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- Creators: Economics Program in CLAS
Description
This thesis takes the form of a market research report with the goal of analyzing the implications of the United Kingdom (UK) leaving the European Union (EU) (known as “Brexit”) on London’s office commercial real estate market. The ultimate goal of this report is to make a prediction, firmly grounded in quantitative and qualitative research conducted over the past several months, as to the direction of London’s commercial real estate market going forward (post-Brexit). Within the commercial real estate sector, this paper narrows its focus to the office segment of the London market.
Understanding the political landscape is crucial to formulating a reasonable prediction as to the future of the London market. Aside from research reports and articles, our main insights into the political direction of Brexit come from our recordings from meetings in March of 2017 with two high-ranking members of Parliament and one member of the House of Lords—all of whom are members of the Tory Party (the meetings being held under the condition of anonymity). The below analysis will be followed by a discussion of the economics of Brexit, primarily focusing on the economic risks and uncertainties which have emerged after the vote, and which currently exist today. Such risks include the UK losing its financial passporting rights, weakening GDP and currency value, the potential for a reduction in foreign direct investment (FDI), and the potential loss of the service sector in the city of London due to not being able to access the European Single Market.
The report will shift focus to analyzing three competing viewpoints of the direction of the London market based on recordings from interviews of stakeholders in the London real estate market. One being an executive of one of the largest REITs in the UK, another being the Global Head of Real Estate at a top asset management firm, and another being a director at a large property consulting firm. The report includes these differing “sub-theses” in order to try to make sense of the vast market uncertainties post-Brexit as well as to contrast their viewpoints with where the market is currently and with the report’s investment recommendation.
The remainder of the report will consist of the methods used for analyzing market trends including how the data was modeled in order to make the investment recommendation. The report will analyze real estate and market metrics pre-Brexit, immediately after the vote, post-Brexit, and will conclude with future projections encapsulating the investment recommendation.
Understanding the political landscape is crucial to formulating a reasonable prediction as to the future of the London market. Aside from research reports and articles, our main insights into the political direction of Brexit come from our recordings from meetings in March of 2017 with two high-ranking members of Parliament and one member of the House of Lords—all of whom are members of the Tory Party (the meetings being held under the condition of anonymity). The below analysis will be followed by a discussion of the economics of Brexit, primarily focusing on the economic risks and uncertainties which have emerged after the vote, and which currently exist today. Such risks include the UK losing its financial passporting rights, weakening GDP and currency value, the potential for a reduction in foreign direct investment (FDI), and the potential loss of the service sector in the city of London due to not being able to access the European Single Market.
The report will shift focus to analyzing three competing viewpoints of the direction of the London market based on recordings from interviews of stakeholders in the London real estate market. One being an executive of one of the largest REITs in the UK, another being the Global Head of Real Estate at a top asset management firm, and another being a director at a large property consulting firm. The report includes these differing “sub-theses” in order to try to make sense of the vast market uncertainties post-Brexit as well as to contrast their viewpoints with where the market is currently and with the report’s investment recommendation.
The remainder of the report will consist of the methods used for analyzing market trends including how the data was modeled in order to make the investment recommendation. The report will analyze real estate and market metrics pre-Brexit, immediately after the vote, post-Brexit, and will conclude with future projections encapsulating the investment recommendation.
ContributorsHorn, Jonathan (Co-author) / Sidi, Adam (Co-author) / Bonadurer, Werner (Thesis director) / McDaniel, Cara (Committee member) / Department of Finance (Contributor) / School of Politics and Global Studies (Contributor) / Economics Program in CLAS (Contributor) / Barrett, The Honors College (Contributor)
Created2017-12
Description
The NFL is one of largest and most influential industries in the world. In America there are few companies that have a stronger hold on the American culture and create such a phenomena from year to year. In this project aimed to develop a strategy that helps an NFL team be as successful as possible by defining which positions are most important to a team's success. Data from fifteen years of NFL games was collected and information on every player in the league was analyzed. First there needed to be a benchmark which describes a team as being average and then every player in the NFL must be compared to that average. Based on properties of linear regression using ordinary least squares this project aims to define such a model that shows each position's importance. Finally, once such a model had been established then the focus turned to the NFL draft in which the goal was to find a strategy of where each position needs to be drafted so that it is most likely to give the best payoff based on the results of the regression in part one.
ContributorsBalzer, Kevin Ryan (Author) / Goegan, Brian (Thesis director) / Dassanayake, Maduranga (Committee member) / Barrett, The Honors College (Contributor) / Economics Program in CLAS (Contributor) / School of Mathematical and Statistical Sciences (Contributor)
Created2015-05
Description
The concentration factor edge detection method was developed to compute the locations and values of jump discontinuities in a piecewise-analytic function from its first few Fourier series coecients. The method approximates the singular support of a piecewise smooth function using an altered Fourier conjugate partial sum. The accuracy and characteristic features of the resulting jump function approximation depends on these lters, known as concentration factors. Recent research showed that that these concentration factors could be designed using aexible iterative framework, improving upon the overall accuracy and robustness of the method, especially in the case where some Fourier data are untrustworthy or altogether missing. Hypothesis testing methods were used to determine how well the original concentration factor method could locate edges using noisy Fourier data. This thesis combines the iterative design aspect of concentration factor design and hypothesis testing by presenting a new algorithm that incorporates multiple concentration factors into one statistical test, which proves more ective at determining jump discontinuities than the previous HT methods. This thesis also examines how the quantity and location of Fourier data act the accuracy of HT methods. Numerical examples are provided.
ContributorsLubold, Shane Michael (Author) / Gelb, Anne (Thesis director) / Cochran, Doug (Committee member) / Viswanathan, Aditya (Committee member) / Economics Program in CLAS (Contributor) / School of Mathematical and Statistical Sciences (Contributor) / Barrett, The Honors College (Contributor)
Created2016-05
Description
In order to discover if Company X's current system of local trucking is the most efficient and cost-effective way to move freight between sites in the Western U.S., we will compare the current system to varying alternatives to see if there are potential avenues for Company X to create or implement an improved cost saving freight movement system.
ContributorsPicone, David (Co-author) / Krueger, Brandon (Co-author) / Harrison, Sarah (Co-author) / Way, Noah (Co-author) / Simonson, Mark (Thesis director) / Hertzel, Michael (Committee member) / Barrett, The Honors College (Contributor) / Department of Supply Chain Management (Contributor) / Department of Finance (Contributor) / Economics Program in CLAS (Contributor) / School of Accountancy (Contributor) / W. P. Carey School of Business (Contributor) / Sandra Day O'Connor College of Law (Contributor)
Created2015-05
Description
This paper examines the Syrian Civil War using seven different civil war settlement theories in order to assess the likelihood of a negotiated settlement ending the conflict. The costs of war, balance of power, domestic political institutions, ethnic identity, divisibility of stakes, veto player, and credible commitment theories were used in a multi-perspective analysis of the Syrian Civil War and the possibility of a peace settlement. It was found that all of the theories except for costs of war and balance of power predict that a negotiated settlement is unlikely to resolve the conflict. Although the Syrian government and the Syrian National Coalition are currently engaged in diplomatic negotiations through the Geneva II conference, both sides are unwilling to compromise on the underlying grievances driving the conflict. This paper ultimately highlights some of the problems inhibiting a negotiated settlement in the Syrian Civil War. These obstacles include: rival ethno-religious identities of combatants, lack of democratic institutions in Syria, indivisibility of stakes in which combatants are fighting for, number of veto player combatant groups active in Syria, and the lack of a credible third party to monitor and enforce a peace settlement.
ContributorsRidout, Scott Jeffries (Author) / Grossman, Gary (Thesis director) / Siroky, David (Committee member) / Barrett, The Honors College (Contributor) / Economics Program in CLAS (Contributor) / School of Politics and Global Studies (Contributor)
Created2014-05
Description
Economists, political philosophers, and others have often characterized social preferences regarding inequality by imagining a hypothetical choice of distributions behind "a veil of ignorance". Recent behavioral economics work has shown that subjects care about equality of outcomes, and are willing to sacrifice, in experimental contexts, some amount of personal gain in order to achieve greater equality. We review some of this literature and then conduct an experiment of our own, comparing subjects' choices in two risky situations, one being a choice for a purely individualized lottery for themselves, and the other a choice among possible distributions to members of a randomly selected group. We find that choosing in the group situation makes subjects significantly more risk averse than when choosing an individual lottery. This supports the hypothesis that an additional preference for equality exists alongside ordinary risk aversion, and that in a hypothetical "veil of ignorance" scenario, such preferences may make subjects significantly more averse to unequal distributions of rewards than can be explained by risk aversion alone.
ContributorsTheisen, Alexander Scott (Co-author) / McMullin, Caitlin (Co-author) / Li, Marilyn (Co-author) / DeSerpa, Allan (Thesis director) / Schlee, Edward (Committee member) / Baldwin, Marjorie (Committee member) / Barrett, The Honors College (Contributor) / Department of Economics (Contributor) / School of Mathematical and Statistical Sciences (Contributor) / Economics Program in CLAS (Contributor) / School of Historical, Philosophical and Religious Studies (Contributor)
Created2014-05
Description
We seek a comprehensive measurement for the economic prosperity of persons with disabilities. We survey the current literature and identify the major economic indicators used to describe the socioeconomic standing of persons with disabilities. We then develop a methodology for constructing a statistically valid composite index of these indicators, and build this index using data from the 2014 American Community Survey. Finally, we provide context for further use and development of the index and describe an example application of the index in practice.
ContributorsTheisen, Ryan (Co-author) / Helms, Tyler (Co-author) / Lewis, Paul (Thesis director) / Reiser, Mark (Committee member) / Economics Program in CLAS (Contributor) / School of Mathematical and Statistical Sciences (Contributor) / School of Politics and Global Studies (Contributor) / Barrett, The Honors College (Contributor)
Created2017-05
Description
This paper examines the qualitative and quantitative effects of the 2008 financial crisis on the current landscape of the investment banking industry. We begin by reviewing what occurred during the financial crisis, including which banks took TARP money, which banks became bank holding companies, and significant mergers and acquisitions. We then examine the new regulations that were created in reaction to the crisis, including the Dodd-Frank Act. In particular, we focus on the Volcker Rule, which is a section of the act that prohibits proprietary trading and other risky activities at banks. Then we shift into a quantitative analysis of the changes that banks made from the years 2005-2016. To do this, we chose four banks to be representative of the industry: Goldman Sachs, Morgan Stanley, J.P. Morgan, and Bank of America. We then analyze four metrics for each bank: revenue mix, value at risk, tangible common equity ratio, and debt to equity ratio. These provide methods for analyzing how banks have shifted their revenue centers to accommodate new regulations, as well as how these shifts have affected banks' risk levels and leverage. Our data show that all four banks that we observed shifted their revenue centers to flatter revenue areas, such as investment management, wealth management, and consumer banking operations. This was paired with fairly flat investment banking revenues across the board when controlling for overall market changes in the investment banking sector. Additionally, trading-focused banks significantly shifted their operations away from proprietary trading and higher risk activities. These changes resulted in lower value at risk measures for Goldman Sachs and Morgan Stanley with very minor increases for J.P. Morgan and Bank of America, although these two banks had low levels of absolute value at risk when compared to Goldman Sachs and Morgan Stanley. All banks' tangible common equity ratios increased and debt to equity ratios decreased, indicating a safer investment for shareholders and lower leverage. We conclude by offering a forecast of our expectations for the future, particularly in light of a Trump presidency. We expect less regulation going forward and the potential reversal of the Volcker Rule. We believe that these changes would result in more revenue coming from trading and riskier strategies, increasing value at risk, decreasing tangible common equity ratios, and increasing debt to equity ratios. While we do expect less regulation and higher risk, we do not expect these banks to reach pre-crisis levels due to the significant amount of regulations that would be particularly difficult for the Trump administration to reverse.
ContributorsPatel, Aashay (Co-author) / Goulder, Gregory (Co-author) / Simonson, Mark (Thesis director) / Hertzel, Michael (Committee member) / Department of Finance (Contributor) / Department of Economics (Contributor) / Economics Program in CLAS (Contributor) / Barrett, The Honors College (Contributor)
Created2017-05
Description
The purpose of this paper is to study the impact that poison pills have on the value of share prices after the cancellation of a transaction. While various studies have focused on the generic share price impact of poison pills, very few have focused on the impact of poison pills in cancelled transactions. Based on our research and analysis, in cancelled transactions, target firms that have poison pills prior to the transaction and target firms without poison pills generate returns above the announcement date premium and subsequent investment in the S&P 500 when held to the cancellation of the transaction and when held from cancellation to 6 months after the transaction. This analysis can contribute to the argument that holding shares of firms regardless of cancellation risk is preferable to taking profit at announcement date. Additionally, it can contribute to the study of undiscovered pricing impact of poison pills.
ContributorsChotalla, Gurkaran (Co-author) / Amjad, Hamza (Co-author) / Reddy, Samir (Co-author) / Stein, Luke (Thesis director) / Lindsey, Laura (Committee member) / School of Mathematical and Statistical Sciences (Contributor) / Department of Finance (Contributor) / Economics Program in CLAS (Contributor) / Barrett, The Honors College (Contributor)
Created2016-12
Description
Millennial involvement levels in the stock market are startlingly low. But what has caused this disconnect between America's younger generation and the financial sector? Stress from past financial crises, distrust of Wall Street, corporate greed, or a dislike of capitalism could surely all be viable culprits. Through our mutual experiences and research, however, we have found that most millennials aren't cynical anarchists avoiding the stock market in an attempt to fight against the system. Rather, they are individuals who have the desire to learn about investing but are clueless as to where/how to start. We both began investing in the stock market early in our college careers by opening online brokerage accounts and developing investment portfolios based on knowledge we learned within our Finance degrees and through independent research. Word of our involvement in the stock market began to spread in our social circles and people would consistently approach either of us and ask a variety of questions regarding investing. Questions such as: Can you sit down and help me open up an account and pick some stocks? What type of things do you invest in? How do I get started? How much money have you made? (always a favorite). Pre-med students, engineers, business, science, and technology majors alike all showed interest in the stock market. The more and more we talked to people, the more we realized that the problem was not a lack of desire or a lack of intellect. The problem was a lack of logically presented information, and barriers to entry that were far too high. We want to fix that. Investnet will be an online educational platform that will teach anyone the basics of investing, in plain, easy to understand terms. Whether the individual has absolutely zero knowledge of finances, or has some familiarity with investing, Investnet will provide them with the knowledge and confidence necessary to start investing in the stock market (or choose not to, but at least they'll know how).
ContributorsMcKenzie, Connor (Co-author) / Shatila, Jordan (Co-author) / Budolfson, Arthur (Thesis director) / Hoffman, David (Committee member) / School of Mathematical and Statistical Sciences (Contributor) / Department of Finance (Contributor) / W. P. Carey School of Business (Contributor) / Economics Program in CLAS (Contributor) / Barrett, The Honors College (Contributor)
Created2016-05