Doctor of Philosophy / Department of Economics / Wayne Nafziger / Kuwait is an oil-based economy that adopts an export promotion policy as the fundamental strategy for economic growth. The country has experienced remarkable economic growth and high per capita GDP for the last four decades. The export-led growth (ELG) hypothesis has been commonly used to examine the impact of exports on economic growth. Numerous studies support this hypothesis and found evidence that exports have a significant positive relationship with economic growth. However, it is not yet known how effective the ELG hypothesis is in small oil producing country like Kuwait. The central question addressed is whether the ELG hypothesis is valid in the case of Kuwait. This empirical research investigates the relationship of two components of exports (oil exports and non-oil exports) with economic growth by examining the ELG hypothesis using annual time series data for the Kuwaiti economy over the period 1970-2004. The study applies a number of econometric techniques: unit root test, cointegration test, error correction model (ECM), impulse responds function (IRF), and Granger causality test. The results of this dissertation show that all the variables are stationary in the first difference. Moreover, the cointegration test confirms the existence of the long run relationship among the three variables. The Granger test shows bidirectional causality between oil exports and economic growth, and a unidirectional causality from non-oil exports to economic growth. However, the causality results are consistent with the results reported by the ECM.

Master of Arts / Department of Economics / Dong Li / This paper on the urban and rural healthcare expenditures gap examines common explanations for why the gap exists. The rural communities have consistently had lower healthcare expenditures than that of the urban communities. Over the years the gap has decreased, but not by a significant amount. According to a 2003 U.S. Census, for people over 65 the gap was nearly double. For people under 65 the gap was significantly smaller, but still exists. There are many factors that lead to the healthcare expenditure gap and there are also many possible solutions to manipulate these factors. This paper will separate these factors, explain them and look at the pros and cons of some possible solutions.

Master of Arts / Department of Economics / James F. Ragan Jr / This report reviews the effects of fertility on female labor supply, primarily female labor force participation and work hours. Although estimates of the causal relationship between fertility and female labor supply are mixed, this report tries to review why and by how much an additional child in a family affects work decisions and work hours of mothers on average. Statistical analysis shows a decreasing trend in fertility and an increasing trend in female labor force participation throughout the world over the last four decades. Using different specifications and estimation techniques, empirical studies suggest that fertility has negative effects on maternal labor supply because childbearing falls on women and women have lower wage rates than men on average. The negative relationship between fertility and female labor supply is explained by social, economic, and technical forces that affect fertility and female labor supply, including an increase in the value of women’s time due to an increase in education levels of women, expensive childcare, and substitutes for children; emphasis on quality instead of quantity of children; an increase in employment opportunities for women; changes in social norms towards supporting women working outside their home; and technical progress in birth control.

Master of Arts / Department of Economics / Tracy M. Turner / Obesity is a growing problem in the United States today. This study provides an econometric analysis of the relationship between child overweight status and neighborhood quality by using nationally representative data from the Panel Study of Income Dynamics (PSID) the 2002 PSID Child Development Survey, and Census data. In this study, the probability of a child overweight status is modeled as a function of neighborhood quality, child age, race and ethnicity, and parent obesity status, income, marital status, and education level. Next, the possible endogeneity between neighborhood quality and parent health is controlled for. Auxiliary regressions, modeling neighborhood quality and parent health on factors such as parent income, education, and marital status, are used to generate predicted values for neighborhood quality and parent health, which are then substituted into the child overweight equation to control for the aforementioned endogeneity. Census track and county level factors that might affect parent health or neighborhood quality are also controlled for. Based on a sample of 1917 children, this study finds evidence that neighborhood quality affects child overweight status.

Master of Arts / Department of Economics / Wayne Nafziger / This essay on AIDS examines the possible economic impact HIV and AIDS can have on an economy. AIDS is a growing problem throughout the world and has become one of the worst pandemics of the 21st century. Africa is one of the worst hit regions in the world, having seven countries with more than 15 percent of the population infected. This essay will have special emphasis on Botswana where 37.3 percent of the population is infected. Botswana has had various negative micro-level economic impacts which have begun to spillover and negatively affect macro-level economics. The International Monetary Fund predicts GDP growth is expected to fall from 5.5 percent a year without AIDS to between 1.5 and 2.5 percent a year with AIDS. There are various sectors in an economy that can be impacted by AIDS. This essay will look at factors affecting these various sectors, explain them and describe what impact they are having on Botswana’s economy.

This thesis advances the view that, in an era of regionalization and globalization, Cambodia, as a least developed country, can deliver sustained economic growth, social stability and development if it can develop a coherent set of economic policies linked to the development of a functional and credible legal system.

Doctor of Philosophy / Department of Economics / William F. Blankenau / This dissertation consists of three chapters. Chapter one presents a theoretical model using a dynamic stochastic general equilibrium (DSGE) approach to investigate the role of world oil prices in explaining the business cycle in Saudi Arabia. This model incorporates both productivity and oil revenue shocks. The results indicate that productivity shocks are relatively more important to business cycles than oil shocks. However, this model has some unfavorable features that are associated with both investment and labor hours. The second chapter presents a modified theoretical model using DSGE approach to examine the role of world oil prices versus productivity shocks in explaining the business cycles in Saudi Arabia. To overcome the unfavorable features of the baseline model, the alternative model adds friction to the model by incorporating investment portfolio adjustment. Thus, the alternative model produces similar dynamics to that of the baseline model but the unfavorable characteristics are eliminated. Also, this chapter conducts sensitivity analysis. The objective of the third chapter is to empirically investigate how real world oil price and productivity shocks affect output, consumption, investment, labor hours, and trade balance/output ratio for Saudi Arabia. This chapter complements the theoretical model of the previous chapters. In addition, this study builds a foundation for future studies in examining the impact of real world oil price shocks on the economies of key trade partners of Saudi Arabia. The results of the third chapter show that productivity shocks matter more for macroeconomic fluctuations than oil shocks for the Saudis’ primary trade partners. Therefore, fears of oil importing countries appear to be overstated. As a whole, this research is important for the following reasons. First, the empirical model is consistent with the predictions of our theoretical model in that productivity is a driving force of business cycles in Saudi Arabia. Second, the policymakers in Saudi Arabia should be more concerned with increasing productivity through adopting new technologies that increase economic prosperity. Therefore, the policymakers should continue diversifying economic resources and reduce their reliance on oil.

Master of Arts / Department of Economics / Dennis L. Weisman / The primary purpose of this report is to address the potential benefits and drawbacks of competitive electricity generation. A number of countries have introduced various forms of competition into the electric utility industry. The most notable attempt in the United States and the focus of this report took place in California in the late 1990s. This report is divided into two parts. The first covers the history of the electricity industry by reviewing influential policies, cost of service regulation, and concluding with incentive regulation. The second part discusses the potential benefits and drawbacks of a competitive generation sector, through the lens of the California experiment. Government policies have dramatically changed in the last twenty years. Many of these changes were aimed towards increasing competition within the generation sector and have made a competitive generation sector possible. Whether these policies are correct has been the focus of much debate. A competitive generation sector could potentially operate more efficiently than under traditional regulatory regimes. Whether this potential will be realized is in question. This report assesses this question by looking at the events that took place in California. The competitive wholesale markets in California functioned properly for nearly two years before the events of the "California Electricity Crisis" took place. This showed that a competitive wholesale market is possible once certain criteria are met; most importantly adequate competition to reduce a firm's potential to exercise market power. The "Crisis" in California showed what can happen if these criteria are not satisfied. Nevertheless, there is still much optimism about the potential benefits of competitive electricity markets.

Master of Arts / Department of Economics / William F. Blankenau / This paper describes the socioeconomic determinants of school dropout for Vietnamese children aged 11-18. It seeks to answer the following two questions: 1) What is the magnitude of the dropout rate for children between the ages of 11-18 and how does this figure change over time? 2) What are the determinants that affect the decision to drop out of school? This paper is based largely on the two Vietnam Living Standard Surveys (VLSS) conducted in 2004 and 2006. A probit model is used to ascertain the major determinants affecting the probability to drop out of school. The decision to drop out of school is affected by key factors including the child’s demographic characteristics (such as age, gender, ethnicity, and regions where they are living) and the child’s household’s situation (such as income per capita, cost of schooling, household size, and parental education). In particular, age and household size have significantly positive effects on the dropout probability. The dropout rate is also shown to vary between girls and boys, but this gender gap has narrowed substantially. Minority girls face more obstacles in staying school than minority boys. The school dropout rate is also very sensitive to changes in the household’s income and cost of schooling. However, the cost of schooling has different impacts on families in different quintiles. Region is another determinant affecting child’s decision to drop out of school. Vietnam’s population is unequally distributed in 8 regions with different socio-economic conditions, and hence the dropout situation is also regionally specific. Moreover, the parents’ perception of the value of education may increase the child’s probability of school retention. Since it is difficult to measure parental attitude to schooling, the paper uses parents’ education level instead, assuming that parents who have more education will appreciate education more.

Doctor of Philosophy / Department of Economics / Yang M. Chang / The first essay is on TRIPS (trade related intellectual property rights), biodiversity and North-South trade. This essay explores how true North-South trade and different IPR (intellectual property rights) regimes affect the level of biodiversity that is maintained by a Southern government. The results show that protecting farmers’ rights only is the regime that will be chosen by the Southern government and that will lead to the maximum level of biodiversity. This is important for policymakers as provisions for protecting farmers’ rights do not currently exist. This finding confirms previous results that did not include true North-South trade. Another result, and one that departs from existing literature, is that positive levels of biodiversity will be maintained by the Southern government if only international patent protection is implemented. The second essay focuses on factors that affect attendance at MLS soccer matches, in particular David Beckham. The primary results in the study are that David Beckham has a very large, statistically significant effect on attendance at MLS matches. This effect is estimated as at least a sixty-five percent increase in attendance in games Beckham plays in. Other results from this study are that there are no significant effects from the months matches are played and that the only day of the week with a significant effect is Saturday (its effect is positive). The results from this study provides insight to MLS as it faces upcoming decisions about designated players, such as Beckham, and about the calendar upon which the MLS season is played. The final essay is on moral hazard, market power and the demand for health insurance. The issue of health insurance is one of the main questions facing the U.S. government and its citizens. This essay explores the particular interaction of moral hazard and market power in the form of a duopoly in a pharmaceutical market. The results from this essay show that there are notable differences in the effects on the welfare of market participants under duopoly as compared to monopoly, such as the importance of cross-price effects that do not show up in a monopoly market.