Leslie Ayers did her independent research with Dr. Robert Leekley on Party Control and the Taxation of the Rich.

ABSTRACT: In the United States, many people identify themselves as either Democrats or Republicans. The two parties represent different ideologies that tend to attract different constituencies. Democrats tend to favor more government intervention to correct market failures, and to redistribute income in order to reduce the inequality among the classes. Republicans tend to have more faith in the capitalist system, and consequently prefer less government intervention. If the two parties actually act on their different ideologies, then the party in control should help explain policy outcomes. However, previous research, focusing on the link between Democratic party control and increased levels of spending, has yielded mixed results.

This paper examines the link between Democratic party control and tax policy. Based on their ideological differences, Democrats should tend to prefer a more progressive tax rate structure to redistribute income to the lower classes, while the Republicans should tend to prefer a flatter tax rate structure as an incentive to work. Hence, greater Democratic party control should result in a more progressive tax rate structure.

Over the period of 1960 to 1993, a measure of the overall progressivity of the tax rate system is developed by taking the difference between the tax rate of the rich, defined as the top ten percent of taxpayers, and the overall tax rate for each year. The independent variables include measures of the proportion of Democrats in the House of Representatives, the Senate, and the President's party affiliation. The average family income and the unemployment rate are used as control variables to isolate party impact. Empirical results demonstrate that party affiliation of legislators assists in explaining the progressivity of the tax rate structure.

Michael Cornstubble did his honors research work with Dr. Margaret Chapman on Japanese U.S. Auto Transplant Production: An Analysis of the Roles of VERs and the Exchange Rate.

ABSTRACT: Since their introduction in 1982, Japanese auto transplants in the U.S. have skyrocketed in production, now producing many more cars than are imported. This study attempts to identify the main factors that are responsible for the introduction of Japanese auto transplants and their massive growth in production over the past 14 years. The author develops two hypotheses from theoretical analysis of the factors contributing to production decisions. The first is that the voluntary export restraints (VERs) imposed on the Japanese from 1981-1985 are responsible for bringing the transplants to the U.S. and for creating major growth in their production. The second hypothesis is that after 1985, a different factor was responsible for sustaining growth in transplant production, the exchange rate. The author relies mainly on theory and observations of quarterly time series data to support his first hypothesis, but supports the second hypothesis with both theoretical and empirical analyses, with strong results throughout.

Dimitrios Dadakas did his independent research with Dr. Robert Leekley on Environmental Quality and Economic Growth.

ABSTRACT: Economic growth is generally considered to have a negative impact on the environment. However, recent literature has suggested an alternative growth pattern. Alan B. Krueger and Nemat Shafik found an initial stage where increases in economic growth cause environmental degradation which is followed immediately by a subsequent stage of improving environmental quality. The result is an inverse U-shape relationship between economic growth and the quality of the environment.

This paper contributes to the existing literature by providing an analysis of this inverted U-curve based on the relative strength of the income and substitution effect--that is, changes in consumption patterns with respect to changes income. The paper also analyzes the response of the political system to the degrading environment and to society's changing preferences for environmental quality. The empirical research uses a variety of pollutants with different characteristics to confirm that the reaction of the political system affects the shape of the inverted U-curve.

Jennifer Heskett, did her independent research with Dr. Michael Seeborg on Chinese National Administrative Policy as a Determinant of Internal Rural-Urban Migration.

ABSTRACT: Urbanization, the increase in the percentage of a country's total population residing in urban areas, represents one of the innumerable social, political, and economic changes that occur within a developing nation. High city population growth rates cause urbanization to a degree; however, internal migration from rural to urban areas also induces this phenomenon. Economists John R. Harris and Michael P. Todaro have developed a model that attributes rural-urban migration to wage differentials. To be sure, differences in absolute rural and urban wages provide incentive for workers to migrate to urban areas within China. Recent Chinese national administrative policies, however, also indirectly encourage rural-urban migration by increasing the probability of finding urban employment. Administrative reform in the agricultural sector has led to the release of millions of surplus workers. The significant finding of this paper is that many of these workers look to the cities for employment opportunities because additional administrative reforms applying to foreign direct investment, state-owned enterprises and the proliferation of markets have all increased the probability of finding a job in an urban area.

Matt Mikulcik did his honors research with Dr. Michael Seeborg on Wealth Through Christ?

ABSTRACT: We would expect religious beliefs to have an impact on an individual's life. If this is so, belief in Christ can profoundly influence a person's life, affecting how they act, what they do, and what they desire. One question that can be raised from this is does a belief in Christ affect a person's economic well-being? If so, secondly, does the denominational affiliation of an individual also have an impact? These two questions are the main focus of this project. Many theories are found as to whether being Christian would have a positive or negative impact, and whether the impact is significant or insignificant. Theories are also found as to whether religious denomination should have an impact, such as Max Weber's theory that being Protestant would have a positive impact on economic well-being due to the "Protestant work ethic."

The major contribution of this project is to empirically test these theories. The data used are taken from the National Longitudinal Survey of Youth. The results of the paper lend support to the theories that being Christian has a positive, significant impact on economic well-being and the hypothesis that denomination also has a significant impact.

Brett Roush did his honors research with Dr. Robert Leekley on The Economic Rationale of a Multi-State Lotto.

ABSTRACT: State lotteries have existed in their modern form in America since 1963. Multi-state lotto games, however, are a relatively recent product development. This study seeks to explain how a multi-state lotto fits into a state's portfolio of lottery products. Past research has never focused specifically on what makes offering a multi-state product attractive from the state's perspective.

In order to economically rationalize this new product the author first develops a model of the consumer under risk, employing the Friedman-Savage utility model as a starting point. Using this model as well as past empirical findings, the author generates a number of specific hypotheses regarding what affects demand for a lotto. Standard regression analysis with data points from across the United States on both a single- and multi-state level allows the construction of a demand function for lotto products. The author then uses the estimated function to predict the future revenues of Illinois' lotto products as well as examine the state's decision to participate in the recently commenced multi-state lotto known as "The Big Game."