This is expected, as a negative income shock likely triggers demand for credit in order to maintain food security.

Investigating Changes in Bitcoin Price Dynamics Following Covid-19

Research completed by Sean Lytle

Abstract: Cryptocurrencies are rapidly becoming integrated into our existing financial structures. While many studies have investigated Bitcoin, by far the largest cryptocurrency, not much work has been done in regard to Bitcoin’s reaction in the wake of the Covid-19 pandemic. Using a distributed lag model and price data on the currently understood price predictors obtained through the Nasdaq and Google Trends website, this paper tests Bitcoin’s price determinants for structural changes following the pandemic. The findings indicate that there was no structural change in Bitcoin’s price directly after the pandemic. This implies that Bitcoin could be resistant to some of the exogenous shocks that usually disturb traditional markets. Additionally, there is strong evidence of a structural change occurring much later, around the end of 2020. This change took place predominantly in the relationship between Bitcoin price and Bitcoin volume. One possible explanation for this is that the availability of cryptocurrencies to the average consumer has been increasing rapidly since 2017. This along with the first stimulus payments going out around the same time as the identified break could be the main reasons for this structural change, though this is largely conjectural.

Does Veteran Status Impact Wages?

Research completed by Jacob Mackin

Abstract: Individuals who serve in the United States military experience increases in human capital. This paper investigates how these increases in human capital are treated in the labor market. Different from previous research, this paper observes a state’s political lean, and how this affects the wages of veterans. The Democratic party is usually seen as the pro-labor party, while Republicans usually talk more about supporting veterans’ benefits. The sample is obtained from the 2012 American Community Survey, and election data is obtained from uselectionatlas.org. Using fixed effects for both occupation and education level, it is found that, overall, veterans experience a wage premium. Females experience the largest wage premium, while Black individuals experience a slight wage penalty. In states which vote for Republican governors, it is estimated that veterans earn more compared to non-veterans. Veterans may experience different wages because the human capital investment they experience is different than the human capital investments non-veterans experience.

Do MLB Players Perform Better Against Their Former Team?

Research completed by Trevor Rodriguez

Abstract: Being traded from one team to another in professional sports is popularly thought to impact a player’s performance. Prior research has suggested that players may have an elevated level of performance and aggression after a trade occurs. The present research looks to understand how MLB players perform against their former team after being traded by investigating post-trade performance against their former team. Data were collected from Baseball Reference for players traded mid-season from the 2013-2019 MLB seasons to find how players’ offensive performance changed against their former team when at their new stadium and the former stadium. The results show that there is some evidence that being traded affects younger and older MLB players differently. Younger players perform better in their new stadium while older players perform worse in the new stadium. The variation in effect may be attributed to economic mechanisms such as informational advantages and different levels of effort exertion.