School of Economics
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This collection contains Honours material from University of Adelaide students within the School of Economics. The material has been approved as making a significant contribution to knowledge.
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Item Open Access Electricity Consumption and Economic Growth in China: Assessing Granger Causality at Provincial, Electricity-Market and National Levels(2015) Xenophon, Aleksis; School of EconomicsThe following thesis investigates the relationship between electricity consumption and economic growth in China over the period 1985-2012. Long and short run Granger causal relationships between these variables are ascertained by applying a vector error correction model to national, electricity-market, and provincial-level data. A comparison is then made between the relationships obtained from these different datasets. The results suggest that a large amount of information is lost as a result of aggregation, with data at the national and electricity-market levels being unable to accurately reflect prevailing relationships observed at the provincial level. This observation is particularly relevant given the predominance of national level studies found in the literature.Item Open Access International Trade and Job Polarisation: Are all the middle-waged jobs disappearing?(2016) Maxted, Jason; School of EconomicsThis thesis investigates the in uence that international trade exposure has on the com- position of the labour force in the manufacturing sector in Australia between 2008 and 2013. In particular we investigate whether the phenomenon of job polarisation is present within the industry, and whether increased trade exposure contributes to this. Thus we have had to carefully map employment data with trade data. Our panel data xed e ects estimation suggests that job polarisation does not exist within the manufacturing sector. This does not rule out its existence when accounting for the entire labour force however. The most significant finding is that increased exposure to trade leads to a movement of labour down the wage distribution. Such a finding has the potential to have significant policy implications.Item Open Access Identifying Marginal Returns to Education Through Social Networks(2016) Hersey, Timothy; School of EconomicsThis thesis explores the role of peers in influencing the decision of individuals to attend college and the resulting labour market outcomes. It proposes a model, combining the econometric methods of networks and treatment effects, to estimate the marginal treatment effect of education when peers have influence on the wage outcome and probability of treatment for an individual. Using Monte Carlo simulations, the effect of networks on the treatment effects model is investigated. We further explore the model by varying the network structure and conducting sensitivity analyses, considering the impact of networks on policy. Our results suggest that networks initially have a significant positive impact on the returns to education and the effects of policy. However, this effect is reduced once homophily in characteristics is introduced.Item Open Access Does Academic Success affect Outcomes in Graduate Labour Markets(2016) Miller, Marcus; School of EconomicsThis thesis explores the impact that university grades have on the labour market outcomes of Australian students graduating from undergraduate study. Using cross sectional data of students from the University of Adelaide, we investigate the effect that a student’s grade point average has on both the likelihood of employment and expected wages. We build on previous literature by using instrumental variable estimation and sample-selection models to correct for potential biases in the model, which also allows us to look at these two measures simultaneously. Our results suggest that when the models of these two outcomes are estimated simultaneously, area of study is the main source of variability in wages amongst individuals. Students’ grades and employment history, which may have been expected to also influence wages, were found to only have a significant impact on employment probability. This challenges previous studies on graduate starting wages, which find positive impacts of these measures on wages when they were looked at in isolation of employment outcomes.Item Open Access Intergovernmental Grants and Efficiency: An Empirical Study on Administrative Discretion om German Municipalities(2016) Nover, Justus; School of EconomicsHow do intergovernmental grants affect the level of efficiency in lower-level governments? The existing literature on this topic provides inconclusive evidence regarding the underlying relations of cause and effect as well as its direction. We shed light on this question by suggesting a more general framework on administrative discretion within local governments. Two hypotheses are developed and tested for a panel of municipalities in the German state of Baden-Wurttemberg. Our dual estimation approach includes parametric Stochastic Frontier Analysis (SFA) and non-parametric Data Envelopment Analysis (DEA). This constitutes a valuable robustness check of the results regarding the choice of the reference technology. The findings confirm the decisive character of local administrative discretion and self-interest lead behaviour, inducing an either positive or negative efficiency effect of grants. Besides providing novel insights for the literature, the conclusions are relevant for the architecture of grant policies since intergovernmental transfers are nowadays among the most important sources of income at the local level.Item Open Access Lobbying and Income Inequality: Experimental Evidence(2016) O'callaghan, David; School of EconomicsIn this paper we develop a simple two-stage model of lobbying with income inequality and examine our predictions in the laboratory. We found a treatment effect contradicting the theoretical predictions: Low wage subjects paired with high wage subjects over exert in a real effort task, beyond individual rationality, producing for the group at the expense of individual welfare. Neither inequality aversion nor competitive preferences explains the off-equilibrium behaviour. In the second stage, in contrast to much of the literature, subjects tended to exert effort in the contest quite close to SPNE. Delving deeper, we found those that contributed more tax revenue in the first stage exerted more effort in the contest in the second stage, despite it being a strictly dominated strategy. Inversely, those that contributed less exerted less. The effect was observed across treatments. Over-exertion of effort displayed by the higher contributors can potentially be explained by an entitlement effect within the preferences of players, which expresses as a dislike for equal splits of pots, which were not created equally.Item Open Access Peak Pricing: An Analysis of the South Australian Electricity Market(2013) Lin Oh, Zhi; School of EconomicsAbstract This paper examines whether there is justification for the implementation of peak pricing in the South Australian electricity market. Peak pricing in the South Australian electricity market appears to improve social welfare by improving consumer surplus, but this analysis is based on strong assumptions that include constant marginal cost and zero cross elasticity of demand. An analysis of peak pricing was investigated with varying cross elasticity of demand. It was found that a greater cross price elasticity value the greater the social welfare improvement in the off-peak model due to a greater increase in off-peak electricity consumption. However, the converse happens for the peak model. In the analysis of benefits outweighing costs, the estimated metering charge to consumers is approximately $120, but the savings on household bills due to time of use pricing almost covers the charge. However, the total expenditure on metering is likely to exceed savings on network costs of approximately $134 million over ten years. Hence, the costs are likely to outweigh the benefits of metering, the case for time of use pricing based is weak.Item Open Access Voters' Partisan Behaviour and Government's Election Strategies for Local Funding Provision: Theory and Empirical Evidence in Australia(2013) Norazman, Muhammad F; School of EconomicsAbstract Firstly, this thesis aims to demonstrate theoretically that different proportion of partisan and non-partisan voters entails different election strategies for the government when it provides local funding. Secondly, this thesis aims to find the empirical evidence of the existence of government's election strategies and if they do exist, what are the exact strategies chosen by the government. These election strategies are whether to fund marginal or safe electorates, and whether to fund aligned or unaligned electorates. Four predictions are yielded from the theoretical model discussed in this thesis and two of them are empirically tested in Australia. The empirical results contradict the theoretical predictions.Item Open Access The Role of Monetary Shocks in the U.S Business Cycle(2013) Ziaul Haque, Qazi; School of EconomicsABSTRACT The purpose of this study is to illustrate how the basic Real Business Cycle (RBC) model can be modified to incorporate money in an attempt to construct monetary business cycle models of the U.S. economy. This is done for one case where money enters the model as direct lump-sum transfers to households and for the other case where money injections enter the economy through the financial system. Interestingly, the two channels generate very different responses to a money growth shock. In the first case, a positive money growth shock increases nominal interest rates and depresses economic activity, which is called the anticipated inflation effect. However, the popular consensus among economists is that nominal interest rates fall after a positive monetary shock. This motivates the construction of our second model where it is conjectured that the banking sector plays an important role in the monetary transmission mechanism and money is injected into the model through financial intermediaries. It is observed in this model that a positive monetary shock reduces interest rates and stimulates economic activity, which is called the liquidity effect. Furthermore, the statistics generated by the models show that monetary shocks have no effect on real variables when money enters as direct lump-sum transfers to households. On the contrary, such shocks have significant real impact when money enters through the financial system. Taken together, this implies that how money enters into the model significantly matters for the impact of monetary shocks and such shocks entering through financial intermediaries may be important in determining the cyclical fluctuations of the U.S. economy.Item Open Access Location, Location, Innovation: The Impact of Local Environmental Factors on Regional Innovation in Australia(2016) De Leon, Maverick; School of EconomicsAbstract This paper investigates the determinants of innovation among Australian regions, focusing on the spatial dimension of innovation and innovative-related activities in creating spillover effects. Through `exploratory' and `confirmatory' spatial data analysis we find evidence that innovation activity is spatially dependent, and that there is evidence of spatial clustering of highly innovative regions. Applying spatial econometric techniques, we estimate a Spatial (panel) Durbin Model to control for spatial autocorrelation to analyse the driving forces of innovation throughout regions. We find that the number of university campuses within a region along with university research has a significant and positive effect on local levels of innovation. In terms of spillover effects, we find that population density creates a negative indirect effect; where neighbouring region's population density adversely impacts innovation levels.Item Open Access Convergence in Alcoholic Beverage Consumption Patterns among OECD Countries(2016) Holmes, Alexander; School of EconomicsAbstract In this thesis, we test Stigler and Becker's identical tastes hypothesis using cross- country alcohol consumption data. Using several new measures of convergence, we rst explore trends in global consumption patterns since 1961. The data suggest that a major convergence has occurred in the alcohol consumption mix across countries, but at a slower pace in traditionally wine- and spirits-consuming countries. We then use the Rotterdam system demand model to test the Stigler and Becker hypothesis and determine whether a common demand equation can be used across the sample of 26 countries. Controlling for differences in income and beverage preferences, we test the hypothesis and the results suggest that the identical tastes hypothesis does not apply to alcoholic beverages.