Doctor of Philosophy / Department of Economics / Dong Li / Wayne Nafziger / The dissertation includes three essays on development and regional economics. Son preference prevails among Indian couples. I test the hypothesis that women who bear sons experience an elevated status within the household, which translates into their increased role in decision-making. The first essay empirically examines the issue. Using data from the Indian Human Development Survey, I find that women who have given birth to at least one son show greater participation in the household’s financial decisions as well as other decisions in a household. Presence of a senior member in the household, however, reduces the women’s relative household bargaining strength. The second essay examines the wage differentials of natives, naturalized citizens, and immigrants on the basis of gender, and for the latter two categories, on the basis of region of origin. This paper argues that the assimilation effect for naturalized citizens should be stronger than that for immigrants since a naturalized citizen, on an average, spends more than 15 years in the country, much higher than immigrants. I find that immigrants experience higher increase in wages than naturalized citizens with longer stay in the United States. The essay concludes that this trend in wages cannot be explained by the assimilation argument alone. We also report that naturalized citizens command higher returns to higher education than immigrants. The third essay explores issues in regional economics. Kansas has the third largest public highway miles and one of the highest miles per person in the country. Due to declining rural population, counties lack the required tax base and fiscal health to support their large ailing rural road infrastructure. The average farm size is increasing and so is the size of vehicles using the rural roads. This paper suggests removing some rural low volume roads from the county road network as one option. I study three Kansas counties to analyze the cost-benefit of reducing low volume road miles. I find that rural counties will be able to save money by closing some low volume roads.

Master of Arts / Department of Economics / Peri da Silva / Rose (2004) reports that GATT/WTO membership produces no positive effects on international trade. This is a remarkable determination given the widespread belief in academic and policy circles that the WTO successfully promotes trade flows by reducing barriers to international trade. Empirical literature measuring the GATT/WTO trade effects has produced notably diverse results since Rose's (2004) paper. This report introduces the history of GATT/WTO and describes the GATT/WTO’s aim to promote trade using multilateral rounds of trade negotiations. It confirms that the efforts toward trade liberalization made by the GATT/WTO are partially achieved by tariff reductions and other trade obligations. In discussing the literature related to Rose’s surprising results, we argue that the gravity model employed by Rose (2004) is not theoretically sound since it omits multilateral resistance terms and fails to capture unobserved bilateral heterogeneity. However, we find that even an accurate specification gravity model that controls multilateral resistance, unobserved bilateral heterogeneity, and individual regional trade agreement effect cannot fully account for Rose’s GATT/WTO trade effects findings. The present report suggests that a new approach, specifically the nonparametric method used by Chang and Lee (2011), may offer sound guidance for future research attempting to understand Rose’s mysterious findings.

Master of Agribusiness / Department of Agricultural Economics / Christine Wilson / Over the last decade, the United States horse industry has seen a decline in all segments of the industry. Both people and organizations within and outside the industry have debated the cause of this decline, with the 2007 horse slaughter ban being at the center of this debate. The purpose of the report is to analyze a specific segment of the industry to determine what has led to this decline over the last decade. To do this, we will look specifically at the total number of thoroughbreds sold over a thirty-year history, and using regression analysis, determine if a controversial bill that banned the slaughter of horses in the United States for the purpose of meat was the cause of this decline or if other key variables that played a key role. These additional variables will include hay prices, corn prices, oat price, gas prices, and a macro economic indicator variable. The regression results show that the horse slaughter ban did in fact have an impact on the decline of the total number of thoroughbreds sold within this specific segment of the industry. Also, both hay and the unemployment rate had an effect on the decline of the total number of thoroughbreds sold, while gas prices appear to have had an unexpected positive effect, which is contrary to common thought. This thesis shed a new light on the decline of the horse industry within the United States and the effect the ban has had on the thoroughbred industry.

Doctor of Philosophy / Department of Economics / Philip G. Gayle / My dissertation is comprised of two essays in the field of industrial organization with an emphasis on the airline industry. In particular, I investigate how airline mergers and alliances affect the components of total cost. By using a methodology that does not require the researcher to have cost data, I am able to infer marginal costs, fixed costs and sunk costs changes associated with mergers and alliances. My first essay examines two recent airline mergers—Delta/Northwest and United/Continental. Most post-merger analysis in airlines disproportionately focuses on assessing price rather than cost changes. Perhaps one reason is that reliable price data are more readily available. Despite the difficulty of obtaining cost data, researchers have sought to empirically assess whether cost efficiency gains associated with a merger outweigh the increased market power of the merged firm. The results from my analysis suggest that both mergers are associated with marginal and fixed costs savings, but higher market entry costs. The magnitude of the cost effects differed across the mergers. Moreover, I find that the market power effects of these mergers were negligible. My second essay investigates the cost effects of the codesharing alliance between Delta, Northwest and Continental Airlines. Codesharing is one of the most popular forms of airline cooperation that allows an airline to market and sell seats on its partners’ flights as though it owns those flights. Studies have found that airline alliances have very little to no effect on total cost. Rather than analyzing cost as a whole, I study whether a disaggregate analysis on cost is more appropriate. I find evidence that forming an alliance helps generate more passenger traffic for the alliance partners thereby reducing the partner carriers' marginal cost. Even though the literature has found that the total cost effects to be small, an alliance can have a considerable impact on some components of cost.

Master of Arts / Department of Economics / Peri da Silva / Terms-of-trade argument (the optimal tariff theory) refers that a country with market power can gain national welfare when they impose a tariff for foreign exports and generate welfare at the expense of foreign trade partners. This argument has been long-term applied as an assumption in many theoretical trade models. Feenstra (2004) shows that the theoretical optimal tariff is equal to the inverse foreign export supply elasticity which implies if we can get the value of inverse export elasticity for each good then we can set up the optimal tariff to maximized our national welfare. Compared with the development in theory, the progress in the empirical study of terms-of-trade argument has been a bit stagnant until recent years. Christian Broda, Nuno Limão and David Weinstein (2008) show us an important empirical evidence that countries use market power when they set up tariff in their non-cooperative trade policy. And they estimate both import demand elasticity and export supply elasticity at the four-digit Harmonized System level by using 16 countries’ trade data and production data. In this report, we firstly introduce the theoretical basis of optimal tariff. Then we will discuss the contributions of Broda et al (2008) and other economists’ empirical findings of optimal tariff theory which applies Broda, Limão and Weinstein’s estimates of elasticities

Master of Arts / Department of Economics / William F. Blankenau / The aim of this paper is to provide an analysis of the consumption, investing, and savings data across racial minority categories within the United States. This paper examines the three biggest minority racial categories within the United States. These three racial categories include Blacks, Asians, and Hispanics. Consumption patterns across minority groups are examined in Chapter 2. These patterns give insights into the annual purchasing decisions of Blacks, Asians, and Hispanics. Many of the choices in budget allocation to specific categories have consequences and implications that are explained at the end of this chapter. Chapter 3 focuses on savings characteristics of minority populations in the United States. 401k plans, IRAs, and other retirement plans are examined for different savings behaviors and rates across minority groups. This paper examines the savings attitudes and survey responses of participants to get a feel of the overall savings climate across racial groups. Chapter 4 examines the investment behaviors and attitudes of different minorities. The financial risk tolerance and portfolio composition of different minority groups are examined to gain insights into the large wealth gap between Whites and minorities in the United States. In addition, this paper examines the hypothesized reasons for the differences between racial categories in consumption, investing, and saving choices. In Chapter 5, I explore the different theories and assumptions presented in the literature on these topics in order to give the reader insight into why racial groups might make different consumption, investment, and savings decisions even when controlling for socioeconomic variables. The final chapter explains the consequences of consumption, investment, and savings decisions for the individual, the community, and the United States.

Master of Arts / Department of Economics / Michael W. Babcock / Many of the railroad demand studies are out-dated, lacking the most recent data. We felt that it is time to re-evaluate the rail markets to determine if changes have occurred in the determinants of railroad demand. This paper examines the effects of industrial production and revenue per ton of railroads on the demand for railroad service for selected manufactured goods. Also there appears to be a fundamental shift in railroad pricing after 2004. Thus a dummy variable for the 2005-2010 period was included in the model. Although there is variation in the price elasticity of demand across the manufactured goods markets, all are price inelastic.

Master of Arts / Department of Economics / Yang M. Chang / This paper studies economic factors that affect a multinational’s decision between serving a foreign market via foreign direct investment (FDI) and setting up a joint venture (JV) with a local firm in the host country. The factors that we consider include the substitutability of products produced by competing firms, as well as the hotly debated intellectual property rights (IPRs) protection. In a simple North-South framework, we show that JV is the equilibrium market structure when the degree of R&D spillover is moderate, products are considerably substitutable, and IPRs strong. The government of South needs to maintain a minimum level of IRP to encourage an effective JV. For increasing social welfare, the South also needs to have a policy that limits foreign ownership in a JV.

Master of Agribusiness / Department of Agricultural Economics / Vincent Amanor-Boadu / Beans and cowpeas are considered nutritionally dense and good sources of protein. In this sense, they are considered excellent food in poor households, especially in those that exhibit high levels of malnutrition or under-nutrition. To address food security and nutrition security in poor countries, there has been an increasing interest in encouraging farmers to grow beans and cowpeas. This has spurred research in value chains for these crops in many countries, especially those that do not traditionally grow them as primary staples. Most of these research efforts have focused on the producer and consumer issues, with little or no attention paid to traders who operated between these two players in the value chain. The objective of this study, therefore, is to contribute to the literature on the bean and cowpea value chain research by identifying the factors influencing the participation decisions of traders in this segment of the agricultural economy in Zambia. Using data collected by the Pulse Value Chain Initiative – Zambia in 2011, a probit model was used to analyze data. The dependent variable trader participation in wholesale marketing of beans and cowpeas in Lusaka and its principal food markets. The explanatory variables encompass trader demographic characteristics and available assets or resources. The research explored the effect of the assets or resources on the choice to trade cowpeas or beans at the wholesale level in Lusaka with and without controlling for traders’ demographic characteristics. Three procurement sources are identified in the study: the local market within which the traders operate; producers/suppliers within Lusaka District; and producers/suppliers outside Lusaka District. The results indicate that the procurement source for beans and cowpeas influenced trader decision to operate at the wholesale level. For example, traders who purchased their produce from locations outside Lusaka District were about 37% more likely to participate in wholesale trade compared to those sourcing their produce within the market in which they operate when demographic characteristics of traders are not controlled for in the model. When the demographic factors are controlled, the likelihood of those procuring from outside Lusaka District participating in the wholesale trade declines slightly to about 34%. These coefficients were both statistically significant at the 1 percent level. The results also showed that traders using credit from friends and family were nearly 18% less likely to participate in wholesale trade than those borrowing from other traders, significant at the 5% level. Controlling for demographic characteristics led to a reduction of this likelihood to about 16.7%, significant only at the 10% level. There were no statistical differences between traders for all education levels and those without any education except for respondents with lower primary and lower secondary education. Traders with lower primary and lower secondary education had a 31% higher likelihood of operating at the wholesale level compared to those without any formal education while those with upper secondary education had about 26.7% higher likelihood of operating at the wholesale level compared to those without any formal education. Marital status was not a discriminant in the decision to operate at the wholesale level. However, males had about a 9% higher probability than females in operating at the wholesale level. Wholesalers tend to move larger volumes of produce and, hence, create wealth much quickly than retailers. Wholesalers are also more likely to be engaging processors when these exist in the supply chain. Given that traders sourcing their produce from outside Lusaka District are more likely to engage in wholesale trading, it recommended that further research into the intricate characteristics of these traders are explored. This future research will do well to explore the factors that specifically differentiate these traders from the others. Understanding these and their potential effects could allow policymakers to provide support and services to this class of traders to engage in structured relationships with larger organizations such as processors and exporters.

Master of Arts / Department of Economics / Dong Li / Comprehensive worksite wellness programs were first introduced in the United States in the late 1970s and early 1980s, with the goals of improving health, reducing health care expenditures, and demonstrating senior management’s commitment to the health and well-being of workers (Ozminkowski et al, 2002). As the annual cost of employer-sponsored family health coverage increased four percent between 2012 and 2013 (Kaiser Family Foundation, 2013), many companies are turning to worksite wellness programs. Wellness programs have shown not only to reduce health care costs, but also decrease absenteeism and increase employee satisfaction. The studies on the benefits of wellness programs are not conclusive; there seems to be a general lack of good data collection and analysis. This report discusses what determines an employer’s likelihood of offering a wellness program, what determines an employee’s participation in a wellness program, and a benefits analysis of wellness programs.