Integration of Satellite and Financial Data to Model Future Economic Impact of Citrus Crops (Final Project Report)

This study analyzed the health and overall landcover of citrus crops in Florida. The analysis was completed using Landsat satellite imagery available free of charge from the University of Maryland Global Landcover Change Facility. The project hypothesized that combining citrus production (economic) data with citrus area per county derived from spectral signatures would yield correlations between observable spectral reflectance throughout the year, and the fiscal impact of citrus on local economies. A positive correlation between these two data types would allow us to predict the economic impact of citrus using spectral data analysis to determine final crop harvests.

A study of stock market fluctuations and their relation to business conditions

Most research on stock prices is based on the present value model or the more general consumption-based model. When applied to real economic data, both of them are found unable to account for both the stock price level and its volatility. Three essays here attempt to both build a more realistic model, and to check whether there is still room for bubbles in explaining fluctuations in stock prices. In the second chapter, several innovations are simultaneously incorporated into the traditional present value model in order to produce more accurate model-based fundamental prices. These innovations comprise replacing with broad dividends the more narrow traditional dividends that are more commonly used, a nonlinear artificial neural network (ANN) forecasting procedure for these broad dividends instead of the more common linear forecasting models for narrow traditional dividends, and a stochastic discount rate in place of the constant discount rate. Empirical results show that the model described above predicts fundamental prices better, compared with alternative models using linear forecasting process, narrow dividends, or a constant discount factor. Nonetheless, actual prices are still largely detached from fundamental prices. The bubblelike deviations are found to coincide with business cycles. The third chapter examines possible cointegration of stock prices with fundamentals and non-fundamentals. The output gap is introduced to form the nonfundamental part of stock prices. I use a trivariate Vector Autoregression (TVAR) model and a single equation model to run cointegration tests between these three variables. Neither of the cointegration tests shows strong evidence of explosive behavior in the DJIA and S&P 500 data. Then, I applied a sup augmented Dickey-Fuller test to check for the existence of periodically collapsing bubbles in stock prices. Such bubbles are found in S&P data during the late 1990s. Employing econometric tests from the third chapter, I continue in the fourth chapter to examine whether bubbles exist in stock prices of conventional economic sectors on the New York Stock Exchange. The ‘old economy’ as a whole is not found to have bubbles. But, periodically collapsing bubbles are found in Material and Telecommunication Services sectors, and the Real Estate industry group.

The electoral geography of the Slovak Republic: A comparison of the 1994, 1998, and 2002 parliamentary elections

In what can rightly be said to be one of the most dramatic geopolitical shifts in modern times, the collapse of communist regimes in Central Europe and the former Soviet Union brought about dramatic changes in the entire region. As a consequence, wide ranging political, economic, and social transformations have occurred in almost all of these countries since 1989. The Slovak Republic, as a newly democratic country, went through the establishment of the electoral and party systems that are the central mechanisms to the formation of almost all modern democratic governments. The primary research purpose of this dissertation was to describe and explain regional variations in party support during Slovakia’s ten years of democratic transformation. A secondary purpose was to relate these spatial variations to the evolution of political parties in the post-independence period in light of the literature on transitional electoral systems. Research questions were analyzed using both aggregate and survey data. Specifically, the study utilized electoral data from 1994, 1998, and 2002 Slovak parliamentary elections and socio-economic data of the population within Slovak regions which were eventually correlated with the voting results by party in the 79 Slovak districts. The results of this study demonstrate that there is a tendency among voters in certain regions to provide continuous support to the same political parties/movements over time. In addition, the socio-economic characteristics of the Slovak population (gender, age, education, religion, nationality, unemployment, work force distribution, wages, urban-rural variable, and population density) in different regions tend to influence voting preferences in the parliamentary elections. Finally, there is an evident correlation between party preference and the party’s position on integration into European Union, as measured by perceived attitudes regarding the benefits of EU membership.

A Study of Stock Market Fluctuations and their Relations to Business Conditions

Most research on stock prices is based on the present value model or the more general consumption-based model. When applied to real economic data, both of them are found unable to account for both the stock price level and its volatility. Three essays here attempt to both build a more realistic model, and to check whether there is still room for bubbles in explaining fluctuations in stock prices. In the second chapter, several innovations are simultaneously incorporated into the traditional present value model in order to produce more accurate model-based fundamental prices. These innovations comprise replacing with broad dividends the more narrow traditional dividends that are more commonly used, a nonlinear artificial neural network (ANN) forecasting procedure for these broad dividends instead of the more common linear forecasting models for narrow traditional dividends, and a stochastic discount rate in place of the constant discount rate. Empirical results show that the model described above predicts fundamental prices better, compared with alternative models using linear forecasting process, narrow dividends, or a constant discount factor. Nonetheless, actual prices are still largely detached from fundamental prices. The bubble-like deviations are found to coincide with business cycles. The third chapter examines possible cointegration of stock prices with fundamentals and non-fundamentals. The output gap is introduced to form the non-fundamental part of stock prices. I use a trivariate Vector Autoregression (TVAR) model and a single equation model to run cointegration tests between these three variables. Neither of the cointegration tests shows strong evidence of explosive behavior in the DJIA and S&P 500 data. Then, I applied a sup augmented Dickey-Fuller test to check for the existence of periodically collapsing bubbles in stock prices. Such bubbles are found in S&P data during the late 1990s. Employing econometric tests from the third chapter, I continue in the fourth chapter to examine whether bubbles exist in stock prices of conventional economic sectors on the New York Stock Exchange. The ‘old economy’ as a whole is not found to have bubbles. But, periodically collapsing bubbles are found in Material and Telecommunication Services sectors, and the Real Estate industry group.

The Electoral Geography of the Slovak Republic: A Comparison of the 1994, 1998, and 2002 Parliamentary Elections

In what can rightly be said to be one of the most dramatic geopolitical shifts in modern times, the collapse of communist regimes in Central Europe and the former Soviet Union brought about dramatic changes in the entire region. As a consequence, wide ranging political, economic, and social transformations have occurred in almost all of these countries since 1989. The Slovak Republic, as a newly democratic country, went through the establishment of the electoral and party systems that are the central mechanisms to the formation of almost all modern democratic governments. The primary research purpose of this dissertation was to describe and explain regional variations in party support during Slovakia’s ten years of democratic transformation. A secondary purpose was to relate these spatial variations to the evolution of political parties in the post-independence period in light of the literature on transitional electoral systems. Research questions were analyzed using both aggregate and survey data. Specifically, the study utilized electoral data from 1994, 1998, and 2002 Slovak parliamentary elections and socio-economic data of the population within Slovak regions which were eventually correlated with the voting results by party in the 79 Slovak districts. The results of this study demonstrate that there is a tendency among voters in certain regions to provide continuous support to the same political parties/movements over time. In addition, the socio-economic characteristics of the Slovak population (gender, age, education, religion, nationality, unemployment, work force distribution, wages, urban-rural variable, and population density) in different regions tend to influence voting preferences in the parliamentary elections. Finally, there is an evident correlation between party preference and the party’s position on integration into European Union, as measured by perceived attitudes regarding the benefits of EU membership.

Essays in environmental economic valuation and decision making in the presence of an environmental disaster

The first essay developed a respondent model of Bayesian updating for a double-bound dichotomous choice (DB-DC) contingent valuation methodology. I demonstrated by way of data simulations that current DB-DC identifications of true willingness-to-pay (WTP) may often fail given this respondent Bayesian updating context. Further simulations demonstrated that a simple extension of current DB-DC identifications derived explicitly from the Bayesian updating behavioral model can correct for much of the WTP bias. Additional results provided caution to viewing respondents as acting strategically toward the second bid. Finally, an empirical application confirmed the simulation outcomes. The second essay applied a hedonic property value model to a unique water quality (WQ) dataset for a year-round, urban, and coastal housing market in South Florida, and found evidence that various WQ measures affect waterfront housing prices in this setting. However, the results indicated that this relationship is not consistent across any of the six particular WQ variables used, and is furthermore dependent upon the specific descriptive statistic employed to represent the WQ measure in the empirical analysis. These results continue to underscore the need to better understand both the WQ measure and its statistical form homebuyers use in making their purchase decision. The third essay addressed a limitation to existing hurricane evacuation modeling aspects by developing a dynamic model of hurricane evacuation behavior. A household's evacuation decision was framed as an optimal stopping problem where every potential evacuation time period prior to the actual hurricane landfall, the household's optimal choice is to either evacuate, or to wait one more time period for a revised hurricane forecast. A hypothetical two-period model of evacuation and a realistic multi-period model of evacuation that incorporates actual forecast and evacuation cost data for my designated Gulf of Mexico region were developed for the dynamic analysis. Results from the multi-period model were calibrated with existing evacuation timing data from a number of hurricanes. Given the calibrated dynamic framework, a number of policy questions that plausibly affect the timing of household evacuations were analyzed, and a deeper understanding of existing empirical outcomes in regard to the timing of the evacuation decision was achieved.

In God we trust: Faith-based development, spiritual transformation, and economic change in southern Andean indigenous communities

In communities throughout the developing world, faith-based organizations (FBOs) focus on goals such as eradicating poverty, bolstering local economies, and fostering community development, while premising their activities and interaction with local communities on theological and religious understandings. Due to their pervasive interaction with participants, the religious ideologies of these FBOs impact the religious, economic, and social realities of communities. This study investigates the relationship between the international FBO, World Vision International (WVI), and changes to religious, economic, and social ideologies and practices in Andean indigenous communities in southern Peruvian. This study aims to contribute to the greater knowledge and understanding of (1) institutionalized development strategies, (2) faith-based development, and (3) how institutionalized development interacts with processes of socio-cultural change. Based on fifteen months of field research, this study involved qualitative and quantitative methods of participant-observation, interviews, surveys, and document analysis. Data were primarily collected from households from a sample of eight communities in the Pitumarca and Combapata districts, department of Canchis, province of Cusco, Peru where two WVI Area Development Programs were operating. Research findings reveal that there is a relationship between WVI’s intervention and some changes to religious, economic, and social structure (values, ideologies, and norms) and practices, demonstrating that structure and practices change when social systems are altered by new social actors. Findings also revealed that the impacts of WVI’s intervention greatly increased over the course of several years, demonstrating that changes in structure and practice occur gradually and need a period of time to take root. Finally, results showed that the impacts of WVI’s intervention were primarily limited to those most closely involved with the organization, revealing that the ability of one social actor to incite changes in the structure and practice of another actor is associated with the intensity of the relationship between the social actors. The findings of this study should be useful in ascertaining deductions and strengthening understandings of how faith-based development organizations impact aspects of religious, economic, and social life in the areas where they work.

Independent Monitoring the Cuban Economic Zone Oil Development

The extensive impact and consequences of the 2010 Deep Water Horizon oil drilling rig failure in the Gulf of Mexico, together with expanding drilling activities in the Cuban Exclusive Economic zone, have cast a spotlight on Cuban oil development. The threat of a drilling rig failure has evolved from being only hypothetical to a potential reality with the commencement of active drilling in Cuban waters. The disastrous consequences of a drilling rig failure in Cuban waters will spread over a number of vital interests of the US and of nations in the Caribbean in the general environs of Cuba. The US fishing and tourist industries will take major blows from a significant oil spill in Cuban waters. Substantial ecological damage and damage to beaches could occur for the US, Mexico, Haiti and other countries as well. The need exists for the US to have the ability to independently monitor the reality of Cuban oceanic oil development. The advantages of having an independent US early warning system providing essential real-time data on the possible failure of a drilling rig in Cuban waters are numerous. An ideal early warning system would timely inform the US that an event has occurred or is likely to occur in, essentially, real-time. Presently operating monitoring systems that could provide early warning information are satellite-based. Such systems can indicate the locations of both drilling rigs and operational drilling platforms. The system discussed/proposed in this paper relies upon low-frequency underwater sound. The proposed system can complement existing monitoring systems, which offer ocean-surface information, by providing sub-ocean surface, near-real time, information. This “integrated system” utilizes and combines (integrates) many different forms of information, some gathered through sub-ocean surface systems, and some through electromagnetic-based remote sensing (satellites, aircraft, unmanned arial vehicles), and other methods as well. Although the proposed integrated system is in the developmental stage, it is based upon well-established technologies.

Essays in economic growth, political economy and institutions

This dissertation analyzes the effects of political and economic institutions on economic development and growth.^ The first essay develops an overlapping-generations political economy model to analyze the incentives of various social groups to finance human capital accumulation through public education expenditures. The contribution of this study to the literature is that it helps explain the observed differences in the economic growth performance of natural resource-abundant countries. The results suggest that the preferred tax rates of the manufacturers on one hand and the political coalition of manufacturers and landowners, on the other hand, are equal to the socially optimal tax rate. However, we show that owners of natural resources prefer an excessively high tax rate, which suppresses aggregate output to a suboptimal level.^ The second essay examines the relationship between the political influence of different social classes and public education spending in panel data estimation. The novel contribution of this paper to the literature is that I proxy the political power and influence of the natural resource owners, manufacturers, and landowners with macroeconomic indicators. The motivation behind this modeling choice is to substantiate the definition of the political power of social classes with economic fundamentals. I use different governance indicators in the estimations to find out how different institutions mediate the overall impact of the political influence of various social classes on public education spending. The results suggest that political stability and absence of violence and rule of law are the important governance indicators.^ The third essay develops a counter argument to Acemoglu et al. (2010) where the thesis is that French institutions and economic reforms fostered economic progress in those German regions invaded by the Napoleonic armies. By providing historical data on urbanization rates used as proxies for economic growth, I demonstrate that similar different rates of economic growth were observed in the regions of France in the post-Napoleonic period as well. The existence of different economic growth rates makes it hard to argue that the differences in economic performance in the German regions that were invaded by the French and those that were spared a similar fate follow from regional differences in economic institutions.^

Quantifying the Impacts of the Recent Economic Crisis on Regional Tourism Industry and Economy

The purpose of this study is to explore the accuracy issue of the Input-Output model in quantifying the impacts of the 2007 economic crisis on a local tourism industry and economy. Though the model has been used in the tourism impact analysis, its estimation accuracy is rarely verified empirically. The Metro Orlando area in Florida is investigated as an empirical study, and the negative change in visitor expenditure between 2007 and 2008 is taken as the direct shock. The total impacts are assessed in terms of output and employment, and are compared with the actual data. This study finds that there are surprisingly large discrepancies among the estimated and actual results, and the Input-Output model appears to overestimate the negative impacts. By investigating the local economic activities during the study period, this study made some exploratory efforts in explaining such discrepancies. Theoretical and practical implications are then suggested.

Constructing threat: How Americans identify economic competitors

China's emergence as an economic powerhouse has often been portrayed as threatening to America's economic strength and to its very identity as "the global hegemon." The media's alarmist response to an economic competitor is familiar to those who remember US-Japanese relations in the 1980s. In order to better understand the basis of American threat perception, this study explores the independent and interactive impact of three variables (perceptions of the Other's capabilities, perceptions of the Other as a threat versus as an opportunity, and perceptions of the Other's political culture) on attitudes toward two different economic competitors (Japan 1977-1995 and China 1985-2011). Utilizing four methods (historical process tracing, public polling data analysis, social scientific experimentation, and content analysis), this study demonstrates that increases in the Other's economic capabilities have a much smaller impact on attitudes than is commonly believed. It further shows that while perceptions of threat/opportunity played a significant role in shaping attitudinal response toward Japan, perceptions of political culture are the most important factor driving attitudes toward China today. This study contributes to a better understanding of how states react to threats and construct negative images of their economic rivals. It also helps to explain the current Sino-American relationship and enables better predictions as to its potential future course. Finally, these findings contribute to cultural explanations of the democratic peace phenomenon and provide a boundary condition (political culture) for the liberal proposition that opportunity ameliorates conflict in the economic realm.^

The influence of neighbourhood formality status and socio-economic position on self-rated health among adult men and women: a multilevel, cross sectional, population study from Aleppo, Syria

Background There is substantial evidence from high income countries that neighbourhoods have an influence on health independent of individual characteristics. However, neighbourhood characteristics are rarely taken into account in the analysis of urban health studies from developing countries. Informal urban neighbourhoods are home to about half of the population in Aleppo, the second largest city in Syria (population>2.5 million). This study aimed to examine the influence of neighbourhood socioeconomic status (SES) and formality status on self-rated health (SRH) of adult men and women residing in formal and informal urban neighbourhoods in Aleppo. Methods The study used data from 2038 survey respondents to the Aleppo Household Survey, 2004 (age 18–65 years, 54.8% women, response rate 86%). Respondents were nested in 45 neighbourhoods. Five individual-level SES measures, namely education, employment, car ownership, item ownership and household density, were aggregated to the level of neighbourhood. Multilevel regression models were used to investigate associations. Results We did not find evidence of important SRH variation between neighbourhoods. Neighbourhood average of household item ownership was associated with a greater likelihood of reporting excellent SRH in women; odds ratio (OR) for an increase of one item on average was 2.3 (95% CI 1.3-4.4 (versus poor SRH)) and 1.7 (95% CI 1.1-2.5 (versus normal SRH)), adjusted for individual characteristics and neighbourhood formality. After controlling for individual and neighbourhood SES measures, women living in informal neighbourhoods were less likely to report poor SRH than women living in formal neighbourhoods (OR= 0.4; 95% CI (0.2- 0.8) (versus poor SRH) and OR=0.5; 95%; CI (0.3-0.9) (versus normal SRH). Conclusions Findings support evidence from high income countries that certain characteristic of neighbourhoods affect men and women in different ways. Further research from similar urban settings in developing countries is needed to understand the mechanisms by which informal neighbourhoods influence women’s health.

Essays on openness, economic integration, and *growth

This dissertation examines the relationship between the degree of openness to international trade and the level of growth experienced by a country. More precisely, it explores how trade liberalization and economic integration can lead to specialization in production, affect national levels of welfare, productivity, and competition and at the same time reinforce deflationary efforts. A large part of this investigation is carried out using industry-level data from Spain. ^

Essays on the political economy of trade policy and economic *development

This dissertation studies the political economy of trade policy in a developing country, namely Turkey, under different economic and political regimes. The research analyzes the effects of these different regimes on the import structure, the trade policy and the industrialization process in Turkey and derives implications for aggregate welfare. ^ In the second chapter, the effects of trade liberalization policies on import demand are examined. Using disaggregated industry-level data, import demand elasticities for various sectors have been computed, analyzed under different economic regimes, and compared with those of developed countries. The results are statistically significant and reliable, and conform to the predictions of economic theory. Estimation of these elasticities is also a necessary ingredient for the third chapter of the dissertation. ^ The third chapter examines the predictions of the state-of-the-art “Protection For Sale” model of Grossman and Helpman (1994). Employing advanced econometric methods and a unique data set, strong support is found for the fundamental predictions of the model in the context of Turkey. Specifically, the government is found to attach a much higher weight to social welfare than to political contributions. This weight is higher under the democratic regime than under the dictatorship, a result potentially of interest to all researchers in the area of political economy. ^ The fourth chapter looks at the effects of industry concentration and import price shocks on protection, promotion and the choice of policy instruments in Turkey. In this context, it examines and finds support for the predictions of some well-known models in the literature. ^

Education policy and national income distribution: New evidence from recent cross -country data

In the mid 19th century, Horace Mann insisted that a broad provision of public schooling should take precedence over the liberal education of an elite group. In that regard, his generation constructed a state sponsored common schooling enterprise to educate the masses. More than 100 years later, the institution of public schooling fails to maintain an image fully representative of the ideals of equity and inclusion. Critical theory in educational thought associates the dominant practice of functional schooling with maintenance of the status quo, an unequal distribution of financial, political, and social resources. This study examined the empirical basis for the association of public schooling with the status quo using the most recent and comparable cross-country income inequality data. Multiple regression analysis evaluated the possible relationship between national income inequality change over the period 1985-2005 and variables representative of national measures of education supply in the prior decade. The estimated model of income inequality development attempted to quantify the relationship between education supply factors and subsequent income inequality developments by controlling for economic, demographic, and exogenous factors. The sample included all nations with comparable income inequality data over the measurement period, N = 56. Does public school supply affect national income distribution? The estimated model suggested that an increase in the average years of schooling among the population age 15 years or older, measured over the period 1975-1985, provided a mechanism that resulted in a more equal distribution of income over the period 1985-2005 among low and lower-middle income nations. The model also suggested that income inequality increased less or decreased more in smaller economies and when the percentage of the population age < 15 years grew more slowly over the period 1985-2000. In contrast, this study identified no significant relationship between school supply changes measured over prior periods and income inequality development over the period 1985-2005 among upper-middle and high income nations.