Economics electronic theses and dissertations (MU)
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The items in this collection are the theses and dissertations written by students of Department of Economics. Some items may be viewed only by members of the University of Missouri System and/or University of Missouri-Columbia. Click on one of the browse buttons above for a complete listing of the works.
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Item Essays on theoretical and applied econometrics(University of Missouri--Columbia, 2024) Zhao, Wei; Kaplan, DavidInstead of having a "yes" or "no" result from a test of the global null hypothesis that a function is increasing, I propose a multiple testing procedure to test at multiple points in Chapter 1. If the global null is rejected, then this multiple testing provides more information about why. If the global null is not rejected, then multiple testing can provide stronger evidence in favor of increasingness, by rejecting the null hypotheses that the function is decreasing. With high-level assumptions that apply to a wide array of models, this approach can be used to test for monotonicity of a function in a broad class of structural and descriptive econometric models. By inverting the proposed multiple testing procedure that controls the familywise error rate, I also equivalently generate "inner" and "outer" confidence sets for the set of points at which the function is increasing. With high asymptotic probability, the inner confidence set is contained within the true set, whereas the outer confidence set contains the true set. I also improve power with stepdown and two-stage procedures. Simulated and empirical examples (income-education conditional mean, and IV Engel curve) illustrate the methodology. Using the same confidence set idea as in Chapter 1, I set up two methods to provide evidence that one latent distribution is "better" than another when only ordinal data are available in Chapter 2. One is to figure out a set of quantile values for which the first latent distribution's quantiles are above the second. Another is to find out a range of latent values on which there is restricted stochastic dominance of the first latent distribution over the second. Specifically, these two methods are proposed to construct "inner" confidence sets for the corresponding quantiles and latent values. With high probability, the inner confidence set from the first method is contained within the true set of quantile values for which the first latent distribution's quantiles are above the second. With high probability, the inner confidence set from the second method is contained within the true set of latent values at which the first distribution dominates the second. These methods are applied to assess how life satisfaction is associated with marital status. Chapter 3 studies the translation from the changes in the outcome/consumption distribution to the changes in the utility distribution under certain assumptions. Much empirical research and econometric methods learn from data about differences in consumption, but essentially people care more about welfare/utility changes. I compare two extreme cases where the results are the contrary. One is the simplest setting (utility homogeneity), the consumption and utility move in the same direction; Specifically, the expected utility becomes higher if the consumption distribution becomes better (in the first order stochastic dominance sense). In contrast, under random utility function and arbitrary dependence assumption, I find a job allocating example that shows subpopulations' expected utility increases even if the new consumption distribution is stochastically dominated, i.e., the consumption and utility move in an opposite direction. I also consider other three different assumption settings: utility function and consumption are independent, they have arbitrary dependence but with rank invariance, they have fixed dependence without rank invariance. The results of all these three cases are same, i.e., first order stochastic dominance in consumption implies higher expected utility.Item Essays on money and credit(University of Missouri--Columbia, 2024) Park, Hyungjin; Gu, ChaoMy dissertation analyzes the private currency system and credit market. In the first chapter, I investigate a situation where a private entity supplies money without a central bank. In Somalia, after the central government collapsed, private money suppliers emerged and provided money, resulting in the stable economy. Plus, Somalis used both Somali currency and dollar as a medium of exchange. We discuss the role of foreign currency for which sellers perfectly recognize the value and the condition of the adoption of dual currency system. In the second chapter, I analyze the credit market with heterogeneity in labor productivity. Variations in labor productivity lead to information asymmetry, potentially resulting in reduced contract sizes. I demonstrate the existence of separating, non-default pooling, and default pooling equilibria, which depend on the level of monitoring and the population distribution across two different productivity level. I also identify multiple equilibria and refine the equilibrium space by applying the undefeated equilibrium concept developed by Mailath, Okuno-Fujiwara, and Postlewaite (1993)Item Essays on retail gasoline pricing(University of Missouri--Columbia, 2024) Kim, Seon Yong; Ni, ShawnThis dissertation investigates retailers' pricing behavior by focusing on the retail gasoline market in Seoul, South Korea. The study consists of two chapters. The first chapter presents an empirical analysis of how gasoline stations change prices. One common feature of retail price changes is their periodic and lumpy nature. Various theories have been proposed to explain why retail prices are sticky, each focusing on different factors that influence how retailers set prices. Studies in macroeconomic theory indicate that optimal price adjustment patterns depend on the nature of costs involved in price adjustment. If a price change incurs a fixed cost (e.g., a "menu cost"), optimal price changes occur when the change in state variables exceeds a threshold, resulting in state-dependent price changes. Alternatively, if there is a fixed cost associated with acquiring information, it is optimal to make price adjustments with periodic regularity (time-dependent). Studies in industrial organization emphasize the role of market power and strategic interactions among retailers. Some studies in marketing science argue that retailers are more likely to maintain certain prices based on consumer psychology (e.g., those ending with the digit 9). Do some or all of these theories explain how Seoul's gasoline retail price changes? In the first chapter, I examine the empirical significance of time-dependent pricing, state-dependent pricing, market power, and psychological pricing in the estimation model and examine how these factors are correlated with each other. The estimation results show that the most dominant factor affecting pricing decisions is the time dependent pricing rule, and this tendency to follow the time-dependent pricing rule varies with retailers' local market power. The analysis of how frequently gas stations change prices helps to better understand another common empirical phenomenon concerning asymmetric changes in retail gasoline prices in response to changes in wholesale prices. Many studies find that increases in costs (such as oil prices) are passed through more quickly to retail prices than decreases in costs, a pattern known as "rockets and feathers". This literature is mostly based on the error correction model that assumes retail prices are a linear function of costs. The pricing behavior examined in the first chapter implies that changes in retail prices are nonlinear in changes in costs, as gas stations keep daily prices mostly unchanged despite continuous changes in costs. In the second chapter, I demonstrate the potential bias arising from using daily data for the "rockets and feathers" study. Recent studies on "rockets and feathers" tend to rely more on high-frequency data to avoid bias arising from the temporal aggregation of data. In this study, I investigate price adjustment patterns by estimating an error correction model using daily station-level data from the Korean gasoline market. I find that compared to those based on weekly data, the estimated adjustment patterns based on daily data exhibit greater variation, which may be attributed to model misspecification that fails to account for the essential feature of daily-level data: censored responses to cost changes. The empirical findings emphasize the need for careful model specification when investigating the price adjustment pattern with daily-level data. In additional analyses, I explore the effect of consumer search on adjustment patterns and find that consumer search may not be a primary driving factor behind asymmetric price adjustments.Item Essays on housing macroeconomics with heterogeneous agents(University of Missouri--Columbia, 2024) Kang, Dong Ho; Hedlund, AaronThis dissertation investigates two important aspects of the U.S. housing market in the post-Great Recession era. Chapter 1 focuses on the supply side of the housing market. Chapter 2 applies information theory to the mortgage market in order to address a recently noted underwriting condition: the minimum credit score requirement. In Chapter 1, the discussion centers on the recent U.S. housing market, specifically during the 2010s, which is characterized by a rapid increase in house prices alongside sluggish growth in homeownership rates. This trend diverges from earlier housing booms, where increases in both house prices and homeownership rates occur simultaneously and rapidly. Utilizing a macro-housing model with heterogeneous agents, this paper quantitatively establishes that the dynamics of the 2010s housing market can be attributed to two factors: a decrease in the productivity of the residential construction sector and a rapid increase in real median income. Specifically, a negative productivity shock in the residential construction sector leads to a shortage of supply, causing house prices to rise. Simultaneously, a positive income shock stimulates housing demand, further driving up prices. However, the impact of the income shock is not strong enough to counterbalance the negative supply shock from decreasing residential productivity, resulting in a slow recovery of the homeownership rate. In Chapter 2, I analyze the effects of minimum credit score requirements, practices that have become prevalent since the 2008 Great Recession, on the housing and mortgage market. To do that, I construct a quantitative model featuring heterogeneous agents within a macro-housing framework. This model incorporates endogenously and dynamically evolving credit scores, which are based on households' earnings and their decision-making behaviors regarding portfolio choices and debt repayment. Using this model, I conduct counterfactual analyses to examine the consequences of implementing a minimum credit score requirement in the mortgage loan market. The minimum credit score threshold decreases the mortgage default risk, which reduces average mortgage rates. The threshold also decreases the average loan-to-value ratio and the fraction of mortgage owners. Intriguingly, when the threshold is set at the subprime credit score level, the homeownership rate increases by approximately 5 percentage points. Counterfactual experiments and econometric analyses reveal that increases in the homeownership rate are influenced by two key factors: i) the motivation to improve one's credit score, which encourages households to pursue ownership in anticipation of its positive effects on creditworthiness; and ii) the availability of affordable mortgage rates, facilitated by reduced default behavior in an economy with a minimum credit score requirement.Item Rural southern residents and the incentive to work(University of Missouri--Columbia., 1972) Scherer, Philip M.; Liebhafsky, E. E."There has been much interest in the past few years in welfare reform. This interest is a result of the rising criticisms of the many relief measures which comprise the welfare, or public assistance, program. Two of these criticisms are that public assistance has too many recipients and that it encourages dependency. The Senate Committee on Finance, in stating that "...we should end a program which rewards idleness and discourages personal initiative of those who can provide for themselves," is resounding the public value placed on economic independence. The problem of creating a class of people permanently economically dependent on welfare is not localized to the United States. "In Europe...the unsolved problem for public policy has been to make certain that programs provide security to all in need...in a dignified, equitable, and efficient manner that preserves incentives to work. This dissertation examines the criticism that the welfare programs encourage dependency. It may be of value both to those engaged in the adoinistering of welfare and to those involved in welfare reform."--Page 1.