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Master of Arts / Department of Economics / Tracy M. Turner / This paper attempts to shed some light on the issue of net neutrality by examining the extent to which Internet usage is efficiently allocated under current conditions. I discuss the unique features of Internet usage which make it a good that markets will tend to provide at an inefficient level. I then discuss alternative pricing regimes that will move the market for Internet usage to efficiency. I conclude with a discussion of the current economic research on the topic.

Doctor of Philosophy / Department of Economics / Philip G. Gayle / My research focuses primarily on industrial organization and applied microeconomics. Specifically, I have extensively studied the airline industry. My first essay considers the effect of the Delta/Continental/Northwest codeshare alliance. Codeshare agreements can benefit airlines due to network expansion and benefit consumers by eliminating a double markup on flight itineraries with multiple operating carriers. However, policymakers have expressed concern that an alliance between airlines may facilitate price and service collusion in markets where codeshare partners’ services overlap. I develop a structural econometric model that is able to separately identify supply and demand factors as sources of price-quantity changes caused by the creation of the alliance. The estimates from the model show both collusive and demand increasing effects associated with the codeshare alliance. However, the demand increasing effect is larger than the collusive effect. My second essay considers the effects of the recent Delta/Northwest merger. This merger is of particular interest because the two airlines are codeshare partners. Using pre-merger data, a counterfactual simulation is performed in which Delta and Northwest are assumed to merge. The results indicate that codeshare products owned by the merging firms experience higher predicted price increases relative to pure online products. In addition, the mean predicted price increases are relatively small across most markets. I also examine pre-merger predictions with post-merger data and analysis and find that the pre-merger predictions roughly accord with “de-merger” simulated effects using post-merger data. My third essay takes an extended look at airline mergers. When the Delta/Northwest merger was approved by the Department of Justice, consumer groups and policymakers were concerned that the merger and poor economic outlook would act as a catalyst for more mergers. This paper examines this possible scenario using simulations to model the effects of other codeshare partners merging in addition to Delta and Northwest. Results indicate that the predicted price increases for all mergers exhibit relatively small averages but large variances across markets. Further, the largest predicted price increases affect a small percent of products and an even smaller percent of passengers who choose products owned by a merging firm.

<p> Online business in Saudi Arabia is almost certain to grow because a large proportion of the population is younger than 25, tech perceptive, and global in their perspectives toward product buying in their everyday lives. The purpose of this research was to suggest leadership theories, tactics, and techniques that Saudi Arabian business owners can utilize to pursue online business strategies of growth and success today and in the future. An online instrument surveyed 142 Saudi Arabian citizens to identify factors affecting online business in Saudi Arabia and to identify the necessary skill sets a leader must have to lead an online business in Saudi Arabia. An important limitation of this study was that the history of Saudi Arabian online business was difficult to research and find. Another limitation is that clarifying problems in the Saudi Arabian social, economic, legal, and political environments were a very sensitive, touchy undertaking for certain facts and information. After getting the approval from this study's committee and getting approval from the Institutional Review Board (IRB) at Pepperdine University, findings from 142 participants (Saudi Arabian citizens) who took the online survey were analyzed, and based on these findings, the researcher generated implications and recommendations. Some of the findings were that the majority of the respondents preferred responding in Arabic. Most of the respondents were male (75.4%). Only a small percentage was younger than 21 and older than 50. The majority were people with bachelor's and master's degrees. Business owners accounted only 44.4% of the total number of respondents. The growth of online business was attributed to passage of time and likelihood of young people using more online services. The respondents thought that the government did not provide enough infrastructure support for online businesses. According to the findings, the most important leadership traits a leader must have to lead an online business in Saudi Arabia are honesty and integrity.</p>

Master of Agribusiness / Department of Agricultural Economics / Vincent Amanor-Boadu / The purpose of this research was to develop a decision tool to identify and rank potential locations for making a greenfield investment in flour milling. The driving characteristics of the tool developed are transparency, reproducibility, specificity and clarity. Currently, the approach to selecting countries in which to invest is driven purely by ad hoc frameworks that often lack the characteristics driving this investment index tool. The investment index was designed to have three main components: market conditions, economic environment and supporting infrastructure. Market conditions for the product of interest – in this case flour – were defined to encompass per capita wheat-based food consumption growth rate, wheat production versus wheat consumption and wheat flour imports growth rate. The economic environment was defined to incorporate the growth rate of per capita gross domestic product, corporate tax rate , labor productivity, foreign direct investment growth rates, position on the World Bank’s Doing Business 2012 rankings, and the number and extent of the country’s membership in regional economic and trade groups. Supporting infrastructure included electricity reliability, transportation quality, urbanization rate and the physical presence of the investing company in the country. The rationale for this last variable is that when the investing company already has a presence in the country under consideration, it has already incurred some of the hurdle costs that it would have to include in investments in a location where it does have current physical activities. The study started by filtering the scope of potential opportunities by a set of well-defined criteria: target geographical locations; Doing Business 2012 scores; and quantity of wheat flour imports in 2009. This led to four countries emerging as leading candidates for investment considerations: Brazil, Malaysia, Indonesia and Thailand. The investment index ranked these countries according to their relative suitability for investment. The three components of the index carry different weights because of their effect on the potential investment outcome. There is no data to support these weighting and therefore executives must utilize different probing approaches to weight the components. To this end, a base scenario and two other scenarios based on alternative weights were considered. The robustness of the ranking is revealed by the consistency of the rankings under the alternative weights applied to the components. The results showed that under the base scenario Malaysia had the highest investment index score. The results also showed that varying the alternative weights for the scenarios did not affect the overall outcome with Malaysia leading with the highest overall index score for each of the three scenarios.

Master of Agribusiness / Department of Agricultural Economics / Michael A. Boland / The purpose of this thesis is to identify Greenfield grain facility sites within 100 miles of Holdrege, Nebraska and to evaluate the feasibility of these sites. CHS Agri Service Center currently has facilities that are within 50 miles of Holdrege, Nebraska. However there are no Greenfield sites in this area that would be feasible due to a large number of competitors already operating in this area. This problem was broken down into two components. The first is site selection and the second is a financial model using net present value to determine if the sites selected would be profitable to the standards that CHS, Inc. requires (12% or better return on assets). In order to determine where Greenfield sites might be located supply and demand factors were evaluated to determine surplus and deficit grain areas. The areas where there were large surpluses of grain have the greatest potential for a Greenfield facility to succeed. Then a feasibility analysis of the chosen sites is conducted using net present value and internal rate of return analysis to determine if there is enough grain volume to operate the grain facility above the 12% return on assets criterion. After a detailed review of the supply and demand factors of grain in the region, two locations were determined to be good candidates for further study. Based on recent projects completed at CHS, Inc. two model facilities were created as tools to determine if a certain facility type is more profitable than another. The cost structures for these two model facilities are based on costs that are currently incurred at CHS Agri Service Center locations. It was found that neither facility at either location was profitable enough to meet the minimum performance criteria required by CHS, Inc. As a result of these findings it may be possible to move ahead with a Greenfield facility at one of these sites if a higher volume can be obtained. A merger with another grain company in the immediate area of the proposed facility may be the best way to increase volume.

Master of Agribusiness / Department of Agricultural Economics / Vincent Amanor-Boadu / The beef industry is a very important in the food sector of agriculture and over the past two decades the United States beef industry has faced many challenges. Over time the distribution of beef exports have changed due to food safety issues and government policies, not just in the U.S., but on a global scale forcing U.S. beef producers to diversify their export outputs to other countries that were not previously strong leaders in the export business. The U.S. must be strategic in their production decisions in order to continue to compete on a global level to avoid significant loss during adverse conditions. One of the major challenges that the U.S. industry has faced is the discovery of BSE in late 2003 in the state of Washington, which led to the closing of many borders to countries who had a significant impact on the beef industry in the U.S. Since U.S. beef is highly regarded by consumers for its quality worldwide, it is important to understand what changes have taken place in the past to have a full understanding of what changes need to be made in the future. The objective of this thesis is to look at how the distribution of the value, volume and price of U.S. beef exports have changed over the past two decades. By looking at how this has changed we will be able to see what countries are emerging as important customers and how others have declined. This is extremely important since some of the major importing countries have changed or put restrictions on the U.S. beef industry over the past two decades and the industry needs to understand these changes so that they can remain strong in the export sector. By analyzing the global trends of U.S. beef exports by value, volume and price across principal regions of the world, research will show us how to change for future changes. By assessing the effect of the discovery of BSE in the U.S on changes in the distribution of beef exports across the global regions, research will show who emerged when other countries declined. By using this research, the foregoing results will be helpful to inform the industry on what export market strategy can be developed for the U.S. beef industry. The results suggest that BSE had some negative effect on the U.S. beef industry in terms of the value and volume but did not have an impact on the price per pound of beef. Some regions had a larger impact than others when BSE was discovered, such as East Asia, but during this other regions, such as North America, came through and became the leaders in exports for U.S. beef. While there was some growth from the Rest of the World, there was not enough of an impact to compete with the foregoing countries.

Purpose of study. This study is to determine whether DRG reimbursement has changed the structure of hospital costs. Due to incentives for greater output efficiency, inpatient per unit costs should fall, ceteris paribus. A countereffect for capital-intensive services is that hospitals may realize economies of scale to a lesser extent under DRGs due to inability to fully adjust in the short-run. Because outpatient services have remained under cost-reimbursement, per unit costs are not expected to decrease, ceteris paribus. However, more emphasis on outpatient services under DRGs could cause per unit costs to decrease due to greater realized economies of scale. / Procedure. A translog multiproduct cost function was used to estimate the structure of hospital costs in FY 1981-82 and 1985-86. The model included four outputs (medical-surgical discharges, outpatient visits, laboratory services, and ancillary procedures and treatments) and four annualized input prices. Other variables included fixed inputs (capital and physicians), casemix, payer mix, hospital ownership, and market structure. Product-specific economies of scale and average incremental costs were then calculated from estimation results. / Findings. Results of a joint likelihood ratio test showed that the cost structure was not significantly different in 1981-82 and 1985-86. However, t-tests regarding the difference in predicted costs evaluated at constant independent variable levels revealed that predicted costs are significantly higher in 1981-82 as anticipated. Comparative results of estimated parameters in the two years suggest hospitals are employing less capital under DRGS and physicians are inducing less demand. Further, average incremental costs for out-patient visits and laboratory services appear to be decreasing, while the average cost of discharges and ancillary procedures and treatments are increasing. Finally, unrealized economies of scale appear to be decreasing in 1985-86 for outpatient services and ancillary procedures and treatments. / Conclusion. The new DRG reimbursement system appears to have potential for reducing excess capacity, service intensity, and costs of services. / Source: Dissertation Abstracts International, Volume: 49-12, Section: B, page: 5213. / Major Professor: Gary Fournier. / Thesis (Ph.D.)--The Florida State University, 1988.