Three essays on entrepreneurial motivation, entry, exit and monetary rewards

This dissertation analyzes rewards and motivations of self-employment. In light of recent research contributions of Barton Hamilton (2000), which find entrepreneurship not as financially rewarding as wage work, my dissertation attempts to both verify and explain this claim. The first essay proposes a theoretical model of evolution of erroneous earnings expectations on part of a nascent entrepreneur. Inability to observe, survey, and take into account all of the returns to entrepreneurship prior to business entry creates a biased set of beliefs on part of the potential entrants. Using Bayesian learning, a nascent entrepreneur starting out with correct perception of profit distribution arrives at erroneous beliefs by incorporating limited information collected from existing businesses. An observed distribution of surviving businesses would exhibit higher earnings because of previous, unobserved, business failure entrepreneur get an overly positive view of her profit potential. Hence, the chapter offers a unique method of modeling overconfidence. The second essay undertakes dynamic empirical comparison of earnings received by business owners and their wage counterparts. Using Survey of Income and Program Participation (SIPP) I examine both short and long run returns to entrepreneurship comparing theses rewards to wage earners returns. I pay particular attention to transitions into and out of business ownership. I estimate entire earnings distribution. To characterize dynamic aspect of changes to individuals’ earnings I split the income distribution into five income quintiles and follow survey participants over the period of seven years. I find that period-to-period transitions to be Markovian. I find business tenure to be short, business ownership is costly in the short and rewarding in the long run. The third essay considered different reporting schemes applied to the self-employed. It is another empirical investigation of entrepreneurial earning uses Panel Study of Income Dynamics (PSID). I find entrepreneurs while reporting lower than wage workers earnings enjoy significant consumption premiums. I observe evidence of income underreporting by entrepreneurs. This finding suggests a need for better earning comparison metrics and proposes to use consumption rather than income metrics for future comparisons.

A distance education case study: A comparison of instructional delivery methods practiced by higher education faculty and emerging standards

The purpose of this research was to compare the delivery methods as practiced by higher education faculty teaching distance courses with recommended or emerging standard instructional delivery methods for distance education. Previous research shows that traditional-type instructional strategies have been used in distance education and that there has been no training to distance teach. Secondary data, however, appear to suggest emerging practices which could be pooled toward the development of standards. This is a qualitative study based on the constant comparative analysis approach of grounded theory.^ Participants (N = 5) of this study were full-time faculty teaching distance education courses. The observation method used was unobtrusive content analysis of videotaped instruction. Triangulation of data was accomplished through one-on-one in-depth interviews and from literature review. Due to the addition of non-media content being analyzed, a special time-sampling technique was designed by the researcher--influenced by content analyst theories of media-related data--to sample portions of the videotape instruction that were observed and counted. A standardized interview guide was used to collect data from in-depth interviews. Coding was done based on categories drawn from review of literature, and from Cranton and Weston's (1989) typology of instructional strategies. The data were observed, counted, tabulated, analyzed, and interpreted solely by the researcher. It should be noted however, that systematic and rigorous data collection and analysis led to credible data.^ The findings of this study supported the proposition that there are no standard instructional practices for distance teaching. Further, the findings revealed that of the emerging practices suggested by proponents and by faculty who teach distance education courses, few were practiced even minimally. A noted example was the use of lecture and questioning. Questioning, as a teaching tool was used a great deal, with students at the originating site but not with distance students. Lectures were given, but were mostly conducted in traditional fashion--long in duration and with no interactive component.^ It can be concluded from the findings that while there are no standard practices for instructional delivery for distance education, there appears to be sufficient information from secondary and empirical data to initiate some standard instructional practices. Therefore, grounded in this research data is the theory that the way to arrive at some instructional delivery standards for televised distance education is a pooling of the tacitly agreed-upon emerging practices by proponents and practicing instructors. Implicit in this theory is a need for experimental research so that these emerging practices can be tested, tried, and proven, ultimately resulting in formal standards for instructional delivery in television education. ^

Liquidity and asset pricing: A comparison between three-factor and three-moment capital asset pricing models

Liquidity is an important attribute of an asset that investors would like to take into consideration when making investment decisions. However, the previous empirical evidence whether liquidity is a determinant of stock return is not unanimous. This dissertation provides a very comprehensive study about the role of liquidity in asset pricing using the Fama-French (1993) three-factor and Kraus and Litzenberger (1976) three-moment CAPM as models for risk adjustment. The relationship between liquidity and well-known determinants of stock returns such as size and book-to-market are also investigated. This study examines the liquidity and asset pricing issues for both intertemporal as well as cross-sectional data. ^ The results indicate an existence of a liquidity premium, i.e., less liquid stocks would demand higher rate of return than more liquid stocks. More specifically, a drop of 1 percent in liquidity is associated with a higher rate of return of about 2 to 3 basis points per month. Further investigation reveals that neither the Fama-French three-factor model nor the three-moment CAPM captures the liquidity premium. Finally, the results show that well-known determinants of stock return such as size and book-to-market do not serve as proxy for liquidity. ^ Overall, this dissertation shows that a liquidity premium exists in the stock market and that liquidity is a distinct effect, and is not influenced by the presence of non-market factors, market factors and other stock characteristics.^

A comparison of the effects of classroom and Multi-User Virtual Environments on the perceived speaking anxiety of adult post-secondary English Language Learners

The population of English Language Learners (ELLs) globally has been increasing substantially every year. In the United States alone, adult ELLs are the fastest growing portion of learners in adult education programs (Yang, 2005). There is a significant need to improve the teaching of English to ELLs in the United States and other English-speaking dominant countries. However, for many ELLs, speaking, especially to Native English Speakers (NESs), causes considerable language anxiety, which in turn plays a vital role in hindering their language development and academic progress (Pichette, 2009; Woodrow, 2006). ^ Task-based Language Teaching (TBLT), such as simulation activities, has long been viewed as an effective approach for second-language development. The current advances in technology and rapid emergence of Multi-User Virtual Environments (MUVEs) have provided an opportunity for educators to consider conducting simulations online for ELLs to practice speaking English to NESs. Yet to date, empirical research on the effects of MUVEs on ELLs' language development and speaking is limited (Garcia-Ruiz, Edwards, & Aquino-Santos, 2007). ^ This study used a true experimental treatment control group repeated measures design to compare the perceived speaking anxiety levels (as measured by an anxiety scale administered per simulation activity) of 11 ELLs (5 in the control group, 6 in the experimental group) when speaking to Native English Speakers (NESs) during 10 simulation activities. Simulations in the control group were done face-to-face, while those in the experimental group were done in the MUVE of Second Life. ^ The results of the repeated measures ANOVA revealed after the Huynh-Feldt epsilon correction, demonstrated for both groups a significant decrease in anxiety levels over time from the first simulation to the tenth and final simulation. When comparing the two groups, the results revealed a statistically significant difference, with the experimental group demonstrating a greater anxiety reduction. These results suggests that language instructors should consider including face-to-face and MUVE simulations with ELLs paired with NESs as part of their language instruction. Future investigations should investigate the use of other multi-user virtual environments and/or measure other dimensions of the ELL/NES interactions.^

A Comparison of the Effects of Classroom and Multi-User Virtual Environments on the Perceived Speaking Anxiety of Adult Post-Secondary English Language Learners

The population of English Language Learners (ELLs) globally has been increasing substantially every year. In the United States alone, adult ELLs are the fastest growing portion of learners in adult education programs (Yang, 2005). There is a significant need to improve the teaching of English to ELLs in the United States and other English-speaking dominant countries. However, for many ELLs, speaking, especially to Native English Speakers (NESs), causes considerable language anxiety, which in turn plays a vital role in hindering their language development and academic progress (Pichette, 2009; Woodrow, 2006). Task-based Language Teaching (TBLT), such as simulation activities, has long been viewed as an effective approach for second-language development. The current advances in technology and rapid emergence of Multi-User Virtual Environments (MUVEs) have provided an opportunity for educators to consider conducting simulations online for ELLs to practice speaking English to NESs. Yet to date, empirical research on the effects of MUVEs on ELLs’ language development and speaking is limited (Garcia-Ruiz, Edwards, & Aquino-Santos, 2007). This study used a true experimental treatment control group repeated measures design to compare the perceived speaking anxiety levels (as measured by an anxiety scale administered per simulation activity) of 11 ELLs (5 in the control group, 6 in the experimental group) when speaking to Native English Speakers (NESs) during 10 simulation activities. Simulations in the control group were done face-to-face, while those in the experimental group were done in the MUVE of Second Life. The results of the repeated measures ANOVA revealed after the Huynh-Feldt epsilon correction, demonstrated for both groups a significant decrease in anxiety levels over time from the first simulation to the tenth and final simulation. When comparing the two groups, the results revealed a statistically significant difference, with the experimental group demonstrating a greater anxiety reduction. These results suggests that language instructors should consider including face-to-face and MUVE simulations with ELLs paired with NESs as part of their language instruction. Future investigations should investigate the use of other multi-user virtual environments and/or measure other dimensions of the ELL/NES interactions.