Economics - Theses, Dissertations, and other Required Graduate Degree Essays

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Three essays on fiscal federalism

Author: 
Peer reviewed: 
No, item is not peer reviewed.
Date created: 
2009
Abstract: 

This dissertation consists of three essays on fiscal federalism. The first essay takes a political economy approach to fiscal centralization, through federation formation. I analyze a simple two region model of federalism with interregional policy spillovers. Departing from a state of independence with decentralized provision of public policy we analyze the proposed formation of a federation to internalize the spillovers. A federation forms when the centralized outcomes satisfy participation constraints. With this restriction to rational federalism we then consider equilibrium allocations under alternative institutional environments involving; simple majority voting, restriction of uniform taxation, and regional bargaining through a bicameral legislature. The analysis illustrates the importance of these institutions on the allocation of policy authority in federations that form. The model produces clear results with regards to the feasible set of equilibrium centralization and the allocations of publicly provided goods therein. In the second essay local governments compete over a mobile business property tax base by adjusting their tax rates. This paper estimates the effect of neighboring tax rates on a local government's tax rate. This tax setting best response function is estimated with a difference-in-differences model. Endogeneity of neighboring tax rates is avoided by using election outcomes as an instrumental variable. The model is estimated using data from the municipalities of British Columbia, Canada. The findings indicate that tax competition is a determining factor of tax setting behavior. The results are discussed with reference to the local government institutions and the rising property values. The third essay studies intergovernmental transfers. Many intergovernmental transfers are said to serve political purposes. I augment a standard model of political career concerns allowing for multilevel governance, to investigate this assertion. When elections are staggered, an equilibrium exists with positive transfers. These transfers are motivated by two factors; sabotaging challengers and rent smoothing. These transfers are non-partisan and an artifact of the electoral dynamics as prescribed by an electoral calendar and politicians' career concerns. These results are discussed with reference to the growing literature on the partisan basis of intergovernmental transfers.

Document type: 
Thesis
File(s): 
Supervisor(s): 
A
Department: 
Dept. of Economics - Simon Fraser University
Thesis type: 
Dissertation (Ph.D.)

Existence of regionality within the BC housing market

Date created: 
2008
Abstract: 

This paper analyzes the dynamics of the British Columbia housing market from 2005 to April 2008. The dataset allows for an investigation into the differentiation in prices that occurs within housing type (single family homes and condominiums) between regions of the province using dynamic panel analysis. Further, the Kolmogorov-Smirnov two-sample test is used to investigate the possible differences in distributions across housing type, regions and time. Significant differences in the variation of housing prices is found across regions and housing types.

Document type: 
Thesis
File(s): 
Supervisor(s): 
G
Department: 
Dept. of Economics - Simon Fraser University
Thesis type: 
Project (M.A.)

Is the Fama-French three factor model better than the CAPM?

Author: 
Date created: 
2005
Abstract: 

This paper compares the performance of the Fama-French three-factor model and the Capital Asset Pricing Model (CAPM) using two data sets. One set of portfolios is formed on size and the book-to-market equity ratio and another set is formed on industry. Using these two sets of portfolios, time series and cross-sectional tests are conducted over two different periods. The tests cannot unambiguously conclude that the three-factor model is better than the CAPM. Moreover, different data sets and periods yield different test results.

Document type: 
Thesis
File(s): 
Department: 
Department of Economics - Simon Fraser University
Thesis type: 
Project (M.A.)

Three essays on income and wealth

Author: 
Date created: 
2008
Abstract: 

This thesis consists of three empirical essays that study two independent topics: income under-reporting and immigrants’ portfolio allocations. The first essay forms Chapter 2 where we use data from the Survey of Financial Security and the Survey of Household Spending to estimate the incidence and extent of income underreporting in Canada. We find that roughly 20% to 40% of households underreport income by, on average, roughly $6,000 in 1999. In contrast to the existing literature, we show that self-employment status is a poor indicator of income under-reporting. We find that roughly 26% of non self-employed households under-report income, regardless of how self-employment status for households is determined. We profile income under-reporters and find that income underreporting is pervasive. We propose a simple ratio method of identifying income-under-reporting households for our second essay, Chapter 3. Our method is a straight-forward application of the Permanent Income Hypothesis; that is, households make consumption decisions based on their expected lifetime income not their reported lifetime income implying that consumption-to-income ratios should be higher for under-reporting households. We argue for using housing costs as the consumption measure in our approach. Our results confirm that households that under-report their income have mortgage-to-income ratios (MIR) or rent-to-income ratios (RIR) well in excess of those households that do not under-report. Using this finding, we propose using a Receiver Operating Characteristic (ROC) curve to determine the optimum cutoff threshold for MIR/RIR to detect under-reporters. Our third essay, Chapter 4, uses data from the 1999 and 2005 Survey of Financial Security to investigate the differences in portfolio allocations and values between immigrants and Canadian-born households. In general, we find that immigrants hold more real estate and less pension assets relative to Canadian-born households. Limited cohort analysis suggests that settled immigrants’ portfolio allocations are similar to that of Canadian-born households in contrast to recent immigrants’ portfolios. We also find evidence that the length of time living in Canada has a positive effect on ownership rate, share and value of both real estate and pension assets.

Document type: 
Thesis
File(s): 
Supervisor(s): 
K
Department: 
Dept. of Economics - Simon Fraser University
Thesis type: 
Thesis (Ph.D.)

An ounce of loyalty for a pound of cleverness: Allegiance and competence in authoritarian regimes

Author: 
Date created: 
2005
Abstract: 

This paper presents a simple framework illustrating how loyalty considerations may affect the ruler's choice of an adviser or a minister. The model suggests that the optimal competence level of the adviser should decrease with the bribe offered by the opposition group and the most severe punishment available to the dictator. The reward offered by the dictator increases with the bribe but decreases in the size of the worst available punishment. Paradoxically, this implies that higher incomes could be paid to less competent advisers in regimes where bribes are more generous or plotting groups are more affluent. Also, more brutal despots would find it optimal to hire less competent advisers. This supports the widely held view that constraints on the executive can improve a country's economic performance.

Document type: 
Thesis
File(s): 
Department: 
Department of Economics - Simon Fraser University
Thesis type: 
Project (M.A.)

Imports and retailers in Canada: does size matter?

Author: 
Date created: 
2008
Abstract: 

This project investigates empirically whether retailer size influences their direct importing activities.Twenty three Canadian retail sectors are analyzed,classified by types of commodities for the year 2002. Two aspects of retailer size are considered, average size and size dispersion of retail establishments in a retail sector. Other explanatory factors include: the share of purchases of imports by wholesalers selling the same product category of each retailer type; Canadian production of the commodities sold in each retail sector, as a fraction of total Canadian production of the year; and three importing sources (the US and Mexico, EU and Japan and Low Cost Asian countries). Only non-highly correlated independent variables are included in each estimation. The best estimation suggests that there is significant negative correlation between average size of retail establishments and their direct import activities; and there is negative link between size dispersion of retail establishments and their direct import activities.

Document type: 
Thesis
File(s): 
Supervisor(s): 
N
Department: 
Dept. of Economics - Simon Fraser University
Thesis type: 
Project (M.A.)

Three essays in international economics

Author: 
Date created: 
2008
Abstract: 

The first paper presents an inter-temporal job search model and argues that both emigration and return of Chinese may be strategically planned as an optimal life-cycle residential location sequence. Particularly, it offers an explanation for two interesting phenomena in the context of Chinese immigration: (1) a substantial increase in both emigrants and returnees; (2) Returnees exhibit varying levels of educational degrees. The model attributes these phenomena to three facts: (1) China has a “dual” labor market with a higher paying modern sector; (2) the benefits of globalization accrue mainly to modern sector workers and; (3) the “information revolution” in US attracts China’s most productive intellectuals. The second and the third papers study the impact of trade variety on regional productivity for China and Canada respectively. The second paper studies the effects of Chinese provincial export variety growth on its technological improvement by applying a monopolistic competition model with endogenous technology. The panel data covers all 31 executive districts of mainland China from 1998 to 2005. The results show that export variety significantly affect productivity growth: it accounts for 44.1% of cross-province TFP differences and 36.6% of within-province TFP growth; a 10% increase in the export variety of all exporting industries leads to a 1.4% productivity increase in China (as a weighted province average). By adding import variety in the empirical model used in the second paper, the third paper consolidates the effects of both import and export variety growth on Canadian productivity. Using balanced provincial data from 1988 to 2006, I find that export variety and import variety respectively account for 10.41% and 1.57% of the variation in Canadian provincial productivity differences, and the net trade variety related effects account for 7.06%. Furthermore, the export and import variety respectively account for 9.92% and 6.95% of within-province productivity growth, and their total effects can account for 17.31%. Evaluated at the sample mean, a 10% increase in all trade varieties leads to a 0.90% increase in Canadian productivity, in which the export variety's contribution is 0.57% and the import variety's is 0.33%.

Document type: 
Thesis
File(s): 
Supervisor(s): 
R
Department: 
Dept. of Economics - Simon Fraser University
Thesis type: 
Thesis (Ph.D.)

How much should immigrants speak English in Canada? Earnings of immigrants depending on English proficiency

Author: 
Date created: 
2008
Abstract: 

This paper investigates immigrant assimilation in Canada; specifically the impact English language proficiency has on wage differentials between adult male immigrants and native workers. Using 1991, 1996 and 2001 Canada Census reports, the analysis employs separate cross-sectional regression, as well as quasi-panel regression. Findings are consistent with the hypothesis that greater English proficiency enhances earnings in the Canadian labour market. It further supports that immigrants at different English skill levels experience varied economic assimilation into the labour market. Most immigrants face wage disparities due to limited access to jobs. Such limited access to Canadian employment can be attributed to primarily poor English skills, as well as immigration status. Finally, English language proficiency and return to post-migration experience, or education appear to be substitutes, that is, those with greater proficiency in English have a smaller effect of time spent in Canada on earnings, but not for those without any English knowledge.

Document type: 
Thesis
File(s): 
Supervisor(s): 
K
Department: 
Dept. of Economics - Simon Fraser University
Thesis type: 
Project (M.A.)

Dynasty discount: inter-team differentials in NHL player compensation

Author: 
Date created: 
2008
Abstract: 

In the past few years, a lot of work has been done to study the effect of firms in wage determination. In fact, firms have been found to contribute a great deal to intra-industry wage differentials. This paper converts this firm effect into a team effect using NHL player and team data and tries to find inter-team differences in NHL player compensation. Using information from various sources, an analysis of player salaries for the period 1998-2004 is done using a standard wage regression with fixed player and team effects. What we find is that in the NHL industry, we observe team effects to be an insignificant component of player compensation. More so, the teams with statistically significant team effects exhibit characteristics often associated with dynasties.

Document type: 
Thesis
File(s): 
Supervisor(s): 
S
Department: 
Dept. of Economics - Simon Fraser University
Thesis type: 
Project (M.A.)

The economic impact of short-sea shipping: using the Fraser River as a commercial highway

Author: 
Date created: 
2008
Abstract: 

Truck traffic is expected to increase by 50% between now and 2021 generated primarily by container trades. Road congestion currently costs the Lower Mainland economy up to $1.5 billion a year. The BC government has carried out the Gateway project aiming to decrease road congestion and air pollution from idling automobiles. However, building roads and bridges cannot be a long term solution. An alternative to road transport if possible must be found. This paper revisits the feasibility of Short Sea Shipping using the Fraser River. It carries out an economic impact study of the benefits and costs, including environmental costs; and it includes a comparative study when SSS becomes feasible compared to trucking as truck idling time on roads and at the deep-sea terminals increases. Not only is SSS more environmental friendly, but also price competitive when congestion is taken into account.

Document type: 
Thesis
File(s): 
Supervisor(s): 
D
Department: 
Dept. of Economics - Simon Fraser University
Thesis type: 
Project (M.A.)