Graduate Research

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A dynamic model on advertising level and product quality
(University of New Brunswick, 2016) Qi, Chen; Dalkir, Elif
This report studies the relationship between advertising level and product quality where the product is a new non-durable experience good within a signaling game framework. The least cost separating equilibrium of the two period model used in Bagwell (2005) is analyzed without the restriction of advertising being dissipative with repeat business effect. The results are conditionally consistent with Bagwell (2005). Further, advertising level as a signal is assumed to be random variable drawn from Normal and Beta distributions. Consumers update their prior beliefs about the quality of product by Bayes’ distributions. Consumers update their prior beliefs about the quality of product by Bayes’ distributions. Consumers update their prior beliefs about the quality of product by Bayes’ rule after observing the advertising level. We show that pooling equilibria exist with the the the assumption of identical price and marginal costs for high quality and low quality firms. If asymmetric marginal costs are assumed, then the results are consistent with both Nelson (1974) and Schmalensee 1978).
A study on the influencing factors of CPI bias in different groups in Canada
(University of New Brunswick, 2019) Wang, Haoyu; Emery, Herb
The official CPI may mismeasure the cost of living for different groups of people. This paper investigates the factors that might explain the size of the CPI bias measured by Emery and Guo (2019) for the years 1999 to 2015. We apply the partial least squares method (PLS) estimates of CPI bias for 10 provinces and 14 sub-groups to determine which subcomponents of the CPI are influential on the CPI bias. The result shows that gasoline, fuel and clothing are important factors affecting the CPI bias of each group. However, when we group the samples in 2010 as the cutoff point, this effect is more significant in the later stage, while the influence factors of each group in the early stage have a large inter-group difference and the exchange rate has an important impact on the CPI bias of each group, especially in the later stage.
Are Canadian households financially distressed? A disaggregated analysis
(University of New Brunswick, 2023-12) Choudhury, Samrana Noor; Chowdhury, Murshed
This study constructs a Financial Distress Index (FDI) for Canadian households and simultaneously examines its determinants using Statistics Canada's Survey of Financial Security (SFS) data (SFS 2019, SFS2016, SFS2012, SFS2005, and SFS1999). Employing Polychoric Principal Component Analysis (PPCA), we choose seven indicators to construct the index: debt-asset ratio, residence-ownership, RRSP withdrawal, bank saving, credit-card balance, payday loan, and stock-ownership. To find the drivers of financial distress, FDI is used as a continuous dependent variable in a fractional probit model. For robustness, marginal effects are estimated from a probit model. We find a higher consumer debt-to-total debt ratio, higher mortgage on principal residence, student loan debt, line of credit debt, and a larger family size contribute to financial distress. Conversely, higher education, greater income, more assets, and owning bonds, lessen the likelihood of distress. The study further sheds light on a comparative analysis of the financial distress across provinces and years.
Assessing the effects of FDI and trade openness on income inequality in developed countries (OECD): Panel data analysis
(University of New Brunswick, 2024-08) Ahmadi, Keyvan; Dalkir, Mehmet
The purpose of this study is to examine the relationship between trade, foreign direct investment net inflows (NFDI), and income inequality for developed OECD countries, using annual data from 2004 to 2021. The study attempts to answer a critical question: does openness affect income distribution? In order to answer this question we have employed the classic FE/RE model however, the analysis of the model involves the examination of likely nonlinear effects of both trade and FDI on income distribution. Therefore, a Difference Generalized Method of Moments (Diff-GMM) estimator was also applied to mitigate the problem of non-linearity and possible endogeneity and compare the results. The results for both models indicate that Trade has significant effects on income inequality while FDI does not have a significant effect when interacting with the Gini index; in the case of GDP, an inverted U-shaped curve holds as proposed by the Kuznet Theory.
Assessing the impact of real effective exchange rate and its volatility on net FDI inflows to Canada: A sector-level analysis
(University of New Brunswick, 2023-08) Lajevardi, Hooman; Chowdhury, Murshed
This research investigates the relationship between REER and its volatility with FDI inflows to Canada, with a novel emphasis on sector-level analysis. The study utilizes time series data from 2007 to 2022 and employs the ARDL approach to assess short-run and long-run relationships. The findings reveal significant impacts of changes in GDP, REER, and its volatility on Total Net FDI in the short run, with lasting effects of lagged GDP, trade openness, REER, and its volatility on Total Net FDI in the long run. At the sectorial level analysis, net FDI inflows in Energy and mining, manufacturing, finance and insurance exhibit significant sensitivity with changes in REER, while volatility of REER have significant impact on FDI inflows in manufacturing industries and Finance and insurance sector in the short run. In the long-run, REER has significant influence on net FDI inflows in Energy and mining and also manufacturing industries.
Brain waste? National and regional analysis of educated immigrants in Canada
(University of New Brunswick, 2022-08) Zambrano, Fabiana Rosado; Chowdhury, Murshed; Solati, Fariba
Canada benefits yearly from the brain gain of immigrants who are admitted in the country based on their human capital, but to what extent are they utilizing their formal education in the labour market? From a labour market perspective, it’s important for immigrants to utilize their education in their subsequent occupations to ensure economic integration, labour productivity, and economic development. Using Census 2016, we investigate whether immigrants work in occupations that match their education or whether they are mismatched due to over/undereducation in the labour market at the national and regional level. The multinomial logistic analysis shows that immigrants from specific source regions are more likely than others to be over/undereducated for their occupation. The latter indicates immigrants are overachieving in their occupation. The former implies brain waste. At the regional level, immigrants in Atlantic Canada have a higher likelihood of a job-education match compared to other Canadian regions.
Can distribution services cost explains home bias in trade?
(University of New Brunswick, 2016) Liu, Yunlu; Dalkir, Mehmet
In this report I consider home bias in international trade. Particularly its causes and results. I refer to the earlier work in the trade literature on the relationship between terms of trade, which is the price of traded versus non-traded goods, and home bias in trade. In this report, I follow the methodology followed by Chaban (2011) and choose distribution services as a main factor that is included in terms of trade, and the national border effect that might resolve the home bias issue. The empirical results in the report illustrate that relatively high distribution costs can explain a large observed home trade bias even with low elasticity of substitution between domestically produced goods and foreign goods.
Can macroeconomic variables explain long term movements of stock market sector indices?: A comparison of the US and Canada
(University of New Brunswick, 2018) Bhuiyan, Erfan Mahmood; Chowdhury, Murshed
While the relationship between stock market returns and macro-economic variables has been amply examined, a gap exists in the literature regarding the relationship between different sector indices and various macroeconomic variables. This study intends to examine how certain macroeconomic variables influence different sectors of the stock market differently in the US and Canada. Using monthly data over the period 2000 – 2018, cointegration analysis is applied to model the relationship between real economic activity, money supply, long-term interest rate and different sector indices. Sectors that have been examined in this study include energy, financials, real estate, industrial, healthcare, consumer discretionary, consumer staples, materials, utilities and technology. Results suggest that there is a stable long-term relationship between the macroeconomic variables used in the study and different sector indices for the US but not for Canada. However, US money supply and interest rate can explain the Canadian Stock Market.
Declining labour share in United States and Canada
(University of New Brunswick, 2015) Kozun, Olga; Murrell, David
Contrary to standard economic thinking where it is assumed that factor shares are constant over time, significant amount of evidence suggests that this may not be the case. The focus of this report is to estimate the variation of labour shares for Canada and United States for the last eighty years. In addition, we look at the other national income components, labour share measurement issues, commercial and public sectors labour income shares as well as composition of the wage bill in order to determine possible sources of these changes. The results suggest that the labour shares have been declining for the United States since 1970s and for Canada since 1960s. It is also observed that the trend depends on the definition of labour income share.
Decomposing the gender wage gap
(University of New Brunswick, 2017) Shcherbakov, Dmitry; McDonald, Ted
The gender wage gap persists as an important and controversial topic in various socio-economic agendas and appears as a topic of research in scholarly research regularly. The conventional approach to conducting a gender wage gap assessment is measuring the difference in average earnings between men and women that remains after controlling for various explanatory variables suggested by theory and empirical labor studies. The list of explanatory factors used in particular papers varies depending on the specificity of the population sample, availability of data, research focus and other aspects. Specifically, variation in occupational distribution between men and women in most cases in the literature has been limited to 20-40 fairly broad occupational groups. The inclusion of occupation as an explanatory variable is a controversial approach as it may lead to an undervaluation of the influence of labor market gender segregation tendencies, or, on the opposite, to over-justification of gender-pay differentials. This thesis provides an overview of conventional techniques used for gender wage gap estimations, discusses the importance and appropriateness of occupation as an explanatory variable, and contrasts gender wage gap estimations with and without these controls in the context of the Canadian labor market. Furthermore the thesis tests whether very detailed occupation controls is advantageous compared with a more limited set of broad occupational groups in terms of examination of the wage gap, and suggests evidence for justification of occupational gender segregation that is often perceived as discrimination.
Determinants of Canadian outward foreign direct investment: a panel data analysis
(University of New Brunswick, 2019) Wang, Fengyi; Chowdhury, Murshed
This report attempts to examine the trends and the impact of various factors on Canadian outward foreign direct investment (OFDI) from the perspective of the home and host countries. Using a panel data of 21 host countries and various regression techniques for the period of 1990 to 2017, we find that Canadian OFDI has a lag effect during the study sample period; the value of OFDI in the current period is significantly affected by the previous period. The GDP of both home and host countries, the distance between the two countries are important determinants of Canadian OFDI. Canadian enterprises tend to choose countries with a high level of economic development, close geographical proximity, and long and stable trade relations when selecting their OFDI location. The results of this Canadian study are largely consistent with the literature on similar studies for other countries.
Disparities in female earnings in Canada: Evidence of gaps by origin country
(University of New Brunswick, 2023-04) Desrosier, Justin; Chowdhury, Murshed
This study examines earnings of female immigrants from different world regions and the Canada-born population. Using annual data from the Longitudinal Immigration Database, the Education and Labour Market Longitudinal Platform, and the Census, we analyze earnings of immigrant cohorts and Canada-born individuals from 2004 to 2019. Specifically, the investigation aims to identify and quantify earnings disparities among female migrants in Canada, determine if there are significant differences in earnings based on place of birth, explore potential reasons for disparities, and assess regional differentiation in earnings. By employing the Blinder-Oaxaca wage decomposition framework to examine the extent of explained and unexplained contributions to earnings differences, we find evidence of migrant groups with consistently higher unexplained differences in earnings. Our study aims to identify disparities among different female groups and promote long-term economic integration in the labour market. In this regard, we find female migrants’ place of birth may be associated with higher (lower) barriers to labour market integration.
Does retirement impact health? Evidence from China
(University of New Brunswick, 2022-02) Wang, Zihan; Farnworth, Michael
Four waves of the China Health and Retirement Longitudinal Study (CHARLS) survey are used to examine the impact of retirement on health in China. Using a fuzzy regression discontinuity design, retirement is found to have a health-preserving effect on general health and the findings differ across gender. In particular females experience a statistically significant increase in physical activity and social support as well as in general health after retirement. In contrast males experience a statistically insignificant change in these behaviors as well as general health after retirement.
Econometric estimation of the link between floods and climate change in the province of New Brunswick
(University of New Brunswick, 2019) Anim-Opare, Victor; Yevdokimov, Yuri
Over the past decades, New Brunswick has recorded many extreme weather and climate events such as winter storms, hurricanes, floods, storm surges, and severe thunderstorms resulting in huge damages to individuals, firms, and Governments. Among these events, it has been proven that flood is the most occurring one. In this study, we estimated the relationship between floods and climatic variables such as temperature, rainfall, sea-level and Green House Gases (GHG) emissions using the logit model. River discharge was used as a hydrological control variable. The model showed that, there exists statistically significant positive relationship between flood and rainfall and GHG emissions. Moreover, temperature and sea-level are close to being significant showing negative and positive relationships with flood respectively. However there exists an insignificant positive relationship between discharge and flood. Results from the logit model were used to predict the probability of future floods in New Brunswick by taking into consideration the long run dynamics of the hydrological variable and climatic variables. It was established in this study that, the probability of flood in New Brunswick will be 100% in 2057 if the effects of temperature, rainfall, sea-level, discharge and GHG emissions are considered. The significance of this study is to provide economic justification for the investments into preventive and mitigation measures in the region.
Econometric evaluation of large weather events due to climate change: floods in Atlantic Canada
(University of New Brunswick, 2018) Hetalo, Stanislav; Yevdokimov, Yuri
According to the 5th Annual Report of the Intergovernmental Panel on Climate Change (IPCC), climate change will increase the frequency of large weather events such as floods, storm surges, cyclones, hurricanes, high speed winds, thunderstorms, snowstorms, blizzards, extreme temperatures and others. All these events lead to a significant economic damage to property, infrastructure and human health. Historically Atlantic Canada has been vulnerable to flooding. Destructive consequences of the flooding have been seen in the past and are expected to occur in the future specifically as a result of ongoing climate change. The ultimate goal of this study is to establish a relationship between socio-economic, climate change as well as direct flood factors and economic loss from floods in Atlantic Canada. As the first step in reaching this goal, the present study evaluates probability of floods in Atlantic Canada due to hydrological as well as climatological factors first and then tests the hypothesis of an increasing frequency of floods in the future due to climate change. Comprehensive statistical analysis performed in this study is based on the data collected from Canadian Disaster Database, Database of Environmental Departments and Local Governments of Maritime Provinces of Canada and Statistics Canada.
Economic consequences of climate change impacts: the case of Atlantic Canada
(University of New Brunswick, 2016) Nesterova, Iuliia; Yevdokimov, Yuri
Climate change poses wide-reaching challenges for regional economy. We study economic consequences of climate change impacts for Atlantic Canada. Designed economic and statistical models describe relationship between economic performance measure, which is regional value added, and two sets of control variables: economic and climate. Statistical model represents linear multiple regression, set in terms of panel data for five regional transportation with autoregressive term for dependent variable. Obtained results showed the negative effect of rising temperature on regional economic performance: if average annual temperature increases by one degree Celsius, it decreases regional value added by 1.74%. Along with an increase in temperature, the rise of the sea level by 1 meter would reduce regional value added by more than 11% meaning that coastal sub-region in Atlantic Canada is highly vulnerable to weather variation and change in climate patterns.
Economic consequences of floods in Maritime provinces
(University of New Brunswick, 2017) Burina, Iuliia; Yevdokimov, Yuri
Historically Maritime Provinces are vulnerable to flooding events. Destructive consequences of these events have been seen in the past and are expected to occur in the future. The goal of this study is to establish a relationship between socio-economic, climate change and direct flood factors on the one hand and economic losses from floods on the other. The study attempts to assess economic consequences of floods as the most frequent, damagecausing extreme weather event in Maritimes. Evaluation of the above mentioned relationship is done on the basis of regression analysis of the event-by-event cross-sectional data collected from Canadian Disaster Database, database of Environment Departments and Local Governments of Maritime Provinces. The study concludes that economic impact from floods in Maritimes is negative and significant which calls for the design of mitigation measures. In this regard, economic loss from floods represents the upper bound for potential investment into mitigation measures.
Economic impact of utilization of liquefied natural gas (LNG) in the province of New Brunswick
(University of New Brunswick, 2015) Zhou, Xiaochen; Yevdokimov, Yuri
In this study, economic impact of liquefied natural gas (LNG) utilization in the province of New Brunswick is analyzed and quantified. First, major economic consequences of LNG utilization for provincial economy are identified. Second, a dynamic demand/supply model of natural gas sector is designed and estimated. Third, the designed model is used to simulate cumulative economic impact of LNG utilization in the province. Finally, simulated data is used to calculate annual long-run increase in value added, tax revenue and job creation due to a one percent increase in LNG utilization in the province of New Brunswick.
Effect of capitation payment on membership, outpatient (OPD) utilization and cost under the national health insurance scheme in Ghana
(University of New Brunswick, 2021) Bayong, Bintu; Watson, Barry
In 2012, the National Health Insurance Authority (NHIA) in Ghana introduced a capitation policy within the districts of the Ashanti region, reducing the generosity of their previous insurance program. The key objective of this policy was to lessen escalating healthcare utilization and cost. Employing a natural experiment design, this study uses district-level longitudinal data from 2010-2015 categorized under two main groups, the intervention districts, and the control districts, to examine the impact capitation had on health insurance membership, along with outpatient department (OPD) utilization and cost. This difference-in-differences approach identifies the effect of capitation on each of these factors using ordinary least squares. Findings from this study suggest that a less generous insurance policy reduced program membership by 39 percent, putting resulting downward pressure on OPD utilization (falling 48 percent) and cost (falling 38 percent). Hence, initial results imply the policy met the expectation of the NHIA in that capitation would reduce or slow down OPD utilization and claims cost. However, capitation tended to impact economically vulnerable populations to a greater degree with large decreases in membership occurring especially among those in poverty (upwards of a 70 percent reduction in membership). Additionally, there appears to have been a cost-offset in that capitation also produced rising inpatient department costs by almost 29 percent among impacted districts, suggesting a negative fiscal externality. Thus, policy makers may wish to be cognizant of the inequitable impacts of capitation along with the potential for cost-offsets which reduce the intended objectives of capitation.
Effects of climate change on industrial demand for electricity in New Brunswick
(University of New Brunswick, 2023-08) Ghahremani, Mahsa; Yevdokimov, Yuri
Climate change is a pervasive and intricate issue with irreversible long-term consequences. New Brunswick faces escalating hot days, storms, and sea levels, impacting electricity usage. This study addresses the previously unexplored impact of climate change on industrial electricity demand from 1970 to 2022, acknowledging its significance in bridging knowledge gaps. The study employs a production function to derive industrial demand for electricity. Consequently, six econometric models, estimated through Ordinary Least Squares, reveal a direct link between temperature and demand: a 1°C rise corresponds to a 0.0025 Petajoules increase. There is also an inverse relationship between electricity price and industrial demand and higher economic activity increases industrial demand as well.

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